Dave (DAVE) risk factors, FY2025 10-K

Other

1. 01The industries in which we operate are highly competitive, which could adversely affect our results of operations97% rewritten
2. 02financial condition and operating results could be adversely affected if a substantial number of our Members fail to repay the ExtraCash overdraft they receiveNew
3. 03We may not be able to scale our business on a timely basis to meet our Members’ growing needs, and if we are not able to grow efficiently, our operating results could be harmed
4. 04We receive funds from, and transfer funds to, our Members daily, which in the aggregate comprise substantial sums, and are subject to the risk of errors, which could result in financial losses, damage to our reputation, or loss of trust in our brand, which would harm our business and financial results54% rewritten
5. 05Our business is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws, and is subject to regulatory investigations, consumer litigation and mass arbitrations
6. 06If accounting standards change or if our estimates or assumptions relating to our critical accounting policies prove to be incorrect, our results of operations and financial condition could be adversely affected

Risks Related to Our Business and Industry

1. 07The industries in which we operate are highly competitive, which could adversely affect our results of operations95% rewritten
2. 08condition and operating results could be adversely affected if a substantial number of our Members fail to repay the ExtraCash overdraft they receiveNew
3. 09Our Members may not view ExtraCash overdrafts facilitated through our platform as having the same significance as other obligations arising under more traditional circumstances
4. 10We offer ExtraCash, based on a limited performance history, and therefore we have only limited prepayment, loss and delinquency data with respect to ExtraCash on which to base projections
5. 11If our settlement of ExtraCash overdrafts is ineffective or unsuccessful, the performance of the overdrafts could be adversely affected
6. 12If we are unable to keep pace with the rapid technological and AI-related developments in our industry and the larger financial services industry necessary to continue providing our Members with new and innovative products and services, the use of our platform and other products and services could decline
7. 13If the prices we charge for our products and services are unacceptable to our Members, our operating results will be harmed29% rewritten
8. 14Use of AI in our operations and product offerings could result in reputational or competitive harm, legal or regulatory liability and adverse impacts on our results of operations40% rewritten
9. 15If we fail to comply with the applicable requirements of our third-party providers, they could seek to suspend or terminate our accounts, which could adversely affect our business
10. 16Our third-party vendor relationships subject us to a variety of risks, and the failure of third parties to comply with legal or regulatory requirements or to provide various services could have an adverse effect on our business, results of operations, financial condition, and future prospects23% rewritten
11. 17and harming our results of operations. Further, negative publicity arising from these types of disruptions could be damaging to our reputation and may adversely impact use of our products and services, including our platform, and adversely affect our ability to attract new Members and business partnersNew
12. 18manage the risks related to fluctuating interest rates and inflation on our business and operations
13. 19general administration, including increased legal and accounting expenses associated with being a public company
14. 20If we fail to offer high-quality customer support, or if our support is more expensive than anticipated, our business and reputation could suffer
15. 21We may require additional capital to support the growth of our business, and this capital may not be available on acceptable terms, if at all
16. 22If the information provided to us by potential Members or other third parties is incorrect or fraudulent, we may misjudge a Member’s qualifications to receive our products and services and our results of operations may be harmed and could subject us to regulatory scrutiny or penalties
17. 23We are exposed to losses from Dave banking Member accounts
18. 24diversion of our resources, including through increased service expenses or financial concessions, and increased insurance costs
19. 25Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and future prospects
20. 26Cyberattacks and other security breaches or disruptions suffered by us or third parties upon which we rely could have a materially adverse effect on our business, harm our reputation and expose us to public scrutiny and liability24% rewritten
21. 27We strive to deliver simple, transparent, and fair financial products, which may conflict with the short-term interests of our stockholders44% rewritten
22. 28Changes in debit interchange rates could adversely affect our business, financial position and results of operations
23. 29Dave has historically incurred losses in the operation of its business. Although we have recently achieved profitability, there is no guarantee that we will sustain profitability
24. 30implement new and upgraded operational and financial systems, procedures and controls
25. 31Fluctuations in market interest rates have had and could continue to have an adverse effect on our business38% rewritten
26. 32Our operating results may fluctuate in the future
27. 33Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects
28. 34If we cannot maintain our company culture as we grow, our success and our business may be harmed
29. 35If we lose key personnel, or if we are unable to attract and retain executives and employees we need to support our operations and growth, our business may be harmed
30. 36Misconduct and errors by our employees, contractors and third-party service providers could harm our business and reputation
31. 37If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected44% rewritten
32. 38A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim consolidated financial statements will not be prevented or detected on a timely basisNew
33. 39If we fail to adequately protect our proprietary rights, our competitive position could be impaired and we may lose valuable assets, generate less revenue and incur costly litigation to protect our rights
34. 40We use open source software in our products, which could subject us to litigation or other actions
35. 41Natural catastrophic events, pandemics and man-made problems such as power disruptions, political instability, civil unrest, terrorist activity or war may disrupt our business
36. 42Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations
37. 43Our revenue is impacted, to a significant extent, by the general economy, the creditworthiness of the U.S. consumer and the financial performance of our partners54% rewritten
38. 44Changes in U.S. policies may adversely impact our business, financial condition, and results of operations32% rewritten
39. 45We operate in a cyclical industry. In an economic downturn, default rates may increase, there may be decreased demand for our products, and there may be adverse impacts to our business21% rewritten

Risks Related to Regulatory and Legal Matters

1. 46Our business is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws, and is subject to regulatory investigations, consumer litigation and mass arbitrations39% rewritten
2. 47Regulatory agencies and consumer advocacy groups are highly focused on potential discrimination resulting from the use of machine learning and “black-box” algorithms
3. 48We are subject to extensive federal, state, and local laws and regulations relating to consumer financial protection
4. 49If ExtraCash overdrafts or other transactions originated through a bank partner are found to violate applicable state usury laws or other lending laws, it could materially adversely affect our business95% rewritten
5. 50Our use of vendors and our other ongoing third-party business relationships are subject to increasing regulatory requirements and attention34% rewritten
6. 51costs, and could subject our business model to scrutiny and otherwise increase our regulatory requirements, which may require us to expend substantial resources, discontinue certain products, or adversely affect our ability to expand our businessNew
7. 52Due to our bank partnership model, we are and will continue to be subject to third-party risk management obligations, our business model may need to be substantially altered and we may not be able to continue to operate our business as it is currently operated
8. 53If we were found to be operating without having obtained necessary state or local licenses, it could adversely affect our business, results of operations, financial condition, and future prospects
9. 54Laws and regulations relating to memberships and subscriptions may adversely affect our business
10. 55We are required to comply with anti-money laundering and anti-terrorism financing laws, as well as the Bank Secrecy Act, including through obligations imposed by our third-party service providers. Failure to comply with these obligations could have significant adverse consequences for us84% rewritten
11. 56Litigation, regulatory actions, and compliance issues could subject us to fines, penalties, judgments, remediation costs, and/or other requirements resulting in increased expenses and reputational harmNew

Risks Relating to Ownership of our Securities

1. 57Dave’s dual class structure may depress the trading price of our Dave Class A Common Stock
2. 58Our stock price is volatile
3. 59general economic, political and market conditions, including fluctuating interest rates
4. 60Dave has never paid cash dividends on our capital stock and does not anticipate paying dividends in the foreseeable future
5. 61Anti-takeover provisions contained in our certificate of incorporation and bylaws and applicable laws could impair a takeover attempt
6. 62Our amended and restated certificate of incorporation contains exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees
7. 63Dave is subject to risks related to taxation in the United States
8. 64Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect Dave’s business and future profitability65% rewritten
9. 65greater risk of examination by taxing authorities, any of which could adversely affect Dave’s after-tax profitability and financial resultsNew
10. 66Dave’s ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations
11. 67The exercise price for our warrants is $368.00 per share of Dave Class A Common Stock. There is no guarantee that the Public Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, they may expire worthless
12. 68We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless
13. 69The valuation of our public and private warrants and earnout shares could materially increase the volatility of our net income (loss) in our consolidated statements of operationsNew
14. 70We have issued and will continue to issue a substantial number of additional shares of Dave Class A Common Stock under an employee incentive plan. Any such issuances dilute the interest of our stockholders and likely present other risks
15. 71There can be no assurance that Dave Class A Common Stock will be able to comply with the listing standards of Nasdaq
16. 72Sales of a substantial number of shares of Dave Class A Common Stock in the public market could occur at any time. This could cause the market price of the Dave Class A Common Stock to drop significantly, even if our business is doing well49% rewritten
17. 73Dave Class V Common Stock convertible into shares of Dave Class A Common Stock, which represents approximately 53.8% of the voting power of the outstanding shares of Common StockNew
18. 74If securities or industry analysts do not publish or cease publishing research or reports about Dave, its business or its market, or if they change their recommendations regarding the Dave Class A Common Stock adversely, the price and trading volume of the Dave Class A Common Stock could decline
19. 75We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder valueNew

Risks Relating to our Indebtedness

1. 76Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt
2. 77As of December 31, 2024 and December 31, 2023, the Company had drawn $75.0 million on the Debt Facility and had made no repayments
3. 78We guarantee certain obligations of one of our wholly-owned subsidiaries, which guarantee contains financial covenants and other restrictions on our actions, which could limit our operational flexibility and otherwise adversely affect our financial condition