What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-14 compared with 2024-11-14 · 144 added, 228 removed, 311 unchanged (54% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated or the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section to “Better Home & Finance,” the “Company,” “we,”“us,” “our” and other similar terms refer to Better Holdco, Inc.

and its subsidiaries prior to the completion (“Closing”) of the transactions contemplated by the Agreement and Plan of Merger, dated as of May 10, 2021, as amended, by and among Aurora Acquisition Corp., Better Holdco, Inc., and Aurora Merger Sub I, Inc.

(such transactions, the “Business Combination”), and to Better Home & Finance Holding Company and its consolidated subsidiaries after the Closing.

The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements as of December 31, 2023 and for the years ended December 31, 2023 and 2022, in each case, together with related notes thereto, included in our 2023 Annual Report on Form 10-K, and our condensed consolidated financial statements and related notes as of and for the quarterly period ended September 30, 2024, included elsewhere in this quarterly report on Form 10-Q.

The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements as of December 31, 2024 and for the years ended December 31, 2024 and 2023, in each case, together with related notes thereto, included in our 2024 Annual Report on Form 10-K, and our condensed consolidated financial statements and related notes as of and for the quarterly period ended March 31, 2025, included elsewhere in this quarterly report on Form 10-Q.

In addition to historical financial information, the following discussion and analysis may contain forward-looking statements within the meaning of federal securities laws that involve risks, uncertainties and assumptions.

7 unchanged sentences

We are a technology-driven organization.

We are seeking to disrupt a business model by leveraging our proprietary platform, Tinman, to enhance the automation of the home finance process.

We are seeking to disrupt a business model by leveraging our proprietary platform, Tinman, as well as Betsy, the first voice-based AI loan assistant built for the mortgage industry, to enhance the automation of the home finance process.

Through this process, we aim to reduce the cost to produce a loan and in the future to create a platform with all homeownership products embedded into a highly automated, single flow, allowing us to pass along savings to our customers.

Our offerings include mortgage financing, real estate services, title and homeowners’insurance.

We offer a selection of loan products for home purchase and refinance, including cash-out refinance, debt consolidation and home equity lines of credit, across a range of maturities and interest rates as well as a suite of non-mortgage products, including real estate agent services offered by our network of third-party partner real estate agents and, through our insurance partners, title insurance and settlement services, and homeowners insurance.

We serve customers in all 50 US states and the United Kingdom.

We are focused on improving our platform and plan to continue making investments to build our business and prepare for future growth.

3 unchanged sentences

We generate revenue through the production and sale of loans and other product offerings through our platform.

The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net) and Better Plus (Other revenue) and net interest income for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended September 30,

(Amounts in thousands, except percentage amounts)

Gain on loans, net $ 21,503 74 % $ 11,553 235 %

Other revenue 3,070 11 % 4,009 82 %

Net interest income/(loss) 4,421 16 % (10,655) (217) %

Total net revenues

Nine Months Ended September 30,

The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net)

and Better Plus (Other revenue) for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31,

(Amounts in thousands, except percentage amounts)

1 unchanged sentence

Other revenue 4,030 12 % 2,817 13 %

Net interest income/ (loss) 13,355 15 % (9,775) (18) %

Net interest income 3,947 12 % 3,782 17 %

Total net revenues

9 unchanged sentences

For loans subsequently sold to our loan purchaser network, the partner receives a portion of the sale proceeds.

Although we aim to expand our B2B relationships, as of September 30, 2024, this channel was primarily comprised of our integrated relationship with Ally Bank (which is our only current integrated relationship).

Although we aim to expand our B2B relationships, as of March 31, 2025, this channel was primarily comprised of our integrated relationship with Ally Bank (which we are currently winding down).

Better Plus Model—Other revenue

10 unchanged sentences

International lending activities primarily include broker fees earned via our digital mortgage broker in the U.K.

During the fourth quarter of 2024, management enacted a plan to sell several entities in the U.K., which management expects to complete the sales within one year.

Key Business Metrics

3 unchanged sentences

Key Business Metric

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Funded Loan Volume

$ 1,035 $ 731 $ 2,658 $ 2,488

Refinance Loan Volume

$ 130 $ 47 $ 289 $ 178

Purchase Loan Volume

$ 739 $ 656 $ 2,062 $ 2,268

HELOC Loan Volume $ 166 $ 28 $ 307 $ 41

HELOC Volume $ 157 $ 51

D2C Loan Volume

$ 776 $ 384 $ 1,805 $ 1,392

B2B Loan Volume

$ 259 $ 346 $ 853 $ 1,095

Total Loans (number of loans, not millions)

3,443 2,067 8,429 6,936

Average Loan Amount ($ value, not millions)

3 unchanged sentences

Total Market Share

0.2 % 0.2 % 0.2 % 0.2 %

Better Real Estate Transaction Volume

$ 105 $ 92 $ 266 $ 442

Insurance Coverage Written

$ 996 $ 1,087

Funded Loan Volume represents the aggregate dollar amount of all loans funded in a given period based on the principal amount of the loan at funding.

Our Funded Loan Volume of $1,035 million in the three months ended September 30, 2024 increased by approximately 42% from $731 million in the three months ended September 30, 2023.

Our Funded Loan Volume increased by approximately 7% period-over-period to $2,658 million in the nine months ended September 30, 2024 from $2,488 in the nine months ended September 30, 2023.

Beginning in the third quarter of 2023, we also include HELOC and closed-end second lien loans in our Funded Loan Volume.

For the three months ended September 30, 2024, purchase and refinance loans comprised $869 million and HELOC and closed-end second lien loans comprised $166 million of Funded Loan Volume.

For the nine months ended September 30, 2024 purchase and refinance loans comprised $2,351 million while HELOC and closed-end second lien loans comprised $307 million of Funded Loan Volume.

Funded Loan Volume represents the aggregate dollar amount of all loans funded in a given period based on the principal amount of the loan at funding, including HELOC loans.

Refinance Loan Volume represents the aggregate dollar amount of refinance loans funded in a given period based on the principal amount of the loan at refinancing date.

Our Refinance Loan Volume of $130 million in the three months ended September 30, 2024 increased by approximately 177% from $47 million in the three months ended September 30, 2023.

Our Refinance Loan Volume increased by approximately 62% year-over-year to $289 million in the nine months ended September 30, 2024 from $178 million in the nine months ended September 30, 2023.

Purchase Loan Volume represents the aggregate dollar amount of purchase loans funded in a given period based on the principal amount of the loan at purchase date.

Our Purchase Loan Volume increased by approximately 13% year-over-year to $739 million in the three months ended September 30, 2024 from $656 million in the three months ended September 30, 2023.

Our Purchase Loan Volume decreased by approximately 9% year-over-year to $2,062 million in the nine months ended September 30, 2024 from $2,268 million in the nine months ended September 30, 2023.

HELOC Loan Volume represents the aggregate dollar amount of HELOC and closed-end second lien loans funded in a given period based on the principal amount of the loan at funding.

The HELOC product was launched during the first half of 2023, and the closed-end second lien product was launched towards the end of 2023, with volume becoming material in the first half of 2024.

Our HELOC Loan Volume increased to $166 million in the three months ended September 30, 2024 from $28 million in the three months ended September 30, 2023.

Our HELOC Loan Volume increased to $307 million in the nine months ended September 30, 2024 from $41 million in the nine months ended September 30, 2023.

HELOC Loan Volume represents the aggregate dollar amount of HELOC loans funded in a given period based on the principal amount of the loan at funding.

D2C Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated from direct interactions with customers using all marketing channels other than our B2B partner relationships.

Our D2C Loan Volume of $776 million in the three months ended September 30, 2024 increased by approximately 102% from $384 million in the three months ended September 30, 2023.

Our D2C Loan Volume of $1,805 million in the nine months ended September 30, 2024 increased by approximately 30% year-over-year from $1,392 million in the nine months ended September 30, 2023.

B2B Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated through one of our B2B partner relationships.

Our B2B Loan Volume of $259 million in the three months ended September 30, 2024 decreased by approximately 25% from $346 million in the three months ended September 30, 2023.

Our B2B Loan Volume of $853 million in the nine months ended September 30, 2024 decreased by approximately 22% year-over-year from $1,095 million in the nine months ended September 30, 2023.

Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans, HELOC loans and closed-end second lien loans.

Our Total Loans of 3,443 in the three months ended September 30, 2024 increased by approximately 67% from 2,067 in the three months ended September 30, 2023.

Our Total Loans of 8,429 in the nine months ended September 30, 2024 increased by approximately 22% year-over-year from 6,936 in the nine months ended September 30, 2023.

Purchase and refinance loans comprised 2,196 of the Total Loans in the three months ended September 30, 2024, while HELOC and closed-end second lien loans comprised 1,247.

Purchase and refinance loans comprised 5,887 of the Total Loans in the nine months ended September 30, 2024, while HELOC and closed-end second lien loans comprised 2,542.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the three months ended September 30, 2024 and 2023, were approximately 24 and 21, respectively.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the nine months ended September 30, 2024 and 2023, were approximately 28 and 21, respectively.

This is defined as the average days between funding and sale for loans funded during each period.

As of each such reporting date, we had an immaterial amount of loans either 90 days past due or non-performing, as we generally aim to sell loans shortly after production.

Average Loan Amount represents Funded Loan Volume divided by Total Loans in a period.

Our Average Loan Amount decreased by approximately 15% to $300,589 in the three months ended September 30, 2024 from $353,547 in the three months ended September 30, 2023 and decreased approximately 12% year-over-year to $315,350 during the nine months ended September 30, 2024 from $358,660 in the nine months ended September 30, 2023.

In general, HELOC and closed-end second lien loans have lower average loan amounts than purchase or refinance loans, and therefore Average Loan Amount has decreased as a result of the growth of HELOC and closed-end second lien growth as a percentage of our fundings.

Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans and HELOC loans.

Average Loan Amount represents Total Funded Loan Volume divided by number of loans funded in a period.

Gain on Sale Margin represents gain on loans, net, as presented on our condensed consolidated statements of operations and comprehensive income (loss), divided by Funded Loan Volume.

Gain on Sale Margin increased by approximately 50 basis points to 2.08% during the three months ended September 30, 2024 from 1.58% for the three months ended September 30, 2023.

We saw an increase in our Gain on Sale Margin for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, as a result of improved pricing on loans funded.

Gain on Sale Margin increased by approximately 27 basis points to 2.31% for the nine months ended September 30, 2024 from 2.04% for the nine months ended September 30, 2023 as a result of improved pricing on loans funded.

Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the same period, as presented by FNMA.

Our Total Market Share of 0.2% during the three months ended September 30, 2024 remained substantially the same as 0.2% in the three months ended September 30, 2023.

Market Share of 0.2% for the nine months ended September 30, 2024 remained substantially the same year-over-year from 0.2% for the nine months ended September 30, 2023.

While we are leaning into growth and have seen an increase in our Total Loans and Funded Loan Volume for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, the total value of loans funded in the industry has also increased and the mortgage market remains competitive among lenders, given the interest rate environment, resulting in relatively flat market share on a percentage basis.

We continue to focus on originating the most profitable business available to us and seek to avoid growing through highly unprofitable channels.

Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the sam e period, as presented by FNMA.

Better Real Estate Transaction Volume represents the aggregate dollar amount of real estate volume transacted in a given period across both in-house agents and third-party network agents.

28 unchanged sentences

We recognize revenues from agent fees on title policies upon the completion of the performance obligation, which is when the loan transaction closes.

As an agent, we do not control the ability to direct the fulfillment of the service, are not primarily responsible for fulfilling the performance of the service, and do not assume the risk in a claim against the policy.

As an agent, we

do not control the ability to direct the fulfillment of the service, are not primarily responsible for fulfilling the performance of the service, and do not assume the risk in a claim against the policy.

Our performance obligations for settlement services and title insurance are typically completed 40 to 60 days after the commencement of the loan origination process and are recognized in revenue upon the closing of the loan transaction.

For international lending revenue, we generate revenue primarily from broker fees earned via our digital mortgage broker in the U.K.

During the fourth quarter of 2024, management enacted a plan to sell several entities in the U.K., which are being actively marketed.

Net Interest Income

Net interest income includes interest income from LHFS, including HELOCs, calculated based on the note rate of the respective loan, interest income from short-term investments, and interest income on loans held for investment, through our U.K.

banking operations.

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, through our U.K.

operations, as well as interest expense on the convertible note, a senior subordinated convertible note in the aggregate principal amount of $528.6 million issued to SB Northstar LP (the “Convertible Note”).

banking operations, as well as interest expense on the Convertible Note.

Components of Our Expenses

5 unchanged sentences

The expense is recorded on a straight-line basis over the requisite service period.

Compensation and benefits excludes amounts capitalized for internal developed software.

Compensation and benefits excludes amounts capitalized for internally developed software.

General and Administrative Expenses

6 unchanged sentences

Marketing and advertising expenses consist of customer acquisition expenses, brand costs, and paid marketing.

For customer acquisition expenses, we primarily generate loan origination leads through third-party financial service websites for which we incur “pay-per-click” expenses.

A majority of our marketing expenses are incurred from leads that we purchase from these third-party financial service websites.

For customer acquisition expenses, we primarily generate loan origination leads for which we incur “pay-per-click” expenses.

Marketing expenses are generally expensed as incurred.

2 unchanged sentences

These expenses are expensed as incurred.

Other Expenses

Other Expenses/(Income)

Other expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation expenses, expenses incurred in relation to our international lending activities, and gains and losses from the warrant and equity related liabilities.

Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents.

Settlement service expenses consist of fees for transactional services performed by

third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents.

Other expenses are expensed as incurred.

1 unchanged sentence

The following table sets forth certain consolidated financial data for each of the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands, except per share amounts)

2024 2023 2024 2023

Gain on loans, net $ 24,576 $ 15,652

3 unchanged sentences

Interest expense (6,498) (4,854)

Net interest income/(loss) 4,421 (10,655) 13,355 (9,775)

Net interest income 3,947 3,782

Total net revenues

13 unchanged sentences

$ (50,557) $ (51,492)

$ (54,210) $ (353,889) $ (147,067) $ (485,521)

Earnings (loss) per share attributable to common stockholders (Basic)

2 unchanged sentences

$ (3.33) $ (3.41)

Three and Nine Months Ended September 30, 2024 as Compared to Three and Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 as Compared to Three Months Ended March 31, 2024

The components of our revenues for the period were:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands)

2024 2023 2024 2023

Gain on loans, net 24,576 15,652

2 unchanged sentences

Interest income 10,445 8,636

Interest expense (5,446) (14,698) (14,545) (27,781)

Mortgage interest expense (6,498) (4,854)

Net interest income 3,947 3,782

3 unchanged sentences

The components of our gain on loans, net for the period were:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands)

2024 2023 2024 2023

Gain on sale of loans, net $ 21,278 $ 9,821

Integrated partnership fees 1,171 2,268

Loan repurchase recovery (reserve) 3,226 (866) 10,168 (178)

Loan repurchase reserve recovery 2,127 3,563

Total gain on loans, net $ 24,576 $ 15,652

Gain on sale of loans, net increased $6.2 million or 65% to $15.8 million for the three months ended September 30, 2024 compared to $9.6 million for the three months ended September 30, 2023.

The increase was largely driven by increased Funded Loan Volume and improved pricing on loans funded.

Gain on sale of loans, net increased $1.2 million or 3% to $44.0 million for the nine months ended September 30, 2024 compared to $42.8 million for the nine months ended September 30, 2023.

The increase was largely driven by increased Funded Loan Volume and improved pricing on loans funded.

Integrated partnership fees decreased $0.4 million, or 14% to a gain of $2.4 million for the three months ended September 30, 2024, compared to gain of $2.8 million for the three months ended September 30, 2023.

The decrease in integrated partnership fees was primarily driven by the reduction in B2B Loan Volume.

Integrated partnership fees decreased $0.9 million, or 11% to a gain of $7.2 million for the nine months ended September 30, 2024, compared to gain of $8.1 million for the nine months ended September 30, 2023.

Gain on sale of loans, net increased $11.5 million or 117% to $21.3 million for the three months ended March 31, 2025 compared to $9.8 million for the three months ended March 31, 2024.

The increase in gain on sale of loans, net was largely driven by the increase of Funded Loan Volume.

Integrated partnership fees decreased $1.1 million, or 48% to a gain of $1.2 million for the three months ended March 31, 2025, compared to gain of $2.3 million for the three months ended March 31, 2024.

The decrease in integrated partnership fees was primarily driven by the reduction in B2B Loan Volume.

Loan repurchase reserve decreased $4.1 million or 473%, to a recovery of $3.2 million for the three months ended September 30, 2024, compared to a reserve of $0.9 million for the three months ended September 30, 2023.

Loan repurchase reserve decreased $1.4 million or 40%, to a recovery of $2.1 million for the three months ended March 31, 2025, compared to a recovery of $3.6 million for the three months ended March 31, 2024.

The loan repurchase reserve has decreased as our estimate for potential loss exposure has declined as we no longer have exposure to the historical periods when we had a significantly higher funded loan volume.

The reduction in potential loss exposure results in a reduction in the loan repurchase reserve liability which is recognized as a recovery within gain on loans, net.

Loan repurchase reserve decreased $10.3 million or 5812%, to a recovery of $10.2 million for the nine months ended September 30, 2024, compared to a reserve of $0.2 million for the nine months ended September 30, 2023.

repurchase reserve has decreased as our estimate for potential loss exposure has declined as we no longer have exposure to the historical periods when we had a significantly higher funded loan volume.

The reduction in potential loss exposure results in a reduction in the loan repurchase reserve liability, which is recognized as a recovery within gain on loans, net.

Other Revenue

The components of other revenue for the period were:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands) 2025 2024

4 unchanged sentences

Total other revenue $ 4,030 $ 2,817

International lending revenue increased $0.1 million, or 11% to $1.2 million for the three months ended September 30, 2024 compared to $1.1 million for the three months ended September 30, 2023.

The increase in international lending revenue was primarily driven by increased operations in the U.K.

brokerage businesses.

International lending revenue increased $0.8 million, or 28% to $3.5 million for the nine months ended September 30, 2024 compared to $2.7 million for the nine months ended September 30, 2023.

The increase in international lending revenue was primarily driven by increased operations in the U.K.

International lending revenue increased $0.4 million, or 38% to $1.5 million for the three months ended March 31, 2025 compared to $1.1 million for the three months ended March 31, 2024.

The increase in international lending revenue was primarily driven by increased operations in U.K.

brokerage businesses.

Insurance services revenue decreased $0.6 million, or 56% to $0.4 million for the three months ended September 30, 2024 compared to $1.0 million for the three months ended September 30, 2023.

The decrease in insurance services revenue was primarily driven by a decrease in Insurance Coverage Written due to fewer insurance transactions, as well as lower revenue generated on each insurance transaction.

Insurance services decreased $1.2 million, or 43% to $1.6 million for the nine months ended September 30, 2024 compared to $2.8 million for the nine months ended September 30, 2023.

Real estate services increased $0.1 million, or 16% to $0.8 million for the three months ended September 30, 2024 compared to $0.7 million for the three months ended September 30, 2023.

The increase in real estate services revenue was primarily driven by an increase in Better Real Estate Transaction Volume .

Real estate services decreased $4.8 million, or 73% to $1.8 million for the nine months ended September 30, 2024 compared to $6.5 million for the nine months ended September 30, 2023.

The decrease in real estate services was primarily driven by a reduction in Better Real Estate Transaction Volume as well as earning lower revenue per transaction for the nine months ended September 30, 2023 as we no longer employed any in-house real estate agents and all activity was through our network of third party real estate agents, which results in lower revenue per transaction.

Other revenue decreased by $0.6 million, or 47% to $0.7 million for the three months ended September 30, 2024 compared to $1.3 million for the three months ended September 30, 2023.

The change in other revenue was driven by changes in mortgage and non-mortgage loan servicing activities in the U.S.

as well as other miscellaneous income.

Other revenue increased by $0.3 million, or 19% to $1.9 million for the nine months ended September 30, 2024 compared to $1.6 million for the nine months ended September 30, 2023.

The change in other revenue was driven by changes in mortgage and non-mortgage loan servicing activities in the U.S.

as well as other miscellaneous income.

Insurance services remained relatively steady for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, which is inline with the insurance coverage written over the respective period.

Real estate services increased $0.6 million, or 173% to $0.9 million for the three months ended March 31, 2025 compared to $0.3 million the three months ended March 31, 2024 due to an increase in real estate transaction volume driven by an increase in purchase volume.

Other revenue increased by $0.2 million, or 22% to $0.9 million for the three months ended March 31, 2025 compared to $0.7 million for the three months ended March 31, 2024.

The increase in other revenue was primarily driven by mortgage and non-mortgage loan servicing activities in the U.S.

Net Interest Income

The components of our net interest income for the period were:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands) 2025 2024

Mortgage interest income $ 6,437 $ 2,964

Interest income on loans held for investment 1,878 82

Interest income from investments 2,130 5,590

Warehouse interest expense (2,788) (2,087)

Interest expense on customer deposits (2,005) (103)

Other interest expense (1,705) (2,664)

Total net interest income/(loss) $ 3,947 $ 3,782

Mortgage interest income increased $1.8 million, or 51% to $5.4 million for the three months ended September 30, 2024 compared from $3.6 million of the three months ended September 30, 2023.

The increase in Mortgage interest income was driven by increased Funded Loan Volume and Total Loans originated.

Mortgage interest income increased $0.5 million, or 4% to $12.8 million for the nine months ended September 30, 2024 compared from $12.3 million of the nine months ended September 30, 2023.

The increase in Mortgage interest income was driven by increased Funded Loan Volume and Total Loans originated.

Interest income from investments increased $4.0 million, or 859% to $4.5 million for the three months ended September 30, 2024 compared to $0.5 million for the three months ended September 30, 2023.

The increase in interest income from investments was primarily driven by increased investments in 2024 in securities with maturities ranging from 90 days to 1 year, driven by our cash management strategies and increased available liquidity resulting from the capital raised in August 2023 through the closing of the Business Combination.

Interest income from investments increased $9.4 million, or 164% to $15.1 million for the nine months ended September 30, 2024 compared to $5.7 million for the nine months ended September 30, 2023.

The increase in interest income from investment was primarily driven by increased investments in 2024 in securities with maturities ranging from 90 days to 1 year, driven by our cash management strategies and increased available liquidity resulting from the capital raised in August 2023 through the closing of the Business Combination.

Warehouse interest expense increased $1.1 million, or 38% to $3.8 million for the three months ended September 30, 2024 compared to $2.8 million for the three months ended September 30, 2023.

The increase in warehouse interest expense was primarily driven by carrying a higher average warehouse balance over the three months ended September 30, 2024 compared to three months ended September 30, 2023 as a result of an increase in loans funded over the same period.

Warehouse interest expense decreased $1.0 million, or 10% to $8.6 million for the nine months ended September 30, 2024 compared to $9.5 million for the nine months ended September 30, 2023.

The decrease in warehouse interest expense was primarily driven by carrying a lower average warehouse balance over the nine months ended September 30, 2024 compared to nine months ended September 30, 2023.

The decrease for the nine month period was driven by lower funded loan volume in the first and second quarters of 2024 in comparison to the first and second quarters of 2023.

Other interest expense decreased $10.3 million, or 86% to $1.6 million for the three months ended September 30, 2024 compared to $11.9 million for the three months ended September 30, 2023.

Other interest expense for the three months ended September 30, 2024 is related to interest expense on the Convertible Note, which is at a lower interest rate, while interest expense for the three months ended September 30, 2023 is related to interest expense on our corporate line of credit, which was at a higher interest rate and was subsequently paid off in full in August 2023.

Other interest expense decreased $12.3 million, or 67% to $6.0 million for the nine months ended September 30, 2024 compared to $18.2 million for the nine months ended September 30, 2023.

Other interest expense for the nine months ended September 30, 2024 is related to interest expense on the Convertible Note, which is at a lower interest rate, while interest expense for the nine months ended September 30, 2023 is related to interest expense on our corporate line of credit, which was at a higher interest rate and was subsequently paid off in full in August 2023.

Mortgage interest income increased $3.5 million, or 117% to $6.4 million for the three months ended March 31, 2025 compared from $3.0 million of the three months ended March 31, 2024.

The increase in mortgage interest income was primarily driven by the increase in origination volume and the mortgage interest income earned on the unpaid principal balance for loans held and serviced during the interim between the origination of the loan and its sale on the secondary market.

Interest income on loans held for investment increased $1.8 million, or 2190% to $1.9 million for the or the three months ended March 31, 2025 compared to $0.1 million for the three months ended March 31, 2024.

The increase in interest income on loans held for investment was driven by increased originations of loans held for investment in our U.K.

banking operations.

Loans held for investment was $207.2 million and $7.9 million as of March 31, 2025 and 2024.

Interest income from investment decreased $3.5 million, or 62% to $2.1 million for the three months ended March 31, 2025 compared to $5.6 million for the three months ended March 31, 2024.

The decrease in interest income from investment was primarily driven by increased HELOC origination volume which is funded with previously invested cash.

Warehouse interest expense increased $0.7 million, or 34% to $2.8 million for the three months ended March 31, 2025 compared to $2.1 million for the three months ended March 31, 2024.

The increase in warehouse interest expense was primarily driven by increased borrowings on funding facilities used in the mortgage production process to meet the increased origination volume.

Interest expense on customer deposits increased $1.9 million, or 1847% to $2.0 million for the three months ended March 31, 2025 compared to $0.1 million for the three months ended March 31, 2024.

The increase in interest expense on customer deposits was driven by increased customer deposits which in turn fund our loans held for investment in our U.K.

banking operations.

Other interest expense decreased $1.0 million, or 36% to $1.7 million for the three months ended March 31, 2025 compared to $2.7 million for the three months ended March 31, 2024.

Other interest expense is related to interest expense on our convertible notes and during the three months ended March 31, 2024 we paid interest in cash at the 1% coupon compared to the three months ended March 31, 2025 where we paid interest in kind which is accrued at a fair value that is less than the 1% coupon.

See Note 15 for further details.

The components of our expenses for the period were:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands)

2024 2023 2024 2023

Compensation and benefits 46,668 38,073

7 unchanged sentences

$ 82,965 $ 73,600

Compensation and benefits expenses were $37.8 million for the three months ended September 30, 2024, a decrease of $46.6 million or (55)% as compared with $84.3 million for the three months ended September 30, 2023.

We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits.

Further, we had a significantly higher stock based compensation expense during three months ended September 30, 2023 of $39.4 million compared to $5.5 million during three months ended September 30, 2024, which was due to awards that had met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during that period.

Compensation and benefits expenses were $111.1 million for the nine months ended September 30, 2024, a decrease of $45.4 million or (29)% as compared with $156.4 million for the nine months ended September 30, 2023.

We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits.

Further, we had a significantly higher stock based compensation expense during nine months ended September 30, 2023 of $47.9 million compared to $21.8 million during the nine months ended September 30, 2024, which was primarily due to awards that had met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during that period.

General and administrative expenses were $12.6 million for the three months ended September 30, 2024, a decrease of $1.6 million or 11% as compared with $14.2 million in the three months ended September 30, 2023.

The decrease in general and administrative expenses was driven primarily by decreases in expenses which were incurred in the prior period due to the Closing of the Business Combination which drove an increase in professional services and other related fees.

This decrease was offset by increased operating expenses associated with maintaining public company infrastructure for the three months ended September 30, 2024.

General and administrative expenses were $41.8 million for the nine months ended September 30, 2024, a decrease of $1.9 million or 4% as compared with $43.7 million in the nine months ended September 30, 2023.

The decrease in general and administrative expenses was driven primarily by decreases in rent and occupancy expenses, as we have taken measures to reduce our real estate footprint, as well as decreases in professional services as we were incurring higher legal and professional expenses leading up to the Closing of the Business Combination for the nine months ended September 30, 2023 in comparison to the nine months ended September 30, 2024.

This decrease was offset by increased operating expenses associated with maintaining public company infrastructure for the nine months ended September 30, 2024.

Technology expenses were $7.2 million for the three months ended September 30, 2024, an increase of $0.9 million or 14% as compared with $6.3 million in the three months ended September 30, 2023.

The increase in technology expenses was driven primarily by an increase in costs associated with software vendors required to run our systems infrastructure compared to the prior period.

Technology expenses were $19.3 million for the nine months ended September 30, 2024, a decrease of $12.7 million or 40% as compared with $32.0 million in the nine months ended September 30, 2023.

The decrease in technology expenses were driven primarily by a reduction in costs associated with software vendors.

This was driven by the reduced

headcount, due to which we required fewer software licenses, replacement of certain vendors with more cost-efficient alternatives, as well as the termination of non-critical vendors, which occurred in early 2023.

Marketing and advertising expenses were $12.1 million for the three months ended September 30, 2024, an increase of $7.0 million or 139% as compared with $5.1 million in the three months ended September 30, 2023.

The increase is due to a focus on growth to drive volume which started at the end of the first quarter in 2024.

Marketing and advertising is composed of performance advertising and pilot marketing, which performance advertising scales with volume through existing channels while pilot marketing is market spend to test new channels along with testing brand marketing, which generally costs more upfront.

Marketing and advertising expenses were $25.2 million for the nine months ended September 30, 2024, an increase of $9.3 million or 58% as compared with $15.9 million in the nine months ended September 30, 2023.

The increase is due to a focus on growth to drive volume which started at the end of the first quarter in 2024.

Compensation and benefits expenses were $46.7 million for the three months ended March 31, 2025, an increase of $8.6 million or 23% compared with $38.1 million for the three months ended March 31, 2024.

We increased our headcount between the two periods, and increased incentive compensation as a result of increased production volume, which lead to an increase in compensation and benefits.

This increase was partially offset by significantly higher stock based compensation expense during the three months ended March 31, 2024, which was primarily due to awards that had met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during that period.

General and administrative expenses were $11.6 million for the three months ended March 31, 2025, a decrease of $2.4 million or 17% as compared with $14.0 million in the three months ended March 31, 2024.

Technology expenses were $7.2 million for the three months ended March 31, 2025, an increase of $1.7 million or 32% as compared with $5.5 million in the three months ended March 31, 2024.

The increase in technology expenses was driven primarily by an increase in costs associated with software vendors.

This was driven by the increased headcount, due to which we required more software licenses.

Marketing and advertising expenses were $8.7 million for the three months ended March 31, 2025, an increase of $4.1 million or 91% as compared with $4.6 million in the three months ended March 31, 2024.

The increase is due to a focus on growth to drive volume.

Loan origination expenses were $3.8 million for the three months ended September 30, 2024, an increase of $3.1 million or 502%, as compared with $0.6 million in the three months ended September 30, 2023.

The increase in loan origination expenses was driven by increased Funded Loan Volume, as well as the absence of certain one-time expense reversals associated with loan origination vendors present in the three months ended September 30, 2023.

Loan origination expenses were $7.1 million for the nine months ended September 30, 2024, and decrease of $2.1 million or 23%, as compared with $9.2 million in the nine months ended September 30, 2023.

The decrease in loan origination expenses was driven by a reduction in costs associated with loan origination vendors, as well as improved technology efficiency that reduced the reliance on certain loan origination vendors.

Other expenses/(income) was an expense of $1.3 million for the three months ended September 30, 2024, a decrease of $235.7 million or 99%, as compared with expenses of $237.0 million in the three months ended September 30, 2023.

The decrease in other expenses was primarily driven by a loss of $237.7 million on the fair value of the embedded derivative included within the Pre-Closing Bridge Notes which converted to common stock in connection with the Closing of the Business Combination during three months ended September 30, 2023.

Other expenses/(income) was an expense of $0.3 million for the nine months ended September 30, 2024, a decrease of $247.3 million or 100%, as compared with expenses of $247.6 million in the nine months ended September 30, 2023.

The decrease in other expenses was primarily driven by a loss of $236.6 million on the fair value of the embedded derivative included within the Pre-Closing Bridge Notes which converted to common stock in connection with the Closing of the Business Combination during three months ended September 30, 2023.

Other expenses/(income) were $2.3 million for the three months ended March 31, 2025, an increase of $2.5 million or 1368%, as compared with a credit of $0.2 million in the three months ended March 31, 2024.

The increase in other expenses was primarily driven by mortgage loan activities in the U.K.

The increase in other expenses was also driven by a reduction on liability classified warrants and equity related liabilities as a result of the increased trading price of our common stock, which are recorded as gains during the three months ended March 31, 2024, while during the three months ended March 31, 2025 we recorded smaller gains on our liability classified warrants and equity related liabilities as our stock price stabilized.

Non-GAAP Financial Measures

16 unchanged sentences

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our Convertible Note, which reduces cash available to us;

• Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our non-funding debt, which reduces cash available to us;

or (ii) tax accruals or tax payments that represent a reduction in cash available to us;

2 unchanged sentences

Adjusted Net Loss and Adjusted EBITDA

We calculate Adjusted Net Loss as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, change in fair value of convertible preferred stock warrants, change in fair value of bifurcated derivative, and restructuring, impairment, and other expenses.

We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, change in fair value of convertible preferred stock warrants, change in the fair value of bifurcated derivative, and restructuring, impairment, and other expenses, as well as

interest and amortization on non-funding debt (which includes interest on the Convertible Note), depreciation and amortization expense, and income tax expense.

We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, interest on the subordinated 0% bridge promissory notes that converted into or were exchanged for our Class A common stock and our Class C common stock (such notes, “Pre-Closing Bridge Notes”), and other non-recurring or non-core operational expenses, as well as interest and amortization on non-funding debt (which includes interest on the Convertible Note), depreciation and amortization expense, and income tax expense.

The following table presents a reconciliation of Net Income (Loss) to Adjusted Net Loss and Adjusted EBITDA for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands)

2024 2023 2024 2023

Adjusted Net Loss

Net income (loss)

Net (loss) income

$ (50,557) $ (51,492)

Stock-based compensation expense (1)

5,487 39,417 21,812 47,879

Change in fair value of warrants and equity related liabilities (2)

(206) (861) (927) (861)

Change in fair value of convertible preferred stock warrants (2)

Change in fair value of bifurcated derivative (3)

— 237,667 — 236,603

Restructuring, impairment, and other expenses (3)

43 679 948 11,508

Adjusted Net Loss

1 unchanged sentence

Adjusted EBITDA

Net income (loss)

Net (loss) income

$ (50,557) $ (51,492)

Income tax expense / (benefit)

126 659 472 2,539

Depreciation and amortization expense (4)

8,259 10,492 25,323 32,791

Stock-based compensation expense (1)

5,487 39,417 21,812 47,879

Interest and amortization on non-funding debt (5)

1,631 11,939 5,962 18,237

Restructuring, impairment, and other expenses (3)

43 679 948 11,508

Change in fair value of warrants and equity related liabilities (2)

(206) (861) (927) (861)

Change in fair value of convertible preferred stock warrants (2)

Change in fair value of bifurcated derivative (3)

— 237,667 — 236,603

Adjusted EBITDA

4 unchanged sentences

We exclude this expense from our internal operating plans and measurement of financial performance (although we consider the dilutive impact to our stockholders when awarding stock-based compensation and value such awards accordingly).

(2) Change in fair value of warrants and equity related liabilities which comprise the Public Warrants and Private Warrants as well as the Sponsor Locked-Up Shares, represents the change in fair value of liability-classified warrants as presented in our Consolidated Statements of Operations and Comprehensive Loss.

Change in fair value of convertible preferred stock warrants represents change in fair value of liability-classified warrants as related to our convertible preferred stock before the completion of the Business Combination.

These charges are non-cash charge.

(3) Change in fair value of bifurcated derivative represents the change in fair value of embedded features within the Pre-Closing Bridge Notes that require bifurcation and are a separate unit of accounting.

The bifurcated derivative is marked to market at each reporting date.

This expense is a non-cash expense, and we believe that it does not correlate to the performance of our business during the periods presented.

(2) Change in fair value of convertible preferred stock warrants and other warrants, which comprise the Public Warrants and Private Warrants as well as the Sponsor Locked-Up Shares, represents the change in fair value of liability-classified warrants as presented in our Consolidated Statements of Operations and Comprehensive Loss.

This charge is a non-cash charge.

(3) Restructuring, impairment, and other expenses are primarily comprised of employee one-time termination benefits, real estate restructuring losses, and impairment of property and equipment.

For further details, please refer to Note 4 to our condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

(4) Depreciation and amortization represents the loss in value of fixed and intangible assets through depreciation and amortization, respectively.

4 unchanged sentences

Our borrowings are repaid with the proceeds we receive from the sale of our loans to our loan purchaser network, which includes government-sponsored enterprises (“GSEs”).

As of September 30, 2024, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $425.0 million.

of March 31, 2025, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $425.0 million.

We have placed focus on growing our U.K.

banking entity during 2024 which has accelerated during the three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024, we had loans held for investment of $207.2 million and $111.5 million, respectively.

The growth in loans held for investment has been primarily funded with customer deposits which are held at the U.K.

banking entity.

As of March 31, 2025 and December 31, 2024, we had customer deposits of $261.1 million and $134.1 million, respectively.

We have also raised capital via the closing of the Business Combination in August 2023, which resulted in gross proceeds of approximately $568 million.

Of the total gross proceeds, $528.6 million was in the form of a Convertible Note issued by Better Home & Finance to SB Northstar LP.

Subsequent to March 31, 2025, we have entered into an the Note Exchange Agreement to exchange our existing Convertible Note in exchange for $155.0 million of New Notes, as defined below, and a cash payment of $110.0 million as further discussed below.

We believe that funds provided by these sources will be adequate to meet our liquidity and capital resource needs for at least the next 12 months under current operating conditions.

Warehouse Lines of Credit

As of September 30, 2024 and December 31, 2023, we had the following outstanding warehouse lines of credit:

As of March 31, 2025 and December 31, 2024, we had the following outstanding warehouse lines of credit:

(Amounts in thousands)

Facility Size

September 30, 2024

March 31, 2025

December 31, 2024

2 unchanged sentences

Funding Facility 2 (2)

December 6, 2024 150,000 72,379 40,088

March 6, 2026 150,000 123,849 74,472

Funding Facility 3 (3)

5 unchanged sentences

Cash collateral deposit of $15.0 million is maintained and included in restricted cash.

Subsequent to September 30, 2024, the Company extended the maturity to September 30, 2025.

(2) Interest charged under the facility is at the 30-day term SOFR plus 2.10% - 2.25% .

(2) Interest charged under the facility is at the one month SOFR plus 2.10% - 2.25% .

Cash collateral deposit of $3.8 million is maintained and included in restricted cash.

(3) Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 3.75%.

There is no cash collateral deposit maintained as of September 30, 2024.

Nasdaq Compliance Requirements

On Friday, August 16, 2024, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, effecting the 1-for-50 reverse stock split of the Company’s common stock (the “Reverse Stock Split”) for the primary purpose of increasing the per share trading price of the Company’s Class A common stock to enable us to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (the “Nasdaq”).

Our Class A common stock began trading on a split-adjusted basis on the Nasdaq upon the market open on Monday, August 19, 2024.

Effective August 16, 2024, as a result of the Reverse Stock Split, every 50 shares of the our issued and outstanding common stock was converted into one issued and outstanding share of Class A common stock, Class B common stock and Class C common stock, as applicable, without any change to the par value per share, the voting rights of the common stock, any stockholder’s percentage interest in the Company’s equity or any other aspect of the common stock.

As previously reported, on October 12, 2023, the Company was notified by the Listing Qualifications Staff (the “Staff”) of Nasdaq that the Company’s common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Listing Rules of Nasdaq.

If the Class A common stock is no longer listed on Nasdaq, or another national securities exchange, such delisting would constitute a fundamental change under the indenture for the Convertible Note that would require us to redeem the Convertible Note prior to maturity for an amount in cash equal to the principal amount of the Convertible Note plus accrued and unpaid interest to the redemption date.

On September 3, 2024, the Company received a letter from Nasdaq notifying us that the Staff has determined that for the last 10 consecutive business days, from August 19, 2024, to August 30, 2024, the closing bid price of the our common stock has been at $1.00 per share or greater, and accordingly, we have regained compliance with Listing Rule 5550(a)(2) and the matter is now closed.

(3) Interest charged under the facility is at the one month SOFR plus 1.75% - 3.75%.

There is no cash collateral deposit maintained as of March 31, 2025.

Convertible Note and Note Exchange Agreement

On April 12, 2025, we entered into a privately negotiated Note Exchange Agreement with SB Northstar LP (the “Investor”), pursuant to which management and the Investor agreed to exchange (the “Exchange”) all of the $532.5 million total aggregate principal amount outstanding of our existing 1.00% Convertible Notes due 2028 (the “Existing Notes”) held by the Investor for (i) $155.0 million in aggregate principal amount of new 6.00% Senior Secured Notes due 2028 (the “New Notes”), and (ii) a cash payment of $110.0 million (the “Cash Payment”).

We will not receive any cash proceeds in connection with the Exchange.

The Exchange was subsequently consummated on April 28, 2025 (the “Closing Date”), upon which we received and cancelled all Existing Notes and the Investor forfeited any accrued and unpaid interest in respect of the Existing Notes to but not including the Closing Date.

Pursuant to the Note Exchange Agreement, we granted the Investor, conditioned on closing of the Exchange, a non-transferrable right to designate one non-voting board observer from June 1, 2025, for so long as the Investor and affiliates of the Investor continue to hold, in the aggregate, either (i) at least 25% of the initial aggregate principal amount of the New Notes or (ii) at least 12% of the sum of the outstanding shares of the Company’s Class A Common Stock, Class B Common Stock and Class C Common Stock, calculated on a fully diluted basis.

New Notes Indenture

On the Closing Date, we entered into an indenture (the “New Notes Indenture”) with GLAS Trust Company LLC, as trustee and notes collateral agent (the “Trustee”).

The New Notes represent our senior secured obligations, and are secured

by substantially all of the Company’s and its material domestic subsidiaries’ assets.

The News Notes are (i) senior in right of payment to our existing and future senior, unsecured indebtedness to the extent of the value of the collateral;

and (ii) senior in right of payment to ours existing and future indebtedness that is expressly subordinated to the New Notes.

Interest on the New Notes is payable, at our election, in cash or by payment-in-kind by issuing additional notes in an aggregate principal amount equal to the relevant amount of interest paid in kind.

The New Notes will accrue interest at a rate of 6.00% per annum, payable semi-annually in arrears on June 30 and December 31 of each year, with the initial payment on June 30, 2025.

The New Notes will mature on December 31, 2028.

The New Notes will be redeemable, in whole and not in part, at our option at any time prior to December 31, 2028, at a cash redemption price equal to 106.00% of the principal amount of the New Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, with an amount not exceeding the net cash proceeds of one or more “Equity Offerings” (as defined in the New Notes Indenture);

provided that at least 60% of the aggregate principal amount of the New Notes remains outstanding immediately after the redemption and the redemption occurs within 150 days of the date of the closing of each such Equity Offering.

Additionally, prior to December 31, 2028, we may redeem all or part of the New Notes at a redemption price equal to the sum of 108% of the principal amount of the New Notes to be redeemed, plus the “Make Whole Premium” (as defined in the New Notes Indenture) at the redemption date, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If certain corporate events that constitute a “Change of Control Triggering Event” (as defined in the New Notes Indenture) occur, then noteholders may require us to repurchase all or any part of their New Notes at a cash repurchase price equal to 101% of the aggregate principal amount of the New Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of settlement.

The definition of Change of Control Triggering Event includes certain business combination transactions involving the Company.

The following table summarizes our cash flows for the periods presented:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

5 unchanged sentences

$ 118,821 $ (1,148)

Nine Months Ended September 30, 2024 as Compared to Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 as Compared to Three Months Ended March 31, 2024

Operating Activities

Net cash used by operating activities was $274 million for the nine months ended September 30, 2024, an increase of $195 million, or 245%, compared to net cash used by operating activities of $79 million for the nine months ended September 30, 2023.

The increase in net cash used by operating activities was primarily due to originations of mortgage loans held for sale in excess of proceeds from sale of mortgage loans held for sale as the Company originated more loans towards the end of the current period.

Also contributing to the increase in cash used by operating activities were net losses over the period.

Net cash used by operating activities was $57 million for the three months ended March 31, 2025, a increase of $14 million, or 34%, compared to net cash used by operating activities of $43 million for the three months ended March 31, 2024.

The increase in net cash used by operating activities was primarily due to changes in operating assets and liabilities as well as adjustments to reconcile net loss to net cash used by operating activities.

Investing Activities

Net cash used in investing activities was $112 million for the nine months ended September 30, 2024, an increase of $70 million, or 166%, compared to net cash used in investing activities of $42 million for the nine months ended September 30, 2023.

The increase in cash used in investing activities primarily consists of purchases of short-term investments in excess of maturities of short-term investments as well as originations of loans held for investment during the second and third quarters of 2024, namely through our U.K.

Loans held for investment are funded from our cash on hand.

Net cash used in investing activities was $159 million for the three months ended March 31, 2025, an increase of $125 million, or 376%, compared to net cash used in investing activities of $33 million for the three months ended March 31, 2024.

The increase in cash used in investing activities primarily consists of purchases in excess of maturities of short-term investments, as well as originations of loans held for investment, both of which are through our U.K.

banking entity which the Company has focused on growing during the three months ended March 31, 2025.

Loans held for investment are funded from our cash on hand as well as growth in customer deposits held by our U.K.

banking entity.

which is included within financing activities.

Financing Activities

Net cash provided by financing activities was $93.1 million for the nine months ended September 30, 2024, a decrease of $238 million, or 72%, compared to net cash provided by financing activities of $331 million for the nine months ended September 30, 2023.

The decrease in cash provided by financing activities was primarily driven by the Closing of the Business Combination during the nine months ended September 30, 2023 which led to a cash increase of $422 million mainly from the issuance of the Convertible Note, issuance of common stock, and proceeds of the Business Combination, offset by the repayment of the Corporate Line of Credit.

During the nine months ended September 30, 2024, our cash provided by financing activities was mainly driven by an increase in customer deposits, namely through our U.K.

Net cash provided by financing activities was $118.8 million for the three months ended March 31, 2025, an increase of $120 million, or 10450%, compared to net cash used by financing activities of $1 million for the three months ended March 31, 2024.

The increase in cash provided by financing activities was primarily driven by an increase in customer deposits, namely through our U.K.

banking entity.

Off-Balance Sheet Arrangements

1 unchanged sentence

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates as of and during the three and nine months ended September 30, 2024, as compared to the critical accounting policies and estimates disclosed in the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K.

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2025, as compared to the critical accounting policies and estimates disclosed in the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2024, which are included in our 2024 Annual Report on Form 10-K.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

5 unchanged sentences

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this quarterly report on Form 10-Q.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-

looking statements.

Forward-looking statements in this quarterly report on Form 10-Q and the associated risks, uncertainties, assumptions and other important factors may include, but are not limited to:

19 unchanged sentences

• Factors relating to our capital structure, governance and the market for our securities, including:

• The existence of multiple classes of our Common Stock, which is comprised of our Class A common stock, our Class B common stock and our Class C common stock, and its impact on the liquidity and value of the Class A common stock;

• The existence of multiple classes of common stock, which is comprised of our Class A common stock, our Class B common stock and our Class C common stock, and its impact on the liquidity and value of the Class A common stock;

• The limited experience of our directors and management team in overseeing a public company;

• Our ability to maintain the listing of the Class A common stock and Public Warrants on the Nasdaq Capital Market;

• Our ability to maintain certain lines of credit and obtain future financing on commercially favorable terms to fund loans and otherwise operate our business;

• The liquidity and trading of our Class A common stock and Warrants;

• Other factors detailed under Part II, Item 1A.

“ Risk Factors ”.

• Our ability to maintain the listing of the Class A common stock and Public Warrants on the Nasdaq;

• Our ability to maintain certain lines of credit and obtain future financing on commercially favorable terms to fund loans and otherwise operate our business, and

• The liquidity and trading of Class A common stock and Warrants.

Additional risks and uncertainties that could cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements include those matters discussed in Part I, Item 1A.

“Risk Factors” of the Company's 2024 Annual Report on Form 10-K.

The forward-looking statements contained in this quarterly report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis