BM Technologies, Inc. (NYSE American: BMTX), a state commercial bank, has re-engaged the services of KPMG LLP for the review of its interim financial statements for the third quarter of 2024. This decision, as detailed in the company's latest SEC Form 8-K filing, comes after KPMG's resignation on August 14, 2024, which followed their review of the company's second-quarter financials.
The re-engagement, effective as of October 31, 2024, is specifically for the third quarter's review and is directly associated with the pending merger agreement announced on October 25, 2024. BM Technologies has clarified that KPMG's engagement will conclude upon the completion of their review for this period.
KPMG's audits of BM Technologies' financial statements for the years ending December 31, 2023, and 2022 did not result in any adverse opinions or modifications. However, the company did acknowledge a material weakness in its internal control over financial reporting as of December 31, 2023, which did not lead to any material misstatements in its consolidated financial statements.
In compliance with regulatory practices, BM Technologies has provided KPMG with a copy of the disclosures from the 8-K filing and has included a letter from KPMG as Exhibit 16.1 in the filing, where KPMG confirms their agreement with the company's statements.
BM Technologies, formerly known as Megalith Financial Acquisition Corp, is incorporated in Delaware and operates with its principal executive offices located in Wayne, Pennsylvania. The information provided is based on the company's recent SEC filing.
In other recent news, BM Technologies has been the subject of considerable analyst attention. Northland, an independent investment banking firm, recently altered its rating of BM Technologies from Outperform to Market Perform, following the announcement of the company's acquisition by First Carolina Bank. The acquisition, an all-cash transaction valued at $67 million, will see all outstanding BMTX common stock purchased at $5.00 per share, a premium of approximately 55% over the company's previous share price.
In addition to the acquisition news, BM Technologies has also reported a 10% year-over-year increase in operating revenues, reaching $12.5 million for the second quarter of 2024, despite a core EBITDA loss of $880,000 for the quarter. The company anticipates a positive core EBITDA for the full year, backed by successful technology platform transformation, the launch of new products and services, and strong client retention in the Higher Education sector.
Furthermore, Northland has upgraded BM Technologies' stock from Market Perform to Outperform, indicating potential gains due to strategic alternatives and anticipated growth in adjusted EBITDA. The company's focus on its Higher Education business and decision to exit its partnership with T-Mobile are expected to contribute to an increase in adjusted EBITDA to approximately $10 million by 2025.
InvestingPro Insights
BM Technologies' recent decision to re-engage KPMG LLP comes amidst a period of significant stock performance and financial challenges. According to InvestingPro data, BMTX has experienced a remarkable 190.8% price total return over the past six months, with a 45.4% increase in the last month alone. This surge has brought the stock to trade near its 52-week high, with the current price at 97.55% of that peak.
Despite this strong market performance, InvestingPro Tips highlight that BMTX is not profitable over the last twelve months, with a negative P/E ratio of -4.81. The company's revenue for the last twelve months stands at $57.96 million, with a concerning revenue growth of -5.84% over the same period. These figures underscore the importance of the upcoming financial review by KPMG, as investors will be keen to see if the company's financial health aligns with its recent stock performance.
InvestingPro Tips also indicate that analysts do not anticipate the company will be profitable this year, which adds context to the material weakness in internal controls reported in the previous year's audit. For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide further insights into BMTX's financial outlook and market position.
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