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What changed in WM TECHNOLOGY, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WM TECHNOLOGY, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+364 added−342 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-13)

Top changes in WM TECHNOLOGY, INC.'s 2025 10-K

364 paragraphs added · 342 removed · 302 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeChallenges in Our End-Markets Despite cannabis being a large and growing sector in the United States, we believe that cannabis is unlike many other consumer goods and retail categories for a number of reasons: • Cannabis as a regulated industry is still in a nascent stage of development. • Cannabis users (defined as adults, aged 21 and older, who have consumed cannabis in the past year) represent less than 22% of the total U.S. adult, aged 21 and older, population today (and less than 16% for those that consumed in the past month) 3 without a “typical” user profile. • Regulations governing cannabis are complex and vary state-by-state and by city and county within states. • Cannabis has wide variance in characteristics that make it complex for consumers to make an informed purchase decision. • Cannabis is a perishable good with a lack of product homogeneity. • Brands are only in the early stages of establishing a consumer presence. • The illicit market continues to pose a major challenge, directly competing with licensed operators burdened by high taxes and complex regulations. • The industry has experienced periods of price deflation, including over the past three years, impacting the financial performance of businesses across the value chain. • Limited access to capital (relative to other industries) and limitations under Section 280E of the Internal Revenue Code of 1986, as amended (the “Code”) on deduction or credit for certain expenses of cannabis business can reduce the cash flow and liquidity of many industry participants.
Biggest changeChallenges in Our End-Markets Despite cannabis being a large and growing sector in the United States, we believe that cannabis is unlike many other consumer goods and retail categories for a number of reasons: • Cannabis as a regulated industry is still in a nascent stage of development. • Regulations governing cannabis are complex and vary state-by-state and by city and county within states. • Cannabis has wide variance in characteristics that make it complex for consumers to make an informed purchase decision. • Cannabis is a perishable good with a lack of product homogeneity. • Brands are only in the early stages of establishing a consumer presence. • The illicit market continues to pose a major challenge, directly competing with licensed operators burdened by high taxes and complex regulations. • The industry has experienced periods of price deflation, including over the past three years, impacting the financial performance of businesses across the value chain. • Limited access to capital (relative to other industries) and limitations under Section 280E of the Internal Revenue Code of 1986, as amended (the “Code”) on deduction or credit for certain expenses of cannabis business can reduce the cash flow and liquidity of many industry participants.
One notable impact for our clients is that rescheduling cannabis to Schedule III would remove the various tax-related hindrances tied to IRS code section 280E, and cannabis-related businesses (whether involved in medical or adult-use cannabis) would finally be able to take advantage of all applicable deductions and credits on their business taxes that other businesses enjoy.
One notable impact for our clients is that rescheduling cannabis to Schedule III would remove the various tax-related hindrances tied to Section 280E of the Code, and cannabis-related businesses (whether involved in medical or adult-use cannabis) would finally be able to take advantage of all applicable deductions and credits on their business taxes that other businesses enjoy.
Our dedicated, best-in-class Talent Acquisition team is focused on finding and attracting diverse and capable talent, and our People & Workplace team is focused on making us a world class employer of choice for that talent once they get here.
Our dedicated, best-in-class Talent Acquisition team is focused on finding and attracting capable talent, and our People & Workplace team is focused on making us a world class employer of choice for that talent once they get here.
Attorney General, Pam Bondi has repeatedly declined to specify her stance on cannabis policy issues, responding to all related questions from senators that she will give “careful consideration after consulting with appropriate Department officials.” She also avoided specifying her stance on the federal enforcement of cannabis laws or how she would approach states where cannabis is legal.
Attorney General, Pam Bondi has repeatedly declined to specify her stance on cannabis policy issues, responding to several related questions from senators that she will give “careful consideration after consulting with appropriate Department officials.” She has also avoided specifying her stance on the federal enforcement of cannabis laws or how she would approach states where cannabis is legal.
These investments serve to deepen the consumer experience with our platform and continue to provide a high level of support to our business clients. While the cannabis industry is still in the early innings of what could be decades of growth, we have established a leading position and a recognized brand given our 16-year operating history.
These investments serve to deepen the consumer experience with our platform and continue to provide a high level of support to our business clients. While the cannabis industry is still in the early innings of what could be decades of growth, we have established a leading position and a recognized brand given our 17-year operating history.
We have a significant opportunity to grow our client base both within existing markets that are continuing to grow and new markets as they become open to regulated cannabis. We believe we are a nationally-recognized brand in the cannabis industry, and we are monetizing our platform in over 35 U.S. states and territories, as of December 31, 2024.
We have a significant opportunity to grow our client base both within existing markets that are continuing to grow and new markets as they become open to regulated cannabis. We believe we are a nationally-recognized brand in the cannabis industry, and we are monetizing our platform in over 35 U.S. states and territories, as of December 31, 2025.
As of December 31, 2024, we actively operated in over 35 U .S. states and territories that have adult-use and/or medical-use regulations in place. We define actively operated markets as those U.S. states or territories with greater than $1,000 monthly revenue. Substantially all of our revenue was generated in the United States.
As of December 31, 2025, we actively operated in over 35 U .S. states and territories that have adult-use and/or medical-use regulations in place. We define actively operated markets as those U.S. states or territories with greater than $1,000 monthly revenue. Substantially all of our revenue was generated in the United States.
Assuming no cap on the number of licenses issued or other restrictions on the number of licenses issued, if these same markets were to issue enough licenses to match a ratio of one retail license per 10,000 residents, approximately 22,000 new retail licenses would be issued.
Assuming no cap on the number of licenses issued or other restrictions on the number of licenses issued, if these same markets were to issue enough licenses to match a ratio of one retail license per 10,000 residents, approximately 15,000 new retail licenses would be issued.
As more businesses and users join the platform, we gain a richer trove of industry data to perform market research and assist in product development and improvement. The result is a self-reinforcing, mutually beneficial, two-sided network effect, which we believe is difficult to replicate. 8 Table of Contents • A Fully-Integrated Solution Specific to the Cannabis Industry.
As more businesses and users join the platform, we gain a richer trove of industry data to perform market research and assist in product development and improvement. The result is a self-reinforcing, mutually beneficial, two-sided network effect, which we believe is difficult to replicate. • A Fully-Integrated Solution Specific to the Cannabis Industry.
Based on our internal research, we believe the minimum level 9 Table of Contents of acceptable retail density to have a healthy and functioning licensed market is one licensed retailer per 10,000 residents. Many of the U.S. states where we operate today are still under-penetrated with low levels of licensed retail density based on our internal data.
Based on our internal research, we believe the minimum level of acceptable retail density to have a healthy and functioning licensed market is one licensed retailer per 10,000 residents. Many of the U.S. states where we operate today are still under-penetrated with low levels of licensed retail density based on our internal data.
Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies and manage compliance needs. 7 Table of Contents We hold a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide.
Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies and manage compliance needs. We hold a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide.
A ssuming no other restrictions on the number of licenses issued, if the entire United States reached a minimum level of density of one retail license per 10,000 residents, the total universe of retail licenses would reach approximately 34,000, which is approximatel y 2.8 ti mes the current count of retail licenses in the United States.
A ssuming no other restrictions on the number of licenses issued, if the entire United States reached a minimum level of density of one retail license per 10,000 residents, the total universe of retail licenses would reach approximately 34,500, which is approximatel y 2.5 ti mes the current count of retail licenses in the United States.
To capitalize on the growth opportunities of our two-sided marketplace and solutions, we plan to continue making investments in raising brand awareness, increasing penetration within existing markets and expanding to new markets, as well as continuing to develop and monetize new solutions to extend the functionality of our platform.
To capitalize on the growth opportunities of our two-sided marketplace and solutions, we plan to continue making investments in raising brand awareness, increasing penetration within existing markets and expanding to new markets, as well as continuing to develop and 7 Table of Contents monetize new solutions to extend the functionality of our platform.
After a dispensary receives the order request from the consumer, the dispensary and the consumer can continue to communicate, adjust items in the request, and handle any stock issues, prior to and while the dispensary processes and fulfills the order. • WM Store: Customizable order and menus embed which allows retailers and brands to import their Weedmaps listing menu or product reservation functionality to their own white-labeled WM Store website or separately owned website.
After a dispensary receives the 6 Table of Contents order request from the consumer, the dispensary and the consumer can continue to communicate, adjust items in the request, and handle any stock issues, prior to and while the dispensary processes and fulfills the order. • WM Store: Customizable order and menus embed which allows retailers and brands to import their Weedmaps listing menu or product reservation functionality to their own white-labeled WM Store website or separately owned website.
Prior to the current administration, President Biden signed into law the “Medical Marijuana and Cannabidiol Research Expansion Act,” a bill aimed at easing restrictions on cannabis research -- bipartisan legislation which is the first standalone cannabis reform bill to pass both the House and Senate.
Prior to the current administration, Pr esident Biden signed into law the “Medical Marijuana and Cannabidiol Research Expansion Act,” a bill aimed at easing restrictions on cannabis research -- bipartisan legislation which is the first standalone cannabis reform bill to pass both the House and Senate.
Despite expectations of growth, the regulated cannabis market in the United States is still nascent and fragmented, with significant challenges facing both consumers seeking to understand cannabis and find the right products for them and businesses seeking to operate compliantly and to effectively reach and market to cannabis consumers.
Despite expectations of growth, the regulated cannabis market in the United States is still nascent and fragmented, with significant challenges facing both consumers seeking 5 Table of Contents to understand cannabis and find the right products for them and businesses seeking to operate compliantly and to effectively reach and market to cannabis consumers.
Our Annual Reports on Form 10-K , Quarterly Reports on Form 10-Q, Curre nt Reports on Form 8-K and our Proxy Statements and any amendments to these reports, are available through our investor relations website, free of charge, after we file them with the SEC.
Our Annual Reports on Form 10-K , Quarterly Reports on Form 10-Q, Curre nt Reports on Form 8-K and our Proxy Statements and any amendments to these reports, are available through our investor relations website, free of charge, after we file them with the 14 Table of Contents SEC.
This may require continued liberalization of license restrictions across cities and counties within certain states where we do business today. In addition, we believe that legalization by additional states and eventually the U.S. government i s inevitable.
This may require continued liberalization of license restrictions across cities and counties within certain states where we do business today. In addition, we believe that legalization by additional states and eventually the U.S. 9 Table of Contents government i s inevitable.
As of December 31, 2024, we have been issued trademark registrations in the United States, Canada, Japan, the European Union, the United Kingdom, Mexico and Australia.
As of December 31, 2025, we have been issued trademark registrations in the United States, Canada, Japan, the European Union, the United Kingdom, Mexico and Australia.
Since the recent election, however, there has also been proposed anti-cannabis legislation, for example, a bill aiming to ensure 280E continues to apply to state cannabis businesses even if cannabis is ultimately rescheduled to Schedule III.
Since the recent election, however, there has also been proposed anti-cannabis legislation, for example, a bill aiming to ensure Section 280E of the Code continues to apply to state cannabis businesses even if cannabis is ultimately rescheduled to Schedule III.
Our platform features self-service administrative functionality that enables clients to manage their listings page, including adding images, adjusting their menus, editing product information and responding to reviews as well as analyzing traffic trends. • Unique and Growing Data Asset.
Our platform features self-service administrative functionality that enables clients to manage their listings page, including adding images, adjusting their menus, editing product information and responding to reviews as well as analyzing traffic trends. 8 Table of Contents • Unique and Growing Data Asset.
With Weedmaps for Business, we offer an end-to-end platform for licensed cannabis retailers to comply 6 Table of Contents with state law. We sell a monthly subscription offering to retailer and brand clients as well as upsell and add-on offerings to licensed clients.
With Weedmaps for Business, we offer an end-to-end platform for licensed cannabis retailers to comply with state law. We sell a monthly subscription offering to retailer and brand clients as well as upsell and add-on offerings to licensed clients.
On the client side, as of December 31, 2024, there were approximately 12,000 retail licenses across the United States with medical and/or adult-use regulations in place, which is an effective retail density of approximately one retail license per 21,750 residents across these markets in the aggregate, based on data available from individual governmental cannabis license databases and the U.S.
On the client side, as of December 31, 2025, there were approximately 13,600 retail licenses across the United States with medical and/or adult-use regulations in place, which is an effective retail density of approximately one retail license per 21,100 residents across these markets in the aggregate, based on data available from individual governmental cannabis license databases and the U.S.
Congress from both parties have introduced bills to end the federal cannabis prohibition, by de-scheduling cannabis completely and regulating it. In addition to broader reforms, this session has seen additional incremental reform bills that aim to increase research, cement medical cannabis patients’ rights, or facilitate state-legal cannabis.
Congress from both parties have introduced bills to end the federal cannabis prohibition, by de-scheduling cannabis completely and regulating it. In addition to broader reforms, this session has seen additional incremental reform bills that aim to increase research, increase access for veterans, or facilitate state-legal cannabis.
For more information, refer to the section titled “Risk Factors—Risks Related to our Business and Industry.” Seasonality The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to 420, July 10 th and the Wednesday before Thanksgiving (“Green Wednesday”).
For more information, refer to the section titled “Risk Factors—Risks Related to our Business and Industry.” Seasonality The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to April 20 th (420), and the day before Thanksgiving (Green Wednesday).
No reversal of that policy of prosecutorial discretion is 12 Table of Contents expected under a Trump administration given his prior administrations actions on cannabis and statements while campaigning, although prosecutions against state-legal entities cannot be ruled out entirely at this time.
No reversal of that policy of prosecutorial discretion is expected under a Trump administration given the recent Executive Order regarding rescheduling cannabis and his prior administrations actions on cannabis and statements while campaigning, although prosecutions against state-legal entities cannot be ruled out entirely at this time.
With $184.5 million in revenues and 5,077 average monthly paying clients for the year ended December 31, 2024, we believe we are the largest two-sided platform for cannabis businesses and consumers in the United States.
With $174.7 million in revenues and 5,190 average monthly paying clients for the year ended December 31, 2025, we believe we are the largest two-sided platform for cannabis businesses and consumers in the United States.
Following that recommendation, DOJ issued a Notice of Proposed Rulemaking (the “NPRM”) proposing to reschedule cannabis, and DEA issued a notice for a hearing which commenced in November 2023, but the hearing is currently stayed pending an administrative interlocutory appeal. It is unclear when the hearing will recommence, and whether the new administration will support rescheduling.
Following that recommendation, DOJ issued a Notice of Proposed Rulemaking (the “NPRM”) proposing to reschedule cannabis, and DEA issued a notice for a hearing which commenced in November 2023, but the hearing is currently stayed pending an administrative interlocutory appeal.
Our trademarks and domain names are material to our business and brand identity. 11 Table of Contents We also rely on non-disclosure agreements, invention assignment agreements, intellectual property assignment agreements, or license agreements with employees, independent contractors, consumers, software providers and other third parties, which protect and limit access to and use of our proprietary intellectual property.
We also rely on non-disclosure agreements, invention assignment agreements, intellectual property assignment agreements, or license agreements with employees, independent contractors, consumers, software providers and other third parties, which protect and limit access to and use of our proprietary intellectual property.
While enforcement regarding hemp-derived products has generally been limited, changes in enforcement priorities or further federal regulations could negatively impact our clients that sell such products, which could adversely impact our business, operating results, financial condition, brand and reputation; at the same time, lack of federal enforcement could negatively impact our cannabis clients that compete against such products, which could adversely impact our business, operating results, financial condition, brand and reputation.
While sales of hemp-derived products have generally continued thus far, the amendment may lead to changes in enforcement priorities or further federal regulations that could negatively impact our clients that sell such products, which could adversely impact our business, operating results, financial condition, brand and reputation; at the same time, a repeal of the hemp amendment or a continued lack of federal enforcement could negatively impact our cannabis clients that compete against such products, which could adversely impact our business, operating results, financial condition, brand and reputation.
For additional information about the risks to our business related to competition, see the section titled “Risk Factors—Risks Related to our Business and Industry—We currently face intense competition in the market and we expect competition to further intensify as the cannabis industry continues to evolve.” 10 Table of Contents Sales and Marketing Sales Our sales team is primarily based out of our Irvine, California headquarters.
For example, rescheduling may increase competitors in this space if non-cannabis technology companies who have previously avoided the space now decide to enter the market For additional information about the risks to our business related to competition, see the section titled “Risk Factors—Risks Related to our Business and Industry—We currently face intense competition in the market and we expect competition to further intensify as the cannabis industry continues to evolve.” 10 Table of Contents Sales and Marketing Sales Our sales team is primarily based out of our Irvine, California headquarters.
People Operations and Human Capital Resources As of December 31, 2024, we had 440 full-time employees and 17 temporary employees, including 171 in engineering, product and design, 191 in sales and marketing and 95 in general and administrative. Of these employees, 450 are located in the United States and 7 are located in Canada.
People Operations and Human Capital Resources As of December 31, 2025, we had 416 full-time employees and 33 temporary employees, including 155 in engineering, product and design, 200 in sales and marketing and 94 in general and administrative. Of these employees, 444 are located in the United States and 5 are located in Canada.
As of December 31, 2024, there were approximately 12,000 existing retail and delivery licenses across the United States.
As of December 31, 2025, there were approximately 13,600 existing retail licenses across the United States.
We also offer add-on and a la carte products and services for additional fees, as discussed below. 5 Table of Contents The state-legal cannabis industry in the United States has grown consistently in recent years and was estimated to be between approximately $30-31 billion in 2024, according to Wall Street analyst estimates, and is expected by some estimates to grow to approximately $35 billion by 2027, assuming a continued pace of new state legalization, with 68% of U.S. adults in support of having legal access to cannabis.
The state-legal cannabis industry in the United States has grown consistently in recent years and was estimated to be approximately $34 billion in 2025, according to Wall Street analyst estimates, and is expected by some estimates to grow to approximately $43 billion by 2027, assuming a continued pace of new state legalization, with majority of U.S. adults in support of having legal access to cannabis.
In January 2023, FDA affirmed that the agency will not compromise—or create new standards—in evaluating or permitting cannabis or cannabinoid compounds and products, and particularly CBD, indicating that Congress must take action to end the stalemate between federal and state laws and the purgatory of FDA selective enforcement.
In January 2023, FDA affirmed that the agency will not compromise—or create new standards—in evaluating or permitting cannabis or cannabinoid compounds and products, and particularly CBD.
On the Closing Date, and in connection with the closing of the Business Combination, Silver Spike was domesticated and continues as a Delaware corporation, and changed its name to WM Technology, Inc. Our business primarily consists of our commerce-driven marketplace (“Weedmaps”), and our fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering (“Weedmaps for Business”).
On the Closing Date, and in connection with the closing of the Business Combination, Silver Spike was domesticated and continues as a Delaware corporation, and changed its name to WM Technology, Inc.
Further, we own several domain names, including: weedmaps.com, marijuana.com, cannabis.com, wmpolicy.com, themuseumofweed.com, wm-retail.com, wmforbusiness.com and WM.store.
Further, we own several domain names, including: weedmaps.com, marijuana.com, cannabis.com, wmpolicy.com, themuseumofweed.com, wm-retail.com, 11 Table of Contents wmforbusiness.com, WM.store and headie.com. Our trademarks and domain names are material to our business and brand identity.
We have been neither a defendant in a criminal action nor the subject of a civil or regulatory enforcement proceeding, prosecuted by a U.S. governmental authority based on our provision of products and solutions to the cannabis industry. 13 Table of Contents Furthermore, we believe that Section 230 provides immunity from civil and state criminal liability to internet service provider intermediaries in the United States, such as us, for content provided on their platforms that they did not create or develop.
Furthermore, we believe that Section 230 provides immunity from civil and state criminal liability to internet service provider intermediaries in the United States, such as us, for content provided on their platforms that they did not create or develop.
Federal courts have held that the provision prohibits the DOJ from spending funds to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws.
Federal courts have held that the provision prohibits the DOJ from spending funds to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws. 12 Table of Contents Despite the Sessions Memo, the U.S. government has not prioritized the enforcement of those laws against cannabis companies complying with state law and their vendors, and has not since 2014.
We intend to continue selectively pursuing opportunities to invest in and acquire technology offerings that either complement our existing products and services or allow us to accelerate our growth.
We intend to continue selectively pursuing opportunities to invest in and acquire technology offerings that either complement our existing products and services or allow us to accelerate our growth. Corporate History WM Technology, Inc. was initially incorporated in the Cayman Islands on June 7, 2019 under the name “Silver Spike Acquisition Corp” (“Silver Spike”).
Should cannabis ultimately be rescheduled to Schedule III, this decision is expected to have far reaching implications that are not yet fully understood. For example, rescheduling may increase competitors in this space if non-cannabis technology companies who have previously avoided the space now decide to enter the market.
For example, rescheduling may increase competitors in this space if non-cannabis technology companies who have previously avoided the space now decide to enter the market. Some of our retail clients sell products with hemp-derived cannabinoids, including, tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”) products.
If this move is confirmed, it would be a momentous change whose full implications are currently unknown. The DEA’s decision to reclassify cannabis would neither legalize nor likely eliminate current state cannabis program.
The Order directs the Attorney General to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act in the most expeditious mann er.” If the DOJ follows through on Trump’s directive, it would be a momentous change whose full implications are currently unknown, however, the decision to reclassify cannabis would neither legalize nor likely eliminate current state cannabis program.
Our comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers. WM Technology, Inc. was initially incorporated in the Cayman Islands on June 7, 2019 under the name “Silver Spike Acquisition Corp” (“Silver Spike”).
Our comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers. Our business primarily consists of our commerce-driven marketplace (“Weedmaps”), and our fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering (“Weedmaps for Business”).
Nevertheless, while the timing of federal reform remains unknown, it is expected that federal policy on cannabis will continue becoming more, rather than less, permissive and legislative efforts to legalize cannabis banking at the national level may progress in 2025. Some of our retail clients sell products with hemp-derived cannabinoids, including, tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”) products.
Nevertheless, while the timing of federal reform remains unknown, it is expected that federal policy on cannabis will continue becoming more, rather than less, permissive, including potentially through rescheduling in 2026. Should cannabis ultimately be rescheduled to Schedule III, this decision is expected to have far reaching implications that are not yet fully understood.
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Within the U.S., cannabis users (defined as adults, aged 21 and older, who have consumed cannabis in the past year) represent less than 22% of the total U.S. adult, aged 21 and older, population today (and less than 16% for those that consumed in the past month).
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We also offer add-on and a la carte products and services for additional fees, as discussed below.
Removed
We believe we compete favorably based on these factors . On May 16, 2024, President Biden announced that the U.S. Attorney General initiated proceedings to transfer cannabis from Schedule I to Schedule III, through a Notice of Proposed Rulemaking ("NPRM") published on May 21, 2024.
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We believe we compete favorably based on these factors . On December 18, 2025, President Trump issued an Executive Order directing that cannabis be rescheduled from Schedule I to Schedule III.
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Despite the Sessions Memo, the U.S. government has not prioritized the enforcement of those laws against cannabis companies complying with state law and their vendors, and has not since 2014.
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The Order directs the Attorney General to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act in the most expeditious manner.” Should cannabis ultimately be rescheduled to Schedule III, this decision is expected to have far reaching implications that are not yet fully understood.
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Furthermore, industry stakeholders (including cannabis industry stakeholders) have urged Congress to reassess the legality of certain hemp THC products.
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On December 18, 2025, President Trump issued an Executive Order directing that cannabis be rescheduled from Schedule I to Schedule III.
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In November 2025, Congress 13 Table of Contents passed the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371) (the “2026 Appropriations Act”), which included a provision (section 781) to amend the definition of hemp in the 2018 Farm Bill to effectively prohibit the currently commercialized hemp-derived THC and full spectrum products, although the change does not become effective for 365 days from the date of enactment.
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Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain.
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The December Executive Order also directs White House staff to work with Congress to “update the statutory definition” of hemp to allow Americans to access CBD products while permitting Congress to “restrict the sale of products posing serious health risks,” and to consult with relevant executive branch departments to “develop a regulatory framework for hemp-derived cannabinoid products, including development of guidance on an upper limit on milligrams of THC per serving with considerations on per container limits and CBD to THC ratio requirements.” It is unclear how this will be achieved, and whether Congress—which just revised the definition of hemp in the 2026 Appropriations Act—will agree to further changes.
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All of this regulatory volatility creates significant uncertainty for our hemp clients.
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We have been neither a defendant in a criminal action nor the subject of a civil or regulatory enforcement proceeding, prosecuted by a U.S. governmental authority based on our provision of products and solutions to the cannabis industry.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeData Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that a company can satisfy or rely on these measures to lawfully transfer personal data to the United States. 30 Table of Contents If there is no lawful manner for a company to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, a company could face significant adverse consequences, including, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against their processing or transferring of personal data related to EU users.
Biggest changeIf there is no lawful manner for a company to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, a company could face significant adverse consequences, including, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against their processing or transferring of personal data related to EU users.
If we are unable to remediate these material weaknesses or to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
If we are unable to remediate these material weaknesses or to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
In 2021, President Joe Biden became the first president to propose a budget with the Joyce amendment included. The amendment most recently was renewed through the signing of the stopgap spending bill.
In 2021, President Joe Biden became the first president to propose a budget with the Joyce Amendment included. The Joyce Amendment most recently was renewed through the signing of the stopgap spending bill.
The market price of our Class A Common Stock and the Public Warrants have been and may continue to be subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operational and financial results; • the development, effects and enforcement of and changes to laws and regulations, including with respect to the cannabis and hemp industries; • the commencement or conclusion of legal proceedings that involve us; • actual or anticipated changes in our growth rate relative to our competitors; 46 Table of Contents • announcements of new products or services by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, or joint ventures; • capital-raising activities or commitments; • issuance of new or updated research or reports by securities analysts; • the use by investors or analysts of third-party data regarding our business that may not reflect our financial performance; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our securities, including short selling of our securities; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • general economic and market conditions; and • other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises, or responses to such events.
The market price of our Class A Common Stock and the Public Warrants have been and may continue to be subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operational and financial results; • the development, effects and enforcement of and changes to laws and regulations, including with respect to the cannabis and hemp industries; • the commencement or conclusion of legal proceedings that involve us; • actual or anticipated changes in our growth rate relative to our competitors; • announcements of new products or services by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, or joint ventures; • capital-raising activities or commitments; • issuance of new or updated research or reports by securities analysts; 47 Table of Contents • the use by investors or analysts of third-party data regarding our business that may not reflect our financial performance; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our securities, including short selling of our securities; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • general economic and market conditions; and • other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises, or responses to such events.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our operating results, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us, and potentially across different cultures and languages in the event of a foreign acquisition; • an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management; • an acquisition may result in a delay or reduction of sales for both us and the company we acquired due to uncertainty about continuity and effectiveness of products or support from either company; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products; • an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; 32 Table of Contents • potential strain on our financial and managerial controls and reporting systems and procedures; • potential known and unknown liabilities associated with an acquired company; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; • the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; • to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing equity holders may be diluted and earnings per share may decrease; and • managing the varying intellectual property protection strategies and other activities of an acquired company.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our operating results, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us, and potentially across different cultures and languages in the event of a foreign acquisition; • an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management; • an acquisition may result in a delay or reduction of sales for both us and the company we acquired due to uncertainty about continuity and effectiveness of products or support from either company; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products; • an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • potential strain on our financial and managerial controls and reporting systems and procedures; • potential known and unknown liabilities associated with an acquired company; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; • the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; • to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing equity holders may be diluted and earnings per share may decrease; and • managing the varying intellectual property protection strategies and other activities of an acquired company.
A number of factors have affected and could potentially negatively affect our reported user engagement and/or traffic and our overall user engagement with our clients, including if: • we do not provide a compelling consumer experience to entice consumers to use our products and services, or our consumers don’t have the ability to maximize the consumer experience; • we are unable to convince consumers and clients of the value and usefulness of our platform and services; • we are unable to find cost-effective marketing channels or other strategies to drive traffic to our website, including replacing any pop-under advertisements that we have decreased our usage of or discontinued; • our products fail to operate effectively on the iOS or Android mobile operating systems; • we are unable to continue to develop products that work with a variety of mobile operating systems, networks and smartphones; • we do not provide a compelling consumer experience because of the decisions we make regarding the type and frequency of advertisements that we display or the structure and design of our products; • consumers engage more with competing platforms or products at the expense of ours or those of our clients; • if the manner in which we promote engagement or traffic is seen by consumers or clients as unappealing or harm our brand image or reputation; • there are concerns about the privacy implications, safety, or security of our products; • our products are subject to increased regulatory scrutiny or approvals, or there are changes in our products that are mandated or prompted by legislation, regulatory authorities, executive actions, or litigation, including settlements or consent decrees, that adversely affect the consumer experience; • technical or other problems frustrate the consumer experience, including by providers that host our platforms, particularly if those problems prevent us from delivering our product experience in a fast and reliable manner; • we, our partners, or other companies in our industry segment are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; or • our current or future products reduce consumer activity on our website or our applications by making it easier for our consumers to interact directly with our clients.
A number of factors have affected and could potentially negatively affect our reported user engagement and/or traffic and our overall user engagement with our clients, including if: • we do not provide a compelling consumer experience to entice consumers to use our products and services, or our consumers don’t have the ability to maximize the consumer experience; • we are unable to convince consumers and clients of the value and usefulness of our platform and services; 25 Table of Contents • we are unable to find cost-effective marketing channels or other strategies to drive traffic to our website, including replacing any pop-under advertisements that we have decreased our usage of or discontinued; • our products fail to operate effectively on the iOS or Android mobile operating systems; • we are unable to continue to develop products that work with a variety of mobile operating systems, networks and smartphones; • we do not provide a compelling consumer experience because of the decisions we make regarding the type and frequency of advertisements that we display or the structure and design of our products; • consumers engage more with competing platforms or products at the expense of ours or those of our clients; • if the manner in which we promote engagement or traffic is seen by consumers or clients as unappealing or harm our brand image or reputation; • there are concerns about the privacy implications, safety, or security of our products; • our products are subject to increased regulatory scrutiny or approvals, or there are changes in our products that are mandated or prompted by legislation, regulatory authorities, executive actions, or litigation, including settlements or consent decrees, that adversely affect the consumer experience; • technical or other problems frustrate the consumer experience, including by providers that host our platforms, particularly if those problems prevent us from delivering our product experience in a fast and reliable manner; • we, our partners, or other companies in our industry segment are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; or • our current or future products reduce consumer activity on our website or our applications by making it easier for our consumers to interact directly with our clients.
The DEA’s decision to reclassify cannabis would neither legalize nor likely eliminate current state cannabis programs. If placed under Schedule III, cannabis will remain a controlled substance and state-legal programs will continue to operate outside of federally legal channels in their distribution of the substance particularly because no state operator holds a DEA registration to possess or distribute cannabis.
The decision to reclassify cannabis would neither legalize nor likely eliminate current state cannabis programs. If placed under Schedule III, cannabis will remain a controlled substance and state-legal programs will continue to operate outside of federally legal channels in their distribution of the substance particularly because no state operator holds a DEA registration to possess or distribute cannabis.
In addition, as our foreign operations continue to grow, we are subject to a variety of risks inherent in doing business internationally, including: • political, social and economic instability; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements and enforcement; • fluctuations in currency exchange rates; • higher levels of credit risk and payment fraud; • complying with tax requirements of multiple jurisdictions; • enhanced difficulties of integrating any foreign acquisitions; • the ability to present our content effectively in foreign languages; • complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions and termination requirements; • reduced protection for intellectual property rights in some countries; • difficulties in staffing and managing global operations and the increased travel, infrastructure and compliance costs associated with multiple foreign locations; • regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash; • import and export restrictions and changes in trade regulation; • complying with statutory equity requirements; 29 Table of Contents • complying with the U.S.
In addition, as our foreign operations continue to grow, we are subject to a variety of risks inherent in doing business internationally, including: • political, social and economic instability; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements and enforcement; • fluctuations in currency exchange rates; • higher levels of credit risk and payment fraud; • complying with tax requirements of multiple jurisdictions; • enhanced difficulties of integrating any foreign acquisitions; • the ability to present our content effectively in foreign languages; • complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions and termination requirements; • reduced protection for intellectual property rights in some countries; • difficulties in staffing and managing global operations and the increased travel, infrastructure and compliance costs associated with multiple foreign locations; • regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash; • import and export restrictions and changes in trade regulation; • complying with statutory equity requirements; • complying with the U.S.
FDA regulation of adult-use and medical-use cannabis, as well as e-cigarettes and other vaping products, could negatively affect the cannabis industry, which would directly affect our financial condition. Should the federal government legalize cannabis for adult-use and/or medical-use, it is possible that the U.S.
FDA regulation of adult-use and medical-use cannabis, as well as hemp products, e-cigarettes and other vaping products, could negatively affect the cannabis industry, which would directly affect our financial condition. Should the federal government legalize cannabis for adult-use and/or medical-use, it is possible that the U.S.
As of December 31, 2024, we have an ongoing entity-level material weakness that was identified in the years ended December 31, 2023 and 2022, and for which remediation efforts continued in the year ended December 31, 2024 as further described below. • We did not fully maintain components of the COSO framework, including elements of the control environment, risk assessment, information and communication, and monitoring activities components, relating to (i) developing general control activities over technology to support the achievement of objectives across the entity, (ii) sufficiency of processes related to identifying and analyzing risks to the achievement of objectives, including technology, across the entity, and (iii) sufficiency of selecting and developing control activities that contribute to the mitigation of risks to the achievement of objectives to acceptable levels.
As of December 31, 2025, we have an ongoing entity-level material weakness that was identified in the years ended December 31, 2024 and 2023, and for which remediation efforts continued in the year ended December 31, 2025 as further described below. • We did not fully maintain components of the COSO framework, including elements of the control environment, risk assessment, information and communication, and monitoring activities components, relating to (i) developing general control activities over technology to support the achievement of objectives across the entity, (ii) sufficiency of processes related to identifying and analyzing risks to the achievement of objectives, including technology, across the entity, and (iii) sufficiency of selecting and developing control activities that contribute to the mitigation of risks to the achievement of objectives to acceptable levels.
Macroeconomic conditions, including but not limited to inflation, tariffs, uncertain credit and global financial markets, past and potential future disruptions in access to bank deposits or lending commitments due to bank failures; current and potential future geopolitical events, including the military conflicts between Russia and Ukraine and the state of war between Israel and Hamas and the related risk of a larger regional conflict; and the occurrence of a catastrophic event, including but not limited to severe weather, wildfire, war, or terrorist attack, could adversely impact our business, financial condition and operating results.
Macroeconomic conditions, including but not limited to inflation, tariffs, uncertain credit and global financial markets, government shutdowns, past and potential future disruptions in access to bank deposits or lending commitments due to bank failures; current and potential future geopolitical events, including the military conflicts between Russia and Ukraine and the state of war between Israel and Hamas and the related risk of a larger regional conflict; and the occurrence of a catastrophic event, including but not limited to severe weather, wildfire, war, or terrorist attack, could adversely impact our business, financial condition and operating results.
Any such issuances of additional shares of Class A Common Stock or preferred stock: • may significantly dilute the equity interests of our investors; • may subordinate the rights of holders of Class A Common Stock if preferred stock is issued with rights senior to those afforded our Class A Common Stock; • could cause a change in control if a substantial number of shares of our Class A Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and • may adversely affect prevailing market prices for our Class A Common Stock and/or Warrants.
Any such issuances of additional shares of Class A Common Stock or preferred stock: • may significantly dilute the equity interests of our investors; • may subordinate the rights of holders of Class A Common Stock if preferred stock is issued with rights senior to those afforded our Class A Common Stock; • could cause a change in control if a substantial number of shares of our Class A Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, and other tax attributes, if any, and could result in the resignation or removal of our present officers and directors; and • may adversely affect prevailing market prices for our Class A Common Stock and/or Warrants.
The TRA also provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, (x) our obligations under the TRA with respect to Class A Units that have been exchanged or redeemed prior to or in connection with such change of control transaction would accelerate and become payable in a lump sum as described above and (y) with respect to Class A Units that have not been exchanged as of such change of control transaction, our or our successor’s obligations under the TRA would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the TRA As a result, upon any acceleration of our obligations under the TRA (including upon a change of control), we could be required to make payments under the TRA that are greater than 85% of our actual cash tax savings, which could negatively 37 Table of Contents impact our liquidity.
The TRA also provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, (x) our obligations under the TRA with respect to Class A Units that have been exchanged or redeemed prior to or in connection with such change of control transaction would accelerate and become payable in a lump sum as described above and (y) with respect to Class A Units that have not been exchanged as of such change of control transaction, our or our successor’s obligations under the TRA would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the TRA As a result, upon any acceleration of our obligations under the TRA (including upon a change of control), we could be required to make payments under the TRA that are greater than 85% of our actual cash tax savings, which could negatively impact our liquidity.
In addition to tax expenses, we will also incur expenses related to our operations, including payment obligations under the TRA agreement (and the cost of administering such payment obligations), which could be significant.
In addition to tax expenses, we will also incur expenses related to our operations, including payment obligations under the TRA (and the cost of administering such payment obligations), which could be significant.
The factors affecting our brand recognition and reputation that are within our control include the following: 20 Table of Contents • the efficacy of our marketing efforts; • our ability to maintain a high-quality, innovative and error- and bug-free platform; • our ability to maintain high satisfaction among clients and consumers; • the quality and perceived value of our platform; • successfully implementing and developing new features, including alternative revenue streams; • our ability to obtain, maintain and enforce trademarks and other indicia of origin that are valuable to our brand; • our ability to successfully differentiate our platform from competitors’ products; • our compliance with laws and regulations, including those applicable to any political action committees affiliated with us and to our registered lobbying activities; • our ability to provide client support; and • any actual or perceived data breach or data loss, or misuse or perceived misuse of our platform.
The factors affecting our brand recognition and reputation that are within our control include the following: • the efficacy of our marketing efforts; • our ability to maintain a high-quality, innovative and error- and bug-free platform; • our ability to maintain high satisfaction among clients and consumers; • the quality and perceived value of our platform; • successfully implementing and developing new features, including alternative revenue streams; • our ability to obtain, maintain and enforce trademarks and other indicia of origin that are valuable to our brand; • our ability to successfully differentiate our platform from competitors’ products; • our compliance with laws and regulations, including those applicable to any political action committees affiliated with us and to our registered lobbying activities; • our ability to provide client support; and • any actual or perceived data breach or data loss, or misuse or perceived misuse of our platform.
Since the Sessions Memo was issued over seven years ago, however, U.S. Attorneys have generally not prioritized the targeting of state law compliant entities. We cannot assure that each U.S. Attorney’s Office in each judicial district where we operate will not choose to enforce federal laws governing cannabis sales against state-legal companies like our business clients.
Since the Sessions Memo was issued over eight years ago, however, U.S. Attorneys have generally not prioritized the targeting of state law compliant entities. We cannot assure that each U.S. Attorney’s Office in each judicial district where we operate will not choose to enforce federal laws governing cannabis sales against state-legal companies like our business clients.
Many foreign countries and governmental bodies, including Canada, the United Kingdom (“UK”), and the European Union (“E.U.”) have laws and regulations concerning the processing of personal information, including for example, in Canada, the federal Personal Information Protection and Electronic Documents Act, or PIPEDA and various related laws. Further, Canada has robust anti-spam legislation, the Anti-Spam Legislation, or CASL.
Many foreign countries and governmental bodies, including Canada, the United Kingdom (“UK”), and the European Union (“E.U.”) have laws, regulations, and industry standards concerning the processing of personal information, including for example, in Canada, the federal Personal Information Protection and Electronic Documents Act, or PIPEDA and various related laws. Further, Canada has robust anti-spam legislation, the Anti-Spam Legislation, or CASL.
While we do believe that Section 280E does not apply to our business, or ancillary service providers that work with state-licensed cannabis businesses, if the IRS interprets the section to apply, it would significantly and materially affect our profitability and financial condition. Cannabis businesses may be subject to civil asset forfeiture.
While we do believe that Section 280E of the Code does not apply to our business, or ancillary service providers that work with state-licensed cannabis businesses, if the IRS interprets the section to apply, it would significantly and materially affect our profitability and financial condition. Cannabis businesses may be subject to civil asset forfeiture.
Attorney General Pam Bondi has repeatedly declined to specify her stance on cannabis policy issues, responding to all related questions from senators that she will give “careful consideration after consulting with appropriate Department officials.” She also avoided specifying her stance on the federal enforcement of cannabis laws.
Attorney General Pam Bondi has repeatedly declined to specify her stance on cannabis policy issues, responding to several related questions from senators that she will give “careful consideration after consulting with appropriate Department officials.” She has also avoided specifying her stance on the federal enforcement of cannabis laws.
Allowing unlicensed or noncompliant businesses to access our products, or allowing businesses to use our solutions in a noncompliant manner, may subject us to legal or regulatory enforcement and negative publicity, which could adversely impact our business, operating results, financial condition, brand 17 Table of Contents and reputation.
Allowing unlicensed or noncompliant businesses to access our products, or allowing businesses to use our solutions in a noncompliant manner, may subject us to legal or regulatory enforcement and negative publicity, which could adversely impact our business, operating 18 Table of Contents results, financial condition, brand and reputation.
If we were to inadvertently fail to comply with applicable tax laws, this could have a material adverse effect on our business, results of operations and financial condition. We have ongoing material weaknesses in our internal control over financial reporting as of December 31, 2024.
If we were to inadvertently fail to comply with applicable tax laws, this could have a material adverse effect on our business, results of operations and financial condition. We have ongoing material weaknesses in our internal control over financial reporting as of December 31, 2025.
While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions, and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
While the Delaware 46 Table of Contents courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions, and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
In addition, on October 17, 2024, a putative shareholder class action complaint, captioned Seret Ishak v. WM Technology, Inc. et al. , Case No. 2:24-cv-08959, was filed in the U.S. District Court for the Central District of California, naming us and certain former and current officers and/or directors of the Company and Silver Spike as defendants.
In addition, on October 17, 2024, a putative 16 Table of Contents shareholder class action complaint, captioned Seret Ishak v. WM Technology, Inc. et al. , Case No. 2:24-cv-08959, was filed in the U.S. District Court for the Central District of California, naming us and certain former and current officers and/or directors of the Company and Silver Spike as defendants.
If our clients are found to be violating U.S. federal law relating to cannabis, they may be subject not only to criminal charges and convictions, but also to forfeiture of property, significant fines and penalties, disgorgement of profits, administrative sanctions, cessation of business activities, or civil liabilities arising from proceedings initiated by either the U.S. government or private citizens.
If our clients are found to be violating U.S. federal law relating to cannabis, they may be subject not only to criminal charges and convictions, but also to forfeiture of property, significant fines 17 Table of Contents and penalties, disgorgement of profits, administrative sanctions, cessation of business activities, or civil liabilities arising from proceedings initiated by either the U.S. government or private citizens.
As a result of (i) potential differences in the amount of net taxable income allocable to us and the other holders of WMH Units, (ii) the lower tax rate 36 Table of Contents applicable to corporations than individuals and (iii) the use of an assumed tax rate (based on the tax rate applicable to individuals) in calculating WMH LLC’s distribution obligations, we may receive tax distributions significantly in excess of our tax liabilities and obligations to make payments under the TRA.
As a result of (i) potential differences in the amount of net taxable income allocable to us and the other holders of WMH Units, (ii) the lower tax rate applicable to corporations than individuals and (iii) the use of an assumed tax rate (based on the tax rate applicable to individuals) in calculating WMH LLC’s distribution obligations, we may receive tax distributions significantly in excess of our tax liabilities and obligations to make payments under the TRA.
Based on management’s assessment of our internal control over financial reporting, under the criteria described in the preceding sentence, management has identified that as of December 31, 2024, our internal control over financial reporting was not effective due to the ongoing material weaknesses in internal control over financial reporting.
Based on management’s assessment of our internal control over financial reporting, under the criteria described in the preceding sentence, management has identified that as of December 31, 2025, our internal control over financial reporting was not effective due to the ongoing material weaknesses in internal control over financial reporting.
Furthermore, any change in the federal government’s 38 Table of Contents enforcement posture with respect to state licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to client base, which would adversely affect our operations, cash flow and financial condition.
Furthermore, any change in the federal government’s enforcement posture with respect to state licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to client base, which would adversely affect our operations, cash flow and financial condition.
As discussed above, under Section 280E of the Code, no deduction or credit is allowed for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA).
As discussed above, under Section 280E of the Code, no deduction or credit is allowed for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the 44 Table of Contents trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA).
While there may be ample public support for legislative action in a particular jurisdiction, numerous factors could impact the legislative process, including lobbying efforts by opposing stakeholders as well as legislators’ disagreements about how to legalize cannabis as well as the interpretation, 19 Table of Contents implementation, and enforcement of applicable laws or regulations.
While there may be ample public support for legislative action in a particular jurisdiction, numerous factors could impact the legislative process, including lobbying efforts by opposing stakeholders as well as legislators’ disagreements about how to legalize cannabis as well as the interpretation, implementation, and enforcement of applicable laws or regulations.
Additionally, proceeds from our clients’ business activities, if found to be in violation of 41 Table of Contents anti-money laundering laws, could subject payments we have received from those clients to seizure or forfeiture, if they are found to be illegal proceeds of a crime committed by a client, which could have a material adverse effect on our business and our investors.
Additionally, proceeds from our clients’ business activities, if found to be in violation of anti-money laundering laws, could subject payments we have received from those clients to seizure or forfeiture, if they are found to be illegal proceeds of a crime committed by a client, which could have a material adverse effect on our business and our investors.
Congress does not extend the Omnibus Spending Bill’s protection of state medical cannabis programs, described below, to apply to all state cannabis programs, U.S. federal authorities could more strictly enforce current federal prohibitions and restrictions.
Congress does not extend the Omnibus Spending Bill’s protection of state medical cannabis programs to apply to all state cannabis programs, U.S. federal authorities could more strictly enforce current federal prohibitions and restrictions.
As of December 31, 2024, we also concluded that this material weakness applied to the payroll cycle and income taxes Additionally, these material weaknesses could result in a misstatement of account balances or disclosures that could result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
As of December 31, 2024, we also concluded that this material weakness applied to the payroll cycle and income taxes 35 Table of Contents Additionally, these material weaknesses could result in a misstatement of account balances or disclosures that could result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
Additionally, to the extent that we need funds and WMH LLC and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or WMH LLC is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
Additionally, to the extent that we need funds and WMH LLC and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any 36 Table of Contents financing arrangements, or WMH LLC is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
Most federal and federally-insured state banks currently do not serve businesses that grow and sell cannabis products on the stated ground that growing and selling cannabis is illegal under federal law, even though the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), issued guidelines to banks in February 2014 that 40 Table of Contents clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act.
Most federal and federally-insured state banks currently do not serve businesses that grow and sell cannabis products on the stated ground that growing and selling cannabis is illegal under federal law, even though the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), issued guidelines to banks in February 2014 that clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act.
A change in banking regulations or a change in the position of the banking industry that permits banks to serve businesses that grow and sell cannabis products may increase competition for us, facilitate new entrants into the industry offering products or solutions similar to those that we offer, or otherwise adversely affect our results of operations.
A change in banking regulations or a change in the position of the banking industry that permits banks to serve businesses that grow and sell cannabis products may increase competition for us, facilitate new entrants 41 Table of Contents into the industry offering products or solutions similar to those that we offer, or otherwise adversely affect our results of operations.
To the extent that we are limited or prohibited from making some or all of our solutions available through any third-party platform, including the Apple App Store or the Google Play, we may need, or choose, to provide our solutions through alternative venues that may be more difficult for potential users to access.
To the extent that we are limited or prohibited from making some or all of our solutions available 23 Table of Contents through any third-party platform, including the Apple App Store or the Google Play, we may need, or choose, to provide our solutions through alternative venues that may be more difficult for potential users to access.
Misconduct by these parties could include intentional, reckless or negligent conduct or other activities that violate laws and 48 Table of Contents regulations, including production standards, U.S. federal and state fraud, abuse, data privacy and security laws, other similar non-U.S. laws or laws that require the true, complete and accurate reporting of financial information or data.
Misconduct by these parties could include intentional, reckless or negligent conduct or other activities that violate laws and regulations, including production standards, U.S. federal and state fraud, abuse, data privacy and security laws, other similar non-U.S. laws or laws that require the true, complete and accurate reporting of financial information or data.
Additionally, in order to retain our clients, we may be required to identify ways to help our clients convert consumers more effectively. Our clients generally do not have long-term obligations to purchase our products and solutions and generally may cancel their use of our products and solutions at any time without penalty.
Additionally, in order to retain our clients, we may be required to identify ways to help our clients convert consumers more effectively. Our clients generally do not have long-term obligations to purchase our products and solutions and generally may cancel their use of our products and solutions at any time 15 Table of Contents without penalty.
Visits to our website could decline significantly if we are listed 22 Table of Contents less prominently or fail to appear in search results for any reason, including ineffective implementation of our digital marketing strategies or any change by a search engine to its ranking algorithms or advertising policies.
Visits to our website could decline significantly if we are listed less prominently or fail to appear in search results for any reason, including ineffective implementation of our digital marketing strategies or any change by a search engine to its ranking algorithms or advertising policies.
We have previously experienced service disruptions, and in the future, we may experience service disruptions, outages or other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints and distributed denial of service, or DDoS, fraud or other security incidents.
We have previously experienced service disruptions, and in the future, we may experience service disruptions, outages or other performance problems due to a variety of factors, including infrastructure changes, human or software errors, defects, software bugs, capacity constraints and distributed denial of service, or DDoS, fraud or other security incidents or vulnerabilities.
On October 9, 2018, CBP released an additional policy statement indicating that Canadian citizens working in or facilitating the proliferation of the legal cannabis industry in Canada, if travelling to the United 44 Table of Contents States for reasons unrelated to the cannabis industry, will generally be admissible.
On October 9, 2018, CBP released an additional policy statement indicating that Canadian citizens working in or facilitating the proliferation of the legal cannabis industry in Canada, if travelling to the United States for reasons unrelated to the cannabis industry, will generally be admissible.
If our clients do not believe the incremental additional cost we are charging for Weedmaps for Business is justified by the additional components 15 Table of Contents included in our software bundles or that our add-on offerings do not generate proper return on investment, such clients may decline to continue using our services, and our revenue and other financial results may be adversely impacted.
If our clients do not believe the incremental additional cost we are charging for Weedmaps for Business is justified by the additional components included in our software bundles or that our add-on offerings do not generate proper return on investment, such clients may decline to continue using our services, and our revenue and other financial results may be adversely impacted.
For content that we publish or provide ourselves, we have editorial procedures in place to provide quality control of the information that we publish or provide. However, we cannot assure you that our editorial and other quality control procedures will be sufficient to ensure that there are no errors or omissions in particular content.
For content that we publish or provide ourselves, we have editorial procedures in place to provide quality control of the information that we publish or provide. However, we cannot assure you that our editorial and other quality control procedures 32 Table of Contents will be sufficient to ensure that there are no errors or omissions in particular content.
It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from 49 Table of Contents governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
These laws may govern, among other issues, taxation, tariffs, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential internet access and the characteristics and quality of offerings. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, and libel apply to the internet or online services.
These laws may govern, among other issues, taxation, tariffs, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential internet access and the characteristics and quality of offerings. It is often unclear how existing laws governing issues such as property ownership, sales, use and other taxes, and libel apply to the internet or online services.
However, if such an event occurs, the event may harm our business, and may also have the effect of heightening many of the other risks described in this “Risk Factors” section. Fluctuations in our quarterly and annual operating results may adversely affect our business and prospects.
However, if such an event occurs, the event may harm our business, and may also have the effect of heightening many of the other risks described in this “Risk Factors” section. 28 Table of Contents Fluctuations in our quarterly and annual operating results may adversely affect our business and prospects.
In addition, our platform also may compete with current or potential products and solutions offered by internet search engines and advertising networks, like Google, general two-sided networks like Yelp, various other newspaper, television, media companies, outdoor billboard advertising, and online merchant platforms, such as Shopify, Square and Lightspeed, or delivery companies like DoorDash.
In addition, our platform also may compete with current or potential products and solutions offered by internet search engines and advertising networks, like Google, general two-sided networks like Yelp, various other newspaper, television, media companies, outdoor billboard 21 Table of Contents advertising, and online merchant platforms, such as Shopify, Square and Lightspeed, or delivery companies like DoorDash.
We have a dedicated Policy & Compliance Operations team that reviews cannabis license information for operational cannabis retail clients, both on submission and on an ongoing basis, to ensure validity and accuracy. We require all operational cannabis retailer clients, including storefronts and delivery services, to display on their WMH listing a valid, unexpired state-issued license number.
We have a dedicated Policy & Compliance Operations team that reviews cannabis license information for operational cannabis retail clients, both on submission and on an ongoing basis, to ensure validity and accuracy. We require all operational cannabis retailer clients, including storefronts and delivery services, to 42 Table of Contents display on their WMH listing a valid, unexpired state-issued license number.
Furthermore, our stockholders may be subject to increased costs to 45 Table of Contents bring these claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors’ ability to bring claims in a judicial forum that they find favorable.
Furthermore, our stockholders may be subject to increased costs to bring these claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors’ ability to bring claims in a judicial forum that they find favorable.
Since the recent election, however, there has also been proposed anti-cannabis legislation, for example, a bill aiming to ensure 280E continues to apply to state cannabis businesses even if cannabis is ultimately rescheduled to schedule III.
Since the recent election, however, there has also been proposed anti-cannabis legislation, for example, a bill aiming to ensure Section 280E of the Code continues to apply to state cannabis businesses even if cannabis is ultimately rescheduled to schedule III.
The loss of the services of a significant portion of our workforce or any member of our senior management or the inability to hire or retain qualified personnel could adversely affect our ability to execute our business plan and harm our operating results.
The loss of the services of a significant portion of our workforce or any member of 22 Table of Contents our senior management or the inability to hire or retain qualified personnel could adversely affect our ability to execute our business plan and harm our operating results.
In 2014, the DOJ under the Obama administration directed federal prosecutors to exercise restraint in prosecuting AML violations arising in the state legal cannabis programs and to consider the federal enforcement priorities enumerated in the Cole Memo when determining whether to charge institutions or individuals based upon cannabis-related activity.
In 2014, the DOJ under the Obama administration directed federal prosecutors to exercise restraint in prosecuting AML violations arising in the state legal cannabis programs and to consider the federal enforcement priorities enumerated in the Cole 40 Table of Contents Memo when determining whether to charge institutions or individuals based upon cannabis-related activity.
Our future success depends on our continued ability to recruit, train, retain and motivate key personnel, including Douglas Francis, our Chief Executive Officer and Chairman; Brian Camire, our General Counsel and Sarah Griffis, our Chief Technology Officer.
Our future success depends on our continued ability to recruit, train, retain and motivate key personnel, including Douglas Francis, our Chief Executive Officer and Chairman, Brian Camire, our General Counsel, Sarah Griffis, our Chief Technology Officer, and Susan Echard, our Chief Financial Officer.
For example, in connection with the COVID-19 pandemic, governments implemented significant measures 27 Table of Contents intended to control the spread of the virus, including closures, quarantines, travel restrictions and other social distancing directives.
For example, in connection with the COVID-19 pandemic, governments implemented significant measures intended to control the spread of the virus, including closures, quarantines, travel restrictions and other social distancing directives.
To the extent that we do not effectively address capacity constraints, respond adequately to service disruptions, upgrade our systems as needed or continually develop 23 Table of Contents our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results would be harmed.
To the extent that we do not effectively address capacity constraints, respond adequately to service disruptions, upgrade our systems as needed or continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results would be harmed.
For more information, refer to “Risk Factors—We are subject to industry standards, governmental laws and regulations, policies and other obligations governing privacy, data protection and information security and any actual or perceived failure to comply with such obligations could harm our business” below.
For more information, refer to “Risk Factors—We are 24 Table of Contents subject to industry standards, governmental laws and regulations, policies and other obligations governing privacy, data protection and information security and any actual or perceived failure to comply with such obligations could harm our business” below.
Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to 24 Table of Contents apply different methodologies for such adjustments and we generally do not intend to update previously disclosed metrics for any such changes.
Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments and we generally do not intend to update previously disclosed metrics for any such changes.
Congress from both parties have introduced bills to end the federal cannabis prohibition, by de-scheduling cannabis completely and regulating it, as well as incremental reform bills, including the “Medical Marijuana and Cannabidiol 39 Table of Contents Research Expansion Act” described above.
Congress from both parties have introduced bills to end the federal cannabis prohibition, by de-scheduling cannabis completely and regulating it, as well as incremental reform bills, including the “Medical Marijuana and Cannabidiol Research Expansion Act” described above.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a compliance period of 180 calendar days from the date of the Notice, or until April 7, 2025, to regain compliance with the minimum closing bid price requirement, which we did, and Nasdaq provided us written confirmation of compliance on December 3, 2024.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a compliance period of 180 calendar days from the date of the Notice, or until August 3, 2026, to regain compliance with the minimum closing bid price requirement, which we did, and Nasdaq provided us written confirmation of compliance on December 3, 2024.
We generated approximately 53% and 52% of our revenue for the years ended December 31, 2024 and 2023 in California, and such developments may in turn have a material adverse effect on our business, operating results and financial condition.
We generated approximately 56% and 53% of our revenue for the years ended December 31, 2025 and 2024 in California, and such developments may in turn have a material adverse effect on our business, operating results and financial condition.
Any decrease to consumer retention, growth, or engagement could render our products less attractive to consumers, advertisers, or partners, and could seriously harm our business. 25 Table of Contents We may be unable to prevent others from aggregating or misappropriating data from our websites.
Any decrease to consumer retention, growth, or engagement could render our products less attractive to consumers, advertisers, or partners, and could seriously harm our business. We may be unable to prevent others from aggregating or misappropriating data from our websites.
Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as obtaining consumer consent and conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance.
Certain states also impose 30 Table of Contents stricter requirements for processing certain personal data, including sensitive information, such as obtaining consumer consent and conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance.
For example, the platform will not provide useful information about cannabis brands or products if clients or consumers do not contribute content that is helpful and reliable, or if they remove previously submitted content.
For example, the platform will not provide useful 20 Table of Contents information about cannabis brands or products if clients or consumers do not contribute content that is helpful and reliable, or if they remove previously submitted content.
California represents one of the largest state legal cannabis markets in the United States, and approximately 53% and 52% of our revenue for the years ended December 31, 2024 and 2023, were generated in California.
California represents one of the largest state legal cannabis markets in the United States, and approximately 56% and 53% of our revenue for the years ended December 31, 2025 and 2024, were generated in California.
There is also a risk that these laws may be interpreted and applied in conflicting ways across jurisdictions, and in a manner that is not consistent with our current 31 Table of Contents practices.
There is also a risk that these laws may be interpreted and applied in conflicting ways across jurisdictions, and in a manner that is not consistent with our current practices.
The entity-level material weakness contributed to material weaknesses within our system of internal control over financial reporting as follows: 34 Table of Contents Unremediated material weaknesses identified in the years ended December 31, 2024, 2023 and 2022 1.
The entity-level material weakness contributed to material weaknesses within our system of internal control over financial reporting as follows: Unremediated material weaknesses identified in the years ended December 31, 2025, 2024 and 2023 1.
For example, on October 9, 2024, we received a letter from the Listing Qualifications Department of Nasdaq notifying us that, for the last 30 consecutive trading days, the closing bid price for our Class A Common Stock was below $1.00 per share, (the “Notice”).
For example, on February 4, 2026, we received a letter from the Listing Qualifications Department of Nasdaq notifying us that, for the last 30 consecutive trading days, the closing bid price for our Class A Common Stock was below $1.00 per share, (the “Notice”).
We generally do not maintain fixed term employment contracts or key man life insurance with any of our employees. In addition, our Chief Financial Officer, Susan Echard, is a consultant and not a full time employee. Ms. Echard is a partner at SeatonHill Partners, LP a CFO services firm. Ms.
We generally do not maintain fixed term employment contracts or key man life insurance with any of our employees. In addition, our Chief Financial Officer, Susan Echard, prior to January 30, 2026 was a consultant and not a full time employee. Ms. Echard was a partner at SeatonHill Partners, LP a CFO services firm. Ms.
If our third-party service providers experience a security incident or other interruption, which has occurred in the past, we could experience adverse consequences.
If our third-party service providers experience a security incident or other 26 Table of Contents interruption, which has occurred in the past, we could experience adverse consequences.
Our revenue may decline due to a number of factors including, but not limited to, slowdowns in the pace of issuance of new licenses to cannabis retailers and brands, and the decline in the number of new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded.
Our revenue has in the past declined in comparison to prior periods and may decline in the future due to a number of factors including, but not limited to, slowdowns in the pace of issuance of new licenses to cannabis retailers and brands, and the decline in the number of new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded.
Although cannabis is a restricted controlled substance under the federal CSA, U.S. states have legalized cannabis to varying degrees through state-specific regulatory frameworks. Laws and regulations affecting the cannabis industry in states and territories of the United States are continually changing.
Although cannabis is a restricted controlled substance under the federal CSA, U.S. states have legalized cannabis to varying degrees through state-specific regulatory frameworks. See “Business—Government Regulation” for additional information. Laws and regulations affecting the cannabis industry in states and territories of the United States are continually changing.
These practices may be subject to increased challenges by class action plaintiffs. Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands. We publish privacy policies, marketing materials and other statements regarding data privacy and security.
Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands. We publish privacy policies, marketing materials and other statements regarding data privacy and security.
For example, our Instagram account was suspended for short periods in each of September 2024, October 2024, and has been suspended since November 2024. Once our account is restated, it may, and our other accounts might also, be suspended or restricted due to changes in the rules and regulations of such social media platforms.
For example, our Instagram account was suspended for short periods in each of September 2024 and was suspended from October 2024 through June 2025. Once our account is restated, it may, and our other accounts might also, be suspended or restricted due to changes in the rules and regulations of such social media platforms.
Other states are considering and may adopt similar laws. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
Other states have adopted and may in the future adopt similar laws. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
Acquisitions by us of Legacy WMH common units in the Business Combination and subsequent taxable redemptions or exchanges of Class A units representing limited liability company interests of WMH LLC (the “Class A Units”) by the WMH LLC equity holders for shares of Class A Common Stock or cash pursuant to the exchange agreement have resulted, and are expected to continue to result in, favorable tax attributes for us.
Acquisitions by us of Legacy WMH common units in the Business Combination and subsequent taxable redemptions or exchanges of Class A units representing limited liability company interests of WMH LLC (the “Class A Units”) by the WMH LLC equity holders for shares of Class A Common Stock or cash pursuant to the exchange agreement have resulted, and are expected to continue to result in, favorable tax attributes for us. 37 Table of Contents In connection with the Business Combination, we entered into the TRA with WMH Class A equity holders and their representative.
Echard served as our interim Chief Financial Officer from February 2024 through November 2024, which, as noted in our Notification of Late Filing on Form 12b-25 with the SEC, had an impact on our ability to complete our financial statements. If Ms.
Echard served as our interim Chief Financial Officer from February 2024 through November 2024, which, as noted in our Notification of Late Filing on Form 12b-25 with the SEC, had an impact on our ability to complete our financial statements. Effectively January 30, 2026, we entered into an employment agreement with Ms. Echard. If Ms.
As of December 31, 2024, our affiliates, executive officers, directors and their respective affiliates as a group beneficially own approximately 22.4% of our outstanding Class A Common Stock and Class V Common Stock.
As of December 31, 2025, our affiliates, executive officers, directors and their respective affiliates as a group beneficially own approximately 19.9% of our outstanding Class A Common Stock and Class V Common Stock.
Travel Act, and other state and national anti-bribery laws in the countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other partners from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector.
Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other partners from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector.
We received such letters and achieved compliance twice prior to October 9, 2024, and may again in the future. There can be no assurance that we will remain in compliance with the minimum bid price requirement.
We received such letters and achieved compliance thrice prior to February 4, 2026, and may again in the future. There can be no assurance that we will remain in compliance with the minimum bid price requirement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity incident response and vulnerability management plans are designed to escalate certain cybersecurity incidents to members of leadership depending on the circumstances. In these situations, members of our leadership team work with our incident response team to help us evaluate, mitigate and remediate cybersecurity incidents of which they are notified.
Biggest changeIn these situations, members of our leadership team work with our incident response team to help us evaluate, mitigate and remediate cybersecurity incidents of which they are notified. In addition, our incident response and vulnerability management plans include reporting to the Audit Committee (who may consult with our technology committee) for certain cybersecurity incidents.
Risk Factors in this Annual Report on Form 10-K, including If our information technology 49 Table of Contents systems or those third parties with whom we work, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences .
Risk Factors in this Annual Report on Form 10-K, including If our information technology systems or those third parties with whom we work, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines 50 Table of Contents and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences .
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our systems and data. We use third-party service providers to assist us from time to time with the identification, assessment, and management of material cybersecurity risks.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our systems and data.
In addition, our incident response and vulnerability management plans include reporting to the Audit Committee (who may consult with our technology committee) for certain cybersecurity incidents. Our technology committee receives periodic reports from our security team concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
Our technology committee receives periodic reports from our security team concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of our security team, led by our CTO. Our CTO has over 14 years of experience in engineering and development, including leadership roles. Other members of our security team collectively have over 50 years of experience in information security.
Our CTO has over 15 years of experience in engineering, development and information security, including leadership roles overseeing enterprise security programs, compliance initiatives, and risk management across regulated industries.
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Our cybersecurity program is informed by recognized industry frameworks and standards and we regularly evaluate our controls and processes against these benchmarks to help ensure the continued effectiveness of our security posture. We use third-party service providers to assist us from time to time with the identification, assessment, and management of material cybersecurity risks.
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We also maintain a security awareness training program designed to educate employees on cybersecurity risks, social engineering threats, and their role in safeguarding company systems and data. Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of our security team, led by our CTO.
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Our CTO is supported by a dedicated security team whose members collectively hold over 40 years of experience in information security, including expertise in threat detection, incident response, vulnerability management, and regulatory compliance . Our cybersecurity incident response and vulnerability management plans are designed to escalate certain cybersecurity incidents to members of leadership depending on the circumstances.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We currently maintain our executive offices and headquarters at 41 Discovery, Irvine, California 92618, pursuant to an operating lease that expires in 2030. We also have office spaces in Los Angeles, California, Denver, Colorado and Austin, Texas. We consider our current office space adequate to meet our ongoing needs.
Biggest changeITEM 2. PROPERTIES We currently maintain our executive offices and headquarters at 41 Discovery, Irvine, California 92618, pursuant to an operating lease that expires in 2030. We also have office spaces in Los Angeles, California and Austin, Texas. We consider our current office space adequate to meet our ongoing needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth under "Commitment and Contingencies—Litigation" in Note 6 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 50 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth under "Commitment and Contingencies—Litigation" in Note 6 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 51 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Record As of March 5, 2025, there were 106 holders of record of our Class A Common Stock, 12 holders of record of our Class V Common Stock and 2 holders of record of our Public Warrants.
Biggest changeHolders of Record As of March 5, 2026, there were 90 holders of record of our Class A Common Stock, 11 holders of record of our Class V Common Stock and 2 holders of record of our Public Warrants.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings There have been no recent sales of unregistered securities for the years ended December 31, 2024 and December 31, 2023 that would be required to be disclosed pursuant to Item 701 of Regulation S-K. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. Reserved
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings There have been no recent sales of unregistered securities for the years ended December 31, 2025 and December 31, 2024 that would be required to be disclosed pursuant to Item 701 of Regulation S-K. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. Reserved
As of March 5, 2025, there were 105,028,513 shares of Class A Common Stock issued and outstanding and 49,319,542 shares of our Class V common stock (the “Class V Common Stock”) issued and outstanding. No market exists for the Class V Common Stock.
As of March 5, 2026, there were 111,187,614 shares of Class A Common Stock issued and outstanding and 47,852,652 shares of our Class V common stock (the “Class V Common Stock”) issued and outstanding. No market exists for the Class V Common Stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeCosts and Expenses The following table shows our total costs and expenses: Years Ended December 31, Change 2024 2023 ($) (%) (dollars in thousands) Cost of revenues (exclusive of depreciation and amortization shown separately below) $ 9,019 $ 12,527 $ (3,508) (28) % Sales and marketing 40,424 47,073 (6,649) (14) % Product development 36,426 36,001 425 1 % General and administrative 70,619 74,313 (3,694) (5) % Depreciation and amortization 13,278 12,133 1,145 9 % Asset impairment charges — 24,403 (24,403) (100) % Total costs and expenses $ 169,766 $ 206,450 $ (36,684) (18) % Cost of Revenues The decrease in cost of revenues was primarily related to a decrease of $2.5 million in cost of revenues associated with multi-channel marketing and cloud communication platforms, primarily due to the sunset in December 2023 of certain products and a decrease of $1.0 million in server costs.
Biggest changeFor the year ended December 31, 2025, Featured Listing and WM Deal products, Weedmaps for Business and other SaaS solutions, and other ad solutions represented approximately 61%, 31% and 8% of our total revenues, respectively. 59 Table of Contents Costs and Expenses The following table shows our total costs and expenses: Years Ended December 31, Change 2025 2024 ($) (%) (dollars in thousands) Cost of revenues (exclusive of depreciation and amortization shown separately below) $ 8,833 $ 9,019 $ (186) (2) % Sales and marketing 38,869 40,424 (1,555) (4) % Product development 28,136 36,426 (8,290) (23) % General and administrative 76,929 70,602 6,327 9 % Depreciation and amortization 13,394 13,278 116 1 % Asset impairment charges 7,777 — 7,777 N/M Total costs and expenses $ 173,938 $ 169,749 $ 4,189 2 % ________________________________ N/M - Not meaningful Cost of Revenues The decrease in cost of revenues was primarily related to a decrease of $0.2 million in credit card processing costs primarily driven by a decrease in revenues.
The actual amounts we will be required to pay may materially differ from these hypothetical amounts, because potential future tax savings that we will be deemed to realize, and the TRA payments made by us, will be calculated based in part on the market value of the Class A Common Stock at the time of each redemption or exchange under the Exchange Agreement and the prevailing applicable tax rates applicable to us over the life of the TRA and will depend on us generating sufficient taxable income to realize the tax benefits that are subject to the TRA.
The actual amounts we will be required to pay may materially differ from these hypothetical amounts, because potential future tax savings that we will be deemed to realize, and the TRA payments made by us, will be calculated based in part on the market value of the Class A Common Stock at the time of each redemption or exchange under the Exchange Agreement and the prevailing applicable tax rates applicable to us over the life of the TRA and will depend on us generating sufficient taxable income to utilize the tax benefits that are subject to the TRA.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.
WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. We are also subject to taxes in foreign jurisdictions.
WM Technology, Inc. is subject to U.S. federal income taxes, state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. We are also subject to taxes in foreign jurisdictions.
Net cash provided by operating activities for the year ended December 31, 2024 was $36.7 million, which resulted from net income of $12.2 million, together with net cash outflows of $4.5 million from changes in operating assets and liabilities, and non-cash items of $29.0 million, consisting of stock-based compensation expense of $9.2 million, depreciation and amortization of $13.3 million, amortization of right of use lease assets of $3.8 million, TRA remeasurement of $2.8 million, partially offset by gain on lease termination of $0.1 million.
Net cash used in operating activities for the year ended December 31, 2024 was $36.7 million , which resulted from net income of $12.2 million, together with net cash outflows of $4.5 million from changes in operating assets and liabilities, and non-cash items of $29.0 million, consisting of stock-based compensation expense of $9.2 million, depreciation and amortization of $13.3 million, amortization of right of use lease assets of $3.8 million, TRA remeasurement of $2.8 million, partially offset by gain on lease termination of $0.1 million.
Increasing prices in the component materials for the goods or services of our clients may impact their ability to maintain or increase their spend with us and their ability to pay their invoices on time.
Increasing prices in the component materials for the goods or services of our clients have and may impact their ability to maintain or increase their spend with us and their ability to pay their invoices on time.
Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with revenue recognition, income taxes, stock-based compensation, capitalized software development costs, provision (recovery) for credit losses, goodwill and intangible assets and fair value measurements to have the greatest potential impact on our consolidated financial statements.
Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with income taxes, stock-based compensation, capitalized software development costs, provision (recovery) for credit losses, goodwill and intangible assets and fair value measurements to have the greatest potential impact on our consolidated financial statements.
Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only two states continue to prohibit cannabis entirely. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 16-year operating history to enter new markets.
Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only two states continue to prohibit cannabis entirely. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 18-year operating history to enter new markets.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income and our other GAAP results.
We expect that the payments we will be required to make under the TRA will not be substantial, and therefore, in conjunction with the recording a full valuation allowance on the related TRA deferred tax assets for the year ended December 31, 2022, we have also adjusted the TRA liabilities as of December 31, 2024 and December 31, 2023.
We expect that the payments we will be required to make under the TRA will not be substantial, and therefore, in conjunction with the recording of a full valuation allowance on the related TRA deferred tax assets for the year ended December 31, 2022, we have also adjusted the TRA liabilities as of December 31, 2025 and December 31, 2024 .
We believe there is an opportunity to improve market efficiency through digital channels and expect to shift our marketing spending accordingly. Over the longer term, we expect to shift and accelerate our marketing spend to additional online and traditional channels, such as broadcast television or radio, as they become available to us.
We believe there is an opportunity to improve market efficiency through digital channels and expect to shift our marketing spending accordingly. Over the longer term, we have and expect to continue to shift and accelerate our marketing spend to additional online and traditional channels, such as broadcast television or radio, as they become available to us.
We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law. As of December 31, 2024, we actively operated in over 35 U.S. states and territories that have adult-use and/or medical-use regulations in place.
We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law. As of December 31, 2025, we actively operated in over 35 U.S. states and territories that have adult-use and/or medical-use regulations in place.
Currently , forty states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purpose s. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use).
Currently, forty states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purposes. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use).
We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. 60 Table of Contents Sources of Liquidity We primarily finance our operations and capital expenditures through cash flows generated by operations.
We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. 61 Table of Contents Sources of Liquidity We primarily finance our operations and capital expenditures through cash flows generated by operations.
Business.” Unless stated otherwise, the comparisons presented in this discussion and analysis refer to the year-over-year comparison of changes in our financial condition and results of operations as of and for the years ended December 31, 2024 and December 31, 2023.
Business.” Unless stated otherwise, the comparisons presented in this discussion and analysis refer to the year-over-year comparison of changes in our financial condition and results of operations as of and for the years ended December 31, 2025 and December 31, 2024.
Historically, a substantial majority of our marketing spending was on out-of-home advertising on billboards, buses and other non-digital outlets. Starting in 2019, consistent with the overall shift in perceptions regarding cannabis, a number of demand-side digital advertising platforms allowed us to advertise online. We also invested in growing our internal digital performance advertising team.
Historically, a substantial 56 Table of Contents majority of our marketing spending was on out-of-home advertising on billboards, buses and other non-digital outlets. Starting in 2019, consistent with the overall shift in perceptions regarding cannabis, a number of demand-side digital advertising platforms allowed us to advertise online. We also invested in growing our internal digital performance advertising team.
In connection with such potential future tax benefits resulting from the Business Combination and subsequent redemptions or exchanges of WMH Units, we have established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is 63 Table of Contents recorded within paid-in capital.
In connection with such potential future tax benefits resulting from the Business Combination and subsequent redemptions or exchanges of WMH Units, we have established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded within paid-in capital.
See Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included herein. Goodwill and Intangible Assets Assets and liabilities acquired from acquisitions are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill.
See Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included herein. 65 Table of Contents Goodwill and Intangible Assets Assets and liabilities acquired from acquisitions are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill.
Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included herein. Critical Accounting Policies Revenue Recognition We recognize revenue when the fundamental criteria for revenue recognition are met.
Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included herein. 63 Table of Contents Critical Accounting Policies Revenue Recognition We recognize revenue when the fundamental criteria for revenue recognition are met.
General and administrative expenses also include provision (recovery) for credit losses and professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by headcount required to support our business and meet our obligations as a public company.
General and administrative expenses also include provision (recovery) for credit losses, loss contingency, legal settlements and professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by headcount required to support our business and meet our obligations as a public company.
The Weedmaps marketplace is a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabi s products with 5,077 average monthly paying clients during the year ended December 31, 2024, on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors).
The Weedmaps marketplace is a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabi s products with 5,190 average monthly paying clients during the year ended December 31, 2025, on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors).
Our Weedmaps for Business subscriptions generally have one-month terms that autom atically renew unless notice of cancellation is provided in advance. Featured and deal listings and other ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools.
Our Weedmaps for Business subscriptions generally have one-month terms that autom atically renew unless notice of cancellation is provided in advance. Featured Listing and WM Deal products are offered as add-on products to the Weedmaps for Business subscriptions. Featured Listing and WM Deal products provide customers with premium placement ad solutions and discount and promotion pricing tools.
The decrease in personnel-related costs was primarily due to decreases in salaries and wages of $0.4 million, bonus expense of $0.5 million, stock-based compensation expense of $0.7 million and vacation expense of 0.4 million, partially offset by an increase in payroll tax expense of $0.1 million.
The decrease in personnel-related costs was primarily due to decreases in salaries and wages of $5.0 million, bonus expense of $0.8 million, stock-based compensation expense of $1.4 million and payroll tax expense of $0.5 million, partially offset by an increase in vacation expense of 0.2 million.
Based on the weight of all available evidence, both positive and negative, we determined during the three months ended December 31, 2022 tha t a full valuation allowance was required against our net deferred tax assets.
Based on the weight of all available evidence, both positive and negative, we determined during the three months ended December 31, 2022 that a full valuation allowance was required against our net deferred tax assets.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience short-term, negative impacts to our operating results and cash flows. Components of Our Results of Operations Revenues Our revenues are derived primarily from monthly subscriptions to Weedmaps for Bu siness, featured and deal listings, other ad solutions and WM Dispatch.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience short-term, negative impacts to our operating results and cash flows. Components of Our Results of Operations Revenues Our revenues are derived primarily from monthly subscriptions to Weedmaps for Bu siness, Featured Listing and WM Deal products and other ad solutions.
We also paid $0.1 million to terminate a lease agreement for one of our offices. In conjunction with the early lease termination, we reported a gain of $0.1 million which is recognized as a reduction to the related lease expense.
We also paid $0.1 million to terminate a lease agreement for one of our offices. In conjunction with the early lease termination, we reported a gain of $0.1 million which is recognized as a reduction to 66 Table of Contents the related lease expense.
Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value, and such changes could materially impact our results of operations in future periods. As of December 31, 2024 and December 31, 2023, warrant liability was $0.6 million.
Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value, and such changes could materially impact our results of operations in future periods. As of December 31, 2025 and December 31, 2024, warrant liability was $0.2 million and $0.6 million, respectively.
Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased approximately 8,700 listing pages as of December 31, 2024. We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain, Switzerland, and Uruguay.
Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased approximately 8,100 active listing pages as of December 31, 2025. We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain, Switzerland, and Uruguay.
Cost of Revenues (Exclusive of Depreciation and Amortization) Cost of revenues excludes depreciation and amortization expense and primarily consists of web hosting, internet service and credit card processing costs. Cost of revenues is primarily driven by fluctuations in revenue leading to increases or decreases in credit card processing and web hosting cost.
Cost of Revenues (Exclusive of Depreciation and Amortization) Cost of revenues excludes depreciation and amortization expense and primarily consists of web hosting, internet service and credit card processing costs. Cost of revenues is primarily driven by fluctuations in revenue leading to increases or decreases in 57 Table of Contents credit card processing and web hosting cost.
If our forecasts of cash flows or other key inputs are negatively revised in the future, the estimated fair value of the reporting unit would be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results. No goodwill impairment charges were recorded for the years ended December 31, 2024 and 2023.
If our forecasts of cash flows or other key inputs are negatively revised in the future, the estimated fair value of the reporting unit would be adversely impacted, potentially leading to an additional impairment in the future that could materially affect our operating results. No goodwill impairment charges were recorded for the year ended December 31, 2024.
For those trade receivables that do not share similar risk characteristics, the allowance for expected credit losses is calculated on an individual basis. Risk characteristics relevant to our accounts receivable include balance of customer account and aging status. The allowance for credit losses was $1.2 million and $8.7 million as of December 31, 2024 and December 31, 2023, respectively.
For those trade receivables that do not share similar risk characteristics, the allowance for expected credit losses is calculated on an individual basis. Risk characteristics relevant to our accounts receivable include balance of customer account and aging status. The allowance for credit losses was $4.2 million and $1.2 million as of December 31, 2025 and December 31, 2024, respectively.
Forfeitures of stock-based awards are recognized as they occur and we record compensation cost over the derived service period. For the years ended December 31, 2024 and 2023, we recognized stock-based compensation expense of $9.2 million and $13.5 million, respectively. See Note 13, “Stock-based Compensation,” to our consolidated financial statements included herein.
Forfeitures of stock-based awards are recognized as they occur and we record compensation cost over the derived service period. For the years ended December 31, 2025 and 2024, we recognized stock-based compensation expense of $7.8 million and $9.2 million, respectively. See Note 13, “Stock-based Compensation,” to our consolidated financial statements included herein.
See Note 15, “Income Taxes,” to our consolidated financial statements included herein. 57 Table of Contents Results of Operations A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
See Note 15, “Income Taxes,” to our consolidated financial statements included herein. 58 Table of Contents Results of Operations A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. No intangible asset impairment charges have been recorded for the year ended December 31, 2024.
For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. No intangible asset impairment charges have been recorded for the years ended December 31, 2025 and December 31, 2024.
Contractual Obligations and Commitments We have non-cancellable contractual agreements primarily related to leases and other purchase obligations. As of December 31, 2024, future payments on our operating leases were $40.5 million. See Note 5, “Leases,” to our consolidated financial statements included herein.
Contractual Obligations and Commitments We have non-cancellable contractual agreements primarily related to leases and other purchase obligations. As of December 31, 2025, future payments on our operating leases were $34.1 million. See Note 5, “Leases,” to our consolidated financial statements included herein.
Provision for Income Taxes Years Ended December 31, Change 2024 2023 ($) (%) (dollars in thousands) Provision for income taxes $ 46 $ 93 $ (47) (51) % For the years ended December 31, 2024 and 2023, we recorded less than $0.1 million in income tax provisions due to the impact of the full valuation allowance on our net deferred assets.
Provision for Income Taxes Years Ended December 31, Change 2025 2024 ($) (%) (dollars in thousands) Provision for income taxes $ 93 $ 46 $ 47 102 % For the years ended December 31, 2025 and 2024, we recorded less than $0.1 million in provision for income taxes due to the impact of the full valuation allowance on our net deferred assets.
Net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in operating lease liabilities of $5.6 million, an increase in prepaid expenses and other assets of $0.5 million and a decrease in deferred revenue of $0.5 million, partially offset by a decrease in accounts receivable of $1.1 million and an increase in accounts payable and accrued expenses of $1.0 million.
Net cash outflows from changes in operating assets and liabilities were primarily due to an increase in accounts receivable of $8.9 million, an increase in prepaid expenses and other current and non-current assets of $2.6 million and a decrease in operating lease liabilities of $3.5 million, partially offset by an increase in accounts payable and accrued expenses of $0.6 million and an increase in deferred revenue of $0.1 million.
For the years ended December 31, 2024 and 2023 , total transaction price adjustments issued were $5.5 million and $4.2 million, respectively. For clients that pay in advance for listing and other services, we record deferred revenue and recognize revenue over the applicable subscription term.
For the years ended December 31, 2025 and 2024 , total transaction price adjustments issued were $7.9 million and $5.5 million, respectively. For clients that pay in advance for listing and other services, we record deferred revenue and recognize revenue over the applicable subscription term.
The decrease in personnel-related costs of $5.5 million were primarily due to decreases in salaries and wages of $3.0 million, bonus expense of $1.4 million, stock-based compensation expense of $1.3 million and payroll tax expense of $0.2 million, partially offset by an increase in vacation expense of $0.4 million.
The decrease in personnel-related costs of $1.8 million were primarily due to decreases in salaries and wages of $0.3 million, bonus expense of $0.7 million, stock-based compensation expense of $0.6 million and payroll tax expense of $0.3 million, partially offset by an increase in vacation expense of $0.1 million.
We recognize revenue by applying the following five steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) we satisfy these performance obligations in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
In accordance with ASC topic 606, “Revenue from Contracts with Customers,” we recognize revenue by applying the following five steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) we satisfy these performance obligations in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
Cash Flows Years Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 36,676 $ 22,928 Net cash used in investing activities $ (11,637) $ (11,871) Net cash used in financing activities $ (7,423) $ (5,290) Net Cash Provided by Operating Activities Cash from operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, change in TRA liability, amortization of right-of-use lease assets, stock-based compensation, asset impairment charges, gain on lease termination, provision (recovery) for credit losses and the effect of changes in working capital.
Cash Flows Years Ended December 31, 2025 2024 (in thousands) Net cash provided by operating activities $ 26,188 $ 36,676 Net cash used in investing activities $ (12,685) $ (11,637) Net cash used in financing activities $ (3,068) $ (7,423) Net Cash Provided by Operating Activities Cash from operating activities consists primarily of net income adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, change in TRA liability, amortization of right-of-use lease assets, stock-based compensation, asset impairment charges, gain on lease termination, provision (recovery) for credit losses and the effect of changes in working capital.
In addition, any client may choose to purchase multiple listing solutions for each of their retail websites or businesses. Average monthly paying clients for the year ended December 31, 2024 decreased by approximately 6% to 5,077 average monthly paying clients from 5,419 average monthly paying clients in the same period in 2023.
In addition, any client may choose to purchase multiple listing solutions for each of their retail websites or businesses. Average monthly paying clients for the year ended December 31, 2025 increased by approximately 2% to 5,190 average monthly paying clients from 5,077 average monthly paying clients in the same period in 2024.
Net cash provided by operating activities is also impacted by the effects of changes in operating assets and liabilities such as: accounts receivable which is impacted by the timing of customer billings and related collections from our customers; accounts payable and accrued expenses due to timing of payments; accrued personnel costs which are impacted by employee performance targets and the timing of payments related to employee bonus incentives.
Net cash provided by operating activities is also impacted by effects of changes in operating liabilities such as accounts payable and accrued expenses due to timing of payments; accrued personnel costs which are impacted by employee performance targets and the timing of payments related to employee bonus incentives.
Our revenues are derived primarily from monthly subscriptions to Weedmaps for Business, featured and deal listings and other WM Ad solutions. Our Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance.
Our revenues are derived primarily from monthly subscriptions to Weedmaps for Business, Featured Listing and WM Deal products and other WM Ad solutions. Our Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured Listing and WM Deal products are offered as add-on products to the Weedmaps for Business subscriptions.
The assessment of collectability considers whether we may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. For more information, refer to Note 3, “Revenue from Contracts with Customers,” of our consolidated financial statements included herein.
Collectability is reassessed when there is a significant change in facts or circumstances. The assessment of collectability considers whether we may limit our credit risk exposure through our right to stop transferring additional service in the event the customer is delinquent. For more information, refer to Note 3, “Revenue from Contracts with Customers,” of our consolidated financial statements included herein.
In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange.
The fair value of the Private Placement Warrants may change significantly as additional data is obtained. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange.
As of December 31, 2024 and December 31, 2023 , our operating leases had a weighted average remaining lease term of 6.0 years and 6.3 years and a weighted-average discount rate of 10.0% and 9.8%, respectively .
As of December 31, 2025 and 2024 , our operating leases had a weighted average remaining lease term of 5.0 years and 6.0 years and a weighted-average discount rate of 10.0% and 10.0%, respectively .
Fiscal Year 2024 Financial Highlights • Revenues were $184.5 million as compared to $188.0 million in the prior year. • Average monthly paying clients was 5,077, as compared to 5,419 in the prior year. • Average monthly revenues per paying client was $3,029, as compared to $2,891 in the prior year. • Net income was $12.2 million as compared to net loss of $15.7 million in the prior year. • Adjusted EBITDA was $42.9 million as compared to Adjusted EBITDA of $36.9 million in the prior year. • Cash totaled $52.0 million as of December 31, 2024, with no long-term debt. 51 Table of Contents For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Net Income (Loss) to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
Fiscal Year 2025 Financial Highlights • Revenues were $174.7 million as compared to $184.5 million in the prior year. • Average monthly paying clients was 5,190, as compared to 5,077 in the prior year. • Average monthly revenues per paying client was $2,805, as compared to $3,029 in the prior year. • Net income was $3.3 million as compared to $12.2 million in the prior year. • Adjusted EBITDA was $39.8 million as compared to Adjusted EBITDA of $42.9 million in the prior year. • Cash and cash equivalents totaled $62.4 million as of December 31, 2025, with no long-term debt. 52 Table of Contents For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income, see “Net Income to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination.
Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under Item.7 in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on May 24, 2024, as amended by Amendment No. 1, filed with the SEC on August 30, 20 24, which are available free of charge on the SEC’s website at https://www.sec.gov and at our investor relations website, https://ir.weedmaps.com.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under Item.7 in our Annual Report on Form 10-K for the year ended December 31, 2024 , filed with the SEC on March 13, 2025 , which are available free of charge on the SEC’s website at https://www.sec.gov and at our investor relations website, https://ir.weedmaps.com.
Net cash from financing activities for the year ended December 31, 2023 was $5.3 million, which resulted from $4.2 million distribution payments to members of WMH LLC, $1.5 million for repayment of insurance premium financing and $0.4 million in proceeds from collection of related party note receivable.
Net Cash Used in Financing Activities Net cash used in financing activities for the year ended December 31, 2025 was $3.1 million, which resulted from $1.9 million of distribution payments to members of WMH LLC, $1.4 million in TRA payments and $0.3 million in proceeds from collection of related party note receivable.
Payments under the TRA are not conditioned on the Class A Unit holders’ continued ownership of us. See Note 15, “Income Taxes,” to our consolidated financial statements included herein. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Payments under the TRA are not conditioned on the TRA parties continued equity ownership in us or WMH LLC. See Note 15, “Income Taxes,” to our consolidated financial statements included herein. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
In connection with the Business Combination, we entered into a TRA with continuing members that provides for a payment to the continuing members of 85% of the amount of tax benefits, if any, that WM Technology, Inc. realizes, or is deemed to realize, as a result of redemptions or exchanges of WMH Units.
In connection with the Business Combination, we entered into a TRA with the WMH Class A equity holders and their representatives that provides for a payment to such holders of 85% of the amount of tax benefits, if any, that WM Technology, Inc. realizes, or is deemed to realize, as a result of redemptions or exchanges of WMH Units and payments under the TRA.
We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity.
Below we have provided a reconciliation of net income (the most directly comparable GAAP financial measure) to EBITDA; and from EBITDA to Adjusted EBITDA. We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity.
Goodwill is assessed for impairment annually on December 31. For the year ended December 31, 2024, in accordance with our annual assessment policy, we opted to bypass the qualitative assessment and performed a quantitative assessment to test goodwill for impairment.
For the year ended December 31, 2025, in accordance with our annual assessment policy, we opted to bypass the qualitative assessment and performed a quantitative assessment to test goodwill for impairme nt.
See Note 15, “Income Taxes,” to our consolidated financial statements included herein. Seasonality The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to 420, July 10 th and Green Wednesday. Likewise, our clients will typically increase spend heading into these events.
See Note 15, “Income Taxes,” to our consolidated financial statements included herein. Seasonality The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to April 20 th (420) and the day before Thanksgiving (Green Wednesday).
Net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in accounts payable and accrued expenses of $15.3 million, a decrease in operating lease liabilities of $6.3 million and a decrease in deferred revenue of $0.3 million, partially offset by a decrease in accounts receivable of $4.5 million and a decrease in prepaid expenses and other assets of $3.3 million.
Net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in operating lease liabilities of $5.6 million, an increase in prepaid expenses and other current and non-current assets of $0.5 million and a decrease in deferred revenue of $0.5 million, partially offset by a decrease in accounts receivable of $1.1 million and an increase in accounts payable and accrued expenses of $1.0 million.The changes in operating assets and liabilities were mostly due to fluctuations in timing of cash receipts and payments.
(3) Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided).
(2) Average monthly revenues per paying client is defined as the average monthly revenues for any particular period divided by the average monthly paying clients in the same respective period. (3) Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided).
Liquidity and Capital Resources The following tables show our cash, accounts receivable and working capital as of the dates indicated: As of December 31, 2024 2023 (in thousands) Cash $ 51,966 $ 34,350 Accounts receivable, net $ 10,060 $ 11,158 Working capital $ 39,079 $ 17,771 As of December 31, 2024 and December 31, 2023, we had cash of $52.0 million and $34.4 million, respectively.
Liquidity and Capital Resources The following tables show our cash, accounts receivable and working capital as of the dates indicated: As of December 31, 2025 2024 (in thousands) Cash and cash equivalents $ 62,401 $ 51,966 Accounts receivable, net $ 14,619 $ 10,060 Working capital $ 48,684 $ 39,079 As of December 31, 2025 and December 31, 2024, we had cash and cash equivalents of $62.4 million and $52.0 million, respectively.
See Note 2. “Revenue Recognition” of our consolidated financial statements for additional information. Critical Accounting Estimates Income Taxes As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes.
Critical Accounting Estimates Income Taxes As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is generally not subject to U.S. federal and certain state and local income taxes.
However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors.
We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors.
The fair value of the Public Warrants is classified as Level 1 financial instruments and is based on the publicly listed trading price of our Public Warrants. The fair value of the Private Warrants is determined with Level 3 inputs using the Black-Scholes model. The fair value of the Private Placement Warrants may change significantly as additional data is obtained.
The warrants are measured at fair value under ASC 820 - Fair Value Measurements . The fair value of the Public Warrants is classified as Level 1 financial instruments and is based on the publicly listed trading price of our Public Warrants. The fair value of the Private Warrants is determined with Level 3 inputs using the Black-Scholes model.
We will continue to evaluate the realization of the TRA tax attributes, and in the future, we may conclude that the TRA liability is probable of payment, and if the TRA is reinstated, the payments would be substantial.
We will continue to evaluate the realization of the TRA tax attributes, and in the future, we may conclude that it is more likely than not that the Company will be able to utilize the deferred tax assets that are subject to the TRA, and therefore that the TRA liability is probable of payment, and if the TRA is reinstated, the payments would be substantial.
For a detailed discussion of our results of operations, see “Results of Operations” below. 52 Table of Contents Years Ended December 31, 2024 2023 (dollars in thousands, except for revenue per paying client) Revenues $ 184,514 $ 187,993 Net income (loss) $ 12,187 $ (15,727) EBITDA (1) $ 25,089 $ (3,534) Adjusted EBITDA (1) $ 42,919 $ 36,907 Average monthly revenues per paying client (2) $ 3,029 $ 2,891 Average monthly paying clients (3) 5,077 5,419 ___________________________ (1) For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Net Income (Loss) to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
Years Ended December 31, 2025 2024 (dollars in thousands, except for revenue per paying client) Revenues $ 174,704 $ 184,514 Net income $ 3,263 $ 12,187 EBITDA (1) $ 14,951 $ 25,089 Adjusted EBITDA (1) $ 39,847 $ 42,919 Average monthly revenues per paying client (2) $ 2,805 $ 3,029 Average monthly paying clients (3) 5,190 5,077 ___________________________ (1) For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income, see “Net Income to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
Our calculation of the TRA asset and liability requires estimates of its future qualified taxable income over the term of the TRA as a basis to determine if the related tax benefits are expected to be realized. As of December 31, 2024 and December 31, 2023, TRA liability were $4.4 million and $1.8 million.
Our calculation of the TRA asset 64 Table of Contents and liability requires estimates of our future qualified taxable income over the term of the TRA as a basis to determine if the related tax benefits are expected to be utilized.
The fair value of performance-based restricted stock units with market conditions is measured using a Monte Carlo simulation. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model.
The fair value of performance-based restricted stock units with market conditions is measured using a Monte Carlo simulation. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, inflation, the military conflict between Russia and Ukraine and the current state of war between Israel and Hamas and the related risk of a larger regional conflict.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, inflation, and global conflicts.
Sales and Marketing Expenses The decrease in sales and marketing expenses was primarily related to a decrease in personnel-related costs of $5.5 million and a decrease in advertising expense of $1.1 million.
Sales and Marketing Expenses The decrease in sales and marketing expenses was primarily related to a decrease in personnel-related costs of $1.8 million and a decrease in advertising expense of $0.3 million, partially offset by an increase in outside service expense of $0.5 million and other expense of $0.1 million.
We believe that continued investment in our platform is important for our growth and expect our product development expenses will increase in a manner consistent with revenue growth as our operations grow.
Amortization expense related to capitalized software development cost is included in depreciation, amortization and asset impairment expense in the consolidated statements of operations. We believe that continued investment in our platform is important for our growth and expect our product development expenses will increase in a manner consistent with revenue growth as our operations grow.
Net cash used in investing activities for the year ended December 31, 2023 was $11.9 million, which resulted from $11.9 million cash paid for purchases of property and equipment, including certain capitalized software development cost. 61 Table of Contents Net Cash Provided by (Used in) Financing Activities Net cash used in financing activities for the year ended December 31, 2024 was $7.4 million, which resulted from $7.7 million of distribution payments to members of WMH LLC, $0.1 million in TRA payments and $0.4 million in proceeds from collection of related party note receivable.
Net cash from financing activities for the year ended December 31, 2024 was $7.4 million, which resulted from $7.7 million distribution payments to members of WMH LLC, $0.1 million in TRA payments and $0.4 million in proceeds from collection of related party note receivable.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and 53 Table of Contents depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, transaction related bonus, legal settlements and other legal costs, discharge of holdback obligation related to prior acquisition, reduction in force, asset impairment charges, change in TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA.
The decrease in net income of $8.9 million was primarily due to a decrease in revenues of $9.8 million and an increase in total costs and expenses of $4.2 million, partially offset by change in TRA liability of $3.1 million resulting from the remeasurement of the TRA liability, change in fair value of warrant liability of $0.4 million and an increase in other income of $1.6 million. 54 Table of Contents To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, legal settlements and other legal costs, loss contingency, asset impairment charges, reduction in force, change in the TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA.
We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses. 54 Table of Contents Growth and Retention of Our Paying Clients Our revenue grows primarily through acquiring and retaining paying clients and increasing the revenue per paying client over time.
We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses.
Net cash used in operating activities for the year ended December 31, 2023 was $22.9 million , which resulted from net loss of $15.7 million, together with net cash outflows of $14.2 million from changes in operating assets and liabilities, and non-cash items of $52.8 million, consisting of asset impairment charges of $24.4 million, stock-based compensation expense of $13.5 million, depreciation and amortization of $12.1 million, amortization of right of use lease assets of $4.9 million, provision for credit losses of $1.8 million, TRA remeasurement of $1.3 million, partially offset by a gain from the discharge of a holdback obligation related to a prior acquisition of $3.7 million, and the change in fair value of warrant liability of $1.5 million.
Net cash provided by operating activities for the year ended December 31, 2025 was $26.2 million, which resulted from net income of $3.3 million, together with net cash outflows of $14.5 million from changes in operating assets and liabilities, and non-cash items of $37.4 million, consisting of fair value of warrant liability of $0.4 million and TRA remeasurement of $0.3 million, partially offset by stock-based compensation expense of $7.8 million, depreciation and amortization of $13.4 million, amortization of right of use lease assets of $2.5 million, impairment loss of $7.8 million and loss contingency of $2.3 million.
Transaction price adjustments are primarily 62 Table of Contents related to our Together for Equity Access and Legislation, (“WM Teal”), program, through wh ich we provide free software, advertising, educational materials and training programs to applicants or licenses under social equity licensing programs.
Revenue reflects the transaction price, including any adjustments, that the Company expects to receive for such goods and service s. Transaction price adjustments are primarily related to our Together for Equity Access and Legislation program, through wh ich we provide free software, advertising, educational materials and training programs to applicants or licenses under social equity licensing programs.
We also have minimum outstanding purchase obligations of $7.3 million in 2025 and $7.5 million in 2026, due under software license agreements, of which the majority relates to the remaining two years of our three-year AWS Enterprise agreement. As of December 31, 2024 and December 31, 2023, our TRA liability was $4.4 million and $1.8 million, respectively.
We also have minimum outstanding purchase obligations $7.5 million in 2026, due under software license agreements, of which the majority relates to the remaining period of our three-year AWS Enterprise agreement.
Assuming a reinstatement of the TRA liability, there are several assumptions that would be relevant such as, no material changes in relevant tax law, that there are no future redemptions or exchanges to Class A Units and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, the tax savings associated with acquisitions of common units in the Business Combination would aggregate to approximately $165.7 million, as of December 31, 2024, over 15 years from the Closing Date.
Assuming a reinstatement of the TRA liability, there are several assumptions that would be relevant in the ultimate determination of the amount of our TRA liability, such as, no material changes in relevant tax law, that there are no future redemptions or exchanges to Class A Units and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA.
Fair Value Measurements In connection with the Business Combination, we assumed 12,499,993 Public Warrants and 7,000,000 Private Placement Warrants. As of December 31, 2024, 12,499,973 of the Public Warrant and all of the Private Placement Warrants remained outstanding. The warrants are measured at fair value under ASC 820 - Fair Value Measurements .
We did not have any impairment charges related to property and equipment for the year ended December 31, 2025 and 2024. Fair Value Measurements In connection with the Business Combination, we assumed 12,499,993 Public Warrants and 7,000,000 Private Placement Warrants. As of December 31, 2025, 12,499,973 of the Public Warrant and all of the Private Placement Warrants remained outstanding.
Factors Affecting Our Performance Growth of Our Two-Sided Weedmaps Marketplace We have historically grown through and intend to focus on continuing to grow through the expansion of our two-sided marketplace, which occurs through growth of the number and type of businesses and consumers that we attract to our platform.
These reduction in force actions are designed to enhance operational efficiency and align resources with strategic priorities in our corporate technology and marketing divisions. 55 Table of Contents Factors Affecting Our Performance Growth of Our Two-Sided Weedmaps Marketplace We have historically grown through and intend to focus on continuing to grow through the expansion of our two-sided marketplace, which occurs through growth of the number and type of businesses and consumers that we attract to our platform.
Regulation and Maturation of Cannabis Markets We believe that we will have significant opportunities for greater growth as more jurisdictions legalize cannabis for medical and/or adult-use and the regulatory environment continues to develop.
In addition, price deflation across our core markets has and may continue to compress our clients’ operating margins and marketing budgets, which directly impacts our revenue. Regulation and Maturation of Cannabis Markets We believe that we will have significant opportunities for greater growth as more jurisdictions legalize cannabis for medical and/or adult-use and the regulatory environment continues to develop.
In accordance with authoritative guidance, we capitalize these costs when the preliminary development project stage is completed, management has authorized further funding for the completion of the project, and it is probable that the project will be completed and performed as intended.
Capitalized Software Development Costs We capitalize certain costs related to the development and enhancement of the Weedmaps platform and SaaS solutions when (i) the preliminary development project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and performed as intended.

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