UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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There were
MoneyLion Inc.
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period Ended September 30, 2023
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Page |
PART I – FINANCIAL INFORMATION |
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Item 1. |
1 |
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1 |
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2 |
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Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity |
3 |
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5 |
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6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
29 |
Item 3. |
46 |
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Item 4. |
47 |
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PART II - OTHER INFORMATION |
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Item 1. |
50 |
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Item 1A. |
52 |
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Item 2. |
52 |
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Item 3. |
52 |
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Item 4. |
52 |
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Item 5. |
52 |
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Item 6. |
53 |
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54 |
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i
INTRODUCTORY NOTE
General
On September 22, 2021, MoneyLion Inc., formerly known as Fusion Acquisition Corp., consummated a business combination (the “Business Combination”) with MoneyLion Technologies Inc., formerly known as MoneyLion Inc. Following the Business Combination, MoneyLion Inc. became a publicly traded company, with MoneyLion Technologies Inc. continuing the existing business operations as a subsidiary of MoneyLion Inc. MoneyLion Inc.’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), is listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “ML.”
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “MoneyLion,” the “Company,” “we,” “us,” “our” and similar references refer to MoneyLion Inc. and, as context requires, its consolidated subsidiaries for the period following the Business Combination and to MoneyLion Technologies Inc. and, as context requires, its consolidated subsidiaries for the period prior to the Business Combination. "MALKA" refers to Malka Media Group LLC, a wholly-owned subsidiary of MoneyLion Technologies Inc., and "Engine" refers to ML Enterprise Inc., doing business as the brand "Engine by MoneyLion," a wholly-owned subsidiary of MoneyLion Technologies Inc. which was previously named "Even Financial Inc." and subsequently renamed in February 2023.
For convenience, the trademarks and service marks referred to in this Quarterly Report on Form 10-Q are listed without the ®, TM and SM symbols, but we intend to assert, and notify others of, our rights in and to these trademarks and service marks to the fullest extent under applicable law.
Reverse Stock Split
On April 24, 2023, the Company amended the Company's Fourth Amended and Restated Certificate of Incorporation (as amended from time to time, the "Certificate of Incorporation") to effect, effective as of 5:01 p.m. Eastern Time on April 24, 2023, a 1-for-30 reverse stock split (the "Reverse Stock Split") of the Class A Common Stock. At the effective time of the Reverse Stock Split, every 30 shares of Class A Common Stock either issued and outstanding or held as treasury stock were automatically reclassified into one new share of Class A Common Stock, and the total number of shares of Class A Common Stock authorized for issuance was reduced by a corresponding proportion from 2,000,000,000 shares to 66,666,666 shares. The Reverse Stock Split was approved by the Company's stockholders at a Special Meeting of Stockholders on April 19, 2023 and approved by the Board of Directors on April 21, 2023. The primary goal of the Reverse Stock Split was to increase the per share price of the Class A Common Stock in order to meet the minimum per share price requirement for continued listing on the NYSE. The Class A Common Stock began trading on the NYSE on an as-adjusted basis on April 25, 2023 under the existing trading symbol "ML."
In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of Class A Common Stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. Furthermore, proportionate adjustments were made to the conversion factor at which the Company’s previously outstanding Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), converted to Class A Common Stock. The total number of shares of preferred stock of the Company authorized for issuance remained at 200,000,000. Stockholders who would have been entitled to receive fractional shares as a result of the Reverse Stock Split were instead entitled to a cash payment in lieu thereof at a price equal to the fraction of one share to which the stockholder was otherwise entitled multiplied by the closing price per share of the Class A Common Stock on the NYSE on the effective date of the Reverse Stock Split.
The effects of the Reverse Stock Split have been reflected in this Quarterly Report on Form 10-Q for all periods presented.
ii
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including the information incorporated herein by reference, contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of MoneyLion Inc. and its wholly-owned subsidiaries. These statements are based on the beliefs and assumptions of the management of MoneyLion. Although MoneyLion believes that its respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, MoneyLion cannot assure you that it will achieve or realize these plans, intentions or expectations. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” or “intends” or similar expressions. The forward-looking statements are based on projections prepared by, and are the responsibility of, MoneyLion’s management.
Forward-looking statements are inherently subject to known and unknown risks and uncertainties, many of which may be beyond MoneyLion’s control. Forward-looking statements are not guarantees of future performance or outcomes, and MoneyLion’s actual performance and outcomes, including, without limitation, actual results of operations, financial condition and liquidity, and the development of the market in which MoneyLion operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
iii
These and other factors are more fully discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2022, and Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.
These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
iv
Risk Factor Summary
Our business is subject to numerous risks and uncertainties, including those we face in connection with the successful implementation of our strategy and the growth of our business. The following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our securities and result in a loss of all or a portion of your investment:
v
The risks described above should be read together with the “Cautionary Statement Regarding Forward-Looking Statements” herein, any other risk factors set forth under Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q, the “Risk Factors” section in the Annual Report on Form 10-K for the year ended December 31, 2022, our consolidated financial statements and the related notes presented in Part I, Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q and the other documents that we file with the SEC. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial.
vi
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MONEYLION INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands, except per share amounts)
(Unaudited)
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September 30, |
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December 31, |
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2023 |
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2022 |
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Assets |
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Cash |
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$ |
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$ |
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Restricted cash, including amounts held by variable interest entities (VIEs) of $ |
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Consumer receivables |
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Allowance for credit losses on consumer receivables |
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Consumer receivables, net, including amounts held by VIEs of $ |
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Enterprise receivables, net |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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— |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity |
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Liabilities: |
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Secured loans, net |
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$ |
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$ |
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Accounts payable and accrued liabilities |
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Warrant liability |
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Other debt, net, including amounts held by VIEs of $ |
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Other liabilities |
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Total liabilities |
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(Note 15) |
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Redeemable convertible preferred stock (Series A), $ |
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— |
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Stockholders' equity: |
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Class A Common Stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Treasury stock at cost, |
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( |
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( |
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Total stockholders' equity |
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Total liabilities, redeemable convertible preferred stock and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
1
MONEYLION INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share amounts)
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue |
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Service and subscription revenue |
$ |
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$ |
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$ |
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$ |
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Net interest income on loan receivables |
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Total revenue, net |
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Operating expenses |
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Provision for credit losses on consumer receivables |
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Compensation and benefits |
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Marketing |
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Direct costs |
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Professional services |
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Technology-related costs |
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Other operating expenses |
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Total operating expenses |
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Net income (loss) before other expense (income) and income taxes |
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( |
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( |
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Interest expense |
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( |
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( |
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( |
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( |
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Change in fair value of warrant liability |
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( |
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( |
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Change in fair value of contingent consideration from mergers and acquisitions |
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— |
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Goodwill impairment loss |
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— |
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— |
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— |
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Other income (expense) |
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Net loss before income taxes |
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Income tax expense (benefit) |
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Net loss |
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( |
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( |
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( |
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(Accrued) / reversal of previously accrued dividends on preferred stock |
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— |
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( |
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( |
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Net loss attributable to common shareholders |
$ |
( |
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$ |
( |
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$ |
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$ |
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Net loss per share, basic and diluted(1) |
$ |
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$ |
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$ |
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$ |
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Weighted average shares used in computing net loss per share, basic and diluted(1) |
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The accompanying notes are an integral part of these consolidated financial statements.
2
MONEYLION INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(amounts in thousands, except share amounts)
(Unaudited)
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Redeemable Convertible |
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Total |
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Preferred Stock (Series A) |
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Class A Common Stock |
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Additional |
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Accumulated |
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Treasury |
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Stockholders' |
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Shares |
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Amount |
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Shares |
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Amount |
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Paid-in Capital |
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Deficit |
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Stock |
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Equity |
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Balances at July 1, 2023 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Balances at September 30, 2023 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Redeemable Convertible |
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Total |
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Preferred Stock (Series A) |
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Class A Common Stock |
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Additional |
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Accumulated |
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Treasury |
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Stockholders' |
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Shares |
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Amount |
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Shares(1) |
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Amount(1) |
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Paid-in Capital(1) |
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Deficit |
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Stock |
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Equity |
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Balances at January 1, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Issuance of common stock in connection with earnout and make-whole provisions related to the acquisition of Malka Media Group LLC |
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— |
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— |
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— |
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— |
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— |
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Issuance of equity in connection with Engine Acquisition and the related contingent consideration, net of working capital adjustments |
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— |
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— |
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— |
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Voluntary conversion of preferred stock to common stock |
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( |
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( |
) |
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— |
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— |
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— |
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Reversal of previously accrued dividends on preferred stock |
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— |
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— |
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— |
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— |
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— |
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— |
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Settlement of accrued dividends on preferred stock |
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— |
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— |
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— |
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— |
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— |
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Automatic conversion of redeemable convertible preferred stock (Series A) |
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( |
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( |
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— |
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— |
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— |
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Other |
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— |
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( |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Balances at September 30, 2023 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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3
MONEYLION INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(amounts in thousands, except share amounts)
(Unaudited)
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Redeemable Convertible |
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Total |
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Preferred Stock (Series A) |
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Class A Common Stock |
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Additional |
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Accumulated |
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Treasury |
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Stockholders' |
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Shares |
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Amount |
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Shares (1) |
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Amount (1) |
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Paid-in Capital(1) |
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Deficit |
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Stock |
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Equity |
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Balances at July 1, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock in connection with earnout and make-whole provisions related to the acquisition of Malka Media Group LLC |
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— |
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— |
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— |
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— |
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— |
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Issuance of options and preferred stock in connection with Engine Acquisition, net of working capital adjustments |
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( |
) |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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Conversion of preferred stock to common stock |
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( |
) |
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( |
) |
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— |
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— |
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— |
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Accrued dividends on preferred stock |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balances at September 30, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
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Redeemable Convertible |
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