Item 2.05 Costs Associated with Exit Disposal Activities.
On January 26, 2023, and in connection with its previously announced near-term
strategy to focus on being an innovative, efficient, risk oriented Fintech with
a sponsor bank model, BM Technologies, Inc. (the "Company") committed to a
targeted Profit Enhancement Plan (the "Plan") that is intended to reduce
operating costs, improve operating margins, improve operating cash flow, and
continue advancing the Company's ongoing commitment to profitable growth and
continued innovation, and direct the Company's resources toward its best
opportunities.
Included within the Plan is a targeted reduction of the Company's employee
workforce of approximately 25% as compared to its headcount at December 31,
2022. This workforce reduction is in addition to targeted spend reduction and
service provider rationalization. The Company expects the actions necessary to
attain these cost reductions will be substantially completed by June 30, 2023.
The Company estimates that it will incur $1.5 million to $3.0 million in charges
in connection with the Plan, substantially all of which are expected to be
incurred in the first quarter of 2023. The charges and timing of such charges
described above are preliminary estimates based on the Company's current
expectations, are subject to a number of assumptions and risks, and actual
results may differ materially from such estimates.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Transition of Various Officers
On January 26, 2023, the Company elected Jamie Donahue, the Company's Executive
Vice President and Chief Technology Officer, as the Company's President. Mr.
Donahue has been in his current position with the Company since 2020. He has a
25-year career in financial services, starting at ADP Brokerage before it spun
out in 1998 to create a company called BISYS, which was ADP's entry into the
banking system. He also served in senior positions at Finastra as well as First
Republic Bank before joining the Company. In his new position as President, Mr.
Donahue will be responsible for leading the entire information technology,
operations, product and program management, and sales teams as the Company
pivots its strategy to ensure sustainable growth and profitability into the
future as a leader in embedded finance and Banking-as-a-Service. Mr. Donahue's
new compensation arrangements associated with his transition to the position as
President have not been finalized and, therefore, are not available at this
time. In accordance with Instruction 2 to Item 2.05 of Form 8-K, the Company
will timely file an amendment to this Current Report on Form 8-K after that
information becomes available.
Effective January 26, 2023, the Company transitioned Robert Ramsey, the
Company's Chief Financial Officer, from that position to a new corporate
development role. Mr. Ramsey's new compensation arrangements associated with his
transition have not been finalized and, therefore, are not available at this
time. In accordance with Instruction 2 to Item 2.05 of Form 8-K, the Company
will timely file an amendment to this Current Report on Form 8-K after that
information becomes available.
Concurrent with the transition of Mr. Ramsey, the Company elected James
Dullinger, the Company's Chief Accounting Officer, to the additional position of
Chief Financial Officer. Mr. Dullinger has been in his current position with the
Company since March 2022. Prior to joining the Company, he served for more than
two years as Chief Financial Officer at a publicly traded provider of Internet
of Things (IoT) services and technologies. Previously, Mr. Dullinger served for
more than 14 years in senior accounting and finance leadership roles at several
publicly traded and private equity owned startup and middle-market technology,
e-commerce, and investment services companies. Mr. Dullinger began his career in
public accounting with 10 years of combined experience at PwC and KPMG,
providing audit and other assurance services to complex publicly traded
companies operating within the banking and investment services industries. A
Certified Public Accountant (PA), he holds an MBA from Georgetown University
McDonough School of Business and a BBA in Accounting from Temple University. Mr.
Dullinger's new compensation arrangements associated with his transition to the
position as Chief Financial Officer have not been finalized and, therefore, are
not available at this time. In accordance with Instruction 2 to Item 2.05 of
Form 8-K, the Company will timely file an amendment to this Current Report on
Form 8-K after that information becomes available.
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Appointment of Board Member
On January 27, 2023, the Board of Directors (the "Board") of the Company
appointed Raj Singh to serve as a Board member until the Company's next annual
meeting of shareholders. Mr. Singh was appointed to fill a vacancy on the Board
that resulted from an increase in the size of the Board from seven to eight
members. Mr. Singh will participate in the current director compensation
arrangements generally applicable to the Company's non-employee directors as
described in the Company's Proxy Statement filed in connection with the 2022
Annual Meeting of Shareholders.
There are no arrangements or understandings between Mr. Singh and other persons
pursuant to which he was selected as a director. No determination has been made
at this time as to any Board committees on which Mr. Singh will serve. The
Board's Nominating and Corporate Governance Committee determined Mr. Singh to be
independent for purposes of NYSE listing standards. Mr. Singh has not engaged in
any transaction with the Company that would be reportable as a related party
transaction under Item 404(a) of Securities and Exchange Commission Regulation
S-K.
Mr. Singh worked in the investment banking practice of Raymond James for more
than 20 years, including most recently as Vice Chairman - Investment Banking
from 2017 to 2023. During his career, Mr. Singh managed over 150 investment
banking transactions, including M&A transactions, debt and equity financings,
balance sheet recapitalizations, in and out-of-court restructurings, financial
opinions, and valuations. Mr. Singh's expertise includes working effectively
with companies requiring significant organizational changes to achieve success
and overcome financial, industry, and market challenges. Mr. Singh holds FINRA
Series 7 and 63 licenses in addition to being a Certified Public Accountant (NJ
inactive). He earned an MBA from the University of North Carolina at Chapel Hill
and a BS in Accounting from Rutgers University.
Item 7.01 Regulation FD Information.
Press Release
On January 30, 2023, the Company issued the press release that is furnished as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Forward Looking Statements
This Current Report on Form 8-K and the press release furnished as Exhibit 99.1
hereto, contain forward looking statements, including, but not limited to,
statements related to the expected benefits of and timing of completion of the
Plan, and the expected costs and charges of the Plan. Words such as "expects,"
"anticipates," "aims," "projects," "intends," "plans," "believes," "estimates,"
"seeks," "assumes," "may," "should," "could," "would," "foresees," "forecasts,"
"predicts," "targets," "commitments," and variations of such words and similar
expressions are intended to identify such forward looking statements. We caution
you that the foregoing may not include all the forward looking statements made
in this Form 8-K.
These forward looking statements are based upon the Company's current plans,
assumptions, beliefs, and expectations. Forward looking statements are subject
to the occurrence of many events outside of the Company's control. Actual
results and the timing of events may differ materially from those contemplated
by such forward looking statements due to numerous factors that involve
substantial known and unknown risks and uncertainties. These risks and
uncertainties include, among other things, the risk that the restructuring costs
and charges may be greater than anticipated; the risk that the Company's
restructuring efforts may adversely affect the Company's internal programs and
the Company's ability to recruit and retain skilled and motivated personnel, and
may be distracting to employees and management; the risk that the Company's
restructuring efforts may negatively impact the Company's business operations
and reputation with or ability to serve customers; the risk that the Company's
restructuring efforts may not generate their intended benefits to the extent or
as quickly as anticipated; and other risks and uncertainties included in the
Company's reports on Forms 10-K, 10-Q, and 8-K and in other filings the Company
makes with the Securities and Exchange Commission from time to time, available
at www.sec.gov.
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Forward looking statements should be considered in light of these risks and
uncertainties. Investors and others are cautioned not to place undue reliance on
forward looking statements. All forward looking statements contained herein
speak only as of the date hereof. The Company assumes no obligation and does not
intend to update these forward looking statements, except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 Press Release dated January 30, 2023 (furnished only) .
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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