8-K: WM Technology Announces Preliminary 2023 Results and Filing Delay

WM Technology reported preliminary full year 2023 financial results and announced a delay in filing its annual report due to a change in executive finance leadership.

Summary

• WM Technology announced preliminary unaudited full year 2023 financial results.
• The company expects revenue to be between $185 million and $195 million.
• Adjusted EBITDA is projected to be in the range of $33 million to $37 million.
• Cash on hand totaled approximately $34 million as of December 31, 2023, a 20% increase from $28.6 million the previous year.
• The filing of the 2023 Form 10-K will be delayed due to a recent change in executive finance leadership and a corresponding delay in preparing the financial statements.
• The company anticipates reporting material weaknesses in internal controls over financial reporting related to control environment, risk assessment, and IT controls.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the delay in filing the 10-K, the announcement of material weaknesses in internal controls, and the preliminary nature of the financial results. While there are some positives, the issues raised are significant.

Positives

• The company's cash position increased by approximately 20% year-over-year, reaching $34 million.
• The company anticipates continued positive trends in cannabis legalization and rescheduling.

Negatives

• The filing of the 2023 Form 10-K is delayed due to a change in executive finance leadership.
• The company expects to report material weaknesses in internal controls over financial reporting.

Risks

• The preliminary financial results are unaudited and may differ from the final results.
• The company faces headwinds in the cannabis industry in 2024.
• Material weaknesses in internal controls could impact the accuracy of financial reporting.
• The company's ability to capitalize on new and existing cannabis markets is subject to various risks.
• The company's future performance is subject to various economic, business, and competitive factors.

Future Outlook

The company anticipates continued headwinds in the cannabis industry in 2024 but remains optimistic about state-by-state legalization and potential federal rescheduling. They are focused on capitalizing on opportunities and maintaining core business discipline.

Management Comments

• Doug Francis, Executive Chair of WM Technology, expressed confidence in the company's strategic measures and direction.
• Doug Francis noted the company is working hard to anticipate and capitalize on opportunities as they arise, while maintaining focus on their core business.

Industry Context

The announcement comes amid ongoing discussions about cannabis legalization and rescheduling, which could significantly impact the industry. The company's performance is being viewed in the context of these broader trends and the challenges faced by cannabis businesses.

Comparison to Industry Standards

• It is difficult to make a direct comparison without full audited financials, however, the revenue and EBITDA ranges are within the expected range for a company of this size in the cannabis technology sector.
• Companies like Akerna Corp and Dutchie are also in the cannabis technology space, and their financial results and growth trajectories would be relevant for comparison once WM Technology releases its full audited results.
• The delay in filing the 10-K and the identification of material weaknesses in internal controls are concerning and would be viewed negatively compared to industry best practices.

Management Changes

Stakeholder Impact

• Shareholders may be concerned about the delay in filing the 10-K and the material weaknesses in internal controls.
• Employees may be affected by the changes in leadership and the company's efforts to address the internal control issues.
• Customers and suppliers may be indirectly affected by the company's financial performance and operational changes.

Next Steps

• The company is working to complete the preparation of its financial statements for the year ended December 31, 2023.
• The company will file the 2023 Form 10-K as soon as possible.
• The company will work to remediate the identified material weaknesses in internal controls.

Key Dates

Keywords

cannabis, financial results, EBITDA, revenue, internal controls, Weedmaps, delay, Form 10-K, legalization