Green Dot 2012 Annual Report Download - page 67

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
57
Note 1—Organization
Green Dot Corporation (“we,” “us” and “our” refer to Green Dot Corporation and its wholly-owned subsidiaries,
Next Estate Communications, Inc.; Green Dot Bank; and Loopt, LLC) is a leading financial services company providing
simple, low-cost and convenient money management solutions to a broad base of U.S. consumers. Our products and
services 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; 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; and GoBank, an innovative checking account developed for
distribution and use via mobile phones, which is expected to be available to U.S. consumers generally during the
second or third quarter of 2013. 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 products and 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 Green Dot Bank and third-party issuing banks including GE Capital
Retail Bank (formerly GE Money Bank),The Bancorp Bank, University National Bank, and prior to November 2012,
Columbus Bank and Trust Company, a division of Synovus Bank. We also have multi-year distribution arrangements
with many large and medium-sized retailers, such as Walmart, Walgreens, CVS, Rite Aid, 7-Eleven, Kroger, Kmart,
and Radio Shack, and with various industry resellers, such as Blackhawk Network, Inc. and Incomm. 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.
Acquisitions
In November 2011, the Board of Governors of the Federal Reserve System and the Utah Department of Financial
Institutions approved our applications to acquire Bonneville Bancorp, a Utah bank holding company, and its bank
subsidiary, Bonneville Bank, renamed Green Dot Bank. We thereby became a bank holding company under the Bank
Holding Company Act of 1956. In December 2011, we completed our acquisition of Bonneville Bancorp for approximately
$15.7 million in cash. We contributed $14.3 million in cash to Green Dot Bank in December 2011 to provide an initial
capital base for its expanded operations.
In March 2012, we acquired Loopt, Inc., or Loopt, for approximately $33.6 million in cash in exchange for all of its
outstanding shares. Loopt's results of operations are included in our consolidated results of operations following the
acquisition date. Pro-forma results of operations have not been presented because the effect of this acquisition was
not material to our financial results. We committed to pay $9.8 million in retention-based incentives for employees we
hired in connection with the acquisition of Loopt. In December 2012, we converted Loopt from a corporation to a limited
liability company.
Note 2—Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
Our consolidated financial statements include the results of entities that we control through a 50% or more ownership
interest. We have prepared the accompanying consolidated financial statements in conformity with U.S. generally
accepted accounting principles, or GAAP. We have eliminated all significant intercompany balances and transactions
in consolidation. We include the results of operations of acquired companies from the date of acquisition.