Financial Performance - For the three months ended June 30, 2022, operating revenues increased by $0.6 million, or 3%, to $23.008 million compared to $22.404 million in the same period of 2021[166]. - Operating expenses also rose by $0.7 million, or 3%, totaling $23.377 million for the quarter ended June 30, 2022[166]. - Net income for the quarter increased by $9.2 million, reaching $4.362 million, compared to a net loss of $4.790 million in the prior year[167]. - Basic earnings per share improved to $0.37 from a loss of $0.40 in the same quarter of the previous year[167]. - Net income for the six months ended June 30, 2022, decreased by $2.9 million, primarily due to a $3.7 million decrease in the gain on fair value of the private warrant liability compared to the same period in 2021[169]. - Operating revenues increased by $1.4 million or 3% to $48.1 million for the six months ended June 30, 2022, driven by a $7.5 million or 38% increase in servicing fees from Partner Bank[174]. - Total operating expenses for the six months ended June 30, 2022, increased by $1.4 million or 3% to $45.5 million, mainly due to a $1.8 million increase in salaries and employee benefits[177]. - Basic earnings per share decreased to $0.70, while diluted earnings per share increased to $0.66, influenced by the impact of private warrants adjustments[172]. - The effective tax rate for the six months ended June 30, 2022, was 23.5%, compared to 21.5% for the same period in 2021[179]. Cash Flow and Liquidity - Cash and cash equivalents increased to $32.5 million at June 30, 2022, from $25.7 million at December 31, 2021, indicating improved liquidity[180]. - Net cash provided by operating activities was $12.4 million for the six months ended June 30, 2022, a decrease of $8.5 million (41%) compared to the same period in 2021[182]. - Cash used in investing activities increased by $3.2 million for the six months ended June 30, 2022, primarily due to increased capitalization of development costs related to internal use software[183]. - Cash used in financing activities decreased by $1.9 million for the six months ended June 30, 2022, compared to the same period in 2021[183]. - The net increase in cash and cash equivalents was $6.78 million for the six months ended June 30, 2022, a decrease of $9.82 million (59%) from the prior year[181]. - The company projects positive operating cash flows for the 2022 fiscal year and intends to fund ongoing activities with existing cash and expected cash flows from operations[180]. Business Operations and Strategy - The merger with First Sound Bank is expected to close in the fourth quarter of 2022, with an aggregate consideration of approximately $23 million[150]. - BMTX has signed a definitive agreement to provide technology to a new BaaS partner with tens of millions of U.S. customers, expected to launch in early 2023[151]. - Higher education serviced deposits typically experience seasonal highs in September and January, correlating with student enrollment periods[149]. - The company’s business model leverages partnerships for high volume, low-cost customer acquisition in its banking services[144]. - BMTX's primary revenue sources include interchange and card revenue, servicing fees, account fees, and university fees, driven by customer activity[144]. Accounts Receivable and Credit Risk - As of June 30, 2022, the Partner Bank accounted for 43% of total accounts receivable, net, compared to 61% at December 31, 2021[188]. - A BaaS partner accounted for 16% of total accounts receivable, net, as of June 30, 2022, up from 13% at December 31, 2021[188]. - MasterCard represented 13% of total accounts receivable, net, as of June 30, 2022, down from 17% at December 31, 2021[188]. - The company has not experienced any material losses related to accounts receivable and believes the credit risk is minimal[187]. - Cash held in the operating account may exceed FDIC coverage of $250,000, but the company has not experienced losses on these cash accounts[189]. - Total contractual lease obligations as of June 30, 2022, amounted to $56,000[185].
BM Technologies(BMTX) - 2022 Q2 - Quarterly Report