BM TECHNOLOGIES, INC. – 10-Ok – 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 Consolidated Financial Statements and the related notes

included in Item 8 “Consolidated Financial Statements and Supplementary Data” of

this Form 10-K.

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the

meaning of the Private Securities Litigation Reform Act of 1995. Such statements

include, but are not limited to, statements about future financial and operating

results, our plans, objectives, expectations and intentions with respect to

future operations, products and services; and other statements identified by

words such as “will likely result,” “are expected to,” “will continue,” “is

anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook”

or words of similar meaning. These forward-looking statements include, but are

not limited to, statements regarding the Company’s industry and market sizes,

future opportunities for the Company and the Company’s estimated future results.

Such forward-looking statements are based upon the current beliefs and

expectations of our management and are inherently subject to significant

business, economic and competitive uncertainties and contingencies, many of

which are difficult to predict and generally beyond our control. Actual results

and the timing of events may differ materially from the results anticipated in

these forward-looking statements.

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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.

BMTX facilitates deposits and banking services between a customer and our

Partner Bank, Customers Bank, which is a related party and a Federal Deposit

Insurance Corporation (“FDIC”) insured bank. BMTX’s business model leverages

partners’ existing customer bases to achieve high volume, low-cost customer

acquisition in its Disbursement, BaaS, and Workplace Banking businesses.

BMTX has four primary revenue sources: interchange and card revenue, servicing

fees from our Partner Bank, account fees, and university fees. The majority of

revenues are driven by customer activity (deposits, spend, transactions, etc.)

but may be paid or passed through by the Company’s Partner Bank, universities,

or paid directly by customers. The Company is actively working on its pipeline

of prospective new BaaS customers to offer a suite of financial services

products.

BMTX is a Delaware corporation, originally incorporated as Megalith Financial

Acquisition Corp in November, 2017 and renamed BM Technologies, Inc. in January

2021 at the time of the merger between Megalith Financial Acquisition Corp and

BankMobile Technologies, Inc. Until January 4, 2021, BankMobile Technologies,

Inc. was a wholly-owned subsidiary of Customers Bank (“Customers Bank”).

Customers Bank is a Pennsylvania state-chartered bank and a wholly-owned

subsidiary of Customers Bancorp, Inc. (the “Bancorp” or “Customers Bancorp”), a

bank holding company. Customers Bank is our Partner Bank. Our Partner Bank holds

the FDIC insured deposits that we source and service and is the issuing bank on

our debit cards. Our Partner Bank pays us a deposit servicing fee for the

deposits generated and passes through interchange income earned from debit

transactions. Deposit servicing fees and interchange income are our largest

revenue sources.

BMTX is not a bank, does not hold a bank charter, and it does not provide

banking services, and as a result we are not subject to direct banking

regulation, except as a service provider to our Partner Bank. We are also

subject to the regulations of the ED, due to our student Disbursements business,

and are periodically examined by them. Our contracts with most of our higher

education institutional clients requires us 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; FERPA; 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 GLBA. Other

products and services offered by us may also be subject to other federal and

state laws and regulations.

BMTX’s higher education serviced deposits fluctuate throughout the year due

primarily to the relationship between the deposits level and the typical cycles

of student disbursements from higher education institutions. Serviced deposit

balances typically experience seasonal lows in December and July and experience

seasonal highs in September and January when individual account balances are

generally at their peak. Debit spend follows a similar seasonal trend but may

slightly lag increases in balances.

On November 14, 2021, we entered into the Agreement and Plan of Reorganization

and Merger with FSB, a Washington state-chartered bank.

Merger with Megalith Financial Acquisition Corporation

On January 4, 2021, BankMobile Technologies, Inc. (“BankMobile”), Megalith

Financial Acquisition Corp. (“Megalith”), and MFAC Merger Sub Inc., consummated

the transaction contemplated by the merger agreement entered into on August 6,

2020. In connection with the closing of the merger, Megalith Financial

Acquisition Corp. changed its name to BM Technologies, Inc. (the “Company”).

Effective January 6, 2021, the Company’s units ceased trading, and the Company’s

common stock and warrants began trading on the NYSE American under the symbols

“BMTX” and “BMTX-WT,” respectively.

The merger was accounted for as a reverse recapitalization in accordance with

U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method

of accounting, Megalith was treated as the “acquired” company for financial

reporting purposes and as a result, the transaction was treated as the

equivalent of BankMobile issuing stock for the net assets of Megalith,

accompanied by a recapitalization. The excess of the fair value of the shares

issued over the value of the net monetary assets of Megalith was recognized as

an adjustment to shareholders’ equity. There was no goodwill or other intangible

assets recorded in the merger. Prior periods presented for comparative purposes

represent the balances and activity of BankMobile Technologies, Inc. (other than

shares which were retroactively restated in connection with the merger).

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COVID-19

In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the

World Health Organization. The spread of COVID-19 created a global public health

crisis that resulted in unprecedented uncertainty, economic volatility, and

disruption in financial markets and in governmental, commercial, and consumer

activity in the United States and globally, including the markets that BMTX

serves. In response to the pandemic, we enabled nearly all of our employees to

work remotely and limited business travel. We are a “Remote First” company and

most of our employees have no assigned work location or regular in-office work

requirement.

With the initial outbreak of COVID-19 in 2020, the Company experienced an

initial decline in revenues as compared to the pre-COVID-19 period. On March 27,

2020, the “Coronavirus Aid, Relief, and Economic Security (“CARES”) Act” was

signed into law and contained substantial tax and spending provisions intended

to address the impact of the COVID-19 pandemic and stimulate the economy,

including cash payments to taxpayers, increased unemployment benefits, and to

support higher education through the Higher Education Emergency Relief Fund

(“HEERF”). This stimulus resulted in increased serviced deposit balances, debit

card spend, and revenues, a trend that continued into early 2021. However, we

have seen the growth rate slow in recent periods compared to the accelerated

growth rate we experienced during early 2021.

BUSINESS MEASUREMENTS

We believe that the following business measurements are important performance

indicators for our business:

•Debit card POS spend (higher education and new business). Spend represents the

dollar amount that our customers spend on their debit cards through a signature

or PIN network. Spend is a key performance indicator, as the company earns a

small percentage of every dollar spent as interchange income and spend is the

primary driver of our card revenues.

•Serviced deposits (ending and average; higher education and new business).

Serviced deposits represent the dollar amount of deposits that are in customer

accounts serviced by our Company. Our deposit servicing fee is based on a

contractual arrangement with our Partner Bank and the average balance of

serviced deposits is the primary driver of our deposit servicing fees. Average

deposits have the strongest correlation to current period serviced deposits, but

ending deposits provide information at a point in time and serve as the starting

point for the following period.

•Higher education retention. Retention is a key measure of our value proposition

with higher education customers. We measure retention in terms of Signed Student

Enrollments (SSEs), which represents the number of students enrolled at higher

education institutions. Retention is calculated by subtracting lost SSEs from

starting SSEs and taking that amount as a percentage of the starting SSEs.

•Higher education financial aid refund disbursement. Represents the dollar

amount of all funds that we process for a college or university partner, whether

it is distributed by ACH, check, or into a BankMobile Vibe account. This is a

measure of the business we process for our higher education partners in exchange

for their subscription and other fees, as well as a measure of the potential

that we have the opportunity to capture into our serviced accounts.

•Higher education organic deposits. Organic deposits represent the dollar total

of all deposits made into a higher education BankMobile Vibe account except for

funds processed through a college or university partner. Because this includes

funds that the account holder adds to the account and excludes the funds

processed through the higher education institution, it is viewed as a strong

indicator of traction with the customer.

CRITICAL ACCOUNTING POLICIES

We have adopted various accounting policies that govern the application of U.S.

GAAP and that are consistent with general practices within the fintech industry

in the preparation of these financial statements. Our significant accounting

policies are described in Note 2 – Basis of Presentation and Significant

Accounting Policies in the Notes to the Consolidated Financial Statements

herein.

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Certain accounting policies involve significant judgments and assumptions by us

that have a material impact on the carrying value of certain assets. We consider

these accounting policies to be critical accounting policies. The judgments and

assumptions used are based on historical experience and other factors, which are

believed to be reasonable under the circumstances. Due to the nature of the

judgments and assumptions management makes, actual results could differ from

these judgments and estimates, which could have a material impact on the

carrying values of our assets.

The critical accounting policies that are both important to the portrayal of our

financial condition and results of operations and require complex, subjective

judgments are the accounting policies for the following: share-based

compensation, provision for operating losses, income taxes, goodwill and other

intangibles, developed software, and accounting for public and private warrants.

Share-Based Compensation Expense

The Company uses share-based compensation, including stock, restricted stock

units and performance stock units, to provide long-term performance incentives

for its employees and directors. Share-based compensation is recognized on a

straight-line basis over the requisite service period of the award based on

their grant-date fair value for time-based awards. Compensation related to

performance-based awards are recognized over the period the performance

obligation is expected to be satisfied. Forfeitures are recognized as they

occur. Share-based compensation expense is included in Salaries and employee

benefits. In addition, the holders of restricted shares may elect to surrender a

portion of their shares on the vesting date to cover their income tax

obligations.

Provision for Operating Losses

The provision for operating losses represents our payments for losses resulting

from fraud or theft-based transactions that have generally been disputed by our

serviced deposit account holders and Regulation E card claim losses incurred by

us, as well as estimated liability for such losses where such disputes have not

been resolved as of the end of the reporting period. Fraud or theft-based

related losses are recognized when realized or incurred. Reg E claims made up a

vast majority of the losses. The remaining fraud or theft-based losses are

mostly Check Fraud and ACH/Wire Fraud.

The main source of Reg E losses is card holder claims of unauthorized use of

their debit card. Drivers include, but are not limited to transaction purchase

volume, in person vs. online, macroeconomic conditions, changes in customer

behavior, and regulatory changes. A customer has 60 days to dispute a charge.

BMTX may decline the claim within 10 days or advance the funds to the account

holder if the investigation is still pending. BMTX may continue to investigate

transactions for 35 more days, before making its final decision. At conclusion

of the investigation, the advance is reversed or is made permanent. BMTX’s loss

includes closed disputes where the customer is entitled to keep the funds

advanced, an expected loss on actual disputes that are pending investigation,

which is based on historical experience, as well as an estimate of disputes not

yet disputed. The estimated liability for disputes not yet disputed is created

by applying historical rates of transactions disputed after the reporting period

end date and applying that rate to actual debit card volume in the period. This

estimate of future disputes is then adjusted for our estimate of the amount

disputed that we expect to result in a loss, which is estimated based on our

historical experience. Our estimation process is subject to risks and

uncertainties, including that future performance may be different from our

historical experience. Accordingly, our actual loss experience may not match

expectations.

Fraud or theft-based related losses are recognized when realized or incurred.

Drivers include, but are not limited to efforts by organized or unorganized

fraudsters to target an account, customer complicity, customer lack of proper

password safeguarding or other preventative measures, onboarding approval

procedures, changes in account funds availability, in person vs. online

transactions, macroeconomic conditions, changes in customer behavior, and

regulatory changes.

Income Taxes

BMTX accounts for income taxes under the liability method of accounting for

income taxes. The income tax accounting guidance results in two components of

income tax expense: current and deferred. Current income tax expense reflects

taxes to be paid or refunded for the current period by applying the provisions

of the enacted tax law to the taxable income or excess of deductions over

revenues. BMTX determines deferred income taxes using the liability (or balance

sheet) method. Under this method, the net deferred tax asset or liability is

based on the tax effects of the differences between the book and tax bases of

assets and liabilities, and enacted changes in tax rates and laws are recognized

in the period in which they occur.

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A tax position is recognized if it is more likely than not, based on the

technical merits, that the tax position will be realized or sustained upon

examination. The term more likely than not means a likelihood of more than 50

percent; the term upon examination includes resolution of the related appeals or

litigation process. A tax position that meets the more-likely-than-not

recognition threshold is measured as the largest amount of tax benefit that has

a greater than 50 percent likelihood of being realized upon settlement with a

taxing authority that has full knowledge of all relevant information. The

determination of whether or not a tax position has met the more-likely-than-not

recognition threshold considers the facts, circumstances and information

available at the reporting date and is subject to management’s judgment.

In assessing the realizability of federal or state deferred tax assets,

management considers whether it is more likely than not that some portion or all

of the deferred tax assets will not be realized. The ultimate realization of

deferred tax assets is dependent upon the generation of future taxable income

during periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities,

projected future taxable income and prudent, feasible and permissible as well as

available tax planning strategies in making this assessment.

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. Other intangible assets represent purchased assets that

lack physical substance but can be distinguished from goodwill because of

contractual or other legal rights. Intangible assets that have finite lives,

such as university relationships, are subject to impairment testing. Intangible

assets are amortized on a straight-line basis over twenty years.

Goodwill is reviewed for impairment annually as of October 31 and between annual

tests when events and circumstances indicate that impairment may have occurred.

The goodwill impairment charge represents the amount by which the reporting

unit’s carrying amount exceeds its fair value; however, the loss recognized

should not exceed the total amount of goodwill allocated to that reporting unit.

BMTX applies a qualitative assessment to determine if the one-step quantitative

impairment test is necessary.

Other intangibles subject to amortization are reviewed for impairment under FASB

ASC 360, Property, Plant and Equipment, which requires that a long-lived asset

or asset group be tested for recoverability whenever events or changes in

circumstances indicate that the carrying value may not be recoverable. The

carrying value of a long-lived asset is not recoverable if it exceeds the sum of

the undiscounted cash flows expected to result from the use and eventual

disposition of the asset.

As part of its qualitative assessment, BMTX reviews regional and national trends

in current and expected economic conditions, examining indicators such as GDP

growth, interest rates and unemployment rates. BMTX also considers its own

historical performance (through BankMobile), expectations of future performance,

indicative deal values, and other trends specific to its industry.

Developed Software

Developed software includes internally developed software and developed software

acquired in the Higher One Disbursement business acquisition. Internally

developed software and related capitalized work-in-process costs relate to the

development of digital banking platforms to connect BaaS banking customers to

partner banks.

BMTX capitalizes certain internal and external costs incurred to develop

internal-use software during the application development stage. BMTX also

capitalizes the cost of specified upgrades and enhancements to internal-use

software that result in additional functionality. Once a development project is

substantially complete and the software is ready for its intended use, BMTX

begins amortizing these costs on a straight-line basis over the internal-use

software’s estimated useful life, which range from three to seven years.

The Higher One Disbursement business developed software is related to the

Disbursement business services to colleges and universities and delivering

services to students. The Higher One Disbursement business developed software

was recorded at the amount determined by a third-party valuation expert and was

estimated based on expected revenue attributable to the software utilizing a

discounted cash flow methodology, giving consideration to potential

obsolescence. The estimated useful life of the Higher One Disbursement business

developed software is 10 years.

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The Company reviews the carrying value of developed software for impairment by

measuring the carrying amount of the asset against the estimated undiscounted

future cash flows associated with it. If the Company determines that the

carrying amount is impaired, the asset is written down to fair value. Fair value

is determined based on discounted cash flows or management’s estimates,

depending on the nature of the assets.

Public & Private Warrants

The Company has Public and Private Warrants outstanding as a result of the

merger transaction which occurred on January 4, 2021. Each whole warrant

entitles the registered holder to purchase one whole share of common stock at a

price of $11.50 a share. The warrants expire January 4, 2026, or earlier upon

redemption or liquidation and 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 others.

The Private Warrants and the Public Warrants are treated differently for

accounting purposes. In accordance with FASB ASC Topic 480, Distinguishing

Liabilities from Equity, the Private Warrants are accounted for as liabilities

and will be marked-to-market each reporting period with the change recognized in

earnings. In general, under the mark-to-market accounting model, as the

Company’s stock price increases, the warrant liability increases, and the

Company recognizes additional expense in its Consolidated Statements of Income

(Loss) – the opposite when the stock price declines. Accordingly, the periodic

revaluation of the Private Warrants could result in significant volatility in

our reported earnings. The amounts recognized are a mark-to-market accounting

determination and are non-cash.

In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity,

for accounting purposes the Public Warrants are treated as equity instruments.

Accordingly, the Public Warrants are not marked-to-market each reporting period,

thus there is no impact to earnings. Any future exercises of the Public Warrants

will be recorded as cash received and recorded in Cash and cash equivalents,

with a corresponding offset to Additional paid-in capital in equity.

NEW ACCOUNTING PRONOUNCEMENTS

The FASB has issued accounting standards that have not yet become effective and

that may impact BMTX’s consolidated financial statements or its disclosures in

future periods. Note 2 – Basis of Presentation and Significant Accounting

Policies provides information regarding those accounting standards.

RESULTS OF OPERATIONS

The following discussion of our results of operations should be read in

conjunction with our Consolidated Financial Statements, including the

accompanying notes. The following summarized tables set forth our operating

results for the twelve months ended December 31, 2021 and December 31, 2020:

Twelve Months Ended

December 31,

2021

2020

(dollars in thousands, except per share %

data) (As Restated) Change Change

Operating revenues $ 94,987 $ 66,437 $ 28,550 43 %

Operating expenses 89,321 77,233 12,088 16 %

Income (loss) from operations 5,666 (10,796) 16,462 NM

Gain on fair value of private warrant

liability 17,225 – 17,225 100 %

Interest expense (96) (1,395) 1,299 (93) %

Income (loss) before income tax expense 22,795 (12,191) 34,986 NM

Income tax expense 5,752 23 5,729 NM

Net income (loss) $ 17,043 $ (12,214) $ 29,257 NM

Net Income (loss) per share – basic $ 1.44 $ (1.99) $ 3.43 NM

Net Income (loss) per share – diluted $ 1.43 $ (1.99) $ 3.42 NM

NM refers to changes greater than 150%.

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For the twelve months ended December 31, 2021, we had substantially higher

operating profitability as compared to the twelve months ended December 31,

2020. The increase was almost entirely due to additional revenues which

increased 43% as compared to the prior year as compared to operating expenses

which increased by only 16% resulting in improved operating profitability. The

increase in revenue is primarily driven by an increase in Servicing fees from

Partner Bank which increased $22.6 million as compared to the prior period. In

addition to increased income from operations, we experienced a year to date gain

on the fair value of the private warrant liability and decreased interest

expense. The resulting increased profitability for the period drove an increase

in income tax expense for the period. The increased profitability as compared to

the prior period was reflected in our Basic and Diluted Earnings Per Share

amounts which increased to $1.44 and $1.43 for the twelve months ended

December 31, 2021, respectively as compared to $(1.99) for both Basic and

Diluted Earnings Per Share for the twelve months ended December 31, 2020. The

reasons for these movements in revenue and expenses are discussed in further

detail below.

Operating Revenues

Twelve Months Ended

December 31,

2021 2020 %

(dollars in thousands) (As Restated) Change Change

Revenues:

Interchange and card revenue $ 28,078 $ 25,864 $ 2,214 9 %

Servicing fees from Partner Bank 45,105 22,465 22,640 101 %

Account fees 10,668 11,308 (640) (6) %

University fees 5,693 5,320 373 7 %

Other revenue 5,443 1,480 3,963 NM

Total operating revenues $ 94,987 $ 66,437 $ 28,550 43 %

NM refers to changes greater than 150%.

For the twelve months ended December 31, 2021, total revenues increased $28.6

million, or 43% as compared to the twelve months ended December 31, 2020. This

increase is primarily attributable to a $22.6 million increase in Servicing fees

from our Partner Bank, driven by an increase in average serviced deposits period

over period from $0.8 billion to $1.6 billion. The Company expects continued

growth in average serviced deposits in the future. In addition, we had a $4.0

million increase in Other revenue, due to higher banking-as-a-service project

revenues, and a $2.2 million increase in Interchange and card revenue due to an

increase in total spend as compared to the prior period. These increases in

revenue were partially offset by a decrease in Account fees of $0.6 million. The

decrease in Account fees of $0.6 million is primarily driven by reduced fees in

our Higher Education business.

Operating Expenses

Twelve Months Ended

December 31, %

(dollars in thousands) 2021 2020 Change Change

Technology, communication, and processing $ 28,973 $ 27,404 $ 1,569 6 %

Salaries and employee benefits 38,036 26,076 11,960 46 %

Professional services 10,395 9,304 1,091 12 %

Provision for operating losses 5,419 5,170 249 5 %

Occupancy 1,197 1,428 (231) (16) %

Customer related supplies 2,214 3,236 (1,022) (32) %

Advertising and promotion 654 941 (287) (30) %

Merger and acquisition related expenses 65 739 (674) (91) %

Other expense 2,368 2,935 (567) (19) %

Total operating expenses $ 89,321 $ 77,233 $ 12,088 16 %

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For the twelve months ended December 31, 2021, operating expenses increased

$12.1 million, or 16% as compared to the twelve months ended December 31, 2020.

This increase is primarily attributable to a $12.0 million increase in Salaries

and employee benefits, a $1.6 million increase in Technology, communication, and

processing, and a $1.1 million increase in Professional services. The increase

in Salaries and employee benefits included $9.5 million for the January 4th,

2021 share-based compensation award and $0.8 million for the accelerated vesting

of restricted stock units and stock options previously granted by our former

parent to certain of the Company’s employees in connection with the divestiture

of the Company, and $1.0 million for executive restricted share units granted

during 2021. The increase in Technology, communication, and processing expense

year-over-year reflects an increase in stand-alone technology and cloud

computing costs, as well as lower partner reimbursements of certain technology

costs in 2021. These increases were partially offset by a $1.0 million decrease

in Customer related supplies, a $0.7 million decrease in Merger and acquisition

related expenses, and a $0.6 million decrease in Other expense.

Income Tax Expense

The Company’s effective tax rate was 25.2% for the twelve months ended

December 31, 2021. The effective tax rate differs from the Company’s federal

statutory rate of 21.0% due to the non-taxable fair value adjustments related to

the non-compensatory private warrant liability being recorded through earnings

as well as tax expense related to the estimated annual increase of the valuation

allowance established against deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

We currently finance our operations through cash flows provided by operating

activities. We had a substantial increase in cash from operating activities in

the twelve months ended December 31, 2021 compared to the twelve months ended

December 31, 2020. We had $25.7 million of Cash and cash equivalents as of

December 31, 2021.

We intend to fund our ongoing operating activities with our existing cash and

expected cash flows from operations; we believe these sources of liquidity will

be adequate for at least the next twelve months. 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:

Twelve Months Ended

December 31,

2021 2020 %

(dollars in thousands) (As Restated) Change Change

Net cash provided by operating activities $ 27,543 $

16,038 $ 11,505 72 %

Net cash used in investing activities (733) (4,020) 3,287 (82) %

Net cash used in financing activities (4,095) (17,615) 13,520 (77) %

Net increase (decrease) in cash and cash

equivalents $ 22,715 $ (5,597) $ 28,312 NM

NM refers to changes greater than 150%.

Cash Flows Provided by Operating Activities

Cash provided by operating activities was $27.5 million in the twelve months

ended December 31, 2021 compared to cash provided of $16.0 million in the twelve

months ended December 31, 2020, an increase of $11.5 million. The increase was

driven primarily by the increase in Income (loss) from operations for the twelve

months ended December 31, 2021 as compared to the prior year.

Cash Flows Used in Investing Activities

Cash used in investing activities decreased $3.3 million in the twelve months

ended December 31, 2021 as compared to the twelve months ended December 31,

2020, primarily due to reduced capitalization of development costs related to

internal use software as compared to the prior year.

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Cash Flows Used in Financing Activities

Cash used in financing activities decreased $13.5 million as compared to the

prior year. The $4.1 million used in financing activities for the twelve months

ended December 31, 2021 reflects the repayment of $21.0 million of debt

substantially offset by $16.9 million of net cash proceeds from the

recapitalization transaction. For the twelve months ended December 31, 2020,

$19.0 million was recorded for repayments on borrowings that were partially

offset by $1.4 million in capital contributions from the Company’s Partner Bank.

CONTRACTUAL OBLIGATIONS

During the twelve months ended December 31, 2021, BMTX repaid its debt

outstanding. Note 7 – Borrowings from Partner Bank in the Notes to the

Consolidated Financial Statements herein provides additional information. There

were no other material changes in our contractual obligations during the twelve

months ended December 31, 2021.

A summary of the Company’s outstanding contractual obligations as of

December 31, 2021 is as follows:

Payments Due by Period

Within 1 to 3 More than Total Amounts

(dollars in thousands) 1 year years 3 years Committed

Operating leases $ 418 $ – $ – $ 418

$ 418 $ – $ – $ 418

Off-Balance Sheet Arrangements

As of December 31, 2021, we did not have any off-balance sheet arrangements.

FAQ not present/live