Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-38633

BM Technologies, Inc.

(Exact name of registrant as specified in its charter)


Delaware									82-3410369
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

201 King of Prussia Road, Suite 650
Wayne, Pennsylvania									19087
(Address of Principal Executive)									(Zip-Code)

(877) 327-9515

Registrant's telephone number, including area code

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BMTX	NYSE American LLC
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	BMTX-WT	NYSE American LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, and emerging growth company in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐

The registrant had issued and outstanding 12,099,490 shares of common stock, par value $0.0001 per share, as of November 14, 2024.

Table of Contents


			Page
Part I - Financial Information			2
Item 1. Unaudited Consolidated Financial Statements			2
Consolidated Balance Sheets at September 30, 2024 and December 31, 2023			2
Consolidated Statements of Loss for the Three and Nine Months Ended September 30, 2024 and 2023			3
Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended September 30, 2024 and 2023			4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023			5
Notes to Unaudited Consolidated Financial Statements			6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			30
Item 4. Controls and Procedures			30

Part II - Other Information			32
Item 1. Legal Proceedings			32
Item 1A. Risk Factors			32
Item 2. Unregistered Sales of Equity and Use of Proceeds			34
Item 3. Defaults Upon Senior Securities			34
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			36

Signatures			37

Part I - Financial Information

ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

BM TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS — UNAUDITED

(amounts in thousands, except share and per share data)


	September 30, 2024		December 31, 2023
ASSETS
Cash and cash equivalents	$	11,224	$	14,288
Accounts receivable, net allowance for doubtful accounts of $1,540 and $1,100	4,891		9,128
Prepaid expenses and other assets	2,314		5,148
Total current assets	18,429		28,564
Premises and equipment, net	430		535
Developed software, net	15,857		16,173
Goodwill	5,259		5,259
Other intangibles, net	3,869		4,109

Total assets	$	43,844	$	54,640
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued liabilities	$	10,295	$	10,577
Deferred revenue, current	11,855		12,322
Total current liabilities	22,150		22,899
Non-current liabilities:
Deferred revenue, non-current	4		127
Liability for private warrants	162		162
Other non-current liabilities	—		480
Total liabilities	$	22,316	$	23,668
Commitments and contingencies (Note 7)
Shareholders’ equity:
Preferred stock: Par value $0.0001 per share; 10,000,000 shares authorized, zero shares issued or outstanding at both September 30, 2024 and December 31, 2023	$	—	$	—
Common stock: Par value $0.0001 per share; 1 billion shares authorized; 12,099,490 shares issued and outstanding at September 30, 2024; 11,984,133 shares issued and outstanding at December 31, 2023	1		1
Additional paid-in capital	71,421		71,787
Accumulated deficit	(49,894)		(40,816)
Total shareholders’ equity	$	21,528	$	30,972
Total liabilities and shareholders’ equity	$	43,844	$	54,640

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF LOSS — UNAUDITED

(amounts in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating revenues:
Interchange and card revenue	$	2,990	$	2,292	$	8,689	$	6,716
Servicing fees	7,557		8,658		23,397		22,990
Account fees	1,680		1,931		5,580		5,981
University fees	1,712		1,412		4,793		4,291
Other revenue	138		88		340		415
Total operating revenues	14,077		14,381		42,799		40,393
Operating expenses:
Technology, communication, and processing	6,168		7,826		15,176		20,949
Salaries and employee benefits	5,590		4,773		15,697		17,337
Professional services	2,840		2,948		8,682		7,926
Provision for operating losses	2,650		2,138		6,827		5,628
Occupancy	11		9		37		33
Customer related supplies	242		227		714		677
Advertising and promotion	117		128		292		371
Restructuring, merger, and acquisition related expenses	58		—		208		993
NextGen implementation costs	—		—		1,560		—
Other expense	490		717		1,709		2,280
Total operating expenses	18,166		18,766		50,902		56,194
Loss from operations	(4,089)		(4,385)		(8,103)		(15,801)
Non-operating income and expense:
Gain on fair value of private warrant liability	54		433		—		2,449
Other loss	951		—		951		—
Loss before income tax expense	(4,986)		(3,952)		(9,054)		(13,352)
Income tax expense	9		—		24		16
Net loss	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)

Weighted average number of shares outstanding - basic	11,799		11,570		11,768		11,567
Weighted average number of shares outstanding - diluted	11,799		11,570		11,768		11,567

Basic loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)
Diluted loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED

For the Three and Nine Months Ended September 30, 2024 and 2023

(amounts in thousands, except share data)


	Common Stock
	Shares of Common Stock Outstanding	Common Stock		Additional Paid in Capital		Accumulated Deficit		Total
Balance at December 31, 2023	11,984,133	$	1	$	71,787	$	(40,816)	$	30,972
Net income	—	—		—		748		748

Tax paid on behalf of employees related to net settlement of share-based awards	(51,133)	—		(176)		—		(176)
Share-based compensation expense	130,773	—		(660)		—		(660)
Balance at March 31, 2024	12,063,773	$	1	$	70,951	$	(40,068)	$	30,884
Net loss	—	—		—		(4,831)		(4,831)
Conversion of private warrants to public warrants	—	—		—		—		—
Tax paid on behalf of employees related to net settlement of share-based awards	(13,725)	—		(57)		—		(57)
Share-based compensation expense	40,940	—		126		—		126
Balance at June 30, 2024	12,090,988	$	1	$	71,020	$	(44,899)	$	26,122
Net loss						(4,995)		(4,995)
Tax paid on behalf of employees related to net settlement of share-based awards	(731)	—		2		—		2
Share-based compensation expense	9,233	—		399		—		399
Balance at September 30, 2024	12,099,490	$	1	$	71,421	$	(49,894)	$	21,528


	Common Stock
(amounts in thousands, except share data)	Shares of Common Stock Outstanding	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Total
Balance at December 31, 2022	12,240,237	$	1	$	72,342	$	(23,485)	$	48,858
Net loss	—	—		—		(4,960)		(4,960)
Conversion of private warrants to public warrants	—	—		20		—		20
Tax paid on behalf of employees related to net settlement of share-based awards	(473,874)	—		(2,429)		—		(2,429)
Share-based compensation expense	95,147	—		447		—		447
Balance at March 31, 2023	11,861,510	$	1	$	70,380	$	(28,445)	$	41,936
Net loss	—	—		—		$	(4,456)	(4,456)
Tax paid on behalf of employees related to net settlement of share-based awards	(1,765)	—		(5)		—		(5)
Share-based compensation expense	6,600	—		568		—		568
Balance at June 30, 2023	11,866,345	$	1	$	70,943	$	(32,901)	$	38,043
Net loss	—	$	—	$	—	$	(3,952)	$	(3,952)
Tax paid on behalf of employees related to net settlement of share-based awards	(1,253)	$	—	$	(4)	—		(4)
Share-based compensation expense	4,833	$	—	$	153	—		153
September 30, 2023	11,869,925	$	1	$	71,092	$	(36,853)	$	34,240

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

(amounts in thousands)


	Nine Months Ended September 30,
	2024		2023
Cash Flows from Operating Activities:
Net loss	$	(9,078)	$	(13,368)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation of premises and equipment	236		198

Amortization of developed software	4,332		9,250
Amortization of other intangible assets	240		240
Impairment of software assets	50		—
Provision for bad debt	440		350
Share-based compensation expense	(135)		1,534
Gain on fair value of private warrant liability	—		(2,449)
Changes in operating assets and liabilities:
Accounts receivable	3,797		(601)
Prepaid expenses and other current assets	2,834		2,988
Other assets	—		72
Accounts payable and accrued liabilities	(282)		(537)


Deferred revenue	(590)		(3,207)

Net Cash provided by (used in) Operating Activities	1,844		(5,530)
Cash Flows from Investing Activities:
Development of internal use software	(4,546)		(4,114)
Purchases of premises and equipment	(131)		(224)
Net Cash used in Investing Activities	(4,677)		(4,338)
Cash Flows from Financing Activities:

Payments related to net settlement of share-based compensation awards	(231)		(2,438)
Net Cash used in Financing Activities	(231)		(2,438)
Net Decrease in Cash and Cash Equivalents	(3,064)		(12,306)
Cash and Cash Equivalents – Beginning	14,288		21,108
Cash and Cash Equivalents – Ending	$	11,224	$	8,802

Supplementary Cash Flow Information:
Income taxes refunded, net	$	(2,380)	$	(4,323)
Noncash Operating, Investing, and Financing Activities:
Conversion of private warrants to public warrants	$	—	$	20
Impairment of software assets	480		0
Contingent liability for acquired software	$	—	$	480

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF THE BUSINESS

BM Technologies, Inc. (“BMTX” or the “Company”) (formerly known as “BankMobile”) provides state-of-the-art high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels.

BankMobile was incorporated in May 2016 as a wholly-owned subsidiary of Customers Bank. On August 6, 2020, the Company entered into an Agreement and Plan of Merger, by and among Megalith Financial Acquisition Corporation, a special purpose acquisition company (“Megalith”), incorporated in Delaware in November 2017, MFAC Merger Sub Inc., a wholly-owned subsidiary of Megalith, BankMobile, and Customers Bank, the sole stockholder of BankMobile. On January 4, 2021, BankMobile became an independent company after the completion of a divestiture transaction and was rebranded BM Technologies, Inc.

BMTX’s fintech business model leverages Banking-as-a-Service (“BaaS”) partners’ and University partners’ existing customer bases to achieve high volume, low-cost customer acquisition in its Higher Education and BaaS businesses. BMTX has four primary revenue sources: interchange and card revenue, servicing fees, account fees, and university fees. The majority of revenues are driven by customer activity (deposits, spend, transactions, etc.) and may be paid or passed through by our Partner Banks, universities, or paid directly by customers.

BMTX facilitates deposits and banking services between a customer and our partner banks, Customers Bank and First Carolina Bank, (the “Partner Banks”), which are related parties and are Federal Deposit Insurance Corporation (“FDIC”) insured banks. The Partner Banks hold the FDIC insured deposits that BMTX sources and services and are the issuing banks on BMTX’s debit cards. The Partner Banks pay the Company a servicing fee for the deposits generated and pass through interchange income earned from transactions on debit cards and transaction-based account fees.

BMTX is not a bank, does not hold a bank charter, and does not provide banking services, and as a result, it is not subject to direct banking regulation, except as a service provider to our partner banks. BMTX is also subject to the regulations of the Department of Education (“ED”), due to its student disbursements business, and is periodically examined by it. BMTX’s contracts with most of its Higher Education institution clients require it to comply with numerous laws and regulations, including, where applicable, regulations promulgated by the ED regarding the handling of student financial aid funds received by institutions on behalf of their students under Title IV of the Higher Education Act of 1965; the Family Educational Rights and Privacy Act of 1995; the Electronic Fund Transfer Act and Regulation E; the USA PATRIOT Act and related anti-money laundering requirements; and certain federal rules regarding safeguarding personal information, including rules implementing the privacy provisions of the Gramm-Leach-Bliley Act. Other products and services offered by BMTX may also be subject to other federal and state laws and regulations.

NOTE 2 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These interim unaudited consolidated financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Any reference to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted from these interim unaudited consolidated financial statements as permitted by U.S. GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of Management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMTX for the interim periods presented.

The preparation of interim unaudited consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include going concern assessment, valuation of deferred tax assets, valuation of private warrants, and goodwill and intangible asset impairment analyses. Actual results could differ from those estimates.

FASB ASC 205-40, Presentation of Financial Statements - Going Concern, requires Management to assess an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance date.

Management has performed this required assessment as of November 14, 2024, and believes there are sufficient funds available to support its ongoing business operations and continue as a going concern for at least the next 12 months with projected liquidity of $13.6 million at November 14, 2025.

Management’s assessment is subject to known and unknown risks, uncertainties, assumptions, and changes in circumstances, many of which are beyond our control including the impact of the macroeconomic environment, and that are difficult to predict as to timing, extent, likelihood, and degree of occurrence, and that could cause actual results to differ from estimates and forecasts, potentially materially.

Based upon the results of Management’s assessment, these interim unaudited consolidated financial statements have been prepared on a going concern basis. The interim unaudited consolidated financial statements do not include any adjustments that could result from the outcome of the aforementioned risks and uncertainties.

Significant Accounting Policies

These interim unaudited consolidated financial statements should be read in conjunction with the 2023 audited consolidated financial statements and related notes of BMTX, which describe BMTX’s significant accounting policies. There have been no material changes to BMTX’s significant accounting policies during the nine months ended September 30, 2024, except for what is noted below.

Insurance Premium Finance Obligations

The Company includes the obligation for its insurance premium financing in Accounts payable and accrued liabilities on the interim unaudited Consolidated Balance Sheets. At September 30, 2024, the Company had two premium finance arrangements outstanding with balances totaling $0.2 million, average remaining installment payment terms of 2.5 months, and a weighted average annualized finance charge of 6.95%. At December 31, 2023, there were no insurance premium financing obligations.

Immaterial Correction of Prior Period Error

In preparation of the Company’s consolidated financial statement as of and for the twelve months ended December 31, 2023, the Company identified an immaterial error in its accounting for certain of its interchange expenses for the three and nine months ended September 30, 2023, reflecting the impacted revenues gross instead of net as required.

The effect of these immaterial error adjustments for the three and nine months ended September 30, 2023:

•Decreased revenue from Interchange and Card revenue and decreased Technology, communication, and processing expense by an equal and offsetting $0.4 million and $0.8 million for the three and nine months ended September 30, 2023, respectively.

The Company assessed the materiality of these errors on the interim period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its Consolidated Statements of Loss are not material to any previously presented consolidated financial statements. The correction had no impact on the Consolidated Balance Sheets, Consolidated Statements of Changes in Shareholders’ Equity, Consolidated Statements of Cash Flows, or Notes to the Consolidated Financial Statements, other than Note 9 - Revenues and Note 12 - Related Party Transactions, for the previously presented interim period.

Accounting Standards Update

As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised ASUs applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use the extended transition period under the JOBS Act.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The Company adopted ASU 2020-06 on January 1, 2024. The adoption of this new accounting standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2024

In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, which is a final standard on improvement to income tax disclosures. This update applies to all entities subject to income taxes. As a public business entity, the new requirements will be effective for annual periods beginning after December 15, 2024. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024.

In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards. This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification. This standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024.

In March 2024, the FASB issued ASU 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”), which removed references to various FASB Concepts Statements and updates technical corrections such as conforming amendments, clarification to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The new guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024.

NOTE 3 — ACCOUNTS RECEIVABLE

Accounts receivable, net primarily relate to billings for deposit processing services to our Partner Banks, MasterCard incentive income, uncollected university subscription and disbursement services fees, and receivables from our BaaS partner, and are recorded at face amounts less an allowance for doubtful accounts.

Management evaluates accounts receivable and establishes the allowance for doubtful accounts based on historical experience, analysis of past due accounts, and other current available information. Accounts receivable deemed to be uncollectible are individually identified and are charged-off against the allowance for doubtful accounts. The allowance for doubtful accounts was $1.5 million at September 30, 2024 and $1.1 million at December 31, 2023.


(amounts in thousands)	Beginning Balance		Additions		Reductions		Ending Balance
Allowance for doubtful accounts
Nine months ended September 30, 2024	$	1,100	$	1,215	$	(775)	$	1,540
Twelve months ended December 31, 2023	$	305	$	1,001	$	(206)	$	1,100

NOTE 4 — PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE

Premises and Equipment

The components of premises and equipment were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023

IT equipment	3 to 5 years	$	1,061	$	930

Accumulated depreciation		(631)		(395)
Total		$	430	$	535

BMTX recorded depreciation expense of less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, and less than $0.1 million and $0.2 million for the three and nine months ended

September 30, 2023, respectively, as a component of Technology, communication, and processing expense on the unaudited Consolidated Statements of Loss.

Impairment is recorded in Technology, communication, and processing expense on the unaudited Consolidated Statements of Loss. BMTX recorded no impairment expense on Premises and Equipment during the three and nine months ended September 30, 2024 and 2023.

Developed Software

The components of developed software were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023
Higher One Disbursement business developed software	10 years	$	27,400	$	27,400
Internally developed software	3 to 7 years	51,632		43,225
Work-in-process		2,271		6,662
		81,303		77,287
Accumulated amortization		(65,446)		(61,114)
Total		$	15,857	$	16,173

BMTX recorded amortization expense of $1.8 million and $4.3 million for the three and nine months ended September 30, 2024, respectively, and $3.3 million and $9.2 million for the three and nine months ended September 30, 2023, respectively, as a component of Technology, communication, and processing expense on the unaudited Consolidated Statements of Loss.

BMTX recorded impairment expenses of zero and less than $0.1 million during the three and nine months ended September 30, 2024, respectively, and zero during the three and nine months ended September 30, 2023, as a component of Technology, communication and processing expense on the unaudited Consolidated Statements of Loss.

NOTE 5 — GOODWILL AND OTHER INTANGIBLES

Goodwill represents the excess of the purchase price over the identifiable net assets of businesses acquired through business combinations accounted for under the acquisition method. Goodwill is reviewed for impairment annually as of October 31 and between annual tests when events and circumstances indicate that impairment may have occurred. There was no goodwill impairment for the three and nine months ended September 30, 2024 and 2023.

Other intangibles, net represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. We have one intangible asset which is being amortized on a straight-line basis over twenty years.

The components of Other intangibles, net as of September 30, 2024 and December 31, 2023 were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023
Customer relationships – universities	20 years	$	6,402	$	6,402
Accumulated amortization		(2,533)		(2,293)
Total		$	3,869	$	4,109

Other intangibles, net, includes assets subject to amortization that are reviewed for impairment under FASB ASC 360, Property, Plant and Equipment. Amortization is recorded in Other expense on the unaudited Consolidated Statements of Loss. BMTX recorded amortization expense of less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, and less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2023, respectively.

The customer relationships - universities will be amortized in future periods as follows:


Remainder of 2024	$	80
2025	320
2026	320
2027	320
2028	320
After 2028	2,509
Total	$	3,869

Impairment is recorded in Technology, communication, and processing expense on the unaudited Consolidated Statements of Loss. There was no impairment for Other intangibles, net during the three and nine months ended September 30, 2024 and 2023.

NOTE 6 — LEASES

The Company’s corporate headquarters is currently operating under a month-to-month short-term lease.

Operating lease expenses are recorded in Occupancy on the unaudited Consolidated Statements of Loss. BMTX recorded lease expense of less than $0.1 million for the three and nine months ended September 30, 2024, respectively, and less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2023, respectively.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the interim unaudited consolidated financial statements that are not currently accrued for. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution may have a material adverse effect on BMTX’s results of operations for a particular period, and future changes in circumstances or additional information could result in accruals or resolution in excess of established accruals, which could adversely affect BMTX’s results of operations, potentially materially.

On June 5, 2023, the Company entered into an agreement to purchase certain software technology assets from a third-party. Purchase consideration was comprised of a cash payment of less than $0.1 million at closing and potential future contingent consideration of $0.5 million over the next three years if the technology is successfully and continuously deployed by the Company. As of June 30, 2024, the Company determined that the successful and continuous deployment of the software technology is no longer probable, as a result, the software technology was impaired and the corresponding contingent consideration was extinguished. As of September 30, 2024 and December 31, 2023, the Company had zero and $0.5 million of contingent consideration, respectively reported in Other non-current liabilities on the unaudited Consolidated Balance Sheets.

NOTE 8 — SHAREHOLDERS’ EQUITY AND PRIVATE WARRANT LIABILITY

Common Stock

The Company is authorized to issue 1,000,000,000 shares of common stock, par value 0.0001 per share. At September 30, 2024, there were 12,099,490 shares of common stock issued and outstanding, which includes the 300,000 performance shares discussed below. At December 31, 2023 there were 11,984,133 shares of common stock issued and outstanding which includes the 300,000 performance shares discussed below.

Each holder of common stock is entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of 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.

Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors (the “Board”). At September 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

Performance Shares

The Company has 300,000 common shares, par value $0.0001 per share, issued and outstanding that contain a restrictive legend, subject to release only if the vesting criteria are met before the seventh anniversary of the closing date of the merger with Megalith. If the vesting criteria are not met prior to the seventh anniversary of the closing date of the merger, the shares will be forfeited and cancelled. The vesting criteria are met when either (1) the volume weighted average price of the Company’s common stock on the principal exchange on which such securities are then listed or quoted shall have been at or above $15.00 for twenty (20) trading days (which need not be consecutive) over a thirty (30) trading day period; or (ii) the Company sells shares of its capital stock in a secondary offering for at least $15.00 per share, in each case subject to equitable adjustment for share splits, share dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the shares of the Company’s common stock after the merger, and possible reduction for certain dividends granted to the Company’s common stock, or (2) the Company undergoes certain change in control or sales transactions. None of the vesting criteria for the performance shares have been met and no expense has been recognized.

Dividend Policy

We have not paid any cash dividends on our common stock to date and have no present intention to pay cash dividends in the future. The payment of cash dividends by the Company in the future will be dependent upon the Company’s revenues and earnings, capital requirements, and general financial condition. The payment of any dividends will be within the discretion of the Board.

January 4, 2021 Share-Based Compensation Award

In connection with its January 4, 2021 divestiture of the Company, Customers Bank, the Company’s former parent, granted 1,317,035 of the merger consideration shares of the Company it received to certain employees and executives of the Company. The share-based compensation award was subject to vesting conditions, including a required service condition from award recipients through January 3, 2023. The grant date fair value of the award, totaling $19.6 million, was recorded as share-based compensation expense on the unaudited Consolidated Statements of Loss on a straight-line basis over the two-year post-grant vesting period, net of any actual forfeitures. The shares awarded were restricted until fully vested. The holders of restricted shares were provided an option to surrender a portion of their shares on the vesting date to cover their income tax obligations. On January 3, 2023, all restricted shares, net of prior forfeitures, vested.

BMTX recorded share-based compensation expense related to these awards of zero for the three and nine months ended September 30, 2024, respectively, and zero and less than $0.1 million for the three and nine months ended September 30, 2023, respectively.

Equity Incentive Plan

The Company’s 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”) provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors, and consultants of both the Company and its affiliates. Additionally, the Equity Incentive Plan provides for the grant of performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants.

On June 20, 2023, an amendment to the Equity Incentive Plan was approved by the Company’s stockholders. The amendment increased the total number of shares of common stock authorized under the Equity Incentive Plan by 1,279,963, from 1,220,037 (the number of shares authorized under the original 2020 Equity Incentive Plan) to 2,500,000.

Grants were made under the 2020 Equity Incentive Plan during the three and nine months ended September 30, 2024 as described within Restricted Stock Units and Performance - Based Restricted Stock Units below.

Restricted Stock Units

Restricted Stock Units (“RSUs”) granted under the 2020 Equity Incentive Plan generally vest in three or four equal installments on each anniversary of the grant date. The RSUs that have been granted are all paid in stock upon vesting, and are thus classified as equity awards, which are measured using the grant date fair value of BMTX common stock and are not remeasured at the end of each reporting period. We recognize compensation cost starting from the grant date on a straight-line basis over the required vesting period in accordance with FASB ASC 718, Compensation - Stock Compensation. We account for forfeitures as they occur and reverse any previously recognized compensation expense related to forfeited awards.

Performance - Based Restricted Stock Units

Performance - Based Restricted Stock Units (“PBRSUs”) granted under the 2020 Equity Incentive Plan, as amended, currently vest upon the later of: a) the third year of employment following the grant date or b) the achievement of the specified performance goals within the fifth year of the grant date. As defined by the 2020 Equity Incentive Plan, the Compensation Committee of the Board determines the number of PBRSUs a participant earns based on the extent to which the corresponding performance goals have been achieved over the five-year performance cycle. The PBRSUs that have been granted are paid in stock upon vesting, and are thus classified as equity awards, which are measured using the grant date fair value of BMTX common stock and are not remeasured at the end of each reporting period. We account for forfeitures as they occur and reverse any previously recognized compensation expense related to forfeited awards.

For PBRSUs with milestones, upon the grant date, and at each subsequent reporting period, we reassess whether it is probable that we will achieve each operational milestone, and if so, the period when we expect to achieve that operational milestone. If upon the grant date, we determine that achievement of an operational milestone is probable, we allocate the full share-based compensation expense over the period between the grant date and the expected vesting condition achievement date. If upon the grant date, achievement of the operational milestone is not probable, we do not recognize compensation expense. If after the grant date, we determine achievement of an operational milestone becomes probable, we will allocate the full share-based compensation expense over the period between the grant date and the expected vesting condition achievement date, and we will recognize a catch-up expense equal to the value of previously unrecognized expense from the grant date to the vesting condition achievement date.

For PBRSUs with a market condition, we used a Monte Carlo simulation to determine the fair value on the grant date and recognize the share-based compensation expense over the derived service period.

Inducement Awards

On February 5, 2024, the Company granted RSUs and PBRSUs outside of its 2020 Equity Incentive Plan, as amended to a certain employee to induce them to accept employment the Company (the “Inducement Awards”). The terms and conditions of the Inducement Awards are substantially similar to those awards granted under the Company’s 2020 Equity Incentive Plans, as amended.

The change in unvested RSUs and PBRSUs awarded is shown below:


	Restricted Stock Units			Performance-Based Restricted Stock Units
	Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU		Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU
Balance as of 12/31/2023	445,106	$	6.47	495,000	$	2.99
Granted *	344,800	$	2.05	615,000	$	2.25
Vested	(180,946)	$	5.72	—	$	—
Forfeited *	(49,909)	$	4.09	(320,000)	$	6.70
Balance as of 9/30/2024	559,050	$	4.20	790,000	$	0.91

*- Includes 193,333 PBRSUs that were granted in 2021, that were cancelled and simultaneously reissued, which qualifies as a modification, specifically, an improbable-to-probable modification (Type III), which includes a $1.3 million reversal of the recognized expense. The modified awards fair value of $2.02 is used to determine stock based compensation expense over the term of the awards. Also includes, 96,667 PBRSUs that were granted in 2021, that have market capitalization goals that were cancelled and subsequently reissued, which qualifies as a modification. The modification increased the fair value of the awards

from $3.46 per share to $4.87 per share, and the incremental stock based compensation expenses is recorded over the new term of the awards.

For the three and nine months ended September 30, 2024, the share-based compensation expense related to the RSU awards, net of forfeitures, totaled less than $0.1 million and $0.8 million, respectively. For the three and nine months ended September 30, 2023, the share-based compensation expense related to the RSU awards, net of forfeitures, totaled $0.3 million and $1.2 million, respectively.

For the three and nine months ended September 30, 2024, the share-based compensation expense related to the PBRSU awards, net of forfeitures, totaled less than $0.1 million and $(1.0) million, respectively. For the three and nine months ended September 30, 2023, the share-based compensation expense related to the PBRSU awards, net of forfeitures, totaled $(0.1) million and $0.3 million, respectively.

Employee Stock Purchase Plan (“ESPP”)

The Company has an ESPP (the “BM Technologies Inc. 2021 Employee Stock Purchase Plan”) which has an effective date of May 1, 2021. The purpose of the ESPP is to provide eligible employees with an incentive to advance the interests of the Company and its Subsidiaries, by affording them an opportunity to purchase stock of the Company at a favorable price. As of September 30, 2024, there have been no shares purchased on behalf of employees under the ESPP.

Warrants

At September 30, 2024 and 2023, respectively, there were 22,703,004 warrants to purchase our common stock outstanding. The warrant totals for each period-end consist of 17,294,044 public warrants and 5,408,960 private warrants as of September 30, 2024 and 2023, respectively.

Each whole warrant entitles the registered holder to purchase one whole share of common stock at a price of $11.50 per share. The warrants will expire five years after the completion of the merger with Megalith (January 4, 2026) or earlier upon redemption or liquidation; the Company has redemption rights if our common stock trades above $24.00 for 20 out of 30 days. The private warrants are identical to the public warrants except that the private warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor and certain other original holders.

As of September 30, 2024, 1,600 of the Company’s outstanding public warrants have been exercised and 1,169,903 of the private warrants have been repurchased by the Company from related parties at $1.69 per warrant.

During the three and nine months ended September 30, 2024 and 2023, zero of the private warrants have been reclassified to public warrants based upon a sale of the private warrants by the original holders which resulted in a modification of terms that effect classification as public warrants. There were no warrants exercised in the three and nine months ended September 30, 2024 and 2023, respectively.

The private warrants and the public warrants are treated differently for accounting purposes, as follows:

Private Warrants

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the private warrants are accounted for as liabilities and are marked-to-market each reporting period with the change in fair value recognized in earnings. In general, under the mark-to-market accounting model, as our stock price increases, the private warrant liability increases, and we recognize additional expense on the unaudited Consolidated Statements of Loss – with the opposite when our stock price declines. Accordingly, the periodic revaluation of the private warrants could result in significant volatility in our reported earnings.

Income Statement Impact: Subsequent to the close of the merger, any change in fair value of the private warrants is recognized on the unaudited Consolidated Statements of Loss below operating profit as Gain on fair value of private warrant liability with a corresponding amount recognized in the Liability for private warrants on the unaudited Consolidated Balance Sheets. For the three and nine months ended September 30, 2024, the Company recorded a gain of less than $0.1 million and zero, respectively, resulting from the revaluation of the private warrants. For the three and nine months ended September 30, 2023, the Company recorded a gain of $0.4 million and $2.4 million, respectively, resulting from the revaluation of the private warrants.

Balance Sheet Impact: The private warrant liability is presented in the account Liability for private warrants in the long-term liabilities section of our unaudited Consolidated Balance Sheets. As noted above, the change in fair value of the underlying private warrants results in a corresponding change in the balance of the warrant liability on the unaudited Consolidated Balance

Sheets. When warrants are exercised, the fair value of the liability is reclassified to Additional paid-in capital within equity. Cash received for the exercise of warrants is reflected in Cash and cash equivalents with a corresponding offset recorded in Common stock and Additional paid-in capital within equity.

Cash Flow Impact: The impact of the change in the fair value of the private warrants has no impact on our cash flows as it is a noncash adjustment. Cash received for the exercise of warrants is recorded in cash flows from financing activities. Cash paid for the repurchase of warrants is recorded in cash flows from financing activities. No such transactions occurred during the three and nine months ended September 30, 2024 and 2023.

Shareholders’ Equity Impact: The impact to Additional paid in-capital as of the opening balance sheet is described above. Exercises of private warrants result in a reduction of the Liability for private warrants on the unaudited Consolidated Balance Sheets with a corresponding increase to Common Stock and Additional paid in-capital.

Public Warrants

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the public warrants are treated as equity instruments under U.S. GAAP. The public warrants are not marked-to-market each reporting period, thus there is no impact to earnings. Exercises of the public warrants are recorded as cash is received and are recorded in Cash and cash equivalents with a corresponding offset recorded in Common stock and Additional paid in-capital within equity. During the three and nine months ended September 30, 2024 and 2023, there were no exercises of public warrants.

NOTE 9 — REVENUES

Revenues

BMTX recognizes operating revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

The following table presents BMTX’s revenues disaggregated by nature of the revenue stream and the pattern or timing of revenue recognition for the three and nine months ended September 30, 2024 and 2023, respectively. The Company has one reportable segment, and all revenues are earned in the U.S.


	Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands)	2024		2023		2024		2023
Revenues:
Revenue recognized at point in time:
Interchange and card revenue	$	2,990	$	2,292	$	8,689	$	6,716
Servicing fees	7,557		8,658		23,397		22,990
Account fees	1,680		1,931		5,580		5,981
University fees - disbursement activity	433		207		1,030		639
Other revenue	36		60		92		155
Total revenue recognized at point in time	12,696		13,148		38,788		36,481
Revenue recognized over time:
University fees - subscriptions	1,279		1,205		3,763		3,652
Other revenue - maintenance and support	102		28		248		260
Total revenue recognized over time	1,381		1,233		4,011		3,912
Total revenues	$	14,077	$	14,381	$	42,799	$	40,393

Deferred Revenue

Deferred revenue consists of payments received from customers prior to the performance of services. Deferred revenue is recognized over the service period on a straight-line basis or when the contractual performance obligation has been satisfied.

The deferred revenue balance as of September 30, 2024 and December 31, 2023 was $11.9 million and $12.4 million, respectively.

During the nine months ended September 30, 2024, the Company recognized revenue of approximately $11.7 million included in deferred revenue at the beginning of the period. During the nine months ended September 30, 2023, the Company recognized revenue of approximately $6.6 million included in deferred revenue at the beginning of the period.

Unbilled receivables

The Company had $1.2 million of unbilled receivables, or amounts recognized as revenue for which invoices have not yet been issued, as of September 30, 2024, and $1.5 million as of December 31, 2023. Unbilled receivables are reported in Accounts receivable, net on the unaudited Consolidated Balance Sheets.

NOTE 10 — LOSS PER COMMON SHARE

The following are the components and results of operations and loss per common share calculations for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands, except per common share data)	2024		2023		2024		2023
Net loss available to common shareholders	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)

Net loss used for EPS	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)
Weighted-average number of common shares outstanding – basic	11,799		11,570		11,768		11,567
Weighted-average number of common shares outstanding – diluted	11,799		11,570		11,768		11,567
Basic loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)
Diluted loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)

The following table presents the reconciliation from basic to diluted weighted average shares outstanding used in the calculation of basic and diluted loss per common share:


	Three Months Ended September 30,		Nine Months Ended September 30,
(amounts in thousands)	2024	2023	2024	2023
Weighted-average number of common shares outstanding – basic	11,799	11,570	11,768	11,567
Add:


Service-based RSUs	—	—	—	—
Weighted-average number of common shares outstanding – diluted	11,799	11,570	11,768	11,567

For basic loss per common share, the performance shares are subject to forfeiture, and they are considered share-indexed instruments and not outstanding shares until they are vested. During the three and nine months ended September 30, 2024 and 2023, the vesting criteria has not been met and they are not included.

For the three and nine months ended September 30, 2024, the Company’s performance shares, public warrants, and private warrants were excluded from the computation of diluted weighted average shares outstanding as the necessary conditions had not been achieved for the performance shares and the average stock price for the period was below the strike price for the warrants. The performance shares are only considered in the calculation for diluted loss per common share if they are dilutive in nature. The performance shares are only dilutive when the average share price is greater than the strike price and when positive net income is reported. During the three and nine months ended September 30, 2024, the average share price was below the strike price and these shares were not included in the diluted loss per common share calculations. For the three and nine months ended September 30, 2024, the Company’s performance-based RSUs were excluded because the vesting is contingent upon the satisfaction of certain conditions which had not been achieved as of September 30, 2024.

For the three and nine months ended September 30, 2023, the Company’s performance shares, public warrants, and private warrants were excluded from the computation of diluted weighted average shares outstanding as the necessary conditions had not been achieved for the performance shares and the average stock price for the period was below the strike price for the warrants. The performance shares are only considered in the calculation for diluted loss earnings per common share if they are dilutive in nature. The performance shares are only dilutive when the average share price is greater than the strike price and when positive net income is reported. During the three and nine months ended September 30, 2023, the average share price was below the strike price and these shares were not included in the diluted loss per common share calculations. For the three and nine months ended September 30, 2023, the Company’s performance-based RSUs were excluded because the vesting is contingent upon the satisfaction of certain conditions which had not been achieved as of September 30, 2023.

The following table presents the potentially dilutive shares that were excluded from the computation of diluted loss per common share:


	Three Months Ended September 30,		Nine Months Ended September 30,
(amounts in thousands)	2024	2023	2024	2023
Performance shares	300	300	300	300
Public warrants	17,294	17,294	17,294	17,294
Private warrants	5,409	5,409	5,409	5,409
Performance-based RSUs	790	495	790	495
Service-based RSUs	559	480	559	480
Total	24,352	23,978	24,352	23,978

NOTE 11 — DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

BMTX uses fair value measurements to determine and disclose the fair value of its financial instruments. FASB’s ASC 825, Financial Instruments, requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For fair value disclosure purposes, BMTX utilized the fair value measurement criteria under FASB ASC 820, Fair Value Measurements (“ASC 820”).

In accordance with FASB ASC 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for BMTX’s financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, focusing on an exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements:


Level 1:			Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:			Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:			Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The following methods and assumptions were used to estimate the fair value of BMTX’s financial instruments as of September 30, 2024 and December 31, 2023:

Cash and cash equivalents

Cash and cash equivalents reported on the unaudited Consolidated Balance Sheets consists of non-interest bearing demand deposits, for which carrying value approximates fair value.

Accounts receivable, net

The carrying amount of accounts receivable approximates fair value because of the short-term nature of these items.

Liability for Private Warrants

The fair value of the private warrants was estimated using a modified version of the binomial lattice model incorporating the Cox-Ross-Rubenstein methodology at September 30, 2024 and at December 31, 2023. The Company assumed a term for the private warrants equal to the contractual term from the date of the merger with Megalith and then discounted the resulting value to the valuation date.

Among the key inputs and assumptions used in the pricing formula at September 30, 2024 were the following: a term of 1.27 years; volatility of 52%; a dividend yield of zero; an underlying stock price of $3.40; a risk free interest rate of 3.86%; and a closing price of the public warrants of $0.03 per share.

Among the key inputs and assumptions used in the pricing formula at December 31, 2023 were the following: a term of 2.02 years; volatility of 58%; a dividend yield of zero; an underlying stock price of $2.05; a risk free interest rate of 4.18%; and a closing price of the public warrants of $0.03 per share.

At September 30, 2024 and December 31, 2023, the warrant liability is classified as a Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement.

The estimated fair value of BMTX’s financial instruments at September 30, 2024 and December 31, 2023 were as follows:


					Fair Value Measurements at September 30, 2024
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	11,224	$	11,224	$	11,224	$	—	$	—
Accounts receivable, net	4,891		4,891		4,891		—		—
Liabilities:
Liability for private warrants	$	162	$	162	$	—	$	—	$	162


					Fair Value Measurements at December 31, 2023
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	14,288	$	14,288	$	14,288	$	—	$	—
Accounts receivable, net	9,128		9,128		9,128		—		—
Liabilities:
Liability for private warrants	$	162	$	162	$	—	$	—	$	162

NOTE 12 — RELATED PARTY TRANSACTIONS

The Company has several relationships with our Partner Banks, which are related parties of the Company. These relationships are described below.

Customers Bank

Cash management

All the Company’s cash and cash equivalents are on deposit with Customers Bank.

Servicing fees and interchange income

On November 7, 2022, the Company and Customers Bank entered into the DPSA amendment, to the Deposit Processing Services Agreement (“the Deposit Processing Services Agreement”) dated January 4, 2021, to extend the Deposit Processing Services Agreement termination date to the earlier of the Company’s successful completion of the transfer of the Company’s serviced deposits to a new partner bank or June 30, 2023. The DPSA Amendment also removes Customers Bank’s obligation to pay the Company the difference between the Durbin-exempt and Durbin-regulated interchange revenues. The other terms of the Deposit Processing Services Agreement remain in effect through the new termination date.

On March 22, 2023, we signed the DPSA Second Amendment. The DPSA Second Amendment, among other things, extends the termination date of the Deposit Processing Services Agreement until the earlier of (i) the transfer of the Company’s serviced deposits to a Durbin-exempt partner bank; or (ii) June 30, 2024; and revises the fee structure of the Deposit Processing Services Agreement. The other terms of the Deposit Processing Services Agreement, as amended by the DPSA Amendment, remain in effect through the new termination date.

On August 18, 2023, the Company and Customers Bank entered into a third amendment to the Deposit Processing Services Agreement (the “DPSA Third Amendment”) for the Higher Education serviced deposit accounts. The DPSA Third Amendment extends the termination date of the Deposit Processing Services Agreement until the earlier of (i) the transfer of the Company’s Higher Education serviced deposits to a Durbin-exempt partner bank; or (ii) April 15, 2025.

On March 22, 2023, the Company and Customers Bank entered into the 2023 Deposit Servicing Agreement, under which, effective March 31, 2023, the Company will perform, on behalf of Customers Bank, Customer Bank’s services, duties, and obligations under the Private Label Banking Program Agreement (the “PLBPA”) by and between Customers Bank and T-Mobile USA, Inc. that are not required by Applicable Law (as defined in the 2023 Deposit Servicing Agreement) to be provided by an FDIC insured financial institution. The obligations of the Company and Customers Bank under the 2023 Deposit Servicing Agreement are similar to those under the Deposit Processing Services Agreement; provided, however, that (i) as of March 31, 2023, the 2023 Deposit Servicing Agreement and not the Deposit Processing Services Agreement shall govern the terms, conditions, roles, responsibilities, duties, and obligations of the Company and Customers Bank with respect to the PLBPA and the Depositor Accounts (as defined in the 2023 Deposit Servicing Agreement); (ii) the Deposit Processing Services Agreement is amended to the extent necessary or advisable to effect the same, including, without limitation, such that “Depositor” under the Deposit Processing Services Agreement shall not include any T-Mobile Customer (as defined in the PLBPA); and (iii) there is a different fee structure under the 2023 Deposit Servicing Agreement from that set forth in the Deposit Processing Services Agreement. The initial term of the 2023 Deposit Servicing Agreement continues until February 24, 2025, and will automatically renew for additional one-year terms unless either party gives written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The 2023 Deposit Servicing Agreement may be terminated early by either party upon material breach, upon notice of an uncured objection from a regulatory authority, or by the Company upon 120 days’ written notice upon the satisfaction of certain conditions.

As compensation under the 2023 Deposit Servicing Agreement, Customers Bank will retain any and all revenue generated from the funds held in the deposit accounts, and Customers Bank will pay the Company monthly servicing fees as set forth in the 2023 Deposit Servicing Agreement. In addition, the Company will have the right to retain all revenue generated by or from the Depositor Accounts (as defined in the 2023 Deposit Servicing Agreement), including, but not limited to, fees and all other miscellaneous revenues. The Company also shall retain all fees (including without limitation interchange fees), and charges generated by its ATMs and from its payment processing services. The Company will be solely liable for any and all fees, expenses, costs, reimbursements, and other amounts that are or may become due and payable under the PLBPA, including, without limitation, any Durbin-exempt Interchange (as defined in the 2023 Deposit Servicing Agreement) fees payable to T-Mobile under the PLBPA. Customers Bank may set off any and all PLBPA Amounts against any compensation payable to the Company under the 2023 Deposit Servicing Agreement.

Other

On January 4, 2021, the Company entered into a Software License Agreement with Customers Bank which provides it with a non-exclusive, non-transferable, royalty-free license to utilize our mobile banking technology for a period up to 10 years. The Software License Agreement is cancellable by Customers Bank at any time, without notice, and without penalty, and for any reason or no reason at all. To date, Customers Bank has not utilized the Company’s mobile banking technology and zero consideration has been paid or recognized under the Software License Agreement.

On January 4, 2021, the Company entered into a Non-Competition and Non-Solicitation Agreement with Customers Bank providing that Customers Bank will not, for a period of 4 years after the closing of the divestiture, directly or indirectly engage in the Company’s business in the territory (both as defined in the Non-Competition Agreement), except for white label digital banking services with previously identified parties and passive investments of no more than 2% of a class of equity interests of a competitor that is publicly traded. Customers Bank also agreed not to directly or indirectly hire or solicit any employees of the Company.

Both the President and Executive Chairman of the Board of Customers Bank are immediate family members of the Company’s CEO, and together with their spouses, own less than 5.0% of the Company’s outstanding common stock at September 30, 2024.

On April 20, 2022, the Company entered into a Special Limited Agency Agreement (“SLA”) with Customers Bank that provides for marketing assistance from the Company for the referral of consumer installment loans funded by Customers Bank. In consideration for this marketing assistance, the Company receives certain fees specified within the SLA which are recorded as a component of Other revenue on the unaudited Consolidated Statements of Loss. No revenue was realized under the SLA. The SLA was terminated on May 16, 2023.

Positions with Customers Bank are presented on the unaudited Consolidated Balance Sheets in Accounts receivable, net, Deferred revenue, and Accounts payable and accrued liabilities. The Accounts receivable balances related to Customers Bank

as of September 30, 2024 and December 31, 2023 were zero and $1.4 million, respectively. The Deferred revenue balances related to Customers Bank as of September 30, 2024 and December 31, 2023 were zero and $1.3 million, respectively. The Accounts payable and accrued liabilities balances related to Customers Bank as of September 30, 2024 and December 31, 2023 were $0.8 million and zero, respectively.

The Company recognized $1.9 million and $6.4 million in revenues from Customers Bank for the three and nine months ended September 30, 2024, respectively. Of these amounts, $0.4 million and $1.2 million are paid directly by MasterCard or individual account holders to the Company for the three and nine months ended September 30, 2024, respectively. These amounts are presented on the unaudited Consolidated Statements of Loss in Total operating revenue.

The Company recognized $13.6 million and $37.8 million in revenues from Customers Bank for the three and nine months ended September 30, 2023, respectively. Of these amounts, $5.3 million and $15.2 million are paid directly by MasterCard or individual account holders to the Company for the three and nine months ended September 30, 2023, respectively. These amounts are presented on the unaudited Consolidated Statements of Loss in Total operating revenue.

The Company incurred zero expenses from Customers Bank for the three and nine months ended September 30, 2024 and 2023, respectively.

First Carolina Bank

Deposit Servicing Agreement for Higher Education

On March 16, 2023, the Company entered into a Deposit Servicing Agreement (the “FCB Deposit Servicing Agreement”) with a new partner bank, First Carolina Bank, a North Carolina chartered, non-member community bank (“FCB” or “Parent”), which provides that FCB will establish and maintain deposit accounts and other banking services in connection with customized products and services offered by the Company to its Higher Education institution clients, and the Company will provide certain other related services in connection with the accounts. FCB retains any and all revenue generated from the funds held in the deposit accounts, and in exchange, pays the Company a deposit servicing fee that is based on a calculation provided by the terms in the FCB Deposit Servicing Agreement, based on average monthly deposit balances and subject to certain contractual adjustments, and a monthly interchange fee equal to all debit card interchange revenues on the demand deposit accounts, minus an interchange share percentage.

On August 20, 2023, the Company and FCB entered into an amendment to the FCB Deposit Servicing Agreement (the “FCB DPSA First Amendment”). The FCB DPSA First Amendment, among other things, (i) extends the initial term from four years to five years after the effective date, (ii) provides that FCB will work with the Company and Customers Bank on the timely transfer of existing student depositor accounts on or before the effective date, and as agreed to by the parties, and (iii) amends the effective date to be the date on which FCB takes on deposits from the existing student depositor accounts.

The FCB Deposit Servicing Agreement and Amendment thereof may be terminated early by either party upon material breach, by either party upon notice that the continuation of the Depositor Program violates Applicable Law or Network Rules (as defined in the FCB Deposit Servicing Agreement); by FCB if a regulatory authority determined that the performance of its obligations under the FCB Deposit Servicing Agreement was not consistent with safe and sound banking practices; by either party upon the other party commencing or being subject to certain bankruptcy proceedings; and by the Company should it experience a change in control on or after March 16, 2026.

On December 1, 2023, the Company and FCB completed the transfer of existing student depositor accounts from Customers Bank to FCB.

Positions with FCB are presented on our unaudited Consolidated Balance Sheets in Accounts receivable, net, Deferred revenue, current, and Accounts payable and accrued liabilities. The Accounts receivable balance related to FCB as of September 30, 2024 and December 31, 2023 was $1.3 million and $0.2 million, respectively. The Deferred revenue balance related to FCB as of September 30, 2024 and December 31, 2023 was $7.9 million and $7.4 million, respectively. The Accounts payable and accrued liabilities balance related to FCB as of September 30, 2024 and December 31, 2023 was zero, respectively.

The Company recognized $11.0 million and $33.2 million in net revenues from FCB for the three and nine months ended September 30, 2024, respectively. Of these amounts, $4.3 million and $9.9 million are paid directly by MasterCard or individual account holders to the Company for the three and nine months ended September 30, 2024, respectively. These amounts are presented on the unaudited Consolidated Statements of Loss in Total operating revenue.

During the three months ended September 30, 2024, the Company recorded a one-time loss consistent with the terms of the Deposit Servicing Agreements associated with the misapplication of funds between Partner Banks. During the three and nine month ended September 30, 2024, the Company credited a Partner Bank $1.0 million for interest lost on cash deposits that is considered infrequent and unusual and is included in the unaudited Consolidated Statements of Loss in Other loss.

NOTE 13 — RESTRUCTURING ACTIVITIES

On January 26, 2023, and in connection with our previously announced near-term strategy to focus on being an innovative, efficient, risk oriented fintech with a partner bank model, the Company committed to a targeted Profit Enhancement Plan (the “PEP”) that is intended to reduce operating costs, improve operating margins, improve operating cash flow, and continue advancing the Company’s ongoing commitment to profitable growth and continued innovation, and direct the Company’s resources toward its best opportunities.

The Company completed a workforce reduction of approximately 9 and 60 employees during the nine months ended September 30, 2024 and 2023, respectively. The Company’s workforce reduction expenses, consisting of severance and other termination benefits for the three and nine months ended September 30, 2024 and 2023, totaled less than $0.1 million and $0.2 million, respectively, and totaled zero and $1.1 million for the three and nine months ended September 30, 2023, and are recorded in Restructuring, merger, and acquisition related expenses on the unaudited Consolidated Statements of Income Loss. $0.2 million of these expenses were incurred but not paid at September 30, 2024 and are included in Accounts payable and accrued liabilities on the unaudited Consolidated Balance Sheets.

NOTE 14 — SUBSEQUENT EVENTS

On October 24, 2024, the Company entered into an Agreement and Plan of Merger (“the Merger Agreement”) with Parent, and Double Eagle Acquisition Corp, Inc. (Merger Sub”), a Delaware corporation and a wholly owned subsidiary of Parent (Merger Sub”). The Merger Agreement has been unanimously approved by the Board. Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), each share of common stock, par value $0.0001 per share, of the Company (collectively, “Shares”) issued and outstanding immediately prior to the Effective Time (other than Shares (i) held by the Company as treasury shares or (ii) held by any person who properly exercises appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to $5.00 per share, without interest and subject to applicable withholding taxes.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our Management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our interim unaudited consolidated financial statements and the related notes included in Item 1 “Unaudited Consolidated Financial Statements” of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023. Historical results and percentage relationships are not necessarily indicative of operating results for future periods. Unless the context otherwise requires, for purposes of this Management’s Discussion and Analysis, references to the “Company,” “we,” and “our” refer to the business and operations of BM Technologies, Inc. (“BMTX”) and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including, without limitation, statements under the heading Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements generally, but not always, can be identified by the use of forward-looking terminology, including the words “believes”, “estimates”, “anticipates”, “expects”, “intends”, “plans”, “may”, “will”, “potential”, “projects”, “predicts”, “continue”, or “should”, or, in each case, their negative or other variations or comparable terminology. These forward-looking statements reflect our current views with respect to, among other things, statements relating to the Company’s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives, the benefits, cost, and synergies of completed acquisitions or dispositions, and the timing, benefits, costs, and synergies of future acquisitions, dispositions, and other growth opportunities. There can be no assurance that actual results will not materially differ from expectations. These statements are based on Management’s current expectations, but actual results may differ materially due to various factors. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to (1) difficulty attracting and retaining highly-effective employees; (2) our ability to successfully execute our business plan; (3) changes in consumer preferences, spending, and borrowing habits, and demand for our products and services; (4) general economic conditions, especially in the communities and markets in which we conduct our business; (5) market risk, including interest rate and liquidity risk; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, network breaches, and maintenance of internal controls, including remediating any material weaknesses in our internal control over financial reporting; (7) increased competition, including competition from other bank and non-bank financial institutions; (8) changes in regulations, laws, taxes, government policies, monetary policies, and accounting policies; (9) regulatory enforcement actions and adverse legal actions; ; (10) the risk that the proposed merger transaction may not be completed in a timely manner or at all; (11) the failure to receive, on a timely basis or otherwise, the required approvals of the proposed merger transaction by the Company’s stockholders; (12) the possibility that any or all of the various conditions to the consummation of the proposed merger transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (13) the possibility that competing offers or acquisition proposals for the Company may be made; (14) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed merger transaction, including in circumstances which would require the Company to pay a termination fee; (15) the effect of the announcement or pendency of the proposed merger transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; (16) risks related to the proposed merger transaction diverting management’s attention from the Company’s ongoing business operations; (17) the amount of costs, fees and expenses related to the proposed merger transaction; (18) the risk that the Company’s stock price may decline significantly if the merger is not consummated; (19) the risk of shareholder litigation in connection with the proposed merger transaction, including resulting expense or delay; and (20) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations, including, those factors summarized in the section titled “Summary of Principal Risk Factors”, which we encourage you to read. These risks and others described under “Risk Factors” may not be exhaustive. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no

obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, and liquidity, and development in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We caution readers that the foregoing list of factors is not exclusive, is not necessarily in order of importance, and readers should not place undue reliance on forward-looking statements. Additional factors that may cause actual results to differ materially from those contemplated by any forward-looking statements may also be found in our 2023 Annual Report on Form 10-K (including the “Risk Factor” section of that report), Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC and available at the SEC’s website at http://www.sec.gov. We do not intend to and, except as required by law, hereby disclaim any obligation to update or revise any forward-looking statement contained in this Quarterly Report on Form 10-Q, which speaks only as of the date of its filing with the SEC, whether as a result of new information, future events, or otherwise.

BUSINESS OVERVIEW

BM Technologies, Inc. (“BMTX” or the “Company”) (formerly known as BankMobile) provides state-of-the-art high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels.

BankMobile Technologies, Inc. (“BankMobile”) was incorporated in May 2016 as a wholly-owned subsidiary of Customers Bank. On August 6, 2020, the Company entered into an Agreement and Plan of Merger, by and among Megalith Financial Acquisition Corporation, a special purpose acquisition company (“Megalith”), incorporated in Delaware in November 2017, MFAC Merger Sub Inc., a wholly-owned subsidiary of Megalith, BankMobile Technologies, Inc., and Customers Bank, the sole stockholder of BankMobile. On January 4, 2021, BankMobile became an independent company after the completion of a divestiture transaction and was rebranded BM Technologies, Inc.

BMTX’s fintech business model leverages Banking-as-a-Service (“BaaS”) partners’ and University partners’ existing customer bases to achieve high volume, low-cost customer acquisition in its Higher Education and BaaS businesses. BMTX has four primary revenue sources: interchange and card revenue, servicing fees, account fees, and university fees. The majority of revenues are driven by customer activity (deposits, spend transactions, etc.) and may be paid or passed through by our Partner Banks, universities or paid directly by customers.

BMTX facilitates deposits and banking services between a customer and our partner banks, Customers Bank and First Carolina Bank, (the “Partner Banks”), which are related parties and are Federal Deposit Insurance Corporation (“FDIC”) insured bank. The Partner Banks hold the FDIC insured deposits that BMTX sources and services and are the issuing bank on BMTX’s debit cards. The Partner Banks pay the Company a servicing fee for the deposits generated and passes through interchange income earned from transactions on debit cards and transaction-based account fees.

BMTX is not a bank, does not hold a bank charter, and does not provide banking services, and as a result, it is not subject to direct banking regulation, except as a service provider to our partner banks. BMTX is also subject to the regulations of the ED, due to our student disbursements business, and is periodically examined by it. BMTX’s contracts with most of its Higher Education institution clients require it to comply with numerous laws and regulations, including, where applicable, regulations promulgated by the ED regarding the handling of student financial aid funds received by institutions on behalf of their students under Title IV of the Higher Education Act of 1965; the Family Educational Rights and Privacy Act of 1995; the Electronic Fund Transfer Act and Regulation E; the USA PATRIOT Act and related anti-money laundering requirements; and certain federal rules regarding safeguarding personal information, including rules implementing the privacy provisions of the Gramm-Leach-Bliley Act. Other products and services offered by BMTX may also be subject to other federal and state laws and regulations.

During the second quarter of 2024, the Company made significant investment in the launch of its NextGen technology platform which for the first time allows the Company to market targeted products and services to its Vibe customer base. The implementation of NextGen resulted in significantly higher expenses in Q2 related to technology costs from having to run two separate platforms for a period of time and significantly higher contractor and customer service-related costs from higher volumes and are not expected to continue.

MERGER AGREEMENT

On October 24, 2024, the Company entered into the Merger Agreement with Parent and Merger Sub, pursuant to which, subject to the terms and conditions thereof, Merger Sub will merge with and into the Company (the “Merger”) with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent. The Merger Agreement has been unanimously approved by the Board.

Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), each Share issued and outstanding immediately prior to the Effective Time (other than Shares (i) held by the Company as treasury shares or (ii) held by any person who properly exercises appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to $5.00 per share, without interest (the “Merger Consideration”), subject to any withholding of taxes required by applicable law.

Each warrant of the Company to purchase Shares that is outstanding as of the Effective Time will be treated in accordance with the applicable terms of the Merger Agreement and the Warrant Agreement.

In addition, pursuant to the Merger Agreement, at the Effective Time (except for certain excluded Company restricted stock units held by certain members of the Company’s management, which, subject to certain terms and conditions, will be cancelled for no consideration), each Company restricted stock unit that is outstanding immediately prior to the Effective Time, whether or not vested, will be automatically canceled and converted into the right to receive an amount in cash equal to the product of (i) the Merger Consideration multiplied by (ii) the total number of Shares subject to such Company restricted stock unit.

The obligation of the Company, Parent and Merger Sub to consummate the Merger is subject to the satisfaction or waiver of certain closing conditions, including, among others, (i) the adoption of the Merger Agreement by the affirmative vote of the holders of not less than a majority of the outstanding Shares, (ii) the absence of any injunction, order, or decree that enjoins, makes illegal or otherwise prohibits the consummation of the Merger and (iii) the receipt of the Requisite Regulatory Approvals (as defined in the Merger Agreement).

Additional conditions to the obligations of Parent and Merger Sub to consummate the Merger include, among others, (i) the accuracy of the Company’s representations and warranties contained in the Merger Agreement (subject, in certain cases, to Company Material Adverse Effect (as defined in the Merger Agreement) and materiality qualifiers), (ii) the Company’s performance of its obligations under the Merger Agreement in all material respects, (iii) the absence, since the date of the Merger Agreement, of any effect, change, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect, (iv) no Requisite Regulatory Approval contains, have resulted in or would reasonably be expected to result in, the imposition of a Burdensome Condition (as defined in the Merger Agreement) and (v) holders of not more than 10% of the outstanding Shares have demanded appraisal for such Shares.

The Merger Agreement contains certain termination rights for the Company and Parent, including, among others, the right of (1) the Company or Parent (on behalf of itself and Merger Sub) to terminate the Merger Agreement if, subject to certain terms and conditions set forth in the Merger Agreement, (i) the Merger is not consummated by January 31, 2025, which date will be automatically extended for three months for purposes of obtaining the Requisite Regulatory Approvals, (ii) a Legal Restraint (as defined in the Merger Agreement) permanently restraining, enjoining, making illegal or otherwise prohibiting consummation of the transactions contemplated by the Merger Agreement shall become final and non-appealable, (iii) the stockholders meeting of the Company was concluded but the Required Stockholder Approval has not been obtained, or (iv) any governmental authority has denied a Requisite Regulatory Approval and such denial has become final or has advised either party that it will not grant a Requisite Regulatory Approval, or any governmental authority has requested that either party withdraw and not be permitted to resubmit within 60 days following such withdrawal; (2) subject to certain conditions set forth in the Merger Agreement, the Company to terminate the Merger Agreement in order to enter into a definitive acquisition agreement providing for a Superior Proposal (as defined in the Merger Agreement) and (3) Parent to terminate the Merger Agreement if the Board changes its recommendation with respect to the Merger Agreement or if the Company has breached the covenants to hold the stockholders meeting to obtain the Required Stockholder Approval in any material respects or the “no-shop” covenants.

Upon termination of the Merger Agreement under specified circumstances, including, among others, by the Company in order to accept a Superior Proposal and enter into a definitive acquisition agreement providing for the consummation of such

proposal or by Parent as a result of the Board changing its recommendation with respect to the Merger, the Company would be required to pay Parent a termination fee of $2,750,000. Additionally, upon termination of the Merger Agreement under specified circumstances relating to the failure to obtain the Requisite Regulatory Approval, Parent will be required to reimburse the Company for certain transaction expenses up to $2,750,000.

Following the effective time of the Merger, the Company’s common stock and public warrants to purchase common stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

For information regarding our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There have been no material changes to the critical accounting policies and estimates previously disclosed in that report.

NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted as September 30, 2024

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”), which removed references to various FASB Concepts Statements and updates technical corrections such as conforming amendments, clarification to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The new guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024.

RESULTS OF OPERATIONS

The following discussion of our results of operations should be read in conjunction with our interim unaudited consolidated financial statements, including the accompanying notes.

The following summarized tables set forth our operating results for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Change		% Change
(dollars in thousands, except per common share data)	2024		2023
Operating revenues	$	14,077	$	14,381	$	(304)	(2)	%
Operating expenses	18,166		18,766		(600)		(3)	%
Loss from operations	(4,089)		(4,385)		296		(7)	%
Gain on fair value of private warrant liability	54		433		(379)		(88)	%
Other loss	951		—		951		100	%
Loss before income tax expense	(4,986)		(3,952)		(1,034)		26	%
Income tax expense	9		—		9		NM
Net loss	$	(4,995)	$	(3,952)	$	(1,043)	26	%

Basic loss per common share	$	(0.42)	$	(0.34)	$	(0.08)	24	%
Diluted loss per common share	$	(0.42)	$	(0.34)	$	(0.08)	24	%

NM - not meaningful

For the three months ended September 30, 2024, Net loss increased $1.0 million as compared to the three months ended September 30, 2023, resulting in a Net loss of $5.0 million, which included a $0.4 million increased loss from the change in the fair value of the private warrants. Loss from operations for the three months ended September 30, 2024 decreased by $0.3 million as compared to the three months ended September 30, 2023. Operating revenues decreased by $0.3 million, or 2%, and Operating expenses decreased by $0.6 million, or 3%. For the three months ended September 30, 2024, the Company credited a Partner Bank $1.0 million for interest lost on cash deposits that is considered infrequent and unusual and is included in the unaudited Consolidated Statements of Loss in Other Loss. Changes in operating revenues and expenses are discussed in greater detail below. Basic and diluted loss per common share, which decreased to $(0.42), are both driven by the impact of total Net loss in the current year.


	Nine Months Ended September 30,				Change		% Change
(dollars in thousands, except per common share data)	2024		2023
Operating revenues	$	42,799	$	40,393	$	2,406	6	%
Operating expenses	50,902		56,194		(5,292)		(9)	%
Loss from operations	(8,103)		(15,801)		7,698		(49)	%
Gain on fair value of private warrant liability	—		2,449		(2,449)		(100)	%
Other loss	951		—		951		100	%
Loss before income tax expense	(9,054)		(13,352)		4,298		(32)	%
Income tax expense	24		16		8		50	%
Net loss	$	(9,078)	$	(13,368)	$	4,290	(32)	%

Basic loss per common share	$	(0.77)	$	(1.16)	$	0.39	(34)	%
Diluted loss per common share	$	(0.77)	$	(1.16)	$	0.39	(34)	%

NM - not meaningful

For the nine months ended September 30, 2024, Net loss decreased $4.3 million as compared to the nine months ended September 30, 2023, resulting in a Net loss of $9.1 million, which included a $2.4 million decrease in the Gain on fair value of private warrant liability as compared to the nine months ended September 30, 2023. Loss from operations for the nine months ended September 30, 2024 decreased $7.7 million, as compared to the nine months ended September 30, 2023, resulting in a Loss from operations of $8.1 million. Operating revenues increased by $2.4 million, or 6%, and Operating expenses, which include one-time costs of $1.6 million related to the implementation of NextGen, decreased by $5.3 million, or 9%. For the nine months ended September 30, 2024, the Company credited a Partner Bank $1.0 million for interest lost on cash deposits that is considered infrequent and unusual and is included in the unaudited Consolidated Statements of Loss in Other loss. Changes in operating revenues and expenses are discussed in greater detail below. Basic and diluted earnings (loss) per common share, which increased to $(0.77), are both driven by the impact of the total net income in the current year.

Operating Revenues


	Three Months Ended September 30,						% Change
(dollars in thousands)	2024		2023		Change
Interchange and card revenue	$	2,990	$	2,292	$	698	30	%
Servicing fees	7,557		8,658		(1,101)		(13)	%
Account fees	1,680		1,931		(251)		(13)	%
University fees	1,712		1,412		300		21	%
Other revenue	138		88		50		57	%
Total operating revenues	$	14,077	$	14,381	$	(304)	(2)	%

Total Operating revenues decreased $0.3 million, or 2%, in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. This decrease is primarily attributable to a $1.1 million, or 13%, decrease in Servicing fees, driven almost exclusively by lower average deposit balances in the BaaS business, offset by a $0.7 million, or 30%, increase in Interchange and card revenue driven primarily by the change to a partner bank with higher Durbin exempt interchange rates for the Higher Education business and higher average deposits.


	Nine Months Ended September 30,						% Change
(dollars in thousands)	2024		2023		Change
Interchange and card revenue	$	8,689	$	6,716	$	1,973	29	%
Servicing fees	23,397		22,990		407		2	%
Account fees	5,580		5,981		(401)		(7)	%
University fees	4,793		4,291		502		12	%
Other revenue	340		415		(75)		(18)	%
Total operating revenues	$	42,799	$	40,393	$	2,406	6	%

Total Operating revenues increased $2.4 million, or 6%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This increase is primarily attributable to a a $2.0 million, or 29%, increase in Interchange and card revenue driven primarily by the change to a partner bank with higher Durbin exempt interchange rates for the Higher Education business. Additionally there was a $0.4 million, or 2%, increase in Servicing fees, driven by a higher Fed Funds rate and higher deposit yields beginning in the second quarter of 2023 under the new deposit processing services agreement, offset by lower average deposit balances in the BaaS business.

Operating Expenses


	Three Months Ended September 30,						% Change
(dollars in thousands)	2024		2023		Change
Technology, communication, and processing	$	6,168	$	7,826	$	(1,658)	(21)	%
Salaries and employee benefits	5,590		4,773		817		17	%
Professional services	2,840		2,948		(108)		(4)	%
Provision for operating losses	2,650		2,138		512		24	%
Occupancy	11		9		2		22	%
Customer related supplies	242		227		15		7	%
Advertising and promotion	117		128		(11)		(9)	%
Restructuring, merger, and acquisition related expenses	58		—		58		NM

Other expense	490		717		(227)		(32)	%
Total operating expenses	$	18,166	$	18,766	$	(600)	(3)	%

NM refers to changes greater than 150%.

Total Operating expenses decreased $0.6 million, or 3%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. This decrease is primarily attributable to a $1.7 million, or 21%, decrease in Technology, communication, and processing due to lower amortization costs as a result of internally developed software that was fully amortized prior to the three months ended September 30, 2024 as well as lower overall technology costs. This decrease was offset by a $0.8 million, or 17%, increase in Salaries and employee benefits driven by an increase in incentive compensation, and a $0.5 million or 24% increase in provision for operating losses due to increase in Reg E fraud losses related to unauthorized card transactions.


	Nine Months Ended September 30,						% Change
(dollars in thousands)	2024		2023		Change
Technology, communication, and processing	$	15,176	$	20,949	$	(5,773)	(28)	%
Salaries and employee benefits	15,697		17,337		(1,640)		(9)	%
Professional services	8,682		7,926		756		10	%
Provision for operating losses	6,827		5,628		1,199		21	%
Occupancy	37		33		4		12	%
Customer related supplies	714		677		37		5	%
Advertising and promotion	292		371		(79)		(21)	%
Restructuring, merger, and acquisition related expenses	208		993		(785)		(79)	%
NextGen implementation costs	1,560		—		1,560		NM
Other expense	1,709		2,280		(571)		(25)	%
Total operating expenses	$	50,902	$	56,194	$	(5,292)	(9)	%

NM refers to changes greater than 150%.

Total Operating expenses, including one-time costs of $1.6 million related to the implementation of NextGen, decreased $5.3 million, or 9%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This decrease is primarily attributable to a $5.8 million, or 28%, decrease in Technology, communication, and processing due to lower amortization costs as a result of internally developed software that was fully amortized prior to the nine months ended September 30, 2024 as well as lower overall technology cost, a $1.6 million, or 9%, decrease in Salaries and employee benefits which included a $1.3 million reduction in 2024 attributable to the gain from cancellation of the 2021 PBRSUs to certain executives and subsequent issuance of new PBRSUs, and lower salary and benefit costs from lower headcount and the effect of the PEP initiatives, and a $0.8 million of decreased Restructuring, merger, and acquisition related

expenses incurred in order to execute the PEP cost savings initiatives in 2023, partially offset by merger related costs. These decreases were offset in part by the $1.6 million increase in costs associated with the implementation of NextGen that were primarily a result of higher technology and professional services costs required to run two platforms during the implementation phase, a $1.2 million, or 21%, increase in Provision for operating losses due to increase in Reg E fraud related to unauthorized card transactions. and a $0.8 million, or 10%, increase in Professional services which included higher third-party technical and professional contractor charges.

Income Tax Expense

The Company’s effective tax rate was (0.2)% and (0.3)% for the three and nine months ended September 30, 2024, respectively. The Company’s effective tax rate was zero and (0.1)% for the three and nine months ended September 30, 2023, respectively. Rates for the periods are driven by required state minimum tax payments. The Company was in a taxable loss position for the three and nine months ended September 30, 2024 and the three and nine months ended September 30, 2023, respectively. The Company has determined it is more likely than not that the future benefit of deferred tax assets will not be realized and has established a full valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES

Our Cash and cash equivalents consist of non-interest bearing, highly-liquid demand deposits. We had $11.2 million of Cash and cash equivalents at September 30, 2024 as compared to $14.3 million of Cash and cash equivalents at December 31, 2023.

We finance our operations through cash flows provided primarily by operating activities. We intend to fund our ongoing operating activities with our existing cash and expected cash flows from future operations. However, should additional liquidity be necessary, the Company could consider equity or debt financing, but there are no assurances that additional capital would be available or on terms that are acceptable to us.

The table below summarizes our cash flows for the periods indicated:


	Nine Months Ended September 30,
(dollars in thousands)	2024		2023		Change
Net cash provided by (used in) operating activities	$	1,844	$	(5,530)	$	7,374
Net cash used in investing activities	(4,677)		(4,338)		(339)
Net cash used in financing activities	(231)		(2,438)		2,207
Net decrease in cash and cash equivalents	$	(3,064)	$	(12,306)	$	9,242

Cash flows provided by (used in) operating activities

The increase in net cash provided by operating activities is driven primarily by a $4.3 million increase in cash Net income, a $0.2 million increased source of cash from Prepaid and other assets, a $4.4 million increased source of cash from

Accounts receivable, and $2.6 million increased source of cash from Deferred revenue, offset by a $4.9 million decrease in Amortization of developed software and a $1.7 million increased use of cash for Share-based compensation expense.

Cash flows used in investing activities

Cash used in investing activities increased $0.3 million in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to increased development of internal use software offset by a decrease in purchases of premises and equipment.

Cash flows used in financing activities

Cash used in financing activities decreased $2.2 million in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to larger tax payments related to the net settlement of the January 4, 2021 share-based compensation awards in 2023.

ITEM 3. QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Credit Risk

We are exposed to various economic risks in the normal course of business including concentration of credit risk. Potential concentration of credit risk consists primarily of accounts receivable from Customers Bank, BaaS partner, MasterCard, and Higher Education institution clients. Historically, we have not experienced any material losses related to these balances and believe that there is minimal risk of expected future losses. However, there can be no assurance that there will not be losses on these balances.

At September 30, 2024 and December 31, 2023, Customers Bank accounted for 0% and 16% of our total Accounts receivable, net, respectively. At September 30, 2024 and December 31, 2023, FCB accounted for 27% and 2% of our total Accounts receivable, net, respectively. At September 30, 2024 and December 31, 2023, a BaaS partner accounted for 42% and 48% of our total Accounts receivable, net, respectively. At September 30, 2024 and December 31, 2023, MasterCard accounted for 13% and 21% of our total Accounts receivable, net, respectively.

Financial instruments that potentially subject the Company to credit risk consist principally of cash held in the Company's operating account. Cash is maintained in accounts with Customers Bank, which, at times may exceed the FDIC coverage limit of $250,000. At September 30, 2024, the Company has not experienced losses on these cash accounts and Management believes, based upon the quality of Customers Bank, that the credit risk with regard to these deposits is not significant.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of Management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e)) and 15d-15(e), as of September 30, 2024.

We identified a material weakness in our internal control over financial reporting, as described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2023, which were not fully remedied as of September 30, 2024. A material weakness is a deficiency or combination of deficiencies, in internal control over financial reporting, such that there is reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Accordingly, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

(b) Changes in Internal Control over Financial Reporting

Except as set forth in the following sentences, no change in our internal control over financial reporting (as that term is defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) occurred during the fiscal quarter ended September 30, 2024 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As of December 31, 2023, we had concluded that our internal control over financial reporting was not effective. During the first half of 2024, we

have been implementing and will continue to implement changes that are both organizational and process-focused to improve the control environment of the Company. We anticipate the actions to be taken and resulting process improvements to generally strengthen our internal control over financial reporting, and over time, will address the material weaknesses noted as of December 31, 2023. These remedial measures were considered changes to our internal control environment which had a material effect on internal control over financial reporting. The Company continues to work on the remediation of these material weaknesses and expects them to be addressed by the end of the first quarter of 2025.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company may be involved from time to time in various legal and administrative proceedings and litigation arising in the ordinary course of business. We are not currently engaged in any legal proceedings that are expected to have a material effect on our financial position, cash flows or results of operations.

ITEM 1A. RISK FACTORS

There have been no material changes to the Risk Factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, except as noted below:

RISKS RELATED TO THE PROPOSED MERGER

The proposed Merger is subject to approval of our stockholders as well as the satisfaction of other closing conditions, including government consents and approvals, some or all of which may not be satisfied or completed within the expected timeframe, if at all.

Completion of the Merger is subject to a number of closing conditions, including the adoption of the Merger Agreement by the holders of a majority of the voting power represented by the outstanding shares of our common stock that are entitled to vote thereon and the receipt of required regulatory approvals, consents or clearances with respect to the Merger. We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the Merger. Many of the conditions to completion of the Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if applicable). Any adverse consequence of the pending Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

Each party’s obligation to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the Merger Agreement as of the closing of the Merger, including, among others, with respect to us, covenants to conduct our business in the ordinary course of business and to refrain from taking certain types of actions without Parent’s consent and to not engage in certain kinds of material transactions prior to closing without Parent’s consent. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, among others, in connection with a change in the recommendation of our Board to enter into an agreement for a Superior Proposal. As a result, we cannot assure you that the Merger will be completed, even if our stockholders approve the Merger, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected timeframe.

We may not complete the proposed Merger within the timeframe we anticipate or at all, which could have an adverse effect on our business, financial results and/or operations.

The proposed Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control. If the Merger is not completed for any reason, including as a result of our stockholders failing to adopt the Merger Agreement, our stockholders will not receive any payment for their shares of our common stock in connection with the Merger. Instead, we will remain a public company, our common stock will continue to be listed and traded on NYSE American and registered under the Exchange Act of 1934, as amended, and we will be required to continue to file periodic reports with the SEC. Moreover, our ongoing business may be materially adversely affected, and we would be subject to a number of risks, including the following:

•we may experience negative reactions from the financial markets, including negative impacts on our stock price, and it is uncertain when, if ever, the price of the shares would return to the prices at which the shares currently trade;

•we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting employees, customers, partners, suppliers and others with whom we do business;

•we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisory, printing and other professional services fees, which may relate to activities that we would not have undertaken other than in connection with the Merger;

•we may be required to pay a cash termination fee to Parent, as required under the Merger Agreement under certain circumstances;

•while the Merger Agreement is in effect, we are subject to restrictions on our business activities, including, among other things, restrictions on our ability to engage in certain kinds of material transactions, which could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may as a result materially adversely affect our business, results of operations and financial condition;

•matters relating to the Merger require substantial commitments of time and resources by our management, which could result in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to us; and

•we may commit significant time and resources to defending against litigation related to the Merger.

If the Merger is not consummated, the risks described above may materialize, and they may have a material adverse effect on our business operations, financial results and stock price, particularly to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed.

We will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with customers and other third-party business partners.

Our efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our results of operation and our business. Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Merger is pending because employees may experience uncertainty about their roles following the Merger. As mentioned above, a substantial amount of our management’s and employees’ attention is being directed toward the completion of the Merger and thus is being diverted from our day-to-day operations. Uncertainty as to our future could adversely affect our business and our relationship with customers and potential customers. For example, customers, suppliers and other third parties may defer decisions concerning working with us, or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our revenue, earnings and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

The Merger Agreement contains provisions that could discourage a potential competing acquirer of the Company or could result in a competing acquisition proposal being at a lower price than it might otherwise be.

The Merger Agreement contains provisions that, subject to limited exceptions, restrict the Company’s ability to solicit or negotiate any alternative acquisition proposal. With respect to any written, bona fide acquisition proposal that the Company receives, Parent generally has an opportunity to offer to modify the terms of the Merger Agreement in response to such proposal before the Board may withdraw or modify its recommendation to stockholders in response to such acquisition proposal or terminate the Merger Agreement to enter into a definitive agreement with respect to such acquisition proposal. Under the terms of the Merger Agreement, we may be required to pay a termination fee of $2.75 million to Parent under specified terms and conditions, including, among others, (i) in the event Parent terminates the Merger Agreement before receipt of our stockholders’ approval due to a change in recommendation by our Board, (ii) in the event we terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal, or (iii) under certain circumstances, in the event either we or Parent terminates the Merger Agreement because the Merger has not been consummated by January 31, 2025 (as such date may be extended in accordance with the Merger Agreement) and we subsequently enter into a definitive agreement with respect to, or consummate, an alternative acquisition.

These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of the Company’s business from considering or making a competing acquisition proposal, even if the potential competing acquirer was prepared to pay consideration with a higher per share cash value than the per share value proposed to be received or realized in the Merger, or might cause a potential competing acquirer to propose to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the Merger Agreement.

If the Merger Agreement is terminated, we may, under certain circumstances, be obligated to pay a termination fee to Parent. This could require us to use available cash that would have otherwise been available for other uses.

If the Merger is not completed, in certain circumstances, we could be required to pay a termination fee of $2.75 million to Parent. If the Merger Agreement is terminated under such circumstances, the termination fee we may be required to pay under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes or other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business, results of operations or financial condition, which in turn would materially and adversely affect the price of our common stock.

We have incurred, and will continue to incur, direct and indirect costs as a result of the Merger.

We have incurred, and will continue to incur, costs and expenses, including fees for professional services and other transaction costs in connection with the Merger, for which we will have received little or no benefit if the Merger is not completed. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses. Many of these fees and costs will be payable by us even if the Merger is not completed and may relate to activities that we would not have undertaken other than to complete the Merger.

Our directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of our other stockholders.

Our directors and executive officers have financial interests in the Merger that may be different from, or in addition to, the interests of our other stockholders. These interests may include:

•the treatment of Company long-term incentive awards;

•severance entitlements and other benefits in the case of certain qualifying terminations under the terms of an individual employment agreement;

•annual bonuses for 2024 for the benefit of certain Company employees;

•continued indemnification and insurance coverage under the Merger Agreement, the Company’s organizational documents and indemnification agreements the Company has entered into with its directors and executive officers.

Litigation challenging the Merger Agreement may prevent the Merger from being consummated within the expected timeframe or at all.

Lawsuits may be filed against us, our Board or other parties to the Merger Agreement, challenging our acquisition by Parent or making other claims in connection therewith. Such lawsuits may be brought by our purported stockholders and may seek, among other things, to enjoin consummation of the Merger. One of the conditions to the consummation of the Merger is that the consummation of the Merger is not restrained, made illegal, enjoined or prohibited by any order or legal or regulatory restraint or prohibition of a court of competent jurisdiction or any governmental entity. As such, if the plaintiffs in such potential lawsuits are successful in obtaining an injunction prohibiting the defendants from completing the Merger on the agreed upon terms, then such injunction may prevent the Merger from becoming effective, or from becoming effective within the expected timeframe.

If the Merger is completed, our stockholders will forgo the opportunity to benefit from potential future appreciation in the value of the Company.

The Merger Agreement provides for the stockholders of record of the Company’s common stock to receive cash consideration of $5.00 per share of Company common stock, without interest and subject to applicable withholding taxes, upon the closing of the transactions contemplated by the Merger Agreement. If the transaction is consummated, our stockholders will no longer hold interests in the Company and, therefore, will not be entitled to benefit from any potential future appreciation in the value of the Company. In the absence of the transactions contemplated by the Merger Agreement, we could have various opportunities to enhance the Company’s value, including, but not limited to, entering into a transaction that values the shares of our common stock higher than the value provided for in the Merger Agreement. Therefore, if the Merger is completed, our stockholders will forgo potential future appreciation, if any, in the value of the Company and the opportunity to participate in any other potential transactions that may have resulted in a higher price per share than the price to be paid in the transaction contemplated by the Merger Agreement.

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

(a) Share repurchases: None

(b) Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements: During the three months ended September 30, 2024, none of our officers or directors (as defined in Rule 16a-1(f) of the Securities and Exchange act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule10b5-1 trading arrangement (as such terms are defined in Item 408 or Regulation S-K of the Securities Act of 1933).

ITEM 6. EXHIBITS

See exhibit index below for a list of the documents filed or furnished as part of this Quarterly Report on Form 10-Q:


Exhibit No.						Description
2.1						Agreement and Plan of Merger, dated October 24, 2024, by and among First Carolina Bank, Double Eagle Acquisition Corp, Inc and the Company (incorporated by reference to the Company’s Form 8-K, filed with the SEC on October 25, 2024).
3.1						Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Form 8-K, filed with the SEC on January 8, 2021).
3.2						Amended and Restated Bylaws of the Company (incorporated by reference to the Company’s Form 8-K, filed with the SEC on January 8, 2021).
31.1						Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).*
31.2						Certification of the Principal Financial and Accounting Officer required by Rule 13a-14(a) or Rule 15d-14(a).*
32						Certification under 18 U.S.C. 1350.*
101						Interactive data files for BM Technologies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL: (i) the Consolidated Balance Sheets (unaudited); (ii) the Consolidated Statements of Income (Loss) (unaudited); (iii) the Consolidated Statements of Changes in Shareholders’ Equity (unaudited); (iv) the Consolidated Statements of Cash Flows (unaudited); and (v) the Notes to Unaudited Consolidated Financial Statements.*
104						The cover page from BM Technologies, Inc.’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2024 (formatted in Inline XBRL and included in Exhibit 101).*
* Filed or furnished herewith.
† Certain confidential information contained in this agreement has been omitted because it is private or confidential and is not material.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


November 14, 2024	BM Technologies, Inc.
	(Registrant)

	By:	/s/ Luvleen Sidhu
	Name:	Luvleen Sidhu
	Title:	Chief Executive Officer
		(Principal Executive Officer)

November 14, 2024	BM Technologies, Inc.
	(Registrant)

	By:	/s/ Ajay Asija
	Name:	Ajay Asija
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION

I, Luvleen Sidhu, certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of BM Technologies, Inc.,

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



/s/ Luvleen Sidhu
Luvleen Sidhu
Chief Executive Officer
(Principal Executive Officer)
Date: November 14, 2024

Exhibit 31.2

CERTIFICATION

I, Ajay Asija, certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of BM Technologies, Inc.,

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



/s/ Ajay Asija
Ajay Asija
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: November 14, 2024

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of BM Technologies, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Luvleen Sidhu, Chief Executive Officer of the Company and Ajay Asija, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Luvleen Sidhu

Name: Luvleen Sidhu

Title: Chief Executive Officer

(Principal Executive Officer)

Date: November 14, 2024

/s/: Ajay Asija

Name: Ajay Asija

Title: Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: November 14, 2024

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification “accompanies” the Form 10-Q to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 14, 2024
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-38633
Entity Registrant Name	BM Technologies, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-3410369
Entity Address, Address Line One	201 King of Prussia Road, Suite 650
Entity Address, City or Town	Wayne
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19087
City Area Code	877
Local Phone Number	327-9515
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,099,490
Entity Central Index Key	0001725872
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	BMTX
Security Exchange Name	NYSEAMER
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
Entity Information [Line Items]
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
Trading Symbol	BMTX-WT
Security Exchange Name	NYSEAMER

CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
ASSETS
Cash and cash equivalents	$ 11,224	$ 14,288
Accounts receivable, net allowance for doubtful accounts of $1,540 and $1,100	4,891	9,128
Prepaid expenses and other assets	2,314	5,148
Total current assets	18,429	28,564
Premises and equipment, net	430	535
Developed software, net	15,857	16,173
Goodwill	5,259	5,259
Other intangibles, net	3,869	4,109
Total assets	43,844	54,640
Liabilities:
Accounts payable and accrued liabilities	10,295	10,577
Deferred revenue, current	11,855	12,322
Total current liabilities	22,150	22,899
Non-current liabilities:
Deferred revenue, non-current	4	127
Liability for private warrants	162	162
Other non-current liabilities	0	480
Total liabilities	22,316	23,668
Commitments and contingencies (Note 7)
Shareholders’ equity:
Preferred stock: Par value $0.0001 per share; 10,000,000 shares authorized, zero shares issued or outstanding at both September 30, 2024 and December 31, 2023	0	0
Common stock: Par value $0.0001 per share; 1 billion shares authorized; 12,099,490 shares issued and outstanding at September 30, 2024; 11,984,133 shares issued and outstanding at December 31, 2023	1	1
Additional paid-in capital	71,421	71,787
Accumulated deficit	(49,894)	(40,816)
Total shareholders’ equity	21,528	30,972
Total liabilities and shareholders’ equity	$ 43,844	$ 54,640

CONSOLIDATED BALANCE SHEETS - UNAUDITED (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,540	$ 1,100	$ 305
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	12,099,490	11,984,133
Common stock, shares outstanding (in shares)	12,099,490	11,984,133

CONSOLIDATED STATEMENTS OF LOSS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Operating revenues:
Total operating revenues	$ 14,077	$ 14,381	$ 42,799	$ 40,393
Operating expenses:
Technology, communication, and processing	6,168	7,826	15,176	20,949
Salaries and employee benefits	5,590	4,773	15,697	17,337
Professional services	2,840	2,948	8,682	7,926
Provision for operating losses	2,650	2,138	6,827	5,628
Occupancy	11	9	37	33
Customer related supplies	242	227	714	677
Advertising and promotion	117	128	292	371
Restructuring, merger, and acquisition related expenses	58	0	208	993
NextGen implementation costs	0	0	1,560	0
Other expense	490	717	1,709	2,280
Total operating expenses	18,166	18,766	50,902	56,194
Loss from operations	(4,089)	(4,385)	(8,103)	(15,801)
Non-operating income and expense:
Gain on fair value of private warrant liability	54	433	0	2,449
Other loss	951	0	951	0
Loss before income tax expense	(4,986)	(3,952)	(9,054)	(13,352)
Income tax expense	9	0	24	16
Net loss	$ (4,995)	$ (3,952)	$ (9,078)	$ (13,368)
Weighted average number of shares outstanding - basic (in shares)	11,799	11,570	11,768	11,567
Weighted average number of shares outstanding - diluted (in shares)	11,799	11,570	11,768	11,567
Basic loss per common share (in dollars per share)	$ (0.42)	$ (0.34)	$ (0.77)	$ (1.16)
Diluted loss per common share (in dollars per share)	$ (0.42)	$ (0.34)	$ (0.77)	$ (1.16)
Interchange and card revenue
Operating revenues:
Total operating revenues	$ 2,990	$ 2,292	$ 8,689	$ 6,716
Servicing fees
Operating revenues:
Total operating revenues	7,557	8,658	23,397	22,990
Account fees
Operating revenues:
Total operating revenues	1,680	1,931	5,580	5,981
University fees
Operating revenues:
Total operating revenues	1,712	1,412	4,793	4,291
Other revenue
Operating revenues:
Total operating revenues	$ 138	$ 88	$ 340	$ 415

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Cash Flows from Operating Activities:
Net loss	$ (4,995)	$ (3,952)	$ (9,078)	$ (13,368)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation of premises and equipment	100	100	236	198
Amortization of developed software	1,800	3,300	4,332	9,250
Amortization of other intangible assets	100	100	240	240
Impairment of software assets	0	0	50	0
Provision for bad debt			440	350
Share-based compensation expense			(135)	1,534
Gain on fair value of private warrant liability	(54)	(433)	0	(2,449)
Changes in operating assets and liabilities:
Accounts receivable			3,797	(601)
Prepaid expenses and other current assets			2,834	2,988
Other assets			0	72
Accounts payable and accrued liabilities			(282)	(537)
Deferred revenue			(590)	(3,207)
Net Cash provided by (used in) Operating Activities			1,844	(5,530)
Cash Flows from Investing Activities:
Development of internal use software			(4,546)	(4,114)
Purchases of premises and equipment			(131)	(224)
Net Cash used in Investing Activities			(4,677)	(4,338)
Cash Flows from Financing Activities:
Payments related to net settlement of share-based compensation awards			(231)	(2,438)
Net Cash used in Financing Activities			(231)	(2,438)
Net Decrease in Cash and Cash Equivalents			(3,064)	(12,306)
Cash and Cash Equivalents – Beginning			14,288	21,108
Cash and Cash Equivalents – Ending	$ 11,224	$ 8,802	11,224	8,802
Supplementary Cash Flow Information:
Income taxes refunded, net			(2,380)	(4,323)
Noncash Operating, Investing, and Financing Activities:
Conversion of private warrants to public warrants			0	20
Impairment of software assets			480	0
Impairment of software assets			$ 0	$ 480

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - UNAUDITED - USD ($) $ in Thousands	Total	Common Stock	Additional Paid in Capital	Accumulated Deficit
Balance, beginning of period (in shares) at Dec. 31, 2022		12,240,237
Balance, beginning of period at Dec. 31, 2022	$ 48,858	$ 1	$ 72,342	$ (23,485)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(4,960)			(4,960)
Conversion of private warrants to public warrants	20		20
Tax paid on behalf of employees related to net settlement of share-based awards (in shares)		(473,874)
Tax paid on behalf of employees related to net settlement of share-based awards	(2,429)		(2,429)
Share-based compensation expense (in shares)		95,147
Share-based compensation expense	447		447
Balance, end of period (in shares) at Mar. 31, 2023		11,861,510
Balance, end of period at Mar. 31, 2023	41,936	$ 1	70,380	(28,445)
Balance, beginning of period (in shares) at Dec. 31, 2022		12,240,237
Balance, beginning of period at Dec. 31, 2022	48,858	$ 1	72,342	(23,485)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(13,368)
Balance, end of period (in shares) at Sep. 30, 2023		11,869,925
Balance, end of period at Sep. 30, 2023	34,240	$ 1	71,092	(36,853)
Balance, beginning of period (in shares) at Mar. 31, 2023		11,861,510
Balance, beginning of period at Mar. 31, 2023	41,936	$ 1	70,380	(28,445)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(4,456)			(4,456)
Tax paid on behalf of employees related to net settlement of share-based awards (in shares)		(1,765)
Tax paid on behalf of employees related to net settlement of share-based awards	(5)		(5)
Share-based compensation expense (in shares)		6,600
Share-based compensation expense	568		568
Balance, end of period (in shares) at Jun. 30, 2023		11,866,345
Balance, end of period at Jun. 30, 2023	38,043	$ 1	70,943	(32,901)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(3,952)			(3,952)
Tax paid on behalf of employees related to net settlement of share-based awards (in shares)		(1,253)
Tax paid on behalf of employees related to net settlement of share-based awards	(4)		(4)
Share-based compensation expense (in shares)		4,833
Share-based compensation expense	153		153
Balance, end of period (in shares) at Sep. 30, 2023		11,869,925
Balance, end of period at Sep. 30, 2023	$ 34,240	$ 1	71,092	(36,853)
Balance, beginning of period (in shares) at Dec. 31, 2023	11,984,133	11,984,133
Balance, beginning of period at Dec. 31, 2023	$ 30,972	$ 1	71,787	(40,816)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	748			748
Tax paid on behalf of employees related to net settlement of share-based awards (in shares)		(51,133)
Tax paid on behalf of employees related to net settlement of share-based awards	(176)		(176)
Share-based compensation expense (in shares)		130,773
Share-based compensation expense	(660)		(660)
Balance, end of period (in shares) at Mar. 31, 2024		12,063,773
Balance, end of period at Mar. 31, 2024	$ 30,884	$ 1	70,951	(40,068)
Balance, beginning of period (in shares) at Dec. 31, 2023	11,984,133	11,984,133
Balance, beginning of period at Dec. 31, 2023	$ 30,972	$ 1	71,787	(40,816)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (9,078)
Balance, end of period (in shares) at Sep. 30, 2024	12,099,490	12,099,490
Balance, end of period at Sep. 30, 2024	$ 21,528	$ 1	71,421	(49,894)
Balance, beginning of period (in shares) at Mar. 31, 2024		12,063,773
Balance, beginning of period at Mar. 31, 2024	30,884	$ 1	70,951	(40,068)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(4,831)			(4,831)
Tax paid on behalf of employees related to net settlement of share-based awards (in shares)		(13,725)
Tax paid on behalf of employees related to net settlement of share-based awards	(57)		(57)
Share-based compensation expense (in shares)		40,940
Share-based compensation expense	126		126
Balance, end of period (in shares) at Jun. 30, 2024		12,090,988
Balance, end of period at Jun. 30, 2024	26,122	$ 1	71,020	(44,899)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(4,995)			(4,995)
Tax paid on behalf of employees related to net settlement of share-based awards (in shares)		(731)
Tax paid on behalf of employees related to net settlement of share-based awards	2		2
Share-based compensation expense (in shares)		9,233
Share-based compensation expense	$ 399		399
Balance, end of period (in shares) at Sep. 30, 2024	12,099,490	12,099,490
Balance, end of period at Sep. 30, 2024	$ 21,528	$ 1	$ 71,421	$ (49,894)

DESCRIPTION OF THE BUSINESS	9 Months Ended
DESCRIPTION OF THE BUSINESS	Sep. 30, 2024
Business Description And Reverse Recapitalization [Abstract]
DESCRIPTION OF THE BUSINESS	DESCRIPTION OF THE BUSINESS BM Technologies, Inc. (“BMTX” or the “Company”) (formerly known as “BankMobile”) provides state-of-the-art high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels. BankMobile was incorporated in May 2016 as a wholly-owned subsidiary of Customers Bank. On August 6, 2020, the Company entered into an Agreement and Plan of Merger, by and among Megalith Financial Acquisition Corporation, a special purpose acquisition company (“Megalith”), incorporated in Delaware in November 2017, MFAC Merger Sub Inc., a wholly-owned subsidiary of Megalith, BankMobile, and Customers Bank, the sole stockholder of BankMobile. On January 4, 2021, BankMobile became an independent company after the completion of a divestiture transaction and was rebranded BM Technologies, Inc. BMTX’s fintech business model leverages Banking-as-a-Service (“BaaS”) partners’ and University partners’ existing customer bases to achieve high volume, low-cost customer acquisition in its Higher Education and BaaS businesses. BMTX has four primary revenue sources: interchange and card revenue, servicing fees, account fees, and university fees. The majority of revenues are driven by customer activity (deposits, spend, transactions, etc.) and may be paid or passed through by our Partner Banks, universities, or paid directly by customers. BMTX facilitates deposits and banking services between a customer and our partner banks, Customers Bank and First Carolina Bank, (the “Partner Banks”), which are related parties and are Federal Deposit Insurance Corporation (“FDIC”) insured banks. The Partner Banks hold the FDIC insured deposits that BMTX sources and services and are the issuing banks on BMTX’s debit cards. The Partner Banks pay the Company a servicing fee for the deposits generated and pass through interchange income earned from transactions on debit cards and transaction-based account fees. BMTX is not a bank, does not hold a bank charter, and does not provide banking services, and as a result, it is not subject to direct banking regulation, except as a service provider to our partner banks. BMTX is also subject to the regulations of the Department of Education (“ED”), due to its student disbursements business, and is periodically examined by it. BMTX’s contracts with most of its Higher Education institution clients require it to comply with numerous laws and regulations, including, where applicable, regulations promulgated by the ED regarding the handling of student financial aid funds received by institutions on behalf of their students under Title IV of the Higher Education Act of 1965; the Family Educational Rights and Privacy Act of 1995; the Electronic Fund Transfer Act and Regulation E; the USA PATRIOT Act and related anti-money laundering requirements; and certain federal rules regarding safeguarding personal information, including rules implementing the privacy provisions of the Gramm-Leach-Bliley Act. Other products and services offered by BMTX may also be subject to other federal and state laws and regulations.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These interim unaudited consolidated financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Any reference to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted from these interim unaudited consolidated financial statements as permitted by U.S. GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of Management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMTX for the interim periods presented. The preparation of interim unaudited consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include going concern assessment, valuation of deferred tax assets, valuation of private warrants, and goodwill and intangible asset impairment analyses. Actual results could differ from those estimates. FASB ASC 205-40, Presentation of Financial Statements - Going Concern, requires Management to assess an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance date. Management has performed this required assessment as of November 14, 2024, and believes there are sufficient funds available to support its ongoing business operations and continue as a going concern for at least the next 12 months with projected liquidity of $13.6 million at November 14, 2025. Management’s assessment is subject to known and unknown risks, uncertainties, assumptions, and changes in circumstances, many of which are beyond our control including the impact of the macroeconomic environment, and that are difficult to predict as to timing, extent, likelihood, and degree of occurrence, and that could cause actual results to differ from estimates and forecasts, potentially materially. Based upon the results of Management’s assessment, these interim unaudited consolidated financial statements have been prepared on a going concern basis. The interim unaudited consolidated financial statements do not include any adjustments that could result from the outcome of the aforementioned risks and uncertainties. Significant Accounting Policies These interim unaudited consolidated financial statements should be read in conjunction with the 2023 audited consolidated financial statements and related notes of BMTX, which describe BMTX’s significant accounting policies. There have been no material changes to BMTX’s significant accounting policies during the nine months ended September 30, 2024, except for what is noted below. Insurance Premium Finance Obligations The Company includes the obligation for its insurance premium financing in Accounts payable and accrued liabilities on the interim unaudited Consolidated Balance Sheets. At September 30, 2024, the Company had two premium finance arrangements outstanding with balances totaling $0.2 million, average remaining installment payment terms of 2.5 months, and a weighted average annualized finance charge of 6.95%. At December 31, 2023, there were no insurance premium financing obligations. Immaterial Correction of Prior Period Error In preparation of the Company’s consolidated financial statement as of and for the twelve months ended December 31, 2023, the Company identified an immaterial error in its accounting for certain of its interchange expenses for the three and nine months ended September 30, 2023, reflecting the impacted revenues gross instead of net as required. The effect of these immaterial error adjustments for the three and nine months ended September 30, 2023: •Decreased revenue from Interchange and Card revenue and decreased Technology, communication, and processing expense by an equal and offsetting $0.4 million and $0.8 million for the three and nine months ended September 30, 2023, respectively. The Company assessed the materiality of these errors on the interim period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its Consolidated Statements of Loss are not material to any previously presented consolidated financial statements. The correction had no impact on the Consolidated Balance Sheets, Consolidated Statements of Changes in Shareholders’ Equity, Consolidated Statements of Cash Flows, or Notes to the Consolidated Financial Statements, other than Note 9 - Revenues and Note 12 - Related Party Transactions, for the previously presented interim period. Accounting Standards Update As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised ASUs applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use the extended transition period under the JOBS Act. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The Company adopted ASU 2020-06 on January 1, 2024. The adoption of this new accounting standard did not have a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2024 In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, which is a final standard on improvement to income tax disclosures. This update applies to all entities subject to income taxes. As a public business entity, the new requirements will be effective for annual periods beginning after December 15, 2024. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024. In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards. This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification. This standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024. In March 2024, the FASB issued ASU 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”), which removed references to various FASB Concepts Statements and updates technical corrections such as conforming amendments, clarification to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The new guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024.

ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

ACCOUNTS RECEIVABLE


(amounts in thousands)	Beginning Balance		Additions		Reductions		Ending Balance
Allowance for doubtful accounts
Nine months ended September 30, 2024	$	1,100	$	1,215	$	(775)	$	1,540
Twelve months ended December 31, 2023	$	305	$	1,001	$	(206)	$	1,100

PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE

Premises and Equipment

The components of premises and equipment were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023

IT equipment	3 to 5 years	$	1,061	$	930

Accumulated depreciation		(631)		(395)
Total		$	430	$	535

September 30, 2023, respectively, as a component of Technology, communication, and processing expense on the unaudited Consolidated Statements of Loss.

Developed Software

The components of developed software were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023
Higher One Disbursement business developed software	10 years	$	27,400	$	27,400
Internally developed software	3 to 7 years	51,632		43,225
Work-in-process		2,271		6,662
		81,303		77,287
Accumulated amortization		(65,446)		(61,114)
Total		$	15,857	$	16,173

GOODWILL AND OTHER INTANGIBLES

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLES

The components of Other intangibles, net as of September 30, 2024 and December 31, 2023 were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023
Customer relationships – universities	20 years	$	6,402	$	6,402
Accumulated amortization		(2,533)		(2,293)
Total		$	3,869	$	4,109

The customer relationships - universities will be amortized in future periods as follows:


Remainder of 2024	$	80
2025	320
2026	320
2027	320
2028	320
After 2028	2,509
Total	$	3,869

LEASES	9 Months Ended
LEASES	Sep. 30, 2024
Leases [Abstract]
LEASES	LEASES The Company’s corporate headquarters is currently operating under a month-to-month short-term lease. Operating lease expenses are recorded in Occupancy on the unaudited Consolidated Statements of Loss. BMTX recorded lease expense of less than $0.1 million for the three and nine months ended September 30, 2024, respectively, and less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2023, respectively.

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the interim unaudited consolidated financial statements that are not currently accrued for. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution may have a material adverse effect on BMTX’s results of operations for a particular period, and future changes in circumstances or additional information could result in accruals or resolution in excess of established accruals, which could adversely affect BMTX’s results of operations, potentially materially. On June 5, 2023, the Company entered into an agreement to purchase certain software technology assets from a third-party. Purchase consideration was comprised of a cash payment of less than $0.1 million at closing and potential future contingent consideration of $0.5 million over the next three years if the technology is successfully and continuously deployed by the Company. As of June 30, 2024, the Company determined that the successful and continuous deployment of the software technology is no longer probable, as a result, the software technology was impaired and the corresponding contingent consideration was extinguished. As of September 30, 2024 and December 31, 2023, the Company had zero and $0.5 million of contingent consideration, respectively reported in Other non-current liabilities on the unaudited Consolidated Balance Sheets.

SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY

SHAREHOLDERS’ EQUITY AND PRIVATE WARRANT LIABILITY

Common Stock

Preferred Stock

Performance Shares

Dividend Policy

January 4, 2021 Share-Based Compensation Award

Equity Incentive Plan

Restricted Stock Units

Performance - Based Restricted Stock Units

For PBRSUs with a market condition, we used a Monte Carlo simulation to determine the fair value on the grant date and recognize the share-based compensation expense over the derived service period.

Inducement Awards

The change in unvested RSUs and PBRSUs awarded is shown below:


	Restricted Stock Units			Performance-Based Restricted Stock Units
	Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU		Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU
Balance as of 12/31/2023	445,106	$	6.47	495,000	$	2.99
Granted *	344,800	$	2.05	615,000	$	2.25
Vested	(180,946)	$	5.72	—	$	—
Forfeited *	(49,909)	$	4.09	(320,000)	$	6.70
Balance as of 9/30/2024	559,050	$	4.20	790,000	$	0.91

from $3.46 per share to $4.87 per share, and the incremental stock based compensation expenses is recorded over the new term of the awards.

Employee Stock Purchase Plan (“ESPP”)

Warrants

The private warrants and the public warrants are treated differently for accounting purposes, as follows:

Private Warrants

Public Warrants

REVENUES

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUES

Revenues

BMTX recognizes operating revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.


	Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands)	2024		2023		2024		2023
Revenues:
Revenue recognized at point in time:
Interchange and card revenue	$	2,990	$	2,292	$	8,689	$	6,716
Servicing fees	7,557		8,658		23,397		22,990
Account fees	1,680		1,931		5,580		5,981
University fees - disbursement activity	433		207		1,030		639
Other revenue	36		60		92		155
Total revenue recognized at point in time	12,696		13,148		38,788		36,481
Revenue recognized over time:
University fees - subscriptions	1,279		1,205		3,763		3,652
Other revenue - maintenance and support	102		28		248		260
Total revenue recognized over time	1,381		1,233		4,011		3,912
Total revenues	$	14,077	$	14,381	$	42,799	$	40,393

Deferred Revenue

The deferred revenue balance as of September 30, 2024 and December 31, 2023 was $11.9 million and $12.4 million, respectively.

Unbilled receivables

LOSS PER COMMON SHARE

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

LOSS PER COMMON SHARE

The following are the components and results of operations and loss per common share calculations for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands, except per common share data)	2024		2023		2024		2023
Net loss available to common shareholders	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)

Net loss used for EPS	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)
Weighted-average number of common shares outstanding – basic	11,799		11,570		11,768		11,567
Weighted-average number of common shares outstanding – diluted	11,799		11,570		11,768		11,567
Basic loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)
Diluted loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)

The following table presents the reconciliation from basic to diluted weighted average shares outstanding used in the calculation of basic and diluted loss per common share:


	Three Months Ended September 30,		Nine Months Ended September 30,
(amounts in thousands)	2024	2023	2024	2023
Weighted-average number of common shares outstanding – basic	11,799	11,570	11,768	11,567
Add:


Service-based RSUs	—	—	—	—
Weighted-average number of common shares outstanding – diluted	11,799	11,570	11,768	11,567

The following table presents the potentially dilutive shares that were excluded from the computation of diluted loss per common share:


	Three Months Ended September 30,		Nine Months Ended September 30,
(amounts in thousands)	2024	2023	2024	2023
Performance shares	300	300	300	300
Public warrants	17,294	17,294	17,294	17,294
Private warrants	5,409	5,409	5,409	5,409
Performance-based RSUs	790	495	790	495
Service-based RSUs	559	480	559	480
Total	24,352	23,978	24,352	23,978

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements:


Level 1:			Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:			Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:			Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The following methods and assumptions were used to estimate the fair value of BMTX’s financial instruments as of September 30, 2024 and December 31, 2023:

Cash and cash equivalents

Cash and cash equivalents reported on the unaudited Consolidated Balance Sheets consists of non-interest bearing demand deposits, for which carrying value approximates fair value.

Accounts receivable, net

The carrying amount of accounts receivable approximates fair value because of the short-term nature of these items.

Liability for Private Warrants

At September 30, 2024 and December 31, 2023, the warrant liability is classified as a Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement.

The estimated fair value of BMTX’s financial instruments at September 30, 2024 and December 31, 2023 were as follows:


					Fair Value Measurements at September 30, 2024
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	11,224	$	11,224	$	11,224	$	—	$	—
Accounts receivable, net	4,891		4,891		4,891		—		—
Liabilities:
Liability for private warrants	$	162	$	162	$	—	$	—	$	162


					Fair Value Measurements at December 31, 2023
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	14,288	$	14,288	$	14,288	$	—	$	—
Accounts receivable, net	9,128		9,128		9,128		—		—
Liabilities:
Liability for private warrants	$	162	$	162	$	—	$	—	$	162

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS The Company has several relationships with our Partner Banks, which are related parties of the Company. These relationships are described below. Customers Bank Cash management All the Company’s cash and cash equivalents are on deposit with Customers Bank. Servicing fees and interchange income On November 7, 2022, the Company and Customers Bank entered into the DPSA amendment, to the Deposit Processing Services Agreement (“the Deposit Processing Services Agreement”) dated January 4, 2021, to extend the Deposit Processing Services Agreement termination date to the earlier of the Company’s successful completion of the transfer of the Company’s serviced deposits to a new partner bank or June 30, 2023. The DPSA Amendment also removes Customers Bank’s obligation to pay the Company the difference between the Durbin-exempt and Durbin-regulated interchange revenues. The other terms of the Deposit Processing Services Agreement remain in effect through the new termination date. On March 22, 2023, we signed the DPSA Second Amendment. The DPSA Second Amendment, among other things, extends the termination date of the Deposit Processing Services Agreement until the earlier of (i) the transfer of the Company’s serviced deposits to a Durbin-exempt partner bank; or (ii) June 30, 2024; and revises the fee structure of the Deposit Processing Services Agreement. The other terms of the Deposit Processing Services Agreement, as amended by the DPSA Amendment, remain in effect through the new termination date. On August 18, 2023, the Company and Customers Bank entered into a third amendment to the Deposit Processing Services Agreement (the “DPSA Third Amendment”) for the Higher Education serviced deposit accounts. The DPSA Third Amendment extends the termination date of the Deposit Processing Services Agreement until the earlier of (i) the transfer of the Company’s Higher Education serviced deposits to a Durbin-exempt partner bank; or (ii) April 15, 2025. On March 22, 2023, the Company and Customers Bank entered into the 2023 Deposit Servicing Agreement, under which, effective March 31, 2023, the Company will perform, on behalf of Customers Bank, Customer Bank’s services, duties, and obligations under the Private Label Banking Program Agreement (the “PLBPA”) by and between Customers Bank and T-Mobile USA, Inc. that are not required by Applicable Law (as defined in the 2023 Deposit Servicing Agreement) to be provided by an FDIC insured financial institution. The obligations of the Company and Customers Bank under the 2023 Deposit Servicing Agreement are similar to those under the Deposit Processing Services Agreement; provided, however, that (i) as of March 31, 2023, the 2023 Deposit Servicing Agreement and not the Deposit Processing Services Agreement shall govern the terms, conditions, roles, responsibilities, duties, and obligations of the Company and Customers Bank with respect to the PLBPA and the Depositor Accounts (as defined in the 2023 Deposit Servicing Agreement); (ii) the Deposit Processing Services Agreement is amended to the extent necessary or advisable to effect the same, including, without limitation, such that “Depositor” under the Deposit Processing Services Agreement shall not include any T-Mobile Customer (as defined in the PLBPA); and (iii) there is a different fee structure under the 2023 Deposit Servicing Agreement from that set forth in the Deposit Processing Services Agreement. The initial term of the 2023 Deposit Servicing Agreement continues until February 24, 2025, and will automatically renew for additional one-year terms unless either party gives written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The 2023 Deposit Servicing Agreement may be terminated early by either party upon material breach, upon notice of an uncured objection from a regulatory authority, or by the Company upon 120 days’ written notice upon the satisfaction of certain conditions. As compensation under the 2023 Deposit Servicing Agreement, Customers Bank will retain any and all revenue generated from the funds held in the deposit accounts, and Customers Bank will pay the Company monthly servicing fees as set forth in the 2023 Deposit Servicing Agreement. In addition, the Company will have the right to retain all revenue generated by or from the Depositor Accounts (as defined in the 2023 Deposit Servicing Agreement), including, but not limited to, fees and all other miscellaneous revenues. The Company also shall retain all fees (including without limitation interchange fees), and charges generated by its ATMs and from its payment processing services. The Company will be solely liable for any and all fees, expenses, costs, reimbursements, and other amounts that are or may become due and payable under the PLBPA, including, without limitation, any Durbin-exempt Interchange (as defined in the 2023 Deposit Servicing Agreement) fees payable to T-Mobile under the PLBPA. Customers Bank may set off any and all PLBPA Amounts against any compensation payable to the Company under the 2023 Deposit Servicing Agreement. Other On January 4, 2021, the Company entered into a Software License Agreement with Customers Bank which provides it with a non-exclusive, non-transferable, royalty-free license to utilize our mobile banking technology for a period up to 10 years. The Software License Agreement is cancellable by Customers Bank at any time, without notice, and without penalty, and for any reason or no reason at all. To date, Customers Bank has not utilized the Company’s mobile banking technology and zero consideration has been paid or recognized under the Software License Agreement. On January 4, 2021, the Company entered into a Non-Competition and Non-Solicitation Agreement with Customers Bank providing that Customers Bank will not, for a period of 4 years after the closing of the divestiture, directly or indirectly engage in the Company’s business in the territory (both as defined in the Non-Competition Agreement), except for white label digital banking services with previously identified parties and passive investments of no more than 2% of a class of equity interests of a competitor that is publicly traded. Customers Bank also agreed not to directly or indirectly hire or solicit any employees of the Company. Both the President and Executive Chairman of the Board of Customers Bank are immediate family members of the Company’s CEO, and together with their spouses, own less than 5.0% of the Company’s outstanding common stock at September 30, 2024. On April 20, 2022, the Company entered into a Special Limited Agency Agreement (“SLA”) with Customers Bank that provides for marketing assistance from the Company for the referral of consumer installment loans funded by Customers Bank. In consideration for this marketing assistance, the Company receives certain fees specified within the SLA which are recorded as a component of Other revenue on the unaudited Consolidated Statements of Loss. No revenue was realized under the SLA. The SLA was terminated on May 16, 2023. Positions with Customers Bank are presented on the unaudited Consolidated Balance Sheets in Accounts receivable, net, Deferred revenue, and Accounts payable and accrued liabilities. The Accounts receivable balances related to Customers Bank as of September 30, 2024 and December 31, 2023 were zero and $1.4 million, respectively. The Deferred revenue balances related to Customers Bank as of September 30, 2024 and December 31, 2023 were zero and $1.3 million, respectively. The Accounts payable and accrued liabilities balances related to Customers Bank as of September 30, 2024 and December 31, 2023 were $0.8 million and zero, respectively. The Company recognized $1.9 million and $6.4 million in revenues from Customers Bank for the three and nine months ended September 30, 2024, respectively. Of these amounts, $0.4 million and $1.2 million are paid directly by MasterCard or individual account holders to the Company for the three and nine months ended September 30, 2024, respectively. These amounts are presented on the unaudited Consolidated Statements of Loss in Total operating revenue. The Company recognized $13.6 million and $37.8 million in revenues from Customers Bank for the three and nine months ended September 30, 2023, respectively. Of these amounts, $5.3 million and $15.2 million are paid directly by MasterCard or individual account holders to the Company for the three and nine months ended September 30, 2023, respectively. These amounts are presented on the unaudited Consolidated Statements of Loss in Total operating revenue. The Company incurred zero expenses from Customers Bank for the three and nine months ended September 30, 2024 and 2023, respectively. First Carolina Bank Deposit Servicing Agreement for Higher Education On March 16, 2023, the Company entered into a Deposit Servicing Agreement (the “FCB Deposit Servicing Agreement”) with a new partner bank, First Carolina Bank, a North Carolina chartered, non-member community bank (“FCB” or “Parent”), which provides that FCB will establish and maintain deposit accounts and other banking services in connection with customized products and services offered by the Company to its Higher Education institution clients, and the Company will provide certain other related services in connection with the accounts. FCB retains any and all revenue generated from the funds held in the deposit accounts, and in exchange, pays the Company a deposit servicing fee that is based on a calculation provided by the terms in the FCB Deposit Servicing Agreement, based on average monthly deposit balances and subject to certain contractual adjustments, and a monthly interchange fee equal to all debit card interchange revenues on the demand deposit accounts, minus an interchange share percentage. On August 20, 2023, the Company and FCB entered into an amendment to the FCB Deposit Servicing Agreement (the “FCB DPSA First Amendment”). The FCB DPSA First Amendment, among other things, (i) extends the initial term from four years to five years after the effective date, (ii) provides that FCB will work with the Company and Customers Bank on the timely transfer of existing student depositor accounts on or before the effective date, and as agreed to by the parties, and (iii) amends the effective date to be the date on which FCB takes on deposits from the existing student depositor accounts. The FCB Deposit Servicing Agreement and Amendment thereof may be terminated early by either party upon material breach, by either party upon notice that the continuation of the Depositor Program violates Applicable Law or Network Rules (as defined in the FCB Deposit Servicing Agreement); by FCB if a regulatory authority determined that the performance of its obligations under the FCB Deposit Servicing Agreement was not consistent with safe and sound banking practices; by either party upon the other party commencing or being subject to certain bankruptcy proceedings; and by the Company should it experience a change in control on or after March 16, 2026. On December 1, 2023, the Company and FCB completed the transfer of existing student depositor accounts from Customers Bank to FCB. Positions with FCB are presented on our unaudited Consolidated Balance Sheets in Accounts receivable, net, Deferred revenue, current, and Accounts payable and accrued liabilities. The Accounts receivable balance related to FCB as of September 30, 2024 and December 31, 2023 was $1.3 million and $0.2 million, respectively. The Deferred revenue balance related to FCB as of September 30, 2024 and December 31, 2023 was $7.9 million and $7.4 million, respectively. The Accounts payable and accrued liabilities balance related to FCB as of September 30, 2024 and December 31, 2023 was zero, respectively. The Company recognized $11.0 million and $33.2 million in net revenues from FCB for the three and nine months ended September 30, 2024, respectively. Of these amounts, $4.3 million and $9.9 million are paid directly by MasterCard or individual account holders to the Company for the three and nine months ended September 30, 2024, respectively. These amounts are presented on the unaudited Consolidated Statements of Loss in Total operating revenue. During the three months ended September 30, 2024, the Company recorded a one-time loss consistent with the terms of the Deposit Servicing Agreements associated with the misapplication of funds between Partner Banks. During the three and nine month ended September 30, 2024, the Company credited a Partner Bank $1.0 million for interest lost on cash deposits that is considered infrequent and unusual and is included in the unaudited Consolidated Statements of Loss in Other loss.

RESTRUCTURING ACTIVITIES	9 Months Ended
RESTRUCTURING ACTIVITIES	Sep. 30, 2024
Restructuring and Related Activities [Abstract]
RESTRUCTURING ACTIVITIES	RESTRUCTURING ACTIVITIES On January 26, 2023, and in connection with our previously announced near-term strategy to focus on being an innovative, efficient, risk oriented fintech with a partner bank model, the Company committed to a targeted Profit Enhancement Plan (the “PEP”) that is intended to reduce operating costs, improve operating margins, improve operating cash flow, and continue advancing the Company’s ongoing commitment to profitable growth and continued innovation, and direct the Company’s resources toward its best opportunities. The Company completed a workforce reduction of approximately 9 and 60 employees during the nine months ended September 30, 2024 and 2023, respectively. The Company’s workforce reduction expenses, consisting of severance and other termination benefits for the three and nine months ended September 30, 2024 and 2023, totaled less than $0.1 million and $0.2 million, respectively, and totaled zero and $1.1 million for the three and nine months ended September 30, 2023, and are recorded in Restructuring, merger, and acquisition related expenses on the unaudited Consolidated Statements of Income Loss. $0.2 million of these expenses were incurred but not paid at September 30, 2024 and are included in Accounts payable and accrued liabilities on the unaudited Consolidated Balance Sheets.

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS On October 24, 2024, the Company entered into an Agreement and Plan of Merger (“the Merger Agreement”) with Parent, and Double Eagle Acquisition Corp, Inc. (Merger Sub”), a Delaware corporation and a wholly owned subsidiary of Parent (Merger Sub”). The Merger Agreement has been unanimously approved by the Board. Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), each share of common stock, par value $0.0001 per share, of the Company (collectively, “Shares”) issued and outstanding immediately prior to the Effective Time (other than Shares (i) held by the Company as treasury shares or (ii) held by any person who properly exercises appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to $5.00 per share, without interest and subject to applicable withholding taxes.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net loss	$ (4,995)	$ (4,831)	$ 748	$ (3,952)	$ (4,456)	$ (4,960)	$ (9,078)	$ (13,368)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation These interim unaudited consolidated financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Any reference to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted from these interim unaudited consolidated financial statements as permitted by U.S. GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of Management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMTX for the interim periods presented. The preparation of interim unaudited consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include going concern assessment, valuation of deferred tax assets, valuation of private warrants, and goodwill and intangible asset impairment analyses. Actual results could differ from those estimates. FASB ASC 205-40, Presentation of Financial Statements - Going Concern, requires Management to assess an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance date. Management has performed this required assessment as of November 14, 2024, and believes there are sufficient funds available to support its ongoing business operations and continue as a going concern for at least the next 12 months with projected liquidity of $13.6 million at November 14, 2025. Management’s assessment is subject to known and unknown risks, uncertainties, assumptions, and changes in circumstances, many of which are beyond our control including the impact of the macroeconomic environment, and that are difficult to predict as to timing, extent, likelihood, and degree of occurrence, and that could cause actual results to differ from estimates and forecasts, potentially materially. Based upon the results of Management’s assessment, these interim unaudited consolidated financial statements have been prepared on a going concern basis. The interim unaudited consolidated financial statements do not include any adjustments that could result from the outcome of the aforementioned risks and uncertainties.
Insurance Premium Finance Obligations	Insurance Premium Finance Obligations The Company includes the obligation for its insurance premium financing in Accounts payable and accrued liabilities on the interim unaudited Consolidated Balance Sheets.
Accounting Standards Update, Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted	Accounting Standards Update As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised ASUs applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use the extended transition period under the JOBS Act. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The Company adopted ASU 2020-06 on January 1, 2024. The adoption of this new accounting standard did not have a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2024 In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, which is a final standard on improvement to income tax disclosures. This update applies to all entities subject to income taxes. As a public business entity, the new requirements will be effective for annual periods beginning after December 15, 2024. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024. In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards. This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification. This standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024. In March 2024, the FASB issued ASU 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”), which removed references to various FASB Concepts Statements and updates technical corrections such as conforming amendments, clarification to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The new guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact of this update to its financial statements for annual periods after December 15, 2024.
Dividend Policy	Dividend Policy We have not paid any cash dividends on our common stock to date and have no present intention to pay cash dividends in the future. The payment of cash dividends by the Company in the future will be dependent upon the Company’s revenues and earnings, capital requirements, and general financial condition. The payment of any dividends will be within the discretion of the Board.

ACCOUNTS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of Allowance for Doubtful Accounts


(amounts in thousands)	Beginning Balance		Additions		Reductions		Ending Balance
Allowance for doubtful accounts
Nine months ended September 30, 2024	$	1,100	$	1,215	$	(775)	$	1,540
Twelve months ended December 31, 2023	$	305	$	1,001	$	(206)	$	1,100

PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Premises and Equipment and Developed Software

The components of premises and equipment were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023

IT equipment	3 to 5 years	$	1,061	$	930

Accumulated depreciation		(631)		(395)
Total		$	430	$	535

The components of developed software were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023
Higher One Disbursement business developed software	10 years	$	27,400	$	27,400
Internally developed software	3 to 7 years	51,632		43,225
Work-in-process		2,271		6,662
		81,303		77,287
Accumulated amortization		(65,446)		(61,114)
Total		$	15,857	$	16,173

GOODWILL AND OTHER INTANGIBLES (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Other Intangibles

The components of Other intangibles, net as of September 30, 2024 and December 31, 2023 were as follows:


(amounts in thousands)	Expected Useful Life	September 30, 2024		December 31, 2023
Customer relationships – universities	20 years	$	6,402	$	6,402
Accumulated amortization		(2,533)		(2,293)
Total		$	3,869	$	4,109

Schedule of Future Amortization

The customer relationships - universities will be amortized in future periods as follows:


Remainder of 2024	$	80
2025	320
2026	320
2027	320
2028	320
After 2028	2,509
Total	$	3,869

SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Change in Unvested RSUs

The change in unvested RSUs and PBRSUs awarded is shown below:


	Restricted Stock Units			Performance-Based Restricted Stock Units
	Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU		Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU
Balance as of 12/31/2023	445,106	$	6.47	495,000	$	2.99
Granted *	344,800	$	2.05	615,000	$	2.25
Vested	(180,946)	$	5.72	—	$	—
Forfeited *	(49,909)	$	4.09	(320,000)	$	6.70
Balance as of 9/30/2024	559,050	$	4.20	790,000	$	0.91

from $3.46 per share to $4.87 per share, and the incremental stock based compensation expenses is recorded over the new term of the awards.

REVENUES (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The Company has one reportable segment, and all revenues are earned in the U.S.


	Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands)	2024		2023		2024		2023
Revenues:
Revenue recognized at point in time:
Interchange and card revenue	$	2,990	$	2,292	$	8,689	$	6,716
Servicing fees	7,557		8,658		23,397		22,990
Account fees	1,680		1,931		5,580		5,981
University fees - disbursement activity	433		207		1,030		639
Other revenue	36		60		92		155
Total revenue recognized at point in time	12,696		13,148		38,788		36,481
Revenue recognized over time:
University fees - subscriptions	1,279		1,205		3,763		3,652
Other revenue - maintenance and support	102		28		248		260
Total revenue recognized over time	1,381		1,233		4,011		3,912
Total revenues	$	14,077	$	14,381	$	42,799	$	40,393

LOSS PER COMMON SHARE (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Components and Results of Operations and Loss Per Common Share Calculations

The following are the components and results of operations and loss per common share calculations for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands, except per common share data)	2024		2023		2024		2023
Net loss available to common shareholders	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)

Net loss used for EPS	$	(4,995)	$	(3,952)	$	(9,078)	$	(13,368)
Weighted-average number of common shares outstanding – basic	11,799		11,570		11,768		11,567
Weighted-average number of common shares outstanding – diluted	11,799		11,570		11,768		11,567
Basic loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)
Diluted loss per common share	$	(0.42)	$	(0.34)	$	(0.77)	$	(1.16)

Schedule of Weighted Average Shares Outstanding

The following table presents the reconciliation from basic to diluted weighted average shares outstanding used in the calculation of basic and diluted loss per common share:


	Three Months Ended September 30,		Nine Months Ended September 30,
(amounts in thousands)	2024	2023	2024	2023
Weighted-average number of common shares outstanding – basic	11,799	11,570	11,768	11,567
Add:


Service-based RSUs	—	—	—	—
Weighted-average number of common shares outstanding – diluted	11,799	11,570	11,768	11,567

Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share

The following table presents the potentially dilutive shares that were excluded from the computation of diluted loss per common share:


	Three Months Ended September 30,		Nine Months Ended September 30,
(amounts in thousands)	2024	2023	2024	2023
Performance shares	300	300	300	300
Public warrants	17,294	17,294	17,294	17,294
Private warrants	5,409	5,409	5,409	5,409
Performance-based RSUs	790	495	790	495
Service-based RSUs	559	480	559	480
Total	24,352	23,978	24,352	23,978

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Values of Financial Instruments

The estimated fair value of BMTX’s financial instruments at September 30, 2024 and December 31, 2023 were as follows:


					Fair Value Measurements at September 30, 2024
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	11,224	$	11,224	$	11,224	$	—	$	—
Accounts receivable, net	4,891		4,891		4,891		—		—
Liabilities:
Liability for private warrants	$	162	$	162	$	—	$	—	$	162


					Fair Value Measurements at December 31, 2023
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	14,288	$	14,288	$	14,288	$	—	$	—
Accounts receivable, net	9,128		9,128		9,128		—		—
Liabilities:
Liability for private warrants	$	162	$	162	$	—	$	—	$	162

DESCRIPTION OF THE BUSINESS - Narrative (Details)	9 Months Ended
DESCRIPTION OF THE BUSINESS - Narrative (Details)	Sep. 30, 2024 source
Business Description And Reverse Recapitalization [Abstract]
Number of primary revenue sources	4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) arrangement	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) arrangement	Sep. 30, 2023 USD ($)	Nov. 14, 2025 USD ($)	Dec. 31, 2023 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Number of insurance premium finance arrangements \| arrangement	2		2
Insurance premium finance obligation	$ 200,000		$ 200,000			$ 0
Insurance premium remaining installment payment terms			2 months 15 days
Insurance premium, weighted average annualized finance charge, percentage			6.95%
Decrease in interchange and card revenue	(14,077,000)	$ (14,381,000)	$ (42,799,000)	$ (40,393,000)
Decrease in technology, communication, and processing expense	(6,168,000)	(7,826,000)	(15,176,000)	(20,949,000)
Revision of Prior Period, Error Correction, Adjustment \| Accounting for Interchange Expenses
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Decrease in technology, communication, and processing expense		400,000		800,000
Interchange and card revenue
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Decrease in interchange and card revenue	$ (2,990,000)	(2,292,000)	$ (8,689,000)	(6,716,000)
Interchange and card revenue \| Revision of Prior Period, Error Correction, Adjustment \| Accounting for Interchange Expenses
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Decrease in interchange and card revenue		$ 400,000		$ 800,000
Forecast
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Projected liquidity					$ 13,600,000

ACCOUNTS RECEIVABLE - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Receivables [Abstract]
Allowance for doubtful accounts	$ 1.5	$ 1.1

ACCOUNTS RECEIVABLE - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 1,100	$ 305
Additions	1,215	1,001
Reductions	(775)	(206)
Ending Balance	$ 1,540	$ 1,100

PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE - Premises and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (631,000)		$ (631,000)		$ (395,000)
Total	430,000		430,000		535,000
Depreciation of premises and equipment	100,000	$ 100,000	236,000	$ 198,000
Impairment	0	$ 0	0	$ 0
IT equipment
Property, Plant and Equipment [Line Items]
IT equipment	$ 1,061,000		$ 1,061,000		$ 930,000
IT equipment \| Minimum
Property, Plant and Equipment [Line Items]
Expected useful life (in years)	3 years		3 years
IT equipment \| Maximum
Property, Plant and Equipment [Line Items]
Expected useful life (in years)	5 years		5 years

PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE - Developed Software (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Developed software, gross	$ 81,303		$ 81,303		$ 77,287
Accumulated amortization	(65,446)		(65,446)		(61,114)
Total	15,857		15,857		16,173
Amortization of developed software	1,800	$ 3,300	4,332	$ 9,250
Impairment expense	$ 0	$ 0	$ 50	$ 0
Higher One Disbursement business developed software
Property, Plant and Equipment [Line Items]
Expected useful life (in years)	10 years		10 years
Developed software, gross	$ 27,400		$ 27,400		27,400
Internally developed software
Property, Plant and Equipment [Line Items]
Developed software, gross	$ 51,632		$ 51,632		43,225
Internally developed software \| Minimum
Property, Plant and Equipment [Line Items]
Expected useful life (in years)	3 years		3 years
Internally developed software \| Maximum
Property, Plant and Equipment [Line Items]
Expected useful life (in years)	7 years		7 years
Work-in-process
Property, Plant and Equipment [Line Items]
Developed software, gross	$ 2,271		$ 2,271		$ 6,662

GOODWILL AND OTHER INTANGIBLES - Narrative (Details)	3 Months Ended		9 Months Ended
GOODWILL AND OTHER INTANGIBLES - Narrative (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) asset	Sep. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Number of intangible assets \| asset			1
Intangible asset amortization period (in years)	20 years		20 years
Amortization expense (less than)	$ 100,000	100,000	$ 240,000	240,000
Impairment for other intangibles, net	$ 0	$ 0	$ 0	$ 0

GOODWILL AND OTHER INTANGIBLES - Components of Other Intangibles (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Expected useful life (in years)	20 years
Customer relationships – universities	$ 6,402	$ 6,402
Accumulated amortization	(2,533)	(2,293)
Total	$ 3,869	$ 4,109

GOODWILL AND OTHER INTANGIBLES - Future Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2024	$ 80
2025	320
2026	320
2027	320
2028	320
After 2028	2,509
Total	$ 3,869	$ 4,109

LEASES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
LEASES - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Lease expense (less than)	$ 0.1	$ 0.1	$ 0.1	$ 0.1

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions	Jun. 05, 2023	Sep. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Purchase consideration	$ 0.1
Contingent consideration liability	$ 0.5	$ 0.0	$ 0.5
Contingent consideration payment period	3 years

SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY - Narrative (Details)				3 Months Ended		9 Months Ended
	Sep. 30, 2024 installment vote $ / shares shares	Jun. 20, 2023 shares	Jan. 04, 2021 USD ($) shares	Sep. 30, 2024 USD ($) installment vote $ / shares shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2024 USD ($) vote trading_day installment $ / shares shares	Sep. 30, 2023 USD ($) shares	Dec. 31, 2023 $ / shares shares	Jun. 19, 2023 shares
Class of Warrant or Right [Line Items]
Common stock, shares authorized (in shares)	1,000,000,000			1,000,000,000		1,000,000,000		1,000,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001			$ 0.0001		$ 0.0001		$ 0.0001
Common stock, shares outstanding (in shares)	12,099,490			12,099,490		12,099,490		11,984,133
Common stock, shares issued (in shares)	12,099,490			12,099,490		12,099,490		11,984,133
Performance shares (in shares)	300,000			300,000		300,000		300,000
Number of votes for each share held \| vote	1			1		1
Preferred stock, shares authorized (in shares)	10,000,000			10,000,000		10,000,000		10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.0001			$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares issued (in shares)	0			0		0		0
Preferred stock, shares outstanding (in shares)	0			0		0		0
Performance shares, par value (in dollars per share) \| $ / shares	$ 0.0001			$ 0.0001		$ 0.0001
Performance shares, period post closing date of merger after which shares would be forfeited and cancelled if no Release Event has occurred						7 years
Performance shares, stock price trigger (in dollars per share) \| $ / shares	$ 15.00			$ 15.00		$ 15.00
Performance shares, threshold trading days \| trading_day						20
Performance shares, threshold trading day period \| trading_day						30
Period of performance cycle						5 years
Warrants to purchase common stock outstanding (in shares)	22,703,004			22,703,004	22,703,004	22,703,004	22,703,004
Number of whole shares of common stock entitled to purchase upon exercise of each whole warrant (in shares)	1			1		1
Exercise price (in dollars per share) \| $ / shares	$ 11.50			$ 11.50		$ 11.50
Maximum expiration period after completion of merger (in years)						5 years
Redemption rights, stock price trigger (in dollars per share) \| $ / shares	$ 24.00			$ 24.00		$ 24.00
Redemption rights, threshold trading days \| trading_day						20
Redemption rights, threshold trading day period \| trading_day						30
Reclassified warrants (in shares)				0	0	0	0
Gain on revaluation of private warrants \| $				$ (54,000)	$ (433,000)	$ 0	$ (2,449,000)
10% + Equity Incentive Plan
Class of Warrant or Right [Line Items]
Increase in aggregate number of shares of common stock (in shares)		1,279,963
Aggregate number of shares of common stock (in shares)		2,500,000							1,220,037
Public Warrants
Class of Warrant or Right [Line Items]
Warrants to purchase common stock outstanding (in shares)	17,294,044			17,294,044	17,294,044	17,294,044	17,294,044
Outstanding warrants exercised (in shares)	1,600			0	0	0	0
Exercises of public warrants				0	0	0	0
Private Warrants
Class of Warrant or Right [Line Items]
Warrants to purchase common stock outstanding (in shares)	5,408,960			5,408,960	5,408,960	5,408,960	5,408,960
Private warrants repurchased (in shares)	1,169,903			1,169,903		1,169,903
Private warrants, price per share (in dollars per share) \| $ / shares	$ 1.69			$ 1.69		$ 1.69
Gain on revaluation of private warrants \| $				$ 100,000	$ (400,000)	$ 0	$ (2,400,000)
Repurchase of private warrants \| $				0	0	0	0
Merger Consideration Share Based Compensation Award
Class of Warrant or Right [Line Items]
RSUs granted (in shares)			1,317,035
Fair value \| $			$ 19,600,000
Vesting period			2 years
Share-based compensation expense, net of forfeitures \| $				0	0	$ 0	100,000
Restricted Stock Units (RSUs)
Class of Warrant or Right [Line Items]
RSUs granted (in shares)						344,800
Share-based compensation expense, net of forfeitures \| $				$ 100,000	300,000	$ 800,000	1,200,000
Restricted Stock Units (RSUs) \| Minimum
Class of Warrant or Right [Line Items]
Vesting installments \| installment	3			3		3
Restricted Stock Units (RSUs) \| Maximum
Class of Warrant or Right [Line Items]
Vesting installments \| installment	4			4		4
Performance Based Restricted Stock Units
Class of Warrant or Right [Line Items]
RSUs granted (in shares)						615,000
Share-based compensation expense, net of forfeitures \| $				$ 100,000	$ (100,000)	$ (1,000,000.0)	$ 300,000

SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY - Schedule of Change in Unvested Awards and RSUs (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	445,106
Granted (in shares)	344,800
Vested (in shares)	(180,946)
Forfeited (in shares)	(49,909)
Ending balance (in shares)	559,050	445,106
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share)	$ 6.47
Granted (in dollars per share)	2.05
Vested (in dollars per share)	5.72
Forfeited (in dollars per share)	4.09
Ending balance (in dollars per share)	$ 4.20	$ 6.47
Performance Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	495,000
Granted (in shares)	615,000
Vested (in shares)	0
Forfeited (in shares)	(320,000)
Ending balance (in shares)	790,000	495,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share)	$ 2.99
Granted (in dollars per share)	2.25
Vested (in dollars per share)	0
Forfeited (in dollars per share)	6.70
Ending balance (in dollars per share)	$ 0.91	$ 2.99
Performance Based Restricted Stock Units \| Improbable-to-Probable Modification (Type III)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	193,333
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Granted (in dollars per share)	$ 2.02
Incremental cost of plan modification	$ 1.3
Performance Based Restricted Stock Units \| Market Capitalization Goal Modification
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	96,667
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Granted (in dollars per share)	$ 4.87	$ 3.46

REVENUES - Disaggregation of Revenue (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) segment	Sep. 30, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Number of reportable segments \| segment			1
Disaggregation of Revenue [Line Items]
Total revenues	$ 14,077	$ 14,381	$ 42,799	$ 40,393
Interchange and card revenue
Disaggregation of Revenue [Line Items]
Total revenues	2,990	2,292	8,689	6,716
Servicing fees
Disaggregation of Revenue [Line Items]
Total revenues	7,557	8,658	23,397	22,990
Account fees
Disaggregation of Revenue [Line Items]
Total revenues	1,680	1,931	5,580	5,981
University fees
Disaggregation of Revenue [Line Items]
Total revenues	1,712	1,412	4,793	4,291
Other revenue
Disaggregation of Revenue [Line Items]
Total revenues	138	88	340	415
Revenue recognized at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	12,696	13,148	38,788	36,481
Revenue recognized at a point in time \| Interchange and card revenue
Disaggregation of Revenue [Line Items]
Total revenues	2,990	2,292	8,689
Revenue recognized at a point in time \| Servicing fees
Disaggregation of Revenue [Line Items]
Total revenues	7,557	8,658	23,397
Revenue recognized at a point in time \| Account fees
Disaggregation of Revenue [Line Items]
Total revenues	1,680	1,931	5,580
Revenue recognized at a point in time \| University fees
Disaggregation of Revenue [Line Items]
Total revenues	433	207	1,030	639
Revenue recognized at a point in time \| Other revenue
Disaggregation of Revenue [Line Items]
Total revenues	36	60	92	155
Revenue recognized over time
Disaggregation of Revenue [Line Items]
Total revenues	1,381	1,233	4,011	3,912
Revenue recognized over time \| University fees
Disaggregation of Revenue [Line Items]
Total revenues	1,279	1,205	3,763	3,652
Revenue recognized over time \| Other revenue
Disaggregation of Revenue [Line Items]
Total revenues	$ 102	$ 28	$ 248	$ 260

REVENUES - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
REVENUES - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 11.9		$ 12.4
Amount recognized in the period from amounts included in deferred revenue at beginning of period	11.7	$ 6.6
Unbilled receivables	$ 1.2		$ 1.5

LOSS PER COMMON SHARE - Components and Results of Operations and Loss Per Common Share Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Net loss available to common shareholders	$ (4,995)	$ (3,952)	$ (9,078)	$ (13,368)
Net loss used for EPS	$ (4,995)	$ (3,952)	$ (9,078)	$ (13,368)
Weighted average common shares outstanding - basic (in shares)	11,799	11,570	11,768	11,567
Weighted average common shares outstanding - diluted (in shares)	11,799	11,570	11,768	11,567
Basic loss per common share (in dollars per share)	$ (0.42)	$ (0.34)	$ (0.77)	$ (1.16)
Diluted loss per common share (in dollars per share)	$ (0.42)	$ (0.34)	$ (0.77)	$ (1.16)

LOSS PER COMMON SHARE - Summary of Weighted Average Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Weighted-average number of common shares outstanding – basic (in shares)	11,799	11,570	11,768	11,567
Service-based RSUs (in shares)	0	0	0	0
Weighted-average number of common shares outstanding – diluted (in shares)	11,799	11,570	11,768	11,567

LOSS PER COMMON SHARE - Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	24,352	23,978	24,352	23,978
Performance shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	300	300	300	300
Public warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	17,294	17,294	17,294	17,294
Private warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	5,409	5,409	5,409	5,409
Performance-based RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	790	495	790	495
Service-based RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	559	480	559	480

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - Private Warrants - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumptions, expected term (in years)	1 year 3 months 7 days	2 years 7 days
Fair value assumptions, volatility rate (as a percent)	52.00%	58.00%
Fair value assumptions, dividend yield	0.00%	0.00%
Fair value assumptions, underlying stock price (in dollars per share)	$ 3.40	$ 2.05
Fair value assumptions, risk free interest rate (as a percent)	3.86%	4.18%
Fair value assumptions, exercise price, closing price of Public Warrants (in dollars per share)	$ 0.03	$ 0.03

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Liabilities:
Liability for private warrants	$ 162	$ 162
Carrying Amount \| Fair Value, Recurring
Assets:
Cash and cash equivalents	11,224	14,288
Accounts receivable, net	4,891	9,128
Liabilities:
Liability for private warrants	162	162
Estimated Fair Value \| Fair Value, Recurring
Assets:
Cash and cash equivalents	11,224	14,288
Accounts receivable, net	4,891	9,128
Liabilities:
Liability for private warrants	162	162
Estimated Fair Value \| Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Cash and cash equivalents	11,224	14,288
Accounts receivable, net	4,891	9,128
Liabilities:
Liability for private warrants	0	0
Estimated Fair Value \| Fair Value, Recurring \| Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents	0	0
Accounts receivable, net	0	0
Liabilities:
Liability for private warrants	0	0
Estimated Fair Value \| Fair Value, Recurring \| Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	0	0
Accounts receivable, net	0	0
Liabilities:
Liability for private warrants	$ 162	$ 162

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands					3 Months Ended		9 Months Ended
	Aug. 20, 2023	Mar. 22, 2023	Mar. 16, 2023	Jan. 04, 2021	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Related Party Transaction [Line Items]
Automatic renewal term		1 year
Notice period for non-renewal		180 days
Notice period for termination		120 days
Accounts receivable, net					$ 4,891		$ 4,891		$ 9,128
Deferred revenue, current					11,855		11,855		12,322
Accounts payable and accrued liabilities					10,295		10,295		10,577
Total operating revenues					14,077	$ 14,381	42,799	$ 40,393
Expenses from affiliate bank					18,166	18,766	50,902	56,194
Initial agreement term	5 years		4 years
Other loss					$ 951	0	$ 951	0
BM Technologies, Inc. \| Affiliated Entity, Chief Executive Officer
Related Party Transaction [Line Items]
Ownership percentage (less than)					5.00%		5.00%
BM Technologies, Inc. \| Affiliated Entity, Executive Chairman Of Board
Related Party Transaction [Line Items]
Ownership percentage (less than)					5.00%		5.00%
Partner Bank \| Related Party
Related Party Transaction [Line Items]
Non-competition and non-solicitation agreement period				4 years
Percentage of equity interests in competitor				2.00%
Accounts receivable, net					$ 0		$ 0		1,400
Deferred revenue, current					0		0		1,300
Accounts payable and accrued liabilities					800		800		0
Total operating revenues					1,900	13,600	6,400	37,800
Expenses from affiliate bank					0	0	0	0
Other loss					1,000		1,000
Partner Bank \| Software Licensing Agreement \| Related Party
Related Party Transaction [Line Items]
Licensing agreement, term				10 years
Paid directly by Mastercard \| Related Party
Related Party Transaction [Line Items]
Total operating revenues					400	$ 5,300	1,200	$ 15,200
First Carolina Bank \| Affiliated Entity
Related Party Transaction [Line Items]
Accounts receivable, net					1,300		1,300		200
Deferred revenue, current					7,900		7,900		7,400
Accounts payable and accrued liabilities					0		0		$ 0
Total operating revenues					11,000		33,200
Paid directly by Mastercard \| Related Party
Related Party Transaction [Line Items]
Total operating revenues					$ 4,300		$ 9,900

RESTRUCTURING ACTIVITIES - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) employee	Sep. 30, 2023 USD ($) employee
Restructuring and Related Activities [Abstract]
Employee reduction \| employee			9	60
Restructuring, merger, and acquisition related expenses	$ 0.1	$ 0.0	$ 0.2	$ 1.1
Expenses incurred but not paid	$ 0.2		$ 0.2

SUBSEQUENT EVENTS (Details) - $ / shares	Oct. 24, 2024	Sep. 30, 2024	Dec. 31, 2023
Subsequent Event [Line Items]
Common stock, par value (in dollars per share)		$ 0.0001	$ 0.0001
Subsequent Event
Subsequent Event [Line Items]
Common stock, par value (in dollars per share)	$ 0.0001
Subsequent Event \| FCB & Double Eagle Acquisition Corp, Inc
Subsequent Event [Line Items]
Business acquisition, share price (in dollars per share)	$ 5.00