bmtx-20240630

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 June 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 12,099,665 shares of common stock, par value $0.0001 per share, as of August 13, 2024.

Table of Contents


			Page
Part I - Financial Information			2
Item 1. Unaudited Consolidated Financial Statements			2
Consolidated Balance Sheets at June 30, 2024 and December 31, 2023			2
Consolidated Statements of Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023			3
Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2024 and 2023			4
Consolidated Statements of Cash Flows for the Six Months Ended June 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			28
Item 4. Controls and Procedures			29

Part II - Other Information			29
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity and Use of Proceeds			30
Item 3. Defaults Upon Senior Securities			30
Item 4. Mine Safety Disclosures			30
Item 5. Other Information			30
Item 6. Exhibits			31

Signatures			32

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)


	June 30, 2024		December 31, 2023
ASSETS
Cash and cash equivalents	$	12,457	$	14,288
Accounts receivable, net allowance for doubtful accounts of $1,500 and $1,100	6,252		9,128
Prepaid expenses and other assets	3,382		5,148
Total current assets	22,091		28,564
Premises and equipment, net	448		535
Developed software, net	16,247		16,173
Goodwill	5,259		5,259
Other intangibles, net	3,949		4,109

Total assets	$	47,994	$	54,640
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued liabilities	$	10,382	$	10,577
Deferred revenue, current	11,271		12,322
Total current liabilities	21,653		22,899
Non-current liabilities:
Deferred revenue, non-current	3		127
Liability for private warrants	216		162
Other non-current liabilities	—		480
Total liabilities	$	21,872	$	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 June 30, 2024 and December 31, 2023	$	—	$	—
Common stock: Par value $0.0001 per share; 1 billion shares authorized; 12,090,988 shares issued and outstanding at June 30, 2024; 11,984,133 shares issued and outstanding at December 31, 2023	1		1
Additional paid-in capital	71,020		71,787
Accumulated deficit	(44,899)		(40,816)
Total shareholders’ equity	$	26,122	$	30,972
Total liabilities and shareholders’ equity	$	47,994	$	54,640

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF (LOSS) INCOME — UNAUDITED

(amounts in thousands, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating revenues:
Interchange and card revenue	$	2,284	$	1,458	$	5,699	$	4,424
Servicing fees	6,874		7,700		15,840		14,332
Account fees	1,805		1,910		3,900		4,050
University fees	1,469		1,373		3,081		2,879
Other revenue	109		200		202		327
Total operating revenues	12,541		12,641		28,722		26,012
Operating expenses:
Technology, communication, and processing	4,297		6,018		9,008		13,123
Salaries and employee benefits	5,660		6,139		10,107		12,564
Professional services	2,634		2,338		5,842		4,978
Provision for operating losses	2,096		1,813		4,177		3,490
Occupancy	10		10		26		24
Customer related supplies	231		222		472		450
Advertising and promotion	75		125		175		243
Restructuring, merger, and acquisition related expenses	71		274		150		993
NextGen implementation costs	1,560		—		1,560		—
Other expense	576		743		1,219		1,563
Total operating expenses	17,210		17,682		32,736		37,428
Loss from operations	(4,669)		(5,041)		(4,014)		(11,416)
Non-operating income and expense:
(Loss) gain on fair value of private warrant liability	(162)		595		(54)		2,016
Loss before income tax expense	(4,831)		(4,446)		(4,068)		(9,400)
Income tax expense	—		10		15		16
Net loss	$	(4,831)	$	(4,456)	$	(4,083)	$	(9,416)

Weighted average number of shares outstanding - basic	11,785		11,563		11,756		11,566
Weighted average number of shares outstanding - diluted	11,785		11,563		11,756		11,566

Basic loss per common share	$	(0.41)	$	(0.39)	$	(0.35)	$	(0.81)
Diluted loss per common share	$	(0.41)	$	(0.39)	$	(0.35)	$	(0.81)

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED

For the Three and Six Months Ended June 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


	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 income	—	—		—		$	(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

See accompanying notes to the unaudited consolidated financial statements.

BM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

(amounts in thousands)


	Six Months Ended June 30,
	2024		2023
Cash Flows from Operating Activities:
Net loss	$	(4,083)	$	(9,416)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of premises and equipment	157		128

Amortization of developed software	2,580		5,980
Amortization of other intangible assets	160		160
Impairment of software assets	50		—
Provision for bad debt	400		257
Share-based compensation expense	(174)		1,358
Loss/(gain) on fair value of private warrant liability	54		(2,016)
Changes in operating assets and liabilities:
Accounts receivable	2,476		920
Prepaid expenses and other current assets	1,766		(1,666)
Other assets	—		72
Accounts payable and accrued liabilities	(555)		(1,403)


Deferred revenue	(1,175)		1,562

Net Cash provided by (used in) Operating Activities	1,656		(4,064)
Cash Flows from Investing Activities:
Development of internal use software	(3,184)		(2,935)
Purchases of premises and equipment	(70)		(151)
Net Cash used in Investing Activities	(3,254)		(3,086)
Cash Flows from Financing Activities:

Payments related to net settlement of share-based compensation awards	(233)		(2,434)
Net Cash used in Financing Activities	(233)		(2,434)
Net Decrease in Cash and Cash Equivalents	(1,831)		(9,584)
Cash and Cash Equivalents – Beginning	14,288		21,108
Cash and Cash Equivalents – Ending	$	12,457	$	11,524

Supplementary Cash Flow Information:
Income taxes (refunded) paid, net	$	(2,282)	$	27
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 August 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 $16.7 million at August 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 six months ended June 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 June 30, 2024, the Company had two premium finance arrangements outstanding with balances totaling $0.5 million, average remaining installment payment terms of 5.5 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 six months ended June 30, 2023, reflecting the impacted revenues gross instead of net as required.

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

•Decreased revenue from Interchange and Card revenue and decreased Technology, communication, and processing expense by an equal and offsetting $0.3 million and $0.4 million for the three and six months ended June 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 June 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 June 30, 2024 and $1.1 million at December 31, 2023.


(amounts in thousands)	Beginning Balance		Additions		Reductions		Ending Balance
Allowance for doubtful accounts
Six months ended June 30, 2024	$	1,100	$	1,119	$	(719)	$	1,500
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	June 30, 2024		December 31, 2023

IT equipment	3 to 5 years	$	1,000	$	930

Accumulated depreciation		(552)		(395)
Total		$	448	$	535

BMTX recorded depreciation expense of less than $0.1 million and less than $0.2 million for the three and six months ended June 30, 2024, respectively, and less than $0.1 million and $0.1 million for the three and six months ended June 30, 2023,

respectively, as a component of Technology, communication, and processing expense on the unaudited Consolidated Statements of Income (Loss).

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

Developed Software

The components of developed software were as follows:


(amounts in thousands)	Expected Useful Life	June 30, 2024		December 31, 2023
Higher One Disbursement business developed software	10 years	$	27,400	$	27,400
Internally developed software	3 to 7 years	51,556		43,225
Work-in-process		985		6,662
		79,941		77,287
Accumulated amortization		(63,694)		(61,114)
Total		$	16,247	$	16,173

BMTX recorded amortization expense of $1.5 million and $2.6 million for the three and six months ended June 30, 2024, respectively, and $3.0 million and $6.0 million for the three and six months ended June 30, 2023, respectively, as a component of Technology, communication, and processing expense on the unaudited Consolidated Statements of Income (Loss).

BMTX recorded impairment expenses of zero and less than $0.1 million during the three and six months ended June 30, 2024, respectively, and zero during the three and six months ended June 30, 2023, as a component of Technology, communication and processing expense on the unaudited Consolidated Statements of Income (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 six months ended June 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 June 30, 2024 and December 31, 2023 were as follows:


(amounts in thousands)	Expected Useful Life	June 30, 2024		December 31, 2023
Customer relationships – universities	20 years	$	6,402	$	6,402
Accumulated amortization		(2,453)		(2,293)
Total		$	3,949	$	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 Income (Loss). BMTX recorded amortization expense of $0.1 million and $0.2 million for the three and six months ended June 30, 2024, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively.

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


Remainder of 2024	$	160
2025	320
2026	320
2027	320
2028	320
After 2028	2,509
Total	$	3,949

Impairment is recorded in Technology, communication, and processing expense on the unaudited Consolidated Statements of Income (Loss). There was no impairment for Other intangibles, net during the three and six months ended June 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 Income (Loss). BMTX recorded lease expense of less than $0.1 million and $0.1 million for the three and six months ended June 30, 2024, respectively, and less than $0.1 million and $0.1 million for the three and six months ended June 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 June 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 June 30, 2024, there were 12,090,988 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. At June 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 c

SEC Form 10-Q filed by BM Technologies Inc.