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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________
FORM 10-Q
_______________________________________________________________________________
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 001-39021
_______________________________________________________________________________
WM TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________
Delaware98-1605615
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
41 Discovery
Irvine, California

92618
(Address of Principal Executive Offices)(Zip Code)
(844) 933-3627
(Registrant’ telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per shareMAPSThe Nasdaq Global Select Market
Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share
MAPSWThe Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   ☐     No  ☒
As of November 3, 2022, there were 90,952,468 shares of the registrant’s Class A common stock outstanding and 55,486,361 shares of Class V common stock outstanding.

WM TECHNOLOGY, INC.
TABLE OF CONTENTS
Page
2
Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021


FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our financial and business performance, including key business metrics and any underlying assumptions thereunder;
•our market opportunity and our ability to acquire new clients and retain existing clients;
•our expectations and timing related to commercial product launches;
•the success of our go-to-market strategy;
•our ability to scale our business and expand our offerings;
•our competitive advantages and growth strategies;
•our future capital requirements and sources and uses of cash;
•our ability to obtain funding for our future operations;
•the outcome of any known and unknown litigation and regulatory proceedings;
•changes in domestic and foreign business, market, financial, political and legal conditions;
•future global, regional or local economic and market conditions affecting the cannabis industry;
•the development, effects and enforcement of and changes to laws and regulations, including with respect to the cannabis industry;
•our ability to successfully capitalize on new and existing cannabis markets, including our ability to successfully monetize our solutions in those markets;
•our ability to manage future growth;
•our ability to effectively anticipate and address changes in the end-user market in the cannabis industry and the impact that no longer tracking and reporting MAUs may have on our business or the expectations of investors;
•our ability to develop new products and solutions, bring them to market in a timely manner, and make enhancements to our platform and our ability to maintain and grow our two sided digital network, including our ability to acquire and retain paying clients;
•the effects of competition on our future business;
•our success in retaining or recruiting, or changes required in, officers, key employees or directors; and
•the possibility that we may be adversely affected by other economic, business or competitive factors.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 9, 2022. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe,” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our

forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

Part I - Financial Information
Item 1.    Financial Statements
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except for share data)
September 30, 2022December 31, 2021
Assets
Current assets
Cash$34,170 $67,777 
Accounts receivable, net16,642 17,550 
Prepaid expenses and other current assets11,201 13,607 
Total current assets62,013 98,934 
Property and equipment, net23,246 13,283 
Goodwill67,156 45,295 
Intangible assets, net10,597 8,299 
Right-of-use assets32,634 36,549 
Deferred tax assets186,287 152,097 
Other assets12,002 10,687 
Total assets$393,935 $365,144 
Liabilities and Equity
Current liabilities
Accounts payable and accrued expenses$24,225 $23,155 
Deferred revenue6,648 8,057 
Operating lease liabilities, current6,105 5,463 
Other current liabilities98 1,125 
Total current liabilities37,076 37,800 
Operating lease liabilities, non-current34,709 39,377 
Tax Receivable Agreement liability142,892 128,567 
Warrant liability6,855 27,460 
Other long-term liabilities3,366 — 
Total liabilities224,898 233,204 
Commitments and contingencies (Note 3)
Stockholders’ equity
Preferred Stock - $0.0001 par value; 75,000,000 shares authorized; no shares issued and outstanding at September 30, 2022 and December 31, 2021
— — 
Class A Common Stock - $0.0001 par value; 1,500,000,000 shares authorized; 90,372,205 shares issued and outstanding at September 30, 2022 and 65,677,361 shares issued and outstanding at December 31, 2021
9 7 
Class V Common Stock - $0.0001 par value; 500,000,000 shares authorized, 56,066,624 shares issued and outstanding at September 30, 2022 and 65,502,347 shares issued and outstanding at December 31, 2021
5 7 
Additional paid-in capital61,375 2,173 
Retained earnings54,004 61,369 
Total WM Technology, Inc. stockholders’ equity115,393 63,556 
Noncontrolling interests53,644 68,384 
Total equity169,037 131,940 
Total liabilities and equity$393,935 $365,144 

The accompanying notes are an integral part of these condensed consolidated financial statements.
2
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for share data)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Revenues$50,500 $50,884 $166,246 $138,969 
Operating expenses
Cost of revenues4,272 2,035 11,870 5,800 
Sales and marketing17,882 12,806 61,887 37,194 
Product development11,988 7,782 38,341 25,921 
General and administrative33,490 23,220 92,155 70,356 
Depreciation and amortization2,513 980 8,916 2,970 
Total operating expenses70,145 46,823 213,169 142,241 
Operating (loss) income(19,645)4,061 (46,923)(3,272)
Other income (expenses)
Change in fair value of warrant liability6,590 45,837 20,605 83,628 
Other expense, net(50)(300)(1,230)(6,341)
(Loss) income before income taxes(13,105)49,598 (27,548)74,015 
(Benefit from) provision for income taxes(2,641)393 (5,699)242 
Net (loss) income(10,464)49,205 (21,849)73,773 
Net (loss) income attributable to noncontrolling interests(5,300)28,370 (14,484)48,675 
Net (loss) income attributable to WM Technology, Inc.$(5,164)$20,835 $(7,365)$25,098 
Class A Common Stock:
Basic (loss) income per share$(0.06)$0.32 $(0.09)$0.39 
Diluted (loss) income per share$(0.06)$0.02 $(0.09)$(0.15)
Class A Common Stock:
Weighted average basic shares outstanding89,552,914 64,216,732 82,872,137 64,149,699 
Weighted average diluted shares outstanding89,552,914 68,304,372 82,872,137 69,950,141 

The accompanying notes are an integral part of these condensed consolidated financial statements.
3
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands, except for share data)
Three and Nine Months Ended September 30, 2022
Common Stock
Class A		Common Stock
Class V
Additional Paid-in Capital
Retained EarningsTotal WM Technology, Inc. Stockholders’ Equity
Non-controlling Interests
Total Equity
SharesPar ValueSharesPar Value
As of December 31, 2021
65,677,361$7 65,502,347$7 $2,173 $61,369 $63,556 $68,384 $131,940 
Stock-based compensation—— —— 7,246 — 7,246 681 7,927 
Issuance of common stock - vesting of restricted stock units, net of shares withheld for taxes879,284 — — — (6)— (6)(7)(13)
Issuance of common stock for acquisition (Note 6)4,721,706 — — — 12,836 — 12,836 15,889 28,725 
Issuance of common stock - Class A Unit exchange4,295,5741 (4,295,574)(1)3,669 — 3,669 (3,669)— 
Issuance of common stock - Class P Unit exchange7,525,045— —— 6,427 — 6,427 (6,427)— 
Issuance of common stock - warrants exercised20— —— — — — — — 
Impact of Tax Receivable Agreement due to exchanges of Class A Units—— —— 11,625 — 11,625 — 11,625 
Net loss—— —— — (13,893)(13,893)(17,340)(31,233)
As of March 31, 202283,098,9908 61,206,7736 43,970 47,476 91,460 57,511 148,971 
Stock-based compensation—— — — 8,015 — 8,015 598 8,613 
Distributions—— — — — — — (1,790)(1,790)
Issuance of common stock - vesting of restricted stock units543,118— — — — — — — — 
Impact of Tax Receivable Agreement due to exchanges of Class A Units— —— 2,282 — 2,282 — 2,282 
Class A Common shares issued - Class A Unit exchange4,740,7601 (4,740,760)(1)4,436 — 4,436 (4,436)— 
Class A Common shares issued - Class P Unit exchange453,460— —— 432 — 432 (432)— 
Net income—— — — — 11,692 11,692 8,156 19,848 
As of June 30, 202288,836,3289 56,466,0135 59,135 59,168 118,317 59,607 177,924 
Stock-based compensation—— — — 1,409 — 1,409 567 1,976 
Distributions—— — — — — — (658)(658)
Issuance of common stock - vesting of restricted stock units, net of shares withheld for employee taxes915,544— — — — — — — — 
Impact of Tax Receivable Agreement due to exchanges of Class A Units—— —— 259 — — 259 — 259 
Class A Common shares issued - Class A Unit exchange399,389— (399,389)— 367 — — 367 (367)— 
Class A Common shares issued - Class P Unit exchange220,944— — — 205 — — 205 (205)— 
Net loss—— — — — (5,164)(5,164)(5,300)(10,464)
As of September 30, 2022
90,372,205$9 56,066,624 $5 $61,375 $54,004 $115,393 $53,644 $169,037 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands, except for share data)
(Continued)
Three and Nine Months Ended September 30, 2021
Common Stock
Class A		Common Stock
Class V
Additional Paid-in Capital
Retained EarningsTotal WM Technology, Inc. Stockholders’ Equity
Non-controlling Interests
Members’ Equity
Total Equity
SharesPar ValueSharesPar Value
As of December 31, 2020
—$— — $— $— $— $— $— $29,271 $29,271 
Distributions to members—— — — — — — — (10,513)(10,513)
Repurchase of Class B Units—— — — — — — — (106)(106)
Net income—— — — — — — — 7,731 7,731 
As of March 31, 2021—— — — — — — — 26,383 26,383 
Share-based compensation—— — — — — — 19,433 — 19,433 
Distributions to members—— — — — — — — (7,597)(7,597)
Repurchase of Class B Units—— — — — — — (5,459)(5,459)
Proceeds and shares issued in the Business Combination (Note 5)63,738,5636 65,502,3477 (20,212)986 (19,213)(45,425)(20,674)(85,312)
Net income—— — — 4,263 4,263 5,227 7,347 16,837 
As of June 30, 202163,738,5636 65,502,347 7 (20,212)5,249 (14,950)(20,765)— (35,715)
Stock-based compensation—— — — 4,173 — 4,173 714 — 4,887 
Transaction costs related to the Business Combination (Note 5)—— — — (274)— (274)— — (274)
Issuance of common stock for acquisitions (Note 6)1,938,7981 — — 12,721 — 12,722 16,590 — 29,312 
Net income—— — — — 20,835 20,835 28,370 — 49,205 
As of September 30, 2021
65,677,361$7 65,502,347 $7 $(3,592)$26,084 $22,506 $24,909 $— $47,415 

The accompanying notes are an integral part of these condensed consolidated financial statements.
5
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended September 30,
20222021
Cash flows from operating activities
Net (loss) income$(21,849)$73,773 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization8,916 2,970 
Change in fair value of warrant liability(20,605)(83,628)
Impairment loss1,317 2,372 
Stock-based compensation17,250 23,625 
Deferred income taxes(5,699)1 
Provision for doubtful accounts14,867 3,015 
Changes in operating assets and liabilities:
Accounts receivable(13,125)(6,371)
Prepaid expenses and other current assets5,222 7,228 
Other assets(263)87 
Accounts payable and accrued expenses5,008 3,313 
Deferred revenue(1,505)2,495 
Net cash (used in) provided by operating activities(10,466)28,880 
Cash flows from investing activities
Purchases of property and equipment(13,135)(4,246)
Cash paid for acquisitions, net of cash acquired(713)(16,000)
Cash paid for acquisition holdback release(1,000)— 
Cash paid for other investments— (3,000)
Net cash used in investing activities(14,848)(23,246)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards(13)— 
Proceeds from the Business Combination— 79,969 
Repayment of note payable— (205)
Distributions(2,448)(18,110)
Repurchase of Class B Units— (5,565)
Repayments of insurance premium financing(5,832)(3,707)
Net cash (used in) provided by financing activities(8,293)52,382 
Net (decrease) increase in cash(33,607)58,016 
Cash – beginning of period67,777 19,919 
Cash – end of period$34,170 $77,935 

The accompanying notes are an integral part of these condensed consolidated financial statements.






6

WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
(Continued)
Nine Months Ended September 30,
20222021
Supplemental disclosures of noncash activities
Issuance of equity for acquisitions$28,725 $29,312 
Insurance premium financing$4,598 $11,146 
Stock-based compensation capitalized for software development$1,266 $695 
Accrued liabilities assumed in connection with acquisition$586 $— 
Holdback liability recognized in connection with acquisition$98 $1,000 
Capitalized assets included in accounts payable and accrued expenses$400 $589 
Warranty liability assumed from the Business Combination$— $193,978 
Tax receivable agreement liability recognized in connection with the Business Combination$— $126,150 
Deferred tax assets recognized in connection with the Business Combination$— $147,973 
Other assets assumed from the Business Combination$— $1,053 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.    Business and Organization
Founded in 2008, WM Technology, Inc. (the “Company”) operates a leading online cannabis marketplace for consumers together with a comprehensive set of eCommerce and compliance software solutions for cannabis businesses, which are sold to retailers and brands in the United States state-legal and Canadian cannabis markets. The Company’s comprehensive business-to-consumer (“B2C”) and business-to-business (“B2B”) suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers.
The Company’s business primarily consists of its commerce-driven marketplace, Weedmaps, and its fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering, Weedmaps for Business. The Weedmaps marketplace provides cannabis consumers with information regarding cannabis retailers and brands. In addition, the Weedmaps marketplace aggregates data from a variety of sources including retailer point-of-sale solutions to provide consumers with the ability to browse by strain, pricing, cannibinoids and other information regarding locally available cannabis products, through the Company’s website and mobile apps. The marketplace provides consumers with product discovery, access to deals and discounts, and reservation of products for pickup by consumers or delivery to consumers by participating retailers. The marketplace also provides education and learning information to help newer consumers learn about the types of products to purchase. It also provides information on the cannabis plant and the industry and advocates for legalization. The Company believes the size, loyalty and engagement of our user base and the frequency of consumption of cannabis of that user base is highly valuable to the Company’s clients and results in its clients paying for its services.
Weedmaps for Business, the Company’s SaaS offering, is a comprehensive set of eCommerce and compliance software solutions catered towards cannabis retailers, delivery services and brands. These solutions support cannabis businesses at every stage in the consumer funnel, enabling them to:
•Strategically reach prospective cannabis consumers;
•Manage pick-up, delivery and inventory in compliance with local regulations;
•Help improve the customer experience by creating online browsing and ordering functionality on a brand, retailer or delivery operator’s website and by extending that functionality in-store with kiosks;
•Foster customer loyalty and re-engage with segments of consumers;
•Leverage the Weedmaps for Business products in conjunction with any other preferred software solutions via integrations and application programming interfaces (“APIs”); and
•Make informed marketing and merchandising decisions using performance analytics and consumer and brand insights to promote products to specific consumer groups.

The Company charges a monthly fee to retailer and brand clients for access to its WM Pages subscription package which includes:
•WM Listings: A listing page for a retailer, delivery service or brand on the Weedmaps marketplace, enabling our clients to be discovered by the marketplace’s consumers;
•WM Orders: Software for retailers to receive pick-up and delivery orders directly from a WM listing and have the orders be connected directly with a client’s point-of-sale (“PoS”) system (for certain PoS systems). The marketplace also enables brands to route customer purchase interest to a retailer that carries the brand’s product;
•WM Store: Customizable menus for brands, retailers and delivery operators to embed on their website that facilitate customer pick-up or delivery orders and reach to more customers by bringing the breadth of the Weedmaps marketplace to a client’s own website;
•WM Connectors: Centralized integration tool that allows for easier menu management, automatic inventory updates and streamlined order fulfillment workflows to enable clients to save time and integrate disparate software systems; and
•WM Insights: An insights and analytics platform for clients leveraging data across the Weedmaps marketplace and software solutions.

The Company also offers other add-on products for additional fees, including:
•Featured Listings: Premium Placement ad solutions on high visibility locations on the Weedmaps marketplace to maximize clients’ listing and deal presence;
8
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
•WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion;
•WM Ads: Ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey;
•WM AdSuite: Omni-channel (on and off platform) marketing solution with access to the Weedmaps marketplace and off marketplace outlets including certain publishers, out-of-home units in addition to other media solutions;
•WM CRM: Customer relationship management software allowing clients to reach new consumers, build loyalty, and grow revenue with the Company’s compliant app, text and marketing tools;
•WM Dispatch: Compliant, automated, and optimized last-mile delivery software that helps clients manage their delivery fleets and logistics. This product streamlines the delivery experience from in-store to front-door; and
•WM Screens: In-store digital menu signage and kiosk solution and media management tool enabling clients to enhance the in-store experience, impact omnichannel retail and centralize operations with revenue-driving and customizable digital signage.
The Company sells its Weedmaps for Business suite in the United States, currently offers some of its Weedmaps for Business solutions in Canada and has a limited number of non-monetized listings in several other countries including Austria, Germany, the Netherlands, Spain and Switzerland. The Company operates in the United States, Canada, and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or applicable national law. The Company is headquartered in Irvine, California.
The Company’s mission is to power a transparent and inclusive global cannabis economy. The Company’s technology addresses the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis users in a legally compliant fashion. Over the past 14 years, the Weedmaps marketplace has become a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products, permitting product discovery and order-ahead for pickup or delivery by participating retailers. Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies, and manage compliance needs.
The Company holds a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide. The Company believes it offers the only comprehensive software platform that allows cannabis retailers to reach their target audience, quickly and cost effectively, addressing a wide range of needs. The Company is committed to building the software solutions that power cannabis businesses compliantly in the industry, to advocating for legalization, licensing and social equity of cannabis, and to facilitating further learning through partnership with subject matter experts on providing detailed, accurate information about cannabis.
WM Technology, Inc. was initially incorporated in the Cayman Islands on June 7, 2019 under the name “Silver Spike Acquisition Corp” (“Silver Spike”). Silver Spike was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On June 16, 2021 (the “Closing Date”), Silver Spike consummated the business combination (the “Business Combination”), pursuant to that certain Agreement and Plan of Merger, dated December 10, 2020 (the “Merger Agreement”), by and among Silver Spike, Silver Spike Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of Silver Spike Acquisition Corp. (“Merger Sub”), WM Holding Company, LLC, a Delaware limited liability company (when referred to in its pre-Business Combination capacity, “Legacy WMH” and following the Business Combination, “WMH LLC”), and Ghost Media Group, LLC, a Nevada limited liability company, solely in its capacity as the initial holder representative (the “Holder Representative”). On the Closing Date, and in connection with the closing of the Business Combination (the “Closing”), Silver Spike was domesticated and continues as a Delaware corporation, changing its name to WM Technology, Inc.
The Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by WMH LLC and continue to operate through WMH LLC and its subsidiaries, and WM Technology, Inc.’s material assets are the equity interests of WMH LLC indirectly held by it. Legacy WMH was determined to be the accounting acquirer in the Business Combination, which was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

9
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2.     Summary of Significant Accounting Policies
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. Management believes that these accounting policies conform to GAAP in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, certain information and footnotes required by GAAP in annual financial statements have been omitted or condensed and these interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022. The condensed financial statements of the Company include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of the Company’s financial position as of September 30, 2022, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire year. There have been no significant changes in the Company’s accounting policies from those described in the Company’s audited consolidated financial statements and the related notes to those statements.
Pursuant to the Merger Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, Silver Spike was treated as the acquired company and Legacy WMH was treated as the acquirer for financial statement reporting purposes.
Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy WMH issuing stock for the net assets of Silver Spike, accompanied by a recapitalization.
Legacy WMH was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
•Legacy WMH Class A Unit holders, through their ownership of the Class V Common Stock, had the greatest voting interest in the Company with over 50% of the voting interest;
•Legacy WMH selected the majority of the new board of directors of the Company;
•Legacy WMH senior management was the senior management of the Company; and
•Legacy WMH was the larger entity based on historical operating activity and had the larger employee base.
Thus, the financial statements included in this quarterly report reflect (i) the historical operating results of Legacy WMH prior to the Business Combination; (ii) the combined results of the WMH LLC and Silver Spike following the Business Combination; and (iii) the acquired assets and liabilities of Silver Spike stated at historical cost, with no goodwill or other intangible assets recorded.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of WM Technology, Inc. and WM Holding Company, LLC, including their wholly and majority owned subsidiaries. In conformity with GAAP, all significant intercompany accounts and transactions have been eliminated.
Foreign Currency
Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the average exchange rates during the periods. The impact of exchange rate fluctuations from translation of assets and liabilities is insignificant for the three and nine months ended September 30, 2022 and 2021.
10
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates made by management include, among others, the valuation of accounts receivable, the useful lives of long-lived assets, income taxes, website and internal-use software development costs, leases, valuation of goodwill and other intangible assets, valuation of warrant liability, deferred tax asset, tax receivable agreement liability, revenue recognition, stock-based compensation, and the recognition and disclosure of contingent liabilities.
Risks and Uncertainties
The Company operates in a relatively new industry where laws and regulations vary significantly by jurisdiction. Currently, the majority of U.S. states permit medical cannabis, and several permit adult use. Additionally, while a number of U.S. legislators have introduced various bills to legalize cannabis at the federal level, none of these bills has become law. Currently, under federal law, cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is still a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines, and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. If any of the states that permit use of cannabis were to change their laws or the federal government was to actively enforce the CSA or other laws related to the federal prohibition on cannabis, the Company’s business could be adversely affected.
In addition, the Company’s ability to grow and meet its operating objectives depends largely on the continued legalization and regulation of cannabis on a widespread basis. There can be no assurance that such legalization will occur on a timely basis, or at all.
The geographic concentration of the Company’s clients makes the Company vulnerable to a downturn in the local market area. Historically, the Company’s business operations have been located primarily in the State of California, and for the nine months ended September 30, 2022, approximately 56% of the Company’s revenue originated in California.
Fair Value Measurements
The Company follows the guidance in ASC 820 - Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
•Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs based on the Company assessment of the assumptions that market participants would use in pricing the asset or liability.
Accounts Receivable
Accounts receivable is recorded at the invoiced amount and does not bear interest.
11
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company measures credit losses on its trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses, which is based on the expected losses rather than incurred losses. Under the credit loss model, lifetime expected credit losses are measured and recognized at each reporting date based on historical, current and forecast information.
The Company calculates the expected credit losses on a pool basis for those trade receivables that have similar risk characteristics. For those trade receivables that do not share similar risk characteristics, the allowance for doubtful accounts is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include balance of customer account and aging status.
Account balances are written off against the allowance when it is determined that it is probable that the receivable will not be recovered. The Company recorded an allowance for doubtful accounts of $13.9 million and $5.2 million as of September 30, 2022 and December 31, 2021, respectively. The increase in allowance for doubtful accounts included a higher reserve for at-risk customers that indicated financial difficulties and the impact from macroeconomic factors.
As of September 30, 2022, a receivable due from one single customer accounted for approximately 11% of the total gross accounts receivable outstanding.

The following table summarizes the changes in the allowance for doubtful accounts:

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Allowance, beginning of period$7,971 $719 $5,169 $914 
Addition to allowance10,176 2,355 14,867 3,015 
Write-offs, net of recoveries(4,273)(49)(6,162)(904)
Allowance, end of period$13,874 $3,025 $13,874 $3,025 
Investments in Equity Securities
Investments in equity securities that do not have a readily determinable fair value and qualify for the measurement alternative for equity investments provided in ASC 321, Investments – Equity Securities are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of September 30, 2022 and December 31, 2021, the carrying value of the Company’s investments in equity securities without a readily determinable fair value was $6.5 million, which is recorded within Other assets on the Company’s condensed consolidated balance sheets.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation, and consist of internally developed software, computer equipment, furniture and fixtures and leasehold improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and generally over five years for computer equipment, seven years for furniture and fixtures and five years for leasehold improvements. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s condensed consolidated statements of operations.
Capitalized website and internal-use software development costs are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalizes certain costs related to the development and enhancement of the Weedmaps marketplace and SaaS solutions. The Company 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. Capitalization ceases upon completion of all substantial testing. Maintenance and training costs are expensed as incurred. 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 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. Product development costs that do not meet the criteria for capitalization are expensed as incurred.
12
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company assess impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable. If an event and a change in circumstance indicates that the carrying amount of an asset (or asset group) may not be recoverable and the expected undiscounted cash flows attributable to the asset are less than its carrying value, an impairment loss, if any, equals to the excess of the asset’s carrying value over its fair value is recognized.
Leases
The Company classifies arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the consolidated balance sheet as both a right-of-use asset (“ROU”) and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred.
In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term.
The Company assess impairment of ROU assets when an event and change in circumstance indicates that the carrying value of such ROU assets may not be recoverable. If an event and a change in circumstance indicates that the carrying value of an ROU asset may not be recoverable and the estimated fair value attributable to the ROU asset is less than its carrying value, an impairment loss, if any, equals to the excess of the ROU asset’s carrying value over its fair value is recognized.
Total net lease costs for the three months ended September 30, 2022 and 2021 were $2.3 million and $2.9 million, respectively. Total net lease costs for the nine months ended September 30, 2022 and 2021 were $7.1 million and $8.9 million, respectively.
Sublease rental income is recognized as a reduction to the related lease expense on a straight-line basis over the sublease term. For the three and nine months ended September 30, 2022, the Company recorded contra rent expense of $0.5 million and $1.3 million, respectively.
The Company recognized impairment charges of $0.6 million and $2.4 million during the nine months ended September 30, 2022 and 2021, related to certain ROU assets reducing the carrying values of the lease assets to their estimated fair values. The fair values were estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on the sublease market rent. The impairment charges are included in general and administrative expenses in the consolidated statements of operations.
Warrant Liability
The Company assumed 12,499,993 public warrants originally issued in the initial public offering of Silver Spike (the “Public Warrants”) and 7,000,000 Private Placement Warrants that were originally issued in a private placement by Silver Spike (the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”) upon the Closing, all of which were issued in connection with Silver Spike’s initial public offering and entitle the holder to purchase one share of Class A Common Stock at an exercise price of at $11.50 per share. As of September 30, 2022, 12,499,973 Public Warrants and 7,000,000 Private Placement Warrants remained outstanding. The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants, and become Public Warrants and be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants.
The Company evaluated the Warrants under ASC 815-40 - Derivatives and Hedging - Contracts in Entity’s Own Equity, and concluded they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Warrants
13
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our Class A equity holders. Because not all of the voting stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Since the Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in change in fair value of warrant liabilities within the condensed consolidated statements of operations at each reporting date.
Tax Receivable Agreement
In connection with the Business Combination, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with continuing members that provides for a payment to the continuing Class A Unit holders of 85% of the amount of tax benefits, if any, that the Company realizes, or is deemed to realize, as a result of redemptions or exchanges of 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 to additional paid-in capital.
Revenue Recognition
The Company’s revenues are derived primarily from monthly subscriptions and additional offerings for access to the Company’s Weedmaps marketplace and SaaS solutions. The Company recognizes revenue when the fundamental criteria for revenue recognition are met. The Company recognizes 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) the Company satisfies these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company excludes sales taxes and other similar taxes from the measurement of the transaction price. For clients that pay in advance for listing and other services, the Company records deferred revenue and recognizes revenue over the applicable subscription term.
The Company offers Weedmaps for Business subscriptions, which include access to the Weedmaps marketplace and certain SaaS solutions. As add-ons for additional fees, the Company offers other products, including featured listings, placements, promoted deals, nearby listings, other display advertising, client relationship management, digital menu, and delivery and logistics services. The Company’s Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. The Company has a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the products are provided. The Company rarely needs to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, the Company recognizes revenue in proportion to the standalone selling prices of the underlying services at contract inception.
Disaggregation of revenue
Weedmaps for Business and other SaaS subscriptions include the Company's WM Pages subscription package as well subscriptions to the Company's other SaaS products. The WM Pages subscription package includes access to WM Listings, WM Orders, WM Store, WM Connectors and WM Insights. Additional SaaS subscriptions include WM CRM, WM Dispatch and WM Screens. These subscriptions are typically monthly in nature. Featured and deal listings include the Featured Listings and WM Deals products. Other ad solutions include certain advertising products on and off the Weedmaps marketplace, including WM AdSuite. For a description of these solutions, see the "Business and Organization" section.
14
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the Company’s revenues disaggregated by major source:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Weedmaps for Business and other SaaS solutions$12,383 $11,067 $38,093 $30,313 
Featured and deal listings34,644 36,297 116,709 99,590 
Subtotal47,027 47,364 154,802 129,903 
Other ad solutions3,473 3,520 11,444 9,066 
Total revenues$50,500 $50,884 $166,246 $138,969 
Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription offerings, as described above, and is recognized as the revenue recognition criteria are met. Deferred revenue as of December 31, 2021 of $8.1 million was fully recognized in the first quarter of fiscal year 2022, and the deferred revenue balance as of September 30, 2022 of $6.6 million is expected to be fully recognized within the next twelve months. The Company generally invoices customers and receives payment on an upfront basis and payments do not include significant financing components or variable consideration and there are generally no rights of return or refunds after the subscription period has passed.
All revenues during the periods presented were recognized over time, as opposed to at a point in time. Substantially all of the revenue has been generated in the United States during the periods presented.
Cost of Revenues
The Company’s cost of revenue primarily consists of web hosting, internet service costs, credit card processing costs and inventory costs related to multi-media offerings.
Product Development Costs
Product development costs include salaries and benefits for employees, including engineering and technical teams who are responsible for building new products, as well as improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred.
Advertising
The Company expenses the cost of advertising in the period incurred. Advertising expense totaled $2.3 million and $4.1 million for the three months ended September 30, 2022 and 2021, respectively, and $12.6 million and $11.9 million for the nine months ended September 30, 2022 and 2021, respectively, and are included in sales and marketing expense in the accompanying condensed consolidated statements of operations.
Stock-Based Compensation
The Company measures fair value of employee stock-based compensation awards on the date of grant and allocates the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units is equal to the market price of the Company’s common stock on the date of grant. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method. When awards include a performance condition that impacts the vesting of the award, the Company records compensation cost when it becomes probable that the performance condition will be met and the expense will be attributed over the performance period.
The Company accounts for non-employee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable.
15
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Income Taxes
The Company uses the asset and liability method of accounting for income taxes under ASC 740 - Income Taxes. Under the guidance, deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more-likely-than-not the deferred tax assets will not be realized.
The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), revaluations of the warrant liability, changes in flow-through income not subject to tax and tax law developments.
As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc. following the Business Combination, on a pro rata basis. WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions.
For the three and nine months ended September 30, 2022, the Company recorded an income tax benefit of $2.6 million and $5.7 million, respectively, and for the three and nine months ended September 30, 2021, an income tax expense of $0.4 million and $0.2 million, respectively. The income tax benefit for the three and nine months ended September 30, 2022 was the result of the tax benefit of the Company's pro rata share of losses and tax credits flowing through from WM Holding LLC. The tax benefit related to U.S. federal and state tax benefits from certain Business Combination-related expenses offset, in part, by income taxes recorded during the period ended March 31, 2021 as a result of an audit performed by the Canada Revenue Agency on prior years income taxes paid by the Company’s subsidiary, WM Canada Holdings, Inc. The effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of warrant valuations, non-controlling interests represented by the portion of the flow-through income not subject to tax, permanent stock-based compensation and state taxes.
During the nine months ended September 30, 2022, the Company acquired additional interest in WM Holding Company LLC (“LLC Interests”) in connection with the exchange of LLC Interests, and activity relating to its stock compensation plan. The Company recognized a deferred tax asset in the amount of $28.5 million associated with the basis difference in its investment in WM Holding Company LLC upon acquisition of these LLC Interests, some of which are related to the additional tax basis increases generated from expected future payments under the Tax Receivable Agreement (“TRA”), some of which are partially offset by the TRA liability amount of $14.3 million, and these amounts were recorded through equity.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company does not believe it has any uncertain income tax positions that are more-likely-than-not to materially affect its condensed consolidated financial statements.
Segment Reporting
The Company and its subsidiaries operate in one business segment.
16
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Earnings Per Share
Basic income (loss) per share is computed by dividing net income (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period.
Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if-converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 13 for additional information on dilutive securities.
Concentrations of Credit Risk
The Company’s financial instruments are potentially subject to concentrations of credit risk. The Company places its cash with high quality credit institutions. From time to time, the Company maintains cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Management believes that the risk of loss is not significant and has not experienced any losses in such accounts.
Reclassifications
Repayments of insurance premium financing in the amount of $3.7 million for the nine months ended September 30, 2021 was previously classified on the consolidated statements of cash flows under cash used in the operating activities in the prior year. During the nine month ended September 30, 2022, the Company reclassified the repayments to cash used in financing activities in accordance with ASC 230 - Statement of Cash Flows. There is no impact to the total cash flow activities from this reclassification.
Recent Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments in ASU 2021-08 require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts from Customers (“ASC 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree financial statements were prepared in accordance with generally accepted accounting principles). For public business entities, the amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of ASU 2021-08 is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company adopted this new guidance as of January 1, 2022. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
3.    Commitments and Contingencies
Litigation
During the ordinary course of the Company’s business, it is subject to various claims and litigation. Management believes that the outcome of such claims or litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flow.
17
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4.    Fair Value Measurements
The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):

LevelSeptember 30, 2022December 31, 2021
Liabilities:
Warrant liability – Public Warrants1$4,125 $16,750 
Warrant liability – Private Placement Warrants32,730 10,710 
Total warrant liability$6,855 $27,460 

The following tables summarize the changes in the fair value of the warrant liabilities (in thousands):
Three Months Ended
September 30, 2022		Nine Months Ended
September 30, 2022
Public WarrantsPrivate Placement WarrantsWarrant LiabilitiesPublic WarrantsPrivate Placement WarrantsWarrant Liabilities
Fair value, beginning of period$8,125 $5,320 $13,445 $16,750 $10,710 $27,460 
Change in valuation inputs or other assumptions(4,000)(2,590)(6,590)(12,625)(7,980)(20,605)
Fair value, end of period$4,125 $2,730 $6,855 $4,125 $2,730 $6,855 

Three Months Ended
September 30, 2021		Nine Months Ended
September 30, 2021
Public WarrantsPrivate Placement WarrantsWarrant LiabilitiesPublic WarrantsPrivate Placement WarrantsWarrant Liabilities
Fair value, beginning of period$79,375 $76,812 $156,187 $— $— $— 
Warrant liability acquired— — — 100,750 93,228 193,978 
Change in valuation inputs or other assumptions(25,375)(20,462)(45,837)(46,750)(36,878)(83,628)
Fair value, end of period$54,000 $56,350 $110,350 $54,000 $56,350 $110,350 

Public Warrants
The Company determined the fair value of the Public Warrants, based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The fair value of the Public Warrants was $4.1 million and $16.8 million as of September 30, 2022 and December 31, 2021, respectively.

Private Placement Warrants
The estimated fair value of the Private Placement Warrants is determined with Level 3 inputs using the Black-Scholes model. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Placement Warrants
18
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the date the Business Combination closed, or June 16, 2026.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
September 30, 2022December 31, 2021
Exercise price$11.50 $11.50 
Stock price$1.61 $5.98 
Volatility87.5 %52.4 %
Term (years)3.714.46
Risk-free interest rate4.18 %1.18 %

Significant changes in the volatility would result in a significant lower or higher fair value measurement, respectively.
The fair value of the Private Placement Warrants was $2.7 million and $10.7 million as of September 30, 2022 and December 31, 2021, respectively.
The Warrants were accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are presented within warrant liability on the accompanying condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the condensed consolidated statements of operations.
There were no transfers in or out of Level 3 from other levels in the fair value hierarchy.
5.     Business Combination
As previously discussed in Note 1, on June 16, 2021, the Company consummated the Business Combination pursuant to the Merger Agreement.
In connection with the Closing, the following occurred:
•Silver Spike was domesticated and continues as a Delaware corporation, changing its name to “WM Technology, Inc.”
•The Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by WMH LLC and continue to operate through WMH LLC and its subsidiaries, and WM Technology, Inc.’s material assets are the equity interests of WMH LLC indirectly held by it.
•The Company consummated the sale of 32,500,000 shares of Class A Common Stock for a purchase price of $10.00 per share (together, the “PIPE Financing”) pursuant to certain subscription agreements dated as of December 10, 2020, for an aggregate price of $325.0 million.
•The Company contributed approximately $80.3 million of cash to WMH LLC, representing (a) the net amount held in the Company’s trust account following the redemption of 10,012 shares of Class A Common Stock originally sold in the Silver Spike’s initial public offering, less (b) cash consideration of $455.2 million paid to Legacy WMH Class A equity holders, plus (c) $325.0 million in aggregate proceeds from the PIPE Financing, less (d) the aggregate amount of transaction expenses incurred by the parties to the Business Combination Agreement.
•The Company transferred $455.2 million to the Legacy WMH equity holders as cash consideration.
•The Legacy WMH equity holders retained an aggregate of 65,502,347 Class A Units and 25,896,042 Class P Units.
•The Company issued 65,502,347 shares of Class V Common Stock to Class A Unit holders, representing the same number of Class A Units retained by the Legacy WMH equity holders.
•The Company, the Holder Representative and the Class A Unit holders entered into the Tax Receivable Agreement, pursuant to which WM Technology, Inc. will pay to WMH LLC Class A equity holders 85% of the net income tax savings that WM Technology, Inc. actually realizes as a result of increases in the tax basis of WMH LLC’s assets as a result of the exchange of Units for cash in the Business Combination and future exchanges of the Class A Units for shares of Class A Common Stock or cash pursuant to the Exchange Agreement, and certain other tax attributes of
19
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
WMH LLC and tax benefits related to the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement.
Concurrently with the closing of the Business Combination, the Unit holders entered into the Exchange Agreement. The terms of the Exchange Agreement, among other things, provide the Unit holders (or certain permitted transferees thereof) with the right from time to time at and after 180 days following the Business Combination to exchange their vested Paired Interests for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or Class P Units for shares of Class A Common Stock with a value equal to the value of such Class P Units less their participation threshold, or in each case, at the Company’s election, the cash equivalent of such shares of Class A Common Stock.
6.     Acquisitions
Eyechronic

On January 14, 2022, the Company acquired all the equity interests of Eyechronic LLC (“Eyechronic”) d/b/a Enlighten and rebranded as WM Screens, a Delaware limited liability company and a provider of software, digital signage services and multi-media offerings to dispensaries and brands, for total consideration of approximately $29.4 million. The Company accounted for the Eyechronic acquisition as an acquisition of a business under ASC 805.

The acquired assets and liabilities of Eyechronic were recorded at their preliminary acquisition date fair values. The purchase price allocations are subject to change as the Company continues to gather information relevant to its determination of the fair value of the assets and liabilities acquired primarily related to, but not limited to, intangible assets. Any adjustments to the purchase price allocations will be made as soon as practicable but no later than one year from the acquisition date.

The following table summarizes the components of consideration and the preliminary estimated fair value of assets acquired (in thousands):
Consideration Transferred:
Cash consideration (1)
$697 
Share consideration (2)
28,725 
  Total consideration$29,422 
____________________________________
(1)Includes $0.2 million settlement of pre-existing accounts payable with Eyechronic and holdback of $0.1 million recorded within other current liabilities on the Company’s condensed consolidated balance sheets.
(2)The fair value of share consideration was calculated based on 5,399,553 shares of Class A common stock multiplied by the share price on the closing date of $5.32. This includes 677,847 of holdback shares to be issued subject to customary indemnification obligations.

20
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Estimated Assets Acquired and Liabilities Assumed:
Assets acquired:
Cash$118 
Accounts receivable835 
Other current assets37 
Fixed assets2,826 
Software technology826 
Trade name103 
Customer relationships3,203 
Order Backlog199 
Goodwill21,861 
Total assets acquired30,008 
Liabilities assumed:
Accounts payable$(460)
Other current liabilities(8)
Deferred revenue(96)
Other liabilities(22)
Total liabilities assumed(586)
Total net assets acquired$29,422 
    
During the nine months ended September 30, 2022, the Company incurred transaction expenses associated with the Eyechronic acquisition of $0.1 million, which is included in general and administrative expenses in the condensed consolidated statements of operations.
The revenue and operating loss from Eyechronic included the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2022 were not material. Pro forma revenue and earnings amounts on a combined basis have not been presented as they are not material to the Company’s historical pre-acquisition financial statements.
For acquisitions, the excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the expected synergies from combining operations. Goodwill recognized was allocated to the Company’s one operating segment and is generally deductible for tax purposes.
The fair values of the trade name and software technology intangible assets are determined using an “income approach”, specifically, the relief-from royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of these assets. Owning these intangible assets means that the underlying entity wouldn’t have to pay for the privilege of deploying those assets. Therefore, a portion of the acquired entity’s earnings, equal to the after-tax royalty that would have been paid for the use of the assets, can be attributed to the firm’s ownership. The fair values of the customer relationships and customer backlog assets were also determined using an “income approach”, specifically a multi-period excess earnings approach, which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are a “wasting” asset and are expected to decline over time.
21
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Sprout
On September 3, 2021, the Company acquired certain assets and liabilities of the Sprout business (“Sprout") now d/b/a WM CRM, a leading, cloud-based customer relationship management (“CRM”) and marketing platform for the cannabis industry, for total consideration of approximately $31.2 million. The Company accounted for the Sprout acquisition as an acquisition of a business under ASC 805- Business Combinations.
The following table summarizes the components of consideration and the estimated fair value of assets acquired (in thousands):
Consideration Transferred:
Cash consideration$12,000 
Share consideration(1)
19,186 
  Total consideration$31,186 
Estimated Assets Acquired and Liabilities Assumed:
Assets acquired:
Software technology$2,973 
Trade name217 
Customer relationships1,410 
Goodwill26,686 
Total assets acquired31,286 
Liabilities assumed:
Other current liabilities(100)
Total net assets acquired$31,186 
___________________________________
(1)The fair value of share consideration issued in connection with the Spout acquisition was calculated based on 1,244,258 shares of Class A common stock issued multiplied by the share price on the closing date of $15.42.
For acquisitions, the excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the expected synergies from combining operations. Goodwill recognized was allocated to the Company’s one operating segment and is generally deductible for tax purposes.
The fair values of the trade name intangible assets are determined using an “income approach”, specifically, the relief-from royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset. Owning that intangible asset means that the underlying entity wouldn’t have to pay for the privilege of deploying that asset. Therefore, a portion of the acquired entity’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The fair value of the software technology intangible asset was also determined using an “income approach”, specifically a multi-period excess earnings approach, which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are a “wasting” asset and are expected to decline over time. The fair value of the customer relationships are determined using an “income approach”, specifically, the With-and-Without method, which is a commonly accepted valuation approach. This method estimates the value of customer-related assets by quantifying the impact on cash flows under a scenario in which the customer-related assets must be replaced and assuming all of the existing assets are in place except the customer-related assets. Essentially, it estimates the intangible asset’s value by calculating the difference between the two discounted cash-flow models. One that represents the status quo for the business enterprise with the asset in place and the second that represents the business enterprise with everything in place besides the customer-related asset. The projected cash flow period is the time-period it takes to build back up to that status quo. The difference between the two cash flows represents the calculated value of the customer-related asset.
22
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Transport Logistics Holding
On September 29, 2021, the Company acquired all of the equity interests of Transport Logistics Holding Company, LLC (“TLH”), which is the parent company of Cannveya & CannCurrent (now d/b/a WM Dispatch & WM Connectors), for total consideration of approximately $15.1 million. WM Dispatch is a logistics platform that enables the compliant delivery of cannabis and WM Connectors is a technology integrations and connectors platform facilitating custom integrations with third party technology providers. The Company accounted for the TLH acquisition as an acquisition of a business under ASC 805- Business Combinations.
The following table summarizes the components of consideration and the estimated fair value of assets acquired (in thousands):
Consideration Transferred:
Cash consideration (1)
$5,000 
Share consideration(2)
10,126 
  Total consideration$15,126 
Estimated Assets Acquired:
Software technology$249 
Trade name59 
Customer relationships170 
Goodwill14,648 
Total asset acquired$15,126 
____________________________________
(1)Includes holdback of $1.0 million, which was paid during the second quarter of 2022.
(2)The fair value of share consideration issued in connection with the TLH acquisition was calculated based on 694,540 shares of Class A common stock issued multiplied by the share price on the closing date of $14.58.

For acquisitions, the excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the expected synergies from combining operations. Goodwill recognized was allocated to the Company’s one operating segment and is generally deductible for tax purposes.
The fair values of the trade name intangible assets are determined using an “income approach”, specifically, the relief-from royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset. Owning that intangible asset means that the underlying entity wouldn’t have to pay for the privilege of deploying that asset. Therefore, a portion of the acquired entity’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The fair value of the software technology intangible asset was also determined using an “income approach”, specifically a multi-period excess earnings approach, which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are a “wasting” asset and are expected to decline over time. The fair value of the customer relationships are determined using an “income approach”, specifically, the With-and-Without method, which is a commonly accepted valuation approach. This method estimates the value of customer-related assets by quantifying the impact on cash flows under a scenario in which the customer-related assets must be replaced and assuming all of the existing assets are in place except the customer-related assets. Essentially, it estimates the intangible asset’s value by calculating the difference between the two discounted cash-flow models. One that represents the status quo for the business enterprise with the asset in place and the second that represents the business enterprise with everything in place besides the customer-related asset. The projected cash flow period is the time-period it takes to build back up to that status quo. The difference between the two cash flows represents the calculated value of the customer-related asset.
23
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7.     Goodwill and Intangible Assets

A summary of changes in goodwill for the nine months ended September 30, 2022 is as follows (in thousands):
Goodwill
Balance at December 31, 2021$45,295 
Acquisition of Eyechronic21,861 
Balance at September 30, 2022$67,156 

Intangible assets consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):
September 30, 2022
Weighted Average Amortization Period (Years)Gross Intangible AssetsAccumulated AmortizationNet Intangible Assets
Trade and domain names14.4$7,634 $(4,542)$3,092 
Software technology6.97,520 (4,135)3,385 
Customer relationships11.24,783 (721)4,062 
Order backlog1.0199 (141)58 
Total intangible assets10.7$20,136 $(9,539)$10,597 
December 31, 2021
Weighted Average Amortization Period (Years)Gross Intangible AssetsAccumulated AmortizationNet Intangible Assets
Trade and domain names14.3$7,532 $(4,081)$3,451 
Software technology7.76,691 (3,222)3,469 
Customer relationships3.41,580 (201)1,379 
Total intangible assets10.4$15,803 $(7,504)$8,299 

Amortization expense for intangible assets was $0.7 million and $0.2 million for the three months ended September 30, 2022 and 2021, respectively, and $2.0 million and $0.7 million for the nine months months ended September 30, 2022 and 2021, respectively.
The estimated future amortization expense of intangible assets as of September 30, 2022 is as follows (in thousands):

Remaining period in 2022 (three months)$662 
Year ended December 31, 20232,135 
Year ended December 31, 20241,898 
Year ended December 31, 20251,565 
Year ended December 31, 20261,318 
Thereafter3,019 
$10,597 
24
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8.     Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
September 30, 2022December 31, 2021
Prepaid insurance$4,313 $6,419 
Prepaid marketing2,295 3,272 
Prepaid software3,776 2,088 
Other prepaid expenses and other current assets817 1,828 
$11,201 $13,607 

The Company capitalizes implementation costs incurred in cloud computing arrangements that are service contracts if they meet certain requirements. Those requirements are similar to the requirements for capitalizing implementation costs incurred to develop internal-use software. Amortization is computed using the straight-line method over the term of the associated hosting arrangement. These implementation costs are classified on the balance sheet in prepaid and other current assets, and the related cash flows are presented as cash outflows from operations. Impairment is recognized and measured when it is no longer probable that the computer software project will be completed and placed in service.
The Company recognized an impairment charge of $0.8 million during the three and nine months ended September 30, 2022, related to certain capitalized implementation costs for a cloud computing arrangement that was abandoned.

9.     Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
September 30, 2022December 31, 2021
Accounts payable$7,405 $4,298 
Accrued employee expenses9,756 10,088 
Other accrued liabilities7,064 8,769 
$24,225 $23,155 

As of September 30, 2022 and December 31, 2021, other accrued liabilities included short-term insurance premium financing of $3.0 million and $4.2 million, respectively.
10.     Warrant Liability
At September 30, 2022, there were 12,499,973 Public Warrants outstanding and 7,000,000 Private Placement Warrants outstanding.
As part of Silver Spike’s initial public offering, 12,500,000 Public Warrants were sold. The Public Warrants entitle the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of Class A Common Stock. No fractional shares will be issued upon exercise of the warrants. The Public Warrants will expire at 5:00 p.m. New York City time on June 16, 2026, or earlier upon redemption or liquidation. The Public Warrants are listed on the NYSE under the symbol “MAPSW.”
The Company may redeem the Public Warrants starting July 16, 2021, in whole and not in part, at a price of $0.01 per Public Warrant, upon not less than 30 days’ prior written notice of redemption to each holder of Public Warrants, and if, and only if, the reported last sales price of the Company’s Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalization and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the holders of Public Warrants.
25
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Simultaneously with Silver Spike’s initial public offering, Silver Spike consummated a private placement of 7,000,000 Private Placement Warrants with Silver Spike’s sponsor (“Silver Spike Sponsor”). Each Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants (including the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain exceptions, and they are nonredeemable as long as they are held by Silver Spike Sponsor or its permitted transferees. Silver Spike Sponsor, as well as its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis and will have certain registration rights related to such Private Placement Warrants. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than Silver Spike Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A Common Stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances of shares of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants.
The Private Placement Warrants are identical to the Public Warrants underlying the units sold in the initial public offering, except that the Private Placement Warrants and the Class A Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company concluded the Public Warrants and Private Placement Warrants, or the Warrants, meet the definition of a derivative under ASC 815- Derivatives and Hedging (as described in Note 2) and are recorded as liabilities. Upon the Closing, the fair value of the Warrants was recorded on the balance sheet. The fair value of the Warrants are remeasured as of each balance sheet date, which resulted in non-cash gains of $6.6 million and $45.8 million for the three months ended September 30, 2022 and 2021, respectively, and non-cash gains of $20.6 million and $83.6 million for the nine months ended September 30, 2022 and 2021, respectively
11.     Equity

Class A Common Stock
Voting Rights
Each holder of the shares of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of the shares of Class A Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, the holders of the outstanding shares of Class A Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class V Common Stock.
26
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Dividend Rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available therefor.
Rights upon Liquidation, Dissolution and Winding-Up
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of the shares of Class A Common Stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the shares of Class A Common Stock, then outstanding, if any.
Preemptive or Other Rights
The holders of shares of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the shares of Class A Common Stock. The rights, preferences and privileges of holders of shares of Class A Common Stock will be subject to those of the holders of any shares of the preferred stock that the Company may issue in the future.

Class V Common Stock
Voting Rights
Each holder of the shares of Class V Common Stock is entitled to one vote for each share of Class V Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of shares of Class V Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, the holders of the outstanding shares of Class V Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class A Common Stock.
Dividend Rights
The holders of the Class V Common Stock will not participate in any dividends declared by the Company’s board of directors.
Rights upon Liquidation, Dissolution and Winding-Up
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class V Common Stock are not entitled to receive any of the Company’s assets.
Preemptive or Other Rights
The holders of shares of Class V Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class V Common Stock.
Issuance and Retirement of Class V Common Stock
In the event that any outstanding share of Class V Common Stock ceases to be held directly or indirectly by a holder of Class A Units, such share will automatically be transferred to us for no consideration and thereupon will be retired. The Company will not issue additional shares of Class V Common Stock other than in connection with the valid issuance or transfer of Units in accordance with the governing documents of WMH LLC.

Preferred Stock
Pursuant to the amended and restated certificate of incorporation in effect as of June 15, 2021, the Company was authorized to issue 75,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2022, there were no shares of preferred stock issued or outstanding.

27
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Noncontrolling Interests
The noncontrolling interest represents the Units held by holders other than the Company. As of September 30, 2022, the noncontrolling interests owned 39.9% of the Units outstanding. The noncontrolling interests’ ownership percentage can fluctuate over time, including as the WMH LLC equity holders elect to exchange Units for Class A Common Stock. The Company has consolidated the financial position and results of operations of WMH LLC and reflected the proportionate interest held by the WMH LLC Unit equity holders as noncontrolling interests.
12.     Stock-based Compensation

WM Holding Company, LLC Equity Incentive Plan
The Company has accounted for the issuance of Class A-3 and Class B Units issued under WM Holding Company, LLC’s Equity Incentive Plan in accordance with ASC 718 - Stock Based Compensation. The Company considers the limitation on the exercisability of the Class A-3 and Class B Units to be a performance condition and records compensation cost when it becomes probable that the performance condition will be met.
In connection with the Business Combination, each of the Class A-3 Units outstanding prior to the Business Combination were cancelled, and the holder thereof received a number of Class A units representing limited liability company interests of WMH LLC (the “Class A Units”) and an equivalent number of shares of Class V Common Stock, par value $0.0001 per share (together with the Class A Units, the “Paired Interests”), and each of the Class B Units outstanding prior to the Business Combination were cancelled and holders thereof received a number of Class P units representing limited liability company interests of WMH LLC (the “Class P Units” and together with the Class A Units, the “Units”), each in accordance with the Merger Agreement.
Concurrently with the closing of the Business Combination, the Unit holders entered into an exchange agreement (the “Exchange Agreement”). The terms of the Exchange Agreement, among other things, provide the Unit holders (or certain permitted transferees thereof) with the right from time to time at and after 180 days following the Business Combination to exchange their vested Paired Interests for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or Class P Units for shares of Class A Common Stock with a value equal to the value of such Class P Units less their participation threshold, or in each case, at the Company’s election, the cash equivalent of such shares of Class A Common Stock.
A summary of the Class P Unit activity for the nine months ended September 30, 2022 is as follows:
Number of Units
Outstanding Class P Units, December 31, 202125,660,529 
Cancellations(48,807)
Exchanged for Class A Common Stock(10,191,901)
Outstanding, Class P Units, September 30, 202215,419,821 
Vested, September 30, 202214,534,582
As of September 30, 2022, unrecognized stock-based compensation expense for non-vested Class P Units was $2.2 million, which is expected to be recognized over a weighted-average period of 1.6 years. For the three months ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense for the Class P Units of $0.6 million and $0.7 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense for the Class P Units of $1.8 million and $20.1 million, respectively. Due to the Business Combination completed in the second quarter of 2021, certain limitations on exercisability related to the Company’s Class P equity awards issued to employees and consultants were removed and as a result, the Company recognized the life-to-date expense on units vested through the Business Combination date on those equity awards during the 2021 period. The stock-based compensation in the nine months ended September 30, 2021 also included a one-time incremental expense of $4.1 million related to an award modification as a result of an advisory agreement entered into with a former executive.
WM Technology, Inc. Equity Incentive Plan
In connection with the Business Combination, the Company adopted the WM Technology, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the granting of incentive stock options to employees and for the grant of
28
WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants. As of September 30, 2022, 25,768,971 shares of Class A Common Stock are authorized for issuance pursuant to awards under the 2021 Plan. The number of shares of Class A Common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to five percent (5%) of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding year; provided, however that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock. As of September 30, 2022, 12,127,760 shares of Class A Common Stock are available for future issuance.
A summary of the restricted stock unit (“RSU”) activity for the nine months ended September 30, 2022 is as follows:
Number of RSUsWeighted-average Grant Date Fair Value
Non-vested at December 31, 2021
5,829,881 $10.91 
Granted6,639,434$5.50 
Vested(1,775,332)$9.44 
Forfeited(1,834,430)$9.22 
Non-vested at September 30, 2022
8,859,553$8.08 
As of September 30, 2022, unrecognized stock-based compensation expense for non-vested RSUs was $63.0 million, which is expected to be recognized over a weighted-average period of 2.8 years. For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense for the RSUs of $5.3 million and $15.8 million, respectively.
The Company grants performance-based restricted stock units (“PRSUs”) with performance and service-based vesting conditions. The level of achievement of such goals may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. The Company recognizes expense ratably over the vesting period for the PRSUs when it is probable that the performance criteria specified will be achieved. The fair value is equal to the market price of the Company’s common stock on the date of grant.
A summary of the PRSU activity for the nine months ended September 30, 2022 is as follows:
Number of PRSUsWeighted-average Grant Date Fair Value
Non-vested at December 31, 2021
2,437,500 $6.40 
Granted— $— 
Vested— $— 
Forfeited— $— 
Non-vested at September 30, 2022
2,437,500 $6.40 

During the second quarter of 2022, management determined that the achievement of the minimum thresholds of the performance criteria of its PRSUs is not probable. As a result, the Company recorded an adjustment to reverse all stock compensation expense previously recorded for these awards. For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation credits for the PRSUs of $4.2 million and $0.4 million, respectively. As of September 30, 2022, the unrecognized compensation expense related to these PRUs was $15.6 million, which will be amortized over the remaining requisite service period if and when the Company determines that vesting is probable.
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WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company recorded stock-based compensation cost (credit) related to the Class P Units, RSUs and PRSUs in the following expense categories on the accompanying condensed consolidated statements of operations (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Sales and marketing$956 $689 $4,839 $4,515 
Product development1,065 1,865 3,993 3,859 
General and administrative(382)1,638 8,418 15,251 
Total stock-based compensation expense1,639 4,192 17,250 23,625 
Amount capitalized to software development337 695 1,266 695 
Total stock-based compensation cost$1,976 $4,887 $18,516 $24,320 
13.     Earnings Per Share
Basic income (loss) per share of Class A Common Stock is computed by dividing net earnings (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share of Class A Common Stock adjusts basic net income (loss) per share of Class A Common Stock for the potentially dilutive impact of securities. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability, net of the portion attributable to non-controlling interests, and adjusts the denominator to include the dilutive shares calculated using the treasury stock method.
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WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The computation of income (loss) per share attributable to WM Technology, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding are as follows for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands, except for share and per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Numerator:
Net (loss) income$(10,464)$49,205 $(21,849)$73,773 
Less: net income attributable to WMH prior to the Business Combination— — — 15,078 
Less: net (loss) income attributable to noncontrolling interests after the Business Combination(5,300)28,370 (14,484)33,597 
Net (loss) income attributable to WM Technology, Inc. Class A Common Stock - basic(5,164)20,835 (7,365)25,098 
Effect of dilutive securities:
Less: fair value change of Public and Private Placement Warrants, net of amounts attributable to noncontrolling interests— 19,618 — 35,679 
Net (loss) income attributable to WM Technology, Inc. Class A Common Stock - diluted$(5,164)$1,217 $(7,365)$(10,581)
Denominator:
Weighted average of shares of Class A Common Stock outstanding - basic89,552,91464,216,73282,872,13764,149,699
Weighted average effect of dilutive securities:
Public warrants1
— 2,558,783— 3,718,232
Private warrants1
— 1,432,918— 2,082,210
Restricted stock units1
— 95,939— — 
Weighted average of shares of Class A Common Stock outstanding - diluted89,552,91468,304,37282,872,13769,950,141
Net (loss) income per share of Class A Common Stock - basic$(0.06)$0.32 $(0.09)$0.39 
Net (loss) income per share of Class A Common Stock - diluted$(0.06)$0.02 $(0.09)$(0.15)
____________________________________
¹Calculated using the treasury stock method.
Shares of the Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented.
The Company excluded the following securities from its computation of diluted shares outstanding for the periods presented, as their effect would have been anti-dilutive:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Class A Units56,066,624 65,502,347 56,066,624 65,502,347 
Class P Units15,419,821 25,679,122 15,419,821 25,679,121 
RSUs8,859,553 — — 8,859,553 3,858,945 
PRSUs2,437,500 — 2,437,500 — 
Public Warrants12,499,973 — 12,499,973 — 
Private Placement Warrants7,000,000 — 7,000,000 — 
Acquisition holdback shares677,847 — 677,847 — 
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WM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

14.     Related Party Transactions
During the second quarter of 2022, the Company entered into a sublease agreement with an affiliate to a member of the board of directors. The sublease commenced on June 1, 2022, and the term is for the remainder of the original lease and will expire on February 28, 2025, or sooner in the event that the original lease is cancelled prior to the expiration date. The monthly base rent, after the rent abatement period for the first four months, is $69,000. As of September 30, 2022, the security deposit for the sublease of approximately $0.1 million is included in other long-term liabilities on the accompanying condensed balance sheets. For the three and nine months ended September 30, 2022, income on the sublease was approximately $0.2 million and this amount is netted with rent expense and included in general and administrative expenses on the accompanying condensed statements of operations.
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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes to those statements included in Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and included elsewhere herein and in our Annual Report on Form 10-K for the year ended December 31, 2021.
Overview
On June 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 with Silver Spike Acquisition Corp (“Silver Spike”). Legacy WMH was deemed to be the accounting acquirer under accounting principles generally accepted in the United States of America (“GAAP”). In connection with the closing, Silver Spike changed its name to WM 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 to WM Technology, Inc, and its subsidiaries following the Business Combination and to Legacy WMH prior to the Business Combination.
Founded in 2008, WM Technology, Inc. operates a leading online cannabis marketplace for consumers together with a comprehensive set of eCommerce and compliance software solutions for cannabis businesses, which are sold to retailers and brands in the United States state-legal and Canadian cannabis markets. Our comprehensive business-to-consumer (“B2C”) and business-to-business (“B2B”) suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers.
Our business primarily consists of our commerce-driven marketplace, Weedmaps, and its fully integrated suite of end-to-end SaaS solutions software offering, Weedmaps for Business. The Weedmaps marketplace provides cannabis consumers with information regarding cannabis retailers and brands. In addition, the Weedmaps marketplace aggregates data from a variety of sources including retailer point-of-sale solutions to provide consumers with the ability to browse by strain, pricing, cannibinoids and other information regarding locally available cannabis products, through our website and mobile apps. The marketplace provides consumers with product discovery, access to deals and discounts, and reservation of products for pickup by consumers or delivery to consumers by participating retailers. The marketplace also provides education and learning information to help newer consumers learn about the types of products to purchase. We believe the size, loyalty and engagement 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.
Weedmaps for Business, our SaaS offering, is a comprehensive set of eCommerce and compliance software solutions catered towards cannabis retailers, delivery services and brands. These solutions support cannabis businesses at every stage in the consumer funnel, enabling them to:
•Strategically reach prospective cannabis consumers;
•Manage pick-up, delivery and inventory in compliance with local regulations;
•Help improve the customer experience by creating online browsing and ordering offerings functionality on a brand, retailer or delivery operator’s website and by extending that functionality in-store with kiosks;
•Foster customer loyalty and re-engage with segments of consumers;
•Leverage the Weedmaps for Business products in conjunction with any other preferred software solutions via integrations and application programming interfaces (“APIs”); and
•Make informed marketing and merchandising decisions using performance analytics and consumer and brand insights to promote products to specific consumer groups.
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maps-20220930_g1.jpg


We charge a monthly fee to retailer and brand clients for access to our WM Pages subscription package which includes:
•WM Listings: A listing page for a retailer, delivery service or brand on the Weedmaps marketplace, enabling our clients to be discovered by the marketplace’s consumers;
•WM Orders: Software for retailers to receive pick-up and delivery orders directly from a WM listing and have the orders be connected directly with a client’s point-of-sale (“PoS”) system (for certain PoS systems). The marketplace also enables brands to route customer purchase interest to a retailer that carries the brand’s product;
•WM Store: Customizable menus for brands, retailers and delivery operators to embed on their website that facilitate customer pick-up or delivery orders and reach to more customers by bringing the breadth of the Weedmaps marketplace to a client’s own website;
•WM Connectors: Centralized integration tool that allows for easier menu management, automatic inventory updates and streamlined order fulfillment workflows to enable clients to save time and integrate disparate software systems; and
•WM Insights: An insights and analytics platform for clients leveraging data across the Weedmaps marketplace and software solutions.
We also offer other add-on products for additional fees, including:
•Featured Listings: Premium Placement ad solutions on high visibility locations on the Weedmaps marketplace to maximize clients’ listing and deal presence;
•WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion;
•WM Ads: Ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey;
•WM AdSuite: Omni-channel (on and off platform) marketing solution with access to the Weedmaps marketplace and off marketplace outlets including certain publishers, out-of-home units in addition to other media solutions;
•WM CRM: Customer relationship management software allowing clients to reach new consumers, build loyalty, and grow revenue with our compliant app, text and marketing tools;
•WM Dispatch: Compliant, automated, and optimized last-mile delivery software that helps clients manage their delivery fleets and logistics. This product streamlines the delivery experience from in-store to front-door; and
•WM Screens: In-store digital menu signage and kiosk solution and media management tool enabling clients to enhance the in-store experience, impact omnichannel retail and centralize operations with revenue-driving and customizable digital signage
We sell our Weedmaps for Business suite in the United States and currently offer some of our Weedmaps for Business solutions in Canada and have a limited number of non-monetized listings in several other countries including Austria, Germany, the Netherlands, Spain and Switzerland. We operate in the United States, Canada, and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or applicable national law. We are headquartered in Irvine, California.
Our mission is to power a transparent and inclusive global cannabis economy. Our technology addresses the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis users in a legally compliant fashion. Over the past 14 years, the Weedmaps marketplace has become a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products, permitting product discovery and order-ahead for pickup or delivery by participating retailers. Weedmaps for Business is a set of eCommerce-enablement tools designed to help
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retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies, and manage compliance needs.
We hold a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide. We believe we offer the only comprehensive software platform that allows cannabis retailers to reach their target audience, quickly and cost effectively, addressing a wide range of needs. We are committed to building the software solutions that power cannabis businesses compliantly in the industry, to advocating for legalization, licensing and social equity of cannabis, and to facilitating further learning through partnership with subject matter experts on providing detailed, accurate information about cannabis.
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 5,576 and 5,380 average monthly paying business clients during the three and nine months ended September 30, 2022, respectively, on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors). Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased over 9,200 listing pages as of September 30, 2022. 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 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.
Business Combination and Public Company Costs
On June 16, 2021, Silver Spike consummated the business combination (the “Business Combination”) pursuant to the certain Agreement and Plan of Merger, dated December 10, 2020 (the “Merger Agreement”), by and among Silver Spike, Silver Spike Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of Silver Spike Acquisition Corp. (“Merger Sub”), Legacy WMH, and Ghost Media Group, LLC, a Nevada 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 to WM 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 an SEC-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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Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(dollars in thousands, except for revenue per paying client)
Revenues$50,500 $50,884 $166,246 $138,969 
Net (loss) income$(10,464)$49,205 $(21,849)$73,773 
EBITDA(1)
$(10,592)$50,578 $(18,632)$76,985 
Adjusted EBITDA(1)
$(9,630)$10,424 $(11,178)$27,901 
Average monthly revenue per paying client(2)
$3,019 $3,817 $3,433 $3,682 
Average monthly paying clients(3)
5,576 4,444 5,380 4,194 
___________________________
(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).
Revenue
We offer Weedmaps for 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 Weedmaps for 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.
Net Income (Loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts
Our financial statements, including net income (loss), are prepared in accordance with GAAP. For more information regarding the components within our net income (loss), see “Components of Our Results of Operations” below.
Net (loss) income for the three months ended September 30, 2022 and 2021 was $(10.5) million and $49.2 million, respectively. The decrease in net income of $59.7 million in the three months ended September 30, 2022 was primarily due to a decrease in revenue of $0.4 million, an increase in operating expenses of $23.3 million, a decrease in other income of $39.0 million, which includes a decrease in change in fair value of warrant liability of $39.2 million, and a decrease in provision for income taxes of $3.0 million.
Net (loss) income for the nine months ended September 30, 2022 and 2021 was $(21.8) million and $73.8 million, respectively. The decrease in net income of $95.6 million in the nine months ended September 30, 2022 was primarily due to an increase in revenue of $27.3 million, offset by an increase in operating expenses of $70.9 million, a decrease in other income of $57.9 million, which includes a decrease in change in fair value of warrant liability of $63.0 million, and a decrease in provision for income taxes of $5.9 million. For more information regarding the components of our net (loss) income, see “Components of Our Results of Operations” below.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts, all 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. Adjusted EBITDA is further adjusted to exclude provision for doubtful accounts for the case of Adjusted EBITDA before Provision for Doubtful Accounts. Below we have provided a reconciliation of net (loss) income (the most directly comparable GAAP financial measure) to EBITDA; from EBITDA to Adjusted EBITDA; and from Adjusted EBITDA to Adjusted EBITDA before Provision for Doubtful Accounts
We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts 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, Adjusted
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EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts have limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts do not reflect changes in, or cash requirements for, our working capital needs; and
•EBITDA, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts do not reflect tax payments that may represent a reduction in cash available to us.
Because of these limitations, you should consider EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts alongside other financial performance measures, including net income (loss) and our other GAAP results.
A reconciliation of net income (loss) to non-GAAP EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in thousands)
Net (loss) income$(10,464)$49,205 $(21,849)$73,773 
(Benefit from) provision for income taxes(2,641)393 (5,699)242 
Depreciation and amortization expenses2,513 980 8,916 2,970 
EBITDA(10,592)50,578 (18,632)76,985 
Stock-based compensation1,639 4,192 17,250 23,625 
Change in fair value of warrant liability(6,590)(45,837)(20,605)(83,628)
Transaction related bonuses1,039 — 4,069 1,550 
Legal settlements and other legal costs2,148 — 3,212 — 
Reduction in force1,960 — 1,960 — 
Impairment loss766 — 1,317 2,372 
Transaction costs— 1,450 251 1,450 
Warrant transaction costs— 41 — 5,547 
Adjusted EBITDA$(9,630)$10,424 $(11,178)$27,901 
Provision for doubtful accounts10,176 2,355 14,867 3,015 
Adjusted EBITDA before Provision for Doubtful Accounts$546 $12,779 $3,689 $30,916 

Average Monthly Revenue Per Paying Client

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.

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Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Average monthly revenue per paying client$3,019 $3,817 $3,433 $3,682 
Average Monthly Paying Clients
We define average monthly paying clients as the monthly average of clients billed each month over a particular period (and for which services were provided). Our paying clients include both individual cannabis businesses as well as retail 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 ended September 30, 2022 increased approximately 25% to 5,576 average monthly paying clients from 4,444 average monthly paying clients in the same period in 2021. Average monthly paying clients for the nine months ended September 30, 2022 increased approximately 28% to 5,380 average monthly paying clients from 4,194 average monthly paying clients in the same period in 2021. The increase in average monthly paying clients in the three and nine months ended September 30, 2022 as compared to the same periods in 2021 was primarily due to new client acquisitions across existing and new states and new clients acquired through acquisitions. This growth was fully offset by a decline in our Revenue Per Paying Client. We expected these pressures given the continued liquidity challenges that clients are facing.
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Average monthly paying clients5,576 4,444 5,380 4,194 
Monthly Active Users
In addition to key financial and operational metrics listed above, we also previously reported Monthly Active Users (“MAUs”), which represented, in any given period, the total number of unique users who opened our Weedmaps mobile app or gained access to our Weedmaps.com website, including through paid advertising channels, during the final calendar month of the period. As discussed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the “Prior 10-Q”), we decided to reevaluate the value to investors of continuing to report MAUs as a key metric on a quarterly or annual basis. We believe that historically, our MAU correlated to the level of our marketing expenditure (which, as previously explained, utilized pop-under advertisements). We observed this as we downshifted our marketing spend, including to rely less on the use of pop-under advertisements, during the third quarter.
In the quarter ended September 30, 2022, our MAUs decreased to 11.2 million in the final month of the quarter ended September 30, 2022 from 17.4 million in the final month of quarter ended June 30, 2022. Our listing page visits, which is the number of visits to retailer and brand listing pages on the marketplace, remained relatively steady during the same period, decreasing slightly from 13.3 million in the final month of the quarter ended June 30, 2022 to 12.8 million during the final month of the quarter ended September 30, 2022. We believe this reflects, among other things, the value proposition the marketplace provides to repeat cannabis consumers.
We are evaluating alternative metrics to provide investors that will shed more clarity on down-funnel marketplace behavior than MAUs historically have, and we have determined not to report MAUs going forward..
Factors Affecting Our Performance

Growth of Our Two-Sided Weedmaps Marketplace
We have historically grown through and intend to focus on continuing to grow through the expansion of our two-sided marketplace, which occurs through growth of the number and type of businesses and consumers that we attract to our platform. We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses.
Growth and Retention of Our Paying Clients
Our revenue grows primarily through acquiring and retaining paying clients and increasing the revenue per paying client over time. We have a history of attracting new paying clients and increasing their annual spend with us over time, primarily due
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to the value they receive once they are onboarded and able to take advantage of the benefits of participating in our two-sided marketplace and leveraging our software solutions.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, the effects of the coronavirus (COVID-19) pandemic and Russia’s initiation of military action against Ukraine. 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 our collections on accounts receivable.
Regulation and Maturation of Cannabis Markets
We believe that we will have significant opportunities for greater growth as more jurisdictions legalize cannabis for medical and/or adult-use and the regulatory environment continues to develop. Thirty-eight U.S. states, the District of Columbia, Puerto Rico, and several U.S. territories have legalized some form of whole-plant cannabis cultivation, sales, and use for certain medical purposes. Nineteen of those states and the District 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 14-year operating history to enter new markets.
We also have a significant opportunity to monetize transactions originating from users engaging with a retailer on the Weedmaps marketplace or tracked via one of our Weedmaps for Business solutions. Given U.S. federal prohibitions on plant-touching businesses and our current policy not to participate in the chain of commerce associated with the sale of cannabis products, we do not charge take-rates or payment fees for transactions originating from users who engage with a retailer on the Weedmaps platform or tracked via one of our Weedmaps for Business solutions. A change in U.S. federal regulations could result in our ability to engage in such monetization efforts without adverse consequences to our business.
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 Recognition and Reputation
We believe that maintaining and enhancing our brand identity and our reputation is critical to maintaining and growing our relationships with clients and consumers and to our ability to attract new clients and consumers. Historically, a substantial majority of our marketing spending was on out-of-home advertising on billboards, buses and other non-digital outlets. Starting in 2019, consistent with the overall shift in perceptions regarding cannabis, a number of demand-side digital advertising platforms allowed us to advertise online. We also invested in growing our internal digital performance advertising team. We believe there is an opportunity to improve market efficiency through digital channels and expect to shift our marketing spending accordingly. Over the longer term, we expect to shift and accelerate our marketing spend to additional online and traditional channels, such as broadcast television or radio, as they become available to us.
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.
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We also believe that the importance of our brand recognition and reputation will continue to increase as competition in our market continues to develop. If our brand promotion activities are not successful, our operating results and growth may be adversely impacted.
Investments in Growth
We intend to continue to make focused organic and inorganic investments to grow our revenue and scale operations to support that growth.
Given our long operating history in the United States and the strength of our network, often businesses will initially list on our platform without targeted sales or marketing efforts by us. However, we plan to accelerate our investments in marketing to maintain and increase our brand awareness through both online and offline channels. We also plan to invest in expanding our business listings thereby enhancing our client and consumer experience, and improving the depth and quality of information provided on our platform. We also intend to continue to invest in several areas to continue enhancing the functionality of our Weedmaps for Business offering. We expect significant near-term investments to enhance our data assets and evolve our current listings and software offerings to our brand clients, among other areas. We anticipate undertaking such investments in order to be positioned to capitalize on the rapidly expanding cannabis market.
On January 14, 2022, we acquired Eyechronic LLC (“Eyechronic”) d/b/a Enlighten, a Delaware 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.
On September 3, 2021, we acquired certain assets of the Sprout business (“Sprout"), a leading, cloud-based customer relationship management (“CRM”) and marketing platform for the cannabis industry.
On September 29, 2021, we acquired all of the equity interests of Transport 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 short-term, negative impacts to our operating results and cash flows.
Components of Our Results of Operations
Revenues
We offer Weedmaps for 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 Weedmaps for 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 Revenues
Cost of revenues primarily consists of web hosting, internet service, credit card processing costs and inventory costs related to multi-media offerings.
Selling 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.
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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 provision for doubtful accounts and professional and outside services related to legal and other consulting services.
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.
Results of Operations
The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in thousands)
Revenues$50,500 $50,884 $166,246 $138,969 
Operating expenses:
Cost of revenues4,272 2,035 11,870 5,800 
Sales and marketing17,882 12,806 61,887 37,194 
Product development11,988 7,782 38,341 25,921 
General and administrative33,490 23,220 92,155 70,356 
Depreciation and amortization2,513 980 8,916 2,970 
Total operating expenses70,145 46,823 213,169 142,241 
Operating (loss) income(19,645)4,061 (46,923)(3,272)
Other income (expenses)
Change in fair value of warrant liability6,590 45,837 20,605 83,628 
Other expense, net(50)(300)(1,230)(6,341)
(Loss) income before income taxes(13,105)49,598 (27,548)74,015 
(Benefit from) provision for income taxes(2,641)393 (5,699)242 
Net (loss) income (10,464)49,205 (21,849)73,773 
Net (loss) income attributable to noncontrolling interests(5,300)28,370 (14,484)48,675 
Net (loss) income attributable to WM Technology, Inc.$(5,164)$20,835 $(7,365)$25,098 

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Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Revenues100 %100 %100 %100 %
Operating expenses:
Cost of revenues8 %4 %7 %4 %
Sales and marketing35 %25 %37 %27 %
Product development24 %15 %23 %19 %
General and administrative66 %46 %55 %51 %
Depreciation and amortization5 %2 %5 %2 %
Total operating expenses139 %92 %128 %102 %
Operating (loss) income(39)%8 %(28)%(2)%
Other income (expenses)
Change in fair value of warrant liability13 %90 %12 %60 %
Other expense, net0 %(1)%(1)%(5)%
(Loss) income before income taxes(26)%97 %(17)%53 %
(Benefit from) provision for income taxes(5)%1 %(3)%0 %
Net (loss) income (21)%97 %(13)%53 %
Net (loss) income attributable to noncontrolling interests(10)%56 %(9)%35 %
Net (loss) income attributable to WM Technology, Inc.(10)%41 %(4)%18 %
Comparison of Three Months Ended September 30, 2022 and 2021
Revenues
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Revenues$50,500 $50,884 $(384)(1)
Total revenues remained consistent for the three months ended September 30, 2022 compared to the same period in 2021. Compared to the prior year period, revenue increased $1.3 million from our Weedmaps for Business and other SaaS subscriptions, offset by a decrease in revenue from featured and deal listings of $1.7 million. For the three months ended September 30, 2022, featured and deal listings, Weedmaps for Business and other SaaS subscriptions and other ad solutions represented approximately 69%, 24% and 7% of our total revenues, respectively.
Cost of Revenues
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Cost of revenues$4,272 $2,035 $2,237 110 
Gross margin92 %96 %  
Cost of revenues was $4.3 million for the three months ended September 30, 2022 compared to $2.0 million for the same period in 2021. The increase was primarily related to an increase of $1.5 million for cost of revenue associated with WM CRM and WM AdSuite and an increase of $0.7 million of server costs.
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Sales and Marketing Expenses
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Sales and marketing expenses$17,882 $12,806 $5,076 40 
Percentage of revenue35 %25 %  
Sales and marketing expenses increased by $5.1 million, or 40%, for the three months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to an increase in personnel-related costs of $6.2 million, an increase in outside services of $0.5 million and an increase in travel and entertainment of $0.3 million, offset by a decrease in website advertising expense of $2.0 million. The increase in personnel-related costs was primarily due to increased headcount and it includes an increase in salaries and wages of $4.4 million, an increase in bonus expense of $1.1 million, an increase in payroll taxes of $0.4 million and an increase in stock-based compensation expense of $0.3 million. Bonus expense for the three months ended September 30, 2022 includes $0.8 million of expense related to future bonus payouts in connection with prior acquisitions.
Product Development Expenses
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Product development expenses$11,988 $7,782 $4,206 54 
Percentage of revenue24 %15 %  
Product development expenses increased by $4.2 million, or 54%, for the three months ended September 30, 2022 compared to the same period in 2021. This increase was primarily due to increases in personnel-related expense of $4.0 million and outside services expense of $0.3 million. The increase in personnel-related costs was primarily due to increased headcount and it includes increases in salaries and wages of $4.0 million and bonus expense of $0.8 million, which includes a $0.2 million expense related to future bonus payouts in connection with prior acquisitions, offset by a decrease in stock-based compensation expense of $0.8 million due to the additional stock-based compensation expense recognized in the 2021 period as a result of the Business Combination.
General and Administrative Expenses
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
General and administrative expenses$33,490 $23,220 $10,270 44 
Percentage of revenue66 %46 %  
General and administrative expenses increased by $10.3 million, or 44%, for the three months ended September 30, 2022 compared to the same period in 2021. This increase was primarily due to an increase in provision for doubtful accounts of $7.8 million, an increase in personnel-related costs of $2.2 million, an increase in professional fees of $1.4 million, an increase in software expense of $0.8 million, and an increase in impairment loss of $0.8 million, offset by decreases in insurance costs of $1.8 million, rent expense of $0.6 million and outside services of $0.5 million. The increase in provision for doubtful accounts included a higher reserve for at-risk customers that indicated financial difficulties and the impact from macroeconomic factors. The increase in personnel-related costs includes an increase in severance costs of $2.0 million, due to the reduction in force in the 2022 period, an increase in salaries and wages of $1.3 million, an increase in employee benefits of $0.8 million and an increase in bonus expense of $0.2 million, which includes a $0.1 million expense in the 2022 period related to future bonus payouts in connection with prior acquisitions, offset by a decrease in stock-based compensation expense of $2.0 million. Stock-based compensation expense decreased primarily due to an adjustment to reverse all expense previously recognized related to the performance-based restricted stock units in the third quarter of 2022 when we determined that attainment on these awards was not probable. The increase in professional fees of $1.4 million includes a $2.1 million expense related to certain legal
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settlements and other legal costs incurred in the 2022 period and an increase in other professional fees of $0.8 million, offset by a decrease in transaction costs of $1.5 million, which was incurred in the 2021 period related to the Business Combination.
Depreciation and Amortization Expenses
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Depreciation and amortization expenses$2,513 $980 $1,533 156 
Percentage of revenue5 %2 %  
Depreciation and amortization expenses increased $1.5 million, or 156%, for the three months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to an increases in capitalized software amortization of $1.2 million and intangible asset amortization of $0.4 million.
Other Income, net
Three Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Change in fair value of warrant liability$6,590 $45,837 (39,247)(86)
Other expense, net(50)(300)250 (83)
Other income, net$6,540 $45,537 (38,997)(86)
Percentage of revenue13 %89 %  

Other income, net decreased by $39.0 million for the three months ended September 30, 2022 compared to the same period in 2021. The decrease in other income, net was primarily due to comparatively unfavorable changes in fair value of warrant liability of $39.2 million.
Comparison of Nine Months Ended September 30, 2022 and 2021
Revenues
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Revenues$166,246 $138,969 $27,277 20 
Total revenues increased by $27.3 million, or 20%, for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was driven by a 28% increase in average monthly paying clients. Our growth in average monthly paying clients primarily reflects growth in our featured and deal listings of $17.1 million, Weedmaps for Business and other SaaS subscriptions of $7.8 million and other ad solutions of $2.4 million. For the nine months ended September 30, 2022, featured and deal listings, Weedmaps for Business and other SaaS subscriptions, and other ad solutions represented approximately 70%, 23% and 7% of our total revenues, respectively.
Cost of Revenues
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Cost of revenues$11,870 $5,800 $6,070 105 
Gross margin93 %96 %  
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Cost of revenues increased by $6.1 million, or 105%, for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily related to an increase of $4.7 million for cost of revenue associated with WM CRM and WM AdSuite and an increase of $1.3 million of server costs.
Sales and Marketing Expenses
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Sales and marketing expenses$61,887 $37,194 $24,693 66 
Percentage of revenue37 %27 %  
Sales and marketing expenses increased by $24.7 million, or 66%, for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to an increase in personnel-related costs of $20.1 million, an increase in outside services costs of $3.1 million, an increase in branding and advertising expense of $1.5 million and an increase in travel and entertainment of $0.9 million. The increases were partially offset by decreases in website advertising expense of $0.7 million and events expense of $0.5 million. The increase in personnel-related costs was primarily due to increased headcount, including increases in salaries and wages of $13.0 million, bonus expense of $5.3 million, payroll taxes of $1.2 million and stock-based compensation of $0.3 million. The increase in bonus expense of $5.3 million includes a $2.8 million expense incurred in the 2022 period related to future bonus payouts in connection with prior acquisitions.
Product Development Expenses
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Product development expenses$38,341 $25,921 $12,420 48 
Percentage of revenue23 %19 %  
Product development expenses increased by $12.4 million, or 48%, for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to an increase in personnel-related expense of $10.6 million, an increase in outside services expense of $1.6 million and an increase in travel and entertainment of $0.3 million. The increase in personnel-related costs was primarily due to increased headcount and it includes an increase in salaries and wages expense of $12.7 million, an increase in bonus expense of $3.4 million, which includes a $0.8 million expense incurred in the 2022 period related to future bonus payouts in connection with prior acquisitions, and an increase in payroll tax expense of $0.6 million, offset by an increase in capitalized software development costs of $6.3 million. Bonus expense for the nine months ended September 30, 2022 includes $0.8 million of expense related to future bonus payouts in connection with prior acquisitions.
General and Administrative Expenses
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
General and administrative expenses$92,155 $70,356 $21,799 31 
Percentage of revenue55 %51 %  
General and administrative expenses increased by $21.8 million, or 31%, for the nine months ended September 30, 2022 compared to the same period in 2021. This increase was primarily due to an increase in provision for doubtful accounts of $11.9 million, an increase in professional services of $4.8 million, an increase in salaries and wages of $4.0 million, an increase in insurance costs of $3.5 million as a result of additional insurance coverage as a public company, an increase in software expense of $3.3 million, an increase in employee benefits expense of $1.7 million, an increase in facilities expense of $1.6 million, an increase in severance expense of $1.0 million, which includes a $2.0 million expense related to the reduction in force in the 2022 period offset by $1.0 million decrease related to other severance expense incurred in the 2021 period, and an increase in travel expense of $0.4 million. The increase in provision for doubtful accounts included a higher reserve for at-risk
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customers that indicated financial difficulties and the impact from macroeconomic factors. These increases were partially offset by a decrease in stock-based compensation expense of $6.9 million, a decrease in rent expense of $1.8 million, a decrease in impairment loss of $1.1 million, and a decrease in bonus expense of $0.4 million, which includes a decrease in $1.2 million of transaction related bonuses, resulting from a $0.4 million transaction related bonus expense recognized in the 2022 period related to future bonus payouts in connection with prior acquisitions as compared to a $1.6 million transaction related bonus expense recognized in the 2021 period related to the Business Combination. Stock-based compensation expense decreased primarily due to an adjustment to reverse all expense previously recognized related to the performance-based restricted stock units in the third quarter of 2022 when we determined that attainment on these awards was not probable. The increase in professional fees of $4.8 million includes a $3.2 million expense related to certain legal settlements and other legal costs incurred in the 2022 period, increase in other professional fees of $2.8 million, offset by a decrease in transaction costs of $1.2 million, which resulted from transaction costs of $0.5 million incurred in the 2022 period as compared to transactions costs of $1.6 million in 2021.
Depreciation and Amortization Expenses
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Depreciation and amortization expenses$8,916 $2,970 $5,946 200 
Percentage of revenue5 %2 %  
Depreciation and amortization expenses increased $5.9 million for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to an increase in capitalized software amortization of $3.9 million, an increase in intangible asset amortization of $1.3 million and an increase in fixed asset depreciation of $0.7 million. Capitalized software amortization included accelerated depreciation of $1.1 million related to discontinued product features of WM Retail in the first quarter of 2022.
Other Income , net
Nine Months Ended September 30,Change
20222021($)(%)
(dollars in thousands)
Change in fair value of warrant liability$20,605 $83,628 (63,023)(75)
Other expense, net(1,230)(6,341)5,111 (81)
Other income, net$19,375 $77,287 (57,912)(75)
Percentage of revenue12 %56 %  
Other income, net decreased by $57.9 million for the nine months ended September 30, 2022 compared to the same period in 2021. The decrease in other income, net was primarily due to comparatively unfavorable changes in fair value of warrant liability of $63.0 million, which was partially offset by a decrease in other expense, net of $5.1 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.
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Liquidity and Capital Resources
The following tables show our cash, accounts receivable and working capital as of the dates indicated:
September 30, 2022December 31, 2021
(in thousands)
Cash$34,170 $67,777 
Accounts receivable, net16,642 17,550 
Working capital24,937 61,134 
As of September 30, 2022, we had cash of $34.2 million. During the second quarter of 2021, we completed the Business Combination, resulting in proceeds of approximately $80.0 million. Our funds are being used for funding our current operations and potential strategic acquisitions in the future. We also intend to increase our capital expenditures to support the organic growth in our business and operations. We expect to fund our near-term capital expenditures from cash provided by operating activities. We believe that our existing cash and cash generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors. We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.
Sources of Liquidity
We primarily finance our operations and capital expenditures through cash flows generated by operations.
To the extent existing cash and investments and cash from operations are not sufficient to fund future activities, we may need to raise additional funds. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness may have rights that are senior to holders of our equity securities and could contain covenants that restrict operations. Any additional equity financing may be dilutive to stockholders. We may enter into investment or acquisition transactions in the future, which could require us to seek additional equity financing, incur indebtedness, or use cash resources.
Cash Flows
Nine Months Ended September 30,
20222021
(in thousands)
Net cash (used in) provided by operating activities$(10,466)$28,880 
Net cash used in investing activities$(14,848)$(23,246)
Net cash (used in) provided by financing activities$(8,293)$52,382 
Net Cash (Used In) Provided by Operating Activities
Cash from operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, 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 nine months ended September 30, 2022 was $10.5 million, which resulted from a net loss of $21.8 million, together with net cash outflows of $4.7 million from changes in operating assets and liabilities, and non-cash items of $16.0 million, consisting of depreciation and amortization of $8.9 million, fair value of warrant liability of $20.6 million, stock-based compensation of $17.3 million, deferred income taxes of $5.7 million, provision for doubtful accounts of $14.9 million and impairment loss of $1.3 million. Net cash outflows from changes in operating assets and liabilities were primarily due to an increase in accounts receivable of $13.1 million and a decrease in deferred revenue of $1.5 million, partially offset by a decrease in prepaid expenses and other current assets of $5.2 million and an increase in accounts payable and accrued expenses of $5.0 million. The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Net cash provided by operating activities for the nine months ended September 30, 2021 was $28.9 million, which resulted from net income of approximately $73.8 million, together with net cash inflows of approximately $6.8 million from changes in operating assets and liabilities, and non-cash items of $51.6 million, consisting of depreciation and amortization of
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$3.0 million, fair value of warrant liability of $83.6 million, stock-based compensation of $23.6 million, impairment loss of $2.4 million and provision for doubtful accounts of $3.0 million. The net cash inflows from changes in operating assets and liabilities were primarily due to a decrease in prepaid expenses and other current assets of $7.2 million, an increase in accounts payable and accrued expenses of $3.3 million and an increase in deferred revenue of $2.5 million. These changes were partially offset by an increase in accounts receivables of $6.4 million. The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Net Cash Used in Investing Activities
Cash used in investing activities for the nine months ended September 30, 2022 was $14.8 million, which resulted from $13.1 million cash paid for purchases of property and equipment, including certain capitalized software development costs, $0.7 million net cash paid for an acquisition and $1.0 million cash paid for an acquisition holdback release.
Cash used in investing activities for the nine months ended September 30, 2021 was $23.2 million, which resulted from cash paid for acquisitions of $16.0 million, purchases of property and equipment of $4.2 million and cash paid for other investments of $3.0 million.
Net Cash (Used in) Provided by Financing Activities
Cash outflows from financing activities for the nine months ended September 30, 2022 was $8.3 million, which primarily consists of repayments of insurance premium financing of $5.8 million and distributions of $2.4 million to the Unit holders other than the Company.
Net cash provided by financing activities for the nine months ended September 30, 2021 was $52.4 million, which primarily resulted from proceeds from the Business Combination of approximately $80.0 million, distributions of $18.1 million, repurchase of Class B Units of $5.6 million and repayments of insurance premium financing of $3.7 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, provision for doubtful accounts, 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 marketplace 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 Taxes
As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period
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was prior to the Business Combination. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc. following the Business Combination, on a pro rata basis. WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions.
WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc., on a pro rata basis. We are 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, that WM 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 of September 30, 2022, total net deferred tax assets and TRA liability were $186.3 million and $142.9 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 Class P 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 nine months ended September 30, 2022, we recognized stock-based compensation expense of $1.6 million and $17.3 million, respectively, and for the three and nine months ended September 30, 2021, we recognized stock-based compensation expense of $4.2 million and $23.6 million, respectively. See Note 12 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 marketplace 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 months ended September 30, 2022 and 2021, we capitalized software development costs of $3.6 million and $3.7 million, respectively. For the nine months ended September 30, 2022 and 2021, we capitalized software development costs of $12.2 million and $3.7 million, respectively.
Accounts Receivable
We measure credit losses on our trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses, which is based on the expected losses rather than incurred losses. Under the credit loss model, lifetime expected credit losses are measured and recognized at each reporting date based on historical, current and forecast information.
We calculate the expected credit losses on a pool basis for those trade receivables that have similar risk characteristics. For those trade receivables that do not share similar risk characteristics, the allowance for doubtful accounts is calculated on an
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individual basis. Risk characteristics relevant to our accounts receivable include balance of customer account and aging status. We recorded an allowance for doubtful accounts of $13.9 million and $5.2 million as of September 30, 2022 and December 31, 2021, respectively. See Note 2 to our condensed consolidated financial statements included herein.
Goodwill and Intangible Assets
Assets and liabilities acquired from acquisitions are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. The accounting for goodwill and intangible assets requires us to make significant judgement, estimates and assumptions. Significant estimates and assumptions in valuing acquired intangible assets and liabilities include projected cash flows attributable to the assets or liabilities, asset useful lives and discount rates.
Goodwill is not amortized and is subject to annual impairment testing, or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. 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.
Fair Value Measurements
In connection with the Business Combination, we assumed 12,499,993 Public Warrants and 7,000,000 Private Placement Warrants. As of September 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 of September 30, 2022 and December 31, 2021, warrant liability was $6.9 million and $27.5 million, respectively. See Note 4 to our condensed consolidated financial statements included herein.
Recent Accounting Pronouncements
See Note 2 to our condensed consolidated financial statements included herein.
Item 3.    Quantitative and Qualitative Disclosures about Market Risk
We have operations both within the United States and in foreign jurisdictions, and we are exposed to market risks in the ordinary course of our business, including the effects of foreign currency fluctuations, interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Interest Rate Fluctuation Risk
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2022, we did not have any cash equivalents.
The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. Because we only hold cash and, our portfolio’s fair value is insensitive to interest rate changes. In future periods, we will continue to evaluate our investment policy in order to ensure that we continue to meet our overall objectives.
Inflation
Other than as set forth in the note above titled “Growth and Retention of Our Paying Clients”, we do not believe that inflation has had a material effect on our business, financial condition or results of operations. We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
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Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2022. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), during the three months ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Part II - Other Information

Item 1.    Legal Proceedings

The information set forth under "Commitment and Contingencies—Litigation" in Note 3 of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated by reference into this Item 1.
Additionally, from time to time, we are involved in legal proceedings and subject to claims that arise in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, to our knowledge we are not currently party to any legal proceedings which, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. We also pursue litigation to protect our legal rights and additional litigation may be necessary in the future to enforce our intellectual property and our contractual rights, to protect our confidential information or to determine the validity and scope of the proprietary rights of others.
Item 1A.    Risk Factors

Investment in our securities involves risk. An investor or potential investor should consider the risks summarized below and under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 (our “2021 Form 10-K”) and of our prior 10-Q. Except for the risk factor discussed below, we do not believe that there have been any material changes to the risk factors disclosed our 2021 Form 10-K and Prior 10-Q.
We track certain performance metrics with internal tools and do not independently verify such metrics. Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We calculate and track performance metrics with internal tools, which are not independently verified by any third-party. While we believe our metrics are reasonable estimates of our user or client base for the applicable period of measurement, the methodologies used to measure these metrics and how we define such metrics require significant judgment and may be susceptible to algorithm or other technical errors. For example, user accounts are based on email addresses, and a user could use multiple email addresses to establish multiple accounts, and clients in many instances will have multiple accounts. Additionally, a user could also use technology (such as incognito browsing, blocking or deleting cookies and IP addresses or other similar methods) that may decrease our ability to obtain useful information with respect to the number of and behavior of users, and as a result, we may include users who are not actively engaging with our platform in the manner in which we assume, and/or we may count as unique users multiple visits by the same underlying user. As a result, the data we report may not be accurate, and we believe unique user statistics could include a significant number of repeat underlying users. Our internal tools and processes we use to identify multiple accounts or fraudulent accounts have a number of limitations, and our methodologies for tracking performance metrics may change over time, which could result in unexpected changes to our metrics, including historical metrics. Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments and we generally do not intend to update previously disclosed metrics for any such changes. Though we regularly review our processes for calculating metrics and may adjust our processes for calculating metrics to improve their accuracy, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our longer term strategies. For example, we determined to discontinue reporting MAUs as a key operational metric as a result of our reevaluation of the value of this metric to investors in light of its significant quarterly fluctuations that we do not believe necessarily reflect the underlying and most important trends in our business. If our performance metrics are not accurate representations of our business, user or client base, or traffic levels; if we discover material inaccuracies in our metrics; or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, user or client base or traffic levels, we may not be able to effectively implement our business strategy, our reputation may be harmed, and our operating and financial results could be adversely affected.
Our clients and investors rely on our key metrics as a representation of our performance. If these third parties do not perceive our user metrics to be accurate representations of our user base or user engagement, or if we discover material inaccuracies in our user metrics, our reputation may be harmed and retailers may be less willing to list a business on our platform, which could negatively affect our business, financial condition, or results of operations.
If we do not successfully manage the transition associated with the resignation of our chief executive officer and the appointment of a new chief executive officer, it could have an adverse impact on our business.

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On November 7, we announced that Doug Francis, co-founder and Executive Chair, will be taking a more active role in leading WM Technology. Mr. Francis succeeds Chris Beals, who has decided to step down from his role as our chief executive officer and a member of our board of directors. We have begun an executive search for a new chief executive officer. Leadership transitions can be inherently difficult to manage, and an inadequate transition to a new chief executive officer may cause disruption to our business. In addition, if we are unable to attract and retain a qualified candidate to become our chief executive officer in a timely manner, our ability to meet our financial and operational goals and strategic plans may be adversely impacted. This may also make it more difficult for us to retain and hire key management and other team members
ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities

None.
ITEM 3.     DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.    OTHER INFORMATION
None.
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ITEM 6.    EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit No.Description
101.INSInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
___________________

#Indicates management contract or compensatory plan, contract or agreement.
*
The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WM TECHNOLOGY, INC.
Date:November 7, 2022By:/s/ Douglas Francis
Name:
Douglas Francis
Title:Executive Chair
 (Principal Executive Officer)
Date:November 7, 2022By:/s/ Arden Lee
Name:Arden Lee
Title:Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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