Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of MoneyLion and is intended to help the reader understand MoneyLion, our operations and our present business environment. This discussion should be read in conjunction with MoneyLion’s unaudited consolidated financial statements and notes to those financial statements included in Part I, Item 1 “Financial Statements” within this Quarterly Report on Form 10-Q. References to “we,” “us,” “our,” “Company” or “MoneyLion” refer to MoneyLion Inc. and, as context requires, its wholly-owned subsidiaries.
Overview
MoneyLion is the go-to destination for consumer financial products and services and marketplace solutions, providing curated money-related content to engage, educate and empower customers. We offer our core suite of innovative first-party financial products and services, along with personalized and actionable financial and non-financial offers in our Consumer marketplace from our Product Partners. We power leading embedded finance marketplace solutions for our Enterprise Partners, connecting and matching consumers with real-time, personalized product and service recommendations through our proprietary integrative technology, and provide complementary data products and services that optimize their marketplace integrations and competitiveness. We also offer creative media and marketing services to clients across industries through our media division and leverage these same creative resources to produce and deliver engaging and dynamic content in support of our product and service offerings.
We have purposefully built our platform in pursuit of our mission to rewire the financial system. We aim to build tools to help consumers through all of their financial inflection points through the use of comprehensive, data-driven analytics that connect consumers with the appropriate financial solution for their individual needs, whether through our first-party products or an offering through our marketplace platforms. As of March 31, 2023, we had 7.8 million Total Customers who used 14.7 million Total Products and over 1,000 Enterprise Partners in our network. We utilize innovative approaches to financial advice, education and literacy by delivering our customers dynamic money-related content, positioning ourselves at the forefront of evolving trends in media consumption so that our customers can better understand and manage their finances. By providing both access and ability and shortening the distance between education and action, we empower customers to take control of their money, no matter their financial circumstances – Every Time You Money.
In our Consumer business, we primarily earn revenue as follows:
•RoarMoney Banking: We earn revenue from interchange fees from payment networks based on customer expenditures on the debit card, as well as transaction volume-based incentive payments from the payment network. We also earn revenue from cardholder fees charged to our customers, such as the monthly administrative fee, an out-of-network ATM fee, a foreign transaction fee and instant transfer fees. Interchange fees, payment network payments and cardholder fees are reflected in service and subscription fees.
•Instacash: We earn revenue from optional tips and instant transfer fees, both reflected in service and subscription fees.
•Credit Builder Plus: We earn revenue from the monthly subscription fee paid by our customers, which is reflected in service and subscription fees. We also earn revenue from interest income on Credit Builder Plus loans, which is reflected in net interest income on finance receivables.
•MoneyLion Investing: We earn revenue from the monthly administration fee paid by our customers, which is reflected in service and subscription fees.
•MoneyLion Crypto: We earn revenue from Zero Hash, which is reflected in service and subscription fees, as they pay us a share of the fees that they earn from our customers in exchange for us enabling Zero Hash to effect digital currency-related transactions for our customers.
25
In our Enterprise business, we primarily earn revenue, reflected in enterprise service revenues, as follows:
•Consumer Marketplace: We earn revenue from fees from our Product Partners based on a range of criteria depending on each Product Partner relationship, including, but not limited to, customers’ clicks, impressions, completed transactions or a share of revenue generated for the Product Partner.
•Enterprise Marketplace: We earn revenue from fees from our Enterprise Partners based on a range of criteria depending on each Enterprise Partner relationship, including, but not limited to, customers’ clicks, completed transactions or a share of revenue generated for the Product Partner. We also earn various SaaS and platform fees from our Enterprise Partners.
•Media Services: We earn revenue from our clients based on performance obligations within our contracts with them.
Recent Developments
Recent events impacting our business are as follows:
Amendment to Monroe Term Loans
As previously reported, the Company is party to that certain Credit Agreement, dated as of March 24, 2022 (as amended by Amendment No. 1 to Credit Agreement, dated as of March 30, 2023, the “Credit Agreement”), by and among certain financial institutions from time to time party thereto (together with their respective successors and permitted assigns, the “Lenders”), as lenders, and Monroe Capital Management Advisors, LLC, a Delaware limited liability company (“Monroe Capital”), as administrative agent and lead arranger. Pursuant to the Credit Agreement, on March 24, 2022, the Company borrowed (a) $70.0 million aggregate principal amount of term loans (the “Term A-1 Loans”), with a maturity date of March 24, 2026, and (b) $20.0 million aggregate principal amount of term loans (the “Term A-2 Loans” and together with the Term A-1 Loans, the "Monroe Term Loans"), with a maturity date of May 1, 2023.
On April 28, 2023, the Company entered into Amendment No. 2 to Credit Agreement (“Amendment No. 2”) with the Lenders and Monroe Capital in order to extend the maturity date of the Term A-2 Loans and proactively manage the Company's interest expense through the remainder of 2023. Pursuant to Amendment No. 2, the Company, the Lenders and Monroe Capital agreed that the Company would: (i) pay $5.0 million of the outstanding principal balance of the Term A-2 Loans on May 1, 2023, $10.0 million of the outstanding principal balance of the Term A-2 loans on July 15, 2023 and the remaining outstanding principal balance of the Term A-2 Loans in full on October 15, 2023, and (ii) prepay $5.0 million of the outstanding principal balance of the Term A-1 Loans on October 15, 2023, with the remaining outstanding principal balance of the Term A-1 Loans continuing to be due on the original maturity date of March 24, 2026. The Company is and was, prior to the entry into Amendment No. 2, in compliance with all of its covenants under the Credit Agreement.
Reverse Stock Split
On April 24, 2023, the Company amended the Certificate of Incorporation to effect, effective as of 5:01 p.m. Eastern Time on April 24, 2023, the 1-for-30 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."
26
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 Series A Preferred Stock may be 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 these consolidated financial statements and the accompanying footnotes for all periods presented.
Silicon Valley Bank
On March 10, 2023, the California Department of Financial Protection and Innovation closed Silicon Valley Bank ("SVB") and appointed the Federal Deposit Insurance Corporation (the "FDIC") as receiver. At such time, we held a substantial portion of our cash deposits at SVB and utilized SVB to process payments. On March 12, 2023, the U.S. Department of the Treasury, U.S. Federal Reserve and the FDIC announced that depositors of SVB would have access to all of their cash deposits starting March 13, 2023, and on March 13, 2023, the FDIC announced that it transferred all deposits and substantially all assets of SVB to a newly created, full-service FDIC-operated bridge bank, Silicon Valley Bridge Bank, N.A. On March 13, 2023, we transferred substantially all of our cash deposits at Silicon Valley Bridge Bank, N.A. to new financial institutions. The Company does not anticipate any losses with respect to its cash that had been deposited with SVB or is deposited with Silicon Valley Bridge Bank, N.A., which continues to process payments for the Company.
Business Combinations — Since January 1, 2022, we have completed the following business combinations:
•Engine – On February 17, 2022, we completed our acquisition of Even Financial Inc., which was subsequently renamed to ML Enterprise Inc., doing business as the brand Engine by MoneyLion ("Engine" and such acquisition, the “Engine Acquisition”). Engine powers the leading embedded finance marketplace solutions we offer to our Enterprise Partners through which consumers are connected and matched with real-time, personalized financial product and service recommendations. For the over 1,000 Enterprise Partners in our network who integrate our software platform onto their properties, we enable a more simple and efficient system of customer acquisition and also provide value-added data analytics and reporting services to enable them to better understand the performance of their marketplace programs and optimize their business over time. The Engine Acquisition expanded our addressable market, extended the reach of our own products and services and diversified our revenue mix.
27
At the closing of the Engine Acquisition, we (i) issued to the equityholders of Even Financial Inc. an aggregate of 28,164,811 shares of Series A Preferred Stock, along with an additional 529,120 shares of Series A Preferred Stock to advisors of Even Financial Inc. for transaction expenses, valued at $193.7 million, (ii) paid to certain Even Financial Inc. management equityholders approximately $14.5 million in cash and (iii) exchanged 8,883,228 options to acquire Even Financial Inc. common stock for 196,728 options to acquire Class A Common Stock, of which the vested portion at the acquisition date was valued at $9.0 million. The equityholders and advisors of Even Financial Inc. are also entitled to receive an additional payment from the Company of up to an aggregate of 8,000,000 shares of Series A Preferred Stock, based on the attributed revenue of Engine’s business during the 13-month period commencing January 1, 2022 (the “Earnout”), and certain recipients of options to acquire shares of Class A Common Stock are entitled to receive dividend equivalents in lieu of receiving Series A Preferred Stock, subject to certain conditions (the “Preferred Stock Equivalents”). The combined value of the Earnout and Preferred Stock Equivalents was $45.3 million as of the closing of the Engine Acquisition. The total purchase price was approximately $271.1 million, subject to customary purchase price adjustments for working capital and inclusive of amounts used to repay approximately $5.7 million of existing indebtedness of Even Financial Inc. and pay $2.9 million of seller transaction costs.
Factors Affecting Our Performance
We are subject to a number of risks including, but not limited to, the need for successful development of products, services and functionality; the need for additional capital (or financing) to fund operating losses; competition with substitute products and services from larger companies; protection of proprietary technology and information; dependence on key individuals; and risks associated with changes in information technology. For additional information, see the "Risk Factors" section in our Annual Report on Form 10-K for the year ended December 31, 2022.
New Customer and Client Growth and Increasing Usage Across Existing Customers and Clients
Our ability to effectively acquire new customers and clients through our acquisition and marketing efforts and drive usage of our products and services across our existing customers and clients is key to our growth, particularly as a significant portion of the revenue we generate in our business is derived from transaction-based fees. We believe our customers’ experience is enhanced by using our full suite of first-party financial products and services, complemented by the full spectrum of offers available in our marketplace, as we can better tailor the insights and recommendations we provide to them. In order to grow our business, we must engage and retain customers and continue to expand their use of our platform by cross-selling additional functionality, products and services to them. In our Enterprise business, we are dependent in part on our relationships with our Enterprise Partners, and any failure to effectively match consumers leads from our Channel Partners with product and service offerings from our Product Partners, or any reduced marketing spend by such Product Partners on our Enterprise platform, could adversely affect our business and results of operations.
Expansion and Innovation of Products, Services and Functionality
We will continue to invest in expanding and enhancing the products, services and functionality available through our platform for our customers and clients. Our ability to expand, enhance and sell additional functionality, products and services to our existing customers and clients may require more sophisticated and costly development, sales or engagement efforts. Any factors that impair our ability to do so may negatively impact our efforts towards retaining and attracting customers and clients.
28
General Economic and Market Conditions
Our performance is impacted by the relative strength of the overall economy, market volatility, consumer spending behavior and consumer demand for financial products and services. For example, with respect to our Consumer business, the willingness of our customers to spend, invest or borrow may fluctuate with their level of disposable income. Other factors such as interest rate fluctuations or monetary policies may also impact our customers’ behavior and our own ability to fund advances and loan volume. In addition, in our Enterprise business, adverse macroeconomic conditions, such as significant tightening of credit markets, may cause our Product Partners to reduce their marketing spend or advertising on our platform or may cause a reduction in client spending in our media division, which could adversely affect our business and results of operations.
Seasonality
We may experience seasonal fluctuations in our revenue. During the fourth quarter, revenue in our Consumer business may benefit from increased consumer spending during the holiday season, which may increase demand for our loan and advance products and services as consumers seek additional liquidity. During the first quarter, we may see weaker demand for our loan and advance products and services as a result of the impact of tax refunds on consumers' liquidity needs, but stronger demand for our banking and investment products and services. In our Enterprise business, due to corporate client advertising spending patterns throughout the year, we may generate higher revenue in our media division in the second and fourth quarters compared to other quarters. Adverse events that occur during these months could have a disproportionate effect on our financial results for the year. Seasonal trends may be superseded by market or macroeconomic events, which can have a significant impact on our business, as described above.
Competition
We compete across our business lines with a variety of competitors, including traditional banks and credit unions; new entrants obtaining banking licenses; non-bank digital providers offering banking-related services; specialty finance and other non-bank digital providers offering consumer lending-related or cash advance products; digital wealth management platforms such as robo-advisors offering consumer investment services and other brokerage-related services; and digital financial platform, embedded finance and marketplace competitors, which aggregate and connect consumers to financial product and service offerings. In addition, we face competition in our media division from others in the digital media and content creation industry, which range from large and established media companies, including social media companies and production studios, to emerging start-ups. We expect our competition to continue to increase. The success of our business depends on our ability to compete effectively and attract new and retain existing customers and clients, which depends upon many factors both within and beyond our control.
Pricing of Our Products and Services
We derive a substantial portion of our revenue from fees earned from our products and services. The fees we earn are subject to a variety of external factors such as competition, interchange rates and other macroeconomic factors, such as interest rates and inflation, among others. We may provide discounts or other incentives and rewards that we pay for to customers who utilize multiple products and services to expand usage of our platform. We may also lower pricing on our products and services to acquire new customers. As the market for our platform matures, or as new or existing competitors introduce new products, services or functionality that compete with ours, we may experience pricing pressure and be unable to retain current customers and clients and attract new customers and clients at prices that are consistent with our pricing model and operating budget. Our pricing strategy may prove to be unappealing to our customers and clients, and our competitors could choose to bundle certain products and services competitive with ours. If this were to occur, it is possible that we would have to change our pricing strategies or reduce our prices, which could adversely affect our business.
29
Product and Service Mix
We offer various products and services on our platform, including our core suite of first-party financial products and services, a broad range of financial and non-financial offers in our Consumer marketplace and embedded finance marketplace solutions and media services in our Enterprise business. Each product and service has a different profitability profile. The relative usage of products and services with high or low profitability and their lifetime value could have an impact on our performance.
Access and Cost of Financing
Our credit products, cash advances and other receivables are primarily financed by special purpose vehicle financings from third-party institutional lenders. The loss of one or more of the financing sources we have for our credit products, cash advances and other receivables could have an adverse impact on our performance, and it could be costly to obtain new financing.
Key Performance Metrics
We regularly review several metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Total Customers
We define Total Customers as the cumulative number of customers that have opened at least one account, including banking, membership subscription, secured personal loan, cash advance, managed investment account, cryptocurrency account and customers that are monetized through our marketplace and affiliate products. Total Customers also include customers that have submitted for, received or clicked on at least one marketplace loan offer. Previously, Total Customers included all customers that submitted for or clicked on an offer through our marketplace but were not necessarily monetized, which we changed beginning in the third quarter of 2022 in order to more accurately reflect management’s view of our customers. We consider Total Customers to be a key performance metric as it can be used to understand lifecycle efforts of our customers, as we look to cross-sell products to our customer base and grow our platform. Total Customers were 7.8 million and 3.9 million as of March 31, 2023 and 2022, respectively. Total Customers for all prior periods have been recast to present the updated definition of Total Customers.
Total Products
We define Total Products as the total number of products that our Total Customers have opened, including banking, membership subscription, secured personal loan, cash advance, managed investment account, cryptocurrency account and monetized marketplace and affiliate products, as well as customers who signed up for our financial tracking services (with either credit tracking enabled or external linked accounts), whether or not the customer is still registered for the product. Total Products also include marketplace loan offers that our Total Customers have submitted for, received or clicked on through our marketplace. If a customer has funded multiple secured personal loans or cash advances or opened multiple products through our marketplace, it is only counted once for each product type. Previously, Total Products included all products for which our Total Customers submitted or clicked on an offer but were not necessarily monetized, which we changed beginning in the third quarter of 2022 in order to more accurately reflect management’s view of our products. We consider Total Products to be a key performance metric as it can be used to understand the usage of our products across our customer base. Total Products were 14.7 million and 9.0 million as of March 31, 2023 and 2022, respectively. Total Products for all prior periods have been recast to present the updated definition of Total Products.
30
Enterprise Partners
Enterprise Partners is comprised of Product Partners and Channel Partners. We define Product Partners as providers of the financial and non-financial products and services that we offer in our marketplaces, including financial institutions, financial services providers and other affiliate partners. We define Channel Partners as organizations that allow us to reach a wide base of consumers, including but not limited to news sites, content publishers, product comparison sites and financial institutions. Enterprise Partners were 1,085 as of March 31, 2023, comprising 494 Product Partners and 591 Channel Partners and were 980 as of March 31, 2022, comprised of 424 Product Partners and 556 Channel Partners.
Total Originations
We define Total Originations as the dollar volume of the secured personal loans originated and cash advances funded within the stated period. We consider Total Originations to be a key performance metric as it can be used to measure the usage and engagement of the customers across our secured personal lending and Instacash products and is a significant driver of net interest income on finance receivables and service and subscription fees. Total Originations were $506 million and $408 million for the three months ended March 31, 2023 and 2022, respectively. All originations were originated directly by MoneyLion.
Adjusted Revenue
Adjusted Revenue is defined as total revenue, net, plus amortization of loan origination costs less provision for loss on subscription receivables, provision for loss on fees receivables and revenue derived from phased out products. Adjusted Revenue is a non-GAAP measure and should not be viewed as a substitute for total revenue, net. Historically, we presented Adjusted Revenue in order to provide an understanding of revenue from ongoing products and revenue for comparability purposes. During the quarter, we determined that Adjusted Revenue was no longer a key performance metric that we use to measure revenue and evaluate our business performance. As a result, we will no longer be presenting Adjusted Revenue for subsequent quarters. Refer to the “— Non-GAAP Measures” section below for further discussion.
Adjusted Gross Profit
Adjusted Gross Profit is defined as gross profit less revenue derived from phased out products. Adjusted Gross Profit is a non-GAAP measure and should not be viewed as a substitute for gross profit. Historically, we presented Adjusted Gross Profit in order to provide an understanding of an aspect of profitability based on our current product portfolio. During the quarter, we determined that Adjusted Gross Profit was no longer a key performance metric that we use to measure profitability and evaluate our business performance. As a result, we will no longer be presenting Adjusted Gross Profit for subsequent quarters. Refer to the “— Non-GAAP Measures” section below for further discussion.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss) plus interest expense related to corporate debt, income tax expense (benefit), depreciation and amortization expense, change in fair value of warrants, change in fair value of subordinated convertible notes, change in fair value of contingent consideration from mergers and acquisitions, stock-based compensation and one-time expenses less origination financing cost of capital. We believe Adjusted EBITDA provides a meaningful understanding of an aspect of profitability based on our current product portfolio. Adjusted EBITDA is a non-GAAP measure and should not be viewed as a substitute for net income (loss). Refer to the “— Non-GAAP Measures” section below for further discussion.
31
Results of Operations for the Three Months Ended March 31, 2023 and 2022
Revenues
The following table is reference for the discussion that follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
|
(In thousands, except for percentages) |
|
Consumer revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Service and subscription fees |
|
$ |
62,438 |
|
|
$ |
46,394 |
|
|
$ |
16,044 |
|
|
|
34.6 |
% |
Net interest income on finance receivables |
|
|
2,928 |
|
|
|
2,568 |
|
|
|
360 |
|
|
|
14.0 |
% |
Total consumer revenues |
|
|
65,366 |
|
|
|
48,962 |
|
|
|
16,404 |
|
|
|
33.5 |
% |
Enterprise service revenues |
|
|
28,303 |
|
|
|
20,752 |
|
|
|
7,551 |
|
|
|
36.4 |
% |
Total revenue, net |
|
$ |
93,669 |
|
|
$ |
69,714 |
|
|
$ |
23,955 |
|
|
|
34.4 |
% |
We generate revenues primarily from various product-related fees, providing membership subscriptions, performing enterprise services and originating loans.
Service and subscription fees
Service and subscription fees increased by $16.0 million, or 34.6%, to $62.4 million for the three months ended March 31, 2023, as compared to $46.4 million for the same period in 2022. The increase in service and subscription fees was primarily driven by increases in fee income related to instant transfer fees and tips from Instacash of $15.4 million, driven by the growth of Instacash advances across both existing and new customers, and an increase of $0.9 million related to interchange, cardholder and administration fees from our bank and investment accounts, driven by higher payment volume, which was slightly offset by lower membership revenues.
Net interest income on finance receivables
Net interest income on finance receivables is generated by interest earned on Credit Builder Plus loans, which is partially offset by the amortization of loan origination costs.
Net interest income on finance receivables increased by $0.4 million, or 14.0%, to $2.9 million for the three months ended March 31, 2023, as compared to $2.6 million for the same period in 2022. The increase in net interest income on finance receivables was driven by origination growth on our Credit Builder Plus loan program across both existing and new customers and less reversals of interest income due to non-collection during the three months ended March 31, 2023, as compared to the same period in 2022. The amortization of loan origination costs decreased by $0.1 million to $0.2 million for the three months ended March 31, 2023, as compared to $0.3 million for the same period in 2022.
Enterprise service revenues
Enterprise service revenues increased by $7.6 million, or 36.4%, to $28.3 million for the three months ended March 31, 2023, as compared to $20.8 million for the same period in 2022. This increase was primarily attributable to a $9.2 million full quarter impact of Engine reflected in the three months ended March 31, 2023 and $0.6 million increase in MALKA revenues, which was partially offset by $2.0 million of lower marketplace revenues.
32
Operating Expenses
The following table is reference for the discussion that follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
|
(In thousands, except for percentages) |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses on consumer receivables |
|
|
16,511 |
|
|
|
23,044 |
|
|
|
(6,533 |
) |
|
|
-28.4 |
% |
Compensation and benefits |
|
|
24,408 |
|
|
|
22,043 |
|
|
|
2,365 |
|
|
|
10.7 |
% |
Marketing |
|
|
6,392 |
|
|
|
11,416 |
|
|
|
(5,024 |
) |
|
|
-44.0 |
% |
Direct costs |
|
|
29,802 |
|
|
|
21,204 |
|
|
|
8,598 |
|
|
|
40.5 |
% |
Professional services |
|
|
4,999 |
|
|
|
7,288 |
|
|
|
(2,289 |
) |
|
|
-31.4 |
% |
Technology-related costs |
|
|
6,038 |
|
|
|
4,505 |
|
|
|
1,533 |
|
|
|
34.0 |
% |
Other operating expenses |
|
|
8,995 |
|
|
|
10,769 |
|
|
|
(1,774 |
) |
|
|
-16.5 |
% |
Total operating expenses |
|
|
97,145 |
|
|
|
100,269 |
|
|
|
(3,124 |
) |
|
|
-3.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(7,511 |
) |
|
|
(6,174 |
) |
|
|
(1,337 |
) |
|
|
21.7 |
% |
Change in fair value of warrant liability |
|
|
(149 |
) |
|
|
3,910 |
|
|
|
(4,059 |
) |
|
nm |
|
Change in fair value of contingent consideration from mergers and acquisitions |
|
|
246 |
|
|
|
(4,660 |
) |
|
|
4,906 |
|
|
nm |
|
Other income (expense) |
|
|
1,649 |
|
|
|
(916 |
) |
|
|
2,565 |
|
|
nm |
|
Net loss before income taxes |
|
|
(5,765 |
) |
|
|
(7,840 |
) |
|
|
2,075 |
|
|
|
-26.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
|
(24 |
) |
|
|
(28,417 |
) |
|
|
28,393 |
|
|
|
-99.9 |
% |
Our operating expenses consist of the following:
Provision for credit losses on consumer receivables
Provision for credit losses on consumer receivables consists of amounts charged during the period to maintain an allowance for credit losses. The allowance represents management’s estimate of the credit losses in our consumer receivable portfolio and is based on management’s assessment of many factors, including changes in the nature, volume and risk characteristics of the consumer receivables portfolio, including trends in delinquency and charge-offs and current economic conditions that may affect the customer’s ability to pay.
Provision for credit losses on consumer receivables decreased by $6.5 million, or 28.4%, to $16.5 million for the three months ended March 31, 2023, as compared to $23.0 million for the same period in 2022. This decrease resulted primarily from a decrease to provision related to Instacash advance receivables of $6.6 million, provision related to Credit Builder Plus loan receivables of $1.3 million and $0.8 million provision related to subscription fees, which was partially offset by an increase in provision for Instacash instant transfer fees and tips of $2.2 million.
Compensation and benefits
Compensation and benefits increased by $2.4 million, or 10.7%, to $24.4 million for the three months ended March 31, 2023, as compared to $22.0 million for the same period in 2022. This increase was driven primarily by a $2.4 million increase in stock-based compensation and a $1.9 million increase due to a full quarter impact of Engine in the three months ended March 31, 2023, which was partially offset by a $1.4 million decrease in employee costs and a $0.6 million decrease in incentive compensation related to expense reduction initiatives.
33
Marketing
Marketing decreased by $5.0 million, or 44.0%, to $6.4 million for the three months ended March 31, 2023, as compared to $11.4 million for the same period in 2022. This decrease resulted primarily from lower marketing and lead generation spend across the organization as we continue to lower our reliance on external marketing sources.
Direct costs
Direct costs increased by $8.6 million, or 40.5%, to $29.8 million for the three months ended March 31, 2023, as compared to $21.2 million for the same period in 2022. The increase was primarily driven by $6.9 million of direct costs due to a full quarter impact of Engine in the three months ended March 31, 2023 and an increase in payment processing and bank partner transaction fees of $2.2 million driven by growth in Total Originations and Total Customers, which was partially offset by a $0.5 million decrease in other direct costs.
Professional services
Professional services decreased by $2.3 million, or 31.4%, to $5.0 million for the three months ended March 31, 2023, as compared to $7.3 million for the same period in 2022. This decrease resulted primarily from $1.2 million of lower legal expenses, $0.8 million of lower outside consulting spend and $0.3 million of lower recruiting spend.
Technology-related costs
Technology-related costs increased by $1.5 million, or 34.0%, to $6.0 million for the three months ended March 31, 2023, as compared to $4.5 million for the same period in 2022. The increase was primarily driven by $1.3 million of technology costs due to a full quarter impact of Engine in the three months ended March 31, 2023, software licenses and subscriptions of $0.2 million and costs related to other technology services of $0.1 million, which was partially offset by a decrease in depreciation and amortization related to equipment and software of $0.1 million.
Other operating expenses
Other operating expenses decreased by $1.8 million, or 16.5%, to $9.0 million for the three months ended March 31, 2023, as compared to $10.8 million for the same period in 2022. The decrease was primarily driven by a reduction in costs related to legal matters of $1.4 million and a reduction in expenses related to processing of transactions in our consumer business of $2.8 million, which was partially offset by an increase of $2.0 million of intangible amortization expenses attributable to the Engine Acquisition.
Our other (expense) income consists of the following:
Interest expense
Interest expense increased by $1.3 million, or 21.7%, to $7.5 million for the three months ended March 31, 2023, as compared to $6.2 million for the same period in 2022. This increase resulted from an increase in interest rate on variable rate debt and an increase in the average debt outstanding during the three months ended March 31, 2023 compared to the same period in 2022. See Part I, Item 1 “Financial Statements — Debt” for more information.
Change in fair value of warrant liability
Change in fair value of warrant liability was an expense of $0.1 million for the three months ended March 31, 2023, as compared to a benefit of $3.9 million for the same period in 2022. The change in fair value of warrant liability was due to changes in inputs that drive the warrant liability fair value calculations.
34
Change in fair value of contingent consideration from mergers and acquisitions
Change in fair value of contingent consideration from mergers and acquisitions was a benefit of $0.2 million for the three months ended March 31, 2023, as compared to an expense $4.7 million for the same period in 2022. The reduction in activity was mainly driven by the settlement of contingencies related to the contingent consideration that were unsettled during the three months ended March 31, 2022.
Other income (expense)
Other income (expense) increased by $2.6 million to other income of $1.6 million for the three months ended March 31, 2023, as compared to other expense of $0.9 million for the same period in 2022. The increase in other income (expense) was driven by interest income from interest bearing deposit accounts that were not in place during the three months ended March 31, 2022 and the losses on extinguishment of debt during the three months ended March 31, 2022.
Income tax (benefit) expense
See Part I, Item 1 “Financial Statements — Income Taxes” for an explanation of the tax activity recorded during the three months ended March 31, 2023.
Non-GAAP Measures
In addition to net income (loss), which is a measure presented in accordance with U.S. GAAP, management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in our industry in assessing performance. Adjusted EBITDA is a supplemental measure of MoneyLion’s performance that is neither required by nor presented in accordance with U.S. GAAP. Adjusted EBITDA should not be considered as a substitute for U.S. GAAP metrics such as net income (loss) or any other performance measures derived in accordance with U.S. GAAP and may not be comparable to similar measures used by other companies.
We define Adjusted EBITDA as net income (loss) plus interest expense related to corporate debt, income tax expense (benefit), depreciation and amortization expense, change in fair value of warrant liability, change in fair value of subordinated convertible notes, change in fair value of contingent consideration from mergers and acquisitions, stock-based compensation and one-time expenses less origination financing cost of capital. We believe that Adjusted EBITDA provides a meaningful understanding of an aspect of profitability based on our current product portfolio. In addition, Adjusted EBITDA is useful to an investor in evaluating our performance because it:
•is a measure widely used by investors to measure a company’s operating performance;
•is a metric used by rating agencies, lenders and other parties to evaluate our credit worthiness; and
•is used by our management for various purposes, including as measures of performance and as a basis for strategic planning and forecasting.
Historically, in addition to total revenue, net and gross profit, which are measures presented in accordance with U.S. GAAP, we also presented Adjusted Revenue and Adjusted Gross Profit. In particular, we presented Adjusted Revenue in order to provide an understanding of revenue from ongoing products and revenue for comparability purposes, and we presented Adjusted Gross Profit in order to provide an understanding of an aspect of profitability based on our current product portfolio. During the quarter, we determined that Adjusted Revenue was no longer a key performance metric that we use to measure revenue and evaluate our business performance. As a result, we will no longer be presenting Adjusted Revenue for subsequent quarters. In addition, we determined that Adjusted Gross Profit was no longer a key performance metric that we use to measure profitability and evaluate our business performance. As a result, we will no longer be presenting Adjusted Gross Profit for subsequent quarters.
35
The reconciliation of total revenue, net to Adjusted Revenue for the three months ended March 31, 2023 and 2022 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Total revenues, net |
|
$ |
93,669 |
|
|
$ |
69,714 |
|
Add back: |
|
|
|
|
|
|
Amortization of loan origination costs1 |
|
|
248 |
|
|
|
324 |
|
Less: |
|
|
|
|
|
|
Provision for credit losses on receivables - subscription receivables2 |
|
|
(736 |
) |
|
|
(1,541 |
) |
Provision for credit losses on receivables - fees receivables3 |
|
|
(4,174 |
) |
|
|
(2,001 |
) |
Revenue derived from products that have been phased out4 |
|
|
(1 |
) |
|
|
(20 |
) |
Adjusted Revenue |
|
$ |
89,006 |
|
|
$ |
66,477 |
|
(1)Amortization of loan origination costs are included within net interest income from finance receivables.
(2)We deduct provision for credit losses on receivables related to subscription receivables from total revenue, net as it is related to revenue-based receivables. For U.S. GAAP reporting purposes, provision for loss on receivables related to subscription receivables is included within provision for loss on receivables on the statement of operations. Refer to Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for further discussion.
(3)We deduct provision for credit losses on receivables related to fees receivables from total revenue, net as it is related to revenue-based receivables. For U.S. GAAP reporting purposes, provision for loss on receivables related to fees receivables is included within provision for loss on receivables on the statement of operations. Refer to Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for further discussion.
(4)Revenue derived from products that have been phased out includes net interest income and fees related to unsecured personal loans, which are included within net interest income from finance receivables and service and subscription fees, respectively. Revenue from unsecured personal loans was $0.0 million for the three months ended March 31, 2023 and 2022.
36
Adjusted Revenue is further broken down into the following categories:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Consumer |
|
$ |
60,703 |
|
|
$ |
45,724 |
|
Enterprise |
|
|
28,303 |
|
|
|
20,753 |
|
Adjusted Revenue |
|
$ |
89,006 |
|
|
$ |
66,477 |
|
The reconciliation of gross profit, which is prepared in accordance with U.S. GAAP, to Adjusted Gross Profit for the three months ended March 31, 2023 and 2022 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Total revenue, net |
|
$ |
93,669 |
|
|
$ |
69,714 |
|
Less: |
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
Direct costs |
|
|
(29,802 |
) |
|
|
(21,204 |
) |
Provision for credit losses on receivables - subscription receivables1 |
|
|
(736 |
) |
|
|
(1,541 |
) |
Provision for credit losses on receivables - fees receivables2 |
|
|
(4,174 |
) |
|
|
(2,001 |
) |
Technology related costs |
|
|
(3,274 |
) |
|
|
(2,461 |
) |
Professional services |
|
|
(1,357 |
) |
|
|
(1,056 |
) |
Compensation and benefits |
|
|
(2,542 |
) |
|
|
(1,014 |
) |
Other operating expenses |
|
|
(130 |
) |
|
|
(104 |
) |
Gross Profit |
|
$ |
51,654 |
|
|
$ |
40,333 |
|
Less: |
|
|
|
|
|
|
Revenue derived from products that have been phased out3 |
|
|
(1 |
) |
|
|
(20 |
) |
Adjusted Gross Profit |
|
$ |
51,653 |
|
|
$ |
40,314 |
|
(1)We deduct provision for credit losses on receivables related to subscription receivables from total revenue, net as it is related to revenue-based receivables. For U.S. GAAP reporting purposes, provision for loss on receivables related to subscription receivables is included within provision for loss on receivables on the statement of operations. Refer to Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for further discussion.
(2)We deduct provision for credit losses on receivables related to fees receivables from total revenue, net as it is related to revenue-based receivables. For U.S. GAAP reporting purposes, provision for loss on receivables related to fees receivables is included within provision for loss on receivables on the statement of operations. Refer to Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for further discussion.
(3)Revenue derived from products that have been phased out includes net interest income and fees related to unsecured personal loans, which are included within net interest income from finance receivables and service and subscription fees, respectively. Revenue from unsecured personal loans was $0.0 million for the three months ended March 31, 2023 and 2022.
37
The reconciliation of net loss, which is prepared in accordance with U.S. GAAP, to Adjusted EBITDA for the three months ended March 31, 2023 and 2022 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Net loss |
|
$ |
(9,217 |
) |
|
$ |
(9,978 |
) |
Add back: |
|
|
|
|
|
|
Interest related to corporate debt1 |
|
|
3,560 |
|
|
|
1,387 |
|
Income tax benefit |
|
|
(24 |
) |
|
|
(28,417 |
) |
Depreciation and amortization expense |
|
|
6,184 |
|
|
|
3,421 |
|
Changes in fair value of warrant liability |
|
|
149 |
|
|
|
(3,910 |
) |
Change in fair value of contingent consideration from mergers and acquisitions |
|
|
(246 |
) |
|
|
4,660 |
|
Stock-based compensation expense |
|
|
5,705 |
|
|
|
3,268 |
|
One-time expenses2 |
|
|
1,185 |
|
|
|
4,777 |
|
Adjusted EBITDA |
|
$ |
7,296 |
|
|
$ |
(24,792 |
) |
(1)We add back the interest expense related to all outstanding corporate debt, excluding outstanding principal balances related to the ROAR 1 SPV Credit Facility and the ROAR 2 SPV Credit Facility. For U.S. GAAP reporting purposes, interest expense related to corporate debt is included within interest expense in the statement of operations.
(2)We add back other one-time expenses, including those related to transactions, including mergers and acquisitions and financings, that occurred, litigation-related expenses and non-recurring costs or gains. Generally, these expenses are included within other expenses or professional fees in the statement of operations.
38
Changes in Financial Condition to March 31, 2023 from December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and restricted cash |
|
$ |
110,756 |
|
|
$ |
153,709 |
|
|
$ |
(42,953 |
) |
|
|
-27.9 |
% |
Consumer receivables |
|
|
176,211 |
|
|
|
169,976 |
|
|
|
6,235 |
|
|
|
3.7 |
% |
Allowance for credit losses on consumer receivables |
|
|
(27,473 |
) |
|
|
(24,841 |
) |
|
|
(2,632 |
) |
|
|
10.6 |
% |
Consumer receivables, net |
|
|
148,738 |
|
|
|
145,135 |
|
|
|
3,603 |
|
|
|
2.5 |
% |
Enterprise receivables, net |
|
|
22,961 |
|
|
|
19,017 |
|
|
|
3,944 |
|
|
|
20.7 |
% |
Property and equipment, net |
|
|
2,682 |
|
|
|
2,976 |
|
|
|
(294 |
) |
|
|
-9.9 |
% |
Goodwill and intangible assets, net |
|
|
216,115 |
|
|
|
220,847 |
|
|
|
(4,732 |
) |
|
|
-2.1 |
% |
Other assets |
|
|
55,907 |
|
|
|
54,658 |
|
|
|
1,249 |
|
|
|
2.3 |
% |
Total assets |
|
$ |
557,159 |
|
|
$ |
596,342 |
|
|
$ |
(39,183 |
) |
|
|
-6.6 |
% |
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Debt agreements |
|
|
208,376 |
|
|
|
232,011 |
|
|
|
(23,635 |
) |
|
|
-10.2 |
% |
Accounts payable and accrued liabilities |
|
|
50,294 |
|
|
|
58,129 |
|
|
|
(7,835 |
) |
|
|
-13.5 |
% |
Warrant liability |
|
|
486 |
|
|
|
337 |
|
|
|
149 |
|
|
|
44.2 |
% |
Other liabilities |
|
|
29,184 |
|
|
|
33,496 |
|
|
|
(4,312 |
) |
|
|
-12.9 |
% |
Total liabilities |
|
|
288,340 |
|
|
|
323,973 |
|
|
|
(35,633 |
) |
|
|
-11.0 |
% |
Series A Preferred Stock |
|
|
173,328 |
|
|
|
173,208 |
|
|
|
120 |
|
|
|
0.1 |
% |
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
1 |
|
|
|
1 |
|
|
|
- |
|
|
|
0.0 |
% |
Additional paid-in capital |
|
|
771,881 |
|
|
|
766,839 |
|
|
|
5,042 |
|
|
|
0.7 |
% |
Accumulated deficit |
|
|
(666,691 |
) |
|
|
(657,979 |
) |
|
|
(8,712 |
) |
|
|
1.3 |
% |
Treasury stock |
|
|
(9,700 |
) |
|
|
(9,700 |
) |
|
|
- |
|
|
|
0.0 |
% |
Total stockholders' equity |
|
|
95,491 |
|
|
|
99,161 |
|
|
|
(3,670 |
) |
|
|
-3.7 |
% |
Total liabilities, redeemable convertible preferred stock and stockholders' equity |
|
$ |
557,159 |
|
|
$ |
596,342 |
|
|
$ |
(39,183 |
) |
|
|
-6.6 |
% |
Assets
Cash and restricted cash
Cash and restricted cash decreased by $43.0 million, or 27.9%, to $110.8 million as of March 31, 2023, as compared to $153.7 million as of December 31, 2022. Refer to the “— Cash Flows” section below for further discussion on the net change in cash and restricted cash from operating activities, investing activities and financing activities during the period.
Consumer receivables, net
Consumer receivables, net increased by $3.6 million, or 2.5%, to $148.7 million as of March 31, 2023, as compared to $145.1 million as of December 31, 2022. The increase was primarily attributable to an increase in Instacash receivables, net of increases in the related allowance for Instacash receivable credit losses.
Enterprise receivables, net
Enterprise receivables, net increased by $3.9 million, or 20.7%, to $23.0 million as of March 31, 2023, as compared to $19.0 million as of December 31, 2022. This increase was primarily attributable to certain delays in billing collections as we converted to new banking partners and rebranded the Engine business.
39
Goodwill and intangible assets, net
Goodwill and intangible assets, net decreased by $4.7 million, or 2.1%, to $216.1 million as of March 31, 2023, as compared to $220.8 million as of December 31, 2022. This decrease was primarily attributable to amortization of customer relationship and trade name intangibles from mergers and acquisitions.
Other assets
Other assets increased by $1.2 million, or 2.3%, to $55.9 million as of March 31, 2023, as compared to $54.7 million as of December 31, 2022. The increase was primarily driven by increases in receivables from payment processors, which were partially offset by declines in prepaid expenses and operating lease right-of-use assets.
Liabilities
Debt agreements
Debt agreements decreased by $23.6 million, or 10.2%, to $208.4 million as of March 31, 2023, as compared to $232.0 million as of December 31, 2022. The decrease was due to optional principal payments made on the ROAR 1 SPV Credit Facility and the ROAR 2 SPV Credit Facility during the three months ended March 31, 2023.
Accounts payable and accrued expenses
Accounts payable and accrued expenses decreased by $7.8 million, or 13.5%, to $50.3 million as of March 31, 2023, as compared to $58.1 million as of December 31, 2022. The decrease was primarily attributable to annual bonuses paid and lower litigation during the three months ending March 31, 2023, which was offset by an increase related to dividends on the Series A Preferred Stock.
Warrant liability
Warrant liability increased by $0.1 million, or 44.2%, to $0.5 million as of March 31, 2023, as compared to $0.3 million as of December 31, 2022. Refer to the “— Results of Operations for the Three Months Ended March 31, 2023 and 2022” section above for further discussion on the change in fair value of warrant liability.
Other liabilities
Other liabilities decreased by $4.3 million, or 12.9%, to $29.2 million as of March 31, 2023, as compared to $33.5 million as of December 31, 2022. The decrease was primarily attributable to a reduction in contingent consideration liabilities from mergers and acquisitions due to the settlement of contingent consideration during the three months ended March 31, 2023.
Liquidity and Capital Resources
We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital needs for at least the next twelve months. Our future financing requirements will depend on several factors, including our growth, the timing and level of spending to support continued development of our platform, the expansion of marketing activities and merger and acquisition activity. In addition, growth of our finance receivables increases our liquidity needs, and any failure to meet those liquidity needs could adversely affect our business. Additional funds may not be available on terms favorable to us or at all. If the Company is unable to generate positive operating cash flows, additional debt and equity financings or refinancing of existing debt financings may be necessary to sustain future operations.
40
Receivables originated on our platform, including Credit Builder Plus loans and Instacash advances, were primarily financed through special purpose vehicle financings from third-party institutional lenders. As of March 31, 2023, there was an outstanding principal balance of $63.0 million under the ROAR 1 SPV Credit Facility and an outstanding principal balance of $59.0 million under the ROAR 2 SPV Credit Facility. For more information, see Note 9, “Debt” and Note 8, “Variable Interest Entities” of the Company’s Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for discussion of the ROAR 1 SPV Credit Facility and the ROAR 2 SPV Credit Facility and VIE considerations related to the ROAR 1 SPV Credit Facility and the ROAR 2 SPV Credit Facility, respectively.
The following table presents the Company’s cash, restricted cash and receivable from payment processor as of March 31, 2023 and December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash |
|
$ |
96,756 |
|
|
$ |
115,864 |
|
Restricted cash |
|
|
14,000 |
|
|
|
37,845 |
|
Receivable from payment processor |
|
$ |
35,280 |
|
|
$ |
32,881 |
|
Cash Flows
The following table presents net change in cash and restricted cash from operating, investing and financing activities during the three months ended March 31, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Net cash provided by (used in) operating activities |
|
$ |
2,680 |
|
|
$ |
(8,651 |
) |
Net cash used in investing activities |
|
|
(21,034 |
) |
|
|
(42,279 |
) |
Net cash (used in) provided by financing activities |
|
|
(24,599 |
) |
|
|
53,693 |
|
Net change in cash and restricted cash |
|
$ |
(42,953 |
) |
|
$ |
2,763 |
|
Operating Activities
Net cash provided by operating activities was $2.7 million for the three months ended March 31, 2023 compared to net cash used in operating activities of $8.7 million for the three months ended March 31, 2022. This increase in net cash provided by operating activities was primarily driven by an increase in profitability, after adjusting for non-cash activity included in our net loss, of approximately $26.5 million during the three months ended March 31, 2023, which was partially offset by changes in working capital.
Investing Activities
Net cash used in investing activities was $21.0 million for the three months ended March 31, 2023 compared to net cash used in investing activities of $42.3 million for the three months ended March 31, 2022. The decrease in net cash used in investing activities was primarily related to $18.6 million spent on the Engine Acquisition, net of cash received, during the three months ended March 31, 2022 and a reduction in net originations and collections of finance receivables during the three months ended March 31, 2023 compared to the three months ended March 31, 2022.
Financing Activities
Net cash used in financing activities was $24.6 million for the three months ended March 31, 2023 compared to net cash provided by financing activities of $53.7 million for the three months ended March 31, 2022. The increase in cash used in financing activities was primarily attributable to the approximately $79.3 million in new financing during the three months ended March 31, 2022 compared to no new financing during the three months ended March 31, 2023.
41
Financing Arrangements
Refer to Part I, Item 1 “Financial Statements — Debt” for further discussion on financing transactions during the period.
Contractual Obligations
The table below summarizes debt, lease and other long-term minimum cash obligations outstanding as of March 31, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
Remainder of 2023 |
|
|
2024 – 2025 |
|
|
2026 – 2027 |
|
|
Thereafter |
|
Monroe Term Loans |
|
|
90,000 |
|
|
|
20,000 |
|
|
|
— |
|
|
|
70,000 |
|
|
|
— |
|
ROAR 1 SPV Credit Facility |
|
|
63,000 |
|
|
|
— |
|
|
|
63,000 |
|
|
|
— |
|
|
|
— |
|
ROAR 2 SPV Credit Facility |
|
|
59,000 |
|
|
|
— |
|
|
|
59,000 |
|
|
|
— |
|
|
|
— |
|
Operating lease obligations |
|
|
11,209 |
|
|
|
2,483 |
|
|
|
5,786 |
|
|
|
2,172 |
|
|
|
768 |
|
Vendor unconditional purchase obligations |
|
|
33,750 |
|
|
|
— |
|
|
|
16,750 |
|
|
|
17,000 |
|
|
|
— |
|
Total |
|
$ |
256,959 |
|
|
$ |
22,483 |
|
|
$ |
144,536 |
|
|
$ |
89,172 |
|
|
$ |
768 |
|
Secured Loans and Other Debt
For more information regarding our secured loans and other debt, see Part I, Item 1 “Financial Statements — Debt” in this Quarterly Report on Form 10-Q.
Off-Balance Sheet Arrangements
At March 31, 2023, the Company did not have any material off-balance sheet arrangements.
Critical Accounting Policies and Estimates
See Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for a description of critical accounting policies and estimates.
Recently Issued and Adopted Accounting Pronouncements
See Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for a description of recently issued accounting pronouncements that may potentially impact our results of operations, financial condition or cash flows.