Company: GDOT
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001386278-25-000009
Chunk: 138

Company: GREEN DOT CORP
Filing Date: 2025-03-04
Form: 10-K
Item: Item 8
Chunk 138
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 among other things, its proportionate share of earnings or losses. However, given the capital structure of the TailFin arrangement, we apply the Hypothetical Liquidation Book Value ("HLBV") method to determine the allocation of profits and losses since our liquidation rights and priorities, as defined by the agreement, differ from our underlying ownership interest. The HLBV method calculates the proceeds that would be attributable to each partner in an investment based on the liquidation provisions of the agreement if the partnership was to be liquidated at book value as of the balance sheet date. Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions. Based on the terms of the agreement and under the HLBV method, we are entitled to 20% of any net profits, but assume 100% of any net losses.Since inception, TailFin has incurred operating expenses but has not generated any operating revenues to date. Use of capital has been primarily allocated to marketing of Walmart's deposit account program and for employee salaries and other professional services focused on developing TailFin's project initiatives. While TailFin's overall objectives have remained unchanged, it is uncertain whether any new products or services will be successfully introduced through the venture. Any future economic benefits derived from products or services developed by TailFin will be negotiated on a case-by-case basis between the parties.As of December 31, 2024 and 2023, our net investment in TailFin amounted to approximately $128.4 million and $109.5 million, respectively, and is included in the long-term portion of prepaid expenses and other assets on our consolidated balance sheets. Based on the terms of the agreement, we recorded equity in losses attributable to TailFin of approximately $16.1 million, $8.0 million and $14.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. These amounts are recorded as a component of other expense, net on our consolidated statements of operations.The following tables present summarized financial information of TailFin's statements of operations and balance sheets. December 31,202420232022(In thousands)Sales and marketing expenses$9,898 $9,916 $14,917 Compensation and professional services$12,522 $2,434