Financial Performance - For the three months ended March 31, 2023, the total performance shares, public warrants, and private warrants amounted to $23,898,000, compared to $23,351,000 for the same period in 2022, reflecting an increase of approximately 2.35%[52] - Operating revenues decreased by $11.6 million, or 46%, to $13.5 million for the three months ended March 31, 2023, compared to $25.0 million for the same period in 2022[75] - Total operating expenses decreased by $2.2 million, or 10%, to $19.9 million for the three months ended March 31, 2023, compared to $22.1 million for the same period in 2022[76] - Net loss income was $4.96 million for the three months ended March 31, 2023, compared to a net income of $3.96 million for the same period in 2022, representing a change of $8.92 million[74] - Basic and diluted loss earnings per common share were both $(0.43) for the three months ended March 31, 2023, compared to earnings of $0.33 and $0.32, respectively, for the same period in 2022[74] Liquidity and Capital Resources - Cash and cash equivalents as of March 31, 2023, were reported at $21,108,000, while accounts receivable, net, stood at $8,260,000, both approximating their fair values[60] - Projected liquidity is estimated at $21.5 million as of May 22, 2024, indicating sufficient funds to support ongoing business operations for at least the next 12 months[79] - Cash used in operating activities was $6.4 million for the three months ended March 31, 2023, a decrease of $15.6 million compared to the same period in 2022[81] Risk Factors - The Company has identified several risks that could materially affect its financial performance, including economic conditions, credit risk, and competition from financial technology providers[45] - The Company’s liquidity and capital resources are influenced by its reliance on third parties for key business infrastructure and services, which poses operational risks[45] Strategic Initiatives - The Company’s strategic initiatives include expanding into new product markets and potential future mergers or acquisitions, which are subject to regulatory and shareholder approvals[45] - The Company entered into a Deposit Servicing Agreement with First Carolina Bank on March 16, 2023, for an initial term of four years, subject to regulatory approval, to enhance its banking services for higher education clients[69] - The Company entered into a new agreement with Customers Bank for BaaS serviced deposit accounts effective March 31, 2023[250] Fair Value Measurements - The estimated fair value of the liability for private warrants was $2,847,000 as of March 31, 2023, compared to $1,406,000 at December 31, 2022, indicating a significant increase[60] - The Company’s financial instruments' fair value measurements indicate a reliance on significant unobservable inputs, classifying certain liabilities as Level 3 in the fair value hierarchy[57] Share Performance - The Company reported that the average share price for the three months ended March 31, 2023, was below the strike price for performance shares and warrants, resulting in their exclusion from diluted earnings per share calculations[50] - The Company’s performance-based RSUs were excluded from diluted earnings calculations due to unmet vesting conditions as of March 31, 2023[50] Customer Concentration - Customers Bank accounted for 50% of total accounts receivable as of March 31, 2023, compared to 17% as of December 31, 2022[82] - The Company experienced a 53% decrease in servicing fees, primarily due to a 44% reduction in average total deposits[75]
BM Technologies(BMTX) - 2023 Q1 - Quarterly Report