Filing summary
Important entity note: Although the request identifies Dave Inc., this is VPC Impact Acquisition Holdings III, Inc.’s unaudited Form 10-Q for the quarter ended June 30, 2021. It reports the SPAC’s financial position and proposed transaction with Dave, not Dave’s operating results.
Business context and reporting period
VPC Impact Acquisition Holdings III was a newly formed blank-check company and had not begun operating activities or generated revenue as of June 30, 2021. The filing covers the three months ended June 30, 2021 and the period from inception on January 14, 2021 through June 30, 2021. Because the company was formed in January 2021, the filing does not provide a comparable prior-year quarter.
On June 7, 2021, the SPAC agreed to combine with Dave Inc. The proposed transaction contemplated $3.5 billion of equity value, based on $10 per share, and a concurrent PIPE subscription for 21 million shares at $10 each ($210 million), subject to closing conditions.
Financial metrics
| Metric | Reported amount |
|---|---|
| Revenue | None; the SPAC had not commenced operations. |
| Net loss, three months ended June 30, 2021 | $3.48 million |
| Net loss, inception through June 30, 2021 | $5.13 million |
| Operating costs, three months ended June 30, 2021 | $1.95 million |
| Cash and working capital at June 30, 2021 | $703,038 cash; $88,130 working capital |
| Trust Account investments | $253.78 million, held in money market funds invested primarily in U.S. Treasury securities |
| Cash flow, inception through June 30, 2021 | $1.47 million used in operating activities; $703,038 ending cash |
| Total liabilities | $31.03 million, including $20.45 million warrant liabilities and $8.88 million deferred underwriting fees |
| Debt | No long-term debt and no working-capital loans outstanding |
Interest income was $9,209 for the quarter and $12,900 from inception. The filing is for a pre-combination SPAC, so operating revenue and operating margins are not applicable. Quarterly results were materially affected by non-cash changes in warrant fair value and warrant-related compensation expense.
Material changes, outlook, and risks
- The SPAC completed its IPO on March 9, 2021, selling 25,376,598 units at $10 each, and raised a further $7.65 million from private-placement warrants.
- The proposed Dave transaction included a dual-class share structure under which CEO Jason Wilk’s Class V shares would carry ten votes per share; the filing estimated approximately 70% of voting power for him immediately after closing, assuming no shareholder redemptions and before the specified repurchase.
- A repurchase agreement provided for the company to repurchase shares from Dave’s CEO and CFO at $10 per share if post-transaction cash exceeded $300 million, with the repurchase capped at $60 million. The transaction and repurchase were not completed as of the reporting date.
- The SPAC had until March 9, 2023 to complete a business combination or, under its charter, redeem public shares and wind up. Completion was not assured; public shareholders could redeem shares in connection with a business combination.
- Management said existing working capital and potential sponsor or affiliate borrowing should be sufficient through the earlier of a business combination or one year from the filing. Such lending was optional, not committed.
- Management identified a material weakness in internal control over financial reporting related to warrant accounting. Remediation steps had begun, but the weakness had not been fully remediated by June 30, 2021; management nevertheless concluded the filed statements fairly presented the reported information.
- Management noted that COVID-19 could adversely affect the company’s financial position, operations, or target search, but the specific impact was not determinable. The filing reported no material changes to previously disclosed risk factors and no legal proceedings.
Key facts for investors to verify
- Confirm the intended filing entity: this 10-Q is for VPC Impact Acquisition Holdings III, not Dave Inc.
- Review the merger agreement, PIPE subscription agreements, redemption terms, closing conditions, and transaction status; the $3.5 billion equity value and $210 million PIPE were proposed terms, not completed financing.
- Assess the effects of shareholder redemptions, the conditional share repurchase, and the dual-class voting structure on post-transaction cash, ownership, and control.
- Examine warrant valuation and the material weakness in internal controls, including whether remediation was completed in later filings.
- Reconcile the filing’s differing disclosures of redeemable Class A shares: the balance sheet lists 21,953,494 shares, while a note lists 21,953,624 shares.