Green Dot 2010 Annual Report Download - page 69

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Organization
Green Dot Corporation (“we,” “us” and “our” refer to Green Dot Corporation and its wholly-owned
subsidiaries, Next Estate Communications, Inc. and Green Dot Acquisition Corp.) is one of the leading
providers of general purpose reloadable prepaid debit cards and cash loading and transfer services in the
United States. Our products include Green Dot MasterCard and Visa-branded prepaid debit cards and
several co-branded reloadable prepaid card programs, collectively referred to as our GPR cards; Visa-
branded gift cards; and our MoneyPak and swipe reload proprietary products, collectively referred to as our
cash transfer products, which enable cash loading and transfer services through our Green Dot Network.
The Green Dot Network enables consumers to use cash to reload our prepaid debit cards or to transfer
cash to any of our Green Dot Network acceptance members, including competing prepaid card programs
and other online accounts.
We market our cards and financial services to banked, underbanked and unbanked consumers in the
United States using distribution channels other than traditional bank branches, such as third-party retailer
locations nationwide and the Internet. Our prepaid debit cards are issued by third-party issuing banks, and
we have relationships with several card issuers, including GE Money Bank and Columbus Bank and
Trust Company, a division of Synovus Bank. We also have distribution arrangements with many large and
medium-sized retailers, such as Walmart, Walgreens, CVS, Rite Aid, 7-Eleven, Kroger, Kmart, Meijer and
Radio Shack, and with various industry resellers, such as Incomm and PaySpot. We refer to participating
retailers collectively as our “retail distributors.”
Initial Public Offering
On July 27, 2010, we completed an initial public offering of 5,241,758 shares of our Class A common
stock at an initial public offering price of $36.00 per share, all of which were sold by existing stockholders.
We did not receive any proceeds from the sale of shares of our Class A common stock in the offering.
Concurrent with the completion of the initial public offering, certain selling stockholders exercised a
warrant to purchase 283,786 shares of Series C-1 preferred stock at an exercise price of $1.41 per share
and vested options to purchase 377,840 shares of Class B common stock with a weighted-average
exercise price of $2.63 in order to sell the underlying shares of Class A common stock in the offering. We
received aggregate proceeds of $1.4 million from these exercises. Additionally, all of our outstanding
shares of convertible preferred stock were automatically converted to 24,941,421 shares of our Class B
common stock, and all shares of our Class B common stock sold in the offering were automatically
converted into a like number of Class A common stock.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
We have prepared the accompanying consolidated financial statements in conformity with accounting
principles generally accepted in the United States, or GAAP. We have eliminated all significant intercom-
pany balances and transactions in consolidation. Our results of operations for the year ended Decem-
ber 31, 2010, the five months ended December 31, 2009 and the years ended July 31, 209 and 2008 are
not necessarily indicative of future results.
We consider an operating segment to be any component of our business whose operating results are
regularly reviewed by our chief operating decision-maker to make decisions about resources to be
allocated to the segment and assess its performance based on discrete financial information. Our Chief
Executive Officer, our chief operating decision-maker, reviews our operating results on an aggregate basis
and manages our operations and the allocation of resources as a single operating segment — prepaid
cards and related services.
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