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Dave Inc./DE

Dave Inc./DEDAVEWEarnings & Financial Report

Nasdaq

Dave, also known as Dave.com, is a U.S. financial technology company and digital banking platform. The company is best known for ExtraCash, a short-term credit product designed as an alternative to overdraft fees and payday loans. Founded in 2017 by Jason Wilk, Dave positions itself as a consumer-friendly challenger to traditional banks.

What changed in Dave Inc./DE's 10-K — 2023 vs 2024

Top changes in Dave Inc./DE's 2024 10-K

839 paragraphs added · 690 removed · 461 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

65 edited+80 added−112 removed26 unchanged
However, the application of state licensing requirements (including those applicable to bank partnerships involving consumer lending) to our business model is not always clear and state regulators may request or require that we obtain licenses or otherwise comply with additional requirements in the future, which may result in changes to our business practices.
However, the application of state or local licensing requirements (including those applicable to bank partnerships involving consumer lending) to our business model is not always clear and regulators may request or require that we obtain licenses or otherwise comply with additional requirements in the future, which may result in changes to our business practices.
We are party to a Bank Services Agreement with Evolve, with a current term set to automatically renew annually unless either party provides written notice of non-renewal, which may be provided without cause to the other party at least 180 days prior to the end of any such term.
We are party to a Bank Services Agreement ("BSA") with Evolve, with a current term set to automatically renew annually unless either party provides written notice of non-renewal, which may be provided without cause to the other party at least 180 days prior to the end of any such term.
In certain circumstances, GLBA requires financial institutions to limit the use and 15 further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information, and requires financial institutions to disclose certain privacy policies and practices with respect to information sharing with affiliated and nonaffiliated entities, as well as to safeguard personal Member information.
In certain circumstances, GLBA requires financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information, and requires financial institutions to disclose certain privacy policies and practices with respect to information sharing with affiliated and nonaffiliated entities, as well as to safeguard personal Member information.
Although we rely on intellectual property and proprietary rights, including patents, copyrights, trademarks, and trade secrets, as well as contractual protections, in our business, we also seek to preserve the integrity and confidentiality of our intellectual property and proprietary rights through appropriate technological restrictions, such as physical and electronic security measures.
Although we rely on intellectual property and proprietary rights, including copyrights, trademarks, and trade secrets, as well as contractual protections, in our business, we also seek to preserve the integrity and confidentiality of our intellectual property and proprietary rights through appropriate technological restrictions, such as physical and electronic security measures.
In addition, other federal and state laws, public policy, and general principles of equity, such as laws prohibiting unfair and deceptive acts or practices, may apply to our activities in banking, ExtraCash advances, payments, and other areas. These laws and regulations impact our business both directly and indirectly.
In addition, other federal and state laws, public policy, and general principles of equity, such as laws prohibiting unfair and deceptive acts or practices, may apply to our activities in banking, ExtraCash, payments, and other areas. These laws and regulations impact our business both directly and indirectly.
Beilman has served as Chief Financial Officer and Secretary since the closing of the Business Combination and prior to the Business Combination served as Legacy Dave’s Chief Financial Officer since January 2021 and between July 2017 to October 2019 and Chief Operating Officer from October 2019 to January 2021. Since January 2021, Mr.
Beilman has served as Chief Financial Officer and Secretary since the closing of the Business Combination and prior to the Business Combination served as Legacy Dave’s Chief Financial Officer since January 2021 and from July 2017 to October 2019 and Chief Operating Officer from October 2019 to January 2021. Since January 2021, Mr.
We believe other market participants do not adequately meet the needs of an estimated 160 to 180 million Americans who make up our target market. We believe our ease of access, speed-to-value, data-driven approach and powerful flywheel will allow us to continue to efficiently scale and generate strong returns.
We believe other market participants do not adequately meet the needs of an estimated approximately 180 million Americans who make up our target market. We believe our ease of access, speed-to-value, data-driven approach and powerful flywheel will allow us to continue to efficiently scale and generate strong returns.
In addition, upon the occurrence of certain early termination events, either we or Evolve may terminate the agreement immediately upon written notice to the other party. The Bank Services Agreement does not prohibit Evolve from working with our competitors or from offering competing services, nor does it prevent us from working with other banks to provide similar services.
In addition, upon the occurrence of certain early termination events, either we or Evolve may terminate the agreement immediately upon written notice to the other party. The BSA does not prohibit Evolve from working with our competitors or from offering competing services, nor does it prevent us from working with other banks to provide similar services.
See the section titled “ Risk Factors—Risks Related to Our Business and Industry ” for a more comprehensive description of risks related to our intellectual property and proprietary rights. 17 Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC.
See the section titled “ Risk Factors—Risks Related to Our Business and Industry ” for a more comprehensive description of risks related to our intellectual property and proprietary rights. 15 Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC.
Exceeding those tolerances may result in limitations being imposed on our ability to initiate ACH transactions. Many transfers of funds in connection with the provision and repayment of our ExtraCash advances are performed by electronic fund transfers, including ACH transfers.
Exceeding those tolerances may result in limitations being imposed on our ability to initiate ACH transactions. Many transfers of funds in connection with the provision and repayment of our ExtraCash overdrafts are performed by electronic fund transfers, including ACH transfers.
In connection with our arrangements with Evolve, we have also entered into a multi-year service agreement with Galileo Financial Technologies, LLC (f/k/a Galileo Financial Technologies, Inc.) (“Galileo”), a payment processing platform, in which Galileo has agreed to process all transactions for our Dave ExtraCash and Banking accounts and debit cards, and to handle corresponding payments and adjustments.
Processing Partner: In connection with our arrangements with Evolve, we have also entered into a multi-year service agreement with Galileo Financial Technologies, LLC (f/k/a Galileo Financial Technologies, Inc.) (“Galileo”), a payment processing platform, in which Galileo has agreed to process all transactions for our Dave ExtraCash, bank accounts and debit cards, and to handle corresponding payments and adjustments.
Our business activities, either directly or indirectly through our partnership with Evolve, are also subject to applicable requirements under other federal statutes and regulations, including but not limited to: • Federal Trade Commission Act .
Our business activities, either directly or indirectly through our partnership with Evolve, are also subject to or may be subject to applicable requirements under other federal statutes and regulations, including but not limited to: • Federal Trade Commission Act .
Additionally, as a result of our partnership with Evolve, which provides ExtraCash advances via an overdraft account, deposit accounts and debit cards to our Members, we are also subject to bank regulators with supervisory authority over Evolve. Ensuring ongoing compliance with these laws and regulations imposes significant burdens on our business operations.
Additionally, as a result of our partnership with Evolve, which provides ExtraCash via an overdraft account, deposit accounts and debit cards to our Members, we are also subject to regulation by bank regulators with supervisory authority over Evolve. Ensuring ongoing compliance with these laws and regulations imposes significant burdens on our business operations.
These competitors include: • Banking Competitors : Traditional banks and credit unions (e.g., Bank of America, Chase, Wells Fargo), new entrants obtaining banking licenses (e.g., Varo Money), and other non-bank digital providers that white-label regulated products, offering banking-related services (e.g., Chime). • Lending and Earned Income Advance Competitors : Traditional banks and credit unions, specialty finance and other non-bank providers, offering consumer lending-related or advance products (e.g., Upstart, MoneyLion). • Innovators in Consumer Finance : Consumer-oriented commerce enablement platforms (e.g., Affirm), finance-oriented social networks (e.g., CashApp, Venmo), and lending platforms (e.g., OpenLending, LendingClub).
These competitors include: • Banking Competitors: Traditional banks and credit unions (e.g., Bank of America, Chase, Wells Fargo), new entrants obtaining banking licenses (e.g., Varo Money), and other non-bank digital providers that white-label regulated products, offering banking-related services (e.g., Chime). • Lending and Earned Wage Access Advance Competitors: Traditional banks and credit unions, specialty finance and other non-bank providers, offering consumer lending-related or earned wage access advance products (e.g., Upstart, MoneyLion, Earnin). • Innovators in Consumer Finance: Consumer-oriented commerce enablement platforms (e.g., Affirm), finance-oriented social networks (e.g., CashApp, Venmo), and lending platforms (e.g., OpenLending, LendingClub).
The federal Electronic Fund Transfer Act (“EFTA”) and Regulation E which implements it provide guidelines and restrictions on the provision of electronic fund transfer services to consumers, and on making an electronic transfer of funds from consumers’ bank accounts.
The federal Electronic Fund Transfer Act (“EFTA”) and Regulation E which implements it provide requirements and restrictions on the provision of electronic fund transfer services to consumers, and on making an electronic transfer of funds from consumers’ bank accounts.
Under Title X of the Dodd-Frank Act, the CFPB also has the authority to pursue enforcement actions against companies that offer or provide consumer financial products or services that engage in unfair, deceptive or abusive acts or practices, commonly referred to as “UDAAPs.” The CFPB may also seek a range of other remedies, including restitution, refunds of money, disgorgement of profits or compensation for unjust enrichment, civil money penalties, rescission of contracts, public notification of the violation, and restrictions on the target’s conduct, activities and functions.
Under Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the CFPB also has the authority to pursue enforcement actions against companies that offer or provide consumer financial products or services that engage in unfair, deceptive or abusive acts or practices, commonly referred to as “UDAAPs.” The CFPB may also seek a range of other remedies, including restitution, refunds of money, disgorgement of profits or compensation for unjust enrichment, civil money penalties, rescission of contracts, public notification of the violation, and restrictions on the target’s conduct, activities and functions.
Personal Financial Management Tool: “Budget” We believe that understanding and visibility are core to a Member’s financial health. That is why we developed our product offering called Budget, a personal financial management tool that helps Members understand their spending and savings habits and learn better financial management.
Personal Financial Management Budget We believe that understanding and visibility are core to a Member’s financial health. That is why we developed our product offering called Budget, a personal financial management tool that helps Members understand their spending and savings habits to enable better financial management.
Our website and the information contained on or through that site are not incorporated into this report. All website addresses in this report are intended to be inactive textual references only. Information About Our Executive Officers and Directors Executive Officers Name Age Position Jason Wilk 38 President & Chief Executive Officer Kyle Beilman 36 Chief Financial Officer Jason Wilk .
Our website and the information contained on or through that site are not incorporated into this report. All website addresses in this report are intended to be inactive textual references only. Information About Our Executive Officers and Directors Executive Officers Name Age Position Jason Wilk 39 President & Chief Executive Officer Kyle Beilman 37 Chief Financial Officer Jason Wilk .
Regulation of our bank partnership model Pursuant to our partnership with Evolve, we offer our Members FDIC-insured, non-interest-bearing deposit accounts (including the ExtraCash account), interest bearing deposit accounts and debit cards that Members can use to access their account balances. These deposit accounts and debit cards are provided by Evolve.
Regulation of our bank partnership model Pursuant to our partnership with Evolve, we offer our Members Federal Deposit Insurance Corporation (“FDIC”)-insured, non-interest-bearing deposit accounts (including the ExtraCash account), interest bearing deposit accounts and debit cards that Members can use to access their account balances. These deposit accounts and debit cards are provided by Evolve.
Please see the section titled “ Risk Factors—Risks Related to Regulatory and Legal Matters—Stringent and changing laws and regulations relating to privacy and data protection could result in claims against us, harm our results of operations, financial condition, and future prospects, or otherwise harm our business. ” Laws Governing Marketing and Member Communications.
Please see the section titled “ Risk Factors—Risks Related to Regulatory and Legal Matters—Stringent and changing laws and regulations relating to privacy and data protection could result in claims against us, harm our results of operations, financial condition, and future prospects, or otherwise harm our business. ” Open Banking .
In addition, the regulatory framework for our products and services is evolving and uncertain and specifically the framework that applies to the ExtraCash advance business, as federal and state governments and regulators consider the application of existing laws and potential adoption of new laws.
In addition, the regulatory framework for our products and services is evolving and uncertain, including the framework that applies to the ExtraCash product, as federal and state governments and regulators consider the application of existing laws and potential adoption of new laws.
Dave Banking accounts also include a physical Dave Debit MasterCard that can be used for everyday purchases and spending transactions as well as at any of the nearly 40,000 MoneyPass ATM network locations to make no-fee withdrawals at these in-network ATMs.
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.
Given our novel business model and products, and the subjective nature of certain laws and regulations such as the prohibition against UDAAPs, we have been and may in the future become subject to regulatory scrutiny or legal challenge with respect to our compliance with these and other regulatory requirements.
In addition, servicing practices are subject to the UDAAP prohibition. Given our novel business model and products, and the subjective nature of certain laws and regulations such as the prohibition against UDAPs, we have been and may in the future become subject to regulatory scrutiny or legal challenge with respect to our compliance with these and other regulatory requirements.
Board of Directors Name Age Position Jason Wilk 38 President & Chief Executive Officer Imran Khan 46 Founder & Chief Investment Officer, Proem Asset Management Brendan Carroll 46 Senior Partner, Victory Park Capital Advisors, LLC Andrea Mitchell 52 Managing Partner, Law firm of Mitchell Sandler LLC Michael Pope 56 Former Chief Financial Officer & Senior Vice President, Shutterfly, Inc.
Board of Directors Name Age Position Jason Wilk 39 President & Chief Executive Officer Imran Khan 47 Founder & Chief Investment Officer, Proem Asset Management Brendan Carroll 47 Senior Partner, Victory Park Capital Advisors, LLC Andrea Mitchell 53 Managing Partner, Law firm of Mitchell Sandler LLC Michael Pope 58 Former Chief Financial Officer & Senior Vice President, Shutterfly, Inc.
Our competitors are generally large, well-capitalized financial services companies. Some of our current and potential competitors have longer operating histories, particularly with respect to financial products similar to what we offer, significantly greater financial, technical, marketing and other resources, and a larger Member base.
Some of our current and potential competitors have longer operating histories, particularly with respect to financial products similar to what we offer, significantly greater financial, technical, marketing and other resources, and a larger Member base.
Dan Preston 38 Former Chief Executive Officer & Director, Metromile Yadin Rozov 46 Founder & Managing Partner, Terrace Edge Ventures LLC
Dan Preston 39 Former Chief Executive Officer & Director, Metromile Yadin Rozov 47 Founder & Managing Partner, Terrace Edge Ventures LLC
EFTA also limits consumers’ liability for unauthorized electronic fund transfers and requires banks and other financial services companies to comply with certain transaction error resolution procedures. Electronic fund transfers within the scope of EFTA include ACH transfers and debit card transfers.
EFTA also limits consumers’ liability for unauthorized electronic fund transfers and requires banks and other financial services companies to comply with certain transaction error resolution procedures. Electronic fund transfers within the scope of EFTA include ACH transfers and debit card transfers. • Payday, Vehicle Title, and Certain High-Cost Installment Loans Final Rule .
In the future we will be looking closely at the possibility of filing design and utility patents to further enhance the measures of intellectual property protection for the company. However, these laws, agreements, and procedures provide only limited protection. In the United States, we own several registered trademarks and have pending trademark applications in various stages of review.
From time to time, we may consider filing design and utility patents to further enhance the measures of intellectual property protection for the company. However, these laws, agreements, and procedures provide only limited protection. In the United States, we own several registered trademarks and have pending trademark applications in various stages of review.
For example, with respect to our ExtraCash overdraft advance product offered through Evolve, certain state laws may, if applicable, regulate the charges or fees that can be assessed by us and how we may obtain repayment from our Members.
For example, with respect to our ExtraCash product offered through Evolve, certain state laws may, if applicable, regulate the charges or fees that can be assessed and how settlements are obtained from our Members.
In addition, if we are found to have engaged in activities subject to state licensure for which we lack the requisite license, or in activities that are otherwise deemed to be in violation of state lending laws, the relevant state authority may impose fines, impose restrictions on our operations in the relevant state, or seek other remedies for activities conducted in the state.
In addition, if we are found to have engaged in activities subject to licensure for which we lack the requisite license, or in activities that are otherwise deemed to be in violation of lending laws, the relevant authority may impose fines, impose restrictions on our operations in the relevant state or locality, or seek other remedies for activities conducted in the state. 10 U.S. federal consumer protection requirements Here we summarize several of the material federal consumer protection and other laws applicable to our business.
This could include the need to modify the way in which we generate revenue from certain business lines, obtain new licenses, or comply with additional laws and regulations in order to conduct our business. State licensing requirements and regulation We believe that none of our current business lines require us to obtain any state licenses.
These laws and regulations could require us to modify the way in which we generate revenue from certain business lines, obtain new licenses, or comply with additional laws and regulations in order to conduct our business.
These laws cover most aspects of our business and include laws, regulations, rules and guidance relating to, among other things, consumer finance and protection, privacy and data protection, anti-money laundering and know your customer requirements, banking, and payments.
Regulatory Environment We operate in a complex regulatory environment consisting of U.S. federal and state laws that is rapidly evolving. These laws cover most aspects of our business and include laws, regulations, rules and guidance relating to, among other things, consumer finance and protection, privacy and data protection, anti-money laundering and know your customer requirements, banking, and payments.
Our marketing activities may subject us to some or all of these laws and regulations. New Laws and Regulations. Various federal and state regulatory agencies in the United States continue to examine a wide variety of issues that are applicable to us and may impact our business.
New Laws and Regulations. Various federal and state regulatory agencies in the United States continue to examine a wide variety of issues that are applicable to us and may impact our business. These issues include consumer protection, marketing, cybersecurity, privacy, electronic transfers, state licensing, and the regulation of overdraft products.
ITEM 1. BUSI NESS Unless otherwise noted or the context otherwise requires, the disclosures in this Item 1 refer to Dave Inc. and its consolidated subsidiaries following the consummation of the Business Combination . Overview In the story of David vs. Goliath, the small underdog is able to outsmart and defeat his larger adversary.
ITEM 1. BUSI NESS Unless otherwise noted or the context otherwise requires, the disclosures in this Item 1 refer to Dave Inc. and its consolidated subsidiaries following the consummation of the Business Combination .
Accordingly, we publish our privacy policies and terms of service, which describe our practices concerning the collection, storage, use, disclosure, transmission, processing, and protection of information. 16 The legal and regulatory framework for privacy and security issues is rapidly evolving, and, although we endeavor to comply with these laws and regulations and our own policies and documentation, we may fail to do so or be alleged to have failed to do so.
The legal and regulatory framework for privacy and security issues is rapidly evolving, and, although we endeavor to comply with these laws and regulations and our own policies and documentation, we may fail to do so or be alleged to have failed to do so.
They also impose disclosure requirements and restrictions on advertising regarding deposit accounts. TISA and Regulation DD apply to the demand deposit accounts opened by our Members at Evolve . • Electronic Fund Transfer Act and NACHA Rules .
TISA and Regulation DD apply to the demand deposit accounts opened by our Members at Evolve . • Electronic Fund Transfer Act .
These issues include consumer protection, cybersecurity, privacy, electronic transfers, state licensing, and the regulation of cash advance services. As we continue to develop and expand, we monitor for additional rules and regulations that may impact our business. Intellectual Property Intellectual property and proprietary rights are important to the success of our business.
As we continue to develop and expand, we monitor for additional rules and regulations that may impact our business. Intellectual Property Intellectual property and proprietary rights are important to the success of our business.
Our Dave Banking demand deposit accounts are currently issued by Evolve. Members can open a Dave Banking account in minutes through the Dave mobile application, add funds to their account and begin spending using a Dave Banking virtual debit card.
Members can open a Dave Checking account in minutes through the Dave app, add funds to their account, and begin spending using a Dave Checking virtual debit card.
We must comply with various federal consumer protection regimes, both pursuant to the financial products and services we provide directly and as a service provider to Evolve. We are subject to regulation by the Consumer Financial Protection Bureau (“CFPB”), which oversees compliance with and enforces federal consumer financial protection laws.
We are subject to regulation by the Consumer Financial Protection Bureau (“CFPB”), which oversees compliance with and enforces federal consumer financial protection laws. The CFPB directly and significantly influences the regulation of consumer financial products and services, including the products and services we provide.
Galileo also maintains cardholder information, implements certain fraud control processes and procedures, and provides related services in connection with the ExtraCash and Dave Banking accounts and debit cards. We pay the greater of actual fees or the minimum monthly fee for these services.
Galileo also maintains cardholder information, implements certain fraud control processes and procedures, and provides related services in connection 8 with the ExtraCash and Dave Checking accounts and debit cards. In January 2023, we executed an amended agreement with Galileo that significantly reduced the fees that we pay to Galileo for these services.
The Federal Trade Commission Act prohibits unfair and deceptive acts and practices in business or commerce and grants the Federal Trade Commission ("FTC") and bank regulators enforcement authority to prevent and redress violations of this prohibition. Whether a particular act or practice violates these laws or the prohibition against UDAAPs frequently involves a highly subjective and/or fact-specific judgment.
The Federal Trade Commission Act prohibits unfair and deceptive acts and practices (“UDAPs”) in business or commerce and grants the Federal Trade Commission (“FTC”) and bank regulators enforcement authority to prevent and redress violations of this prohibition.
The FTC Act also contains the Restore Online Shoppers' Confidence Act (ROSCA) which regulates subscriptions and other recurring on-line transactions. • Truth in Savings Act. The federal Truth in Savings Act (“TISA”) and Regulation DD which implements it require that consumers be provided various disclosures concerning terms and conditions of deposit accounts.
The federal Truth in Savings Act (“TISA”) and Regulation DD which implements it require that consumers be provided various disclosures concerning terms and conditions of deposit accounts. They also impose disclosure requirements and restrictions on advertising regarding deposit accounts.
Our founding team includes serial entrepreneurs, experienced designers and technology experts. Sourcing from some of the largest and most successful companies in consumer and financial technology, we have hired leaders in People, Product and Marketing. Our Legal and Regulatory functions are led by veterans from high-growth financial services firms.
We have assembled a team of experts from leading consumer and financial technology companies with deep experience in people, engineering, product, marketing, and finance. Our founding team includes serial entrepreneurs, skilled designers, and seasoned technology professionals, while legal and compliance functions are led by veterans from high-growth financial services firms.
Our Dave Banking demand deposit accounts and associated debit cards are currently issued by Evolve.
Key Partnerships Bank Partner: ExtraCash, Dave Checking demand deposit accounts and associated Dave Cards are currently issued by Evolve.
There are no fees for a Dave Banking account, making it accessible for people of all financial situations. 8 Our Dave Banking account includes what we believe are some of the best features and rewards in banking, including: • Zero account minimums; • 40,000 MoneyPass ATM network locations to make no-fee withdrawals; • Paychecks delivered up to two days earlier than the scheduled payment date with direct deposit into the Dave Banking account, a feature accessible with no additional mandatory fees; • Access to mobile wallets such as Apple Pay and Google Pay; • 4% APY accrued on deposits in Members’ Dave Spend Account; • Free cash deposits with in-app barcode at Walgreens and CVS locations nationwide; • Free remote check deposit with optional instant fund availability for a fee; • Round-up feature allowing Members to round-up their debit card transaction into a Goals account which helps Members accumulate savings; and • Ability to receive discounted ExtraCash instant transfer fees when advances are disbursed to Members' Dave Banking accounts.
Our Dave Checking account includes what we believe are some of the best features in the checking account market, including: • No mandatory fees: no minimum balances required, no account maintenance fees • 40,000 MoneyPass ATM network locations to make no-fee withdrawals; • Paychecks delivered up to two days earlier than the scheduled payment date; • Access to mobile wallets such as Apple Pay and Google Pay; • 4% APY paid on deposits in checking and Goals savings accounts; • Free remote check deposit capture; and • Round-up feature allowing Members to round-up their debit card transactions into a Goals savings account to help Members boost savings.
The rule was later stayed by a federal district court order in an industry challenge to the rule, and the effective date of many provisions of the rule was separately delayed by the CFPB in June 2019. A section pertaining to underwriting was subsequently rescinded in July 2020.
In 2017, the CFPB issued a final rule intended to provide various consumer protections with respect to certain short-term credit products. The rule was later stayed by a federal district court order in an industry challenge to the rule, and the effective date of many provisions of the rule was separately delayed by the CFPB in June 2019.
In January 2023, we executed an amended agreement with Galileo that significantly reduced the fees that we pay to Galileo for these services. In conjunction with the amended agreement, the term of the agreement was amended such that the agreement expires on the fifth anniversary of the effective date of the amended agreement.
In conjunction with the amended agreement, the term of the agreement was amended such that the agreement expires on the fifth anniversary of the effective date of the amended agreement.
In addition, transfers performed by ACH are subject to specific authorization, timing and notification rules and guidelines administered by the National Automated Clearinghouse Association (“NACHA”). NACHA operating rules further imposes maximum tolerances on the volume of ACH transfers that may be returned as unauthorized or for other reasons.
We, as well our partner bank that issues our debit card, are required to comply with the appropriate National Automated Clearing House Association (“NACHA”), bylaws, operating rules, and agreements, as well as card network rules and guidelines. NACHA operating rules further imposes maximum tolerances on the volume of ACH transfers that may be returned as unauthorized or for other reasons.
We have developed and currently operate an AML program designed to prevent our products from being used to facilitate money laundering, terrorist financing, and other financial crimes.
Bank Secrecy Act and Anti-Money Laundering. Given our involvement in payments, banking transactions, and our arrangements with Evolve, we are subject to compliance obligations related to U.S. anti-money laundering (“AML”) laws and regulations. We have developed and currently operate an AML program designed to prevent our products from being used to facilitate money laundering, terrorist financing, and other financial crimes.
As such, our partnership with Evolve is subject to the supervision and enforcement authority of the Federal Reserve, Evolve’s primary banking regulator, as well as the FDIC. Other regulatory requirements In addition to the requirements described above, we are subject to and work to comply with other state and federal laws and regulations applicable to consumer financial products and services.
We expect the same regulatory considerations to apply to this new bank partnership. 13 Other regulatory requirements In addition to the requirements described above, we are subject to and work to comply with other state and federal laws and regulations applicable to consumer financial products and services.
This automated financial management tool leverages historical bank account data to help Members understand both recurring and commonly occurring charges, helping Members understand potential upcoming pain points. Budget also notifies Members when there is a chance of an overdraft. We charge a $1 monthly subscription for access to the Budget product.
The Budget tool leverages historical bank account data to help Members understand both recurring and commonly occurring charges, helping Members understand potential upcoming transactions that might impact their balance. Budget also notifies Members when there is a chance of an overdraft. Side Hustle Side Hustle is a streamlined job application portal for Dave Members to find supplemental or temporary work.
The CFPB directly and significantly influences the regulation of consumer financial products and services, including the products and services we provide. The CFPB has substantial power to regulate such products and services and the banks and non-bank entities that provide them, as well as their respective third-party service providers.
The CFPB has substantial power to regulate such products and services and the banks and non-bank entities that provide them, as well as their respective third-party service providers. This power includes rule making and enforcement authority in enumerated areas of federal law such as truth in lending, credit discrimination, electronic fund transfers and truth in savings.
Dave Banking accounts can be funded with an ExtraCash advance, direct deposit, an external debit card, an external bank account, or mobile check capture.
Dave Checking accounts can be funded with an ExtraCash overdraft, direct deposit, an external debit card, an external bank account, or mobile check capture. There are no fees to open a Dave Checking account, making it accessible for people of all financial situations.
We will continue to focus on building our leadership team as we grow and diversify our business. Employees and Culture Every day, our lean and agile team works together to level the financial playing field. It is this mission and the opportunity to impact the lives of tens of millions of current and future Members that drives us.
As we continue to scale and diversify our business, we remain focused on building and nurturing top-tier leadership. Talent and Culture Every day, our nimble and innovative team comes together in an effort to level the financial playing field. This shared mission—empowering millions of current and future Members—fuels our passion and purpose.
Job Application Portal: “Side Hustle” Side Hustle is our streamlined job application portal for Dave Members to find supplemental or temporary work. We focus 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.
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.
Dave Banking offers security controls such as multi-factor authentication, contactless payment, instant card lock and protection against unauthorized purchases if cards are lost or stolen. Our Dave Banking demand deposit accounts are currently issued by Evolve.
Dave Checking offers security controls such as multi-factor authentication, contactless payment, instant card lock and protection against unauthorized purchases if cards are lost or stolen. 5 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).
U.S. federal consumer protection requirements Here we summarize several of the material federal consumer protection and other laws applicable to our business. Many states have laws and regulations that are similar to the federal laws described, but the degree and nature of such laws and regulations vary from state to state.
Many states and localities have laws and regulations that are similar to the federal laws described, but the degree and nature of such laws and regulations vary from jurisdiction to jurisdiction. We must comply with various federal consumer protection regimes, both pursuant to the financial products and services we provide directly and as a service provider to Evolve.
This functionality drives engagement within the Dave ecosystem and deepens our relationship to our Members’ financial wellbeing.
Surveys Our Surveys product allows for additional earning opportunities, allowing Members to take paid surveys anytime within the Dave app. This functionality drives engagement within the Dave ecosystem and deepens our relationship to our Members’ financial wellbeing. We generate monthly subscription revenue from Members enrolled in our Personal Financial Management service.
But, being mission driven alone is not enough to attract great talent. We have made significant strides towards becoming a great place to work. Over the past year, we have fully embedded the OKR (Objectives and Key Results) framework utilized by many high performing technology organizations into our ways of working here at Dave.
However, attracting and retaining top talent requires more than a compelling mission. That is why we have made meaningful strides in becoming a truly exceptional place to work. We have deeply integrated the OKR (Objectives and Key Results) framework into our culture and ways of working, inspired by the best practices of high-performing technology companies.
Similarly, the December 2023 Paycheck to Paycheck Report published by PYMNTS found that, in November 2023, 62%, or approximately 160 million, of all U.S. consumers were living paycheck to paycheck, up from 57% merely six months earlier.
According to the Financial Health Network (“FHN”) in 2024, approximately 180 million Americans are classified as financially “coping” or “vulnerable” representing over 70% of the U.S. population, up from 66% in 2021. A December 2024 report by PYMNTS also found that 65% of U.S. consumers were living paycheck to paycheck, up from 60% a year earlier.
In addition, there are federal and state laws and regulations on marketing activities conducted over the internet, through email, or by mail or telephone, including the federal Telephone Consumer Protection Act (“TCPA”), the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM Act”), FTC regulations and guidelines that implement, among other things, the FTC’s Do-Not-Call Registry and other requirements in connection with telemarketing activities, and state telemarketing laws.
In addition, the FTC Telemarketing Sales Rule implements the FTC’s Do-Not-Call Registry and imposes numerous other requirements and limitations in connection with telemarketing. The Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act makes it unlawful to send certain electronic mail messages that contain false or deceptive information and provide other protections for email users.
Voluntary employee turnover has decreased dramatically and, for 2023, has dipped below the market median rates of our peer set. We are committed to this model and believe that the removal of daily commutes and in-office distractions has increased productivity while not increasing our team size.
We believe that this shift has not only broadened our team but also reduced voluntary turnover, which now is below the median rates of our peer set for 9 2024. The flexibility of remote work has boosted productivity while keeping our team size steady.
The following table outlines Dave’s customer acquisition cost, which is defined as total marketing expense in a given period divided by the number of new Members who join the Dave platform in a given period by connecting an existing bank account to the Dave platform or by opening a Dave Banking account: Year Customer Acquisition Cost (per customer) 2020 $17 2021 $25 2022 $24 2023 $17 Competitive Landscape Consumer financial services is a large, fragmented, and competitive market, and we compete in varying degrees with a range of existing providers of consumer-focused banking, lending, commerce and other financial products.
Competitive Landscape Consumer financial services is a large, fragmented, and competitive market, and we compete in varying degrees with a range of existing providers of consumer-focused banking, lending, commerce and other financial products. Our competitors are generally large, well-capitalized financial services companies.
We take this process seriously, which shows by a consistent 90%+ participation rate in 13 every survey, as team members know that their feedback will be reviewed and actioned on. As of December 31, 2023, we had approximately 285 full time employees across all locations.
With a consistent 90%+ participation rate, our team trusts that their voices are heard and acted upon. As of December 31, 2024, we had 274 full-time employees across all locations. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
However, certain nonrecourse advance products are currently excluded from coverage by the rule provided certain consumer contract requirements are met and the advance provider does not engage in certain activities with respect to such products. • Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act (“GLBA”) imposes limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties.
Additionally, the MLA prohibits creditors from requiring covered borrowers to waive rights to legal recourse, submit to arbitration, or pay a prepayment penalty or fee. • Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act (“GLBA”) imposes limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated 12 third parties.
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This is the spirit behind the name “Dave.” We have built an integrated and fully digital financial services platform that provides millions of Americans with seamless access to a variety of intuitive financial products at a fraction of the cost and with much greater transparency and higher speed to value than that of the legacy financial services incumbents, such as traditional banks, credit unions, and independent finance companies.
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Company Overview Dave 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, we set out to challenge legacy banking by leveraging technology to expand financial access and improve consumer financial health.
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Our mission is to build products that level the financial playing field. Our strategy is focused on delivering a superior banking experience for anyone living paycheck to paycheck.
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Through our mobile-first platform, we deliver innovative financial products designed to help underserved consumers manage their money more effectively. Our mission is to level the financial playing field by providing intuitive, transparent, and accessible solutions that empower our Members to navigate life’s financial challenges with confidence.
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Based on our observation and analysis of Member data, legacy financial institutions charge high fees for consumer banking and other financial services products, which disproportionately burdens tens of millions of Americans who can least afford them.
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We have engineered a purpose-driven platform designed to deliver on our mission, making a significant impact across the stakeholder groups we serve. Since our inception, more than 16 million Members have signed up for the Dave app, with over 12 million having used at least one of our products.
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We witness this dynamic playing out with our Members who we believe are on average paying between $300-$400 per year in overdraft fees, maintenance and other fees to their existing bank for basic checking services. Further, we see a significant opportunity to address the broader short-term credit market.
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We have provided Members with more than $15 billion in ExtraCash, offering critical liquidity when they need it most. To further support our communities, we have donated approximately $23 million to charity and important causes since inception. Customers value our products, as demonstrated by more than 700,000 App Store reviews with an average 4.8-star rating as of February 2025.
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According to a 2023 report by The Financial Health Network (“FHN”), legacy financial institutions charge nearly $40 billion in fees annually. The FHN estimates that financially “coping” and “vulnerable” populations pay over $160 billion a year in fees and interest for access to short-term credit. Our prospective Member opportunity is also significant.
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Our business model is built on transparency and customer alignment and building relationships with our Members that drive positive outcomes for both them and our business. At the core of our success is a world-class team dedicated to delivering on our mission.
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In the 2023 report, the FHN estimated that approximately 180 million Americans are “financially vulnerable” or “financially coping” based on financial health scores which reflect spending patterns relative to income, the sufficiency of liquid savings, and the manageability of debt obligations; this figure grew 8% or by 14 million Americans in 2021 as fiscal stimulus impacts waned and as inflationary and interest rate pressures persisted.
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Dave has been recognized by Built In as a Best Place to Work for five consecutive years, reinforcing our commitment to both our Members and employees. Market Opportunity The U.S. financial system has historically failed to address the needs of the millions of Americans who are living paycheck to paycheck.
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The FHN study implies that over 70% of Americans fall into these low or volatile income and credit-challenged categories, which is up from 66% in 2021.
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This market includes both young and financially challenged individuals who have trouble managing cash flow, have minimal savings, regularly overdraft, and pay high fees for access to financial services.
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Given these dynamics, we estimate that our total addressable market consists of between 160 million to 180 million Americans who are in need of financial stability and are either not served or underserved by legacy financial institutions. Dave offers a suite of innovative financial products aimed at helping our Members improve their financial health.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Our business and prospects should be considered in light of the risks and significant challenges we face as a new entrant in our industry, including, among other things, with respect to our ability to: • build a well-recognized, trusted and respected brand; • establish and expand our Member base; • successfully market our products and services; • properly price our services and successfully anticipate the usage of such services by our Members; • improve and maintain our operational efficiency; 23 • maintain a reliable, secure, high-performance and scalable technology infrastructure; • predict our future revenues and appropriately budget our expenses; • attract, retain and motivate talented employees; • anticipate trends that may emerge and affect our business; • anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and • navigate an evolving and complex regulatory environment.
Our business and prospects should be considered in light of the risks and significant challenges we face as a new entrant in our industry, including, among other things, with respect to our ability to: • build a well-recognized, trusted and respected brand; • establish and expand our Member base; • successfully market our products and services; • properly price our services and successfully anticipate the usage of such services by our Members; • improve and maintain our operational efficiency; • maintain a reliable, secure, high-performance and scalable technology infrastructure; • predict our future revenues and appropriately budget our expenses; • attract, retain and motivate talented employees; • anticipate trends that may emerge and affect our business; • anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and • navigate an evolving and complex regulatory environment.
We will 43 remain an emerging growth company until the earliest of (a) the last day of the fiscal year (i) following March 4, 2025, the fifth anniversary of our IPO, (ii) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time) or (iii) in which we are deemed to be a large accelerated filer, which means the market value of the shares of Dave Class A Common Stock that are held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.
We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year (i) following March 4, 2025, the fifth anniversary of our IPO, (ii) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time) or (iii) in which we are deemed to be a large accelerated filer, which means the market value of the shares of Dave Class A Common Stock that are held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.
If The Nasdaq Stock Market delists the 41 Dave Class A Common Stock from trading on its exchange for failure to meet the listing standards, our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that the Dave Class A Common Stock is a “penny stock” which will require brokers trading in the Dave Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If The Nasdaq Stock Market delists the Dave Class A Common Stock from trading on its exchange for failure to meet the listing standards, our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that the Dave Class A Common Stock is a “penny stock” which will require brokers trading in the Dave Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
Any perceived or actual breach of security, regardless of how it occurs or the extent of the breach, could have a significant impact on our reputation as a trusted brand, cause us to lose existing partners or Members, prevent us from obtaining new partners and Members, require us to expend significant funds to remedy problems caused by breaches and implement measures to prevent further breaches, and expose us to legal risk and potential liability including from governmental or regulatory investigations, class action litigation and other lawsuits.
Any perceived or actual breach of security, regardless of how it occurs or the extent of the breach, could have a significant impact on our reputation as a trusted brand, cause us to lose existing partners or Members, prevent us from obtaining new partners and Members, require us to expend significant funds to remedy problems caused by breaches and implement measures to prevent further breaches, and expose us to legal risk and potential liability including from governmental or 29 regulatory investigations, class action litigation and other lawsuits.
Compliance with current or future privacy and data protection laws (including those regarding security breach notification) affecting consumer and/or employee data to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services (such as products or services that involve us sharing information with third parties or storing sensitive information), which could materially and adversely affect our profitability and could reduce income from certain business initiatives.
Compliance with current or future privacy and data protection laws (including those regarding security breach notification) affecting consumer and/or employee data to which we are subject could result in higher compliance and technology costs and restrict our ability to provide certain products and services (such as those that involve sharing information with third parties or storing sensitive information), which could materially and adversely affect our profitability and could reduce income from certain business initiatives.
Any damage to, or failure of, third party computer network systems or data centers generally, or those of our vendors (including as a result of disruptions at our third-party data center hosting facilities and cloud providers), or an improper action by our employees, agents or third-party vendors, could result in interruptions in our services, causing Members and other partners to become dissatisfied with our products and services or subject us to potential financial losses.
Any damage to, or failure of, third party computer network 24 systems or data centers generally, or those of our vendors (including as a result of disruptions at our third-party data center hosting facilities and cloud providers), or an improper action by our employees, agents or third-party vendors, could result in interruptions in our services, causing Members and other partners to become dissatisfied with our products and services or subject us to potential financial losses.
We have expanded our employee base to support our operations as a public company and it is possible that additional employees may need to be hired, which will increase our operating costs in future periods. Dave identified material weaknesses in its internal control over financial reporting in its financial statements for the years ended December 31, 2023 and 2022.
We have expanded our employee base to support our operations as a public company and it is possible that additional employees may need to be hired, which will increase our operating costs in future periods. 34 Dave identified material weaknesses in its internal control over financial reporting in its financial statements for the years ended December 31, 2023 and 2022.
If any of our agreements with our processing providers are terminated or if we experience any interruption or delay in the services provided by our third-party service providers, delivery of our products and services could be impaired or suspended and our business could suffer. • Our recent rapid growth, including growth in our volume of payments, may not be indicative of future growth, and if we continue to grow rapidly, we may not be able to manage our growth effectively.
If any of our agreements with our service providers are terminated or if we experience any interruption or delay in the services provided by our third-party service providers, delivery of our products and services could be impaired or suspended and our business could suffer. • Our recent rapid growth, including growth in our volume of payments, may not be indicative of our future growth, and if we continue to grow rapidly, we may not be able to manage our growth effectively.
The development and implementation of the standards and controls and the 31 hiring of experienced personnel necessary to achieve the level of accounting standards required of a public company may require expenditures greater than expected, and a delay could impact our ability to accurately and timely report our operating results, timely file required reports with the SEC and comply with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
The development and implementation of the standards and controls and the hiring of experienced personnel necessary to achieve the level of accounting standards required of a public company may require expenditures greater than expected, and a delay could impact our ability to accurately and timely report our operating results, timely file required reports with the SEC and comply with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
For example, State attorneys general have indicated that they will take a more active role in enforcing consumer protection laws, 34 including through the establishment of state consumer protection agencies as well as the use of Dodd-Frank Act provisions that authorize state attorneys general to enforce certain provisions of federal consumer financial laws and obtain civil money penalties and other relief available to the CFPB.
For example, State attorneys general have indicated that they will take a more active role in enforcing consumer protection laws, including through the establishment of state consumer protection agencies as well as the use of Dodd-Frank Act provisions that authorize state attorneys general to enforce certain provisions of federal consumer financial laws and obtain civil money penalties and other relief available to the CFPB.
In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support, risk and compliance operations, and professional services, to serve our growing Member base. 22 Any failure of or delay in these efforts could result in service interruptions, impaired system performance, and reduced Member satisfaction, which could negatively impact our revenue growth.
In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support, risk and compliance operations, and professional services, to serve our growing Member base. Any failure of or delay in these efforts could result in service interruptions, impaired system performance, and reduced Member satisfaction, which could negatively impact our revenue growth.
If we are unable to increase our revenue at a rate sufficient to offset the expected increase in our costs, or if we encounter difficulties in managing a growing volume of payments, our business, financial position and operating results will be adversely affected, and we may not be able to achieve or maintain profitability over the long term.
If we are unable to increase our revenue at a rate sufficient to offset the expected increase in our costs, or if we encounter difficulties in managing a 25 growing volume of payments, our business, financial position and operating results will be adversely affected, and we may not be able to achieve or maintain profitability over the long term.
Regulators have broad discretion with respect to the interpretation, implementation, and enforcement of these laws and regulations, including through enforcement actions that could subject us to civil money penalties, Member remediation, increased compliance costs, and limits or prohibitions on our ability to offer certain products or services or to engage in certain activities.
Regulators have broad discretion with respect to the interpretation, implementation, and enforcement of these laws and regulations, 37 including through enforcement actions that could subject us to civil money penalties, Member remediation, increased compliance costs, and limits or prohibitions on our ability to offer certain products or services or to engage in certain activities.
Many existing and potential competitors are entities substantially larger in size and more established, including with greater resources, highly diversified revenues and significantly more brand awareness than ours. As such, many of our competitors can leverage their size, robust networks, financial wherewithal, brand awareness, pricing power and technological assets to compete with us.
Many existing and potential competitors are entities substantially larger in size and more established, including with greater resources, highly diversified revenues and significantly more brand awareness than ours. As such, many of 18 our competitors can leverage their size, robust networks, financial wherewithal, brand awareness, pricing power and technological assets to compete with us.
It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect Dave’s business and future profitability.
It is unclear whether these or similar changes will be enacted and, if enacted, how 48 soon any such changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect Dave’s business and future profitability.
Information security risks in the financial services industry continue to increase generally, in part because of new technologies, the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business 28 transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and other malicious third parties.
Information security risks in the financial services industry continue to increase generally, in part because of new technologies, the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and other malicious third parties.
Factors that 39 could materially affect Dave’s future effective tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdiction, and (d) pre-tax operating results of Dave’s business.
Factors that could materially affect Dave’s future effective tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdiction, and (d) pre-tax operating results of Dave’s business.
The Warrant Agreement provides that the terms of the Public Warrants 40 may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
The Warrant Agreement provides that the terms of the Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
Even if we are successful in these efforts to scale our business, they will be expensive and complex, and require the dedication of significant management time and attention. We could also face inefficiencies or service disruptions as a result of our efforts to scale our internal infrastructure.
Even if we are successful 21 in these efforts to scale our business, they will be expensive and complex, and require the dedication of significant management time and attention. We could also face inefficiencies or service disruptions as a result of our efforts to scale our internal infrastructure.
Such mandatory disclosures are costly, could lead to negative publicity, may cause our Members to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.
Such disclosures are costly, could lead to negative publicity, may cause our Members to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.
Pursuant to the Investor Rights Agreement, certain holders are entitled to, among other things, certain registration rights, including the demand of up to three underwritten offerings and customary piggyback registration rights. Further, pursuant to the Subscription Agreements, we are also required to register additional shares of Dave Class A Common Stock.
Pursuant to the Investor Rights Agreement, certain holders are entitled to, among other things, certain registration rights, including the demand of up to three underwritten offerings and customary piggyback registration rights. 51 Further, pursuant to the Subscription Agreements, we are also required to register additional shares of Dave Class A Common Stock.
To date, our operations have been supported by primarily through cash receipts from services and transaction based revenues, equity financings, borrowings under the Debt Facility, issuances of convertible notes and funds received as a result of the business combination.
To date, our operations have been supported by primarily through cash receipts from services and transaction based revenues, equity financings, borrowings under the Debt Facility, issuances of 31 convertible notes and funds received as a result of the business combination.
We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any 30 insurer will not deny coverage as to any future claim.
As a result, undetected errors, failures, bugs, or defects may be present in such software or occur in the future in such software, including open source software and other software we license from third parties, especially when updates or new products or services are released.
As a result, undetected errors, failures, bugs, or defects may be present in such software or occur in the future in such software, including open source software and software we license from third parties, especially when updates or new products or services are released.
We 36 expect that there will continue to be new proposed laws, regulations, and industry standards relating to privacy, data protection, marketing, consumer communications, and information security, and we cannot determine the impact such future laws, regulations, and standards may have on our business.
We expect that there will continue to be new proposed laws, regulations, and industry standards relating to privacy, data protection, marketing, consumer communications, and information security, and we cannot determine the impact such future laws, regulations, and standards may have on our business.
As we have increased our Member base and our brand has become more 29 widely known and recognized, third parties may continue to seek to compromise our security controls or gain unauthorized access to our sensitive corporate information or our Members’ data.
As we have increased our Member base and our brand has become more widely known and recognized, third parties may continue to seek to compromise our security controls or gain unauthorized access to our sensitive corporate information or our Members’ data.
If any of our agreements with our processing providers are terminated or if we experience any interruption or delay in the services provided by our third-party service providers, delivery of our products and services could be impaired or suspended and our business could suffer.
If any of our agreements with our service providers are terminated or if we experience any interruption or delay in the services provided by our third-party service providers, delivery of our products and services could be impaired or suspended and our business could suffer.
Changes in the laws, regulations and enforcement priorities applicable to our business, or changes in the way existing laws and regulations are interpreted and applied to us, could have a material impact on our business model, operations and financial position.
Changes in the laws, regulations and enforcement priorities applicable to our business, or 39 changes in the way existing laws and regulations are interpreted and applied to us, could have a material impact on our business model, operations and financial position.
However, banking products made available through us by our bank partner remain subject to regulation and supervision by our bank partner’s regulators and we, as a service provider to our bank partner, undertake certain compliance obligations.
Banking products made available through us by our bank partner remain subject to regulation and supervision by our bank partner’s regulators and we, as a service provider to our bank partner, undertake certain compliance obligations.
The May 2020 and June 2020 incidents are collectively referred to herein as the "2020 Incidents." We took remedial measures, including the engagement of an outside security consultant to monitor for ongoing dark web activity and to conduct a security audit and incident investigation, and notified relevant parties as required under applicable law and agreements.
The May 2020 and June 2020 incidents are collectively referred to herein as the “2020 Incidents.” We took remedial measures, including the engagement of an outside security consultant to monitor for ongoing dark web activity and to conduct a security audit and incident investigation, and notified relevant parties as required under applicable law and agreements.
In addition, our platform and our internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data.
In addition, our platform and systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data.
Our ability to sell additional functionality to our existing Members may require more sophisticated and costly sales efforts. Similarly, the rate at which our Members purchase additional products from us depends on several factors, including general economic conditions, such as rising interest rates and inflation, and the pricing of additional product functionality.
Our ability to sell additional functionality to our existing Members may require more sophisticated and costly sales efforts. Similarly, the rate at which our Members purchase additional products from us depends on several factors, including general economic conditions, such as fluctuating interest rates and inflation, and the pricing of additional product functionality.
In addition, we expect to invest substantial financial and other resources on: • product development, including investments in our product development team and the development of new products and new functionality for our platform; • sales, marketing and customer success; • technology infrastructure, including systems architecture, scalability, availability, performance and security; • acquisitions and/or strategic investments; 25 • regulatory compliance and risk management; and • general administration, including increased legal and accounting expenses associated with being a public company.
In addition, we expect to invest substantial financial and other resources on: • product development, including investments in our product development team and the development of new products and new functionality for our platform; • sales, marketing and customer success; • technology infrastructure, including systems architecture, scalability, availability, performance and security; • acquisitions; • regulatory compliance and risk management; and • general administration, including increased legal and accounting expenses associated with being a public company.
Such negative publicity could involve: the transparency, fairness, Member experience, quality, and reliability of our platform or consumer fintech platforms in general, the effectiveness of our risk models, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, misconduct by our employees, funding sources, bank partners and structure of our bank partner products, service providers, or others in 32 our industry, the experience of consumers with our platform or services.
Such negative publicity could involve the: transparency, fairness, our Members’ experience, quality, and reliability of our platform or consumer fintech platforms in general, the effectiveness of our risk models, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, misconduct by our employees, funding sources, bank partners and structure of our bank partner products, service providers, or others in our industry, the experience of consumers with our platform or services.
The introduction of AI technologies into our products and services may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks, ethical concerns or other complications that could adversely affect our business, reputation or financial results.
The introduction of AI technologies into our products and services may result in new or enhanced governmental or regulatory scrutiny, compliance requirements, litigation, confidentiality or security risks, ethical concerns or other complications that could adversely affect our business, reputation or financial results.
We are required to comply with frequently changing federal, state, and local laws and regulations that regulate, among other things, the terms of the financial products and services we offer. New laws or regulations may require us to incur significant expenses to ensure compliance.
We are required to comply with frequently changing federal, state, and local laws and regulations that regulate, among other things, the terms of the financial products and services we offer. New laws or regulations may require us to incur significant expenses to enable compliance.
Dave is a U.S. corporation and thus subject to U.S. corporate income tax on its worldwide income. Further, since Dave’s operations and customers are located throughout the United States, Dave will be subject to various U.S. state and local taxes, including local and state sales and use taxes.
Dave is a U.S. corporation and thus subject to U.S. corporate income tax on its worldwide income. Further, since Dave’s operations and Members are located throughout the United States, Dave will be subject to various U.S. state and local taxes, including local and state sales and use taxes.
These agreements and corresponding regulations governing banks and financial institutions may give Evolve substantial discretion in approving certain aspects of our business practices, including our application and qualification procedures for Members and require us to comply with certain legal requirements.
These agreements and corresponding regulations governing banks and financial institutions may give them substantial discretion in approving certain aspects of our business practices, including our application and qualification procedures for Members, and require us to comply with certain legal requirements.
See “Cautionary Note Regarding Forward-Looking Statements.” 18 Unless otherwise noted or the context otherwise requires, the disclosures in this Item 1A refer to Dave Inc. and its consolidated subsidiaries following the consummation of the Business Combination.
See “Cautionary Note Regarding Forward-Looking Statements.” 16 Unless otherwise noted or the context otherwise requires, the disclosures in this Item 1A refer to Dave Inc. and its consolidated subsidiaries following the consummation of the Business Combination.
The third party was able to access to Dave’s system by breaching the system of one of Dave’s third party service providers.
The third party was able to gain access to Dave’s system by breaching the system of one of Dave’s third-party service providers.
As usage of our platform grows and we sign additional strategic partners, we will need to devote additional resources to improving and maintaining our infrastructure and computer network and integrating with third-party applications to maintain the performance of our platform.
As usage of our platform grows and we add additional strategic partners, we will need to devote additional resources to improving and maintaining our infrastructure and computer network and integrating with third-party applications to maintain the performance of our platform.
These cybersecurity challenges, including threats to our own IT infrastructure or those of third-party providers, may take a variety of forms ranging from stolen bank accounts, business email compromise, user fraud, account takeover, check fraud or cybersecurity attacks, such as ransomware, unauthorized encryption, denial-of-service attacks, social engineering, unauthorized access, spam or other attacks, to “mega breaches” targeted against cloud-based services and other hosted software, which could be initiated by individual or groups of hackers or sophisticated cyber criminals.
These cybersecurity challenges, including threats to our own IT infrastructure or that of our third-party providers, may take a variety of forms ranging from stolen bank accounts, email compromise, user fraud, account takeover, check fraud and cybersecurity attacks (including ransomware, unauthorized encryption, denial-of-service attacks, social engineering, unauthorized access, spam and other attacks) to “mega breaches” targeted against cloud-based services and other hosted software, which could be initiated by individual or groups of hackers or sophisticated cyber criminals.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our products and services effectively to attract new Members; • create new products and expand the functionality and scope of the products we offer on our platform; • maintain the rates at which Members subscribe to and continue to use our platform; • provide our Members with high-quality support that meets their needs; • introduce our products to new markets; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; • increase awareness of our brand and successfully compete with other companies; and • manage the risks related to the effects of the COVID-19 pandemic, rising interest rates and inflation on our business and operations.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our products and services effectively to attract new Members; • create new products and expand the functionality and scope of the products we offer on our platform; • maintain the rates at which Members subscribe to and continue to use our platform; • provide our Members with high-quality support that meets their needs; • introduce our products to new markets; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; • increase awareness of our brand and successfully compete with other companies; and • manage the risks related to fluctuating interest rates and inflation on our business and operations.
This may require us to expend substantial resources or to discontinue certain products, which would negatively affect our business, financial condition, and operating results. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise adversely affect the growth of our business.
This may require us to expend substantial resources, discontinue certain products, or cease providing services to a certain Members, which would negatively affect our business, financial condition, and operating results. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise adversely affect the growth of our business.
Legislators and regulators are increasingly adopting or revising privacy and data protection laws, rules, directives, and regulations that could have a significant impact on our current and planned privacy and data protection-related practices, our processing of consumer or employee information, and our current or planned business activities.
Legislators and regulators are increasingly adopting or revising privacy and data protection laws, rules, directives, and regulations, each of which could have a significant impact on our current and planned privacy and data protection-related practices, our processing of consumer or employee information, and our current or planned business activities.
Under our terms of service and our contracts with strategic partners, if there is a breach of nonpublic personal information of our Members that we store, we could be liable to the partner for their losses and related expenses.
Under our terms of service and our contracts with strategic partners, if there is a breach of non-public personal information of our Members that we store, we could be liable to the partner for their losses and related expenses.
Our allowance for credit losses is an estimate, and if actual repayment defaults are materially greater than our allowance for credit losses, or more generally, if our forecasts are not accurate, our financial position, liquidity and results of operations could be materially adversely affected.
Our credit loss allowance is an estimate, and if actual repayment defaults are materially greater than our credit loss allowance, or more generally, if our forecasts are not accurate, our financial position, liquidity and results of operations could be materially adversely affected.
If Dave is unable to remediate these material weaknesses, or if it identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect Dave’s business and share price.
If Dave identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect Dave’s business and share price.
If we are unable to find a replacement financial institution to provide the services we receive from Evolve, we would not be able to offer ExtraCash advances, service our deposit accounts, debit cards and other services, which would have a material adverse effect on our business, financial condition and results of operations.
If we are unable to find a replacement financial institution to provide the services we receive from our bank partner, we would not be able to offer ExtraCash, service our deposit accounts, debit cards and other services, which would have a material adverse effect on our business, financial condition and results of operations.
While we oversee these service providers to ensure they provide services in accordance with our agreements and regulatory requirements, we do not have control over the operations of any of the third-party service providers that we utilize.
While we oversee these service providers to help ensure they provide services in accordance with our agreements and regulatory requirements, we do not have control over the operations of any of our third-party service providers.
Any such reputational harm could further affect the behavior of consumers, including their willingness to obtain advances, deposit accounts, and other products and services facilitated through our platform. As a result, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.
Any such reputational harm could further affect the behavior of consumers, including their willingness to use ExtraCash, deposit accounts, and other products and services facilitated through our platform. As a result, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.
For example, in October 2023, the CFPB proposed a rule intended to accelerate a shift towards open banking by establishing a comprehensive regulatory framework providing consumers and their authorized third parties with rights to receive access to consumers' personal financial data held by a financial institution.
For example, in October 2024, the CFPB finalized a rule intended to accelerate a shift towards open banking by establishing a comprehensive regulatory framework providing consumers and their authorized third parties with rights to receive access to consumers’ personal financial data held by a financial institution.
In addition, if we were to combine our proprietary software products with open source software in a certain manner under certain open source licenses, we could be required to release the source code of our proprietary software products.
In addition, if we were to combine our proprietary software products with open source software in a certain manner under certain open source licenses, we could be required to make public the source code of our proprietary software products.
These factors include: • actual or anticipated fluctuations in operating results; • failure to meet or exceed financial estimates and projections of the investment community or that Dave provides to the public; • issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; • announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • operating and share price performance of other companies in the industry or related markets; • the timing and magnitude of investments in the growth of the business; • actual or anticipated changes in laws and regulations; • additions or departures of key management or other personnel; • increased labor costs; • disputes or other developments related to intellectual property or other proprietary rights, including litigation; • the ability to market new and enhanced solutions on a timely basis; • sales of substantial amounts of the Dave Class A Common Stock by Dave’s directors, executive officers or significant stockholders or the perception that such sales could occur; • limited liquidity and trading volumes in the Dave Class A Common Stock; • changes in capital structure, including future issuances of securities or the incurrence of debt; and • general economic, political and market conditions, including rising interest rates.
These factors include: • actual or anticipated fluctuations in operating results; • failure to meet or exceed financial estimates and projections of the investment community or that Dave provides to the public; 46 • issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; • announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • operating and share price performance of other companies in the industry or related markets; • the timing and magnitude of investments in the growth of the business; • actual or anticipated changes in laws and regulations; • investigations, claims, disputes, enforcement actions, litigation and/or other regulatory or legal proceedings, including with respect to the DOJ's Amended Complaint; • additions or departures of key management or other personnel; • increased labor costs; • disputes or other developments related to intellectual property or other proprietary rights, including litigation; • the ability to market new and enhanced solutions on a timely basis; • sales of substantial amounts of the Dave Class A Common Stock by Dave’s directors, executive officers or significant stockholders or the perception that such sales could occur; • limited liquidity and trading volumes in the Dave Class A Common Stock; • changes in capital structure, including future issuances of securities or the incurrence of debt; and • general economic, political and market conditions, including fluctuating interest rates.
Furthermore, our financial results could be adversely affected if our costs associated with using Evolve materially change or if any penalty or claim for damages is imposed as a result of our breach of our agreements with them.
Furthermore, our financial results could be adversely affected if our costs associated with using our bank partner materially change or if any penalty or claim for damages is imposed as a result of our breach of our agreements with our bank partner.
ExtraCash advances expose us to credit risk of our Members and if our underwriting criteria for making advances is not sufficient to mitigate against this risk, or if the data we use to underwrite is inaccurate or incomplete, our financial condition and operating results could be adversely affected if a substantial number of our Members fail to repay the ExtraCash advance they receive.
ExtraCash exposes us to credit risk of our Members and if our underwriting criteria for ExtraCash is not sufficient to mitigate against this risk, or if the data we use to underwrite is inaccurate or incomplete, our financial condition and operating results could be adversely affected if a substantial number of our Members fail to repay the ExtraCash overdraft they receive.
The ExtraCash advance product exposes us to financial losses if Members do not repay the advance provided. The timing and volume of advance repayments have a significant impact on our financial results and cash flows. If a large number of Members do not repay advances, our financial condition and operating results would be adversely affected.
The ExtraCash product exposes us to financial losses if Members do not repay the ExtraCash overdraft. The timing and volume of repayments have a significant impact on our financial results and cash flows. If a large number of Members do not repay ExtraCash overdrafts, our financial condition and operating results would be adversely affected.
Application of such requirements and restrictions to our products and services could require us to make significant changes to our business practices (which may increase our operating expenses and/or decrease revenue) and, in the event of retroactive application of such laws, subject us to litigation or enforcement actions that could result in the payment of damages, restitution, monetary penalties, injunctive restrictions, or other sanctions, any of which could have a material adverse effect on our business, financial position, and results of operations.
Application of such requirements and restrictions to our products and services could require us to make significant changes to our business practices (which may increase our operating expenses and/or decrease revenue) and, in the event of retroactive application of such laws, subject us to litigation or enforcement actions that could result in the payment of damages, restitution, monetary penalties, injunctive restrictions, or other sanctions, as well as unenforceability of ExtraCash overdrafts facilitated through our platform, any of which could have a material adverse effect on our business, financial position, and results of operations.
In the event that Dave’s business expands domestically or internationally, its effective tax rates may fluctuate widely in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. GAAP, changes in deferred tax assets and liabilities, or changes in tax laws.
In the event that Dave’s business expands domestically or internationally, its effective tax rates may fluctuate widely in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. Generally Accepted Accounting Principles (“GAAP”), changes in deferred tax assets and liabilities, or changes in tax laws.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to be successful. Our operating revenues increased from $204.8 million in 2022 to $259.1 million in 2023.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to be successful. Our operating revenues increased from $259.1 million in 2023 to $347.1 million in 2024.
The attacker was able to download a large data set, including encrypted social security numbers for some Members; however, there was no evidence that unauthorized transactions were made or advances requested on the Dave system, nor do we believe that the third party gained access to decryption keys or was otherwise able to decrypt encrypted information.
The attacker was able to download a large data set, including encrypted social security numbers for some Members; however, there was no evidence that unauthorized transactions were made or ExtraCash overdrafts requested on our platform, nor do we believe that the third party gained access to decryption keys or otherwise was able to decrypt the encrypted information.
As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We expect to remain an emerging growth company until December 31, 2025 and to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
Fluctuations in our quarterly or annual results of operations might result from a number of factors, many of which are outside of our control, including, but not limited to: • the election by our Members of expedited processing of the ExtraCash advance product; • the timing and volume of optional tips our Members send to us, advance payments and subscriptions and use of our products and services; 26 • the timing and success of new product or service introductions by us or our competitors; • fluctuations in Member retention rates; • changes in the mix of products and services that we provide to our Members; • the timing of commencement of new product development and initiatives, the timing of costs of existing product roll-outs and the length of time we must invest in those new products before they generate material operating revenues; • our ability to effectively sell our products through direct-to-consumer initiatives; • changes in our or our competitors’ pricing policies or sales terms; • costs associated with significant changes in our risk policies and controls; • the amount and timing of costs related to fraud losses; • the amount and timing of commencement and termination of major advertising campaigns, including partnerships and sponsorships; • disruptions in the performance of our products and services, and the associated financial impact thereof; • the amount and timing of costs of any major litigation to which we are a party; • the amount and timing of costs related to the acquisition of complementary businesses; • the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our business; • changes in our executive leadership team; • our ability to control costs, including third-party service provider costs and sales and marketing expenses in an increasingly competitive market; and • changes in the political or regulatory environment affecting the banking or financial technology service industries.
Fluctuations in our quarterly or annual results of operations might result from a number of factors, many of which are outside of our control, including, but not limited to: • the election by our Members on how they use our ExtraCash and Dave Banking products; • the timing and volume of ExtraCash overdraft payments and subscriptions and use of our products and services; • the timing and success of new product or service introductions by us or our competitors; • fluctuations in Member retention rates; • changes in the mix of products and services that we provide to our Members; • the timing of commencement of new product development and initiatives, the timing of costs of existing product roll-outs and the length of time we must invest in those new products before they generate material operating revenues; • our ability to effectively sell our products through direct-to-consumer initiatives; • changes in our or our competitors’ pricing policies or sales terms; • costs associated with significant changes in our risk policies and controls; • the amount and timing of costs related to fraud losses; • the amount and timing of commencement and termination of major advertising campaigns, including partnerships and sponsorships; • disruptions in the performance of our products and services, and the associated financial impact thereof; • the amount and timing of costs of any major litigation to which we are a party; • the amount and timing of costs related to the acquisition of complementary businesses; • the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our business; • changes in our executive leadership team; • our ability to control costs, including third-party service provider costs and sales and marketing expenses in an increasingly competitive market; and • changes in the political or regulatory environment affecting the banking or financial technology service industries. 32 Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects.
This concentrated control may have the effect of delaying, preventing or deterring a change in control of Dave, could deprive its stockholders of an opportunity to receive a premium for their capital stock as part of a sale of Dave and might ultimately affect the market price of shares of Dave Class A Common Stock. 37 Dave’s dual class structure may depress the trading price of our Dave Class A Common Stock.
This concentrated control may have the effect of delaying, preventing or deterring a change in control of Dave, could deprive its stockholders of an opportunity to receive a premium for their capital stock as part of a sale of Dave and might ultimately affect the market price of shares of Dave Class A Common Stock.
If sensitive information is lost or improperly disclosed through a data breach or otherwise or threatened to be disclosed, we could experience a loss of confidence by our partners and Members in the security of our systems, products and services and prevent us from obtaining new partners and Members, and we could incur significant costs to remedy problems caused by breaches and implement measures to prevent further breaches, and expose us to legal risk and potential liability and penalties, including from governmental or regulatory investigations, class action litigation and other lawsuits, all of which could adversely affect our reputation and our operating results.
If sensitive information is lost or improperly disclosed through a data breach or otherwise or threatened to be disclosed, our partners and Members could lose confidence in the security of our systems, products and services, we could have difficulty obtaining new partners and Members, we could incur significant costs to remedy breaches and implement measures to prevent further breaches, and we could be exposed to legal risk and potential liability and penalties, including from governmental or regulatory investigations, class action litigation and other lawsuits, all of which could adversely affect our reputation and our operating results.
The MOU requires us to provide the CA DFPI with certain information as requested by the CA DFPI and adhere to certain best practices in connection with our ExtraCash advance product (including certain disclosures related to us not being licensed by the CA DFPI).
The MOU required us to provide the CA DFPI with certain information as requested by the CA DFPI and adhere to certain practices in connection with our prior ExtraCash product (including certain disclosures related to not being licensed by the CA DFPI).
In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Dave Class A Common Stock had your warrants remained outstanding.
Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Dave Class A Common Stock had your warrants remained outstanding.
In addition, our agreements with certain partners and service providers may require us to notify them in the event of a security breach.
In addition, our agreements with certain partners and service providers may require us to notify them in the event of certain types of security breaches.
We did not uncover any evidence that the attacker was able to take any actions with respect to the data, other than gaining read access to it, nor do we believe any unauthorized transactions were made or advances requested on the Dave system.
We did not uncover any evidence that the attacker was able to take any actions with respect to the data other than gaining read access to it, nor do we believe any unauthorized transactions were made or ExtraCash overdrafts requested on our platform.
We believe it is likely that our risk control mechanisms may continue to adversely affect the growth of our Dave banking product for the foreseeable future and, as a result, negatively impact our operating revenues. 27 We are exposed to losses from Dave banking Member accounts.
We believe it is likely that our risk control mechanisms may continue to adversely affect the growth of our Dave Banking Product for the foreseeable future and, as a result, negatively impact our operating revenues.
Jason Wilk, Dave’s co-founder and its Chief Executive Officer and President, holds all of the issued and outstanding shares of Dave Class V Common Stock. Accordingly, as of March 1, 2024, Mr.
Jason Wilk, Dave’s co-founder and its Chief Executive Officer and President, holds all of the issued and outstanding shares of Dave Class V Common Stock. Accordingly, as of February 20, 2025, Mr.
Under payment network rules, we may be liable for the transaction amount even if the Member has made additional purchases in the intervening period and funds are no longer available in the Member’s account at the time the transaction is posted.
Under payment network rules, we may be liable for the transaction amount even if the Member has made additional purchases in the intervening period and funds are no longer available in the Member’s account at the time the transaction is posted. Laws and regulation governing overdrafts continues to evolve and may change.
Although we believe that our practices at all times have been in compliance with applicable law, the defense or resolution of this matter could involve significant monetary costs or penalties and have a significant impact on our financial results and operations.
Although we believe that our practices and products offered at all times in Maryland and Connecticut have been in compliance with applicable law, the defense or resolution of these matters could involve significant monetary costs or penalties and have a significant impact on our financial results and operations.
Therefore, we have made in the past, and may make in the future, decisions that we believe will benefit our Members and therefore provide long-term benefits for our business, even if our decision negatively impacts our short-term results of operations. For example, the advances facilitated through our platform have no mandatory fees.
Therefore, we have made in the past, and may make in the future, decisions that we believe will benefit our Members and therefore provide long-term benefits for our business, even if our decision negatively impacts our short-term results of operations.
In the event that a third-party service provider fails to perform such functions for any reason, including negligence, willful misconduct or fraud, fire, natural disaster, power loss, telecommunication failures, software and hardware defects, terrorist attacks and similar events, our ability to process payments and perform other operational functions for which we currently rely on such third-party service providers will suffer and our business, cash flows and future prospects may be negatively impacted. 30 We use both internally developed and third-party systems, including cloud computing and storage systems, for our services and certain aspects of transaction processing.
In the event that a third-party service provider fails to perform for any reason, including negligence, willful misconduct or fraud, fire, natural disaster, power loss, telecommunication failures, software and hardware defects, terrorist attacks and similar events, our ability to process payments and perform other operational functions for which we currently rely on such third-party service providers will suffer and our business, cash flows and future prospects may be negatively impacted.
Dave has never paid cash dividends on our capital stock and currently intends to retain any future earnings to fund the growth of its business.
Dave has never paid cash dividends on our capital stock and does not anticipate paying dividends in the foreseeable future. Dave has never paid cash dividends on our capital stock and currently intends to retain any future earnings to fund the growth of its business.
As of March 1, 2024, our current officers and directors hold approximately 15% of the outstanding shares of Common Stock, including the 1,514,082 shares of Dave Class V Common Stock convertible into shares of Dave Class A Common Stock, which represents approximately 60.0% of the voting power of the outstanding shares of Common Stock.
As of February 20, 2025, our current officers and directors hold approximately 16% of the outstanding shares of Common Stock, including the 1,514,082 shares of Dave Class V Common Stock convertible into shares of Dave Class A Common Stock, which represents approximately 60% of the voting power of the outstanding shares of Common Stock.
We also have arrangements in place with certain third-party service providers that require us to share consumer information for servicing purposes.
We also have arrangements in place with certain third-party service providers with which we share consumer information for servicing purposes.
While we decline authorization attempts for amounts that exceed the available balance in a Member’s account, the application of payment network rules and the timing of the settlement of transactions, among other things, can result in overdrawn accounts. Our remaining overdraft exposure arises primarily from late-posting.
While we decline authorization attempts for amounts that exceed the available balance in a Member’s account, the application of payment network rules and the timing of the settlement of transactions, among other things, can result in overdrawn accounts. In the Dave Checking account we may also be subject to overdraft exposure arising primarily from late-posting.
As a result of the 2020 Incidents, we are in the process of settling a purported class action in California for approximately $3.1 million and we settled individual claims outside of California for approximately $4.4 million. See Item 1. Legal Proceedings.
As a result of the 2020 Incidents, we settled a purported class action in California for approximately $3.1 million and we settled individual claims outside of California for approximately $4.4 million.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Propert ies. We operate out of our headquarters in Los Angeles, California. We maintain two sublease agreements for approximately 9,000 square feet located in Los Angeles, California. The subleases for the Los Angeles spaces are scheduled to expire in October 2028 and December 2025, respectively. Item 3. Legal Pr oceedings.
Item 2. Propert ies. We operate out of our headquarters in Los Angeles, California. We maintain two sublease agreements for approximately 9,000 square feet located in Los Angeles, California. The subleases for the Los Angeles spaces are scheduled to expire in December 2025 and October 2028, respectively. Item 3. Legal Pr oceedings.
See Note 12, ”Commitments and Contingencies,” to our consolidated financial statements included in this report for information regarding legal proceedings in which we are involved. Item 4. Mine Safety Disclosures. Not applicable. 45 PART II
See Note 12, ”Commitments and Contingencies,” to our consolidated financial statements included in this report for information regarding legal proceedings in which we are involved. Item 4. Mine Safety Disclosures. Not applicable. 55 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Holders of Record As of December 31, 2023, there were 95 holders of record of Dave Class A common stock, one holder of record of our Class V common stock and two holders of record of the public warrants.
Holders of Record As of December 31, 2024, there were 55 holders of record of Dave Class A common stock, one holder of record of our Class V common stock and 17 holders of record of the public warrants.
The terms of the convertible note are described in Note 9 Convertible Note Payable in the notes to our consolidated financial statements for the year ended December 31, 2023 contained in this Annual Report on Form 10-K.
Refer to Note 9 Convertible Note in the notes to our consolidated financial statements for the year ended December 31, 2024 contained in this Annual Report on Form 10-K. Issuer Purchases of Equity Securities None. Item 6. [Reserved] 56
We do not anticipate declaring any cash dividends to holders of our Dave Class A Common Stock in the foreseeable future. Sales of Unregistered Securities On March 21, 2022, the Company issued a convertible note in the principal amount of $100.0 million.
We do not anticipate declaring any cash dividends to holders of our Dave Class A Common Stock in the foreseeable future. Sales of Unregistered Securities On January 29, 2024, the Company repurchased the $105.5 million outstanding balance of the convertible note as of December 31, 2023 for $71.0 million.
Removed
On January 29, 2024, the Company repurchased the $105.5 million outstanding balance of the convertible note as of December 31, 2023 for $71.0 million. Refer to Note 21 in the accompanying consolidated financial statements of Dave for additional information. Issuer Purchases of Equity Securities None. Item 6. [Reserved] 46

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Adjusted EBITDA “Adjusted EBITDA” is defined as net loss adjusted for interest expense, net, provision for income taxes, depreciation and amortization, stock-based compensation and other discretionary items determined by management. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP.
Adjusted EBITDA “Adjusted EBITDA” is defined as net income (loss) adjusted for interest expense, net, provision for income taxes, depreciation and amortization, stock-based compensation and other discretionary items determined by management. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP.
We expect to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and non-public companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
We expect to use this extended transition 69 period for complying with new or revised accounting standards that have different effective dates for public and non-public companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
While our contractual commitments will have an impact on our future liquidity, we believe that we will be able to adequately fulfill these obligations through cash generated from operations and from our existing cash balances. Dave does not have any “off-balance sheet arrangements,” as defined by the SEC regulations.
While our contractual commitments will have an impact on our future liquidity, we believe that we will be able to adequately fulfill these obligations through cash generated from operations and from 66 our existing cash balances. Dave does not have any “off-balance sheet arrangements,” as defined by the SEC regulations.
See Note 11, Debt and Credit Facility in the notes to our consolidated financial statements in this report. Additionally, we also had certain contractual payment obligations for interest owed under the $100.0 million Note we issued and sold pursuant to the Note Purchase Agreement entered into with FTX Ventures.
See Note 11, Debt Facility in the notes to our consolidated financial statements in this report. Additionally, we also had certain contractual payment obligations for interest owed under the $100.0 million Note we issued and sold pursuant to the Note Purchase Agreement entered into with FTX Ventures.
Cash Flows From Financing Activities During the year ended December 31, 2023, net cash provided by financing activities was $0.02 million, which primarily consisted of payments of $0.01 million for fractional shares that resulted from our reserve stock spilt and $0.03 million in proceeds from the issuance of common stock for stock option exercises.
During the year ended December 31, 2023, net cash provided by financing activities was $0.02 million, which primarily consisted of payments of $0.01 million for fractional shares that resulted from our reserve stock spilt and $0.03 million in proceeds from the issuance of common stock for stock option exercises.
We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal 54 periods. The non-GAAP financial measure is not, and should not be viewed as, a substitute for GAAP reporting measures.
We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal periods. The non-GAAP financial measure is not, and should not be viewed as, a substitute for GAAP reporting measures.
Income Taxes We follow ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements 58 or tax returns.
Income Taxes We follow ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.
Based upon management’s assessment of all available evidence, we have concluded that it is more-likely-than-not that the deferred tax assets, net of certain deferred tax liabilities, will not be realized.
Based upon management’s assessment of all available evidence, we have concluded that it is more-likely-than-not that the deferred tax assets, net of deferred tax liabilities, will not be realized.
We believe that the accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates relate to the more significant areas involving management’s judgments and estimates. Please refer to Note 2 in our accompanying consolidated financial statements for the years ended December 31, 2023 and 2022 included in this Annual Report on Form 10-K.
We believe that the accounting estimates discussed below are critical to understanding our historical and future performance, as these estimates relate to the more significant areas involving management’s judgments and estimates. Please refer to Note 2 in our accompanying consolidated financial statements for the years ended December 31, 2024 and 2023 included in this Annual Report on Form 10-K.
In the near term, we expect to continue to generate ExtraCash originations relying primarily on our balance sheet cash and Debt Facility, as needed. Interest payments on term loan borrowings under the Debt Facility are required to be made on a monthly basis. At December 31, 2023, $75.0 million of term loans under the Debt Facility were outstanding.
In the near term, we expect to continue to generate ExtraCash originations relying primarily on our balance sheet cash and Debt Facility, as needed. Interest payments on term loan borrowings under the Debt Facility are required to be made on a monthly basis. At December 31, 2024, $75.0 million of term loans under the Debt Facility were outstanding.
See Note 2 of our accompanying consolidated financial statements included in this report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the years ended December 31, 2023 and 2022. In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act for emerging growth companies.
See Note 2 of our accompanying consolidated financial statements included in this report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the years ended December 31, 2024 and 2023. In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act for emerging growth companies.
For the measurement dates presented herein, given our methods of collecting funds, and that we have not observed meaningful changes in our customers’ payment behavior, we determined that our historical loss rates remained most indicative of our lifetime expected losses. We immediately recognize an allowance for expected credit losses upon the origination of the advance.
For the measurement dates presented herein, given our methods of collecting funds, and that we have not observed meaningful changes in our customers’ payment behavior, we determined that our historical loss rates remained most indicative of our lifetime expected losses. We immediately recognize an allowance for expected credit losses upon the origination of the ExtraCash receivable.
For U.S. income tax purposes, we are taxed as a Subchapter C corporation. We recognize deferred taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. We recorded a valuation allowance against our deferred tax assets, net of certain deferred tax liabilities, at December 31, 2023 and December 31, 2022.
For U.S. income tax purposes, we are taxed as a Subchapter C corporation. We recognize deferred taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. We recorded a valuation allowance against our deferred tax assets, net of deferred tax liabilities, at December 31, 2024 and December 31, 2023.
Comparison of Years Ended December 31, 2022 and 2021 A discussion regarding our results of operations for the year ended December 31, 2022 compared to the results for the year ended December 31, 2021 can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Dave – Results of Operations” in our Form 10-K filed with the SEC on March 13, 2023 , which is available on the SEC’s website at www.sec.gov .
Comparison of Years Ended December 31, 2023 and 2022 A discussion regarding our results of operations for the year ended December 31, 2023 compared to the results for the year ended December 31, 2022 can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Dave – Results of Operations” in our Form 10-K filed with the SEC on March 5, 2024, which is available on the SEC’s website at www.sec.gov .
We use 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. We consider whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience.
We use 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. We consider whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience.
Other Operating Expenses Other operating expenses consist primarily of technology and infrastructure (third-party Software as a Service “SaaS”), commitments to charity, transaction based 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.
Other Operating Expenses Other operating expenses consist primarily of technology and infrastructure (third-party Software as a Service or “SaaS”), 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.
Subsequent recoveries, if any, of Member advances written-off are recorded as a reduction to Member advances, resulting in a reduction to the allowance for credit losses and a corresponding reduction to the provision for credit losses in the consolidated statements of operations when collected.
Subsequent recoveries, if any, of Member ExtraCash receivables, written-off are recorded as a reduction to ExtraCash receivables, resulting in a reduction to the allowance for credit losses and a corresponding reduction to the provision for credit losses in the consolidated statements of operations when collected.
Changes to the allowance have a direct impact on the provision for credit losses in the consolidated statement of operations. We consider advances aged more than 120 days or which become uncollectible based on information available to us as impaired.
Changes to the allowance have a direct impact on the provision for credit losses in the consolidated statement 59 of operations. We consider ExtraCash receivables, aged more than 120 days or which become uncollectible based on information available to us as impaired.
On January 5, 2023, the Board of Directors approved an amendment to the Company’s certificate of incorporation to complete a 1-for-32 reverse stock split effective January 5, 2023. The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes. Overview In the story of David vs.
On January 5, 2023, the Board of Directors approved an amendment to the Company’s certificate of incorporation to complete a 1-for-32 reverse stock split effective January 5, 2023. The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes.
Excluding non-cash impacts, changes in cash flows from operations included an increase in receivables related to revenue from Member advances of $4.1 million, a decrease in accounts payable of $5.9 million, a decrease in legal settlement accrual of $5.6 million, and a decrease in other current liabilities of $1 million.
Excluding non-cash impacts, changes in cash flows from operations included an increase in receivables related to revenue from ExtraCash receivables of $4.1 million, a decrease in accounts payable of $5.9 million, a decrease in legal settlement accrual of $6.1 million, and a decrease in other current liabilities of $0.5 million.
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 we determine that a Member advance is not collectible, the uncollectible amount is written-off as a reduction to both the allowance and the gross asset balance.
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 we determine that an ExtraCash receivable is not collectible, the uncollectible amount is written-off as a reduction to both the allowance and the gross asset balance.
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.
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 ExtraCash receivable may result in an additional allowance for expected credit losses being recognized in the period in which the change occurs.
Except for processing and servicing fees associated with advance disbursements which are recorded net against revenue, all other processing and service fees are expensed as incurred. Advertising and Marketing Advertising and marketing expenses consist primarily of fees we pay to our advertising and marketing platform partners.
Except for processing and servicing fees associated with ExtraCash originations which are recorded net against revenue, all other processing and service fees are expensed as incurred. Advertising and Marketing Advertising and marketing expenses consist primarily of fees we pay to our advertising and marketing platform partners.
We expect to remain an emerging growth company and to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards.
We expect to remain an emerging growth company until December 31, 2025 and to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards.
We pool our Member advances, all of which are short-term 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.
We pool our ExtraCash receivables, all of which are short-term 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.
During the year ended December 31, 2023, cash provided by operating activities increased compared to the year ended December 31, 2022 due to decreases in the provision for credit losses, processing costs, marketing and compensation and benefits across the business.
During the year ended December 31, 2024, cash provided by operating activities increased compared to the year ended December 31, 2023 due to decreases in the provision for credit losses, processing costs, marketing and compensation and benefits across the organization.
Processing and Servicing Costs Processing and servicing fees consist of fees paid to our processing partners for the recovery of advances, optional tips, optional express processing fees and subscriptions. These expenses also include fees paid for services to connect Members’ bank accounts to our application.
Processing and Servicing Costs Processing and servicing fees consist of fees paid to our processing partners for the recovery of ExtraCash, optional tips, optional express processing fees, overdraft service fees and subscriptions. These expenses also include fees paid for services to connect Members’ bank accounts to our application.
This amount included payments for internally developed software costs of $7.9 million, the purchase of property and equipment of $0.7 million, net disbursements and collections of Member advances of $63.0 million, the purchase of investments of $120.0 million, and the purchase of marketable securities of $34.4 million, offset by the sale of marketable securities of $33.7 million and the sale and maturity of investments of $177.9 million.
This amount included payments for internally developed software costs of $7.9 million, the purchase of property and equipment of $0.7 million, net ExtraCash originations and collections of $63.0 million, the purchase of investments of $120.0 million, and the purchase of marketable securities of $34.4 million, offset by the sale of marketable securities of $33.7 million and the sale and maturity of investments of $177.9 million.
As of December 31, 2023 and 2022, our cash and cash equivalents, marketable securities and investments balance was $155.9 million and $192.0 million, respectively. As an early-stage company, the expenses we have incurred since inception are consistent with our strategy and approach to capital allocation.
As of December 31, 2024 and 2023, our cash and cash equivalents, marketable securities and investments balance was $90.3 million and $155.9 million, respectively. As an early-stage company, the expenses we have incurred since inception are consistent with our strategy and approach to capital allocation.
All impaired advances are deemed uncollectible and subsequently written off and are a direct reduction to the allowance for credit losses.
All impaired ExtraCash receivables, are deemed uncollectible and subsequently written off and are a direct reduction to the allowance for credit losses.
Processing and service costs —Processing and servicing costs totaled $28.9 million for the year ended December 31, 2023, compared to $31.9 million for the year ended December 31, 2022.
Processing and service costs —Processing and servicing costs totaled $30.4 million for the year ended December 31, 2024, compared to $28.9 million for the year ended December 31, 2023.
Our remaining leases have terms of approximately 2 to 5 years as of December 31, 2023, and we had a total lease liability of $0.8 million. See Note 13, Leases in the notes to our consolidated financial statements for additional information regarding our lease liabilities as of December 31, 2023.
Our remaining leases have terms of approximately 1 to 4 years as of December 31, 2024, and we had a total lease liability of $0.6 million. See Note 13, Leases in the notes to our consolidated financial statements for additional information regarding our lease liabilities as of December 31, 2024.
We have estimated $1.3 million and $0.9 million of uncertain tax positions as of December 31, 2023 and 2022, respectively, related to state income taxes and federal and state R&D tax credits. We are subject to income tax in jurisdictions in which we operate, including the United States.
We have 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 research and development tax credits. We are subject to income tax in jurisdictions in which we operate, including the United States.
We will remain an emerging growth company under the JOBS Act until the earliest of (1) the last day of the fiscal year (a) following March 4, 2026, (b) in which we have total annual gross revenue of at least $1.235 billion, (c) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years. 59 Recently Issued Accounting Standards Refer to Note 2, “Significant Accounting Policies,” of our consolidated financial statements included in this report for a discussion of the impact of recent accounting pronouncements.
We will remain an emerging growth company under the JOBS Act until the earliest of (1) the last day of the fiscal year (a) following March 4, 2026, (b) in which we have total annual gross revenue of at least $1.235 billion, (c) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.
Costs associated with technology and infrastructure (third-party SaaS), depreciation and amortization of property and equipment and intangible assets, legal fees, rent, office related expenses, public relations costs, professional services fees, travel and entertainment, and insurance vary based upon our investment in infrastructure, business development, risk management and internal controls and are generally not correlated with our operating revenues or other transaction metrics. 49 Other (income) expenses Other (income) expenses consist of interest income, interest expense, other strategic financing and transactional expenses, earnout liabilities fair value adjustments, derivative asset fair value adjustments, and changes in fair value of warrant liabilities.
Costs associated with technology and infrastructure (third-party SaaS), depreciation and amortization of property and equipment and intangible assets, legal fees, rent, office related expenses, public relations costs, professional services fees, travel and entertainment, and insurance vary based upon our investment in infrastructure, business development, risk management and internal controls and are generally not correlated with our operating revenues or other transaction metrics.
This resulted in a decrease to the allowance for credit losses and corresponding lower provision for credit losses expense during the year ended December 31, 2023 as compared to December 31, 2022.
This resulted in an increase to the allowance for credit losses and corresponding increase in provision expense during the year ended December 31, 2024 as compared to December 31, 2023.
We expect to incur net losses in accordance with our operating plan as we continue to expand and improve upon our financial platform. 55 Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, prospects, financial condition and operating results.
Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, prospects, financial condition and operating results.
The decrease of $7.9 million, or 12%, was primarily attributable to an increase of $8.8 million related to Member advances aged over 120 days and those that have become uncollectible based on information available to us, partially offset by a decrease in provision expense of $16.7 million related to Member advances aged 120 days and under.
The decrease of $3.8 million, or 6%, was primarily attributable to a decrease of $10.3 million related to ExtraCash receivables aged over 120 days and those that have become uncollectible based on information available to us, offset by an increase in provision expense of $6.6 million related to ExtraCash receivables aged 120 days and under.
The increase of $2.1 million, or 3.1%, was primarily attributable to the following: • an increase in legal fees of $4.0 million primarily due to ongoing litigation, settlement, compliance, employment and general corporate related matters; • an increase in expenses related to our Checking Product of $2.7 million, primarily attributable to processing fees, card fees and fraud related costs associated with the growth in Members and the number of transactions processed; • an increase in charitable contribution expenses of $2.0 million, primarily due to increased amounts pledged to charitable meal donations related to Members’ tips; • an increase in technology and infrastructure expenses of $0.8 million, primarily due to increased costs to support the growth of our business and development of new products and features; 52 • a decrease in insurance related costs of $3.5 million, primarily related to reductions in director and officer premiums; • a decrease in rent expense of $1.8 million due to a reduction in leased office space; • a decrease in depreciation and amortization of $1.2 million, primarily due to accelerated amortization related to the change in useful life of a certain intangible asset during the year ended December 31, 2022, offset by increased amortization of internally developed software due to increased internally developed capitalized costs, and depreciation related to leasehold improvements and equipment purchases; and • a decrease in administrative expenses of $0.8 million, primarily due to reductions in investor relations fees, accounting related fees, in-person company meetings, bank service charges, sales tax, licenses and fees, travel and entertainment and other administrative expenses.
The increase of $4.9 million, or 7%, was primarily attributable to the following: • an increase in legal fees of $3.5 million primarily due to ongoing litigation, settlement, compliance, employment and general corporate related matters; • an increase in depreciation and amortization of $2.1 million, primarily due to increased internally developed capitalized costs, and depreciation related to leasehold improvements and equipment purchases; • an increase in certain expenses related to our checking product of $1.8 million, primarily attributable to processing fees, card fees and fraud related costs associated with the growth in Members and the number of transactions processed; and • an increase in technology & infrastructure expenses of $0.5 million, primarily due to increased costs to support the growth of our business and development of new products and features; offset by a 63 • a decrease in insurance related costs of $1.1 million, primarily related to reductions in director and officer insurance premiums; • a decrease in charitable contribution expenses of $0.9 million, primarily due to decreased amounts pledged to charitable meal donations related to Members' tips; and • a decrease in administrative expenses of $1.1 million, primarily due to reductions in investor and public relations fees, accounting related fees, bank service charges and other administrative expenses.
Changes in fair value of warrant liability —Changes in fair value of warrant liability totaled a benefit of $0.3 million for the year ended December 31, 2023, compared to total a benefit of $14.2 million for the year ended December 31, 2022.
Changes in fair value of warrant liability —Changes in fair value of warrant liability totaled an expense of $1.7 million for the year ended December 31, 2024, compared to total a benefit of $0.3 million for the year ended December 31, 2023.
Compensation and benefits —Compensation and benefits expenses totaled $94.9 million for the year ended December 31, 2023, compared to $103.4 million for the year ended December 31, 2022.
Compensation and benefits —Compensation and benefits expenses totaled $107.0 million for the year ended December 31, 2024, compared to $94.9 million for the year ended December 31, 2023.
Interest payments relating to the Note were required to be made or added to the outstanding principal on a semi-annual basis. At December 31, 2023, a total of $5.5 million of interest was added to the outstanding principal. On January 29, 2024, we repurchased the $105.5 million outstanding balance of the Note as of December 31, 2023 for $71.0 million.
Interest payments relating to the Note were required to be made or added to the outstanding principal on a semi-annual basis. On January 29, 2024, we repurchased the $105.5 million outstanding balance of the Note as of December 31, 2023 for $71.0 million. For more information on the Note Purchase Agreement with FTX Ventures, see Note 9, Convertible Note.
Changes in fair value of earnout liability —Changes in fair value of earnout liabilities totaled a benefit of $0.02 million for the year ended December 31, 2023, compared to totaled a benefit of $9.6 million for the year ended December 31, 2022.
Changes in fair value of earnout liability —Changes in fair value of earnout liabilities totaled an expense of $1.0 million for the year ended December 31, 2024, compared to a benefit of $0.02 million for the year ended December 31, 2024.
Tip amounts may not always trend ratably as tips often vary depending on the total amount of the advance and number of Members who leave a tip.
Tip amounts may not always trend ratably as tips can vary depending on the total amount of the ExtraCash, amount of tips Members choose to leave and the percentage of Members who leave a tip.
For information on the aging of Member advances and a roll-forward of the allowance for credit losses, refer to the tables in Note 5 Member Advances, Net in the accompanying consolidated financial statements of Dave included in this report.
The changes in the allowance for credit losses, period over period, have a direct impact on the provision for credit losses. For information on the aging of ExtraCash receivables and a roll-forward of the allowance for credit losses, refer to the tables in Note 5 ExtraCash Receivables, Net in the accompanying consolidated financial statements of Dave included in this report.
We reported cash flows provided by operating activities of $33.8 million for the year ended December 31, 2023 and cash flows used in operating activities of $44.9 million for the year ended December 31, 2022.
We reported cash flows provided by operating activities of $125.1 million for the year ended December 31, 2024 and cash flows provided by operating activities of $33.8 million for the year ended December 31, 2023.
The percentage of Members that chose to pay a processing fee to expedite an advance remained relatively flat for the years ended December 31, 2023 and 2022. The average processing fees Members paid to expedite these advances increased modestly for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Additionally, the average processing fees Members paid to expedite ExtraCash increased modestly, while the percentage of Members that chose to pay a processing fee to expedite ExtraCash remained relatively flat for the year ended December 31, 2024 as compared to the year ended December 31, 2023, respectively.
During the year ended December 31, 2022, net cash used in investing activities was $285.6 million.
During the year ended December 31, 2023, net cash used in investing activities was $14.4 million.
The decrease of $8.5 million, or 8.2%, was primarily attributable to the following: • a decrease in stock-based compensation of $14.0 million, primarily due to larger amounts of restricted stock units granted during the year ended December 31, 2022 compared to the year ended December 31, 2023 and stock options granted in prior years' that have fully vested; • a decrease in contractor and consulting fees of $2.8 million due to the average increase in employee headcount and corresponding reduction in external support for IT security, finance, marketing, design and customer service resources; and • an increase in payroll and related costs of $8.2 million, primarily due to average headcount and salary increases, bonuses and severance payments; Other operating expenses —Other operating expenses totaled $70.7 million for the year ended December 31, 2023, compared to $68.6 million for the year ended December 31, 2022.
The increase of $12.1 million, or 13%, was primarily attributable to the following: • an increase in stock-based compensation of $10.7 million, primarily due to the vesting of certain performance-based restricted stock units during the year ended December 31, 2024 compared to the year ended December 31, 2023, offset by a reduction in stock-based compensation expense related to stock options granted in prior years that have fully vested; • an increase in payroll and related costs of $1.8 million, primarily due to average headcount and salary increases and bonuses; offset by • a decrease in contractor and consulting fees of $0.4 million due to the average increase in employee headcount and corresponding reduction in external support for IT security, finance, marketing, design and customer service resources.
The increase was primarily attributable to an increase in paying Members on our platform. Other Other revenue for the year ended December 31, 2023 were $1.3 million, an increase of $0.2 million, or 20%, compared to the year ended December 31, 2022.
The increase was primarily attributable to an increase in paying Members on our platform. 61 Other Other revenue for the year ended December 31, 2024 was $0.5 million, a decrease of $0.9 million, or 65% from $1.3 million for the year ended December 31, 2023.
The increase was primarily attributable to increases in transacting Members, increases in total advance volume from approximately $2,709 million to approximately $3,629 million year over year and average advance amounts that increased from $134 to $152 as of the years ended December 31, 2022 and 2023, respectively.
The increase was primarily attributable to increases in transacting Members, increases in total ExtraCash origination volume from approximately $3.6 billion to approximately $5.1 billion year over year and average ExtraCash origination amounts that increased from $152 to $170 as of the years ended December 31, 2023 and 2024, respectively.
Cash Flows Summary (in thousands) For the Year Ended December 31, Total cash provided by (used in): 2023 2022 Operating activities $ 33,754 $ (44,883 ) Investing activities (14,375 ) (285,579 ) Financing activities 22 321,767 Net increase (decrease) in cash and cash equivalents and restricted cash $ 19,401 $ (8,695 ) 56 Cash Flows From Operating Activities We recorded a net loss of $48.5 million for the year ended December 31, 2023, and a net loss of $128.9 million for the year ended December 31, 2022.
Cash Flows Summary (in thousands) For the Year Ended December 31, Total cash provided by (used in): 2024 2023 Operating activities $ 125,137 $ 33,754 Investing activities (45,843 ) (14,375 ) Financing activities (70,995 ) 22 Net increase in cash and cash equivalents and restricted cash $ 8,299 $ 19,401 Cash Flows From Operating Activities We recorded net income of $57.9 million for the year ended December 31, 2024, and a net loss of $48.5 million for the year ended December 31, 2023.
These changes were offset primarily by an increase in legal settlement accrual of $5.7 million, a decrease in prepaid income taxes of $0.6 million, and an increase in accounts payable of $0.3 million. Cash Flows From Investing Activities During the year ended December 31, 2023, net cash used in investing activities was $14.4 million.
These changes were offset primarily by a decrease in prepaid income taxes of 0.7 million, a decrease in prepaid expenses and other current assets of $3.3 million and an increase in accrued expenses of $1.7 million. Cash Flows From Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $45.8 million.
Comparability of Financial Information Our future results of operations and financial position may not be comparable to historical results as a result of the consummation of the Business Combination. 47 Key Factors Affecting Operating Results Our future operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including Member growth and activity, product expansion, competition, industry trends and general economic conditions.
Key Factors Affecting Operating Results Our future operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including Member growth and activity, product expansion, competition, industry trends and general economic conditions.
This amount included payments for internally developed software costs of $8.6 million, the purchase of property and equipment of $0.7 million, net disbursements and collections of Member advances of $114.3 million, the purchase of investments of $202.1 million, and the purchase of marketable securities of $317.7 million, offset by the sale of marketable securities of $325.6 million and the sale and maturity of investments of $32.2 million.
This amount included payments for internally developed software costs of $7.3 million, the purchase of property and equipment of $0.3 million, net ExtraCash originations and collections of $111.5 million, the purchase of investments of $111.3 million, and the purchase of marketable securities of $59.3 million, offset by the sale of marketable securities of $60.1 million and the sale and maturity of investments of $183.7 million.
Provision for income taxes For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2023 2022 2023/2022 2023/2022 Provision for (benefit from) income taxes 120 (67 ) 187 -279 % Total $ 120 $ (67 ) $ 187 -279 % Provision for income taxes for the year ended December 31, 2023 increased by $0.2 million, or 279%, compared to the year ended December 31, 2022.
Provision for income taxes 64 For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2024 2023 2024/2023 2024/2023 Provision for income taxes 2,481 120 2,361 1968 % Total $ 2,481 $ 120 $ 2,361 1968 % Provision for income taxes for the year ended December 31, 2024 increased by approximately $2.4 million compared to the year ended December 31, 2023.
The following table reconciles net loss to Adjusted EBITDA for the years ended December 31, 2023 and 2022: For the Year Ended (in thousands) December 31, 2023 2022 Net loss $ (48,517 ) $ (128,906 ) Interest expense, net 6,479 6,244 Provision for (benefit from) income taxes 120 (67 ) Depreciation and amortization 5,450 6,661 Stock-based compensation 26,674 40,639 Legal settlement and litigation expenses - 6,282 Other strategic financing and transactional expenses - 4,591 Gain on extinguishment of liability - (4,290 ) Changes in fair value of earnout liabilities (22 ) (9,629 ) Changes in fair value of derivative asset on loans to stockholders - 5,572 Changes in fair value of public and private warrant liabilities (260 ) (14,192 ) Adjusted EBITDA $ (10,076 ) $ (87,095 ) Liquidity and Capital Resources In the past, we have financed our operations primarily from cash receipts from service and transaction based revenues, equity financings, borrowings under the Debt Facility, issuances of convertible notes and funds received as a result of the business combination.
The reconciliation of net income (loss) to Adjusted EBITDA below should be reviewed, and no single financial measure should be relied upon to evaluate our business. 65 The following table reconciles net income (loss) to Adjusted EBITDA for the years ended December 31, 2024 and 2023: For the Year Ended (in thousands) December 31, 2024 2023 Net income (loss) $ 57,873 $ (48,517 ) Interest expense, net 5,005 6,479 Provision for income taxes 2,481 120 Depreciation and amortization 7,540 5,450 Stock-based compensation 37,327 26,674 Legal settlement and litigation accrual 7,000 - Gain on extinguishment of convertible debt (33,442 ) - Changes in fair value of earnout liabilities 965 (22 ) Changes in fair value of public and private warrant liabilities 1,729 (260 ) Adjusted EBITDA (loss) $ 86,478 $ (10,076 ) Liquidity and Capital Resources In the past, we have financed our operations primarily from cash receipts from service and transaction-based revenues, equity financings, borrowings under the Debt Facility, issuances of convertible notes and funds received as a result of the business combination.
For more information on the Note Purchase Agreement with FTX Ventures, see Note 9, Convertible Note Payable and Note 21, Subsequent Events. We may use cash to acquire businesses and technologies. The nature of these potential transactions, however, makes it difficult to predict the amount and timing of such cash requirements.
We may use cash to acquire businesses and technologies. The nature of these potential transactions, however, makes it difficult to predict the amount and timing of such cash requirements.
While our significant accounting estimates are described in the notes to our consolidated financial statements, we believe that the following accounting estimates require a greater degree of judgment and complexity and are the most critical to understanding our financial condition and historical and future results of operations.
While our significant accounting estimates are described in the notes to our consolidated financial statements, we believe that the following accounting estimates require a greater degree of judgment and complexity and are the most critical to understanding our financial condition and historical and future results of operations. 68 Allowance for Credit Losses ExtraCash receivables from contracts with Members as of the balance sheet dates are recorded at their original receivable amounts reduced by an allowance for expected credit losses.
Transaction based revenue, net Transaction based revenue, net primarily consists of interchange and ATM revenues from our Checking Product, net of interchange and ATM-related fees, fees earned from funding and withdrawal-related transactions, volume support from a certain co-branded agreement, fees earned related to the Rewards Product for Members who make debit card spending transactions at participating merchants and deposit referral fees and are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained. 48 Operating expenses We classify our operating expenses into the following five categories: Provision for Credit Losses The provision for credit losses primarily consists of an allowance for expected credit losses at a level estimated to be adequate to absorb credit losses inherent in the outstanding advances receivable, inclusive of outstanding processing fees and tips along with outstanding amounts aged over 120 days or which become uncollectible based on information available to us during the period.
Transaction based revenue, net Transaction based revenue, net primarily consists of interchange and ATM revenues from our Checking Product, net of interchange and ATM-related fees, fees earned from funding and withdrawal-related transactions, volume support from a certain co-branded agreement, fees earned related to the Rewards Product for Members who make debit card spending transactions at participating merchants and deposit referral fees and are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.
The decrease of $9.6 million, or 99.8%, was primarily attributable to fair value adjustments associated with certain earnout shares liability due to decreases in our underlying Class A Common Stock price.
The increase of $1.0 million, was primarily attributable to fair value adjustments associated with certain earnout shares liability due to increases in our underlying Class A Common Stock price as of the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Service based revenue, net Service based revenue, net primarily consists of optional tips, optional express processing fees and subscriptions charged to Members, net of processor-related costs associated with advance disbursements. Service based revenue, net also consists of lead generation fees from our Side Hustle advertising partners and revenue share from our surveys partner.
Service based revenue, net also consists of lead generation fees from our Side Hustle advertising partners and revenue share from our surveys partner.
The decrease was primarily attributable to lower tip engagement from Members despite increases in transacting Members, increases in total advance volume from approximately $2,709 million to approximately $3,629 million year over year and average advance amounts that increased from $134 to $152 as of the years ended December 31, 2022 and 2023, respectively.
The increase was primarily attributable to higher tips from Members due primarily to increases in transacting Members, increases in total ExtraCash origination volume from approximately $3.6 billion to approximately $5.1 billion year over year and average ExtraCash origination amounts that increased from $152 to $170 as of the years ended December 31, 2024 and 2023, respectively.
The average tip Members chose to leave increased while the percentage of Members that chose to leave a tip decreased for the year ended December 31, 2023 as compared to the year ended December 31, 2022. 50 Subscriptions Subscriptions for the year ended December 31, 2023 were $21.5 million, an increase of $2.3 million, or 12%, from $19.1 million for the year ended December 31, 2022.
The average tip Members chose to leave increased modestly while the percentage of Members that chose to leave a tip decreased modestly for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Any changes to our historical loss and collections experience directly affect the historical loss rates utilized in the calculation of the allowance for uncollectible advances. The changes in the allowance for credit losses, period over period, has a direct impact on the provision for credit losses.
Historical loss and collections rates utilized in the calculation of the provision for credit losses improved slightly as compared to historical rates due to continued improvement in historical collections performance. Any changes to our historical loss and collections experience directly affect the historical loss rates utilized in the calculation of the 62 allowance for credit losses.
The decrease in provision expense of $16.7 million related to Member advances aged 120 days and under was primarily attributed to improved collections performance and lower advances outstanding, despite a 27% increase in advance volume during the last four months for the year ended December 31, 2023 compared to the last four months of the year ended December 31, 2022.
The increase in provision expense of $6.6 million related to ExtraCash receivables aged 120 days and under was primarily attributed to an increase in receivables outstanding related to the 43% increase in ExtraCash origination volume, offset by improved collections performance during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Operating expenses For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2023 2022 2023/2022 2023/2022 Provision for credit losses $ 58,386 $ 66,266 $ (7,880 ) -12 % Processing and servicing costs 28,926 31,946 (3,020 ) -9 % Advertising and marketing 48,392 69,038 (20,646 ) -30 % Compensation and benefits 94,910 103,432 (8,522 ) -8 % Other operating expenses 70,679 68,551 2,128 3 % Total $ 301,293 $ 339,233 $ (37,940 ) -11 % Provision for credit losses —The provision for credit losses totaled $58.4 million for the year ended December 31, 2023, compared to $66.3 million for the year ended December 31, 2022.
Operating expenses For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2024 2023 2024/2023 2024/2023 Provision for credit losses $ 54,626 $ 58,386 $ (3,760 ) -6 % Processing and servicing costs 30,377 28,926 1,451 5 % Advertising and marketing 44,904 48,392 (3,488 ) -7 % Compensation and benefits 107,028 94,910 12,118 13 % Other operating expenses 75,530 70,679 4,851 7 % Total $ 312,465 $ 301,293 $ 11,172 4 % Provision for credit losses —The provision for credit losses totaled $54.6 million for the year ended December 31, 2024, compared to $58.4 million for the year ended December 31, 2023.
Tips Tips for the year ended December 31, 2023 were $56.9 million, a decrease of $5.0 million, or 8%, from $62.0 million for the year ended December 31, 2022.
Tips Tips for the year ended December 31, 2024 were $67.6 million, an increase of $10.6 million, or 19%, from $56.9 million for the year ended December 31, 2023.
We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis. The reconciliation of net loss to Adjusted EBITDA below should be reviewed, and no single financial measure should be relied upon to evaluate our business.
We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis.
The decrease of $3.0 million, or 9.5%, was primarily driven by technology enhancements made to our ExtraCash payments structure along with discounts and cost savings due to price reductions from our processors. Advertising and marketing —Advertising and marketing expenses totaled $48.4 million for the year ended December 31, 2023, compared to $69.0 million for the year ended December 31, 2022.
The increase of $1.5 million, or 5%, was primarily driven by an increase in process transaction volume year over year, offset by technology enhancements made to our ExtraCash payments structure along with discounts and cost savings due to rebates and price reductions from our processors.
The decrease in benefit of $13.9 million, or 98.2%, was primarily attributable to fair value adjustments associated with certain public and private warrant liabilities due to decreases in our underlying Class A Common Stock price over the last 12 months.
The increase in expense of $2.0 million, or 765%, was primarily attributable to fair value adjustments associated with our public and private warrant liabilities due to increases in our publicly traded warrants price and underlying Class A Common Stock price for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
We anticipate volatility in Member advances outstanding each period as they are directly correlated with the timing and volume of Member advance activity during the last 120 days prior to the end of the period. 51 Throughout the year ended December 31, 2023, loss and collections experience of Member advances continued to improve, due primarily to underwriting modifications related to advance eligibility requirements, advance stability, new Member conversion and risk detection.
We anticipate volatility in ExtraCash receivables outstanding each period as they are directly correlated with the timing and volume of Member ExtraCash originations and collections during the last 120 days prior to the end of the period.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Operating revenues For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2023 2022 2023/2022 2023/2022 Service based revenue, net Processing fees, net $ 152,490 $ 106,664 $ 45,826 43 % Tips 56,945 61,951 (5,006 ) -8 % Subscriptions 21,483 19,146 2,337 12 % Other 1,323 1,099 224 20 % Transaction based revenue, net 26,852 15,978 10,874 68 % Total $ 259,093 $ 204,838 $ 54,255 26 % Service based revenue, net— Processing fees, net Processing fees, net of processor costs associated with advance disbursements, for the year ended December 31, 2023 were $152.5 million, an increase of $45.8 million, or 43%, from $106.7 million for the year ended December 31, 2022.
Provision for income taxes Provision for income taxes consists of the federal and state corporate income taxes accrued on income resulting from the sale of our services. 60 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 Operating revenues For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2024 2023 2024/2023 2024/2023 Service based revenue, net Processing fees, net $ 218,802 $ 152,490 $ 66,312 43 % Tips 67,563 56,945 10,618 19 % Subscriptions 24,599 21,483 3,116 15 % Other 462 1,323 (861 ) -65 % Transaction based revenue, net 35,650 26,852 8,798 33 % Total $ 347,076 $ 259,093 $ 87,983 34 % Service based revenue, net— Processing fees, net Processing fees, net of processor costs associated with ExtraCash originations, for the year ended December 31, 2024 were $218.8 million, an increase of $66.3 million, or 43%, from $152.5 million for the year ended December 31, 2023.
Transaction based revenue, net —Transaction based revenue, net for the year ended December 31, 2023 was $26.9 million, an increase of $10.9 million, or 68%, from $16.0 million, for the year ended December 31, 2022.
The decrease was primarily attributable to lower revenues resulting from the elimination of our Legacy Rewards product in 2023. Transaction based revenue, net Transaction based revenue, net for the year ended December 31, 2024 was $35.7 million, an increase of $8.8 million, or 33%, from $26.9 million, for the year ended December 31, 2023.
The increase of $2.3 million, or 79.3%, was primarily attributable to interest earned from yields from investments and higher interest rates during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The decrease of $2.3 million, or 44%, was primarily attributable to an average lower balance of investments held during the year ended December 31, 2024 as compared to the year ended December 31, 2023. Interest expense — Interest expense totaled $8.0 million for the year ended December 31, 2024, compared to $11.8 million for the year ended December 31, 2023.
Interest expense — Interest expense totaled $11.8 million for the year ended December 31, 2023, compared to $9.2 million for the year ended December 31, 2022.
Advertising and marketing —Advertising and marketing expenses totaled $44.9 million for the year ended December 31, 2024, compared to $48.4 million for the year ended December 31, 2023.
Other (income) expense For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2023 2022 2023/2022 2023/2022 Interest income $ (5,295 ) $ (2,953 ) $ (2,342 ) 79 % Interest expense 11,774 9,197 2,577 28 % Legal settlement and litigation expenses - 6,282 (6,282 ) -100 % Other strategic financing and transactional expenses - 4,591 (4,591 ) -100 % Gain on extinguishment of liability - (4,290 ) 4,290 -100 % Changes in fair value of earnout liabilities (22 ) (9,629 ) 9,607 -100 % Changes in fair value of derivative asset on loans to stockholders - 5,572 (5,572 ) -100 % Changes in fair value of public and private warrant liabilities (260 ) (14,192 ) 13,932 -98 % Total $ 6,197 $ (5,422 ) $ 11,619 -214 % Interest income — Interest income totaled $5.3 million for the year ended December 31, 2023, compared to $3.0 million for the year ended December 31, 2022.
Other (income) expense For the Year Ended Change (in thousands, except for percentages) December 31, $ % 2024 2023 2024/2023 2024/2023 Interest income $ (2,984 ) $ (5,295 ) $ 2,311 -44 % Interest expense 7,989 11,774 (3,785 ) -32 % Gain on extinguishment of convertible debt (33,442 ) - (33,442 ) -100 % Changes in fair value of earnout liabilities 965 (22 ) 987 -4486 % Changes in fair value of public and private warrant liabilities 1,729 (260 ) 1,989 -765 % Total $ (25,743 ) $ 6,197 $ (31,940 ) -515 % Interest income — Interest income totaled $3.0 million for the year ended December 31, 2024, compared to $5.3 million for the year ended December 31, 2023.
Changes in fair value of derivative asset on loans to stockholders —Changes in fair value of derivative asset on loans to stockholders totaled $0 for the year ended December 31, 2023, compared $5.6 million for the year ended December 31, 2022.
Gain on extinguishment of convertible debt — The gain on extinguishment of convertible debt totaled $33.4 million for the year ended December 31, 2024, compared to $0 for the year ended December 31, 2023.
For further details, please refer to Note 2 in the accompanying consolidated financial statements of Dave included in this report.
Recently Issued Accounting Standards Refer to Note 2, “Significant Accounting Policies,” of our consolidated financial statements included in this report for a discussion of the impact of recent accounting pronouncements.
Excluding non-cash impacts, changes in cash flows from operations included an increase in receivables related to revenue from Member advances of $6.8 million, a decrease in other current liabilities of $0.3 million, an increase in prepaid expenses and other current assets of $6.8 million, and a decrease in accrued expenses of $1.7 million.
Net cash provided by operating activities for the year ended December 31, 2024 included net income of $57.9 million, and excluding non-cash impacts, included an increase in prepaid expenses and other current assets of $8.2 million and an increase in receivables related to revenue from ExtraCash of $6.2 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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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.
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 (loss). For securities with unrealized losses, any credit related portion of the loss is recognized in earnings.
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.
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.
Redemption of Public Warrants for when the price per share of Class A Common Stock equals or exceeds $ 320.00 : Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants: • in whole and not in part; • at $ 0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” (as defined below) of the Class A Common Stock; and • if, and only if, the closing price of Class A Common Stock equals or exceeds $ 320.00 per Public Share (as adjusted) for any 20 trading days within the 30 -trading day period ending three trading days bef ore the Company sends notice of redemption to the warrant holders.
Redemption of Public Warrants for when the price per share of Class A Common Stock equals or exceeds $ 320.00 : 95 Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants: • in whole and not in part; • at $ 0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” (as defined below) of the Class A Common Stock; and • if, and only if, the closing price of Class A Common Stock equals or exceeds $ 320.00 per Public Share (as adjusted) for any 20 trading days within the 30 -trading day period ending three trading days bef ore the Company sends notice of redemption to the warrant holders.
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized. 77 ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits.
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained in a court of last resort, based on the technical merits.
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.
If it is more likely than not that the Company will be unable or does not intend to hold the security to recovery of the non-credit related unrealized loss, the loss is recognized in earnings. Realized gains and losses are determined using the specific identification method and recognized in the consolidated statements of comprehensive income (loss).
Options to extend or terminate a lease are considered as part of calculating the lease term to the extent that the option is reasonably certain of exercise. The leases do not include the options to purchase the leased property. The depreciable life of assets 76 and leasehold improvements are limited by the expected lease term.
Options to extend or terminate a lease are considered as part of calculating the lease term to the extent that the option is reasonably certain of exercise. The leases do not include the options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
Note 9 Convertible Note Payable 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”).
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 CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the 79 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.
Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options. Expected dividend yield —The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.
Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options. 102 Expected dividend yield —The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.
The Company 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 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 help ensure that the Company continues to be the primary beneficiary.
During the quarter ended March 31, 2023, th e Company granted 629,454 RSUs to certain employees in six tranches. Each of the six tranches contain service and market conditions. The market conditions relate to the achievement of certain specified price targets.
During the quarter ended March 31, 2023, th e Company granted 629,454 RSUs to certain employees in six tranches. Each of the six tranches contain service and market conditions. The market conditions relate to the achievement of 104 certain specified price targets.
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 86 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.
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 84 carrying value.
Adjustments to the allowance each period for changes in the estimate of lifetime 74 expected credit losses are recognized in operating expenses—provision for credit losses in the consolidated statements of operations.
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.
Cash and Cash Equivalents The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents. Restricted Cash Restricted cash primarily represents cash held at financial institutions that is pledged as collateral for specific accounts that may become overdrawn. Marketable Securities Marketable securities consist of a money market mutual fund.
Cash and Cash Equivalents The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents. Restricted Cash Restricted cash primarily represents cash held at financial institutions that is pledged as collateral for specific accounts that may become overdrawn. Marketable Securities Marketable securities consist of a publicly traded money market mutual fund.
The statute of limitations for California and various other state jurisdictions remains open for the tax periods December 31, 2019 and thereafter. Note 19 401(k) Savings Plan The Company maintains a 401(k) savings plan for the benefit of its employees. Employees can defer up to 90 % of their compensation subject to fixed annual limits.
The statute of limitations for California and various other state jurisdictions remains open for the tax periods December 31, 2020 and thereafter. Note 19 401(k) Savings Plan The Company maintains a 401(k) savings plan for the benefit of its employees. Employees can defer up to 90 % of their compensation subject to fixed annual limits.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
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.
The fair value measurements for the securities are based upon the quoted prices of similar items in active markets multiplied by the number of securities owned. Investments: The following describes the valuation techniques used by the Company to measure the fair value of investments held as of December 31, 2023 and December 31, 2022. U.S.
The fair value measurements for the securities are based upon the quoted prices of similar items in active markets multiplied by the number of securities owned. Investments: The following describes the valuation techniques used by the Company to measure the fair value of investments held as of December 31, 2024 and December 31, 2023. U.S.
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 86 cost is recognized on a straight-line basis over the requisite service period for the entire award.
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”).
The Debt Facility contained certain financial covenants, including a requirement to maintain a minimum cash, cash equivalents, or marketable securities balance of $ 8.0 million. On September 13, 2023, the Company executed the Third Amendment to the Debt Facility with the existing Lenders.
The Debt Facility contained certain financial covenants, including a requirement to maintain a minimum cash, cash equivalents, or marketable securities balance of $ 15.0 million. On September 13, 2023, the Company executed the Third Amendment to the Debt Facility with the existing Lenders.
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. The federal statute of limitations remains open for the tax periods December 31, 2020 and thereafter.
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. The federal statute of limitations remains open for the tax periods December 31, 2021 and thereafter.
The following table presents the key inputs and assumptions used to value the RSUs granted during January 2023 that contain service and market conditions on the grant date: Remaining term 5.0 years Risk-free interest rate 3.5 % Expected volatility 79.7 % During October 2023, the Company granted 71,844 RSUs to c ertain employees in six tranches.
The following table presents the key inputs and assumptions used to value the RSUs granted during January 2023 that contain service and market conditions on the grant date: Remaining term 5.0 years Risk-free interest rate 3.5 % Expected volatility 79.7 % During October 2023, the Company granted 71,844 RSUs to c ertain em ployees in six tranches.
As such, unrealized losses were determined not to be related to credit losses and the Company did not record any credit-related impairment losses on the available-for-sale investment securities during the year ended December 31, 2023 and 2022.
As such, unrealized losses were determined not to be related to credit losses and the Company did not record any credit-related impairment losses on the available-for-sale investment securities during the year ended December 31, 2024 and 2023.
Opinion on the Financial Statements 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").
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Dave Inc. 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").
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.
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 started, but not yet completed a comprehensive analysis of its past ownership changes.
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.
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 the Company's Surveys partners.
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.
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 remitted by merchants and represents a percentage of the underlying transaction value processed through a payment network.
The Company recognized insignificant amounts of interest expense as a component of income tax expense during the years ended December 31, 2023 and 2022. The income tax related accrued interest amounts were also insignificant as of December 31, 2023 and 2022, respectively.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not required for smaller reporting companies. 60 Ite m 8. Financial Statements and Supplementary Data. DAVE INC.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not required for smaller reporting companies. 70 Ite m 8. Financial Statements and Supplementary Data. DAVE INC.
The Company’s policy is to recognize interest expense and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the statement of operations. The Company recognized $ 0.005 million and $ 0.005 million of interest expense and penalties as a component of income tax expense during the year ended December 31, 2023 and 2022, respectively.
The Company’s policy is to recognize interest expense and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the statement of operations. The Company recognized $ 0.036 million and $ 0.005 million of interest expense and penalties as a component of income tax expense during the year ended December 31, 2024 and 2023, respectively.
Note 10 Warrant Liabilities As of December 31, 202 3, there were 6,344,021 public warra nts (“Public Warrants”) outstanding and 5,100,214 private placement warrants (“Private Warrants”) outstanding. Public Warrants may only be exercised for a whole number of shares.
Note 10 Warrant Liabilities As of December 31, 2024 , there were 6,344,021 public warra nts (“Public Warrants”) outstanding and 5,100,214 private placement warrants (“Private Warrants”) outstanding. Public Warrants may only be exercised for a whole number of shares.
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.
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.
Management determined that there were insufficient federal and state deferred tax liabilities to offset all of the federal and state deferred tax assets at December 31, 2023 and 2022.
Management determined that there were insufficient federal and state deferred tax liabilities to offset all of the federal and state deferred tax assets at December 31, 2024 and 2023 .
At a special meeting held on December 16, 2022, stockholders approved the reverse stock split. The primary goal of the reverse stock split is to bring the Company’s stock price above the share bid price requirement for continued listing on Nasdaq. The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes.
At a special meeting held on December 13, 2022, stockholders approved the reverse stock split. The primary goal of the reverse stock split was to bring the Company’s stock price above the share bid price requirement for continued listing on Nasdaq. The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes.
The Company uses a portion of tips received to make a charitable cash donation to third parties who use the funds to provide meals to those in need. For the years ended December 31, 2023 and 2022, the Company pledged $ 5.1 million and $ 3.2 million related to charitable donations, respectively.
The Company uses a portion of tips received to make a charitable cash donation to third parties who use the funds to provide meals to those in need. For the years ended December 31, 2024 and 2023 , the Company pledged $ 4.3 million and $ 5.1 million related to charitable donations, respectively.
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 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.
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.
Any related amounts recorded in accumulated other comprehensive income (loss) are reclassified to earnings (on a pretax basis). 83 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.
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. 84 Interest may be paid in-kind or in cash, at the Company’s option.
The Note bore interest at a rate of 3.00 % 94 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.
The unrecognized tax benefits of $ 0.1 million as of December 31, 2023, 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.
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 109 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.
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.
The underlying money market instruments were primarily comprised of certificates of deposit and financial company asset backed commercial paper. At December 31, 2023 and 2022, the investment portfolio had a weighted-average maturity of 40 days and 48 days, respectively.
The underlying money market instruments were primarily comprised of certificates of deposit and financial company asset backed commercial paper. At December 31, 2024 and 2023 , the investment portfolio had a weighted-average maturity of 18 days and 40 days, respectively.
Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, restricted cash, Member advances, and accounts receivable.
Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, restricted cash, ExtraCash receivables, and accounts receivable.
The Company uses an aging method and historical loss rates as a basis for estimating the percentage of current and delinquent Member advances balances that will result in credit losses to derive the allowance for credit losses.
The Company 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.
Other costs are expensed as incurred and included within other operating expenses in the consolidated statements of operations. Capitalized costs for the years ended December 31, 2023 and 2022, were $ 7.6 million and $ 8.6 million, respectively .
Other costs are expensed as incurred and included within other operating expenses in the consolidated statements of operations. Capitalized costs for the years ended December 31, 2024 and 2023 , were $ 7.3 million and $ 7.6 million, respectively.
The gain recognized in connection with the investment in marketable securities for the year ended December 31, 2023, was approximately $ 0.4 million and recorded as a component of interest income in the consolidated statements of operations.
The gain recognized in connection with the investment in marketable securities for the year ended December 31, 2024 , was approximately $ 0.08 million and recorded as a component of interest income in the consolidated statements of operations.
Debt Facility Brendan Carroll, a Senior Partner at Victory Park Capital Advisors, LLC ("VPC") joined the board of directors of the Company upon closing of the Business Combi nation. Interest expense related to the Debt Facility totaled $ 8.6 million for the year ended December 31, 2023.
Debt Facility: Brendan Carroll, a Senior Partner at Victory Park Capital Advisors, LLC ("VPC") joined the board of directors of the Company upon closing of the Business Combi nation. Interest expense related to the Debt Facility totaled $ 7.7 million for the year ended December 31, 2024.
Based on the average advance outstanding Member advance term of approximately 11 days, advances outstanding 12 or more days from origination may be considered past due. Subsequent recoveries are recorded when received and are recorded as a recovery of the allowance for expected credit losses.
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.
There were $ 0.016 million and $ 0.012 million of accrued interest expense and penalties as of December 31, 2023 and 2022, respectively. 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.
There were $ 0.052 million and $ 0.016 million of accrued interest expense and penalties as of December 31, 2024 and 2023, respectively. Segment Information The Company determines its operating segment based on how its chief operating decision makers manage operations, make operating decisions, and evaluate operating performance.
A roll-forward of the Level 1 public warrant liability is as follows (dollars in thousands): Opening value at January 1, 2023 $ 209 Change in fair value during the period ( 112 ) Ending value at December 31, 2023 $ 97 Private Warrants: As discussed further in Note 10, Warrant Liabilities, in January 2022, upon completion of the Business Combination, private warrants were automatically converted to warrants to purchase Common Stock of the Company.
A roll-forward of the Level 1 public warrant liability is as follows (dollars in thousands): Opening value at January 1, 2024 $ 97 Change in fair value during the period 919 Ending value at December 31, 2024 $ 1,016 100 Private Warrants: As discussed further in Note 10, Warrant Liabilities, in January 2022, upon completion of the Business Combination, private warrants were automatically converted to warrants to purchase Common Stock of the Company.
No impairment charges were recognized related to long-lived assets for the years ended December 31, 2023 and 2022. 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.
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, 2024 was $ 0.8 million.
The Company treats tips as an adjustment of yield to the advances and are recognized over the average expected contractual term of its advances. Subscriptions The Company accounts for subscriptions in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
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 The Company accounts for subscriptions in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
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. 72 Tips The Company encourages, but does not contractually require its Members who receive a cash advance to leave a discretionary tip.
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. Tips The Company encourages, but does not contractually require its Members who receive ExtraCash to leave a discretionary tip.
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.
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.
A roll-forward of the Level 3 private warrant liability is as follows (in thousands): Opening value at January 1, 2023 $ 253 Change in fair value during the period ( 148 ) Ending value at December 31, 2023 $ 105 The Company used a Black-Scholes option pricing model to determine the fair value of the private warrant liability.
A roll-forward of the Level 3 private warrant liability is as follows (in thousands): Opening value at January 1, 2024 $ 105 Change in fair value during the period 811 Ending value at December 31, 2024 $ 916 The Company used a Black-Scholes option pricing model to determine the fair value of the private warrant liability.
A roll-forward of the Level 3 Founder Holder Earnout Shares liability is as follows (in thousands): Opening value at January 1, 2023 $ 53 Change in fair value during the period ( 22 ) Ending value at December 31, 2023 $ 31 The Company used a Monte Carlo Simulation Method to determine the fair value of the Founder Holder Earnout Shares liability.
A roll-forward of the Level 3 Founder Holder Earnout Shares liability is as follows (in thousands): Opening value at January 1, 2024 $ 31 Change in fair value during the period 965 Ending value at December 31, 2024 $ 996 The Company used a Monte Carlo Simulation Method to determine the fair value of the Founder Holder Earnout Shares liability.
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.
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.
Therefore, management believes it is more-likely-than-not that the net federal and state deferred assets will not be fully realized and has recorded valuation allowances in the amounts of $ 67.5 million and $ 48.0 million, as of December 31, 2023 and 2022, respectively.
Therefore, management believes it is more-likely-than-not that the net federal and state deferred assets will not be fully realized and has recorded valuation allowances in the amounts of $ 58.7 million and $ 67.5 million, as of December 31, 2024 and 2023, respectively.
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.
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.
The federal NOLs do not expire; 97 however, they are subject to a utilization limit of 80 % of taxable income in any given year. The State NOLs begin to expire in 2031 , except for $ 20.9 million of state NOLs that do not expire.
The federal NOLs do not expire; however, they are subject to a utilization limit of 80 % of taxable income in any given year. The state NOLs begin to expire in 2031 , except for $ 7.3 million of state NOLs that do not expire.
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.
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 remain most indicative of its lifetime expected losses. The Company immediately recognizes an allowance for expected credit losses at the time of the ExtraCash origination.
ATM fees earned from the Member’s usage of out-of-network reduced by related ATM transaction costs during the years ended December 31, 2023 and 2022, were $ 2.6 million and $ 2.9 million, respectively.
ATM 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.
Each tranche will be expensed monthly over the derived service period unless vesting conditions for a particular tranche are met, at which point all remaining compensation charges related to that particular tranche will be expensed in the period in which the vesting conditions were met.
The 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.
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.
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.
We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Los Angeles, California March 5, 2024 We have served as the Company's auditor since 2022. 62 Dave Inc.
We believe that our audits provide a reasonable basis for our opinion. /S/ Deloitte & Touche LLP Los Angeles, California March 4, 2025 We have served as the Company's auditor since 2022. 72 Dave Inc.
ATM-related fees recognized as a reduction of transaction based revenue during the years ended December 31, 2023 and 2022, were $ 1.8 million and $ 0.7 million, respectively. Processing and Servicing Costs Processor costs consist of amounts paid to third party processors for the recovery of advances, tips, processing fees, and subscriptions.
ATM-related fees recognized as a reduction of transaction based revenue during the years ended December 31, 2024 and 2023 , were $ 2.1 million and $ 1.8 million, respectively. Processing and Servicing Costs Processing costs consist of amounts paid to third party processors for the recovery of ExtraCash, tips, processing fees and subscriptions.
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.
The amendments require enhanced disclosures in connection with an entity's effective tax rate reconciliation, income taxes paid disaggregated by jurisdiction, and clarification on uncertain tax positions and related financial statement impacts. The amendments are effective for annual periods beginning after December 15, 2024.
The amendments require enhanced disclosures in connection with an entity's effective tax rate reconciliation, income taxes paid disaggregated by jurisdiction, and clarification on uncertain tax positions and related financial statement impacts. The amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this amendment on its financial statement disclosures.
These expenses also include fees paid for services to connect Member’s bank accounts to the Company’s 73 application. Except for processing and service fees associated with advance disbursements, which are recorded net against revenue, all other processing and service fees are expensed as incurred.
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.
Other Current Liabilities The Company’s other current liabilities consisted of the following (dollars in thousands): December 31, 2023 December 31, 2022 Deferred transaction costs $ 3,150 $ 3,150 Other 715 1,161 Total $ 3,865 $ 4,311 Other current liabilities includes deferred transaction costs associated with the Business Combination.
Other Current Liabilities The Company’s other current liabilities consisted of the following (dollars in thousands): December 31, 2024 December 31, 2023 Deferred transaction costs $ 3,150 $ 3,150 Other 982 715 Total $ 4,132 $ 3,865 Other current liabilities includes deferred transaction costs associated with the Business Combination.
If the Company’s shares of Class A Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. 85 The Public Warrants and the Private Warrants have an exercise price of $ 368.00 per share, subject to adjustments and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.
If the Company’s shares of Class A Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The 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.
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.
As a result, the Company consolidated Dave OD and all intercompany accounts have been eliminated. The carrying value of Dave OD’s assets and liabilities, after elimination of any intercompany transactions and balances are shown in the consolidated balance sheets.
As a result, the Company consolidated Dave OD and all intercompany accounts have been eliminated. The carrying value of Dave OD’s assets and liabilities, after elimination of any intercompany transactions and balances are shown in the consolidated balance sheets. The assets of Dave OD are restricted and may only be used to settle obligations of Dave OD.
The gain 90 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.
Amortization expense related to change in useful life of a certain definite-lived intangible asset for the year ended December 31, 2022 was $ 2.7 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.
The Company’s cash and cash equivalents and restricted cash in excess of the Federal Deposit Insurance Corporation insured limits were approximately $ 40.9 million and $ 20.7 million at December 31, 2023 and 2022, respectively.
The Company’s cash and cash equivalents 85 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.
These costs are a component of stock-based compensation expense, presented within compensation and benefits in the consolidated statements of operations. The Company recognizes forfeitures as they occur. Restricted Stock Awards: Restricted stock awards (“RSAs”) are valued on the grant date.
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.
The following table presents the assumptions used to value the private warrant liability for the year ended December 31, 2023: Exercise price $ 368.00 Expected volatility 107.7 % Risk-free interest rate 4.01 % Remaining term 3.01 years Dividend yield 0 % 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”).
The following table presents the assumptions used to value the private warrant liability for the year ended December 31, 2024: Exercise price $ 368 Expected volatility 66.9 % Risk-free interest rate 4.25 % Remaining term 2.01 years Dividend yield 0 % Earnout Shares Liability: 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”).
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.
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 are received on a monthly basis from Members who subscribe to the Company’s application.
The following is a schedule of future minimum rental payments as of December 31, 2023, under Company’s sublease for the properties located in Los Angeles, California signed with PCJW (in thousands): Year Related-Party Commitment 2024 $ 366 2025 $ 383 2026 $ 76 Thereafter 148 Total minimum lease payments $ 973 Less: imputed interest ( 132 ) Total lease liabilities $ 841 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.
The following is a schedule of future minimum rental payments as of December 31, 2024, under Company’s sublease for the properties located in Los Angeles, California signed with PCJW (in thousands): Year Related-Party Commitment 2025 386 2026 79 2027 83 2028 72 Total minimum lease payments $ 620 Less: imputed interest ( 66 ) Total lease liabilities $ 554 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.

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