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Table of Contents
美國
證券交易委員會
華盛頓特區20549
_______________________________________________________________________________
表格 10-Q
_______________________________________________________________________________
☒根據1934年證券交易法第13或15(d)條款的季度報告。
截至2024年6月30日季度結束 2024年9月30日
或
☐根據1934年證券交易法第13或15(d)條款的過渡報告
轉型期從____ 至____ 至____
委員會文件編號 001-39021
_______________________________________________________________________________
Wm 科技公司。
（依憑章程所載的完整登記名稱）
_______________________________________________________________________________
特拉華州98-1605615
(成立地或組織其他管轄區)（聯邦稅號）
41 發現
艾爾文, 加利福尼亞州

92618
（總部地址）(郵遞區號)
(844) 933-3627
(申報人電話號碼，包括區號)
根據1973年證券交易法第12(b)條規定註冊的證券：
每種類別的名稱交易標的每個註冊交易所的名稱
每股面值為0.0001美元的A類普通股MAPS納斯達克全球精選市場
每張認股權能以11.50美元的價格行使，兌換成一股A類普通股
MAPSW納斯達克全球貨幣選擇市場

☒ 是 ☐ 否
請以勾選方式指示登記者：(1) 是否在過去12個月內按照1934年證券交易法第13條或第15(d)條的規定提交了所有報告（或者對登記者要求提交此類報告的較短期間）？並且(2)過去90天內是否受到這些提交要求的約束。 Yes ☒ 否 ☐
請用勾選標示符號表示：是否在過去12個月（或對於註冊人需要提交和發布此類文件的較短時間）內，根據Regulation S-t的第405條規定，已將每個互動式數據文件以電子方式提交並發布在其公司網站上（如有的話）。 Yes ☒ 否 ☐
請勾選相應的選項，指出公司是否屬於大型加速遞交人、加速遞交人、非加速遞交人、較小型報表公司或新興成長公司。請參閱《交易所法》第120億2條中「大型加速遞交人」、「加速遞交人」、「較小型報表公司」和「新興成長公司」的定義。
大型加速歸檔人☐加速歸檔人☒
非加速歸檔人☐小型報告公司☒新興成長型企業☐
如果一家新興成長型企業，請打勾表示公司已選擇不使用擴展過渡期以符合根據《交易所法案》第13(a)條所提供的任何新的或修訂財務會計準則。 ☐
請用勾選表示，公司是否屬於殼公司（如本法案第120億2條所定義）。 是 ☐ 否 ☒
截至2024年11月4日， 97,376,026 現時該公司A類普通股流通數量為 55,486,361 V類普通股流通數量為

Table of Contents
Wm 科技公司。
目 錄
頁面
總合縮減 基本報表 （未經審計）
綜合總帳賬目表於2024年9月30日及2023年12月31日的基本報表
綜合營運財務報表截至2024年9月30日及2023年，為期三個月和九個月的基本報表
綜合權益財務報表y f截至2024年9月30日及2023年，為期三個月和九個月的基本報表
綜合現金流量表 截至2024年9月30日及2023年，為期九個月的基本報表

Table of Contents

關於前瞻性聲明的注意事項
此第10-Q表格季度報告中包含根據1933年證券法（修訂）第27A條和1934年證券交易法（修訂）第21E條的前瞻性聲明，涉及我們及我們的行業的重大風險和不確定性。本報告中的所有非歷史事實聲明，包括有關我們未來業務業績和財務狀況、業務策略和計劃以及管理層未來業務目標的聲明，均屬前瞻性聲明。在某些情況下，前瞻性聲明可能會透過“預期”、“相信”、“持續”、“可能”、“設計”、“估計”、“預期”、“打算”、“可能”、“計劃”、“潛在地”、“預測”、“項目”、“應該”、“將”、“將會”、“將”等詞語或其他類似表達方式加以識別。這些前瞻性聲明包括但不限於有關以下事項的聲明：
•我們的財務和業務表現，包括關鍵業務指標和其中的任何基本假設；
•我們的市場機遇和我們獲得新客戶以及保留現有客戶的能力；
•我們對商業產品發布的期望和時機。
•我們的市場推廣策略的成功；
•我們擴展業務和增加產品的能力；
•我們的競爭優勢和增長策略;
•我們未來的資本需求以及現金的來源和用途；
•我們未來營運的籌資能力；
•內部控制中存在實質缺陷以及我們解決此類實質缺陷的能力對我們預期的時間安排產生的影響，或根本就無法解決；
•我們能否保持在納斯達克股票交易所上市的能力；
•對我們聲譽和投資者對我們的信懇智能所造成的影響，以及可能性增加的法律訴訟和監管調查；
•已知和未知诉讼和监管程序的结果；
•國內外業務、市場、金融、政治和法律條件的變化；
•宏觀經濟環境的影響，包括但不限於通脹、不確定的信貸和全球金融市場、最近和潛在的銀行倒閉導致存款或貸款承諾受阻的干擾；最近和潛在的地緣政治事件，包括俄羅斯和烏克蘭之間的軍事衝突、以色列和哈馬斯之間的戰爭狀態以及相關的更大規模區域衝突的風險；以及災難性事件的發生，包括但不限於嚴重天氣、戰爭或恐怖襲擊；
•未來全球貨幣、區域型或地方經濟和市場條件對大麻股的影響；
•關於大麻行業板塊的法律法規的制定、影響和實施，以及變化
•我們成功利用新興和現有大麻股市場的能力，包括我們在這些市場中成功變現解決方案的能力；
•我們管理未來增長的能力；
•我們有效預測和應對終端用戶市場變化的能力在大麻股行業中具有重要意義；
•我們能夠及時開發新產品和解決方案，並將其推向市場，對我們的平台進行改進，並能夠維護和發展我們的雙邊市場，包括我們獲取和留住付費客戶的能力;
•競爭對我們未來業務的影響;
•我們在留住或招聘，或對高級職員、關鍵員工或董事的變化要求方面的成功；
•網絡攻擊和安防-半導體漏洞；以及
•我們可能會受到其他經濟、商業或競爭因素的不利影響；
您不應將前瞻性聲明視爲未來事件的預測。我們在此季度10-Q表格中包含的前瞻性聲明主要基於我們對可能影響我們業務、財務控件和運營結果的未來事件和趨勢的當前預期和預測。上述前瞻性聲明中所描述事件的結果受「風險因素」一節中描述的風險、不確定性和其他因素的影響，幷包含在我們於2023年12月31日結束的年度10-K表格的報告中，該報告於2024年5月24日提交給證券交易委員會。此外，我們在一個具有很強競爭性和快速變化的環境中運營。新的風險和不確定性

目錄
不時會出現風險和不確定因素，我們無法預測所有可能影響本季度10-Q表格中前瞻性聲明的風險和不確定因素。前瞻性聲明中反映的結果、事件和情況可能無法實現或發生，實際結果、事件或情況可能與前瞻性聲明中描述的有實質性差異。
此外，諸如「我們認爲」及類似的表述反映了我們對相關主題的信念和觀點。這些表述基於截至本季度10-Q表格報告日期時我們所掌握的信息。雖然我們認爲這些信息爲這些表述提供了合理的基礎，但該信息可能是有限或不完整的。我們的表述不應被解讀爲我們對所有相關信息進行了全面的調查或審查。這些表述本質上是不確定的，投資者被警告不要過度依賴這些表述。
本10-Q表季度報告中做出的前瞻性陳述僅涉及截至陳述發表之日的事件。除非法律要求，否則我們沒有義務更新本10-Q表季度報告中做出的任何前瞻性陳述，以反映本10-Q表季度報告發布之日之後的事件或情況，也沒有義務反映新信息或意外事件的發生。實際上，我們可能無法實現前瞻性陳述中披露的計劃、意圖或預期，您不應過分依賴我們的前瞻性陳述。我們的前瞻性陳述不反映未來任何收購、合併、處置、合資企業或投資的潛在影響。

目錄
第I部分-財務信息
項目1。財務報表
WM 科技股份有限公司和子公司
簡明合併資產負債表
（未經審計）
(單位: 千, 除了股份數據)
2024年9月30日2023年12月31日
資產
流動資產
現金$45,043 $34,350 
應收賬款，淨額7,907 11,158 
預付費用及其他流動資產6,409 5,978 
總流動資產59,359 51,486 
物業和設備，淨值24,876 24,255 
商譽68,368 68,368 
無形資產-淨額2,091 2,507 
使用權資產15,513 15,629 
其他資產3,361 4,776 
總資產$173,568 $167,021 
負債和股東權益
流動負債
應付賬款和應計費用$16,533 $21,182 
遞延收入5,765 5,918 
經營租賃負債，流動4,088 6,493 
應稅款項協議負債，流動1,396 122 
總流動負債27,782 33,715 
經營租賃負債，非流動26,912 26,550 
應稅款項協議負債，非流動1,730 1,634 
認股權責任390 585 
其他長期負債1,764 1,386 
總負債58,578 63,870 
承諾和 contingencies
股東權益
優先股 - $0.0001 面值； 75,000,000 授權股份數; 沒有 2024年9月30日和2023年12月31日發行和流通的股份
— — 
A類普通股 - $0.0001 面值； 1,500,000,000 批准的股份； 97,376,026 在2024年9月30日和發行的股票總數爲 94,383,053截止2024年3月31日，已發行股票總數爲56,637,473股
10 9 
V類普通股 - $0.0001 面值； 500,000,000 授權股數， 55,486,361 2024年9月30日和2023年12月31日發行和流通的股份
5 5 
追加實收資本88,762 80,884 
累積赤字(59,230)(64,518)
WM Technology，Inc. 股東權益合計29,547 16,380 
非控制權益85,443 86,771 
股東權益總額114,990 103,151 
總負債和股東權益$173,568 $167,021 

附帶的說明是這些簡明合併財務報表不可或缺的一部分。
3
目錄
Wm 科技公司及其子公司
簡明綜合經營表
（未經審計）
(單位: 千, 除了股份數據)
截至9月30日的三個月截至9月30日的九個月
2024
2023
正如重述的那樣1
2024
2023
正如重述的那樣1
淨收入$46,552 $46,687 $136,844 $141,526 
成本和開支
收入成本（不包括下文單獨顯示的折舊和攤銷）2,182 3,015 6,729 9,748 
銷售和營銷9,671 11,544 30,374 36,171 
產品開發9,484 7,748 28,355 27,882 
一般和行政16,494 18,151 51,549 55,839 
折舊和攤銷3,517 3,395 9,641 9,417 
資產減值費用— 8,382 — 8,382 
總成本和支出41,348 52,235 126,648 147,439 
營業收入（虧損）5,204 (5,548)10,196 (5,913)
其他收入（支出），淨額
認股權證負債公允價值的變化585 (460)195 (780)
應收稅協議負債的變化(548)(69)(1,486)(689)
其他收入（支出）98 3,565 (362)2,884 
所得稅前收入（虧損）5,339 (2,512)8,543 (4,498)
所得稅準備金21 — 72 — 
淨收益（虧損）5,318 (2,512)8,471 (4,498)
歸屬於非控股權益的淨收益（虧損）1,986 (974)3,183 (1,711)
歸屬於WM Technology, Inc.的淨收益（虧損）$3,332 $(1,538)$5,288 $(2,787)
A 類普通股：
每股基本收益（虧損）$0.03 $(0.02)$0.06 $(0.03)
攤薄後每股收益（虧損）$0.03 $(0.02)$0.05 $(0.03)
A 類普通股：
已發行基本股的加權平均值97,166,788 93,651,871 95,743,064 92,947,191 
加權平均攤薄後已發行股數97,811,251 93,651,871 96,761,731 92,947,191 
___________________________
1. 截至2023年9月30日的三個月和九個月，淨營業收入和一般行政費用已進行追溯調整，以反映先前報告的營業收入和信用損失重述。有關詳細信息，請參閱附註2「重大會計政策摘要」。

附帶的說明是這些簡明合併財務報表不可或缺的一部分。
4
目錄
Wm 科技公司及其子公司
壓縮的合併股權聲明
(未經審計)
(單位: 千, 除了股份數據)
2024年9月30日止的三個月和九個月
普通股
A類		普通股
V類
股本溢價
累計赤字Wm科技公司股東權益總額
非控股權益
總權益
股份面值股份面值
截至2023年12月31日
94,383,053$9 55,486,361$5 $80,884 $(64,518)$16,380 $86,771 $103,151 
基於股票的補償—— — — 3,115 — 3,115 60 3,175 
普通股的發行 - 限制性股票單位的歸屬，扣除用於稅收的股份628,941— — — (2)— (2)— (2)
分配—— — — — — — (1,455)(1,455)
普通股的發行 - P類單位交易所39,741— — — 59 — 59 (59)— 
淨利潤—— — — — 1,240 1,240 719 1,959 
截至2024年3月31日95,051,735$9 55,486,361$5 $84,056 $(63,278)$20,792 $86,036 $106,828 
基於股票的補償—— — — 2,950 — 2,950 59 3,009 
普通股的發行 - 限制性股票單位的歸屬，扣除用於稅收的股份1,896,5151 — — (1)— — — — 
分配—— — — — — — (1,845)(1,845)
淨利潤—— — — — 716 716 478 1,194 
截至2024年6月30日96,948,250$10 55,486,361$5 $87,005 $(62,562)$24,458 $84,728 $109,186 
基於股票的補償—— — — 1,758 — 1,758 59 1,817 
普通股發行 - 限制性股票單位的歸屬，扣除用於繳稅的股份427,776— — — (1)— (1)— (1)
分配—— — — — — — (1,330)(1,330)
淨利潤—— — — — 3,332 3,332 1,986 5,318 
截至2024年9月30日97,376,026$10 55,486,361$5 $88,762 $(59,230)$29,547 $85,443 $114,990 

附帶的說明是這些簡明合併財務報表不可或缺的一部分。

5
目錄
Wm 科技公司及其子公司
壓縮的合併股權聲明
(未經審計)
(單位: 千, 除了股份數據)
2023年9月30日結束的三個月和九個月
普通股
A類		普通股
V類
股本溢價
留存收益總Wm 科技 公司股東權益
非控股權益
總權益
股份面值股份面值
截至2022年12月31日
92,062,468$9 55,486,361 $5 $67,986 $(54,620)$13,380 $101,397 $114,777 
基於股票的補償—— — — 4,396 — 4,396 285 4,681 
普通股發行-限制性股票單位解鎖，減去用於稅款的股份475,510— — — — — — — — 
分配—— — — — — — (250)(250)
普通股發行-類P單位交換35,488— — — 62 — 62 (62)— 
淨虧損—— — — — (2,475)(2,475)(1,494)(3,969)
截至2023年3月31日
92,573,466$9 55,486,361$5 $72,444 $(57,095)$15,363 $99,876 $115,239 
基於股票的補償—— — — 3,908 — 3,908 97 4,005 
普通股發行-限制性股票單位解鎖，減去用於稅款的股份842,178— — — (1)— (1)— (1)
分配—— — — — — — (752)(752)
淨收入—— — — — 1,226 1,226 757 1,983 
截至2023年6月30日93,415,644$9 55,486,361$5 $76,351 $(55,869)$20,496 $99,978 $120,474 
基於股票的補償—— — — 2,587 — 2,587 75 2,662 
與先前收購相關的履行留存義務的解除—— — — (1,612)— (1,612)(1,995)(3,607)
發行普通股 - 受限股票單位的歸屬，減去用於繳納稅款的股份455,820— — — (4)— (4)— (4)
分配—— — — — — — (2,231)(2,231)
發行普通股 - P類單位交換9,666— — — 17 — 17 (17)— 
淨虧損—— — — — (1,538)(1,538)(974)(2,512)
截至2023年9月30日93,881,130 $9 55,486,361 $5 $77,339 $(57,407)$19,946 $94,836 $114,782 

附帶的說明是這些簡明合併財務報表不可或缺的一部分。
6
目錄
Wm 科技公司及其子公司
簡明合併現金流量表
(未經審計)
(以千爲單位)
截至9月30日的九個月
2024
2023
正如重述的那樣1
經營活動產生的現金流
淨收益（虧損）$8,471 $(4,498)
爲將淨收益（虧損）與經營活動提供的淨現金進行對賬而進行的調整：
折舊和攤銷9,641 9,417 
認股權證負債公允價值的變化(195)780 
應收稅協議負債的變化1,486 689 
使用權租賃資產的攤銷3,284 3,666 
資產減值費用— 8,382 
基於股票的薪酬7,172 10,389 
終止租賃的收益
(109)— 
解除與先前收購相關的滯留義務
— (3,705)
信貸損失準備金（追回）
(295)(196)
運營資產和負債的變化：
應收賬款3,546 5,320 
預付費用和其他流動資產(439)2,419 
其他資產1,029 21 
應付賬款和應計費用(1,169)(15,439)
遞延收入(153)(167)
經營租賃負債(4,994)(4,668)
經營活動提供的淨現金27,275 12,410 
來自投資活動的現金流
資本化軟件和支出(9,499)(8,870)
用於投資活動的淨現金(9,499)(8,870)
來自融資活動的現金流量
還款保險費融資— (1,450)
分佈(7,250)(3,233)
償還關聯方票據的收益286 286 
應收稅款協議付款(116)— 
與股權獎勵淨股結算相關的已繳稅款(3)(5)
用於融資活動的淨現金(7,083)(4,402)
現金淨增加（減少）10,693 (862)
現金 — 期初34,350 28,583 
現金 — 期末$45,043 $27,721 
___________________________
1. 截至2023年9月30日的九個月，根據先前報道的營業收入和信貸損失的重述，已經進行追溯調整，以反映資產賬款減值準備金額和應收賬款的變動。有關詳細信息，請參閱第2條「重大會計政策摘要」。
附帶的說明是這些簡明合併財務報表不可或缺的一部分。

7
目錄
Wm 科技公司及其子公司
簡明合併現金流量表
(未經審計)
(以千爲單位)
(續)
截至9月30日的九個月
20242023
非現金投資和融資活動的補充披露
資本化的軟件開發股票薪酬$829 $959 
包含在應付賬款和應計費用中的資本化資產$560 $663 
由於租賃修改而重新計量租賃負債和使用權資產$3,348 $— 
附帶的說明是這些簡明合併財務報表不可或缺的一部分。
8
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)

1.    業務和組織
成立於2008年，總部位於加利福尼亞州爾灣，Wm Technology, Inc.（以下簡稱"公司"）運營着一個領先的在線大麻股市場，爲消費提供服務，並提供一整套全面的電子商務和合規軟件解決方案，出售給美國各州和地區合法大麻市場的零售商（包括實體店和配送運營商）及品牌。公司的全面雙邊市場結合了面向消費者和麪向商業的產品套件，爲所有規模的大麻股零售商和品牌提供集成工具，以合法運行其業務，並接觸、轉化和留住消費者。
公司的業務主要包括以商業驅動的市場（"Weedmaps"）以及一整套的端到端軟件即服務（"SaaS"）解決方案（"Weedmaps for Business"）。Weedmaps市場爲大麻股消費者提供有關大麻零售商和品牌的信息。此外，Weedmaps市場匯聚了來自各種來源的數據，包括零售商的pos解決方案，以便消費者能夠通過公司的官網和移動應用按照品種、價格、大麻素和其他有關本地大麻產品的信息進行瀏覽。市場爲消費者提供產品發現、獲取優惠和折扣的機會，以及爲消費者預留產品以便提貨或由參與零售商送貨（零售商在Weedmaps市場之外完成訂單並處理付款，因爲Weedmaps僅作爲入口，將消費者的查詢提供給藥房）。市場還提供教育和課堂信息，以幫助新消費者了解要購買的產品類型。公司認爲，其用戶基礎的規模、忠誠度和參與度，以及用戶基礎對大麻股的消費頻率，使Weedmaps市場對其客戶具有高度的價值。
Weedmaps爲業務提供的saas-雲計算服務是一套全面的電子商務和合規軟件解決方案，專門針對大麻股零售商、配送服務和品牌，旨在簡化前端和後端操作，並幫助管理合規需求。通過開發Weedmaps爲業務，公司提供了一個端到端的平台，以便獲得許可的大麻股零售商遵守州法律。法律。公司向店面、配送和品牌客戶銷售每月訂閱服務，並向獲得許可的客戶提供增值和附加服務。公司還提供其他廣告解決方案和Wm Dispatch服務，需額外收費。
Wm Technology, Inc. 最初於2019年6月7日在開曼群島註冊，名稱爲「Silver Spike Acquisition Corp」（「Silver Spike」）。Silver Spike成立的目的是爲了與一家或多家企業進行合併、融合、股權交換、資產收購、股票購買、重組或類似的業務組合。2021年6月16日（「成交日期」），Silver Spike完成了業務組合（「業務組合」），依據2020年12月10日Silver Spike、Silver Spike Merger Sub LLC（一個特拉華州有限責任公司，Silver Spike Acquisition Corp.的全資直接子公司）、Wm Holding Company, LLC（一個特拉華州有限責任公司，在業務組合之前被稱爲「Legacy WMH」，在業務組合後被稱爲「WMH LLC」）以及Ghost Media Group, LLC（一個內華達州有限責任公司）之間的某項合併協議及計劃。在成交日期，並且與業務組合的完成（「成交」）有關，Silver Spike進行了本土化，並繼續作爲特拉華州的公司，同時更名爲Wm Technology, Inc.
Legacy WMH被重組爲Up-C結構，其中幾乎所有資產和業務由WMH LLC持有，並通過WMH LLC及其子公司繼續運營，而Wm Technology, Inc.的主要資產是其間接持有的WMH LLC的股權。Legacy WMH被確定爲業務組合中的會計取得方，該組合按照美國普遍接受的會計原則（「GAAP」）進行了作爲倒合併的會計處理。
截至 2024年9月30日，公司累計虧損達到 $59.2 百萬公司主要通過客戶支付的服務費用和與首次公開募股及後續募股相關的普通股發行所得來資助其運營。截止到 2024年9月30日，公司有現金 $45.0 百萬公司認爲其現有的流動性來源將滿足至少未來十二個月的運營資金和資本需求。
2.     重要會計政策摘要
呈現基礎
所附的未經審計的簡明合併基本報表是根據公認會計原則和證券交易委員會（「SEC」）關於10-Q表格季度報告的規則和規定編制的。
9
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)
根據《S-X規章》第10-1條，按照GAAP要求的年度基本報表中某些信息和腳註已被省略或簡化，這些中期基本報表應與公司截至2023年12月31日的年度報告(Form 10-k)中包含的經審計的合併基本報表及其註釋一起閱讀，該報告已於2024年5月24日提交給SEC。公司的合併基本報表包括管理層認爲爲公平表述公司截至2024年9月30日的財務狀況及其經營結果和現金流所必需的所有正常經常性調整。某些前期金額已被重新分類，以符合當前期的呈現。在截至2024年9月30日的三個月和九個月的經營結果不一定代表全年預計的結果。公司的會計政策未發生重大變化，與公司經過審計的合併基本報表及相關注釋中所述的一致。
合併原則
簡明綜合財務報表包括Wm Technology, Inc.和WMH LLC的賬目，包括它們全部擁有或控股的子公司。按照GAAP的規定，所有重要的公司間賬目和交易已經被清除。
重新報告2023年季度營業收入和信貸損失
在編制公司截至2023年12月31日的財政年度的合併財務報表時，公司發現 在2023年，該公司在收入確認方面的政策不足，這些收入與2023年以現金方式存入的特定客戶的現金收款有關。對於這些客戶，由於已確定存在重大收款風險，而且公司無法估計其應得對價的可收性，因此《會計準則編纂》（「ASC」）主題606禁止收入確認， “與客戶簽訂合同的收入” 直到爲所提供的服務籌集到現金爲止。公司將這種情況下的客戶稱爲以現金爲基礎的客戶。如下文進一步討論的那樣，2023年，公司在2023年前三個季度的每個季度都錯誤地應用了這項政策，沒有將現金收入用於先前的應收賬款（通過信用損失追回），而是確認了現金收據的額外收入（在某些情況下）。
公司根據ASC 606對與客戶的合同確認營業收入。營業收入標準的核心原則是，公司應當確認營業收入，以表明所承諾的商品或服務的轉移，金額應反映公司預計因這些商品或服務應有的對價。一旦公司認爲不再可能收回全部應得的對價，並因此不被允許確認營業收入，直到有可能確認其有權收取全部對價。因此，當識別出客戶存在重大收款風險時，公司會全額計提所有未收賬款的準備，並對這些應收款項記錄信用損失。
最初，在客戶支付或結清所有未清的應收賬款餘額之前，公司評估不太可能收取的合同的收入才予以確認。當事實或情況發生重大變化時，將重新評估可收款性。對收款能力的評估考慮了公司是否可以通過在客戶拖欠的情況下停止轉讓額外服務的權利來限制其信用風險敞口。當仍向被確定存在重大收款風險的客戶提供服務時，公司最初將收到的所有款項用作客戶最早的發票。但是，如果公司在很長一段時間內繼續向這些客戶提供服務，現金收款情況已經穩定下來，並且其他因素表明這是適當的，則對現金收款進行評估，以確定是否應根據ASC 606將任何持續現金收入記作持續服務的可變對價，而不是收回信貸損失。 迄今爲止，尚未確認任何重大變量對價，在應用下表所示的更正後，這些客戶的所有現金收款均反映爲信貸損失的追回。
由於現金應用與現金基礎客戶相關不一致，以及公司不認爲自己將獲得應得的回報時禁止確認營業收入，公司已確定對這些客戶錯誤確認了收入，而應改爲確認與這些現金收款相關的信貸損失回收。公司確定已錯誤地確認了這些客戶的收入，而應該改爲確認與這些現金收據相關的信貸損失回收。
所有所示的期間均已進行回顧性重新報表，以反映收入和營業費用變更的影響。對於任何已呈現的期間，營業利潤（虧損）、淨利潤（虧損）、每股淨收益（虧損）、經營活動提供的淨現金和調整後的EBITDA沒有受到影響。合併股東權益表不受此重新報表影響。
10
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)
公司已對截至2023年9月30日的未經審計的簡要合併運營報表進行了重述，具體如下（以千爲單位）：
三個月已結束
2023 年 9 月 30 日		九個月已結束
2023 年 9 月 30 日
之前曾報道調整正如重述的那樣之前曾報道調整正如重述的那樣
淨收入$47,725 $(1,038)$46,687 $146,584 $(5,058)$141,526 
一般和管理費用$19,189 $(1,038)$18,151 $60,897 $(5,058)$55,839 
總成本和支出$53,273 $(1,038)$52,235 $152,497 $(5,058)$147,439 
公司已重新披露截至2023年9月30日的未經審計的簡明合併現金流量表如下（單位：千）:
九個月已結束
2023 年 9 月 30 日
之前曾報道調整正如重述的那樣
爲將淨收益（虧損）與經營活動提供的淨現金（用於）進行對賬而進行的調整：
信貸損失準備金（追回）
$4,862 $(5,058)$(196)
運營資產和負債的變化：
應收賬款$262 $5,058 $5,320 
外幣
以外幣計價的資產和負債在資產負債表日按當時的匯率轉換爲美元。營業收入和費用帳戶則按照期間的平均匯率進行轉換。2024年和2023年截止至9月30日的三個月和九個月中，資產和負債的匯率波動帶來的影響微不足道。
使用估計
根據GAAP的要求，編制符合要求的簡明合併財務報表需要管理層進行估計和假設，這些會影響中期簡明合併財務報表日期的資產和負債的報告金額以及附註的資產和負債，以及報告期間內的收入和支出金額。實際結果可能會與這些估計不同。
管理層作出的重要估計包括：信用損失的準備金、長期資產的使用壽命、所得稅、網站及內部使用的軟件開發成本、租賃、商譽和其他無形資產的估值、認股權證負債的估值、遞延稅資產及相關的估值準備、應收稅款協議（「TRA」）負債、營業收入確認、業績和基於股票的補償及或有負債的確認和披露。
風險和不確定性
公司運營在一個相對新的行業，各個司法管轄區的法律法規差異很大。目前，三十九個州、哥倫比亞特區、波多黎各、維爾京群島和關島爲某些醫療用途合法化了某種形式的大麻使用。其中的二十四個州、哥倫比亞特區、關島和北马里亞納對成年人非醫療用途的大麻也合法化了（有時稱爲成人或娛樂用途）。另外八個州合法化了低濃度大麻的各種形式，用於選擇性醫療條件。只有三個州繼續完全禁止大麻。此外，儘管一些美國立法者提出了各種法案以聯邦一級合法化大麻，但這些法案都沒有成爲法律。目前，在聯邦法律下，大麻（不包括大麻含量不超過0.3%乾重基準的大麻衛安那L.定義的大麻）除了大麻以外，仍然是《受控物質法案》（「CSA」）下的一級管制物質。即使在某種程度上已經合法化大麻的州或領土內，種植、持有和出售大麻都違反《CSA》，並可能面臨監禁、巨額罰款和財產沒收。此外，如果個人或實體協助和教唆，可能會違反聯邦法律
11
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)
違反《受控物質法》（CSA）或與他人共謀違反法律，並且違反《受控物質法》可能成爲某些其他犯罪的前因，包括洗錢法和《敲詐勒索有組織犯罪法》。如果任何允許使用大麻股的州改變其法律，或聯邦政府積極執行《受控物質法》或與聯邦禁止大麻股相關的其他法律，公司的業務可能會受到不利影響。
此外，公司的成長能力和滿足經營目標在很大程度上依賴於大麻股的持續合法化和廣泛監管。無法確保這種合法化會及時發生，或根本會發生。
公司客戶的地理集中使公司容易受當地市場下行的影響。歷史上，公司的業務運營主要位於加利福尼亞州。有關更多信息，請參閱附註3“Revenue from Contracts with Customers，”以獲取這些簡明綜合財務報表的附加信息。
公允價值衡量
公司遵循ASC 820中的指引 – 公允價值衡量 針對其在每個報告期重新計量並以公允價值報告的金融資產和負債。有關更多信息，請參見這些簡明合併基本報表中的註釋5「公允價值計量」。
應收賬款淨額
當存在無條件開票和收款的權利時，會記錄應收款項。應收賬款主要包括與客戶應收款相關的金額。應收款項淨額顯示在信貸損失預備金的扣除後，預備金的水平由管理層認爲足以吸收應收賬款組合中的預計損失。公司根據ASC 326採用當前預期信貸損失模型來衡量其貿易應收賬款的信貸損失。 – 在 2023 年 11 月，FASB 發佈了 No. 2023-07，.
公司根據具有相似風險特徵的應收賬款池基礎計算預期信用損失。對於沒有相似風險特徵的應收賬款，信用損失準備金是按個別基礎計算的。與公司應收賬款相關的風險特徵包括客戶帳戶餘額和賬齡狀態。
當確定應收賬款無法收回時，帳戶餘額將從準備費用中沖銷。公司的信用損失準備金爲$0.9 百萬美元和美元8.7 我們對提供的擔保的最大承擔風險，即如果他們無法在租賃期結束時以合同約定的殘值以上的價格出售車輛，截至2024年9月30日和2023年12月31日分別爲$百萬。
截至2024年9月30日和2023年12月31日，沒有客戶佔總應收賬款的10%以上。
以下表格總結了信貸損失準備金的變化。

截至9月30日的三個月截至9月30日的九個月
2024
2023
正如重述的那樣1
2024
2023
正如重述的那樣1
津貼，期初$2,756 $10,202 $8,748 $12,232 
信貸損失準備金（追回）320 219 (295)(196)
註銷(2,218)(1,317)(7,595)(2,932)
津貼，期末$858 $9,104 $858 $9,104 
___________________________
1 截至2023年9月30日的三個月和九個月的信用損失準備（回收）及截至2023年9月30日的相關備抵已 追溯調整，以反映之前報告的信用損失的更正。請參見 重新報告2023年季度營業收入和信貸損失 上述的進一步信息。
資產和設備
資產和設備以成本減累計折舊的形式列示，包括內部開發的軟件、計算機設備、傢俱和固定裝置以及租賃改進。折舊是根據資產的預計可用年限，通常爲線性法計算的 三年 用於計算機設備 七年 用於傢俱和固定裝置。租賃改進採用線性法攤銷，攤銷期限爲其預計可用年限或相關租賃剩餘期限中較短的。維護和維修費用按發生時支出。當資產
12
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)
當資產被退休或以其他方式處置時，相關成本和累計折舊將從帳戶中解除，任何產生的收益或損失將在公司的簡明合併運營報表中反映。
公司在有事件和情況變化表明，資產的賬面價值可能無法收回時，評估資產和設備的減值。如果事件和情況的變化表明資產（或資產組）的賬面價值可能無法收回，並且與資產相關的預期未折現現金流小於其賬面價值，則應確認減值損失，等於資產賬面價值高於其公允價值的金額。 No 2024年9月30日結束的三個和九個月內，公司記錄了對資產和設備的減值。公司在2024年9月30日結束的三個和九個月內，對某些產品推出進行了資產和設備的非現金減值，金額爲$。2.3與2023年12月停產的某些產品相關，公司在2023年9月30日結束的三個和九個月內，記錄了一筆$的非現金資產減值費用，該費用包括在綜合損益簡表中的資產減值損失中。
資本化的軟件
資本化網站和內部使用軟件開發成本包含在隨附的簡明合併資產負債表中的財產和設備中。該公司將與開發和增強Weedmaps平台和SaaS解決方案相關的某些成本資本化。當初步開發工作成功完成，管理層批准並承諾提供項目資金，而且該項目很可能會完成並按預期使用軟件時，公司開始將這些成本資本化。完成所有實質性測試後，資本化即告終止。維護和培訓費用在發生時記作支出。此類成本在投入使用時在相關資產的估計使用壽命內按直線分期攤銷，通常估計爲 三年。一般而言，本來預計會帶來更多特性或功能的增強所產生的費用記作資本，並在增強的估計使用壽命內計爲費用 三年。產品開發成本包括員工的薪酬和福利，包括負責開發新產品以及維護和改進現有產品的工程和技術團隊。不符合資本化標準的產品開發成本在發生時記作支出。
截至2024年9月30日和2023年12月31日，公司有$23.7百萬美元和$23.1百萬的資本化軟件成本，淨額，分別記錄在公司簡明合併資產負債表的物業和設備，淨額中。在截至2024年9月30日和2023年9月30日的三個月內，公司攤銷了$3.1百萬美元和$2.2百萬，分別。在截至2024年9月30日和2023年9月30日的九個月內，公司攤銷了$8.4百萬美元和$5.4百萬，分別。內部使用的軟件開發成本的攤銷包括在陪同的簡明合併損益表中的折舊和攤銷費用 。
商譽和無形資產
商譽是指購買價格超過被收購企業可識別的淨資產公允價值的部分。商譽每年進行減值測試，使用定性或定量的過程，至少在每年的12月31日進行，例如商業氣候變化、經營業績差的因子，或報告單元顯著部分的出售或處置。截至2024年9月30日和2023年12月31日，公司擁有$68.4 百萬的商譽。
在進行商譽減值測試時，公司可以選擇利用定性評估來評估報告單位的公允價值是否有可能超過賬面價值。如果確定賬面價值不太可能超過公允價值，公司就不需要完成定量商譽減值評估。如果確定在考慮定性因素時，賬面價值可能超過公允價值，就會進行定量商譽減值評估。在進行定量評估時，如果報告單位的賬面價值超過其公允價值，將記錄等於差額的減值損失。
每年的12月31日，將進行對商譽的減值評估。截至2023年12月31日止年度，根據公司的年度評估政策，公司選擇跳過定性評估，執行定量評估以檢驗商譽的減值情況。作爲公司減值評估的一部分，通過折現現金流估值法估算出報告單位的公允價值，其中包括對長期增長率、營業收入和盈利預測、現金流量估計、折現率和其他因素的假設。2023年12月31日結束的年度中，在進行定量評估時，確定好商譽的公允價值超過其賬面價值約 18%，結果導致在2023年12月31日的年度評估日期，沒有出現減值。如果公司未來現金流預測或其他關鍵輸入發生負面修訂，則報告單位的估計公允價值可能受到不利影響，可能導致未來發生減值，從而可能對我們的營業收入產生實質影響。
13
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)
運營結果。已經有 沒有 截至2024年和2023年9月30日的三個月和九個月內錄得的商譽減值費用。
無形資產按照成本減去累計攤銷進行記錄。無形資產在事件或環境變化可能影響淨資產可回收性時會進行減值檢查。此類檢查可能包括對當前結果的分析，並考慮預計運營現金流的未折現價值。公司記錄了一項非現金的無形資產減值費用爲$6.1百萬，該費用與2023年12月停止銷售的某些產品相關，包含在合併簡明經營報表中的資產減值費用中。截至2024年9月30日的三個月和九個月內沒有記錄無形資產減值費用。有關更多信息，請參見這些合併簡明基本報表的第6條「無形資產」。
租賃
公司的經營租賃包括位於美國的辦公空間。公司沒有任何被分類爲融資租賃的租賃。 公司將符合租賃定義的安排分類爲經營租賃或融資租賃，租賃在合併資產負債表上以使用權資產（「ROU」）和租賃負債的形式記錄，計算方法是根據租賃期內的固定租賃支付以租賃中隱含的利率或公司的增量借款利率折現。租賃負債因利息而增加，並因每期支付而減少，使用權資產在租賃期內進行攤銷。對於經營租賃，租賃負債的利息和使用權資產的攤銷在租賃期內產生直線租金費用。經營租賃資產和負債在開始時基於租賃期內租賃支付的現值進行確認。對於融資租賃，租賃負債的利息和使用權資產的攤銷在租賃期內產生前期費用。 變動租賃費用在發生時記錄。
在計算使用權資產和租賃負債時，公司選擇將所有資產類別的租賃和非租賃元件組合在一起。公司作爲會計政策選擇，將初始期限爲12個月或更短的短期租賃排除在新指引之外，並在租賃期限內按直線法確認租金費用。
公司在事件和情況變化表明資產的賬面價值可能無法收回時，會評估租賃資產的減值。如果一個事件和情況變化表明租賃資產的賬面價值可能無法收回且與租賃資產相關的預估公允價值低於其賬面價值，則認定減值損失等於租賃資產的賬面價值超過其公允價值的差額。
ROU資產的公允價值是使用收益法估算的，該方法基於管理層對未來現金流的預測，預計將根據轉租市場租金得出。首先，公司通過將資產組的未貼現現金流（包括與租賃協議相關的預期未來租賃付款，由預期的轉租收入抵消）與該資產組的賬面金額進行比較，來測試該資產組的可收回性。如果長期資產減值測試的第一步得出結論，認爲該資產組的賬面金額不可收回，則公司將進行長期資產減值測試的第二步，將資產組的公允價值與賬面金額進行比較，並確認賬面金額超過公允價值的金額的租賃減值費用。爲了估算該資產集團的公允價值，公司依靠貼現現金流法，使用市場參與者對預期現金流的假設。在截至2024年9月30日和2023年9月30日的三個月和九個月中，公司承認 不 與投資回報率資產相關的減值費用。
2024年和2023年截至9月30日三個月的淨租賃費用分別爲$2024年和2023年截至9月30日九個月的淨租賃費用分別爲$1.7 百萬美元和美元2.2百萬美元。百萬。租賃費用已經包括在內2024年和2023年截至9月30日三個月的淨租賃費用分別爲$5.8 百萬美元和美元6.6 2024年和2023年截至9月30日九個月的淨租賃費用分別爲$百萬，租賃費用已經包括在內在附表的綜合損益表中列示爲一般和管理費用。
在2024年第三季度，公司修改了與位於加利福尼亞州爾灣的總部大樓相關的租賃協議。修改延長了租約期限 五年 至2030年2月，並減少了租用面積。租金延長被視爲租賃修改，公司使用增量借款利率 11.5％重新計量其租賃負債和ROU資產，並確認了一項非現金租賃負債 $3.3高級擔保信貸設施、2026年票據和新票據的公允價值是基於金融機構之間交易債務的利率水平，屬於二級輸入。和相應的非現金ROU資產 $3.3截至2021年3月27日，未償還本金總額爲$。租賃分類仍然爲經營租賃。
此外，在2024年第二季度，公司支付了$0.1百萬終止了一項辦公租賃協議。隨着提前終止租約，公司報告了一項$0.1百萬的收益，該收益被確認爲對
14
目錄
Wm 科技公司及其子公司
附註-簡明合併財務報表註釋
(未經審計)
相關的租賃費用。公司還在由於提前終止租賃而在簡明合併資產負債表上註銷了剩餘的使用權資產$0.2百萬，以及一項租賃負債，金額爲$0.4百萬。
2022年， 公司與首席執行官的關聯方簽訂了一份轉租協議。 轉租協議於2022年6月1日起生效，於2024年10月31日到期。有關附表基本報表中第13注「關聯方交易」中有更多信息。
轉租租金收入按照轉租期限的直線法扣減相關的租賃費用。2024年和2023年9月30日結束的三個月內，公司分別錄得與轉租相關的租金收入$0.2 百萬美元和美元0.5 百萬。2024年和2023年9月30日結束的九個月內，公司分別錄得與轉租相關的租金收入$1.3 百萬美元和美元1.6 百萬，分別爲。
認股權負債
公司在收盤時假設了最初在白銀Spike的首次公開發行中發行的公開認股權證（「公開認股權證」）和最初在白銀Spike私募中發行的私募認股權證（「私募認股權證」，以及公開認股權一起，稱爲「認股權證」），所有這些權證均是在白銀Spike首次公開發行時發行的。公司根據ASC 815-40評估了認股權證 - 衍生工具與套期交易-實體自身權益中的合同 並得出結論，它們不符合歸類爲股東權益的標準。請參閱這些簡明合併資產負債表的第9節「認股權利」以獲取更多信息。
於2023年10月6日，Opco交易合併的時候的合夥人（「Exchange TRA Holders」）和公司（集體稱爲「TRA Holders」）與Opco進入了一份稅收應收款協議，向TRA Holders提供了Opco的85%稅收優惠（如果有的話），這是由於（i）未來由Opco資助的贖回或交換，或在某些情況下被視爲交換，推廣Falcon的Opco普通單位爲公司的A類普通股，每股面值$ 4或現金，以及（ii）根據稅收應收款協議進行的某些額外稅收優惠所產生的。
關於業務合併，公司與繼續成員簽訂了一份稅務安排協議，爲繼續的A類單位持有人支付 85公司將根據單位的贖回或交換而實現的任何稅收優惠的%或被認爲實現的稅收優惠的%支付給繼續A類單位持有人。關於由業務合併產生的潛在未來稅收優惠，公司已爲額外的稅基礎建立了遞延稅收資產以及相應的稅務安排協議負債，金額爲 85%的預期益處。剩餘的%記錄爲額外的實收資本。 15%記錄爲額外的實收資本。
TRA負債受重新計量影響，由於各種因素，包括聯邦和州收入稅率的變化和付款概率的評估。由於這些重新計量變動發生在初始計量之後，重新計量的影響記錄在資產負債表利潤或損失中。截至2024年9月30日和2023年12月31日，TRA負債分別爲$3.1 百萬美元和美元1.8 百萬美元。在截至2024年9月30日的三個月和九個月內，公司分別確認了$0.5 百萬美元和美元1.5 百萬美元的虧損，與其TRA負債的重新計量相關。在截至2023年9月30日的三個月和九個月內，公司分別確認了$0.1 百萬美元和美元0.7 百萬美元的虧損，與其TRA負債的重新計量相關。請參閱 所得稅 以下是有關公司對淨遞延稅資產的減值準備的信息。
收入確認
當收入確認的基本標準得到滿足時，公司就會確認收入。同意與 ASC 606 共舞 - 與客戶簽訂合同的收入， t公司通過應用以下五個步驟確認收入：確定與客戶的合同；確定合同中的履約義務；確定交易價格；將交易價格分配給合同中的履約義務；當公司履行這些履約義務時（或當公司履行這些義務時）確認收入，金額應反映出其爲換取這些服務而應得的對價。公司在衡量交易價格時不包括銷售稅和其他類似稅。交易價格反映了公司在扣除折扣後預計將獲得的此類商品的金額。發放的折扣主要與公司的Wm Teal計劃有關，該計劃代表 「共同促進股權准入和立法」，公司通過該計劃向申請人提供折扣，包括免費軟件、廣告、教育材料和培訓計劃，或根據社會股權許可計劃獲得許可。公司向根據所有者資格被國家授予特殊身份的許可證持有人提供折扣。這些通常是在新市場中提供的，以增加大麻領域的多樣性和包容性。許可證的社會公平地位由公司在適用州的網站上驗證。對於 預先爲上市和其他服務付款的客戶，公司記錄遞延收入，並在適用的訂閱期內確認收入。
The Company’s revenues are derived primarily from monthly subscriptions to Weedmaps for Business, featured and deal listings and other ad solutions. The Company’s Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured and deal listings and other ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with
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Table of Contents
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
premium placement ad solutions and discount and promotion pricing tools. Other ad solutions include banner ads and promotion tiles on the Company’s marketplace ad as well as other advertising products on and off the Weedmaps marketplace. The Company has a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the services are provided. The Company rarely needs to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, the Company recognizes revenue in proportion to the standalone selling prices of the underlying services at contract inception.
Revenue for service contracts that the Company assesses are not probable of collection is not recognized until the contract is completed and payment is received. Collectability is reassessed when there is a significant change in facts or circumstances. The assessment of collectability considers whether the Company may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. See Note 3, “Revenue from Contracts with Customers,” to these condensed consolidated financial statements for additional information.
Cost of Revenues (Exclusive of Depreciation and Amortization)
The Company’s cost of revenue primarily consists of web hosting, internet service costs, credit card processing costs and other third party services.    
Advertising
The Company expenses the cost of advertising in the period incurred. Advertising expense totaled $2.0 million and $3.5 million for the three months ended September 30, 2024 and 2023, respectively, and $8.3 million and $8.1 million for the nine months ended September 30, 2024 and 2023, respectively, and are included in sales and marketing expense in the accompanying condensed consolidated statements of operations.
Stock-Based Compensation
The Company measures fair value of employee stock-based compensation awards on the date of grant and allocates the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units is equal to the market price of the Company’s common stock on the date of grant. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method. When awards include a performance condition that impacts the vesting of the award, the Company records compensation cost when it becomes probable that the performance condition will be met and the expense will be attributed over the performance period. See Note 11, “Stock-based Compensation,” to these condensed consolidated financial statements for additional information.
Employee Benefit Plan
The Company’s 401(k) saving plan is a tax-qualified deferred compensation arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating U.S. employees may contribute a portion of their eligible earnings, subject to applicable U.S. Internal Revenue Service and plan limits. The Company matches up to 3.5% of the employee’s eligible compensation, vested upon two years of service. For the three months ended September 30, 2024 and 2023, the Company recognized an expense of $0.4 million and $0.9 million, respectively, and for the nine months ended September 30, 2024 and 2023, the Company recognized an expense of $1.4 million and $1.9 million, respectively, related to employer contributions for the Company’s 401(k) plan.
Other Income (Expense), net
Other income (expense), net consists primarily of change in fair value of warrant liability, TRA liability remeasurement, discharge of a holdback obligation related to a prior acquisition, interest income and other tax related expenses.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes under ASC 740 - Income Taxes. Under the guidance, deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when
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(Unaudited)
those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted.
The Company assesses whether it is “more-likely-than-not” that it will realize its deferred tax assets. The Company establishes a valuation allowance when available evidence indicates that it is more-likely-than-not that the deferred tax asset will not be realized. In assessing the need for a valuation allowance, the Company considers the amounts and timing of expected future deductions or carry forwards and sources of taxable income that may enable utilization. This includes an analysis of the Company’s current financial position, results of operations for the current and prior years and all currently available information about future years. This assessment and estimates require significant management judgment. The Company maintains an existing valuation allowance until enough positive evidence exists to support its reversal. Change in the amount or timing of expected future deductions or taxable income may have a material impact on the level of income tax valuation allowances.
For nine months ended September 30, 2024 and for the year ending December 31, 2023, the Company conducted similar analyses, and determined that a full valuation allowance was still required. As of September 30, 2024 and December 31, 2023, the TRA liability was $3.1 million and $1.8 million, respectively.
The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), revaluations of the warrant liability, changes in flow-through income not subject to tax, valuation allowances and tax law developments.
As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc. on a pro rata basis. WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions.
WMH LLC will generally be required from time to time to make pro rata distributions in cash to the Company and the other holders of WMH Units at certain assumed tax rates in amounts that are intended to be sufficient to cover the taxes on the Company’s and the other WMH equity holders’ respective allocable shares of the taxable income of WMH LLC.
For the three and nine ended September 30, 2024, the Company recorded $0.02 million and $0.07 million, respectively, in income tax provisions due to the impact of the full valuation allowance on its net deferred assets. For the three and nine months ended September 30, 2023, the Company recorded zero in income tax provisions due to the impact of the full valuation allowance on its net deferred assets. The effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of valuation allowances, warrant valuations, non-controlling interests represented by the portion of the flow-through income not subject to tax, permanent stock-based compensation and state taxes.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company does not believe it has any uncertain income tax positions that are more-likely-than-not to materially affect its condensed consolidated financial statements.
Segment Reporting
The Company has identified one business segment which management also considers to be one reporting unit as the Company’s Chief Executive Officer and Chief Financial Officer allocate resources, assess performance and manage the businesses as one segment.
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Earnings (Loss) Per Share
Basic income (loss) per share is computed by dividing net income (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period.
Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if-converted method, as applicable. Potential common shares are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 12, “Earnings Per Share,” for additional information on dilutive securities.
Concentrations of Credit Risk
The Company’s financial instruments are potentially subject to concentrations of credit risk. The Company places its cash with high quality credit institutions and the Company’s cash balances at these institutions typically exceed the Federal Deposit Insurance Corporation limit. As of September 30, 2024, the Company had cash balances that exceeded the FDIC limit with four financial institutions. Management believes that the risk of loss is not significant and has not experienced any losses in such accounts.
Recently Adopted Accounting Pronouncements
The Company reviewed the accounting pronouncements that became effective for fiscal year 2024 and determined that either they were not applicable, or they did not have a material impact on the consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure”, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. This ASU is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In December 2023, the Financial Accounting Standards Board issued ASU 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. We are currently evaluating the impact of the adoption of this standard.
The Company also reviewed other recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the consolidated financial statements.
3.    Revenue from Contracts with Customers
The Company sells a monthly subscription offering to retailer and brand clients as well as upsell and add-on offerings to licensed clients. The Company’s current Weedmaps for Business monthly subscription package includes:
•WM Listings: A listing page with product menu for a retailer or brand on the Weedmaps marketplace, enabling the Company’s clients to be discovered by the marketplace’s users. This also allows clients to disclose their license information, hours of operation, contact information, discount policies and other information that may be required under applicable state law.
•WM Orders: Software for retailers to receive pickup and delivery orders directly from a Weedmaps listing and connect orders directly with a client’s POS system (for certain POS systems). The marketplace also enables brands to route customer purchase interest to a retailer that carries the brand’s product. After a dispensary receives the order request from the consumer, the dispensary and the consumer can continue to communicate, adjust items in the request, and handle any stock issues, prior to and while the dispensary processes and fulfills the order.
•WM Store: Customizable order and menus embed which allows retailers and brands to import their Weedmaps listing menu or product reservation functionality to their own white-labeled WM Store website or separately owned website.
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WM Store facilitates customer pickup or delivery orders and enables retailers to reach more customers by bringing the breadth of the Weedmaps marketplace to a client’s own website.
•WM Connectors: A centralized integration platform, including API tools, for easier menu management, automatic inventory updates and streamlined order fulfillment to enable clients to save time and more easily integrate into the WM Technology ecosystem and integrate with disparate software systems. This creates business efficiencies and improves the accuracy and timeliness of information across Weedmaps, creating a more positive experience for consumers and businesses.
•WM Insights: An insights and analytics platform for clients leveraging data across the Weedmaps marketplace and software solutions. WM Insights provides data and analytics on user engagement and traffic trends to a client’s listing page. For Brand clients, WM Insights allows them to monitor their brand and product rankings, identify retailers not carrying products and keep track of top brands and products by category and state.
The Company also offers other add-on products for additional fees, including:
•WM Ads, which includes, featured and deal listings and other ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey including:
◦Featured Listings: Premium placement ad solutions on high visibility locations on the Weedmaps marketplace (desktop and mobile) to amplify our clients’ businesses and maximize clients’ listings and deal presence.
◦WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion. In some jurisdictions, it is required by applicable law to showcase discounts.
◦Other ad solutions: Includes banner ads and promotion tiles on our marketplace as well as banner ads that can be tied to keyword searches. These products provide clients with targeted ad solutions in highly visible slots across our digital surfaces.
•WM Dispatch: Compliant, automated and optimized logistics and fulfillment last-mile delivery software (including driver apps) that helps clients manage their delivery fleets. This product streamlines the delivery experience from in-store to front-door.
In December 2023, we completed the sunset of WM AdSuite, WM CRM and WM Screens product offerings as we continue to focus our efforts on other Weedmaps for Business products that support the Weedmaps marketplace and improve the eCommerce experience for our clients and users.
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Disaggregation of revenue
The following table summarizes the Company’s disaggregated net revenues information (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024
2023
As Restated1
2024
2023
As Restated1
Revenues:
Weedmaps for Business and other SaaS solutions$13,583 $10,877 $40,285 $33,847 
Featured and deal listings29,233 31,907 85,814 96,782 
Subtotal42,816 42,784 126,099 130,629 
Other ad solutions3,736 3,903 10,745 10,897 
Total net revenues2
$46,552 $46,687 $136,844 $141,526 
___________________________
1 For the three and nine months ended September 30, 2023, net revenues have been retrospectively adjusted to reflect the restatement of previously reported 2023 revenue. See Note 2, “Summary of Significant Accounting Policies,” for further information.
2 Net revenues are net of discounts of $0.1 million and $0.8 million, respectively, for the three months ended September 30, 2024 and 2023 and $0.6 million and $3.0 million, respectively, for the nine months ended September 30, 2024 and 2023.
Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription offerings, as described above, and is recognized as the revenue recognition criteria are met. Deferred revenue balance as of September 30, 2024 and December 31, 2023 were $5.8 million and $5.9 million, respectively, and the balance is expected to be fully recognized within the next twelve months. The Company generally invoices customers and receives payment on an upfront basis and payments do not include significant financing components or variable consideration and there are generally no rights of return or refunds after the subscription period has passed.
Substantially all of the Company’s revenue has been generated in the United States for the three and nine months ended September 30, 2024 and 2023. For the three and nine months ended September 30, 2024, approximately 52% of the Company’s net revenues originated in California. For the three and nine months ended September 30, 2023, approximately 51% and 52% of the Company’s net revenues originated in California, respectively.
4.    Commitments and Contingencies
Litigation
During the ordinary course of the Company’s business, it is subject to various claims and litigation. Management believes that the outcome of such claims or litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flow.
SEC Matter
As previously disclosed, in the second quarter of 2022, the Company’s board of directors received an internal complaint regarding the calculation, definition and reporting of the Company’s monthly active users (“MAUs”) metric. In response, the Company’s board of directors formed a special committee of independent directors to conduct an internal investigation with the assistance of outside counsel. As a result of the findings of that internal investigation, the Company provided certain additional information regarding the growth and nature of the Company’s previously-reported MAUs in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 9, 2022. This investigation found no impact on the Company’s financial results under GAAP or the reporting or disclosure of any currently disclosed non-GAAP financial metric. As also previously reported, in the third quarter of 2022, the Company determined not to report MAUs going forward. In August 2022, the Company’s board of directors determined to voluntarily report the internal complaint and subsequent internal investigation to the SEC, following which the SEC’s Division of Enforcement commenced an investigation. The Company has been fully cooperating with the SEC’s investigation.
As also previously reported in the Current Report on Form 8-K filed on July 25, 2024, on July 22, 2024, the Company reached an agreement in principle with the SEC staff to resolve the SEC’s investigation with respect to the Company. Under the terms of the settlement, the Company consented, without admitting or denying the SEC’s findings, to the entry of an administrative
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cease-and-desist order finding violations of Sections 17(a)(2) and (3) of the Securities Act of 1933, as amended, Sections 13(a) and 14(a) of the Securities Exchange Act of 1934, as amended, and Rules 12b-20, 13a-1, 13a-11, 13a-13, and 14a-9 thereunder, and pay a civil money penalty of $1.5 million. The settlement was approved by the SEC, and the administrative cease-and-desist order was entered in September 2024. The Company issued payment to the SEC, and it was received by the SEC, in October 2024. Accordingly, the SEC enforcement matter is concluded with respect to the Company.
As of September 30, 2024, the Company recorded a liability of $1.5 million for the SEC settlement which is included in general and administrative expenses in the condensed consolidated statements of operations and accounts payable and accrued expenses in the condensed consolidated balance sheets. The SEC settlement of $1.5 million was paid in October 2024.
Purchase Obligations
The Company has minimum outstanding purchase obligations of approximately $1.8 million for the remaining three months in 2024, $7.3 million in 2025 and $7.5 million in 2026, due under software license agreements, of which the majority relates to the Company’s three-year AWS Enterprise agreement.
5.    Fair Value Measurements
The Company follows the guidance in ASC 820 – Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
•Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs based on the Company assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):
LevelSeptember 30, 2024December 31, 2023
Liabilities:
Warrant liability – Public Warrants1$250 $375 
Warrant liability – Private Placement Warrants3140 210 
Total warrant liability$390 $585 
The following tables summarize the changes in the fair value of the warrant liabilities (in thousands):
Three Months Ended
September 30, 2024		Nine Months Ended
September 30, 2024
Public WarrantsPrivate Placement WarrantsWarrant LiabilitiesPublic WarrantsPrivate WarrantsWarrant Liabilities
Fair value, beginning of period$625 $350 $975 $375 $210 $585 
Change in valuation inputs or other assumptions(375)(210)(585)(125)(70)(195)
Fair value, end of period$250 $140 $390 $250 $140 $390 
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Three Months Ended
September 30, 2023		Nine Months Ended
September 30, 2023
Public WarrantsPrivate Placement WarrantsWarrant LiabilitiesPublic WarrantsPrivate WarrantsWarrant Liabilities
Fair value, beginning of period$1,500 $910 $2,410 $1,250 $840 $2,090 
Change in valuation inputs or other assumptions250 210 460 500 280 780 
Fair value, end of period$1,750 $1,120 $2,870 $1,750 $1,120 $2,870 
Public Warrants
The Company determined the fair value of the Public Warrants, based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The fair value of the Public Warrants was $0.3 million and $0.4 million as of September 30, 2024 and December 31, 2023, respectively.
Private Placement Warrants
The estimated fair value of the Private Placement Warrants is determined with Level 3 inputs using the Black-Scholes model. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Placement Warrants as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the date the Business Combination closed, or June 16, 2026.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
September 30, 2024December 31, 2023
Exercise price$11.50 $11.50 
Stock price$0.87 $0.72 
Volatility93.0 %87.5 %
Term (years)1.712.46
Risk-free interest rate3.75 %4.13 %
Significant changes in the volatility would result in a significant lower or higher fair value measurement, respectively.
The fair value of the Private Placement Warrants was $0.1 million and $0.2 million as of September 30, 2024 and December 31, 2023, respectively. There were no transfers in or out of Level 3 from other levels in the fair value hierarchy.
6.    Intangible Assets
Intangible assets consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024
Weighted Average Amortization Period (Years)Gross Intangible AssetsAccumulated AmortizationNet Intangible Assets
Trade and domain names15.0$7,256 $(5,370)$1,886 
Software technology5.0249 (150)99 
Customer relationships8.0170 (64)106 
Total intangible assets14.5$7,675 $(5,584)$2,091 
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December 31, 2023
Weighted Average Amortization Period (Years)Gross Intangible AssetsAccumulated AmortizationNet Intangible Assets
Trade and domain names15.0$7,256 $(5,008)$2,248 
Software technology5.0249 (112)137 
Customer relationships8.0170 (48)122 
Total intangible assets14.5$7,675 $(5,168)$2,507 
Amortization expense for intangible assets was $0.1 million and $0.5 million during the three months ended September 30, 2024 and 2023, respectively. Amortization expense for intangible assets was $0.4 million and $1.6 million during the nine months ended September 30, 2024 and 2023, respectively.
The Company recorded a non-cash intangible impairment charge of $6.1 million for the three and nine months ended September 30, 2023 related to certain product offerings that were sunset in December, 2023, which is included in asset impairment charges in the condensed consolidated statements of operations.
The estimated future amortization expense of intangible assets as of September 30, 2024 is as follows (in thousands):
Remaining period in 2024 (three months)$139 
Year ended December 31, 2025555 
Year ended December 31, 2026543 
Year ended December 31, 2027505 
Year ended December 31, 2028222 
Thereafter127 
Total$2,091 
7.     Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets as of September 30, 2024 and December 31, 2023 consisted of the following (in thousands):
September 30, 2024December 31, 2023
Prepaid insurance$1,730 $1,530 
Prepaid marketing292 387 
Prepaid software1,954 2,406 
Other prepaid expenses and other current assets2,433 1,655 
Total$6,409 $5,978 
The Company capitalizes implementation costs incurred in cloud computing arrangements that are service contracts if they meet certain requirements. Those requirements are similar to the requirements for capitalizing implementation costs incurred to develop internal-use software. Amortization is computed using the straight-line method over the term of the associated hosting arrangement. These implementation costs are classified on the balance sheet in prepaid and other current assets, and the related cash flows are presented as cash outflows from operations. Impairment is recognized and measured when it is no longer probable that the computer software project will be completed and placed in service.
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(Unaudited)
8.     Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of September 30, 2024 and December 31, 2023 consisted of the following (in thousands):
September 30, 2024December 31, 2023
Accounts payable and other accrued liabilities$6,932 $7,323 
Accrued employee expenses9,601 13,859 
Total$16,533 $21,182 
Accrued employee expenses include accrued bonuses and commission of $4.2 million and $7.4 million as of September 30, 2024 and December 31, 2023, respectively. Accounts payable and other accrued liabilities as of September 30, 2024 include $1.5 million in potential SEC settlement. See Note 4, “Commitments and Contingencies” to these condensed consolidated financial statements for further information.
9.     Warrant Liability
At September 30, 2024, there were 12,499,973 Public Warrants outstanding and 7,000,000 Private Placement Warrants outstanding.
The Public Warrants entitle the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of Class A Common Stock. No fractional shares will be issued upon exercise of the warrants. The Public Warrants will expire at 5:00 p.m. New York City time on June 16, 2026, or earlier upon redemption or liquidation. The Public Warrants are listed on the NYSE under the symbol “MAPSW.”
The Company may redeem the Public Warrants starting July 16, 2021, in whole and not in part, at a price of $0.01 per Public Warrant, upon not less than 30 days’ prior written notice of redemption to each holder of Public Warrants, and if, and only if, the reported last sales price of the Company’s Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalization and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the holders of Public Warrants.
Each Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants (including the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain exceptions, and they are nonredeemable as long as they are held by Silver Spike Sponsor or its permitted transferees. Silver Spike Sponsor, as well as its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis and will have certain registration rights related to such Private Placement Warrants. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than Silver Spike Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A Common Stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances of shares of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants.
The Company concluded the Public Warrants and Private Placement Warrants, or the Warrants, meet the definition of a derivative under ASC 815- Derivatives and Hedging and are recorded as liabilities. Upon the Closing, the fair value of the Warrants was recorded on the balance sheet. The fair value of the Warrants are remeasured as of each balance sheet date, which resulted in a non-cash gain of $0.6 million and $0.2 million in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024, respectively, and a non-cash loss of $0.5 million and $0.8 million in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023, respectively. See Note 5, “Fair Value Measurements” to these condensed consolidated financial statements for additional information.
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10.     Equity
Class A Common Stock
Voting Rights
Each holder of the shares of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of the shares of Class A Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, the holders of the outstanding shares of Class A Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class V Common Stock.
Dividend Rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available therefor.
Rights upon Liquidation, Dissolution and Winding-Up
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of the shares of Class A Common Stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the shares of Class A Common Stock, then outstanding, if any.
Preemptive or Other Rights
The holders of shares of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the shares of Class A Common Stock. The rights, preferences and privileges of holders of shares of Class A Common Stock will be subject to those of the holders of any shares of the preferred stock that the Company may issue in the future.
Class V Common Stock
Voting Rights
Each holder of the shares of Class V Common Stock is entitled to one vote for each share of Class V Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of shares of Class V Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, the holders of the outstanding shares of Class V Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would
alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class A Common Stock.
Dividend Rights
The holders of the Class V Common Stock will not participate in any dividends declared by the Company’s board of directors.
Rights upon Liquidation, Dissolution and Winding-Up
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class V Common Stock are not entitled to receive any of the Company’s assets.
Preemptive or Other Rights
The holders of shares of Class V Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class V Common Stock.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Issuance and Retirement of Class V Common Stock
In the event that any outstanding share of Class V Common Stock ceases to be held directly or indirectly by a holder of Class A Units, such share will automatically be transferred to us for no consideration and thereupon will be retired. The Company will not issue additional shares of Class V Common Stock other than in connection with the valid issuance or transfer of Units in accordance with the governing documents of WMH LLC.
Preferred Stock
Pursuant to the amended and restated certificate of incorporation in effect as of June 15, 2021, the Company was authorized to issue 75,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2024, there were no shares of preferred stock issued or outstanding.
Noncontrolling Interests
The noncontrolling interest represents the Units held by holders other than the Company. As of September 30, 2024, the noncontrolling interests owned 36.9% of the Units outstanding. The noncontrolling interests’ ownership percentage can fluctuate over time, including as the WMH LLC equity holders elect to exchange Units for Class A Common Stock. The Company has consolidated the financial position and results of operations of WMH LLC and reflected the proportionate interest held by the WMH LLC Unit equity holders as noncontrolling interests.
11.     Stock-based Compensation
WM Holding Company, LLC Equity Incentive Plan
The Company has accounted for the issuance of Class A-3 and Class B Units issued under WM Holding Company, LLC’s Equity Incentive Plan in accordance with ASC 718 – Stock Based Compensation. The Company considers the limitation on the exercisability of the Class A-3 and Class B Units to be a performance condition and records compensation cost when it becomes probable that the performance condition will be met.
In connection with the Business Combination, each of the Class A-3 Units outstanding prior to the Business Combination were cancelled, and the holder thereof received a number of Class A units representing limited liability company interests of WMH LLC (the “Class A Units”) and an equivalent number of shares of Class V Common Stock, par value $0.0001 per share (together with the Class A Units, the “Paired Interests”), and each of the Class B Units outstanding prior to the Business Combination were cancelled and holders thereof received a number of Class P units representing limited liability company interests of WMH LLC (the “Class P Units” and together with the Class A Units, the “Units”), each in accordance with the Merger Agreement.
Concurrently with the closing of the Business Combination, the Unit holders entered into an exchange agreement (the “Exchange Agreement”). The terms of the Exchange Agreement, among other things, provide the Unit holders (or certain permitted transferees thereof) with the right from time to time at and after 180 days following the Business Combination to exchange their vested Paired Interests for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or Class P Units for shares of Class A Common Stock with a value equal to the value of such Class P Units less their participation threshold, or in each case, at the Company’s election, the cash equivalent of such shares of Class A Common Stock.
A summary of the Class P Unit activity for the nine months ended September 30, 2024 is as follows:
Number of Units
Outstanding Class P Units, December 31, 202314,804,507 
Cancellations(775)
Exchanged for Class A Common Stock(125,000)
Outstanding, Class P Units, September 30, 202414,678,732 
Vested, September 30, 202414,659,364
As of September 30, 2024, unrecognized stock-based compensation expense for non-vested Class P Units was $0.04 million which is expected to be recognized over a weighted-average period of 0.2 years. For the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense for the Class P Units of $0.1 million and $0.1
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense for the Class P Units of $0.2 million and $0.5 million, respectively.
WM Technology, Inc. Equity Incentive Plan
In connection with the Business Combination, the Company adopted the WM Technology, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the granting of incentive stock options to employees and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants. As of September 30, 2024, 40,639,882 shares of Class A Common Stock were authorized for issuance pursuant to awards under the 2021 Plan. The number of shares of Class A Common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to five percent (5%) of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding year; provided, however that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock. As of September 30, 2024, 27,621,566 shares of Class A Common Stock were available for future issuance.
A summary of the restricted stock unit (“RSU”) activity for the nine months ended September 30, 2024 is as follows:
Number of RSUsWeighted-average Grant Date Fair Value
Non-vested at December 31, 2023
7,683,598 $2.96 
Granted906,232$1.03 
Vested(2,897,408)$2.97 
Forfeited(1,328,501)$2.87 
Non-vested at September 30, 2024
4,363,921$2.57 
As of September 30, 2024, unrecognized stock-based compensation expense for non-vested RSUs was $10.0 million, which is expected to be recognized over a weighted-average period of 1.2 years. For the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense for the RSUs of $1.5 million and $2.7 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense for the RSUs of $6.9 million and $10.1 million, respectively.
The Company grants performance-based restricted stock units (“PRSUs”) with performance and service-based vesting conditions. The level of achievement of such goals may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. The Company recognizes expense ratably over the vesting period for the PRSUs when it is probable that the performance criteria specified will be achieved. The fair value is equal to the market price of the Company’s common stock on the date of grant.
Number of PRSUsWeighted-average Grant Date Fair Value
Non-vested at December 31, 2023
234,375 $6.40 
Granted0$— 
Vested(58,594)$6.40 
Forfeited(175,781)$6.40 
Non-vested at September 30, 2024
— $— 
As of September 30, 2024, the Company has no outstanding grants for PRSUs. For the three months ended September 30, 2024, the Company recorded no stock-based compensation expense for PRSUs. For the three months ended September 30, 2023, the Company recorded stock-based compensation credit of for PRSUs $0.5 million. For the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense for PRSUs of $0.1 million and stock-based compensation credit for PRSUs of $0.2 million, respectively.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company recorded stock-based compensation cost related to the Class P Units, RSUs and PRSUs in the following expense categories on the accompanying condensed consolidated statements of operations (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Sales and marketing$351 $587 $1,116 $2,180 
Product development985 944 2,811 3,226 
General and administrative265 766 3,245 4,983 
Total stock-based compensation expense1,601 2,297 7,172 10,389 
Amount capitalized to software development216 365 829 959 
Total stock-based compensation cost$1,817 $2,662 $8,001 $11,348 
12.     Earnings Per Share
Basic income (loss) per share of Class A Common Stock is computed by dividing net earnings (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share of Class A Common Stock adjusts basic net income (loss) per share of Class A Common Stock for the potentially dilutive impact of securities. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability, net of the portion attributable to non-controlling interests, and adjusts the denominator to include the dilutive shares calculated using the treasury stock method.
The computation of income (loss) per share attributable to WM Technology, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding are as follows for the three and nine months ending September 30, 2024 and 2023 (in thousands, except for share and per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Numerator:
Net income (loss)$5,318 $(2,512)$8,471 $(4,498)
Less: net income (loss) attributable to noncontrolling interests1,986 (974)3,183 (1,711)
Net income (loss) attributable to WM Technology, Inc. Class A Common Stock – basic and diluted$3,332 $(1,538)$5,288 $(2,787)
Denominator:
Weighted average of shares of Class A Common Stock outstanding – basic97,166,78893,651,87195,743,06492,947,191
Weighted average effect of dilutive securities:
Acquisition holdback shares— — — — 
Restricted stock units1
644,463 — 1,016,101 — 
Performance-based restricted stock units — — 2,566 — 
Weighted average of shares of Class A Common Stock outstanding – diluted97,811,25193,651,87196,761,73192,947,191
Net income (loss) per share of Class A Common Stock – basic$0.03 $(0.02)$0.06 $(0.03)
Net income (loss) per share of Class A Common Stock – diluted$0.03 $(0.02)$0.05 $(0.03)
¹ Calculated using the treasury stock method.
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WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Shares of the Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented. However, shares of the Class V Common Stock outstanding for the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method and are included in the computation of diluted earnings (loss) per share, except when the effect would be anti-dilutive.
The Company excluded the following securities from its computation of diluted shares outstanding for the periods presented, as their effect would have been anti-dilutive:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Class V Units55,486,361 55,486,361 55,486,361 55,486,361 
Class P Units14,678,732 14,966,127 14,678,732 14,966,127 
RSUs2,813,084 7,173,708 2,964,600 7,173,708 
PRSUs— 234,375 — 234,375 
Public Warrants12,499,973 12,499,973 12,499,973 12,499,973 
Private Placement Warrants7,000,000 7,000,000 7,000,000 7,000,000 
13.     Related Party Transactions
During the second quarter of 2022, the Company entered into a sublease agreement with an affiliate of the Chief Executive Officer. The sublease commenced on June 1, 2022, and the term is for the remainder of the amended lease term which expired on October 31, 2024. The monthly base rent, after the rent abatement period for the first four months, is $69,000. As of September 30, 2024 and December 31, 2023, rent receivable was $0.2 million and $0.7 million, respectively, and these amounts are included in prepaid expenses and other current assets on the accompanying condensed balance sheets. The Company expects to collect the remaining rent receivable balance which was $0.2 million as of September 30, 2024 in the fourth quarter of 2024. Rent receivable of $0.7 million from December 31, 2023 was subsequently collected in April 2024. For the three and nine months ended September 30, 2024, income on the sublease with a related party was $0.2 million and $0.5 million, respectively. For the three and nine months ended September 30, 2023, income on the sublease with a related party was $0.2 million and $0.5 million, respectively. The income on sublease is netted with rent expense and included in general and administrative expenses on the condensed consolidated statements of operations.
In connection with the Business Combination, the Company paid $1.1 million in certain transaction costs reimbursable by Silver Spike’s sponsor (“Silver Spike Sponsor”), an affiliate to a member of the board of directors. On March 16, 2023, Silver Spike Holdings, an affiliate of Silver Spike Sponsor, entered into a promissory note with the Company and agreed to pay the principal amount of $1.1 million in 12 equal quarterly installments commencing on March 31, 2023. The promissory note bears interest at a rate of 5% per annum commencing on March 31, 2023. In an event of default, the outstanding principal amount shall bear interest for the entire period during which the principal balance is unpaid at a rate which is equal to 10% per annum. As of September 30, 2024, the remaining balance of the promissory note receivable was the $0.4 million of which $0.3 million was included in prepaid expenses and other current assets and $0.1 million was included in other assets on the condensed consolidated balance sheets. As of December 31, 2023, the remaining balance of the promissory note receivable was $0.7 million of which $0.4 million was included in prepaid expenses and other current assets and $0.3 million was included in other assets on the consolidated balance sheets. For the three and nine ended September 30, 2024 and 2023, interest income on the promissory note was less than $0.1 million, which is included in other income (expense), net on the accompanying condensed consolidated statements of operations.
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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes to those statements included in Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and included elsewhere herein and in our Annual Report on Form 10-K for the year ended December 31, 2023.
Third Quarter 2024 Financial Highlights
•Net revenues were $46.6 million as compared to $46.7 million in the prior year.
•Average monthly paying clients was 5,100, as compared to 5,414 in the prior year.
•Average monthly net revenues per paying client was $3,043, as compared to $2,874 in the prior year.
•Net income was $5.3 million as compared to net loss of $2.5 million in the prior year.
•Adjusted EBITDA was $11.3 million as compared to $10.7 million in the prior year.
For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Net Income (Loss) to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
Overview
Founded in 2008, and headquartered in Irvine, California, WM Technology, Inc. operates a leading online cannabis marketplace for consumers together with a comprehensive set of eCommerce and compliance software solutions for cannabis businesses, which are sold to both storefront locations and delivery operators (“retailers”) and brands in the legalized cannabis markets in states and territories of the United States. Our comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers.
Our business primarily consists of our commerce-driven marketplace (“Weedmaps”), and our fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering (“Weedmaps for Business”). The Weedmaps marketplace is a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products with 5,100 average monthly paying clients during the three months ended September 30, 2024 on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors). Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased approximately 8,300 listing pages as of September 30, 2024.
We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain and Switzerland. We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law. As of September 30, 2024, we actively operated in over 35 U.S. states and territories that have adult-use and/or medical-use regulations in place. Substantially all of our revenue was generated in the United States during the periods presented. We define actively operated markets as those U.S. states or territories with greater than $1,000 monthly revenue.
Our mission is to power a transparent and inclusive global cannabis economy. Our technology addresses the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis users in a legally compliant fashion. Since our founding in 2008, Weedmaps has become a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products, permitting product discovery and order-ahead for pickup or delivery by participating retailers. Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies and manage compliance needs.
As we continue to expand the presence and increase the number of consumers on the Weedmaps marketplace and broaden our offerings, we generate more value for our business clients. As we continue to expand the presence and increase the number of cannabis businesses listed on weedmaps.com, we become a more compelling marketplace for consumers. To capitalize on the growth opportunities of our two-sided marketplace and solutions, we plan to continue making investments in raising brand awareness, increasing penetration within existing markets and expanding to new markets, as well as continuing to develop and monetize new solutions to extend the functionality of our platform. These investments serve to deepen the consumer experience with our platform and continue to provide a high level of support to our business clients.
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Key Operating and Financial Metrics
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following table summarize our financial performance for the three and nine ended September 30, 2024 compared with the same period in 2023. For a detailed discussion of our results of operations, see “Results of Operations” below.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(dollars in thousands, except for net revenues per paying client)
Net revenues(1)
$46,552 $46,687 $136,844 $141,526 
Net income (loss)$5,318 $(2,512)$8,471 $(4,498)
EBITDA(2)
$8,576 $872 $17,853 $4,896 
Adjusted EBITDA(2)
$11,312 $10,671 $31,001 $28,028 
Average monthly net revenues per paying client(1)(3)
$3,043 $2,874 $3,025 $2,831 
Average monthly paying clients(4)
5,100 5,414 5,027 5,555 
___________________________
(1)For the three and nine ended September 30, 2023, net revenues has been retrospectively adjusted to reflect the restatement of previously reported revenue. See Note 2, “Summary of Significant Accounting Policies,” for further information.
(2)For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Net Income (Loss) to EBITDA and Adjusted EBITDA” below.
(3)Average monthly net revenues per paying client is defined as the average monthly net revenues for any particular period divided by the average monthly paying clients in the same respective period. Average monthly net revenues per paying client is calculated in the same manner as our previously-reported “average monthly revenue per paying client,” and the description of the metric is being updated solely to clarify that it is calculated using net revenues.
(4)Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided).
Non-GAAP Financial Measures
Net Income (Loss) to EBITDA and Adjusted EBITDA
Our financial statements, including net income (loss), are prepared in accordance with GAAP. For more information regarding the components within our net income (loss), see “Components of Our Results of Operations” below.
Net income for the three months ended September 30, 2024 was $5.3 million compared with a net loss for the three months ended September 30, 2023 of $2.5 million. The change in net income was primarily due to a decrease in total costs and expenses of $10.9 million, change in fair value of warrant liability of $1.0 million, and change in tax receivable agreement (“TRA”) liability of $0.5 million, partially offset by a decrease in revenue of $0.1 million and a decrease in other income (expense) of $3.5 million.
Net income for the nine months ended September 30, 2024 was $8.5 million compared with a net loss for the nine months ended September 30, 2023 of $4.5 million. The increase in net income was primarily due to a decrease in total costs and expenses of $20.8 million, and change in fair value of warrant liability of $1.0 million, partially offset by a decrease in revenue of $4.7 million, change in tax receivable agreement (“TRA”) liability of $0.8 million and a decrease in other income (expense) of $3.2 million.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, transaction related bonus, legal settlements and other legal costs, reduction in force, asset impairment charges, change in TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net income (loss) (the most directly comparable GAAP financial measure) to EBITDA; and from EBITDA to Adjusted EBITDA.
We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
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Each of EBITDA and Adjusted EBITDA has limitations as an analytical tool, and you should not consider any of these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
•EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.
A reconciliation of net income (loss) to non-GAAP EBITDA and Adjusted EBITDA is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in thousands)
Net income (loss)$5,318 $(2,512)$8,471 $(4,498)
Provision for income taxes
21 — 72 — 
Depreciation and amortization expenses3,517 3,395 9,641 9,417 
Interest income(280)(11)(331)(23)
EBITDA8,576 872 17,853 4,896 
Stock-based compensation1,601 2,297 7,172 10,389 
Change in fair value of warrant liability(585)460 (195)780 
Transaction related bonus expense
— 833 — 3,400 
Legal settlements and other legal costs1,172 1,470 4,685 3,003 
Reduction in force (recovery) expense— (7)— 194 
Asset impairment charges
— 8,382 — 8,382 
Discharge of a holdback obligation related to a prior acquisition
— (3,705)— (3,705)
Change in tax receivable agreement liability548 69 1,486 689 
Adjusted EBITDA$11,312 $10,671 $31,001 $28,028 
Average Monthly Net Revenues Per Paying Client
Average monthly net revenues per paying client measures how much clients, for the period of measurement, are willing to pay us for our subscription and additional offerings and the efficiency of the bid-auction process for our featured listings placements. We calculate this metric by dividing the average monthly net revenues for any particular period by the average monthly number of paying clients in the same respective period. The increase in our average monthly net revenues per paying client was due to sunset of certain products in December 2023, which had lower average monthly spending clients.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Average monthly net revenues per paying client
$3,043 $2,874 $3,025 $2,831 
Average Monthly Paying Clients
We define average monthly paying clients as the monthly average of clients billed each month over a particular period (and for which services were provided). Our paying clients include both individual cannabis businesses as well as retail websites or businesses within a larger organization that have independent relationships with us, many of whom are owned by holding companies where decision-making is decentralized such that purchasing decisions are made, and relationships with us are located, at a lower organizational level. In addition, any client may choose to purchase multiple listing solutions for each of their retail websites or businesses.
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Average monthly paying clients for the three months ended September 30, 2024 decreased 6% to 5,100 average monthly paying clients from 5,414 average monthly paying clients in the same period in 2023. Average monthly paying clients for the nine months ended September 30, 2024 decreased 10% to 5,027 average monthly paying clients from 5,555 average monthly paying clients in the same period in 2023. The decrease in average monthly paying clients compared to the same periods in 2023 was primarily due to the removal of paying clients from our platform who have become delinquent, the impact on client count related to the sunset of certain products in December 2023, as well as expected client churn due to continued industry challenges, such as price deflation and ongoing consolidation.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Average monthly paying clients5,100 5,414 5,027 5,555 
Factors Affecting Our Performance
Growth of Our Two-Sided Weedmaps Marketplace
We have historically grown through and intend to focus on continuing to grow through the expansion of our two-sided marketplace, which occurs through growth of the number and type of businesses and consumers that we attract to our platform. We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses.
Growth and Retention of Our Paying Clients
Our revenue grows primarily through acquiring and retaining paying clients and increasing the revenue per paying client over time. We have a history of attracting new paying clients and increasing their annual spend with us over time, primarily due to the value they receive once they are onboarded and able to take advantage of the benefits of participating in our two-sided marketplace and leveraging our software solutions.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, inflation, the military conflict between Russia and Ukraine and the recent state of war between Israel and Hamas and the related risk of a larger regional conflict. Increasing prices in the component materials for the goods or services of our clients may impact their ability to maintain or increase their spend with us and their ability to pay their invoices on time. Rapid and significant changes in commodity prices may negatively affect our revenue if our clients are unable to mitigate inflationary increases through various customer pricing actions and cost reduction initiatives. This could also negatively impact our net dollar retention and our collections on accounts receivable.
Regulation and Maturation of Cannabis Markets
We believe that we will have significant opportunities for greater growth as more jurisdictions legalize cannabis for medical and/or adult-use and the regulatory environment continues to develop. Currently, thirty-nine states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purposes. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use). Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only three states continue to prohibit cannabis entirely. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 15-year operating history to enter new markets.
We also have a significant opportunity to monetize transactions originating from users engaging with a retailer on the Weedmaps marketplace or tracked via one of our Weedmaps for Business solutions. Given U.S. federal prohibitions on plant-touching businesses and our current policy not to participate in the chain of commerce associated with the sale of cannabis products, we do not charge take-rates or payment fees for transactions originating from users who engage with a retailer on the Weedmaps platform or tracked via one of our Weedmaps for Business solutions. A change in U.S. federal regulations could result in our ability to engage in such monetization efforts without adverse consequences to our business. A change in U.S. federal regulations could also increase access to capital and remove limitations of Section 280E of the Internal Revenue Code of 1986, as amended, thus allowing deduction or credit for certain expenses of cannabis business to increase our cash flow and liquidity, as well as those of many industry participants.
Our long-term growth depends on our ability to successfully capitalize on new and existing cannabis markets. Each market must reach a critical mass of both cannabis businesses and consumers for listing subscriptions, advertising placements and other
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solutions to have meaningful appeal to potential clients. As regulated markets mature and as we incur expenses to attract paying clients and convert non-paying clients to paying clients, we may generate losses in new markets for an extended period.
Furthermore, we compete with cannabis-focused and general two-sided marketplaces, internet search engines and various other newspaper, television and media companies and other software providers. We expect competition to intensify in the future as the regulatory regime for cannabis becomes more settled and the legal market for cannabis becomes more accepted, which may encourage new participants to enter the market, including established companies with substantially greater financial, technical and other resources than existing market participants. Our current and future competitors may also enjoy other competitive advantages, such as greater name recognition, more offerings and larger marketing budgets.
Brand Recognition and Reputation
We believe that maintaining and enhancing our brand identity and our reputation is critical to maintaining and growing our relationships with clients and consumers and to our ability to attract new clients and consumers. Historically, a substantial majority of our marketing spending was on out-of-home advertising on billboards, buses and other non-digital outlets. Starting in 2019, consistent with the overall shift in perceptions regarding cannabis, a number of demand-side digital advertising platforms allowed us to advertise online. We also invested in growing our internal digital performance advertising team. We believe there is an opportunity to improve market efficiency through digital channels and expect to shift our marketing spending accordingly. Over the longer term, we expect to shift and accelerate our marketing spend to additional online and traditional channels, such as broadcast television or radio, as they become available to us. Further, we have begun reinvesting in our own on-the-ground and field marketing presence and are increasing the types and cadence of client events. These events and in-store activations allow Weedmaps to engage with consumers at the point of purchase and also afford Weedmaps with the opportunity to engage directly with our clients, understand their needs and challenges and foster goodwill.
Negative publicity, whether or not justified, relating to events or activities attributed to us, our employees, clients or others associated with any of these parties, may tarnish our reputation and reduce the value of our brand. Given our high visibility and relatively long operating history compared to many of our competitors, we may be more susceptible to the risk of negative publicity. Damage to our reputation and loss of brand equity may reduce demand for our platform and have an adverse effect on our business, operating results and financial condition. Moreover, any attempts to rebuild our reputation and restore the value of our brand may be costly and time consuming, and such efforts may not ultimately be successful.
We also believe that the importance of our brand recognition and reputation will continue to increase as competition in our market continues to develop. If our brand promotion activities are not successful, our operating results and growth may be adversely impacted.
Investments in Growth
We intend to continue to make focused organic and inorganic investments to grow our revenue and scale operations to support that growth.
Given our long operating history in the United States and the strength of our network, often businesses will initially list on our platform without targeted sales or marketing efforts by us. However, we plan to accelerate our investments in marketing to maintain and increase our brand awareness through both online and offline channels. We also plan to invest in expanding our business listings thereby enhancing our client and consumer experience and improving the depth and quality of information provided on our platform. We also intend to continue to invest in several areas to continue enhancing the functionality of our Weedmaps for Business offering. We expect significant near-term investments to enhance our data assets and evolve our current listings and software offerings to our brand clients, among other areas. We anticipate undertaking such investments in order to be positioned to capitalize on the rapidly expanding cannabis market.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience short-term, negative impacts to our operating results and cash flows.
Components of Our Results of Operations
Net revenues
Our revenues are derived primarily from monthly subscriptions to Weedmaps for Business, featured and deal listings, other ad solutions and WM Dispatch. Our Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured and deal listings and other ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools. Other ad solutions include banner ads and promotion tiles on the Company’s marketplace ad as well as other advertising products on and off the Weedmaps marketplace. We have a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during
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a month-to-month subscription period as the products are provided. We rarely need to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, we recognize revenue in proportion to the standalone selling prices of the underlying services at contract inception.
Costs and Expenses
Our cost structure has two components: cost of revenues and operating expenses. Our operating expenses include costs related to selling and marketing, product development, general and administrative functions and depreciation and amortization. Certain of our costs and expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to changes in revenue.
Cost of Revenues (Exclusive of Depreciation and Amortization)
Cost of revenues excludes depreciation and amortization expense and primarily consists of web hosting, internet service and credit card processing costs. Cost of revenues is primarily driven by fluctuations in revenue leading to increases or decreases in credit card processing and web hosting cost. We expect our cost of revenue to continue to increase on an absolute basis and remain relatively flat as a percentage of revenue as we scale our business and inventory costs related to multi-media offerings.
Selling and Marketing Expenses
Selling and marketing expenses consist of salaries and benefits, stock-based compensation expense, travel expense and incentive compensation for our sales and marketing employees. In addition, sales and marketing expenses include customer acquisition marketing, events cost and branding and advertising costs. Over the longer term, we expect sales and marketing expense to increase in a manner consistent with revenue growth, however, we may experience fluctuations in some periods as we enter and develop new markets or have large one-time marketing projects.
Product Development Expenses
Product development costs consist of salaries and benefits and stock-based compensation expense for employees, including engineering and technical teams who are responsible for building new products, as well as maintaining and improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred. Amortization expense related to capitalized software development cost is included in depreciation, amortization and asset impairment expense in the consolidated statements of operations. We believe that continued investment in our platform is important for our growth and expect our product development expenses will increase in a manner consistent with revenue growth as our operations grow.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll, benefit costs and stock-based compensation expense for our employees involved in general corporate functions including our senior leadership team as well as costs associated with the use by these functions of software and facilities and equipment, such as rent, insurance and other occupancy expenses. General and administrative expenses also include provision (recovery) for credit losses and professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by headcount required to support our business and meet our obligations as a public company. We expect general and administrative expenses to decline as percentage of revenue as we scale our business and leverage investments in these areas.
Depreciation and Amortization Expenses
Depreciation and amortization expenses primarily consist of depreciation on computer equipment, furniture and fixtures, leasehold improvements, capitalized software development costs and amortization of intangibles. We expect depreciation and amortization expenses to increase on an absolute basis for the foreseeable future as we scale our business.
Asset Impairment Charges
Asset impairment charges primarily consist of impairment of ROU assets related to our operating leases, impairment of intangible assets, impairment of equity securities and impairment of property and equipment.
Other Income (Expense), Net
Other income (expense), net consists primarily of change in fair value of warrant liability, TRA liability remeasurement, discharge of a holdback obligation related to a prior acquisition, interest income and other tax related expenses.
Provision for Income Taxes
We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the
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temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance is recognized if we determine it is more-likely-than-not that all or a portion of a deferred tax asset will not be recognized. In making such determination, we consider all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent and expected future results of operation. See Note 2, “Summary of Significant Accounting Policies” to our condensed consolidated financial statements for further information.
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Results of Operations
The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
Three Months Ended September 30,Nine Months Ended September 30,
2024
2023
As Restated1
2024
2023
As Restated1
(in thousands)
Net revenues
$46,552 $46,687 $136,844 $141,526 
Costs and expenses
Cost of revenues (exclusive of depreciation and amortization)2,182 3,015 6,729 9,748 
Sales and marketing9,671 11,544 30,374 36,171 
Product development9,484 7,748 28,355 27,882 
General and administrative16,494 18,151 51,549 55,839 
Depreciation and amortization3,517 3,395 9,641 9,417 
Asset impairment charges— 8,382 — 8,382 
Total costs and expenses41,348 52,235 126,648 147,439 
Operating income (loss)5,204 (5,548)10,196 (5,913)
Other income (expense), net:
Change in fair value of warrant liability585 (460)195 (780)
Change in tax receivable agreement liability(548)(69)(1,486)(689)
Other income (expense)98 3,565 (362)2,884 
Income (loss) before income taxes5,339 (2,512)8,543 (4,498)
Provision for income taxes
21 — 72 — 
Net income (loss) 5,318 (2,512)8,471 (4,498)
Net income (loss) attributable to noncontrolling interests1,986 (974)3,183 (1,711)
Net income (loss) attributable to WM Technology, Inc.$3,332 $(1,538)$5,288 $(2,787)
___________________________
1. For the three and nine months ended September 30, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.
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Three Months Ended September 30,Nine Months Ended September 30,
2024
2023
As Restated1
2024
2023
As Restated1
Net revenues100 %100 %100 %100 %
Costs and expenses
Cost of revenues (exclusive of depreciation and amortization)5 %6 %5 %7 %
Sales and marketing21 %25 %22 %26 %
Product development20 %17 %21 %20 %
General and administrative35 %39 %38 %39 %
Depreciation and amortization8 %7 %7 %7 %
Asset impairment charges0 %18 %0 %6 %
Total costs and expenses89 %112 %93 %104 %
Operating income (loss)11 %(12)%7 %(4)%
Other income (expense), net:
Change in fair value of warrant liability1 %(1)%0 %(1)%
Change in tax receivable agreement liability(1)%— %(1)%0 %
Other income (expense)0 %8 %0 %2 %
Income (loss) before income taxes11 %(5)%6 %(3)%
Provision for income taxes0 %0 %0 %0 %
Net income (loss) 11 %(5)%6 %(3)%
Net income (loss) attributable to noncontrolling interests4 %(2)%2 %(1)%
Net income (loss) attributable to WM Technology, Inc.7 %(3)%4 %(2)%
___________________________
1. For the three and nine months ended September 30, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Comparison of Three Months Ended September 30, 2024 and 2023
Net Revenues
Three Months Ended September 30,Change
2024
2023
As Restated1
($)(%)
(dollars in thousands)
Net revenues
$46,552 $46,687 $(135)— %
___________________________
1. For the three months ended September 30, 2023, net revenues has been retrospectively adjusted to reflect the restatement of previously reported revenue. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Net revenues decreased by $0.1 million or less than 0.1% for the three months ended September 30, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in net revenues from our Featured Listing and WM Deal products of $2.7 million driven by our clients continuing to face constrained marketing budgets, the ongoing consolidation of our industry, partially offset by an increase in net revenues from our Weedmaps for Business and other SaaS solutions of $2.7 million driven by favorable pricing changes partially offset by a loss in revenue from products that were sunset in December 2023.
For the three months ended September 30, 2024, Featured Listing and WM Deal products, Weedmaps for Business and other ad solutions represented approximately 63%, 29% and 8% of our total net revenues, respectively.
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Costs and Expenses
The following table shows our total costs and expenses:
Three Months Ended September 30,Change
2024
2023
As Restated1
($)(%)
(dollars in thousands)
Cost of revenues$2,182 $3,015 $(833)(28)%
Sales and marketing9,671 11,544 (1,873)(16)%
Product development9,484 7,748 1,736 22 %
General and administrative16,494 18,151 (1,657)(9)%
Depreciation and amortization3,517 3,395 122 4 %
Asset impairment charges— 8,382 (8,382)(100)%
Total costs and expenses$41,348 $52,235 $(10,887)(127)%
___________________________
1. For the three months ended September 30, 2023, general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Cost of Revenues
The decrease in cost of revenues was primarily related to a decrease of $0.6 million for cost of revenues associated with multi-channel marketing and cloud communication platforms, primarily due to the sunset in December 2023 of WM CRM, WM Screens and WM AdSuite and a decrease of $0.2 million in server costs.
Sales and Marketing Expenses
The decrease in sales and marketing expenses was primarily related to decreases in personnel-related costs of $0.4 million, decrease in advertising expense of $1.2 million and a decrease in event expense of $0.3 million. The decrease in personnel-related costs was primarily driven by lower headcount resulting in decreases in salaries and wages of $0.4 million, stock-based compensation expense of $0.2 million and payroll tax expense of $0.1 million, partially offset by increases in bonus and commission expense of $0.3 million.
Product Development Expenses
The increase in product development expenses was primarily due to an increase in contracted outside services expense of $0.6 million and an increase in personnel-related costs of $1.1 million. The increase in personnel-related costs was primarily due to increases in salaries and bonus expense of $1.1 million driven by lower capitalized software development costs compared to the same period in 2023, resulting in an increase in net salaries and wages expense.
General and Administrative Expenses
The decrease in general and administrative expenses was primarily due to decreases in salaries and wages of $0.2 million, stock-based compensation expense of $0.5 million, employee benefits of $0.2 million, rent expense of $0.5 million due to lease modification and termination, professional legal and audit services of $0.4 million, facilities expense of $0.8 million, software expense of $0.3 million, and insurance expense of $0.3 million, partially offset by increases in bonus expense of $0.5 million, outside service expense of $0.2 million, office expense of $0.5 million and provision for credit losses of $0.1 million, payroll tax of $0.1 million and severance of $0.1 million.
Depreciation and Amortization Expenses
The increase in depreciation and amortization expense was primarily due to an increase in capitalized software amortization, partially offset by a decrease in amortization of intangible assets.
Asset Impairment Charges
The decrease in asset impairment charges was primarily due to $8.3 million in impairment of intangible assets and property and equipment associated with the sunset of certain product offerings in December 2023.
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Other Income (Expense), net
Three Months Ended September 30,Change
20242023($)(%)
(dollars in thousands)
Change in fair value of warrant liability$585 $(460)$1,045 (227)%
Change in tax receivable agreement liability(548)(69)(479)694 %
Other income (expense)98 3,565 (3,467)97 %
Other income (expense), net$135 $3,036 $(2,901)(96)%
The decrease in other income (expense), net was primarily due to favorable changes in fair value of warrant liability of $1.0 million, a decrease in TRA liability of $0.5 million and a decrease in other income of $3.5 million, primarily due to a non-cash gain recorded in September 2023 of $3.7 million associated with the discharge of a holdback obligation related to a prior acquisition.
Provision for Income Taxes
Three Months Ended September 30,Change
20242023($)(%)
(dollars in thousands)
Provision for income taxes
$21 $— $21 N/M
________________________________
N/M – Not meaningful
For the three months ended September 30, 2024, we recorded $21 thousand in income tax provisions due to the impact of the full valuation allowance on its net deferred assets. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Comparison of Nine Months Ended September 30, 2024 and 2023
Net Revenues
Nine Months Ended September 30,Change
2024
2023
As Restated1
($)(%)
(dollars in thousands)
Net revenues
$136,844 $141,526 $(4,682)(3)%
___________________________
1. For the nine months ended September 30, 2023, net revenues has been retrospectively adjusted to reflect the restatement of previously reported revenue. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Net revenues decreased by $4.7 million, or 3%, for the nine months ended September 30, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in net revenues from our Featured Listing and WM Deal products of $11.0 million driven by our clients continuing to face constrained marketing budgets, the ongoing consolidation of our industry, partially offset by an increase in net revenues from our Weedmaps for Business and other SaaS solutions of $6.4 million driven by favorable pricing changes partially offset by a loss in revenue from products that were sunset in December 2023.
For nine months ended September 30, 2024, Featured Listing and WM Deal products, Weedmaps for Business and other ad solutions represented approximately 63%, 29% and 8% of our total net revenues, respectively.
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Costs and Expenses
The following table shows our total costs and expenses:
Nine Months Ended September 30,Change
2024
2023
As Restated1
($)(%)
(dollars in thousands)
Cost of revenues$6,729 $9,748 $(3,019)(31)%
Sales and marketing30,374 36,171 (5,797)(16)%
Product development28,355 27,882 473 2 %
General and administrative51,549 55,839 (4,290)(8)%
Depreciation and amortization9,641 9,417 224 2 %
Asset impairment charges— 8,382 (8,382)(100)%
Total costs and expenses$126,648 $147,439 $(20,791)(151)%
___________________________
1. For the nine months ended September 30, 2023, general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Cost of Revenues
The decrease in cost of revenue was primarily related to a decrease of $2.3 million for cost of revenues associated with multi-channel marketing and cloud communication platforms primarily due to the sunset in December 2023 of WM CRM, WM Screens and WM AdSuite and a decrease of $0.7 million in server costs.
Sales and Marketing Expenses
The decrease in sales and marketing expenses was primarily due to a decrease in personnel-related costs of $5.6 million, a decrease in outside services of $0.4 million and a decrease in advertising expense of $0.7 million, partially offset by an increase in event expense of $0.2 million and an increase in print and products expense of $0.7 million. The decrease in personnel-related costs was primarily driven by lower headcount resulting in decreases in salaries and wages of $2.5 million, bonus expense of $1.8 million, payroll taxes of $0.3 million and $1.0 million in stock-based compensation expense.
Product Development Expenses
The increase in product development expenses was due to an increase in outside service expense of $1.8 million and an increase in travel and entertainment expense of $0.1 million partially offset by a decrease in personnel-related costs of $1.4 million. The decrease in personnel-related costs was primarily due to decreases in salaries and wages of $1.0 million, driven by a decline in headcount, partially offset by lower capitalized software development costs compared to the same period in 2023 and stock-based compensation expense of $0.4 million.
General and Administrative Expenses
The decrease in general and administrative expenses was primarily due to a decrease in personnel-related costs of $3.0 million, a decrease in facilities expense of $1.7 million, a decrease in insurance expense of $1.4 million, a decrease in rent expense of $0.8 million, a decrease in software expense of $0.9 million and a decrease in provision for credit losses of $0.1 million, partially offset by $1.5 million charge recorded in the second quarter of 2024 related to potential settlement of an SEC matter, increases in professional legal and audit services of $0.5 million, an increase in office expense of $0.5 million, an increase in promotional expense of $0.2 million and an increase in outside service expense of $0.9 million.
The decrease in personnel-related costs was primarily driven by lower headcount resulting into a decrease in salaries and wages of $1.2 million, a decrease in severance costs of $0.5 million, a decrease in stock-based compensation expense of $1.8 million, a decrease in employee benefit expense of $0.4 million, partially offset by an increase in bonus expense of $0.8 million and an increase in payroll tax expense of $0.1 million. See Note 4, “Commitments and Contingencies” to these condensed consolidated financial statements for additional information related to the potential settlement of an SEC matter.
Depreciation and Amortization Expenses
The decrease in depreciation and amortization expense was primarily due to an increase in capitalized software amortization, partially offset by a decrease in amortization of intangible assets.
Asset Impairment Charges
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The decrease in asset impairment charges was primarily due to $8.3 million in impairment of intangible assets and property and equipment associated with the sunset of certain product offerings in December 2023.
Other Income (Expense), net
Nine Months Ended September 30,Change
20242023($)(%)
(dollars in thousands)
Change in fair value of warrant liability$195 $(780)975 (125)%
Change in tax receivable agreement liability(1,486)(689)(797)116 %
Other income (expense)(362)2,884 (3,246)(113)%
Other (expense) income, net$(1,653)$1,415 $(3,068)(217)%
The decrease in other income (expense) net was primarily due to favorable changes in fair value of warrant liability of $1.0 million, partially offset by an increase in TRA liability of $0.8 million and a decrease in other expense of $3.2 million, primarily due to a non-cash gain recorded in September 2023 of $3.7 million associated with the discharge of a holdback obligation related to a prior acquisition.
Provision for Income Taxes
Nine Months Ended September 30,Change
20242023($)(%)
(dollars in thousands)
Provision for income taxes
$72 $— $72 N/M
________________________________
N/M – Not meaningful
For the nine months ended September 30, 2024, we recorded $72 thousand in income tax provisions due to the impact of the full valuation allowance on our net deferred assets. See Note 2, “Summary of Significant Accounting Policies,” for further information.
Seasonality
The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to 420, July 10th and the Wednesday before Thanksgiving (“Green Wednesday”). Likewise, our clients will typically increase their spend heading into these events. We also typically invest in marketing spend around these holidays which can create some seasonality in our sales and market expenses from quarter to quarter. While seasonality has not had a significant impact on our results in the past, our clients may experience seasonality in their businesses which in turn can impact the revenue generated from them. Our business may become more seasonal in the future and historical patterns in our business may not be a reliable indicator of future performance.
Liquidity and Capital Resources
The following tables show our cash, accounts receivable and working capital as of the dates indicated:
September 30, 2024December 31, 2023
(dollars in thousands)
Cash$45,043 $34,350 
Accounts receivable, net$7,907 $11,158 
Working capital$31,577 $17,771 
As of September 30, 2024 and December 31, 2023, we had cash of $45.0 million and $34.4 million, respectively. Our funds are being used for funding our current operations and potential strategic acquisitions in the future. We also intend to increase our capital expenditures to support the organic growth in our business and operations. We expect to fund our liquidity requirements from cash and working capital on hand at September 30, 2024, as well as from cash provided by operating activities. We believe that our existing cash and cash generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on
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many factors. We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.
Sources of Liquidity
We primarily finance our operations and capital expenditures through cash flows generated by operations. To the extent existing cash and investments and cash from operations are not sufficient to fund future activities, we may need to raise additional funds. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness may have rights that are senior to holders of our equity securities and could contain covenants that restrict operations. Any additional equity financing may be dilutive to stockholders. We may enter into investment or acquisition transactions in the future, which could require us to seek additional equity financing, incur indebtedness, or use cash resources.
Cash Flows
Nine Months Ended September 30,
20242023
(dollars in thousands)
Net cash provided by operating activities$27,275 $12,410 
Net cash used in investing activities$(9,499)$(8,870)
Net cash used in financing activities$(7,083)$(4,402)
Net Cash Provided by Operating Activities
Cash from operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, change in TRA liability, amortization of right-of-use lease assets, stock-based compensation, asset impairment charges, gain on lease termination, provision (recovery) for credit losses and the effect of changes in working capital.
Net cash provided by operating activities for the nine months ended September 30, 2024 was $27.3 million, which resulted from a net income of $8.5 million, together with net cash outflows of $2.2 million from changes in operating assets and liabilities, and non-cash items of $21.0 million, consisting of depreciation and amortization of $9.6 million, change in TRA liability of $1.5 million, amortization of right-of-use lease assets of $3.3 million, stock-based compensation of $7.2 million, partially offset by change in fair value of warrant liability of $0.2 million, gain on lease termination of $0.1 million and provision (recovery) for credit losses of $0.3 million. Net cash outflows from changes in operating assets and liabilities was primarily due to an increase in prepaid expenses and other current assets of $0.4 million, a decrease in accounts payable and accrued expenses of $1.2 million, a decrease in deferred revenue of $0.2 million and a decrease in operating lease liabilities of $5.0 million, partially offset by a decrease in accounts receivable of $3.5 million and a decrease in other assets of $1.0 million. The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Net cash provided by operating activities for the nine months ended September 30, 2023 was $12.4 million, which resulted from net loss of $4.5 million, together with net cash outflows of $12.5 million from changes in operating assets and liabilities, and non-cash items of $29.4 million, consisting of depreciation and amortization of $9.4 million, fair value of warrant liability of $0.8 million, change in TRA liability of $0.7 million, amortization of right-of-use lease assets of $3.7 million, asset impairment charges of $8.4 million and stock-based compensation of $10.4 million, partially offset by gain from the discharge of a holdback obligation related to a prior acquisition of $3.7 million and provision (recovery) for credit losses of $0.2 million. Net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in accounts payables and accrued expenses of $15.4 million, a decrease in operating lease liabilities of $4.7 million and a decrease in deferred revenue of $0.2 million, partially offset by a decrease in accounts receivables of $5.3 million and a decrease in prepaid expenses and other current assets of $2.4 million. The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Net Cash Used in Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024 was $9.5 million, which resulted from $9.5 million cash paid for capital expenditures which includes purchases of property and equipment, including certain capitalized software development cost.
Net cash used in investing activities for the nine months ended September 30, 2023 was $8.9 million, which resulted from $8.9 million cash paid for capital expenditures which includes purchases of property and equipment, including certain capitalized software development cost.
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Net Cash Used in Financing Activities
Net cash outflows from financing activities for the nine months ended September 30, 2024 was $7.1 million, which primarily consists of $7.3 million in distributions payments to members of WMH LLC, $0.1 million in TRA payments and $0.3 million in proceeds from collection of related party note receivable.
Net cash outflows from financing activities for nine months ended September 30, 2023 was $4.4 million, which primarily consists of $1.5 million in repayments of insurance premium financing and $3.2 million in distributions payments to members of WMH LLC and $0.3 million in proceeds from collection of related party note receivable.
Critical Accounting Policies and Estimates
The Company had no significant changes to our critical accounting policies and estimates from those disclosed in “Part I. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on May 24, 2024.
Critical Accounting Estimates
Goodwill and Intangible Assets
Assets and liabilities acquired from acquisitions are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. The accounting for goodwill and intangible assets requires us to make significant judgement, estimates and assumptions. Significant estimates and assumptions in valuing acquired intangible assets and liabilities include projected cash flows attributable to the assets or liabilities, asset useful lives and discount rates.
Goodwill is not amortized and is subject to annual impairment testing, or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. Goodwill is assessed for impairment annually on December 31. For the year ended December 31, 2023, in accordance with our annual assessment policy, we opted to bypass the qualitative assessment and performed a quantitative assessment to test goodwill for impairment. As part of our impairment assessment, the fair value of the reporting unit is estimated using a discounted cash flow valuation which incorporates assumptions regarding long-term growth rates, revenue and earnings projections, estimation of cash flows, discount rates and other factors. Changes in these inputs could materially affect the results of our impairment review. In conducting our quantitative assessment, we determined that the fair value of our goodwill substantially exceeded its carrying amount by approximately 18%, and as a result, no impairment existed as of the annual assessment date of December 31, 2023. If our forecasts of cash flows or other key inputs are negatively revised in the future, the estimated fair value of the reporting unit would be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results. No goodwill impairment charges were recorded for the three and nine months ended September 30, 2024 and 2023.
Intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. We recorded an impairment charge of $6.1 million for the three and nine months ended September 30, 2023 related to intangible assets associated with certain product offerings that were sunset in December 2023, which is included in asset impairment charges in the condensed consolidated statements of operations. There were no goodwill or intangible asset impairment charges recorded for the three and nine months ended September 30, 2024.
See Note 2, “Summary of Significant Accounting Policies,” and Note 6, “Intangible Assets,” to these condensed consolidated financial statements for additional information.
Recent Accounting Pronouncements
We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2, “Summary of Significant Accounting Policies,” such standards will not have a material impact on our condensed consolidated financial statements or do not otherwise apply to our current operations.
Item 3.    Quantitative and Qualitative Disclosures about Market Risk
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this Item.
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Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With the foregoing in mind, our chief executive officer and chief financial officer (“Certifying Officers”) evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based on the evaluation, our chief executive officer and chief financial officer have concluded that as of September 30, 2024, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based on the evaluation, our chief executive officer and chief financial officer have concluded that as of December 31, 2023, our internal control over financial reporting was not effective due to the material weaknesses in internal control over financial reporting described below.
Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As disclosed in our Annual Report on Form 10K for the year ended December 31, 2023, the following entity-level material weaknesses have been identified: We did not fully maintain components of the COSO framework, including elements of the control environment, risk assessment, information and communication and monitoring activities components, relating to (i) developing general control activities over technology to support the achievement of objectives across the entity, (ii) sufficiency
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of processes related to identifying and analyzing risks to the achievement of objectives, including technology, across the entity, and (iii) sufficiency of selecting and developing control activities that contribute to the mitigation of risks to the achievement of objectives to acceptable levels.
The entity-level material weaknesses contributed to other material weaknesses within our system of internal control over financial reporting as follow:
•We did not design and maintain effective information technology (IT) general controls for certain information systems supporting our key financial reporting processes. Specifically, we did not design, implement and maintain (a) change management controls to ensure that program and data changes affecting financial applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (b) access controls to ensure appropriate IT segregation of duties are maintained that adequately restrict and segregate privileged access between environments which support development and production, and (c) controls to monitor on an on-going basis for the proper segregation of privileged access between environments which support development and production. As a result, IT application controls and business process controls that are dependent on the ineffective IT general controls, or that rely on data produced from systems impacted by the ineffective IT general controls, are also deemed ineffective, which affects substantially all of our financial statement account balances and disclosures.
•We did not design and maintain effective information technology (IT) general controls for certain information systems supporting our key financial reporting processes. Specifically, we did not design, implement and maintain sufficient change management, security, and operations controls for certain in-scope on-premise applications and vendor-supported applications.
•We did not design and maintain effective process-level controls related to the order-to-cash cycle (including revenues, accounts receivables, and deferred revenue), procure-to-pay-cycle (including operating expenses, prepaid expenses and other current assets, accounts payable and accrued expenses), capitalized software, and long-term assets. The material weakness related to the order-to-cash cycle resulted in an inadequate policy associated with our revenue recognition policies related to the cash collection of a certain subset of our customers that had been placed on a cash basis and, in turn, the restatement of our unaudited condensed consolidated financial statements in our prior three quarters reported in 2023 as of and for the three months ended March 31, 2023, six months ended June 30, 2023 and nine months ended September 30, 2023 included in our quarterly reports on Form 10-Q for the corresponding periods. Additionally, this material weakness could result in a misstatement of any account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, we identified a material weakness in internal control related to ineffective IT general controls in the areas of user access and program change-management over certain information technology systems that support our financial reporting processes. We took measures to remediate this material weakness, specifically by undertaking the following measures:
•removing developers’ administrative access from production systems;
•removing the ability for certain users, including developers, to access other users’ accounts; and
•implementing audit trails to log and monitor system configuration and data changes made by users to detect erroneous or unauthorized changes.
Our remediation efforts concluded as of June 30, 2023 when we determined that the above measures had been implemented. As of July 2023, administrative access to the sandbox environment where development activities take place was extended to users with administrative access to the production environment, thereby negating the remediation efforts taken. This access was not subject to our monthly monitoring control activity and persisted through the remainder of fiscal 2023. The lack of successful completion of our remediation efforts related to this material weakness identified for the year ended December 31, 2022 is reflected in the first bullet of our 2023 material weaknesses discussed above.
Remediation
We have begun the process of and are focused on designing and implementing effective internal controls to improve our internal controls over financial reporting and remediate the material weakness, including;
•the recruitment of additional personnel with extensive knowledge of GAAP,
•implementation of a new ERP system,
•strengthening IT governance and designing IT general controls including program change management, accessing and restricting user access to our internal systems used for financial reporting and accessing.
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Until the remediation plan is fully implemented, tested, and deemed effective we cannot assure that our actions will adequately remediate the material weaknesses or that additional material weaknesses in our internal controls will not be identified in the future. If we are unable to remediate the material weaknesses, our ability to record, process and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could be adversely affected and could reduce the market’s confidence in our financial statements and harm our stock price.

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Part II - Other Information
Item 1.    Legal Proceedings
The information set forth under "Commitments and Contingencies—Litigation" in Note 4 of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated by reference into this Item 1.
On October 17, 2024, a putative shareholder class action complaint, captioned Seret Ishak v. WM Technology, Inc. et al., No. 2:24-cv-08959, was filed in the U.S. District Court for the Central District of California, naming us and certain former and current officers and/or directors of the Company and Silver Spike Acquisition Corp. (“Silver Spike”) as defendants. The lawsuit alleges that we made material misrepresentations and/or omissions of material fact relating to historical public reporting of MAUs in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The putative class action is brought on behalf of persons or entities who purchased or otherwise acquired our securities between May 25, 2021, and September 24, 2024, inclusive, and seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorney’s fees.
At this early stage of the proceedings, we are unable to make any prediction regarding the outcome of the litigation.
As previously disclosed, in the second quarter of 2022, our board of directors received an internal complaint regarding the calculation, definition and reporting of our monthly active users (“MAUs”) metric. In response, our board of directors formed a special committee of independent directors to conduct an internal investigation with the assistance of outside counsel. As a result of the findings of that internal investigation, we provided certain additional information regarding the growth and nature of our previously-reported MAUs in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 9, 2022. This investigation found no impact on our financial results under accounting principles generally accepted in the United States of America (“GAAP”) or the reporting or disclosure of any currently disclosed non-GAAP financial metric. As also previously reported, in the third quarter of 2022, we determined not to report MAUs going forward. In August 2022, our board of directors determined to voluntarily report the internal complaint and subsequent internal investigation to the SEC, following which the SEC’s Division of Enforcement commenced an investigation. We have been fully cooperating with that investigation.
As also previously reported in the Current Report on Form 8-K filed on July 25, 2024, on July 22, 2024, we reached an agreement in principle with the SEC staff to resolve the SEC investigation with respect to the Company. Under the terms of the settlement, we consented, without admitting or denying the SEC’s findings, to the entry of an administrative cease-and-desist order finding violations of Sections 17(a)(2) and (3) of the Securities Act of 1933, as amended, Sections 13(a), and 14(a) of the Securities Exchange Act of 1934, as amended, and Rules 12b-20, 13a-1, 13a-11, 13a-13, and 14a-9 thereunder, and to pay a civil money penalty of $1.5 million. The settlement was approved by the SEC, and the administrative cease-and-desist order was entered in September 2024. We issued payment to the SEC, and it was received by the SEC, in October 2024. Accordingly, the SEC enforcement matter is concluded with respect to the Company.
Further, on November 8, 2024, a shareholder derivative action, captioned DeGennaro v. Francis, et. al, Case No. 8:24-cv-02454 was filed in the U.S. District Court for the Central District of California against certain members of our Board of Directors and certain former and current officers. The plaintiff purports to bring the action derivatively on behalf of the Company, and the Company is a nominal defendant in the action. The derivative complaint alleges, among other things, that the individual defendants authorized or permitted materially false statements and/or material omissions of fact relating to historical public reporting of MAUs. The derivative complaint asserts claims for violations of Section 10(b) of the Exchange Act as well as claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets. The derivative complaint seeks unspecified damages on behalf of the Company, disgorgement or restitution, corporate governance reforms, declaratory relief, and an award of costs and expenses to the derivative plaintiff, including attorneys’ fees.
Additionally, from time to time, we are involved in legal proceedings and subject to claims that arise in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, to our knowledge we are not currently party to any legal proceedings which, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. We also pursue litigation to protect our legal rights and additional litigation may be necessary in the future to enforce our intellectual property and our contractual rights, to protect our confidential information or to determine the validity and scope of the proprietary rights of others.
Item 1A.    Risk Factors
Investment in our securities involves risk. An investor or potential investor should consider the risks summarized below and under the caption “Risk Factors” in Part I, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2023 (our “2023 Form 10-K”) and of Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (our “Prior 10-Q”) when
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making investment decisions regarding our securities. Except for the risk factors discussed below, we do not believe that there have been any material changes to the risk factors disclosed in our 2023 Form 10-K and Prior 10-Q.
Litigation or legal proceedings could expose us to significant liabilities and have a negative impact on our reputation or business.
From time to time, we may be party to various claims and legal proceedings. For example, in August 2022, our board of directors determined to voluntarily report an internal complaint and subsequent internal investigation to the SEC. Since that date, we have responded to subpoenas from the SEC’s Division of Enforcement and on July 22, 2024, we reached an agreement in principle with the SEC staff to resolve the SEC staff’s investigation with respect to the Company. The settlement was approved by the SEC, and the administrative cease-and-desist order was entered in September 2024. In addition, on October 17, 2024, a putative shareholder class action complaint, captioned Seret Ishak v. WM Technology, Inc. et al., No. 2:24-cv-08959, was filed in the U.S. District Court for the Central District of California, naming us and certain former and current officers and/or directors of the Company and Silver Spike as defendants. The lawsuit alleges that we made material misrepresentations and/or omissions of material fact relating to historical public reporting of MAUs. In addition, on November 8, 2024, a shareholder derivative action, captioned DeGennaro v. Francis, et. al, Case No. 8:24-cv-02454, was filed in the U.S. District Court for the Central District of California against certain members of our Board of Directors and certain former and current officers. The derivative complaint alleges that the individual defendants authorized or permitted materially false statements and/or material omissions of fact relating to historical public reporting of MAUs. See Part II, Item 1 of this Quarterly Report on Form 10-Q, titled “Legal Proceedings” for more information regarding this litigation.
Regardless of the outcome, such proceedings can have an adverse impact on us because of legal costs, penalties and other sanctions, diversion of management resources, negative publicity and reputational harm and other factors.
Even when not merited, the defense of any lawsuits or legal proceedings, including potential securities litigation, is expensive and may divert management’s attention, and we may incur significant expenses in defending any lawsuits or legal proceedings. The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against us, which could negatively impact our financial position, cash flows or results of operations. We evaluate all claims and proceedings to assess the likelihood of unfavorable outcomes and to estimate, if probable and estimable, the amount of potential losses. Based on these assessments and estimates, we may establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from our assessments and estimates.
Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our recovery. In addition, any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.
We currently do not meet, and may not regain compliance with, the listing standards of the Nasdaq Stock Market LLC (“Nasdaq”), and as a result our Class A Common Stock may be delisted. Delisting could adversely affect the liquidity of our Class A Common Stock and the market price of our Class A Common Stock could decrease.
Our Class A Common Stock is currently listed on the Nasdaq Global Select Market, which has minimum requirements that a company must meet in order to remain listed. These requirements include maintaining a minimum closing bid price of $1.00 per share, which closing bid price cannot fall below $1.00 per share for a period of more than 30 consecutive business days
On October 9, 2024, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for the last 30 consecutive trading days, the closing bid price for our Class A Common Stock was below $1.00 per share, which is the minimum closing bid price required for continued listing on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Notice”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we are provided a compliance period of 180 calendar days from the date of the Notice, or until April 7, 2025, to regain compliance with the minimum closing bid price requirement. If at any time during the 180 calendar day grace period, the closing bid price of our Class A Common Stock is at least $1.00 per share for a minimum of ten consecutive business days (unless the Nasdaq staff exercises its discretion to extend this ten business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq will provide us written confirmation of compliance, and the matter will be closed.
If we do not regain compliance during the compliance period, we may be provided a second 180 calendar day period to regain compliance if we apply to transfer the listing of our Class A Common Stock to the Nasdaq Capital Market. To qualify, we must meet the continued listing requirement for market value of publicly-held shares and all other initial listing standards for the Nasdaq Capital Market (with the exception of the minimum bid price requirement), based on our most recent public filings and
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market information and notify Nasdaq of our intent to cure the deficiency by effecting a reverse stock split, if necessary. If we do not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, our Class A Common Stock will be subject to delisting. We would have the right to appeal a determination to delist our Class A Common Stock, and our Class A Common Stock would remain listed on the Nasdaq Global Select Market until the completion of the appeal process.
There can be no assurance that we will regain compliance with the minimum bid price requirement during the 180-day compliance period, secure a second 180-day period to regain compliance, or maintain compliance with the other Nasdaq listing requirements.
Additionally, if a reverse stock split is implemented, there can be no assurance that the market price per new share of our Class A Common Stock following the reverse stock split will remain unchanged or will increase in proportion to the reduction in the number of old shares of our Class A Common Stock outstanding before the reverse stock split. The liquidity of the shares of our Class A Common Stock may be affected adversely by any reverse stock split given the reduced number of shares of our Class A Common Stock that will be outstanding following such reverse stock split. Furthermore, following any reverse stock split, the resulting market price of our Class A Common Stock may not attract new investors and may not satisfy the investing requirements of those investors.
In the event that our Class A Common Stock is delisted from Nasdaq as a result of our failure to regain compliance with the minimum closing bid price requirement, as a result of Nasdaq not granting us an extension or the panel not granting us a favorable decision or due to our failure to continue to comply with any other requirement for continued listing on Nasdaq, trading of our Class A Common Stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board, but there can be no assurance that our Class A Common Stock will be eligible for trading on such alternative exchange or market.
Additionally, if our Class A Common Stock is delisted from Nasdaq, the liquidity of our Class A Common Stock would be adversely affected, the market price of our Class A Common Stock could decrease, our ability to obtain sufficient additional capital to fund our operations and transactions in our Class A Common Stock could lose federal preemption of state securities laws. Furthermore, there could also be a further reduction in our coverage by securities analysts and the news media and broker-dealers may be deterred from making a market in or otherwise seeking or generating interest in our Class A Common Stock, which could cause the price of our Class A Common Stock to decline further. Moreover, delisting may also negatively affect our clients’, customers’ and employees’ confidence in us and employee morale.
ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3.     DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.    OTHER INFORMATION
Nasdaq Deficiency Notice
On October 9, 2024, we received the Notice from the Listing Qualifications Department of Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our Class A Common Stock was below $1.00 per share, which is the minimum closing bid price required for continued listing on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1). The Notice is a notice of deficiency, not delisting, and has no immediate effect on the listing of our Class A Common Stock, and our Class A Common Stock will continue to trade on The Nasdaq Global Select Market under the symbol “MAPS” at this time, subject to our with the other Nasdaq listing requirements.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we are provided a compliance period of 180 calendar days from the date of the Notice, or until April 7, 2025, to regain compliance with the minimum closing bid price requirement. If at any time during the 180-calendar day grace period, the closing bid price of our Class A Common Stock is at least $1.00 per share for a minimum of ten consecutive business days (unless the Nasdaq staff exercises its discretion to extend this ten business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq will provide us written confirmation of compliance, and the matter will be closed.
If we do not regain compliance during the compliance period, we may be provided a second 180 calendar day period to regain compliance if we apply to transfer the listing of our Class A Common Stock to the Nasdaq Capital Market. To qualify, we must meet the continued listing requirement for market value of publicly-held shares and all other initial listing standards for the
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Nasdaq Capital Market (with the exception of the minimum bid price requirement), based on our most recent public filings and market information and notify Nasdaq of our intent to cure the deficiency by effecting a reverse stock split, if necessary. If we do not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, our Class A Common Stock will be subject to delisting. We would have the right to appeal a determination to delist our Class A Common Stock, and our Class A Common Stock would remain listed on the Nasdaq Global Select Market until the completion of the appeal process.
We intend to monitor the closing bid price of our Class A Common Stock and assess potential actions to regain compliance. While we plan to review all available options, there can be no assurance that we will regain compliance with the minimum bid price requirement during the 180-day compliance period, secure a second 180 day period to regain compliance, or maintain compliance with the other Nasdaq listing requirements.

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ITEM 6.    EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit No.Description
101.INSInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
___________________
#Indicates management contract or compensatory plan, contract or agreement.
*
The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WM TECHNOLOGY, INC.
Date:November 12, 2024By:/s/ Douglas Francis
Name:
Douglas Francis
Title:
Chief Executive Officer
 (Principal Executive Officer)
Date:November 12, 2024By:/s/ Susan Echard
Name:Susan Echard
Title:
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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