WM TECHNOLOGY, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)
The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes to those statements included in Item 1 "Financial Statements" in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under "Risk Factors" and included elsewhere herein and in our Annual Report on Form 10-K for the year endedDecember 31, 2021 . Overview OnJune 16, 2021 ,WM Holding Company, LLC (when referred to in its pre-Business Combination capacity, "Legacy WMH" and following the Business Combination, "WMH LLC ") completed its previously announced business combination withSilver Spike Acquisition Corp ("Silver Spike"). Legacy WMH was deemed to be the accounting acquirer under accounting principles generally accepted inthe United States of America ("GAAP"). In connection with the closing, Silver Spike changed its name toWM Technology, Inc. As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the "Company," "we," "us," and "our," and similar references refer toWM Technology, Inc , and its subsidiaries following the Business Combination and to Legacy WMH prior to the Business Combination.WM Technology, Inc. is one of the oldest and largest marketplace and technology solutions providers exclusively servicing the cannabis industry, primarily consumers, retailers and brands inthe United States state-legal and Canadian cannabis markets. Our business primarily consists of our commerce-driven marketplace, Weedmaps, and our monthly subscription software offering, WM Business. Our Weedmaps marketplace provides information on the cannabis plant and the industry and advocates for legalization. The Weedmaps marketplace provides consumers with information regarding cannabis retailers and brands, as well as the strain, pricing, and other information regarding locally available cannabis products, through our website and mobile apps, permitting product discovery, access to deals and discounts, and reservation of products for pickup by consumers or delivery to consumers by participating retailers. We believe the size of our user base and the frequency of consumption of cannabis of that user base is highly valuable to our clients and results in clients paying for our services. WM Business, our subscription package, is a comprehensive set of eCommerce and compliance software solutions catered towards cannabis retailers, delivery services and brands where clients receive access to a standard listing page and our suite of software solutions, including WM Orders,WM Dispatch ,WM Store , WM Dashboard, our WM Connectors (integrations and API platform), as well as access to our WM Exchange products, where available. We charge a monthly fee to clients for access to our WM Business subscription package and then offer other add-on products for additional fees, including our featured listings and our Sprout (customer relationship management), Cannveya (delivery and logistics software) and Enlighten (software, digital signage services and multi-media offerings) solutions. We sell our WM Business offering inthe United States , currently offer some of our WM Business solutions inCanada (including a third party integration that enables our clients to accept payments from consumers, currently available only inCanada ) and have a limited number of non-monetized listings in several other countries, includingAustria ,Germany ,the Netherlands ,Spain andSwitzerland . We operate inthe United States ,Canada , and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or applicable national law. We are headquartered inIrvine, California . We were founded in 2008 and operate a leading online marketplace with a comprehensive set of eCommerce and compliance software solutions sold to retailers and brands in theU.S. state-legal and Canadian cannabis markets. The Company's mission is to power a transparent and inclusive global cannabis economy. We address the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis patients and customers in a legally compliant fashion with our Weedmaps marketplace and WM Business software solutions. Over the past 13 years, we have grown the Weedmaps marketplace to become a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products, permitting product discovery and order-ahead for pickup or delivery by participating retailers. WM Business is a set of eCommerce-enablement tools designed to help our retailer and brand clients get the best out of their Weedmaps experience, while creating labor efficiency and managing their compliance needs. We have grown the Weedmaps marketplace to become the premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products with 17.4 million monthly active users ("MAUs") as ofJune 30, 2022 on the demand side and 5,537 and 5,282 average monthly paying business clients during the three and six months endedJune 30, 2022 , respectively, on the supply-side of our marketplace, see "-Monthly Active Users" below for additional information regarding MAUs. These paying clients include retailers, brands and other client types (such as doctors). Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased over 9,400 listing pages as ofJune 30, 2022 (of the over 17,600 listing pages on the marketplace). The Weedmaps marketplace provides consumers with information regarding cannabis retailers and brands, as well as the strain, pricing, and other information regarding locally 31
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available cannabis products, through our website and mobile apps, permitting product discovery and order-ahead for pickup or delivery by participating retailers. Our weedmaps.com site, our iOS Weedmaps mobile application and our Android Weedmaps mobile application also have educational content including news articles, information about cannabis strains, a number of "how-to" guides, policy white-papers and research to allow consumers to educate themselves on cannabis and its history, uses and legal status. While consumers can discover cannabis products, brands, and retailers on our site, we neither sell (or fulfill purchases of) cannabis products, nor do we process payments for cannabis transactions across our marketplace or SaaS solutions.
Costs for business combinations and public companies
OnJune 16, 2021 , Silver Spike consummated the business combination (the "Business Combination") pursuant to the certain Agreement and Plan of Merger, datedDecember 10, 2020 (the "Merger Agreement"), by and among Silver Spike,Silver Spike Merger Sub LLC , aDelaware limited liability company and a wholly owned direct subsidiary ofSilver Spike Acquisition Corp. ("Merger Sub"), Legacy WMH, andGhost Media Group, LLC , aNevada limited liability company, solely in its capacity as the initial holder representative (the "Holder Representative"). Pursuant to the Merger Agreement, Merger Sub merged with and into Legacy WMH, whereupon the separate limited liability company existence of Merger Sub ceased and Legacy WMH became the surviving company and continued in existence as a subsidiary of Silver Spike. On the Closing Date, and in connection with the Closing, Silver Spike changed its name toWM Technology, Inc. Legacy WMH was deemed to be the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification 805. While Silver Spike was the legal acquirer in the Business Combination, because Legacy WMH was deemed the accounting acquirer, the historical financial statements of Legacy WMH became the historical financial statements of the combined company, upon the Closing. The Business Combination was accounted for as a "reverse recapitalization." A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy WMH in many respects. Under this method of accounting, Silver Spike was treated as the "acquired" company for financial reporting purposes. For accounting purposes, Legacy WMH was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of Legacy WMH (i.e., a capital transaction involving the issuance of stock by Silver Spike for the stock of Legacy WMH). Accordingly, the consolidated assets, liabilities and results of operations of Legacy WMH became the historical financial statements of the combined company, and Silver Spike's assets, liabilities and results of operations were consolidated with Legacy WMH beginning on the acquisition date. Operations prior to the Business Combination are presented as those of Legacy WMH. The net assets of Silver Spike were recognized at historical cost (which are consistent with carrying value), with no goodwill or other intangible assets recorded. As a consequence of the Business Combination, Legacy WMH became the successor to anSEC -registered and Nasdaq-listed company which requires us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We have and expect to continue to incur additional annual expenses as a public company for, among other things, directors' and officers' liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.
Key operating and financial metrics
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
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Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (dollars in thousands, except for revenue per paying client) Revenues$ 58,294 $ 46,931 $ 115,746 $ 88,085 Net income (loss)$ 19,848 $ 16,837 $ (11,385) $ 24,568 EBITDA(1)$ 20,996 $ 17,433 $ (8,040) $ 26,407 Adjusted EBITDA(1) $ (595)$ 8,503 $ (1,548) $ 17,477 Average monthly revenue per paying client(2)$ 3,509 $ 3,706 $ 3,652 $ 3,609 Average monthly paying clients(3) 5,537 4,221 5,282 4,068 MAUs (in thousands)(4) 17,402 12,302 17,402 12,302 ___________________________ (1)For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income, see "-EBITDA and Adjusted EBITDA" below. (2)Average monthly revenue per paying client is defined as the average monthly revenue for any particular period divided by the average monthly paying clients in the same respective period. (3)Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided). (4)See "-Monthly Active Users" below for additional information regarding MAUs.
revenue
We offer WM Business subscriptions, which include access to the Weedmaps marketplace and certain SaaS solutions. As add-ons for additional fees, we offer other products, including featured listings, placements, promoted deals, nearby listings, other display advertising, customer relationship management, digital menus, and delivery and logistics services. Our WM Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. We have a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand, though we are testing a more dynamic, performance-based pricing model for these solutions across several markets. For clients that pay us in advance for listing and other services we record deferred revenue and recognize revenue over the applicable subscription term.
EBITDA and Adjusted EBITDA
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, transaction related bonuses, transaction costs, legal settlements and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net (loss) income (the most directly comparable GAAP financial measure) to EBITDA and from EBITDA to Adjusted EBITDA. We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
EBITDA and Adjusted EBITDA have limitations as an analytical tool and should not be viewed in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA and Adjusted EBITDA do not reflect changes or liquidity requirements for our working capital needs; and
•EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in the cash available to us.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income and our other GAAP results. 33
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A reconciliation of net income (loss) to non-GAAP EBITDA and Adjusted EBITDA is as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Net income (loss)$ 19,848 $ 16,837 $ (11,385) $ 24,568 Benefit from income taxes (1,310) (392) (3,058) (151) Depreciation and amortization expenses 2,458 988 6,403 1,990 EBITDA 20,996 17,433 (8,040) 26,407 Stock-based compensation 8,094 19,433 15,611 19,433
Change in fair value of option liability (32,234) (37,791)
(14,015) (37,791) Transaction related bonuses 1,073 1,550 3,030 1,550 Transaction costs - - 251 - Legal settlements and other legal costs 925 - 1,064 - Warrant transaction costs - 5,506 - 5,506 Impairment of right-of-use assets 551 2,372 551 2,372 Adjusted EBITDA $ (595)$ 8,503 $ (1,548) $ 17,477
Average monthly revenue per paying customer
Average monthly revenue per paying client measures how much clients, for the period of measurement, are willing to pay us for our subscription and additional offerings and the efficiency of the bid-auction process for our featured listings placements. We calculate this metric by dividing the average monthly revenue for any particular period by the average monthly number of paying clients in the same respective period. Three Months EndedJune 30 ,
Six months ended
2022 2021 2022 2021
Average monthly revenue per paying customer
Average monthly paying customers
We define average monthly paying clients as the monthly average of clients billed each month over a particular period (and for which services were provided). Our paying clients include both individual cannabis businesses as well as retail sites or businesses within a larger organization that have independent relationships with us, many of whom are owned by holding companies where decision-making is decentralized such that purchasing decisions are made, and relationships with us are located, at a lower organizational level. In addition, any client may choose to purchase multiple listing solutions for each of their retail sites or businesses. Average monthly paying clients for the three months endedJune 30, 2022 increased approximately 31% to 5,537 average monthly paying clients from 4,221 average monthly paying clients in the same period in 2021. Average monthly paying clients for the six months endedJune 30, 2022 increased approximately 30% to 5,282 average monthly paying clients from 4,068 average monthly paying clients in the same period in 2021. The increase in average monthly paying clients in the three and six months endedJune 30, 2022 as compared to the same periods in 2021 was primarily due to broad increases throughout our Featured Listing product, WM Business subscription offering and other ad solutions. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Average monthly paying clients 5,537 4,221 5,282 4,068
Monthly active users
In any given period, we calculate our monthly active users by determining the total number of unique users who opened our Weedmaps mobile app or gained access to our Weedmaps.com website during the final calendar month of the period. This number has been reported as Monthly Active Users ("MAUs"). This statistic includes users who gain access to the website through paid advertising channels. In the second quarter of 2022, our board of directors received an internal complaint regarding the calculation, definition, and reporting of our MAUs. In response, the board of directors formed a special committee (the "Special Committee") of independent directors to conduct an internal investigation with the assistance of outside counsel. As a result of this internal investigation, we have determined to provide the following information. 34
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As we have previously disclosed, one of the ways in which we acquire users is through paid advertising. To an increasing degree over time, growth of our monthly active users, reported as MAUs, has been driven by the purchase of pop-under advertisements, which are marketing advertisements on third party websites that automatically present our platform on users' screens in certain circumstances. Our internal data suggests that the vast majority of users who are directed to weedmaps.com via pop-under advertisements close the site without clicking on any links. Based on management's review, users whose access to the website resulted from these pop-under advertisements represented approximately 65% of our MAUs as ofJune 30, 2022 , and 54%, 50% and 54% of our MAUs as ofMarch 31, 2022 ,December 31, 2021 andSeptember 30, 2021 , respectively.
Our management has employed pop-under ads and other digital marketing strategies based on the belief that they provide a cost-effective means of promoting the weedmaps.com website and Weedmaps mobile apps. However, we expect to shift our marketing spend over the coming months to use less pop-under advertising.
In addition, there are inherent limitations on the ability of online platforms to identify unique, rather than repeat, users across sessions. In particular, incognito browsing, usage across devices or mobile and internet platforms, blocking or deleting cookies and IP addresses or other similar methods employed by users limits our ability to identify unique users and, as a result, we believe it is likely that our MAUs may include a significant number of repeat underlying users. Prior to and in the course of the internal investigation described above, we have continued to review user engagement metrics to determine which metrics may be most useful for investors in evaluating our evolving business and quarterly results of operations, and we intend to update investors on those efforts in connection with the results of operations for the quarter endingSeptember 30, 2022 .
The information described above, which is currently under further consideration by the Special Committee, is not expected to affect our GAAP financial results or the reporting or disclosure of any non-GAAP financial measures currently released.
As of June 30, 2022 2021 MAUs (in thousands) 17,402 12,302
For information on risks associated with reliance on specific metrics, including MAUs, see “Part II Item 1A. Risk Factors” below.
Factors affecting our performance
growth of our
We have historically grown through and intend to focus on continuing to grow through the expansion of our two-sided marketplace, which occurs through growth of the number and type of businesses and consumers that we attract to our platform. We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses.
Growth and retention of our paying customers
Our revenue grows primarily through acquiring and retaining paying clients and increasing the revenue per paying client over time. We have a history of attracting new paying clients and increasing their annual spend with us over time, primarily due to the value they receive once they are onboarded and able to take advantage of the benefits of participating in our two-sided marketplace and leveraging our software solutions. Our monthly net dollar retention, which is defined as total revenue from clients in a given month who were paying clients in the immediately preceding month, averaged at 98% in the first half of 2022. Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, the effects of the coronavirus (COVID-19) pandemic andRussia's initiation of military action againstUkraine . Increasing prices in the component materials for the goods or services of our clients may impact their ability to maintain or increase their spend with us and their ability to pay their invoices on time. Rapid and significant changes in commodity prices, such as fuel, may negatively affect our revenue if our clients are unable to mitigate inflationary increases through various customer pricing actions and cost reduction initiatives. This could also negatively impact our net dollar retention and collections on our accounts receivable. 35
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Regulation and maturation of the cannabis markets
We believe that we will have significant opportunities for greater growth as more jurisdictions legalize cannabis for medical and/or adult-use and the regulatory environment continues to develop. Thirty-eightU.S. states, theDistrict of Columbia ,Puerto Rico , and severalU.S. territories have legalized some form of whole-plant cannabis cultivation, sales, and use for certain medical purposes. Nineteen of those states and theDistrict of Columbia have also legalized cannabis use by adults for non-medical or adult-use purposes, and several other states are at various stages of similar legalization measures. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 13-year operating history to enter new markets. We also have a significant opportunity to monetize transactions originating from users engaging with a retailer on the Weedmaps marketplace or tracked via one of our WM Business solutions. GivenU.S. federal prohibitions on plant-touching businesses and our current policy not to participate in the chain of commerce associated with the sale of cannabis products, we do not charge take-rates or payment fees for transactions originating from users who engage with a retailer on the Weedmaps platform or tracked via one of our WM Business solutions. A change inU.S. federal regulations could result in our ability to engage in such monetization efforts without adverse consequences to our business. Our long-term growth depends on our ability to successfully capitalize on new and existing cannabis markets. Each market must reach a critical mass of both cannabis businesses and consumers for listing subscriptions, advertising placements and other solutions to have meaningful appeal to potential clients. As regulated markets mature and as we incur expenses to attract paying clients and convert non-paying clients to paying clients, we may generate losses in new markets for an extended period. Furthermore, we compete with cannabis-focused and general two-sided marketplaces, internet search engines, and various other newspaper, television and media companies and other software providers. We expect competition to intensify in the future as the regulatory regime for cannabis becomes more settled and the legal market for cannabis becomes more accepted, which may encourage new participants to enter the market, including established companies with substantially greater financial, technical and other resources than existing market participants. Our current and future competitors may also enjoy other competitive advantages, such as greater name recognition, more offerings and larger marketing budgets.
brand awareness and reputation
We believe that maintaining and enhancing our brand identity and our reputation is critical to maintaining and growing our relationships with clients and consumers and to our ability to attract new clients and consumers. Historically, a substantial majority of our marketing spending was on out-of-home advertising on billboards, buses and other non-digital outlets. Starting in 2019, consistent with the overall shift in perceptions regarding cannabis, a number of demand-side digital advertising platforms allowed us to advertise online. We also invested in growing our internal digital performance advertising team. We believe there is an opportunity to improve market efficiency through digital channels and expect to shift our marketing spending accordingly. Over the longer term, we expect to shift and accelerate our marketing spend to additional online and traditional channels, such as broadcast television or radio, as they become available to us. Negative publicity, whether or not justified, relating to events or activities attributed to us, our employees, clients or others associated with any of these parties, may tarnish our reputation and reduce the value of our brand. Given our high visibility and relatively long operating history compared to many of our competitors, we may be more susceptible to the risk of negative publicity. Damage to our reputation and loss of brand equity may reduce demand for our platform and have an adverse effect on our business, operating results and financial condition. Moreover, any attempts to rebuild our reputation and restore the value of our brand may be costly and time consuming, and such efforts may not ultimately be successful. We also believe that the importance of our brand recognition and reputation will continue to increase as competition in our market continues to develop. If our brand promotion activities are not successful, our operating results and growth may be adversely impacted. Investments in Growth
We intend to continue to make targeted organic and inorganic investments to grow our sales and scale operations to support this growth.
Given our long operating history inthe United States and the strength of our network, often businesses will initially list on our platform without targeted sales or marketing efforts by us. However, we plan to accelerate our investments in marketing to maintain and increase our brand awareness through both online and offline channels. We also plan to invest in expanding our business listings thereby enhancing our client and consumer experience, and improving the depth and quality of information provided on our platform. We also intend to continue to invest in several areas to continue enhancing the functionality of our WM Business offering. We expect significant near-term investments to enhance our data assets and evolve our current listings 36
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and software offerings for our branded customers, among others. We anticipate making such investments to be able to capitalize on the rapidly growing cannabis market.
OnJanuary 14, 2022 , we acquiredEyechronic LLC ("Eyechronic") d/b/a Enlighten, aDelaware limited liability company and a provider of software, digital signage services and multi-media offerings to dispensaries and brands. We are continuing to integrate Eyechronic and our other acquisitions and will continue to invest in them appropriately to scale during this fiscal year 2022. OnSeptember 3, 2021 , the Company acquired certain assets of the Sprout business ("Sprout"), a leading, cloud-based customer relationship management ("CRM") and marketing platform for the cannabis industry. OnSeptember 29, 2021 , the Company acquired all of the equity interests ofTransport Logistics Holding Company, LLC ("TLH"), which is the parent company of Cannveya & CannCurrent. Cannveya is a logistics platform that enables the compliant delivery of cannabis and CannCurrent is a technology integrations and connectors platform facilitating custom integrations with third party technology providers.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience an adverse impact on our results of operations and cash flows in the near term.
Components of our earnings situation
revenues
We offer WM Business subscriptions, which include access to the Weedmaps marketplace and certain SaaS solutions. As add-ons for additional fees, we offer other products, including featured listings, placements, promoted deals, nearby listings, other display advertising, customer relationship management, digital menus, and delivery and logistics services. Our WM Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. We have a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand, though we are testing a more dynamic, performance-based pricing model for these solutions across several markets. For clients that pay us in advance for listing and other services we record deferred revenue and recognize revenue over the applicable subscription term.
cost of revenue
Cost of sales consists primarily of web hosting, internet services, credit card processing costs and inventory costs related to multimedia offerings.
Sales and Marketing Expenses
Selling and marketing expenses consist of salaries, benefits, travel expense and incentive compensation for our sales and marketing employees. In addition, sales and marketing expenses include business acquisition marketing, events cost, and branding and advertising costs. We expect our sales and marketing expenses to increase on an absolute basis as we enter new markets. Over the longer term, we expect sales and marketing expense to increase in a manner consistent with revenue growth, however, we may experience fluctuations in some periods as we enter and develop new markets or have large one-time marketing projects.
Product development expenses
Product development costs consist of salaries and benefits for employees, including engineering and technical teams who are responsible for building new products, as well as maintaining and improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred. The majority of our new software development costs have historically been expensed. We believe that continued investment in our platform is important for our growth and expect our product development expenses will increase in a manner consistent with revenue growth as our operations grow.
General and administrative expenses
General and administrative expenses consist primarily of payroll and related benefit costs for our employees involved in general corporate functions including our senior leadership team as well as costs associated with the use by these functions of software and facilities and equipment, such as rent, insurance, and other occupancy expenses. General and administrative expenses also include professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by increases in headcount required to support business growth and meeting our obligations as a public company. We expect general and administrative expenses to decline as a percentage of revenue as we scale our business and leverage investments in these areas. 37
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Depreciation and amortization expenses
Depreciation and amortization expenses primarily consist of depreciation on computer equipment, furniture and fixtures, leasehold improvements, capitalized software development costs and amortization of purchased intangibles. We expect depreciation and amortization expenses to increase on an absolute basis for the foreseeable future as we scale our business. 38
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operating results
The following tables present our results of operations for the periods presented and express the relationship of certain items as a percentage of net sales for those periods. Period comparisons of financial results are not necessarily indicative of future results.
Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Revenues$ 58,294 $ 46,931 $ 115,746 $ 88,085 Operating expenses: Cost of revenues 3,858 1,908 7,598 3,765 Sales and marketing 22,123 15,271 44,005 24,388 Product development 13,263 10,271 26,353 18,139 General and administrative 29,610 33,770 58,665 47,136 Depreciation and amortization 2,458 988 6,403 1,990 Total operating expenses 71,312 62,208 143,024 95,418 Operating loss (13,018) (15,277) (27,278) (7,333) Other income (expenses) Change in fair value of warrant liability 32,234 37,791 14,015 37,791 Other expense, net (678) (6,069) (1,180) (6,041) Income (loss) before income taxes 18,538 16,445 (14,443) 24,417 Benefit from income taxes (1,310) (392) (3,058) (151) Net income (loss) 19,848 16,837 (11,385) 24,568 Net income (loss) attributable to noncontrolling interests 8,156 12,574 (9,184) 20,305 Net income (loss) attributable to WM Technology, Inc.$ 11,692 $ 4,263 $ (2,201) $ 4,263 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenues 100 % 100 % 100 % 100 % Operating expenses: Cost of revenues 7 % 4 % 7 % 4 % Sales and marketing 38 % 33 % 38 % 28 % Product development 23 % 22 % 23 % 21 % General and administrative 51 % 72 % 51 % 54 % Depreciation and amortization 4 % 2 % 6 % 2 % Total operating expenses 122 % 133 % 124 % 108 % Operating (loss) income (22) % (33) % (24) % (8) % Other income (expenses) Change in fair value of warrant liability 55 % 81 % 12 % 43 % Other income, net (1) % (13) % (1) % (7) % Income (loss) before income taxes 32 % 35 % (12) % 28 % Benefit from income taxes (2) % (1) % (3) % 0 % Net income (loss) 34 % 36 % (10) % 28 % Net income (loss) attributable to noncontrolling interests 14 % 27 % (8) % 23 % Net income (loss) attributable to WM Technology, Inc. 20 % 9 % (2) % 5 % 39
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Comparison of the past three months
Revenues Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Revenues$ 58,294 $ 46,931 $ 11,363 24 Total revenues increased by$11.4 million , or 24% for the three months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily driven by a 31% increase in average monthly paying clients. Our growth in average monthly paying clients primarily reflects growth in our featured listing product of$3.8 million , WM Business subscription offering of$0.9 million and other ad and SaaS solutions of$6.6 million , which includes revenues attributable to companies we acquired since the second quarter of 2021. For the three months endedJune 30, 2022 , featured listing product, WM Business subscription offering and other ad and SaaS solutions represented 51%, 20% and 29% of our total revenues, respectively. Cost of Revenues Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Cost of revenues$ 3,858 $ 1,908 $ 1,950 102 Gross margin 93 % 96 % Cost of revenues was$3.9 million for the three months endedJune 30, 2022 compared to$1.9 million for the same period in 2021. The increase was primarily related to an increase of$1.6 million attributable to inventory costs of certain advertising revenue as well as the cost of revenue attributable to a company we acquired in the third quarter of 2021. Sales and Marketing Expenses Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Sales and marketing expenses$ 22,123 $ 15,271 $ 6,852 45 Percentage of revenue 38 % 33 % Sales and marketing expenses increased by$6.9 million , or 45% for the three months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily due to increases in personnel-related costs of$4.9 million , branding and advertising costs of$1.0 million , outside services costs of$0.8 million , website advertising expense of$0.3 million as more advertising options become available in the cannabis industry, and travel and entertainment expense of$0.5 million , offset by a decrease in event expense of$1.0 million . The increase in personnel-related costs was attributable to increased headcount and a$0.8 million of bonus expense related to future bonus payouts in connection with prior acquisitions, offset by a decrease in stock-based compensation expense of$1.8 million due to additional stock-based compensation expense recognized in the 2021 period as a result of the Business Combination.
Product development expenses
Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Product development expenses$ 13,263 $ 10,271 $ 2,992 29 Percentage of revenue 23 % 22 % Product development expenses increased by$3.0 million , or 29% for the three months endedJune 30, 2022 compared to the same period in 2021. This increase was primarily due to an increase in personnel-related costs of$7.0 million and an increase in outside services of$0.6 million , offset by capitalized software costs of$4.6 million . The increase in personnel 40
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The associated costs are mainly due to wage and salary increases
General and administrative expenses
Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) General and administrative expenses$ 29,610 $ 33,770 $ (4,160) (12) Percentage of revenue 51 % 72 % General and administrative expenses decreased by$4.2 million , or 12% for the three months endedJune 30, 2022 compared to the same period in 2021. This decrease was primarily due to decreases in personnel-related costs of$9.5 million and impairment of right-of-use assets of$1.8 million , offset by increases in insurance costs of$2.2 million for additional insurance coverage as a public company, software costs of$1.2 million , bad debt expense of$1.4 million and professional fees of$2.3 million . The decrease in personnel-related costs includes a decrease in stock-based compensation expense of$9.1 million as a result of the additional stock-based compensation expense recognized in the 2021 period as a result of the Business Combination.
Depreciation and amortization expenses
Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Depreciation and amortization expenses$ 2,458 $ 988 $ 1,470 149 Percentage of revenue 4 % 2 % Depreciation and amortization expenses increased$1.5 million , or 149% for the three months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily due to increases in capitalized software amortization of$0.9 million and amortization of intangible assets of$0.3 million .
Other income (expense), net
Three Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Change in fair value of warrant liability$ 32,234 $ 37,791 (5,557) (15) Other expense, net (678) (6,069) 5,391 (89) Other income (expense), net$ 31,556 $ 31,722 (166) (1) Percentage of revenue 54 % 68 % Other income (expense), net decreased by$0.2 million for the three months endedJune 30, 2022 compared to the same period in 2021. The decrease in other income was primarily due to comparatively unfavorable changes in fair value of warrant liability of$5.6 million , offset by a decrease in other expense, net of$5.4 million primarily attributable to transaction costs of$5.5 million recognized in the 2021 period related to the Business Combination. 41
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Comparison of the completed six months
Revenues Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Revenues$ 115,746 $ 88,085 $ 27,661 31 Total revenues increased by$27.7 million , or 31%, for the six months endedJune 30, 2022 compared to the same period in 2021. The increase was driven by a 30% increase in average monthly paying clients. Our growth in average monthly revenue per paying client and average monthly paying clients primarily reflects growth in our featured listing product of$11.5 million , WM Business subscription offering of$2.7 million and other ad and SaaS solutions of$13.4 million , which includes revenues attributable to companies we acquired since the second quarter of 2021. For the six months endedJune 30, 2022 , featured listing product, WM Business subscription offering and other ad and SaaS solutions represented 52%, 20% and 28% of our total revenues, respectively. Cost of Revenues Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Cost of revenues$ 7,598 $ 3,765 $ 3,833 102 Gross margin 93 % 96 % Cost of revenues increased by$3.8 million , or 102%, for the six months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily related to an increase of$3.1 million attributable to inventory costs of certain advertising revenue as well as the cost of revenue attributable to a company we acquired in the third quarter of 2021. Sales and Marketing Expenses Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Sales and marketing expenses$ 44,005 $ 24,388 $ 19,617 80 Percentage of revenue 38 % 28 % Sales and marketing expenses increased by$19.6 million , or 80%, for the six months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily due to increases in personnel-related costs of$13.8 million , outside services costs of$2.6 million , branding and advertising expense of$1.5 million and website advertising expense of$1.3 million . The increase in personnel-related costs was primarily due to increased headcount, including increases in salaries and wages of$8.6 million and bonus expense of$4.1 million , which includes$2.0 million of expense related to future bonus payouts in connection with prior acquisitions. Product Development Expenses Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Product development expenses$ 26,353 $ 18,139 $ 8,214 45 Percentage of revenue 23 % 21 % Product development expenses increased by$8.2 million , or 45% for the six months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily due to increases in personnel-related costs of$14.9 million and outside services costs of$1.4 million , offset by an increase in capitalized software development costs of$8.3 million . The increase in personnel-related costs was primarily due to increases in salaries, wages and bonus of$11.9 million , due to increased headcount, and stock-based compensation costs of$1.9 million driven by the issuance of restricted stock units to our employees 42
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in the second half of 2021 and the first half of 2022. Includes bonus expense for the first half of 2022
General and administrative expenses
Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) General and administrative expenses$ 58,665 $ 47,136 $ 11,529 24 Percentage of revenue 51 % 54 % General and administrative expenses increased by$11.5 million , or 24%, for the six months endedJune 30, 2022 compared to the same period in 2021. This increase was primarily due to increases in salaries and wages of$2.7 million , insurance costs of$5.4 million as a result of additional insurance coverage as a public company, bad debt expense of$4.0 million due to higher reserves for past due balances, professional services of$3.5 million and software expense of$2.6 million . These increases were partially offset by a decrease in stock-based compensation expense of$4.8 million and a decrease in impairment loss on right-of-use assets of$1.8 million . The decrease in stock-based compensation expense was a result of additional stock-based compensation expense recognized in the 2021 period in connection with the Business Combination.
Depreciation and amortization expenses
Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Depreciation and amortization expenses$ 6,403 $ 1,990 $ 4,413 222 Percentage of revenue 6 % 2 % Depreciation and amortization expenses increased$4.4 million for the six months endedJune 30, 2022 compared to the same period in 2021. The increase was primarily due to increases in capitalized software amortization of$2.6 million , fixed asset depreciation of$0.9 million and intangible asset amortization of$0.9 million . Capitalized software amortization included accelerated depreciation of$1.1 million related to discontinued product features of WM Retail in the first quarter of 2022. Other (Expense) Income , net Six Months Ended June 30, Change 2022 2021 ($) (%) (dollars in thousands) Change in fair value of warrant liability$ 14,015 $ 37,791 (23,776) (63) Other expense, net (1,180) (6,041) 4,861 (80) Other (expense) income, net$ 12,835 $ 31,750 (18,915) (60) Percentage of revenue 11 % 36 % Other (expense) income, net decreased by$18.9 million for the six months endedJune 30, 2022 compared to the same period in 2021. The decrease in other (expense) income, net was primarily due to comparatively unfavorable changes in fair value of warrant liability of$23.8 million , which was partially offset by a decrease in other expense, net of$4.9 million , primarily attributable to transaction costs of$5.5 million recognized in the 2021 period related to the Business Combination. Seasonality Our rapid growth and recent changes in legislation have historically offset seasonal trends in our business. While seasonality has not had a significant impact on our results in the past, our clients may experience seasonality in their businesses which in turn can impact the revenue generated from them. Our business may become more seasonal in the future and historical patterns in our business may not be a reliable indicator of future performance. 43
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liquidity and capital resources
The following tables show our cash, accounts receivable and working capital as of the dates shown:
June 30, 2022 December 31, 2021 (in thousands) Cash$ 47,604 $ 67,777 Accounts receivable, net 27,305 17,550 Working capital 45,462 61,134 As ofJune 30, 2022 , we had cash of$47.6 million . During the second quarter of 2021, we completed the Business Combination, resulting in proceeds of approximately$80.0 million . Our funds are being used for funding our current operations and potential strategic acquisitions in the future. We also intend to increase our capital expenditures to support the organic growth in our business and operations. We expect to fund our near-term capital expenditures from cash provided by operating activities. We believe that our existing cash and cash generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors. We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.
sources of liquidity
We fund our operations and capital expenditures primarily from cash flows generated from operations.
To the extent existing cash and investments and cash from operations are not sufficient to fund future activities, we may need to raise additional funds. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness may have rights that are senior to holders of our equity securities and could contain covenants that restrict operations. Any additional equity financing may be dilutive to stockholders. We may enter into investment or acquisition transactions in the future, which could require us to seek additional equity financing, incur indebtedness, or use cash resources. Cash Flows Six Months Ended June 30, 2022 2021 (in thousands) Net cash (used in) provided by operating activities$ (3,814) $ 16,539 Net cash used in investing activities$ (10,267) $ (836) Net cash (used in) provided by financing activities $
(6,092)
Cash from operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, impairment charges, stock-based compensation, provision for doubtful accounts, deferred taxes and the effect of changes in working capital. Net cash used in operating activities for the six months endedJune 30, 2022 was$3.8 million , which resulted from a net loss of$11.4 million , together with net cash outflows of$2.6 million from changes in operating assets and liabilities, and non-cash items of$10.2 million , consisting of depreciation and amortization of$6.4 million , fair value of warrant liability of$14.0 million , stock-based compensation of$15.6 million , deferred income taxes of$3.1 million , provision for doubtful accounts of$4.7 million and impairment loss on right-of-use asset of$0.6 million . Net cash outflows from changes in operating assets and liabilities were primarily due to an increase in accounts receivable of$13.6 million , partially offset by a decrease in prepaid expenses and other assets of$2.9 million and an increase in accounts payable and accrued expenses of$8.9 million . The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments. Net cash provided by operating activities for the six months endedJune 30, 2021 was$16.5 million , which resulted from net income of approximately$24.6 million , together with net cash inflows of approximately$5.7 million from changes in operating assets and liabilities, and non-cash items of$13.7 million , consisting of depreciation and amortization of$2.0 million , fair value of warrant liability of$37.8 million , stock-based compensation of$19.4 million , impairment loss on right-of-use asset of$2.4 million , provision for doubtful accounts of$0.7 million and deferred income taxes of$0.4 million . The net cash 44
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inflows from changes in operating assets and liabilities were primarily due to a decrease in prepaid expenses and other current assets of$4.4 million , an increase in accounts payable and accrued expenses of$1.7 million , an increase in deferred revenue of$1.7 million . These changes were partially offset by an increase in accounts receivables of$2.1 million . The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Cash used in investing activities in the past six months
Cash used in investing activities in the past six months
Cash outflows from financing activities for the six months endedJune 30, 2022 was$6.1 million , which primarily consists of repayments of insurance premium financing of$4.3 million and distributions of$1.8 million to the Unit holders other than the Company. Net cash used in financing activities for the six months endedJune 30, 2021 was$56.0 million , which resulted from proceeds from the Business Combination of$80.3 million , distributions of$18.1 million , repurchase of ClassB Units of$5.6 million and repayments of insurance premium financing of$0.4 million .
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with revenue recognition, income taxes, stock-based compensation, capitalized software development costs, goodwill and intangible assets and fair value measurements to have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see Note 2 to our condensed consolidated financial statements included herein. Revenue Recognition Our revenues are derived primarily from monthly subscriptions and additional offerings for access to the Weedmaps platform and SaaS solutions. We recognize revenue when the fundamental criteria for revenue recognition are met. We recognize revenue by applying the following steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) we satisfy these performance obligations in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We exclude sales taxes and other similar taxes from the measurement of the transaction price. The determination of the performance obligations and the timing of satisfaction of such obligations either over time or at a point-in-time requires us to make significant judgement and estimates. Substantially all of our revenue is generated by providing standard listing subscription services and other paid listing subscriptions services, including featured listings, placements, promoted deals, nearby listings, other display advertising as well as customer relationship management and delivery and logistic services. These arrangements are recognized over-time, generally during a month-to-month subscription period as the products are provided.
income tax
As a result of the Business Combination,WM Technology, Inc. became the sole managing member ofWMH LLC , which is treated as a partnership forU.S. federal and most applicable state and local income tax purposes. As a partnership,WMH LLC is not subject toU.S. federal and certain state and local income taxes. Accordingly, no provision forU.S. federal and state income taxes has been recorded in the financial statements for the period ofJanuary 1 to June 16, 2021 as this period was prior to the Business Combination. 45 -------------------------------------------------------------------------------- Table of ContentsWM Technology, Inc. is subject toU.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income ofWMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions. Any taxable income or loss generated byWMH LLC is passed through to and included in the taxable income or loss of its members, includingWM Technology, Inc. following the Business Combination, on a pro rata basis.WM Technology, Inc. is also subject to taxes in foreign jurisdictions. Tax laws and regulations are complex and periodically changing and the determination of our provision for income taxes, including our taxable income, deferred tax assets and tax receivable agreement liability, requires us to make significant judgment, assumptions and estimates. In connection with the Business Combination, the Company entered into a Tax Receivable Agreement ("TRA") with continuing members that provides for a payment to the continuing members of 85% of the amount of tax benefits, if any, thatWM Technology, Inc. realizes, or is deemed to realize, as a result of redemptions or exchanges of WMH Units. In connection with such potential future tax benefits resulting from the Business Combination, the Company has established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded within paid-in capital. To date, no payments have been made with respect to the TRA. Our calculation of the TRA asset and liability requires estimates of its future qualified taxable income over the term of the TRA as a basis to determine if the related tax benefits are expected to be realized. As ofJune 30, 2022 , total net deferred tax assets and TRA liability were$183.2 million and$142.7 million , respectively.
Stock-Based Compensation
We measure fair value of employee stock-based compensation awards on the date of grant and allocate the related expense over the requisite service period. The fair value of restricted stock units ("RSUs") and performance-based restricted stock units ("PRSUs") is equal to the market price of our Class A common stock on the date of grant. The fair value of the ClassP Units is measured using the Black-Scholes-Merton valuation model. When awards include a performance condition that impacts the vesting of the award, we record compensation cost when it becomes probable that the performance condition will be met. The level of achievement of such goals in the performance-based restricted stock awards may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. Forfeitures of stock-based awards are recognized as they occur. For the three and six months endedJune 30, 2022 , we recognized stock-based compensation expense of$8.1 million and$15.6 million , respectively, and for the three and six months endedJune 30, 2021 , we recognized stock-based compensation expense of$19.4 million . See Note 11 to our condensed consolidated financial statements included herein.
Capitalized software development costs
We capitalize certain costs related to the development and enhancement of the Weedmaps platform and SaaS solutions. In accordance with authoritative guidance, we began to capitalize these costs when preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded in product development expenses on our consolidated statements of operations. Costs incurred for enhancements that were expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements, generally three years. The accounting for website and internal-use software costs requires us to make significant judgement, assumptions and estimates related to the timing and amount of recognized capitalized software development costs. For the three and six months endedJune 30, 2022 , we capitalized$4.5 million and$8.6 million of costs related to the development of software applications, respectively.
Assets and liabilities acquired from acquisitions are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. The accounting for goodwill and intangible assets requires us to make significant judgement, estimates and assumptions. Significant estimates and assumptions in valuing acquired intangible assets and liabilities include projected cash flows attributable to the assets or liabilities, asset useful lives and discount rates.Goodwill is not amortized and is subject to annual impairment testing, or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. Intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. See Note 2 to our consolidated financial statements included herein. 46
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Fair Value Measurement
In connection with the Business Combination, we assumed 12,499,993 Public Warrants and 7,000,000 Private Placement Warrants. As ofJune 30, 2022 , 12,499,973 of the Public Warrants and all of the Private Placement Warrants remained outstanding . The warrants are measured at fair value under ASC 820 - Fair Value Measurements. The fair value of the Public Warrants is classified as Level 1 financial instruments and is based on the publicly listed trading price of our Public Warrants. The fair value of the Private Warrants is determined with Level 3 inputs using the Black-Scholes model. The fair value of the Private Placement Warrants may change significantly as additional data is obtained. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value, and such changes could materially impact our results of operations in future periods. As ofJune 30, 2022 andDecember 31, 2021 , warranty liability was$13.4 million and$27.5 million , respectively. See Note 4 to our condensed consolidated financial statements included herein.
Current accounting pronouncements
See Note 2 to our condensed consolidated financial statements contained herein.
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