Figure Technology Solutions, Inc. 10-Q

figr-20250930 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 001-42829 _________________________ FIGURE TECHNOLOGY SOLUTIONS, INC. (Exact name of registrant as specified in its charter) _________________________ Nevada 99-2556408 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 100 West Liberty Street, Suite 600 Reno , NV 89501 (Address of Principal Executive Offices) (Zip Code) ( 917 ) 789-8049 Registrant’s telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, par value $0.0001 per share FIGR The Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large Accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of November 10, 2025, registrant had outstanding 176,100,512 shares of Class A common stock, and 37,893,047 shares of Class B common stock. Table of Contents Page No. Part I . Financial Information Item 1. Financial Statements 7 Condensed Consolidated Balance Sheets 8 Condensed Consolidated Statements of Operations 9 Condensed Consolidated Statements of Stockholders’ Equity 10 Condensed Consolidated Statements of Cash Flows 13 Notes to Condensed Consolidated Financial Statements 14 Note 1 – Business and Organization 14 Note 2 – Summary of Significant Accounting Policies 15 Note 3 – Investments 29 Note 4 – Servicing 33 Note 5 – Loans 34 Note 6 – Debt 36 Note 7 – Equity 39 Note 8 – Net I ncome (Loss) Per Share 44 Note 9 – Variable Interest Entities 45 Note 10 – Commitments and Contingencies 46 Note 1 1 – Related Party Transactions 48 Note 1 2 – Fair Value Measurements 50 Note 1 3 – Income Taxes 54 Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations 55 Item 3. Quantitative And Qualitative Disclosures About Market Risk 78 Item 4. Controls And Procedures. 79 Part II . Other Information Item 1. Legal Proceedings 81 Item 1A. Risk Factors 81 Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds 156 Item 3. Defaults Upon Senior Securities 156 Item 4. Mine Safety Disclosures 156 Item 5. Other Information 156 Item 6. Exhibits 157 Signatures 159 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact contained in this Quarterly Report, including without limitation, statements regarding our future financial performance, including our expectations regarding our revenue, expenses, ability to determine reserves, and ability to remain profitable; our ability to maintain, expand, and enter into new relationships with partners and loan purchasers on the secondary market, our ability to broaden our network of partners; and our ability to successfully execute our business and growth strategy; and anticipated trends, growth rates, and challenges in our business, the cryptoeconomy, the price, and market capitalization of digital assets and in the markets in which we operate are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. SUMMARY RISK FACTORS Our business is subject to numerous risks and uncertainties, including those described in Part II Item 1A. “Risk Factors” in this Quarterly Report. You should carefully consider these risks and uncertainties, together with all of the other information contained in this Quarterly Report, when investing in our common stock or warrants. The principal risks and uncertainties affecting our business include the following: • We have a history of losses, we may not be able to maintain profitability in the future, and there is no assurance that our revenue and business model will be successful. • If we fail to effectively manage our growth, our business, financial condition, and results of operations could be adversely affected. • Substantially all of our revenue is derived from our HELOC product, and we are thus particularly susceptible to fluctuations in the HELOC market. Our current product offerings may also not be sufficiently broad to attract and retain partners. • Our success and ability to develop our lending business depend on retaining and expanding our reach through both our Figure-branded and Partner-branded strategies. If we or our partners fail to add new borrowers or customers, as applicable, our business, financial condition, and results of operations could be adversely affected. • If loans originated by us or through our platform and purchased by us do not perform, or significantly underperform, we may incur financial losses on the loans we hold on our balance sheet, which could adversely affect our business, financial condition, and results of operations, as well as result in the loss of confidence of our funding sources. • Increases in borrower default rates on loans could make us and our loans less attractive to loan purchasers, lenders under warehouse credit facilities and investors in securitizations, which may adversely affect our access to financing and our business, financial condition, and results of operations. • Our HELOCs and other loans we make, such as digital assets-secured personal loans, are subject to federal, state and local laws that regulate various aspects of lending, including disclosures, interest rates and other charges, and if we exceed applicable limitations on interest, loan charges, and other fees or fail to provide required disclosures, our business, financial condition, and results of operations could be significantly adversely affected, including but not limited to, through litigation (including damages), investigation, enforcement and other regulatory and legal action and penalties. • If a court or regulator determines that our HELOCs cannot be characterized as a fixed-rate extension of “open-end credit” under the Truth in Lending Act (“TILA”) or state law, we would be subject to the more prescriptive closed-end mortgage laws and rules, as well as laws and rules applicable to variable-rate HELOCs, which would have a material adverse effect on our business, financial condition, and results of operations. • A particular digital asset, product or service’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a digital asset or product offering, or if the regulatory framework with respect to digital assets changes, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition. • Depositing and withdrawing digital assets into and from Figure Exchange involve risks, which could result in loss of customer assets, customer disputes and other liabilities, and adversely impact our business, financial condition, and results of operations. • Our business is significantly impacted by interest rates. Changes in prevailing interest rates or U.S. monetary policies that affect interest rates could adversely affect our business, financial condition, and results of operations. • Technology disruptions or failures in, and cyberattacks or other breaches or incidents relating to, our operational, security or fraud-detection systems or infrastructure, or those of third parties with whom we do business, could disrupt our business, cause legal or reputational harm, and adversely affect our business, financial condition, and results of operations. • Our business, financial condition, and results of operations could be adversely affected if we fail to adequately maintain, protect and enforce our intellectual property and proprietary rights or face allegations that our product offerings or conduct infringes on the intellectual property rights of third parties. • We are subject to or facilitate compliance with a variety of federal, state, and local laws, including those related to lending and mortgages, money transmission, consumer protection, financial services and loan financings. • Our marketing practices involving relationships with third parties may expose us to risks of alleged Real Estate Settlement Procedures Act (the “RESPA”) violations. • We hold state licenses that result in substantial costs, including licensing fees and compliance costs, and our business, financial condition, and results of operations would be adversely affected if our licenses were impaired as a result of noncompliance with those requirements. • Litigation, regulatory actions, and compliance issues could subject us to significant fines, penalties, judgments, remediation costs, negative publicity, changes to our business model, and requirements resulting in increased expenses. • Our compliance and risk management policies, procedures and techniques may not be sufficient to identify all of the financial, legal, regulatory, and other risks to which we are exposed, and failure to identify and address such risks could adversely affect our business, financial condition, and results of operations. • Changes in applicable laws and regulations, as well as changes in government enforcement policies and priorities, could materially increase our operating costs and negatively impact our ability to offer certain products or the terms and conditions upon which they are offered, and ability to compete, which could have a material adverse effect on our business, financial condition, and results of operations. • We have identified material weaknesses in our internal control over financial reporting. If we fail to remedy these material weaknesses, experience additional material weaknesses in the future or otherwise fail to continue to design, implement and maintain effective internal control over financial reporting, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us, and, as a result, the value of our Class A common stock. • The dual-class structure of our common stock has the effect of concentrating voting control which limits your ability to affect the outcome of key transactions, including a change in control, and it may depress the trading price of our Class A common stock. • The market price of our Class A common stock may be volatile, and you could lose all or part of your investment. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FIGURE TECHNOLOGY SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,097,123 $ 287,256 Restricted cash 64,590 57,777 Loans held for sale, at fair value 389,032 395,922 Digital assets ($ 101,408 and $ 76,362 at fair value) 102,913 77,862 Accounts receivable, net 46,238 20,998 Other current assets 59,828 14,875 Total current assets 1,759,724 854,690 Loan servicing asset, at fair value 100,000 88,497 Marketable securities, at fair value 239,694 163,489 Digital assets, non-current 7,272 9,704 Loan to related parties 9,927 9,372 Other non-current assets 40,172 33,826 Total assets $ 2,156,789 $ 1,159,578 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 55,320 $ 37,217 Payables to third-party loan owners 336,547 212,619 Debt, current ($ 18,962 and $ — at fair value) 268,923 305,294 Other current liabilities 117,385 70,401 Total current liabilities 778,175 625,531 Debt, non-current 197,827 167,882 Lease liability, non-current 4,227 2,790 Total liabilities 980,229 796,203 Stockholders' equity: Convertible Preferred stock — no shares authorized, issued and outstanding at September 30, 2025; $ 0.00001 par value per share: 115,983,447 shares authorized, 111,900,495 issued and outstanding at December 31, 2024, liquidation preference $ 528,566,000 — 2 Common stock — no shares authorized, issued and outstanding at September 30, 2025; $ 0.00001 par value per share: 240,820,153 shares authorized, 69,300,284 issued and outstanding at December 31, 2024 — 2 Preferred stock — $ 0.0001 par value per share: 100,000,000 shares authorized, no shares issued and outstanding at September 30, 2025; no shares authorized, issued and outstanding at December 31, 2024 — — Class A common stock — $ 0.0001 par value per share: 1,000,000,000 shares authorized, 174,853,649 shares issued and outstanding at September 30, 2025; no shares authorized, issued and outstanding at December 31, 2024 17 — Class B common stock — $ 0.0001 par value per share: 200,000,000 shares authorized, 37,893,047 shares issued and outstanding at September 30, 2025; no shares authorized, issued and outstanding at December 31, 2024 4 — Blockchain common stock — $ 0.0001 par value per share: 500,000,000 shares authorized, no shares issued and outstanding at September 30, 2025; no shares authorized, issued and outstanding at December 31, 2024 — — Additional paid-in capital 1,369,956 675,945 Accumulated deficit ( 202,153 ) ( 320,851 ) Total Figure Technology Solutions, Inc. stockholders' equity 1,167,824 355,098 Noncontrolling interests in consolidated subsidiaries 8,736 8,277 Total stockholders' equity 1,176,560 363,375 Total liabilities and stockholder's equity $ 2,156,789 $ 1,159,578 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 8 FIGURE TECHNOLOGY SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net Revenue Ecosystem and technology fees $ 35,691 $ 7,323 $ 79,445 $ 19,830 Servicing fees 7,882 6,483 22,537 18,389 Interest income 17,864 12,772 50,502 32,475 Origination fees 21,415 18,940 50,142 51,244 Gain on sale of loans, net 63,561 57,434 131,896 116,069 Gain (loss) on servicing asset, net 9,332 ( 2,057 ) 11,502 18,580 Other revenue 620 112 928 443 Total net revenue 156,365 101,007 346,952 257,030 Expenses General and administrative 36,366 15,890 71,603 78,428 Technology and product development 15,915 16,080 49,349 46,407 Operations and processing 18,217 11,333 45,342 33,275 Sales and marketing 22,144 15,031 54,077 40,979 Interest expense 12,450 14,761 35,798 41,951 Other (income) expense ( 1,445 ) 1,775 2,268 5,951 Total expenses 103,647 74,870 258,437 246,991 Operating income 52,718 26,137 88,515 10,039 Other income, net Other income, net 5,641 2,543 3,812 5,775 Total other income, net 5,641 2,543 3,812 5,775 Income before income taxes 58,359 28,680 92,327 15,814 Income tax provision ( 31,463 ) 1,253 ( 26,876 ) 1,788 Net income 89,822 27,427 119,203 14,026 Net income attributable to noncontrolling interests in consolidated subsidiaries 246 88 505 2,288 Net income attributable to Figure Technology Solutions, Inc. $ 89,576 $ 27,339 $ 118,698 $ 11,738 Net income per share of Class A and Class B common stock Basic $ 0.42 $ 0.09 $ 0.48 $ 0.00 Diluted $ 0.34 $ 0.09 $ 0.38 $ 0.00 Weighted-average Class A and Class B common shares outstanding Basic 103,571,820 68,568,542 80,896,185 63,700,455 Diluted 129,922,329 73,585,747 103,106,387 69,854,927 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 9 FIGURE TECHNOLOGY SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands, except share and per share data) Convertible Preferred Stock Common Stock Class A Common Stock Class B Common Stock Additional Paid-In Capital Accumulated Deficit Total Figure Technology Solutions Stockholders’ Equity Noncontrolling Interests in Consolidated Subsidiaries Total Stockholders’ Equity Shares Amount Shares Amount Shares Amount Shares Amount Balance at June 30, 2025 111,900,495 $ 2 69,939,160 $ 2 — $ — — $ — $ 687,655 $ ( 291,729 ) $ 395,930 $ 8,530 $ 404,460 Vesting of preferred stock warrants — — — — — — — — 2,459 — 2,459 — 2,459 Exercise of stock options and warrants 2,010,410 1 367,855 — — — — — 7,691 — 7,692 — 7,692 Stock compensation expense — — — — — — — — 17,469 — 17,469 — 17,469 Dividends & redemptions of subsidiaries — — — — — — — — — — — ( 40 ) ( 40 ) Settlement of restricted stock units — — — — 297,171 — — — — — — — — Issuance and conversion of common stock in connection with initial public offering, net of offering costs and commissions — — ( 70,307,015 ) ( 2 ) 98,538,620 10 — — 654,682 — 654,690 — 654,690 Conversion of convertible preferred stock to common stock in connection with initial public offering ( 113,910,905 ) ( 3 ) — — 113,910,905 11 — — — — 8 — 8 Conversion of Class A Common Stock to Class B Common Stock — — — — ( 37,893,047 ) ( 4 ) 37,893,047 4 — — — — — Net income — — — — — — — — — 89,576 89,576 246 89,822 Balance at September 30, 2025 — $ — — $ — 174,853,649 $ 17 37,893,047 $ 4 $ 1,369,956 $ ( 202,153 ) $ 1,167,824 $ 8,736 $ 1,176,560 10 FIGURE TECHNOLOGY SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands, except share and per share data) Convertible Preferred Stock Common Stock Class A Common Stock Class B Common Stock Additional Paid-In Capital Accumulated Deficit Total Figure Technology Solutions Stockholders’ Equity Noncontrolling Interests in Consolidated Subsidiaries Total Stockholders’ Equity Shares Amount Shares Amount Shares Amount Shares Amount Balance at December 31, 2024 111,900,495 $ 2 69,300,284 $ 2 — $ — — $ — $ 675,945 $ ( 320,851 ) $ 355,098 $ 8,277 $ 363,375 Vesting of preferred stock warrants — — — — — — — — 7,863 — 7,863 — 7,863 Exercise of stock options and warrants 2,010,410 1 1,006,731 — — — — — 8,736 — 8,737 — 8,737 Stock compensation expense — — — — — — — — 22,730 — 22,730 — 22,730 Dividends & redemptions of subsidiaries — — — — — — — — — — — ( 146 ) ( 146 ) Other equity contributions — — — — — — — — — — — 100 100 Settlement of restricted stock units — — — — 297,171 — — — — — — — — Issuance and conversion of common stock in connection with initial public offering, net of offering costs and commissions — — ( 70,307,015 ) ( 2 ) 98,538,620 10 — — 654,682 — 654,690 — 654,690 Conversion of convertible preferred stock to common stock in connection with initial public offering ( 113,910,905 ) ( 3 ) — — 113,910,905 11 — — — — 8 — 8 Conversion of Class A Common Stock to Class B Common Stock — — — — ( 37,893,047 ) ( 4 ) 37,893,047 4 — — — — — Net income — — — — — — — — — 118,698 118,698 505 119,203 Balance at September 30, 2025 — $ — — $ — 174,853,649 $ 17 37,893,047 $ 4 $ 1,369,956 $ ( 202,153 ) $ 1,167,824 $ 8,736 $ 1,176,560 11 FIGURE TECHNOLOGY SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands, except share and per share data) Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Deficit Total Figure Technology Solutions Stockholders’ Equity Noncontrolling Interests in Consolidated Subsidiaries Total Stockholders’ Equity Shares Amount Shares Amount Balance at June 30, 2024 110,626,501 $ 2 68,479,148 $ 2 $ 648,530 $ ( 353,666 ) $ 294,868 $ 7,812 $ 302,680 Issuance of Series E preferred stock, net of issuance costs 1,273,994 — — — 12,376 — 12,376 — 12,376 Issuance of preferred stock warrants — — — — 2,572 — 2,572 — 2,572 Exercise of stock options and warrants — — 182,719 — — — — — — Stock compensation expense — — — — 4,533 — 4,533 — 4,533 Dividends & redemptions of subsidiaries — — — — — — — ( 16 ) ( 16 ) Net income — — — — — 27,339 27,339 88 27,427 Balance at September 30, 2024 111,900,495 $ 2 68,661,867 $ 2 $ 668,011 $ ( 326,327 ) $ 341,688 $ 7,884 $ 349,572 Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Deficit Total Figure Technology Solutions Stockholders’ Equity Noncontrolling Interests in Consolidated Subsidiaries Total Stockholders’ Equity Shares Amount Shares Amount Balance at December 31, 2023 104,575,110 $ 1 51,618,208 $ 1 $ 555,133 $ ( 338,065 ) $ 217,070 $ 5,353 $ 222,423 Issuance and exchange of equity — — 16,498,104 1 — — 1 — 1 Issuance of Series E preferred stock, net of issuance costs 7,325,385 1 — — 71,773 — 71,774 — 71,774 Issuance of preferred stock warrants — — — — 6,977 — 6,977 — 6,977 Exercise of stock options and warrants — — 545,555 — 867 — 867 — 867 Stock compensation expense — — — — 34,526 — 34,526 — 34,526 Noncontrolling interest investment in subsidiary — — — — — — — 290 290 Dividends & redemptions of subsidiaries — — — — ( 1,265 ) — ( 1,265 ) ( 47 ) ( 1,312 ) Net income — — — — — 11,738 11,738 $ 2,288 14,026 Balance at September 30, 2024 111,900,495 $ 2 68,661,867 $ 2 $ 668,011 $ ( 326,327 ) $ 341,688 $ 7,884 $ 349,572 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 12 FIGURE TECHNOLOGY SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Nine Months Ended September 30, 2025 2024 Operating Activities: Net income $ 119,203 $ 14,026 Adjustments to reconcile net loss to net cash flows used in operating activities: Gain on servicing asset, net ( 11,502 ) ( 18,580 ) Gain on sale of loans, net ( 126,130 ) ( 116,069 ) Loss (gain) on sale of digital assets ( 2,979 ) ( 7,065 ) Income from fund and equity method investments 475 296 Amortization of deferred financing costs 732 712 Amortization of internally developed software 12,381 13,255 Impairment of internally developed software costs — 8,591 Impairment of digital assets — 5,851 Services exchanged for issuance of warrants 7,863 4,019 Stock-based compensation expense 22,730 34,526 Losses on repurchased loans 2,268 5,951 Net change in operating assets and liabilities: Proceeds from loan sales, net of repurchases 4,599,255 3,553,500 Originations of loans held for sale ( 2,561,856 ) ( 2,409,864 ) Purchases of loans held for sale ( 2,221,013 ) ( 1,568,000 ) Principal payments on loans held for sale 324,568 334,777 Purchases of marketable securities ( 141,878 ) ( 81,622 ) Proceeds from sale of marketable securities — 872 Principal payments on marketable securities 62,517 8,342 Accounts receivable, net ( 25,240 ) 3,682 Other assets ( 54,528 ) ( 12,994 ) Accounts payable and other liabilities 42,431 11,429 Net cash provided by (used in) operating activities 49,297 ( 214,365 ) Investing activities: Capitalization of internally developed software costs ( 16,077 ) ( 12,498 ) Investment contributions ( 2,477 ) ( 3,314 ) Purchases of digital assets ( 9,938 ) ( 25,777 ) Proceeds from sales of digital assets 12,634 10,842 Loan receivable issued to related parties — ( 2,030 ) Payment on note receivable from related parties — 809 Distributions from investments 797 — Realized losses on futures ( 5,766 ) — Sale of internally developed software — 1,000 Net cash used in investing activities ( 20,827 ) ( 30,968 ) Financing activities: Proceeds from debt 4,169,636 3,459,213 Principal payments on debt ( 4,175,300 ) ( 3,217,322 ) Payments of deferred financing costs ( 1,494 ) ( 1,574 ) Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions 663,443 — Proceeds from servicing activity on behalf of third-party loan owners 123,086 60,390 Proceeds from issuance of preferred stock — 71,774 Distributions to shareholders — ( 2,765 ) Proceeds from exercises of stock options 8,737 867 Other financing activities 102 258 Net cash provided by financing activities 788,210 370,841 Net increase in cash, cash equivalents, and restricted cash 816,680 125,508 Cash, cash equivalents, and restricted cash, beginning of period 345,033 175,780 Cash, cash equivalents, and restricted cash, end of period $ 1,161,713 $ 301,288 Supplemental cash flow disclosures Cash paid during the period for interest $ 36,371 $ 41,117 Cash paid during the period for income taxes 8,015 48 Supplemental disclosures of non-cash investing and financing activities Stock-based compensation included in capitalized internally developed software 329 401 Contribution from related party — 1,500 Distribution of noncontrolling interest in fund — 8 Distributions from Onshore Solana Fund 1,759 — Transfers from held for sale to held for investment — 4,959 Other capital contributions — 2,958 Accrued issuance costs 3,533 1,025 Unrealized losses on futures 318 — Right of use assets obtained in exchange for operating lease liabilities 3,080 — The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 13 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) NOTE 1 – BUSINESS AND ORGANIZATION Figure Technology Solutions, Inc. (“FTS”, “Figure”, or the “Company”) is a financial technology company that has built a suite of blockchain-based products and solutions centered around the vision of promoting efficiency and liquidity in financial markets. The Company offers a technology-enabled loan origination system and pairs this system with a distribution marketplace, Figure Connect, providing access to a deep and broad pool of capital markets partners (together, the “Technology Offering”). In addition, the Company has utilized blockchain technology to develop an exchange for digital assets and credit, with new product offerings including providing interest-bearing stablecoin deposits. Reorganization Prior to a change in corporate structure on March 18, 2024, the consolidated financial statements were under the former parent company, Figure Technologies, Inc. ("FT"). On March 18, 2024, FT, FT Intermediate, Inc. (“FTI”), and Figure Markets Holdings, Inc. (“FMH”) and other entities under common control consummated a reorganization (the “Reorganization”) whereby FT contributed assets and liabilities to FTI and subsequently, FT consummated a reverse merger with a subsidiary of FTI. Each outstanding share of common stock of FT converted into one share of common stock of FTI, whereby FTI (a) contributed assets and liabilities applicable to the FMH business and (b) 100 % of the equity interest to FT's successor. FT then ratably distributed 74.1 % of FMHs' common stock to third-party shareholders and 25.9 % to related parties in exchange for their FTI common stock. As a result of the Reorganization, there were two affiliated corporations under common control. Each of the following two corporations was owned either directly or indirectly by its controlling shareholder, Michael Cagney (“Controlling Party”): • FTI was formed on March 18, 2024 as a Delaware corporation and primarily operates through its wholly-owned subsidiary, Figure Lending Corp. (“Lending”). Lending offers Figure Connect which generates ecosystem and technology fees, and originates, sells, and securitizes home equity line of credit (“HELOC”) loans that it services. • FMH was formed on January 25, 2024 as a Delaware corporation. FMH utilized blockchain technology to develop an exchange for digital assets and credit, with new product offerings including providing interest-bearing stablecoin deposits. In May 2025, both FTS and FMH redomiciled from the State of Delaware to the State of Nevada. Recombination On August 29, 2025 (“Recombination Date”), FTI and FMH recombined the businesses through a series of transactions (the “Recombination”) and FMH became a wholly-owned subsidiary of FTI. Approximately five outstanding shares of FMH common or preferred stock, options, or warrants converted into one share of common or preferred stock, options, or warrants of FTI (“Conversion Rate”). Upon the consummation of the Recombination, FTI changed its name to Figure Technology Solutions, Inc. The Recombination was a reorganization of entities under common control as FTI and FMH were owned, either directly or indirectly, by the Controlling Party before and after the Recombination. As a result, the Recombination is accounted for in a manner similar to a pooling of interests with the assets and liabilities of the parties to the Recombination carried over at their historical amounts. Therefore, the accompanying Condensed Consolidated Financial Statements have been retrospectively recast to reflect the results as if FTI and FMH were a single consolidated entity as of the earliest period presented. Initial Public Offering On September 12, 2025, the Company completed its initial public offering (“IPO”) of 36,225,000 shares of its Class A common stock, including 7,993,395 shares sold by selling stockholders and 4,725,000 sold by the Company pursuant to the exercise of the underwriters’ over-allotment option which was exercised in full, at a public offering price of $ 25.00 per share. The IPO resulted in net proceeds to the Company of $ 663.4 million after deducting the underwriting discounts and commissions and before deducting offering costs of $ 8.8 million, which were charged to additional paid-in capital as a reduction of the net proceeds received from the IPO. In connection with the IPO, all shares of outstanding convertible preferred stock, including 2,010,410 shares of Series E preferred stock issued upon the exercise of outstanding warrants, automatically converted to 113,910,905 shares of Class A 14 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) common stock, and a total of 39,393,047 shares of our Class A common stock held by the Controlling Party and his permitted transferees were converted into an equivalent number of shares of Class B common stock, of which 1,500,000 shares were subsequently converted back to Class A and sold in connection with the IPO. In connection with the IPO, the Company filed its Second Amended and Restated Certificate of Incorporation (the “Charter”), which authorizes a total of 1,000,000,000 shares of Class A common stock, par value $ 0.0001 (“Class A Common Stock”), 200,000,000 shares of Class B common stock, par value, $ 0.0001 (“Class B Common Stock”), 500,000,000 shares of Blockchain common stock, par value, $ 0.0001 (“Blockchain Common Stock”), and 100,000,000 shares of preferred stock, par value $ 0.0001 (“Preferred Stock”). Certain of our restricted stock units (“RSUs”) granted to employees included both a service condition and a liquidity-event-related performance condition. The performance condition related to these awards was met upon the completion of the IPO, and the Company recognized $ 11.0 million of stock-based compensation expense during the three months ended September 30, 2025 and as a result 1,599,216 shares of Class A common stock vested during the period. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The financial statements for the three and nine months ended September 30, 2025 and 2024 reflect the recast consolidated statements of FTS to give effect to the Recombination of entities under common control to the earliest period presented. The Condensed Consolidated Financial Statements include the accounts of the Company and the combined wholly-owned subsidiaries over which the Company controls significant operating, financial, and investing decisions of the entity as well as those entities deemed to be variable interest entities (“VIEs”) in which the Company is determined to have a controlling financial interest. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows have been included and are of a normal and recurring nature. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared under GAAP may be condensed or omitted for interim financial reporting, and the operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim or annual period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Combined Consolidated Financial Statements for the year ended December 31, 2024 and footnotes thereto included in the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”), as amended and declared effective on September 10, 2025. Capitalized terms used herein, and not otherwise defined, are defined in the Company’s Combined Consolidated Financial Statements for the year ended December 31, 2024. Emerging Growth Company The Company is an “emerging growth company” (“EGC”), as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, and modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an EGC can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when an accounting standard is issued or revised and it has different application dates for public and private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or 15 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) revised standard. This may make comparison of the Company’s Condensed Consolidated Financial Statements with another public company that is neither an EGC nor an EGC that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Consolidation Variable Interest Entities A variable interest entity (“VIE”) is a legal entity in which (i) equity at risk investors do not have the characteristics of a controlling financial interest, (ii) the entities do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, or (iii) substantially all of the activities of the entity are performed on behalf of the party with disproportionately few voting rights. The Company’s variable interest arises from contractual, ownership, or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The determination of whether or not to consolidate a VIE under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests. To make these judgments, management conducts an analysis, on a case-by-case basis, on whether the Company is the primary beneficiary, the party who has the power to direct the activities of a VIE that most significantly impacts its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, and are therefore required to consolidate the entity. In circumstances where an entity does not have the characteristics of a VIE, the Company would consolidate the entity if the Company owns a majority of the equity interest and has control over significant operating, financial and investing decisions of the entity. For entities over which the Company exercises significant influence, but which do not meet the requirements for consolidation, the Company applies the equity method of accounting whereby it records its share of the underlying income of such entities. The Company records its share of income and losses in “Other income, net” in the Condensed Consolidated Statements of Operations. Distributions from equity method investments are classified as investing activities in the Condensed Consolidated Statements of Cash Flows. The Company applies the measurement alternative for entities in which the Company holds non-security interests and over which the Company does not exercise significant influence. Under the measurement alternative, investments are measured at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer in the current period. The carrying value is not adjusted for the Company’s investment if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. See Note 3 for additional information regarding the Company’s measurement alternative and equity method investees. Management continually reconsiders whether the Company should consolidate a VIE or not; upon the occurrence of certain events, management will reconsider its conclusion regarding the status of an entity as a VIE. See Note 9 for additional information regarding the VIEs that the Company consolidates. Noncontrolling Interests in Consolidated Subsidiaries Noncontrolling interests represent the portion of subsidiaries’ net assets the Company consolidates but does not own. The Company recognizes each noncontrolling holder’s respective share of the net assets at the date of formation or acquisition. Noncontrolling interests are subsequently adjusted for the noncontrolling holder’s share of additional contributions, distributions, and their share of the net earnings or losses of each respective consolidated entity. The Company allocates net income or loss to noncontrolling interests based on the weighted-average ownership interest during the period. The net income or loss that is not attributable to the Company is reflected in “Net income attributable to noncontrolling interests in consolidated subsidiaries” in the Condensed Consolidated Statements of Operations. The Company does not recognize a gain or loss on transactions with a consolidated entity in which it does not own 100% of the equity, but the Company reflects the difference in cash received from, or paid to, the noncontrolling interests as adjustments to its carrying amount offset by additional paid-in-capital adjustments. 16 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Segments As detailed in Note 1, the Recombination that was effective on August 29, 2025 recombined FTI and FMH through a series of transactions into a single operating entity. Prior to the Recombination, the Company operated and managed its business through FTI and FMH, including their respective subsidiaries, as two distinct legal entities and disclosed operating segments based on each legal entity. Following the Recombination, the Company operates as a single operating and reportable segment. The legacy executive management teams have been consolidated into one executive team, and the Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The CODM evaluates performance and allocates resources using consolidated net income as reported in the Condensed Consolidated Statements of Operations. Significant expense categories and revenue streams reviewed by the CODM are presented on the face of the Condensed Consolidated Statements of Operations. The CODM does not review assets, liabilities, or capital expenditures at a more granular level; accordingly, no such disclosures are presented. Total consolidated assets are presented on the Condensed Consolidated Balance Sheets. Substantially all of the Company’s revenues and long-lived assets are located in the United States, and the Company does not have any customers that represent more than 10% of consolidated revenues. The change in segment reporting did not have an impact on the Company’s consolidated financial position, results of operations, cash flows, or stockholders’ equity. 17 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Risks and Uncertainties In the course of its business, the Company primarily encounters two significant types of economic risk: credit risk and market risk. Credit risk is the risk of default on the Company’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of investments due to changes in prepayment rates, interest rates, or other market factors, including risks that impact the value of the collateral underlying the Company’s marketable securities, loans, servicing, and digital assets. To the extent the Company originates, invests in, or services loans concentrated in certain geographic locations, disruptions to those locations may cause material risks to the Company despite favorable macroeconomic conditions. Changes in federal, state, or international tax laws or tax rulings could adversely affect the Company’s effective tax rate and its operating results. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make subjective estimates, judgments, and assumptions that affect the reported amounts in these Condensed Consolidated Financial Statements and accompanying notes, including assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and estimates may change as the Company obtains new information. Management uses historical experience, current events, and other factors to develop estimates and assumptions that management reviews periodically. The Condensed Consolidated Financial Statements reflect the effects of estimate revisions in the period in which such revisions occur. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the Condensed Consolidated Financial Statements. Significant estimates include the determination of the prepayment rates, discount rates, default rates, and servicing costs (as applicable) used in determining the fair value adjustments for loans held for sale, held for investment, and servicing assets; valuation allowance for deferred tax assets; fair value of warrants; stock-based compensation, including the grant date fair value of the related common stock and employee awards of the Company, and other employee-related costs; inputs for capitalized internal use software and the related useful life for amortization; and whether or not to consolidate a VIE. Fair Value GAAP requires the categorization of the fair value of assets and liabilities into three broad levels that form a hierarchy based on the transparency of inputs to the valuation. Level Measurement 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. 2 Inputs are other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets and inputs other than quoted prices that are observable for the asset or liability. 3 Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The Company follows this hierarchy for its assets and liabilities, with classifications based on the lowest level of input that is significant to the fair value measurement. The following summarizes the Company’s assets and liabilities within the fair value hierarchy at September 30, 2025 and December 31, 2024: 18 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Level Assets and Liabilities Measurement 1 Cash and cash equivalents and restricted cash Estimates of fair value are measured using observable, quoted market prices, or Level 1 inputs. Digital assets Estimates of fair value are measured using observable, quoted digital asset prices within the Company’s principal market at the time of measurement as Level 1 inputs. 2 Marketable securities Estimates of fair value are measured based upon observable market data of similar instruments. Publicly-traded face-amount certificates Estimates of fair value are measured based upon observable market data of similar instruments. 3 Marketable Securities —Residual Interest Securities Estimates of fair value are measured based upon discounted expected future cash flows arising from the securitization collateral cash flows after payments of principal and interest to senior noteholders and other fees, incorporating assumptions of scheduled principal and interest collections; prepayment and default rates; and debt-to-income and loan-to-value ratios. Loans Estimates of fair value are measured based upon discounted expected future contractual loan cash flows, incorporating assumptions of scheduled principal and interest collections; prepayment and default rates; and debt-to-income and loan-to-value ratios. Loan servicing assets Estimates of fair value are measured based upon discounted expected future cash flows arising from the market fees earned to service underlying similar loans, net of market servicing costs, of the forecasted loan balances, incorporating scheduled principal and interest collections as well as prepayment and default rates. Significant Inputs — For the assets and liabilities measurements above, the Company uses the following significant inputs: • Conditional Prepayment Rate (“CPR”) — The percentage per annum of a pool of loans expected to voluntarily repay principal in advance of scheduled, contractual payment terms based on available market data for similar loan types and prepayment statuses. • Constant Default Rate (“CDR”) — The percentage per annum of a pool of loans expected to experience delinquency of greater than 90 days based on available market data for similar loan types and delinquency statuses. • Servicing Rates — Servicing rates used by the Company are based on available market data for similar loan types and delinquency statuses. • Discount Rate — Expected future cash flows are discounted at a rate derived from market data for similar financial instruments or related collateral. Fair Value Option — The fair value option provides the Company with an irrevocable option to elect fair value as an alternative measurement for selected financial instruments upon initial recognition of an asset or liability, which the Company is then required to carry at fair value and reflect changes thereon in earnings. The Company elected the fair value option for marketable securities, including retained security interests, publicly-traded face-amount certificate liabilities, and loans as management believes incorporating current market conditions in the carrying value of these financial instruments provides better information regarding the Company’s economic exposure to these assets. Valuation Process — On a quarterly basis, with assistance from an independent valuation firm, management estimates the fair value of the Company’s Level 3 assets and liabilities. The Company’s determination of fair value is based upon the best information available for a given circumstance and may incorporate assumptions that are management’s best estimates after considering a variety of internal and external factors. When an independent valuation firm expresses an opinion on the fair value of an asset or liability in the form of a range, management selects a value within the range provided by the independent valuation firm to assess the reasonableness of management’s estimated fair value for that asset or liability. At September 30, 2025, the Company’s valuation process for Level 3 measurements, as described below, was conducted internally or by an independent valuation firm and reviewed by management: • Marketable Securities — Residual Interest Securities — Management generally classifies the Company’s investments in the residual interests of securitizations collateralized by loans as Level 3 assets in the fair value 19 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) hierarchy given such assets lack sufficient observable market activity to classify as Level 2. The Company also holds marketable securities in certain securitizations with recent similar transactions in active markets to derive the fair value of those securities as Level 2 assets. • Loans — Management generally considers the Company’s loans as Level 3 assets in the fair value hierarchy as such assets are illiquid investments that are specific to the loan product, for which there is limited market activity. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of each loan categorized as a Level 3 asset. • Loan Servicing Asset — Management generally considers the Company’s servicing assets as Level 3 assets in the fair value hierarchy given such assets are illiquid contracts that are specific to the loan pool serviced. Servicing fees earned, and costs incurred, are derived from various loan types and are adjusted for the loans the Company services. • Other Valuation Matters — For Level 3 assets acquired, and liabilities assumed, during the calendar month immediately preceding a quarter end that were conducted in an orderly transaction with an unrelated party, management generally believes that the transaction price provides the most observable indication of fair value given the illiquid nature of these assets or liabilities unless management is aware of any circumstances that may cause a material change in the fair value through the remainder of the reporting period. For instance, significant changes in a counterparty’s intent or ability to make payments on a financial asset may cause material changes in the fair value of that financial asset. See Note 12 for additional information regarding the valuation of the Company’s assets and liabilities. Transfers and Servicing In situations where the Company is the transferor of financial assets to an entity that it does not consolidate, the Company assesses whether the transfer of the underlying assets would qualify for sale accounting or should be accounted for as secured borrowing. A special purpose entity (“SPE”) is an entity designed to fulfill a specific limited need of the company that organized it. SPEs are often used to facilitate transactions that involve securitizing financial assets or resecuritizing previously securitized financial assets. The objective of such transactions may include obtaining non-recourse financing, obtaining liquidity, or refinancing the underlying securitized financial assets on improved terms. Securitization involves transferring assets to an SPE to convert all or a portion of those assets into cash before they would have been realized in the normal course of business through the SPE’s issuance of debt or equity instruments. Investors in an SPE usually have recourse only to the assets in the SPE and, depending on the overall structure of the transaction, may benefit from various forms of credit enhancement, such as over-collateralization in the form of excess assets in the SPE, priority with respect to receipt of cash flows relative to holders of other debt or equity instruments issued by the SPE, or a line of credit or other form of liquidity agreement that is designed with the objective of ensuring that investors receive principal and/or interest cash flow on the investment in accordance with the terms of their investment agreement. The Company generally securitizes loans if possible. The Company may periodically enter into transactions in which it transfers assets to a third party. Upon a transfer of financial assets, the Company may retain or acquire subordinated interests in the related assets. In such circumstances, the Company determines whether it has surrendered control over the transferred financial assets, considering its continuing involvement in the transferred financial asset through arrangements or agreements made contemporaneously with, or in contemplation of, the transfer. If the Company surrenders control of the financial assets, including legal isolation of the financial asset and ability of the transferee to pledge or exchange the transferred assets without constraint, the Company accounts for the transfer as a sale and (a) recognizes the financial and servicing assets it acquired or retained and the liabilities it has incurred, (b) derecognizes financial assets it has sold and liabilities extinguished, (c) recognizes a gain (loss) for the fair value of servicing assets (liabilities), if any, obtained as “Gain (loss) on servicing asset, net” in the Condensed Consolidated Statements of Operations, and (d) for loans sold, recognizes a realized gain or loss for the difference between the cash proceeds from the sale of loans and the carrying value of the loans sold as “Gain on sale of loans, net” in the Condensed Consolidated Statements of Operations. 20 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) If the Company has not transferred the entire original financial asset to an entity that is not consolidated and/or when the transferor has continuing involvement with the transferred financial asset that precludes treating the transfer as a sale, the Company retains the financial assets with a related secured borrowing liability for the collateral pledged and does not recognize any gain or loss. Leases The Company recognizes right-of-use assets (“ROU”) and lease liabilities for operating leases at the commencement date of the lease based on the present value of remaining fixed and determinable lease payments over the lease term. The Company calculates the present value of future payments by using an estimated incremental borrowing rate, which approximates the rate at which the Company would borrow on a secured basis and over a similar term, and recognizes lease expense for operating leases on a straight-line basis over the lease term. ROU assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company uses the incremental borrowing rate on the commencement date in determining the present value of the lease payments. Derivatives The Company enters into long and short treasury note futures contracts to manage its interest rate risk and, from time to time, enhance investment returns. The Company’s derivatives are recorded as either assets or liabilities in the Condensed Consolidated Balance Sheets and measured at fair value. The Company’s derivative financial instrument contracts are not designated as accounting hedges under GAAP; accordingly, all changes in fair value are recognized in earnings. The Company estimates the fair value of its derivative instruments as described in Note 12 of these Condensed Consolidated Financial Statements. The Company recorded aggregate net realized and unrealized gains (losses) for derivative assets and liabilities within “Gain on sale of loans, net” in the Condensed Consolidated Statements of Operations of $ 0.3 million and $( 6.1 ) million for the three and nine months ended September 30, 2025, respectively, and $ — million and $ — million for the three and nine months ended September 30, 2024, respectively. The Company records derivative assets and liabilities within “Other current liabilities” and “Other current assets” in the Condensed Consolidated Balance Sheets. As of September 30, 2025 and December 31, 2024, we recorded the following balances, respectively: Notional September 30, 2025 December 31, 2024 Other current assets Treasury note futures $ 213,700 $ 11 $ 329 Balance Sheet Measurement Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid short-term investments with maturities less than 90 days when purchased to be cash equivalents, which are primarily money market funds for the Company. Substantially all amounts on deposit with federally insured financial institutions exceed insured limits. Restricted cash represents cash held on behalf of third parties, primarily principal and interest collected on behalf of loan investors as part of the Company’s servicing operations and held in restricted accounts. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows: September 30, 2025 December 31, 2024 Cash and cash equivalents $ 1,097,123 $ 287,256 Restricted cash 64,590 57,777 Total cash, cash equivalents and restricted cash $ 1,161,713 $ 345,033 21 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Investments Marketable Securities Upon securitization of loans that the Company originates or purchases in transactions that qualify as sales, the Company is required to retain a certain portion of the securitization trusts into which the loans are sold in the form of debt securities and/ or beneficial or other interests to satisfy risk retention regulations. In each case, the Company elected the fair value option, where applicable, for the securities and other interests acquired at the time of sale, and it carries those securities and other interests at their fair values. Realized and unrealized changes in fair value are recorded as components of “Gain on sale of loans, net” in the Condensed Consolidated Statements of Operations resulting in a total increase of $ 0.9 million and $ 4.5 million for the three and nine months ended September 30, 2025, respectively, and $ 0.9 million and $ 2.7 million for the three and nine months ended September 30, 2024, respectively. Digital Assets The Company holds digital assets for sale, measured at fair value, with changes in fair value recognized in “Other income, net” in the Condensed Consolidated Statements of Operations. Realized gains and losses on disposition of digital assets held for sale are recognized on a first-in-first-out basis that are influenced by the volume and mix of digital assets received and used as well as the timing of the digital asset turnover. Cash flows from digital assets held for sale are recorded as investing activities in the Condensed Consolidated Statements of Cash Flows. The Company also holds digital assets held as collateral against personal loans that the Company originates. Recognized customer assets and liabilities comprise customer custodial funds and corresponding customer custodial liabilities that represent the Company’s obligation to return these assets to customers. Digital asset collateral is recognized if the Company obtains control of the collateral. The company does not obtain control of digital assets provided as collateral in self-custody via decentralized Multi-Party Computation (“MPC”) wallets. The Company does not use customer digital assets held as collateral for any loan, margin, rehypothecation, or other similar activities to which the Company or its affiliates are a party, without the customer’s consent. The Company also holds digital assets supported by blockchain network protocols that verify new blocks of data through a consensus mechanism where digital asset holders are selected to participate in network functions, such as verifying new blocks, based on the relative percentage of assets they have placed at stake. By performing these functions, new digital assets are created and awarded to those performing the function, and the Company recognizes such awards as “Other income, net” in the Condensed Consolidated Statements of Operations when earned and available for use. See Notes 3 and 12 for additional information regarding the Company’s investments and related valuation, respectively. Servicing Rights Servicing rights represent the contractual right to service the loan that the Company either originates and sells or purchases and sells. Upon loan sale, the Company recognizes a servicing asset at fair value, with realized and unrealized changes in fair value recorded as components of “Gain (loss) on servicing asset, net” in the Condensed Consolidated Statements of Operations. Realized gains (losses) on servicing rights represent the excess (deficient) expected benefits of servicing that are greater (less) than market compensation for servicing obligations, based on the estimated fair value of servicing rights retained. Servicing rights are aggregated into pools as applicable, and each pool of servicing rights is accounted for in the aggregate as a servicing asset. After the sale of loans that the Company services, the Company recognizes the monthly contractual servicing fees it earns, gross of subservicing fees paid to a third party subservicer, based upon the unpaid principal balance (“UPB”) of the underlying loans as revenue, presented as “Servicing fees” in the Condensed Consolidated Statements of Operations. See Notes 4 and 12 for additional information regarding the Company’s servicing rights and valuation, respectively. Loans The Company’s loan portfolio primarily consists of originated or purchased HELOC loans classified as either (a) held-for-investment when management has the intent and ability to hold such loans until maturity or repayment for the foreseeable 22 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) future or (b) held for sale when management intends to sell the loans. Additionally, the Company originates personal loans collateralized by digital assets. Upon origination or purchase, the Company elects the fair value option for all loans, except for those made to related parties, and carries those loans at their fair value. Realized and unrealized changes in fair value are recorded as components of “Gain on sale of loans, net” in the Condensed Consolidated Statements of Operations, resulting in a net gain (loss) of $ 9.2 million and $ 7.7 million for the three and nine months ended September 30, 2025, respectively, and $ 17.9 million and $ 29.4 million for the three and nine months ended September 30, 2024, respectively. The Company recognizes loan discounts, if any, on the loans it originates as “Origination fees” in the Condensed Consolidated Statements of Operations at time of origination. See Notes 5 and 12 for additional information regarding the Company’s loans and related valuation, respectively, and see Note 10 for information regarding the Company’s commitments and obligations related to loans the Company holds and sells. Debt The Company primarily finances its operations using (a) warehouse credit facilities secured by the loans it originates or acquires (“Funding Debt”), (b) repurchase agreements for the securities it retains upon securitization of those loans, excluding residual interests therein (“Retained Interest Facility”), and (c) a promissory note under a senior secured financing facility whereby the Company pledges certain eligible loan servicing rights, net of expected costs (“MSR Note”). Each of these borrowing arrangements are treated as collateralized financing transactions and carried at their contractual amounts, excluding accrued interest, as specified in the respective agreements. The carrying amount of the Company’s secured financing agreements and warehouse credit facilities approximates fair value as they are either short-term and/or mark-to-market facilities. The Company pledges certain securities, loans, or other assets as collateral under secured financing agreements and warehouse credit facilities with financial institutions, the terms and conditions of which are governed by each respective lender agreement. The amounts available to be borrowed under repurchase agreements and warehouse credit facilities are dependent upon the fair value of the securities, or unpaid principal balance of loans pledged as collateral, which can fluctuate with changes in interest rates, type of security, and liquidity conditions within the banking, mortgage finance, and real estate industries. The Company capitalizes and amortizes deferred debt facility costs incurred when entering financing agreements on a straight-line basis over the expected term of term facilities or weighted-average life of the expected principal repayments for revolving credit facilities. The Company recognizes amortization of deferred debt facility costs, as well as deferred amounts written off and contractual interest and fees owed as incurred, as interest expense in its Condensed Consolidated Statements of Operations, which does not materially differ from the effective interest method applied to such facilities. The Company also consolidates the Figure Certificate Company (“FCC”) that issues face-amount certificates that trade on blockchain as an interest-bearing stablecoin (“YLDS”), which the Company carries at fair value and expenses financing costs as incurred. See Note 6 for additional information regarding the Company’s debt. Other Assets and Liabilities At September 30, 2025 and December 31, 2024, (a) Other current assets primarily included prepaid expenses and distressed asset claims and (b) Other non-current assets primarily included right-of-use lease assets, internally developed software, and other investments. At September 30, 2025 and December 31, 2024, Other current liabilities primarily included digital asset collateral repayment obligations, loan indemnification reserve, and other payables. See Notes 3 and 12 for further information on the digital asset collateral repayment obligation. Income Recognition Revenue Recognition The Company’s revenues are substantially comprised of ecosystem and technology fees, loan originations and sales gains or losses, including interest income earned on those loans, and loan servicing. 23 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Ecosystem Fees The Company provides certain loan originators access to its custom-built marketplace platform to facilitate the origination, buying, and selling of standardized assets originated through its loan origination system in exchange for fees to use its technology for origination. The provision of continuous stand-ready access to this platform is the Company’s only performance obligation. Accordingly, the performance obligation is satisfied when each loan is originated and the Company has the right to invoice the loan originator upon origination. Loan originators can access the platform until their status is terminated via written notice by either the loan originator or the Company. The Company elected to use the as-invoiced practical expedient to recognize revenue associated with this subscription as the invoiced amount directly corresponds to the value to the loan originator of the Company’s performance obligation completed to date since the platform no longer provides any further utility to the loan originator after loan origination. Ecosystem fees are one-time fees applied on a loan-by-loan basis, and invoiced monthly based on the monthly funded volume the loan originator originated in the previous complete calendar month. The fees are based on a sliding scale that decreases as higher volume tiers are reached, with some loan originators subject to a minimum fee threshold applicable to higher volume tiers. The Company assesses the tiered volume on a month-to-month basis and volume applied to tiers reached in any given month does not apply to future periods. Technology Fees The Company earns volume-based technology and processing fees, based on the principal balance of each loan originated from our originator partners, excluding wholesale brokers, using the Technology Offering, access to which represents the Company’s sole performance obligation that is satisfied upon each loan transaction, as well as a fee associated with the execution of loan sales. The Technology Offering enables partners, who are retail and wholesale lenders, to originate loans branded under each partner’s name, through access to a suite of services such as loan application, submission and verification, risk underwriting, and electronic loan offer and documentation delivery for borrower execution. The Company bills a fixed amount for each loan originated and generally bills associated fees on a monthly basis with customary payment terms. As such, the Company’s contracts with customers do not include a significant financing component. The Company recognizes ecosystem and technology fees in accordance with FASB Accounting Standards Codification Topic (“ASC”) 606, Revenue from Contracts with Customers or ASC 310 , Receivables . If the Company purchases a loan on which it earns ecosystem or technology fees, it recognizes the revenue in accordance with ASC 310 upon purchase, or origination if the loan seller originates a loan using the Company’s platform, as the Company elects the fair value option for those loans. When the Company does not purchase the loan, it recognizes the revenue in accordance with ASC 606 upon invoicing as the Company elected the practical expedient to recognize revenue in the amount to which the Company has the right to invoice. At the Company’s discretion and subject to its right of first refusal, the Company may purchase loans originated using its Technology Offering and account for such purchases in accordance with ASC 860, classified as Loans held for sale, at fair value in the Condensed Consolidated Balance Sheets as the Company intends to resell these loans to third-party loan investors while retaining servicing rights. 24 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Program Fees The Company earns a fee for arranging and facilitating the transfer of financials assets through the securitization of HELOCs, for which the Company accounts under ASC 860. This fee is based on the outstanding principal balance of the transferred HELOC and is fully earned and paid on the securitization closing date. The following table presents the components of “Ecosystem and technology fees” in the Condensed Consolidated Statements of Operations: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Ecosystem and technology fees Technology offering fees (A) $ 15,548 $ 5,179 $ 35,195 $ 15,332 Ecosystem fees (B) 16,248 — 35,501 — 31,796 5,179 70,696 15,332 Program fees (C) 3,895 2,144 8,749 4,498 Total ecosystem and technology fees $ 35,691 $ 7,323 $ 79,445 $ 19,830 (A) Technology offering fees include fees that are accounted for under ASC 606, as well as $ 6.7 million and $ 13.5 million for the three and nine months ended September 30, 2025 that are in the scope of ASC 310. All technology fees recorded for the three and nine months ended September 30, 2024 were within the scope of ASC 606. (B) Ecosystem fees include fees that are accounted for under ASC 606, as well as $ 8.5 million and $ 17.5 million for the three and nine months ended September 30, 2025 that are in the scope of ASC 310. The Company did not earn ecosystem fees for the three and nine months ended September 30, 2024. (C) Program fees are not in the scope of ASC 606. Interest Income The Company earns interest income primarily from three sources: • Loans — The Company accrues interest income on loans it holds based on the UPB outstanding at contractual interest rates, reported as “Interest income” in the Condensed Consolidated Statements of Operations. Loans are placed on nonaccrual status when they become 90 days past due (30 days past due for collateralized personal loans) or when management doubts full recovery of interest and principal. Loans are considered past due when contractually required principal or interest payments have not been made on the due dates. When a loan is placed on nonaccrual status, the accrued and unpaid interest is reversed as a reduction of interest income and accrued interest receivable. Interest income is subsequently recognized only to the extent cash payments are received or when the loan has been placed back in accrual status. Loans are restored to accrual status when the loan becomes current and management expects repayment of the remaining contractual principal and interest. The Company also recognizes cash received on non-accrual loans as interest income after all contractual principal is repaid or expects collection of the remaining UPB. • Marketable Securities — The Company recognizes interest income on debt securities where the Company expects to collect all contractual cash flows, and the debt security cannot be contractually prepaid in such a way that the Company would not recover substantially all of its recorded investment based on the stated coupon rate and the outstanding principal amount of the debt security. The Company recognizes interest income on beneficial interests based on the investment’s accretable yield, which represents the difference between the expected undiscounted cash flows and the carrying value of the investment. The Company recognizes the accretable yield as interest income on a prospective level yield basis over the life of the expected cash flows. Changes in the amount or timing of actual or expected cash flows may change the accretable yield, and the Company adjusts interest income recognized in future periods using a recalculated level yield applied to the then-current carrying value. Increases (decreases) in the amount of cash flows or acceleration (deceleration) of cash flows, in isolation, generally increase (decrease) the interest income recognized in future periods. • Cash and Cash Equivalents — The Company accrues interest income monthly for cash held at depository institutions and investments in short-term instruments such as money-market funds. Other Revenue 25 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Other revenue consists of fees earned and gains (losses) on the Company’s investments in certain entities during the three and nine months ended September 30, 2025 and 2024. See Note 3 for additional information regarding the Company’s equity method investments. See “— Loans” for a discussion of revenues recognized as “Origination fees” and “Gain on sale of loans, net”, and see “— Servicing” for a discussion of revenue recognized as “Servicing fees” and “Gain (loss) on servicing asset, net”, respectively, in the Condensed Consolidated Statements of Operations. Expense Recognition Operating Costs The Company presents stock-based compensation, software costs, and other operational expenses within the following functional groups based on the headcount allocable to each group and the specific operation of each group: • General and Administrative — Corporate activities not allocable to the other groups • Technology and product development — Development and maintenance of the Technology Offering • Operations and processing — Loan underwriting, origination, and servicing • Sales and marketing — Advertising, marketing, and sales Stock-Based Compensation The Company issues stock options and restricted stock units (“RSUs”) to employees and non-employees, including directors and consultants. Stock options are initially measured at fair value at the date of grant using a Black-Scholes option-pricing model, and RSUs are measured at the fair market value of the Company’s common stock at the grant date. For RSUs that include a market condition, the grant-date fair value is estimated using a Monte Carlo simulation model, which incorporates assumptions regarding the expected volatility of the Company’s common stock and other market-related factors. Compensation expense for such awards is recognized over the requisite service period, regardless of whether the market condition is ultimately satisfied. Stock-based compensation expense for options and RSUs is recognized based on the respective grant-date fair values. For awards that include a performance-based vesting requirement, the Company recognizes expense when it is probable that the performance-based condition is satisfied and the award has satisfied other vesting conditions, if any. The Company recognizes compensation expense over the requisite service period, generally on a straight-line basis for awards that vest solely based on continued service, or immediately if there is no service period. The Company elects to account for forfeitures as they occur. See Note 7 for additional information regarding the Company’s stock-based compensation. Software Costs The Company incurs costs associated with the development, maintenance, purchase, and licensing of software. The Company expenses costs to maintain software, preliminary stage costs incurred before development commences, and other costs required by GAAP, presented as operating costs, aggregated by most closely associated functional group, in the Condensed Consolidated Statements of Operations. The Company capitalizes remaining costs as permitted by GAAP, including costs associated with substantively new software functionality for internal use and technologically feasible software for external use that the Company evaluates for impairment at least quarterly. Once internally-developed software is substantively complete and ready for intended use or upon release of software for external use, the Company amortizes capitalized costs over the estimated useful lives on a straight-line basis within “Technology and product development” expense in the Condensed Consolidated Statements of Operations as follows: 26 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Estimated Useful Life (Years) September 30, 2025 December 31, 2024 Internally developed software 3 $ 96,741 $ 80,664 Accumulated amortization (A) ( 69,885 ) ( 57,503 ) Net $ 26,856 $ 23,161 (A) The Company amortized $ 4.3 million and $ 12.4 million of capitalized internally-developed software costs during the three and nine months ended September 30, 2025, respectively, and $ 3.8 million and $ 13.3 million, respectively, during the three and nine months ended September 30, 2024. During the nine months ended September 30, 2024, the Company impaired and wrote-off $ 6.3 million of software it developed that it intended to use to offer equity management services, but that the Company did not ultimately offer, as well as $ 2.3 million of software it purchased to administer its exchange platform, but that the Company no longer planned to use as intended since the seller subsequently provided enhanced technology services that made the impaired software obsolete. Accordingly, the Company recognized an aggregate impairment of $ — million and $ 8.6 million in “Other income, net” in the Condensed Consolidated Statements of Operations in connection with this software during the three and nine months ended September 30, 2024, respectively. Other Operational Costs In addition to stock-based compensation and software costs, the Company primarily incurs costs related to salaries and bonuses of its employees that it accrues on a quarterly basis, or annually for bonuses based on annual service requirements, as well as costs it expenses as incurred, including advertising and promotion; loan underwriting, origination, and servicing; legal, audit, and other professional services; rent; and other general and administrative costs. Sales and marketing costs, including marketing services, direct mail, and digital advertising campaigns, are expensed as incurred. Sales and marketing costs for the three and nine months ended September 30, 2025 was $ 22.1 million and $ 54.1 million, respectively, which included $ 19.1 million and $ 46.0 million, respectively, of advertising expense. Sales and marketing costs for the three and nine months ended September 30, 2024 was $ 15.0 million and $ 41.0 million, respectively, which included $ 13.4 million and $ 37.5 million, respectively, of advertising expense. Other income, net For the three and nine months ended September 30, 2025 and 2024, “Other income, net” included changes in the fair value of digital assets, realized gains and losses incurred on the sale of digital assets held for sale, gains on legal settlement, and impairment of internally developed software. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the Condensed Consolidated Financial Statements’ carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards, measured using the enacted tax rates that are expected to be in effect when the temporary differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income (loss) in the period that includes the enactment date. The Company evaluates the likelihood of future realization of deferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more-likely-than-not that deferred tax assets will not be realized. The Company accounts for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. See Note 13 for additional information regarding the Company’s income taxes. Recently Issued Accounting Standards With the exception of those discussed below, there have not been recent changes in accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) that are applicable to, or adopted by, the Company during the nine months ended September 30, 2025. 27 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Recently Issued Accounting Standards Not Yet Adopted In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for a Share-Based Payment from a Customer in a Revenue Contract (“ASU 2025-07”). The ASU expands the population of contracts excluded from derivative accounting by excluding contracts whose underlyings are based on operations or activities specific to one of the parties to the contract. In addition, the ASU clarifies that a share-based payment received from a customer as consideration for goods or services should be accounted for under ASC 606’s share-based noncash consideration guidance, and that guidance in other topics should not be applied unless and until the entity’s right to receive or retain the share-based noncash consideration is unconditional under ASC 606. ASU 2025-07 is effective for annual periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with earlier adoption permitted. The Company is currently evaluating the effect of adopting ASU 2025-07 on its financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for software costs by removing references to prescriptive project stages and establishing a new recognition threshold. Under ASU 2025-06, entities are required to begin capitalizing internal-use software costs once management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used as intended. In assessing the probability threshold, entities must evaluate whether significant development uncertainty exists, including unresolved technological innovations or unproven features, or whether significant performance requirements have not been identified or continue to be substantially revised. The amendments also incorporate website development cost guidance into Subtopic 350-40, require property, plant, and equipment disclosures for capitalized internal-use software costs, and eliminate duplicative intangible disclosure requirements. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect of adopting ASU 2025-06 on its financial statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under topic 606. The practical expedient lets an entity assume that when estimating expected credit losses, current conditions as of the balance sheet date do not change for the remaining life of the asset. The accounting policy election applies to entities other than public business entities who elect the practical expedient to consider collection activity after the balance sheet date when estimating expected credit losses. ASU 2025-05 is effective for periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the effect of adopting ASU 2025-05 on its financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. ASU 2024-03 also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclosure of the total amount of selling expenses, and in annual reporting periods. the Company’s definition of selling expenses. ASU 2024-03 is effective for public business entities’ annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of adopting ASU 2024-03 on its disclosures. 28 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) In December 2023, the FASB issued ASU 2023‐09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. ASU 2023-09 is effective for public business entities’ annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the effect of adopting ASU 2023-09 on its disclosures. NOTE 3 – INVESTMENTS The Company holds investments across three primary categories: marketable securities that represents the interests it is required to retain upon securitizing loans in transactions that are considered sales under GAAP, digital assets in the form of cryptocurrencies held for sale and held as collateral for personal loans, and investments in entities that the Company does not consolidate. Marketable Securities The following table summarizes the Company’s marketable securities at September 30, 2025 and December 31, 2024: September 30, 2025 Outstanding Face Amount (A) Net Fair Value Adjustment Carrying Value (B) Marketable securities, at fair value Investment grade debt securities (C) $ 175,139 $ 1,763 $ 176,902 Below investment grade debt securities (D) 24,145 339 24,484 Residual interest securities (E) 38,175 133 38,308 Total $ 237,459 $ 2,235 $ 239,694 December 31, 2024 Outstanding Face Amount (A) Net Fair Value Adjustment Carrying Value (B) Marketable securities, at fair value Investment grade debt securities (C) $ 121,278 $ ( 102 ) $ 121,176 Below investment grade debt securities (D) 7,897 ( 90 ) 7,807 Residual interest securities (E) 24,138 10,368 34,506 Total $ 153,313 $ 10,176 $ 163,489 (A) The total outstanding face amount represents the aggregate face amount of the debt securities outstanding at each period end, excluding residual interest securities and interest-only securities. (B) The Company elected the fair value option for marketable securities; therefore, carrying value represents fair value. See Note 12 for additional information regarding the valuation of the Company’s marketable securities. (C) Represents debt securities rated A- or above by DBRS Morningstar or comparable rating by other rating agencies. (D) Represents debt securities rated below A- by DBRS Morningstar or comparable rating by other rating agencies. (E) Represents residual interests and non-rated securities in securitizations that are not considered debt securities, including 15 and 11 non-rated securities with aggregate outstanding face amounts of $ 20.4 million and $ 15.1 million at September 30, 2025 and December 31, 2024, respectively, and 12 and 6 interest-only securities based upon aggregate outstanding principal amounts of $ 17.8 million and $ 9.1 million at September 30, 2025 and December 31, 2024, respectively. 29 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Digital Assets The following table summarizes the significant digital assets held by third-party custodians on behalf of the Company’s customers at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Units Fair Value (A) Units Fair Value (A) Digital Assets Held as Collateral (B) Bitcoin (BTC) 661 $ 75,367 531 $ 49,593 Ethereum (ETH) 2,327 9,649 4,457 14,846 Total 2,988 $ 85,016 4,988 $ 64,439 (A) The Company records digital assets and the corresponding liability for digital assets held as collateral at fair value, and the Company does not consider the cost basis to be meaningful. See Note 12 for additional information regarding the valuation of these assets and liabilities. (B) Digital assets held for collateral are included in “Digital assets” in the Condensed Consolidated Balance Sheets. The Company originates loans collateralized by digital assets and recorded a corresponding $ 85.0 million and $ 64.4 million liability at September 30, 2025 and December 31, 2024, respectively, representing the fair value digital assets owed to the borrower in the event of loan repayment that is included in “Other current liabilities” in the Condensed Consolidated Balance Sheets. The following table summarizes the significant digital assets held by the Company, and by third-party custodians on behalf of the Company, at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Units Cost Basis Fair Value (A) Units Cost Basis Fair Value (A) Digital Assets Held for Sale (B) Solana (SOL) (C) 84,726 $ 11,701 $ 17,687 95,139 $ 10,110 $ 18,020 USDC 4,143,156 4,143 4,143 2,414,254 2,414 2,414 USDT 958,297 958 958 — — — Other digital assets (D)(E) Various 1,844 2,381 Various 2,693 2,693 Total $ 18,646 $ 25,169 $ 15,217 $ 23,127 (A) The Company records digital assets held for sale at fair value. See Note 12 for additional information regarding the valuation of these assets and liabilities. (B) Digital assets held for sale are included in both “Digital assets” and “Digital assets, non-current” in the Condensed Consolidated Balance Sheets, depending on the nature of the underlying asset and related restrictions. (C) Includes 58,204 SOL that are subject to a lock-up period through January 2028 and unlocked on a monthly basis based on a contractual schedule. The locked tokens are not accessible, are staked, and earn rewards during the lock up period. (D) Includes native utility tokens used by the Company as a medium of exchange (HASH), maintained by an affiliated entity, which is carried at cost in the Condensed Consolidated Balance Sheets. See Note 11 for additional information regarding the related party relationship. (E) Includes various other digital asset balances, none of which individually represented more than 5% of the carrying value of total digital assets held for sale other than HASH, which had a cost basis of $ 1.5 million and $ 1.5 million at September 30, 2025 and December 31, 2024, respectively. 30 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) The following table summarizes activities involving the Company’s digital assets held as collateral and held for sale for the nine months ended September 30, 2025 and 2024: Held as Collateral Held for Sale Balance at December 31, 2023 $ — $ 5,865 Purchases (A) — 25,777 Sales (B) — ( 10,842 ) Collateral received (C) 35,941 — Collateral returned (C) ( 3,057 ) — Gains (D) — 1,176 Distributions from Fund I (E) — 240 Change in fair value — 5,889 Impairment of digital assets — ( 5,851 ) Balance at September 30, 2024 $ 32,884 $ 22,254 Balance at December 31, 2024 $ 64,439 $ 23,127 Purchases (A) — 9,938 Sales (B) — ( 12,634 ) Collateral received (C) 55,946 — Collateral returned (C) ( 44,597 ) — Gains (D) — 6,052 Distributions from Fund I (E) — 1,759 Change in fair value 9,228 ( 3,073 ) Balance at September 30, 2025 $ 85,016 $ 25,169 (A) Includes receipts of digital assets held for sale resulting from the disbursement of cash. (B) Includes transactions related to the settlement and transfer of digital assets held for sale in exchange for the receipt of cash. (C) Collateral received and returned includes movements impacting digital assets held as collateral associated with borrower personal loan activities which can include receipt of digital assets held as collateral related to loan originations, combined loan to value maintenance, and returns of collateral owed to the borrower once a loan has been repaid. (D) Includes realized gains incurred on the sale of digital assets held for sale, and the recognition of income associated to blockchain staking rewards which are reflected in “Other income, net” in the Condensed Consolidated Statements of Operations. No realized gains were recorded for digital assets held as collateral, as the liquidation of collateral reduces the corresponding liability and cash proceeds are applied to the borrower’s personal loan balance. (E) Represents distributions of digital assets received from SOL Opportunity Fund L.P. (“Domestic Solana Fund”), a dom estic fund that invests primarily in SOL. Safeguarding of Digital Assets The Company engages a third party to provide custodial services for digital assets, which includes holding the cryptographic key information and working to protect the digital assets from loss or theft. The third-party custodian holds digital assets as custodial assets in an account in the Company’s name for the benefit of borrowers that collateralize their loans using digital assets. The Company maintains internal recordkeeping of the collateral in the form of digital assets, including the amount and type of digital assets owned by each borrower. 31 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Equity Investments The Company holds the following minority investments in certain entities not considered significant to the Company and recorded within “Other non-current assets” in the Condensed Consolidated Balance Sheets, with the Company’s share of net income of equity-method investees recorded as “Other revenue” in the Condensed Consolidated Statements of Operations. The following table presents the carrying value of these investments at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Equity Method Investees Domestic Solana Fund (A) $ 3,916 $ 5,748 Reflow (B) 50 920 Fig SIX (C) 2,477 — 6,443 6,668 Measurement Alternative Investments JAM FINTOP (D) 1,337 1,542 Total Equity Investments $ 7,780 $ 8,210 (A) Represents a 4.8 % equity interest in Domestic Solana Fund at September 30, 2025 and December 31, 2024. (B) Represents a 17.3 % interest in Reflow Services LLC (“Reflow”), an SEC-registered investment adviser, at September 30, 2025 and December 31, 2024. (C) Represents a 5.0 % equity interest in Fig SIX Mortgage, LLC (“Fig SIX”), a company domiciled in the United States of America, at September 30, 2025. (D) Represents a 1.0 % equity interest in JAM FINTOP Blockchain LP (“JAM FINTOP”), an investment company domiciled in the United States of America, at September 30, 2025 and December 31, 2024. A summary of changes in the Company’s equity investments is as follows: Equity Method Investees Measurement Alternative Investments Total Balance at December 31, 2023 $ 477 $ 1,542 $ 2,019 Share of investee earnings 1,114 — 1,114 Dividends received ( 668 ) — ( 668 ) Additional contributions 3,342 — 3,342 Measurement alternative adjustments n.a. — — Balance at September 30, 2024 $ 4,265 $ 1,542 $ 5,807 Balance at December 31, 2024 $ 6,668 $ 1,542 $ 8,210 Share of investee earnings ( 475 ) — ( 475 ) Dividends received ( 2,353 ) — ( 2,353 ) Additional Contributions 2,603 — 2,603 Measurement alternative adjustments n.a. ( 205 ) ( 205 ) Balance at September 30, 2025 $ 6,443 $ 1,337 $ 7,780 32 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) NOTE 4 – SERVICING The following table summarizes the Company’s servicing assets at September 30, 2025 and December 31, 2024: September 30, 2025 UPB of Underlying Loans Loan Count Carrying Value (A) HELOC loans $ 11,148,741 302,066 $ 98,120 Mortgage loans 149,482 273 1,880 Total $ 11,298,223 302,339 $ 100,000 December 31, 2024 UPB of Underlying Loans Loan Count Carrying Value (A) HELOC loans $ 7,933,975 113,413 $ 86,465 Mortgage loans 162,908 294 2,032 Total $ 8,096,883 113,707 $ 88,497 (A) The Company records loan servicing assets at fair value. See Note 12 for additional information regarding the valuation of these assets. The following table includes a rollforward of the Company’s servicing assets for the nine months ended September 30, 2025 and 2024: Balance at December 31, 2023 $ 55,860 Change in fair value due to: Additions (A) 37,845 Realization of cash flows (B) ( 13,749 ) Change in valuation inputs and assumptions ( 5,516 ) Total impact of change to fair value 18,580 Balance at September 30, 2024 $ 74,440 Balance at December 31, 2024 $ 88,497 Change in fair value due to: Additions (A) 41,903 Realization of cash flows (B) ( 20,180 ) Change in valuation inputs and assumptions ( 10,220 ) Total impact of change to fair value 11,503 Balance at September 30, 2025 $ 100,000 (A) Represents the fair value of servicing rights retained upon sale of originated and purchased loans. (B) Based on the paydown of the underlying loans. 33 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) The table below summarizes the geographic concentration of the loans underlying the servicing rights at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 State Amount Outstanding (A) % of Total Amount Outstanding (A) % of Total California $ 2,872,702 25.4 % $ 2,146,371 26.5 % Florida 1,357,888 12.0 990,404 12.2 Arizona 562,655 5.0 429,469 5.3 Georgia 521,330 4.6 407,651 5.0 Washington 456,709 4.0 362,370 4.5 New Jersey 415,090 3.7 320,124 4.0 North Carolina 327,759 2.9 261,013 3.2 Virginia 360,311 3.2 241,844 3.0 Colorado 305,980 2.7 239,559 3.0 Ohio 350,075 3.1 227,069 2.8 Other (B) 3,767,724 33.4 2,471,009 30.5 Total $ 11,298,223 100.0 % $ 8,096,883 100.0 % (A) Represents the principal balance of the loans that the Company services. (B) The Company did not service loans in any state or U.S. territory contained in “Other” aggregating to more than 5% of the total amount outstanding of the loans that the Company services. The Company serviced international loans of $ 2.8 million and $ — million as of September 30, 2025 and December 31, 2024, respectively, included in Other that represented less than 5% of the total amount outstanding of the loans that the Company services. As part of its servicing operations, the Company held principal, interest, and other borrower payments of $ 326.9 million and $ 198.8 million at September 30, 2025 and December 31, 2024, respectively, due to third-party loan buyers recorded as “Payables to third-party loan owners” in the Condensed Consolidated Balance Sheets. The Company makes payments on these arrangements by remitting amounts due from proceeds received from borrower payments on the underlying loans. Additionally, the Company has outstanding liability obligations to repurchase loans that are in early payment default status. At September 30, 2025 and December 31, 2024, the total obligation to repurchase loans associated with contractual arrangements was $ 14.6 million and $ 13.8 million, respectively, recorded in “Payables to third-party loan owners” in the Condensed Consolidated Balance Sheets. NOTE 5 – LOANS The following table summarizes loans held by the Company at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 UPB Carrying Value (A) Loan Count UPB Carrying Value (A) Loan Count Loans Held for Sale HELOC loans $ 311,672 $ 323,184 6,191 $ 359,155 $ 366,154 4,582 Personal loans (B) 63,185 62,935 645 24,975 24,975 233 Other (C) 3,015 2,913 173 4,977 4,793 326 Total $ 377,872 $ 389,032 7,009 $ 389,107 $ 395,922 5,141 (A) The Company records loans at fair value. See Note 12 for additional information regarding the valuation of these assets. (B) Loans collateralized by digital assets. (C) Primarily contains legacy mortgages and other unsecured loans. Loans are generally placed on non-accrual status when principal or interest is 90 days or more past due. The Company does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material for non-accrual loans. The Company placed loans held for sale with an aggregate UPB of $ 0.9 million and $ 1.2 million and fair value of $ 0.6 million and $ 0.8 million on non-accrual status at September 30, 2025 and December 31, 2024, respectively. The Company did not hold any loans held for investment at September 30, 2025 or December 31, 2024. 34 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of loans held by the Company at September 30, 2025 and December 31, 2024. September 30, 2025 December 31, 2024 Payment Delinquency UPB Carrying Value (A) Carrying Value (A) Over (Under) UPB UPB Carrying Value (A) Carrying Value (A) Over (Under) UPB Loans Held for Sale Current $ 360,044 $ 371,990 $ 11,946 $ 373,876 $ 383,551 $ 9,675 30 to 59 days 3,998 3,800 ( 198 ) 3,535 3,170 ( 365 ) 60 to 89 days 2,362 2,332 ( 30 ) 2,440 2,125 ( 315 ) 90 days or more 11,088 10,557 ( 531 ) 8,548 6,411 ( 2,137 ) Forbearance 380 353 ( 27 ) 708 665 ( 43 ) Total $ 377,872 $ 389,032 $ 11,160 $ 389,107 $ 395,922 $ 6,815 (A) The Company records loans at fair value. See Note 12 for additional information regarding the valuation of these assets. The following table summarizes activities involving the Company’s loans for the nine months ended September 30, 2025 and 2024: Loans held for sale Loans held for investment Balance at December 31, 2023 $ 255,516 $ 61,337 Transfers from Held for Investment to Held for Sale 4,959 ( 4,959 ) Purchases 1,566,219 1,781 Originations 2,409,864 — Sales, net of repurchases ( 3,466,079 ) — Principal payments ( 324,043 ) ( 10,734 ) Change in fair value (A) 16,461 6,104 Loans not yet repurchased 5,245 — Balance at September 30, 2024 $ 468,142 $ 53,529 Balance at December 31, 2024 $ 395,922 $ — Purchases 2,221,013 — Originations 2,561,856 — Sales, net of repurchases ( 4,466,689 ) — Principal payments ( 324,568 ) — Change in fair value (A) 656 — Loans not yet repurchased 842 — Balance at September 30, 2025 $ 389,032 $ — (A) Change in fair value of loans are reflected in “Gain on sale of loans, net” in the Condensed Consolidated Statements of Operations. The top five loan originators for the nine months ended September 30, 2025 and 2024 originated $ 1.7 billion and $ 1.2 billion unpaid principal balance of loans, or 76.3 % and 73.7 %, of total unpaid principal balance of loans purchased by the Company, whose “Gain on sale of loans, net” revenue represent 15.0 % and 8.2 % of total revenue, respectively. The top five loan purchasers for the nine months ended September 30, 2025 and 2024 purchased $ 2.7 billion and $ 1.8 billion unpaid principal balance of loans, or 79.1 % and 63.2 %, of total unpaid principal balance of loans sold by the Company, excluding $ 874.6 million and $ 381.2 million unpaid principal balance securitized, whose “Gain on sale of loans, net” revenue represent 26.5 % and 17.7 % of total revenue, respectively. 35 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) NOTE 6 – DEBT The following table summarizes the Company’s debt components at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Carrying Value Facility Inception Date Final Stated Maturity (A) Weighted Average Funding Cost Collateral Carrying Value Carrying Value Debt Carried at Cost Funding Debt Warehouse Facility 1 (B) $ — August 2020 July 2025 — % $ — $ 28,286 Warehouse Facility 2 (C) 21,270 November 2022 May 2026 6.4 24,584 61,007 Warehouse Facility 3 (D) — October 2023 October 2025 — — 26,227 Warehouse Facility 4 (E) 59,647 February 2023 January 2026 6.7 60,367 68,568 Warehouse Facility 5 (F) — October 2023 n.a. — — 21,697 REIT Warehouse (G) 42,106 October 2024 December 2026 7.7 38,510 99,204 Warehouse Facility 6 (H) — May 2024 May 2026 — — — Warehouse Facility 7 (I) — February 2023 August 2025 — — — Warehouse Facility 8 (J) — March 2022 n.a. — — — Warehouse Facility 9 (K) — March 2024 March 2025 — — 861 Warehouse Facility 10 (L) 17,637 April 2025 April 2026 6.5 17,929 — Warehouse Facility 11 (M) 60,946 July 2025 June 2027 6.5 62,029 — Digital Asset Loan Facility (N) 9,893 April 2025 October 2026 13.9 10,032 — Total Funding Debt 211,499 305,850 MSR Financing Lender 1 (O) 40,000 June 2024 June 2026 16.8 65,907 40,000 Financed Retained Interests Retained Interest Facility (P) 199,129 April 2023 Various (Q) 6.6 199,178 129,005 Total Debt Carried at Cost, Gross 450,628 474,855 Unamortized deferred financing costs (R) ( 2,840 ) ( 1,679 ) Total Debt Carried at Cost, Net 447,788 473,176 Debt at Fair Value FCC (S) 1,156 — Democratized Prime YLDS (T) 17,806 — Total Debt Carried at Fair Value 18,962 — Total Debt $ 466,750 $ 473,176 (A) Debt obligations with a stated maturity through the date of issuance of the Condensed Consolidated Financial Statements were refinanced, extended or repaid. (B) Warehouse Facility 1 was closed in July 2025. (C) Warehouse Facility 2 bears interest at Secured Financing Overnight Rate (“SOFR”) plus a spread of 2.25 % at September 30, 2025. (D) Warehouse Facility 3 was paid down in September 2025 and subsequently reached maturity. The interest accrued on the loans was payable to the lender during the period the loans are held, and the Company paid a variable exit fee, which was determined on a quarterly basis as follows: (i) the first $ 50.0 million of principal balance repurchased is subject to a 0.5 % exit fee, and (ii) amounts in excess of $ 50.0 million are subject to an exit fee that are between 0.125 % to 1.50 % of the price at which the Company securitizes repurchased loans (or otherwise agreed between the Company and the lender for repurchased loans not securitized). (E) Warehouse Facility 4 bears variable interest at SOFR plus a spread between 2.15 % and 5.50 % at September 30, 2025. A portion of the facility is also subject to a 0.5 % non-use fee. (F) Warehouse Facility 5 is an advance facility in which the lender earns carry on collateral in the facility. (G) REIT Warehouse bears interest at SOFR plus a spread of (i) if the average daily aggregate outstanding purchase price for all purchased mortgage loans subject to outstanding transactions during such pricing rate period is greater than or equal to $ 100.0 million, 3.00 % or (ii) if the average daily aggregate outstanding purchase price for all purchased mortgage loans subject to outstanding transactions during such pricing rate period is less than $ 100.0 million, 3.50 %. The facility also carries a 0.15 % exit fee on repurchased, non-securitized loans which in aggregate cannot exceed $ 0.5 million in a given calendar year. 36 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) (H) Warehouse Facility 6 bears interest at SOFR, plus a spread of 3.5 % at September 30, 2025. The facility also carries a 0.5 % exit fee on all loans repurchased from the facility. (I) Warehouse Facility 7 was closed in August 2025. (J) Warehouse Facility 8 was closed in December 2024. (K) Warehouse Facility 9 was closed in March 2025. (L) Warehouse Facility 10 bears interest at SOFR, plus a spread of 2.35 %. (M) Warehouse Facility 11 bears interest at SOFR, subject to a 2.0 % floor, plus a spread of 1.75 %. (N) The Digital Asset Loan Facility bears interest at a rate of 13.5 %. (O) The MSR Note bears interest at 16.5 % per annum and secured by eligible servicing assets, which include servicing fees related to loan servicing rights owned by, or delegated to, the Company. (P) Under the Retained Interest Facility, the interest accrued on the securities and beneficial interests is payable to the lender during the period the loans are held plus a spread between 0.50 % and 0.55 %, depending on the tranche to which the Company pledges collateral. (Q) The maturities of financed retained interests align with the terms of the underlying securities. The financed retained interest have maturity dates through August 2055. (R) During the three and nine months ended September 30, 2025 and 2024, the Company amortized $ 0.3 million and $ 0.7 million, and $ 0.1 million and $ 0.7 million, respectively, of deferred financing costs, respectively. (S) Interest accrues at a rate of SOFR less 0.5 % based on the face-amount certificates issued by FCC. Certificates mature 20 years from the issue date, but may be surrendered at any time by the holder at face amount, plus accrued interest minus any applicable expenses or fees. (T) Interest is accrued at an hourly rate that is agreed upon through a Dutch auction process; during the three and nine months ended September 30, 2025, the average interest rate was 9.0 %. YLDS can be redeemed by the holder at face amount, plus accrued interest minus any applicable expenses or fees on demand. Maturities Contractual maturities of recourse and nonrecourse debt obligations at September 30, 2025, are as follows: Years Ending December 31, Recourse Nonrecourse Total 2025 (remainder) $ — $ — $ — 2026 138,554 51,999 190,553 2027 — 60,946 60,946 2028 — — — 2029 — — — Thereafter — 199,129 199,129 $ 138,554 $ 312,074 $ 450,628 37 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Borrowing Capacity The following table represents borrowing capacity of committed debt facilities at September 30, 2025: September 30, 2025 Debt Borrowing Capacity Balance Outstanding Available Financing Funding Debt Warehouse Facility 1 $ — $ — $ — Warehouse Facility 2 150,000 21,270 128,730 Warehouse Facility 3 100,000 — 100,000 Warehouse Facility 4 335,300 59,647 275,653 REIT Warehouse 200,000 42,106 157,894 Warehouse Facility 6 250,000 — 250,000 Warehouse Facility 7 — — — Warehouse Facility 8 — — — Warehouse Facility 9 — — — Warehouse Facility 10 300,000 17,637 282,363 Warehouse Facility 11 200,000 60,946 139,054 Digital Asset Loan Facility 30,000 9,893 20,107 MSR Financing Lender 1 40,000 40,000 — Financed Retained Interests Retained Interest Facility 250,000 199,129 50,871 $ 1,855,300 $ 450,628 $ 1,404,672 Certain debt obligations are subject to customary loan covenants, such as minimum tangible net worth, minimum liquidity, maximum leverage ratios, required range of net income or loss during specified periods, periodic financial reporting requirements, and event of default provisions, including event of default provisions triggered by certain specified declines in the Company’s equity or a failure to maintain a specified tangible net worth, liquidity, or indebtedness to tangible net worth ratio. The Company was in compliance with all of its debt covenants at September 30, 2025. Facilities The following summarizes the debt facilities that the Company entered into or amended during the nine months ended September 30, 2025 and during the year ended December 31, 2024. Warehouse Facility 2 In December 2024, the Company amended Warehouse Facility 2 to reduce the borrowing limit to $ 250.0 million and to lower the interest rate from SOFR plus a spread of 4 % to SOFR plus a spread of 3 %. In May 2025, the Company and its lender amended Warehouse Facility 2 to reduce the borrowing capacity to $ 150.0 million, expand eligible collateral types, and reduce certain funding costs. The amended facility has an initial maturity date of May 2026, and borrowings under the facility bear interest at a rate of SOFR plus a spread of 2.3 %. Warehouse Facility 3 In February 2024, the Company amended Warehouse Facility 3 to temporarily increase the borrowing limit from $ 100.0 million to $ 200.0 million for the period February 1, 2024 through April 30, 2024. Warehouse Facility 4 In March 2024, the Company amended Warehouse Facility 4 to establish a second class of buyer under the facility. Borrowings to Class A and Class B Buyers were limited to $ 200.0 million and $ 37.50 million, respectively, with an aggregate borrowing limit of $ 237.50 million. In January 2025, the Company further amended Warehouse Facility 4 to increase the aggregate borrowing limit to $ 335.3 million and extend the maturity date to January 2026. 38 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) REIT Warehouse In October 2024, the Company entered into a secured warehouse credit facility with a borrowing limit of $ 150.0 million. In August 2025, the Company amended the REIT Warehouse to increase the borrowing limit to $ 200.0 million, extend the maturity date to December 2026, and add an exit fee of 0.15 % that is not to exceed $ 0.5 million in any calendar year. It also amended the interest rate to be SOFR plus a spread of (i) if the average daily aggregate outstanding purchase price for all purchased mortgage loans subject to outstanding transactions during such pricing rate period is greater than or equal to $ 100.0 million, 3.00 % or (ii) if the average daily aggregate outstanding purchase price for all purchased mortgage loans subject to outstanding transactions during such pricing rate period is less than $ 100.0 million, 3.50 %. MSR Note In June 2024, the Company entered into a loan and security agreement with Lender 1 under which the Company borrowed the MSR Note that had an initial borrowing limit of $ 30.0 million. In September 2024, the Company and Lender 1 amended the MSR Note to increase the borrowing limit to $ 40.0 million. FCC During the nine months ended September 30, 2025, FCC issued $ 1.2 million face-amount certificates to third parties redeemable upon redemption of YLDS. The certificates entitle the certificate owner to receive, at certificate maturity, a stated amount of money, interest, or credits declared from time to time by FCC, at its discretion. The certificates issued by FCC are not insured by any government agency or other entity. Democratized Prime YLDS During the nine months ended September 30, 2025, FCC issued $ 17.8 million face-amount certificates to third parties, redeemable upon redemption of YLDS. Democratized Prime YLDS represents liabilities where third parties have lent YLDS to the Company through the Democratized Prime platform. The Company pays interest based on a rate agreed upon through a Dutch auction process defined within the pool and can be redeemed each hour for YLDS. The YLDS are collateralized by pools of HELOC loans and are not insured by any government agency or other entity. Digital Asset Loan Facility In April 2025, the Company executed a master participation agreement with an asset management firm that allows the Company to grant 100 % participation interest for digital asset backed loans it owns. The $ 30.0 million facility, with the ability to increase to a maximum facility size of $ 50.0 million, matures in October 2026, bears interest at a rate of 13.5 %, and has a purchase period through April 2026. Warehouse Facility 10 In April 2025, the Company entered into a master repurchase agreement with a major banking institution that contains customary debt covenants, a borrowing capacity of $ 300.0 million, including $ 1.0 million in committed capacity, and an initial maturity date in April 2026, with the option to renew at maturity. Borrowings under the facility bear interest at a rate of SOFR plus 2.35 %. Warehouse Facility 11 In June 2025, the Company executed a master repurchase agreement with a major banking institution that had a facility limit up to $ 100.0 million, with the option to temporarily upsize to $ 200.0 million and has an initial maturity date in June 2027 with the option to renew at maturity. Borrowings under the facility bear interest at a rate of SOFR, subject to a floor of 2.0 %, plus 1.75 % that results in a minimum rate of 3.75 %. In July 2025, the Company amended Warehouse Facility 11 to permanently increase the facility limit to $ 200.0 million. NOTE 7 – EQUITY On September 12, 2025, the Company completed its IPO, in which 36,225,000 shares of the Company’s Class A common stock were issued and sold, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $ 25.00 per share. 39 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) The Charter authorizes a total of 1,000,000,000 shares of Class A common stock, par value $ 0.0001 , 200,000,000 shares of Class B common stock, par value, $ 0.0001 , 500,000,000 shares of Blockchain common stock, par value, $ 0.0001 , and 100,000,000 shares of preferred stock, par value $ 0.0001 . In connection with the IPO, all shares of outstanding convertible preferred stock automatically converted into a total of 113,910,905 shares of Class A common stock. Additionally, a total of 39,393,047 shares of Class A common stock held by the Controlling Party and his permitted transferees were converted into an equivalent number of shares of Class B common stock; 1,500,000 shares of Class B common stock were subsequently converted back to Class A common stock and sold as part of the IPO. The holders of Class A common stock are entitled to one vote for each share of common stock held. The holders of Class B common stock are entitled to ten votes for each share of common stock held. For periods prior to the IPO, references to ‘common stock’ refer to the single class of common stock outstanding prior to the IPO. In connection with the IPO, all outstanding shares of convertible preferred stock were converted into shares of Class A common stock on a one-to-one basis as of the date of the IPO. As such, there are no shares of preferred stock issued and outstanding as of September 30, 2025. The following table summarizes the Company’s equity instruments at September 30, 2025 and December 31, 2024: September 30, 2025 Authorized Shares Issued and Outstanding (A) Shares Warrants Options RSUs Class A Common Stock, $ 0.0001 par value per share 1,000,000,000 174,853,649 456,909 27,470,601 6,189,477 Class B Common Stock, $ 0.0001 par value per share 200,000,000 37,893,047 — 7,760,846 5,334,903 Blockchain Common Stock, $ 0.0001 par value per share 500,000,000 — — — — Preferred Stock, $ 0.0001 par value per share 100,000,000 — — — — Total 1,800,000,000 212,746,696 456,909 35,231,447 11,524,380 December 31, 2024 Authorized Shares Issued and Outstanding (A) Shares Warrants Options RSUs Common Stock, $ 0.00001 par value per share 240,820,153 69,300,284 — 32,030,416 44,973,456 Convertible Preferred Stock, $ 0.00001 par value per share 115,983,447 111,900,495 1,381,486 — — Total 356,803,600 181,200,779 1,381,486 32,030,416 44,973,456 (A) Includes the equity instruments of the 2018 Equity Incentive Plan, the 2024 Equity Incentive Plan, and the 2025 Equity Incentive Plan. The following table includes information regarding each series of convertible preferred stock as of December 31, 2024: December 31, 2024 Per Share Number of Shares Outstanding Liquidation Preference Liquidation Price Dividend Rate Conversion Price Series Seed 16,100,540 $ 16,947 $ 1.05 $ 0.08 $ 1.05 Series A 32,860,461 41,759 1.27 0.10 1.27 Series B 29,448,787 73,519 2.50 0.20 2.50 Series C 11,238,629 85,000 7.56 0.61 7.56 Series C-1 504,081 3,050 6.05 0.48 6.05 Series C-2 1,983,287 15,000 7.56 0.61 7.56 Series D 12,439,325 219,999 17.69 1.41 17.69 Series E 7,325,385 73,292 10.01 0.80 10.01 Total 111,900,495 $ 528,566 Warrants In March 2024, the Company issued warrants to purchase up to 411,219 , 411,219 , and 1,644,881 Series E shares to an existing convertible preferred shareholder in exchange for a software license, one year of software development services, and up to two years of other services, respectively, for a total of 2,467,319 Series E shares issuable. The remaining 40 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) convertible preferred warrants may be exercised at an exercise price of $ 3.23 per Class A common stock within a five-year period after issuance. Warrants for services provided by the convertible preferred shareholder not related to software are granted and vest monthly as the services are rendered. In connection with the IPO, 2,010,410 shares of Series E preferred stock, which were issued upon the exercise of vested warrants in conjunction with the Recombination, were automatically converted into shares of Class A common stock. As of September 30, 2025, up to 456,909 shares of Class A common stock remain issuable upon the exercise of the remaining warrants, at an exercise price of $ 3.23 , subject to vesting conditions with respect to the other services under the warrant agreement. During the three and nine months ended September 30, 2025, the Company recognized equity-based compensation expense within “Technology and product development” expense in the Condensed Consolidated Statements of Operations of $ 2.5 million and $ 7.9 million, respectively, of the grant-date fair value of the warrants to purchase up to 259,029 and 777,087 , respectively, Class A common shares related to other services provided by the convertible preferred warrant holder. At September 30, 2025, exercisable warrants have a weighted average exercise period of 2.0 years. Equity-Based Compensation The Company grants equity-based compensation in the form of options and RSUs to its officers, employees, and other service providers under the terms of the applicable equity incentive plans for the purpose of providing incentives and rewards for service or performance that align the interest of grantees with the long-term growth and profitability of the Company. Prior to the IPO, RSUs granted under the plans generally vested based upon the satisfaction of both a service condition and a liquidity-event related performance condition. Both the service condition and liquidity-event related performance condition needed to be met for the expense to be recognized. For these outstanding RSUs, the liquidity-event related performance condition was met upon the completion of the IPO, and the Company recognized $ 11.0 million of stock-based compensation expense during the three and nine months ended September 30, 2025 related to the settlement of approximately 1,599,216 shares of Class A common stock. Subsequent to the IPO, the Company expects to grant RSUs to employees and members of the board which vest subject to either (i) continued service, or based on continued service, and (ii) a market condition tied to the Company’s share price. As of September 30, 2025, the Company has granted RSUs with a market condition that will vest only if the Company’s 10 -day average closing stock price at the end of each defined performance period equals or exceeds specified thresholds, in addition to the continuous service requirement through the service period of the award. The RSUs were granted with an average grant date fair value of $ 21.87 . The target number of market-based RSUs granted was 2,133,961 . One-fourth of these market based RSUs vest if the closing average market price per share of the Company’s Class A Common Stock over the ten ( 10 ) trading day period ending on each applicable performance date of September 10, 2026, September 10, 2027, September 10, 2028 and September 10, 2029, respectively, equals or exceeds the corresponding stock price thresholds for such performance dates of $ 32.50 , $ 42.25 , $ 52.75 , and $ 63.00 respectively. Any shares for which the market-based component is not achieved with respect to the first, second, or third performance date shall remain outstanding and be eligible to be earned based on the applicable 10 -day average closing stock price for a subsequent period performance date (such that, for example, if the applicable 10 -day average stock price is not achieved in connection with the first performance date, but the applicable 10 -day average stock price for the second performance date is achieved in connection with the second performance date, one-half of the shares subject to the award would vest on the second performance date). The fair value of this market-condition RSU is estimated on the grant date using a Monte Carlo simulation that considers expected volatility, risk-free interest rate, dividend yield, expected term, and the effect of the market target. As the market condition is incorporated into the fair value, the Company recognizes the full compensation cost (based on that grant-date fair value) over the grantee’s requisite service period, even if the market conditions are ultimately not achieved. 41 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) The Company records stock-based compensation for service-based RSUs on a straight-line basis over the requisite service period, which is generally the vesting period. The following table presents the amount of stock-based compensation expense related to equity-based compensation recognized in the Condensed Consolidated Statements of Operations: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 General and administrative $ 16,850 $ 3,844 $ 20,370 $ 31,874 Sales and marketing 165 89 347 54 Technology and product development 2,822 3,064 9,560 6,311 Operations and processing 91 107 316 306 Total equity-based compensation expense $ 19,928 $ 7,104 $ 30,593 $ 38,545 Equity Incentive Plans 2018 Equity Incentive Plan In 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”) that authorized the Company to grant awards of up to 52,346,283 shares of common stock of FTS to FTS’ employees, non-employees, officers, and directors in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock and RSUs. Each award outstanding under the 2018 Plan continues to be governed by the terms and conditions of the 2018 Plan. In connection with the IPO, the 2018 Plan awards were amended to cover shares of Class A common stock (or, if determined by the plan administrator, Class B common stock). At September 30, 2025 and December 31, 2024 the Company had granted awards equivalent to 52,291,738 and 48,861,380 shares of common stock, respectively, gross of forfeited and delivered awards under the 2018 Plan. In connection with the IPO, the Company has frozen the 2018 Plan and no new awards will be granted under the 2018 Plan. In 2024, the Company modified awards under the 2018 Plan and extended the post-termination exercise period of vested options held by certain current and former employees, resulting in $ — million and $ 0.7 million, and $ 1.6 million and $ 5.2 million of incremental equity-based compensation expense recognized during the three and nine months ended September 30, 2025 and 2024, respectively. 2024 Equity Incentive Plan As part of the Reorganization, FMH adopted the 2024 Equity Incentive Plan (“2024 Plan”) that authorized FMH to grant awards of up to 4,635,234 shares of common stock of FMH to FMH employees, non-employees, officers, and directors in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock and RSUs. As part of the Recombination, the Company assumed the 2024 Plan and all options outstanding thereunder as of the Recombination Date, and such outstanding options were converted to options of FTS based on the Conversion Rate. As of September 30, 2025 and December 31, 2024 the Company had granted awards equivalent to 3,212,647 and 2,866,299 shares of common stock, respectively, gross of forfeited and delivered awards under the 2024 Plan. In connection with the IPO, the Company has frozen the 2024 Plan and no new awards will be granted under it. 2025 Incentive Award Plan As part of the IPO, the Company adopted the 2025 Incentive Award Plan (“2025 Plan”) in order to facilitate the grant of equity incentives to directors, employees (including named officers), and consultants of the Company. Following the effective date of the 2025 Plan, the Company will not make any further grants under the 2018 Plan or the 2024 Plan. However, the 2018 Plan and the 2024 Plan will continue to govern the terms and conditions of the outstanding awards granted thereunder. The 2025 Plan authorizes the issuance of 22,985,926 of Class A or Class B common stock of FTS, subject to an automatic increase on January 1 of each calendar year from January 1, 2026 through and including January 1, 2035, by a number of shares equal to the lesser of (i) 5 % of the total shares of the aggregate number of shares of Class A common stock and Class B common stock outstanding (on an as-converted basis) as of the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the board. Awards under the 2025 Plan may be granted in the form of incentive stock options, non-qualified stock options, stock appreciation rights, and RSUs. At September 30, 2025, the Company had granted awards equivalent to 9,514 and 8,535,845 shares of Class A and Class B common stock, respectively, gross of forfeited and delivered awards under the 2025 Plan. 42 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) 2025 Employee Stock Purchase Plan (“ESPP”) In connection with the IPO, the Company adopted the ESPP under which eligible employees may purchase shares of Class A common stock of FTS, up to a maximum percentage of their eligible compensation (which shall be 20% unless otherwise specified in an applicable offering document), subject to certain IRS and share purchase limitations, at 85% of the lower of the closing price (fair market value) of a share of FTS on the first day of the offering period or the purchase date, whichever is lower. As of September 30, 2025, there have been no offering periods under the ESPP program. The maximum aggregate number of shares that may be subject to awards and sold under the ESPP is 2,133,961 shares, subject to an automatic annual increase on the first day of each calendar year beginning in 2026 and ending on and including January 1, 2035 in an amount equal to the lesser of (i) one percent ( 1 %) of the aggregate number of shares of Class A common stock and Class B common stock of FTS outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as determined by the Board. Unrecognized Compensation Expense At September 30, 2025, the Company has not yet recognized compensation expense for the following awards: Weighted Average Recognition Period (Years) Shares Unrecognized Compensation Expense Vesting Condition Options RSUs Total Options RSUs Time-based (A) 3.6 11,134,713 — 11,134,713 $ 67,382 $ — Multiple (A)(B) 3.3 — 10,222,338 10,222,338 — 148,163 Total 11,134,713 10,222,338 21,357,051 $ 67,382 $ 148,163 (A) All awards vest over a period of two to four years , and most awards have a one year cliff vesting feature with quarterly vesting thereafter. (B) Awards include a service period vesting condition, as noted above, as well as market based and liquidity-based vesting conditions. The liquidity event for awards which have that feature has been satisfied in connection with the IPO as of September 30, 2025. Noncontrolling Interests in Consolidated Subsidiaries The following amounts relate to equity interests held by the third-party investors in a real estate investment trust subsidiary, Figure REIT, Inc. (“Figure REIT”) and the Figure Markets Offshore Opportunity Investment Fund L.P. (“Offshore Solana Fund”) both of which the Company consolidates, but does not wholly-own. The noncontrolling interests in the net income (loss) is computed as follows: Three Months Ended September 30, 2025 2024 Net Income (Loss) Noncontrolling Interest as a Percent of Total (A) Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries Net Income Noncontrolling Interest as a Percent of Total (A) Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries (B) Figure REIT $ 321 44.9 % $ 147 $ 170 44.6 % $ 76 Offshore Solana Fund 3,559 2.8 99 411 2.8 12 Total / weighted average $ 3,880 6.3 % $ 246 $ 581 15.0 % $ 88 Nine Months Ended September 30, 2025 2024 Net Income (Loss) Noncontrolling Interest as a Percent of Total (A) Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries Net Income Noncontrolling Interest as a Percent of Total (A) Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries (B) Figure REIT $ 1,193 44.9 % $ 536 $ 4,802 44.6 % $ 2,143 Offshore Solana Fund ( 1,084 ) 2.8 ( 31 ) 5,162 2.8 145 Total / weighted average $ 109 24.9 % $ 505 $ 9,964 22.9 % $ 2,288 (A) Represents the weighted average percentage of total noncontrolling shareholders’ net income (loss) in consolidated subsidiaries. (B) Balances may not cross-foot due to rounding for presentation purposes in the Noncontrolling Interest as a Percent of Total shown. 43 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) The noncontrolling interests in the equity of consolidated subsidiaries is computed as follows: September 30, 2025 December 31, 2024 Total Consolidated Equity Noncontrolling Ownership Interest as a Percent of Total Noncontrolling Interest in Equity of Consolidated Subsidiaries Total Consolidated Equity Noncontrolling Ownership Interest as a Percent of Total Noncontrolling Interest in Equity of Consolidated Subsidiaries Figure REIT $ 18,678 44.9 % $ 8,394 $ 18,261 44.6 % $ 7,769 Offshore Solana Fund 12,148 2.8 342 17,807 2.8 508 Total / weighted average $ 30,826 28.3 % $ 8,736 $ 36,068 24.0 % $ 8,277 Note 8 - NET INCOME (LOSS) PER SHARE Basic net income per share is computed by dividing net income (loss) attributable to the Company by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to the Company by the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive securities. Diluted net income per share reflects the dilutive effect of potential common shares from share-based awards, warrants and convertible preferred stock. The treasury stock method is used to calculate the dilutive effect of outstanding share-based awards and warrants, which assumes the proceeds upon vesting or exercise would be used to purchase common stock at the average price for the period. Net income per share is computed using the two-class method which is required for multiple classes of common stock and participating securities. In historical periods where the Company had outstanding convertible preferred stock, net income attributable to FTS is first allocated to the convertible preferred stock based on their dividend preference. Any remaining net income attributable to FTS is then allocated to common stockholders and preferred stockholders using the if-converted method. All preferred stock was convertible on a 1:1 basis to common stock. The rights, including the liquidation and dividend rights and sharing of losses, of the Class A common stock and Class B common stock are identical, other than voting rights. As the liquidation and dividend rights and sharing of profits are identical, the undistributed earnings are allocated on a proportionate basis for those classes and the resulting net income per share will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis, and they have been combined as common shares below. The following table sets forth the calculation of basic and diluted net income per common share for the periods: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator Net income attributable to FTS $ 89,576 $ 27,339 $ 118,698 $ 11,738 Less: Undistributed earnings attributable to convertible preferred stockholders $ ( 45,792 ) ( 20,969 ) $ ( 79,699 ) ( 11,738 ) Net income attributable to common stockholders, basic and diluted $ 43,784 6,370 $ 38,999 — Denominator Basic weighted average common shares attributable to FTS 103,571,820 68,568,542 80,896,185 63,700,455 Add: effect of dilutive securities related to share-based payment awards (A) 26,350,509 5,017,205 22,210,202 6,154,472 Diluted weighted average common shares attributable to FTS 129,922,329 73,585,747 103,106,387 69,854,927 Net income per common share attributable to FTS, basic $ 0.42 $ 0.09 $ 0.48 $ 0.00 Net income per common share attributable to FTS, diluted $ 0.34 $ 0.09 $ 0.38 $ 0.00 (A) The dilutive impact of share-based payment awards and warrants for the three months ended September 30, 2025 and 2024 comprised of 21,414,298 and 4,452,523 shares related to stock options, 1,349,563 and 564,682 shares related to warrants, and 3,586,648 and zero shares related to unvested RSUs, respectively. The dilutive impact of share-based payment awards and warrants for the nine months ended September 30, 2025 and 2024 comprised of 18,072,864 and 5,787,713 shares related to stock options, 1,041,277 and 366,759 shares related to warrants, and 3,096,061 and zero shares related to unvested RSUs, respectively. For the three and nine months ended September 30, 2024, 694,564 and 327,943 44 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) shares, respectively, related to unvested RSUs were excluded from the dilutive impact as the issuance of those shares was contingent upon the satisfaction of a liquidity condition which was not satisfied as of the end of those periods. NOTE 9 – VARIABLE INTEREST ENTITIES Consolidated VIEs The Company consolidates VIEs in which the Company is deemed to have both the power to direct the most significant activities of the entities and the right to receive benefits, or the obligation to absorb losses, that could potentially be significant to the entities. The table below presents the carrying value and classification of the assets and liabilities of VIEs consolidated within the Condensed Consolidated Balance Sheets, after elimination of intercompany balances: September 30, 2025 December 31, 2024 Total Assets Total Liabilities Total Assets Total Liabilities Offshore Solana Fund $ 12,151 $ — $ 17,811 $ 4 Figure REIT 62,353 43,861 121,817 103,556 Figure Certificate Company 22,612 21,998 — — Total $ 97,116 $ 65,859 $ 139,628 $ 103,560 Additionally, the Company has wholly-owned consolidated VIEs that are formed to acquire, receive, participate, hold, release and dispose of participation interests for the Company’s warehouse facilities. The Company is the primary beneficiary of these VIEs, and retains the risks and benefits associated with the assets and liabilities transferred to the VIEs. See Note 6 for further discussion of the Company’s warehouse facilities. Offshore Solana Fund The Offshore Solana Fund was initially a wholly-owned subsidiary of the Company. In July 2024, the Company sold 2.8 % of the Offshore Solana Fund limited partnership interests to unrelated third parties. As of September 30, 2025, the Company holds a 97.2 % interest in the Offshore Solana Fund. Through its ownership of the general partner, the Company has the power to direct the activities that most significantly impact the economic performance of the Offshore Solana Fund and the Company has an obligation to absorb losses or receive returns of the Offshore Solana Fund. Third-party limited partners in the Offshore Solana Fund hold a ratable interest in the fair value of the Offshore Solana Fund’s net assets, and the Company presents such noncontrolling interests at fair value in the Condensed Consolidated Balance Sheets and reflects changes thereon in the Condensed Consolidated Statements of Operations. Figure REIT The Company holds all voting rights in Figure REIT, and it directs the activities that most significantly impact the economic performance of Figure REIT through an advisor. However, third parties own 44.9 % of the non-voting equity in Figure REIT at September 30, 2025. While the Company has economic exposure through its direct and indirect interest in Figure REIT, there is no recourse to the Company for Figure REIT’s liabilities. See Note 7 for further discussion of noncontrolling interests in the Offshore Solana Fund and Figure REIT. Figure Certificate Company FCC is a face-amount certificate company registered with the SEC. FCC was incorporated in April 2023 as a wholly-owned subsidiary of FT until the Reorganization in 2024. Subsequent to the Reorganization, FCC is a wholly-owned subsidiary of FMH. The Company holds all voting rights in FCC and it directs the activities that most significantly impact the economic performance of FCC. Non-Consolidated VIEs While the Company continues to be involved with securitizations considered VIEs in its role as the sponsor and the servicer of securitization transactions, the Company has determined that it is not the primary beneficiary of these entities and therefore does not consolidate these securitizations. These entities are established as grantor trusts for various securitization transactions. The activities that most significantly impact the economic performance of the VIE include servicing activities with respect to delinquent and defaulted loans, determined by a third-party special servicer that the 45 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Company may not remove without cause. Assets transferred into each securitization trust are legally isolated from the creditors of the Company, not available to satisfy obligations of the Company, and can only be used to settle obligations of the underlying trust in exchange for debt securities and beneficial interests sold. The following table summarizes the aggregate risk characteristics of the unconsolidated VIEs and the Company’s maximum exposure to loss at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 UPB of securitization collateral $ 4,595,629 $ 2,785,341 Weighted average delinquency (A) 0.7 % 0.4 % Face amount of debt held by third parties $ 4,165,312 $ 2,586,297 Maximum exposure (B) $ 299,322 $ 201,512 (A) Represents the percentage of the UPB that is 60 + days delinquent. (B) Primarily represents the aggregate fair value of the Company’s investments in marketable securities and the servicing assets associated with underlying collateral of the securitizations. In certain cases, the Company is obligated to fund securitization reserve accounts. See Note 10 for further discussion regarding the Company’s reserve account funding obligations. NOTE 10 – COMMITMENTS AND CONTINGENCIES Litigation — The Company is or may become, from time to time, involved in various disputes, litigation, arbitration, and regulatory inquiry and investigation matters that arise in the ordinary course of business. Given the inherent unpredictability of matters the Company has been and currently is involved in, the outcome of these proceedings cannot be determined at this time, and it is possible that future adverse outcomes could have a material adverse effect on its business, financial position or results of operations. The Company is not aware of any unasserted claims that it believes are material and probable of assertion where the risk of loss is expected to be reasonably possible, but the Company may become involved in additional litigation in the ordinary course of the Company’s business in the future, including litigation that could be material to its business. The Company reviews the need for any loss contingency reserves and establishes reserves when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated. Management, after consultation with legal counsel, believes that there are no known actions or threats that would result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. The Company is, from time to time, subject to inquiries by government entities, though the Company currently does not believe any of these inquiries would result in a material adverse effect on the Company’s business. Indemnifications — In the normal course of business, the Company and its subsidiaries entered into contracts that contain representations and warranties that provide general indemnifications in regards to legal proceedings. The Company’s maximum exposure under these arrangements is unknown as this would involve future legal claims that may be made against the Company that have not yet occurred. However, based on its experience, the Company expects the risk of material loss to be remote. Debt Covenants — Certain of the Company’s debt obligations are subject to loan covenants and event of default provisions. See Note 6 for further discussion of the Company’s debt obligations. Loan Purchase and Servicing Commitments — The Company enters into agreements with various loan origination partners to purchase and service the loans they originate through the Technology Offering. At September 30, 2025 and December 31, 2024, purchase commitments totaled $ 13.4 million and $ 142.2 million to loan origination partners, respectively. The Company does not record an asset or liability for purchase or servicing commitments since it expects such commitments to benefit the Company, and the Company has not yet taken control of the underlying loans. Loan Funding Obligations — The HELOC loans that the Company originates or purchases include terms that permit borrowers to draw amounts, or redraw previously repaid amounts, during a 5-year period after the original origination date. At September 30, 2025 and December 31, 2024, borrowers were able to borrow up to $ 41.2 million and $ 29.1 million on undrawn HELOC loans that the Company has committed to fund. Additionally, the Company has $ 41.1 million and $ — million in unfunded loan commitments at September 30, 2025 and December 31, 2024, respectively, related to loans 46 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) originated or purchased near the end of each respective period, which were substantially settled within a week after each period end. Loan Repurchase Obligations — The Company has contractual agreements with certain loan buyers to repurchase or substitute loans where a borrower misses a payment within 30 to 90 days since the loan’s origination, though the Company indemnifies the loan buyer against future losses on such loans in certain cases. The repurchase price is equal to the original sale price to the loan purchaser and the Company recognizes a loss to the extent the repurchase price of the loan exceeds the estimated fair value on the repurchase date, further adjusted upon resale of the loan, if applicable. The Company generally continues to service the defaulting loan through a third-party subservicer. The Company repurchased loans for which it recognized gains (losses) of $ 1.4 million and $( 2.3 ) million, respectively, for the three and nine months ended September 30, 2025, and $( 1.8 ) million and $( 6.0 ) million, respectively, for the three and nine months ended September 30, 2024 within “Other (income) expense” in the Condensed Consolidated Statements of Operations. At September 30, 2025, the Company has contingent commitments to repurchase loans with an aggregate UPB of up to $ 1.5 billion for which the Company recorded repurchase obligations totaling $ 14.6 million within “Payables to third-party loan owners” in the Condensed Consolidated Balance Sheets. The Company recorded a reserve of $ 6.4 million within “Other current liabilities” in the Condensed Consolidated Balance Sheets, based on the Company’s estimate of expected future losses at September 30, 2025. Securitization Reserve Account Funding Obligations — The Company, in its capacity as servicer of certain securitizations, has committed to fund and replenish customary reserve accounts held by the securitization trust that the Company initially funds at the time of securitization in an amount based upon expected prepayments, delinquencies, defaults, and draws from borrowers for loans in the securitization. While the Company’s obligation to fund reserve amounts is not limited, and the Company cannot reliably estimate the long-term macroeconomic environment that may impact its maximum exposure for such obligations over the contractual life of the securitization, the Company does not expect to fund material amounts to its securitizations in excess of current balances at September 30, 2025. Securitization Commitments — During the three months ended September 30, 2025, the Company entered into a pre-funded securitization transaction backed by HELOC loans originated or purchased by the Company that qualified as a sale. The transaction includes a prefunding feature that allowed for the transfer of HELOC loans in multiple tranches. At September 30, 2025, the Company is committed to fund the remaining unfunded balance of $ 89.3 million. Capital Commitments — In February 2025, the Company entered into a joint venture agreement with a third party to finance loans originated or purchased by the Company. As part of that agreement, the Company committed to invest up to $ 10.5 million in exchange for a 5.0 % interest in the joint venture. The Company contributed capital of $ 2.5 million to the joint venture during the nine months ended September 30, 2025. Leases — The Company has non-cancellable leases on office spaces expiring through 2031 that it does not sublease. Rent expense totaled $ 0.7 million and $ 1.9 million for the three and nine months ended September 30, 2025 and totaled $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2024, respectively. The Company has leases that include renewal options, leasehold improvement incentives, and escalation clauses. At September 30, 2025, the Company has not considered such renewal provisions in the determination of the lease term, as it is not reasonably certain these options will be exercised. The terms of the leases do not impose any financial restrictions or covenants. Operating lease ROU assets of $ 5.5 million are presented in “Other non-current assets”, and lease liabilities of $ 5.8 million are presented in “Other current liabilities” and “Lease liability, non-current”, in the Condensed Consolidated Balance Sheets at September 30, 2025. Future undiscounted, minimum lease payments for the Company’s non-cancellable operating leases at September 30, 2025 were as follows: 47 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Years Ending December 31, Amount 2025 (remainder) $ 540 2026 1,955 2027 1,437 2028 1,253 2029 967 Thereafter 1,071 Total undiscounted lease payments 7,223 Less: Imputed Interest ( 1,401 ) Operating Lease Liabilities $ 5,822 At September 30, 2025 and December 31, 2024, the weighted average remaining lease term for operating leases was 4.3 years and 1.2 years, respectively, and the weighted average discount rate was 9.0 % and 2.0 %, respectively. The Company paid $ 0.7 million and $ 2.0 million in cash included in the measurement of lease liabilities for the three and nine months ended September 30, 2025, respectively, and $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2024, respectively. San Francisco Office Space In January 2025, the Company amended its expiring lease agreement for office space located in San Francisco, California. The lease amendment relocated the leased premises, extended the lease term until August 2028, reduced monthly lease payments, and includes both a rent abatement period and tenant improvement allowances. The modification of the existing premise lease was treated as a lease modification that was not material. The Company took possession of the relocated premises, and accounted for it a new lease that commenced, during the nine months ended September 30, 2025. New York Office Space In June 2025, the Company entered into a non-cancellable lease agreement for a new office space in New York City, New York. The lease agreement is for a five-year term and includes a rent abatement period. The Company took possession of the premises and accounted for it as a new lease that commenced during the three months ended September 30, 2025. NOTE 11 – RELATED PARTY TRANSACTIONS Transactions with Controlled Affiliates The Company entered into arrangements with entities also controlled, or significantly influenced, by the Controlling Party or other affiliates of the Company. Provenance Foundation Term Note In July 2022, FT entered into an interest bearing term note with the Provenance Foundation (“Provenance”), pursuant to which FT provided Provenance with a $ 5.0 million loan. On June 12, 2023, the term note was amended, pursuant to which the total principal amount of the loan was increased to $ 9.1 million. The term note is held by FMH and is eligible to be settled in cash or an equivalent value of HASH at maturity. At September 30, 2025 and December 31, 2024 the outstanding principal of the loan, including interest paid in-kind, was recorded at $ 9.9 million and $ 9.4 million, respectively as “Loan to related parties” in the Condensed Consolidated Balance Sheets. Interest accrued on the note for the three and nine months ended September 30, 2025 is $ 0.2 million and $ 0.6 million, gross of a $ 0.7 million interest reduction during the three months ended June 30, 2025, and $ 0.2 million and $ 0.6 million, respectively, for the three and nine months ended September 30, 2024, recorded as “Interest income” in the Condensed Consolidated Statements of Operations. Gas Fee Service Provider In February 2025, FCC entered into a services agreement with Provenance whereby Provenance pays, on behalf of FCC, HASH to cover fees to network validators for processing and validating operations on the blockchain incurred in connection with the purchase or sale of the face-amount certificates issued by FCC and transacted on Provenance’s blockchain (“Provenance Blockchain”). FCC reimburses Provenance in cash in an amount equal to the then-current market value of HASH paid by Provenance. The Company recognized $ — million and $ — million incurred under the services 48 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) agreement for the three and nine months ended September 30, 2025, respectively, recorded as expense in “Operations and processing” on the Condensed Consolidated Statements of Operations. At September 30, 2025, the Company owed $ — million to Provenance recorded in “Accounts payable and accrued liabilities” in the Condensed Consolidated Balance Sheets. Transactions with Equity-Method Investees Reflow The Company holds a 17.3 % interest in Reflow contributed to the Company by the Controlling Party. The Company received distributed profits of $ — million and $ 0.9 million, respectively, for the three and nine months ended September 30, 2025 and $ — million and $ — million for the three and nine months ended September 30, 2024, respectively, recorded in “Other revenue” in the Condensed Consolidated Statements of Operations. The Company recorded receivables of $ — million and $ — million at September 30, 2025 and December 31, 2024, respectively, as “Accounts receivable, net” in the Condensed Consolidated Balance Sheets for such services. See Note 3 for detail on the Company’s investment in Reflow. Domestic Solana Fund The Domestic Solana Fund acquired its investments in SOL primarily through auctions held through the FTX Trading Ltd. (“FTX”) bankruptcy proceedings through a purchase and sale agreement with Alameda Research and Maclaurin Investments. The Company recorded contributions, net of distributions, to the Domestic Solana Fund in “Other non-current assets” in the Condensed Consolidated Balance Sheets as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Contributions $ 16 $ 24 $ 126 $ 3,779 Distributions 322 613 1,759 613 See Note 3 for detail on the Company’s investment in Domestic Solana Fund . Transactions with the Controlling Party The Company incurred $ 0.5 million and $ 0.8 million, respectively, for the three and nine months ended September 30, 2025, and $ — million and $ 0.4 million, respectively, for the three and nine months ended September 30, 2024, in costs to arrange travel for the Controlling Party and other affiliates, recorded as “General and administrative” expense in the Condensed Consolidated Statements of Operations. As of September 30, 2025, the Controlling Party holds $ 0.5 million of YLDS issued by FCC, recorded as “Debt, current” on the Condensed Consolidated Balance Sheets. The Controlling Party’s holdings are on normal market terms and do not include any preferential terms, guarantees, or other arrangements with the Company. Other Transactions Investments in Loan Securitizations The Company retains beneficial interests in loan securitization trusts that it sponsors. See Notes 3 and 9 for additional detail. Employee DSCR Loan In May 2025, the Company issued a debt-service coverage ratio (“DSCR”) loan to an employee. The principal amount of the loan is $ 0.1 million, bears interest at a rate of 6.90 % per annum, and matures in June 2055. On August 15, 2025, the employee repaid the loan in full in an amount equal to $ 0.1 million, including principal of approximately $ 0.1 million and total accrued unpaid interest of approximately $ 0.0 million . 49 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) NOTE 12 – FAIR VALUE MEASUREMENTS Assets and Liabilities Recorded at Fair Value on a Recurring Basis The following table summarizes information about the assets and liabilities that are measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024: September 30, 2025 Carrying Value Fair value Level 1 Level 2 Level 3 (A) Total Assets Cash and cash equivalents $ 1,097,123 $ 1,097,123 $ — $ — $ 1,097,123 Restricted cash 64,590 64,590 — — 64,590 Digital assets (B) 108,680 110,185 — — 110,185 Distressed asset claims (C) 3,068 — — 3,068 3,068 Marketable securities, at fair value (D) 239,694 — 201,386 38,308 239,694 Loans held for sale, at fair value 389,032 — — 389,032 389,032 Loan servicing assets, at fair value 100,000 — — 100,000 100,000 Treasury note futures 11 11 — — 11 Total assets $ 2,002,198 $ 1,271,909 $ 201,386 $ 530,408 $ 2,003,703 Liabilities Digital asset collateral repayment obligation (E) $ 85,016 $ 85,016 $ — $ — $ 85,016 Certificate repayment obligation (E) 18,962 — 18,962 — 18,962 Total liabilities $ 103,978 $ 85,016 $ 18,962 $ — $ 103,978 December 31, 2024 Carrying Value Fair value Level 1 Level 2 Level 3 (A) Total Assets Cash and cash equivalents $ 287,256 $ 287,256 $ — $ — $ 287,256 Restricted cash 57,777 57,777 — — 57,777 Digital assets (B) 86,036 86,036 — — 86,036 Distressed asset claims (C) 7,589 — — 7,589 7,589 Marketable securities, at fair value (D) 163,489 — 128,983 34,506 163,489 Loans held for sale, at fair value 395,922 — — 395,922 395,922 Loan servicing assets, at fair value 88,497 — — 88,497 88,497 Total assets $ 1,086,566 $ 431,069 $ 128,983 $ 526,514 $ 1,086,566 Liabilities Digital asset collateral repayment obligation (E) $ 64,447 $ 64,447 $ — $ — $ 64,447 Total liabilities $ 64,447 $ 64,447 $ — $ — $ 64,447 (A) See Notes 4 and 5 regarding changes in the carrying values of servicing assets and loans, respectively. There were no transfers of Level 3 instruments to, or from, other fair value levels during the periods presented. (B) Included in “Digital assets” in the Condensed Consolidated Balance Sheets and represents digital assets held for sale at fair value, and excludes digital assets held at cost that are considered intangible assets. (C) Included in “Other current assets” in the Condensed Consolidated Balance Sheets. (D) Residual interest securities and non-rated securities in securitizations not considered debt securities are included within Level 3 of the fair value hierarchy. (E) Included in “Debt, current” in the Condensed Consolidated Balance Sheets. 50 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Significant Valuation Inputs The Company used the following unobservable inputs that it considers significant to value the financial assets and liabilities carried at fair value and classified within Level 3 of the fair value hierarchy: September 30, 2025 Fair Value Discount Rate (A) (%) CPR (B) (%) CDR (C) (%) Servicing Rate (D) (%) Loss Severity (E) Marketable Securities Residual interest securities $ 38,308 11.5 % - 24.6 % 18.3 % 16.2 % - 20.8 % 18.8 % — % - 2.4 % 1.2 % n.a n.a Servicing Assets HELOC loans $ 98,120 13.0 % - 13.0 % 13.0 % — % - 32.5 % 13.7 % — % - 4.9 % 0.8 % 0.3 % n.a Mortgage loans 1,880 9.5 % - 10.5 % 10.3 % 3.6 % - 8.0 % 5.3 % — % - 1.1 % 0.4 % — % n.a Total / Weighted average (F) $ 100,000 12.9 % 13.5 % 0.7 % 0.3 % Loans Held for Sale HELOC loans (G) $ 323,184 4.9 % - 8.9 % 6.5 % 2.6 % - 39.6 % 15.6 % — % - 94.3 % 1.6 % n.a — % - 97.6 % 28.4 % Personal loans (H) 62,935 8.9 % - 11.5 % 10.2 % — % - — % — % — % - — % — % n.a — % - — % — % Other (I) 2,913 6.2 % - 8.7 % 7.1 % 18.0 % - 40.4 % 24.7 % 1.3 % - 8.7 % 6.1 % n.a 88.0 % - 92.0 % 90.0 % Total / Weighted average (F) $ 389,032 5.5 % 13.1 % 1.4 % December 31, 2024 Fair Value Discount Rate (A) (%) CPR (B) (%) CDR (C) (%) Servicing Rate (D) (%) Loss Severity (E) Marketable Securities Residual interest securities $ 34,506 14.5 % - 24.0 % 19.7 % 15.2 % - 20.1 % 17.7 % 1.5 % - 1.7 % 1.6 % n.a n.a Servicing Assets HELOC loans $ 86,465 13.0 % - 13.0 % 13.0 % 1.0 % - 33.0 % 14.4 % — % - 4.4 % 0.7 % 0.2 % n.a Mortgage loans 2,032 10.0 % - 11.0 % 10.8 % 3.9 % - 8.2 % 5.7 % — % - 1.0 % 0.2 % — % n.a Total / Weighted average (F) $ 88,497 12.9 % 14.2 % 0.7 % 0.2 % Loans Held for Sale HELOC loans (G) $ 366,154 6.4 % - 10.1 % 7.6 % 1.3 % - 32.4 % 13.6 % 1.5 % - 1.7 % 1.6 % n.a 16.6 % - 44.2 % 32.4 % Other (I) 3,829 5.1 % - 8.7 % 6.9 % 17.9 % - 99.7 % 25.6 % 0.4 % - 10.2 % 7.7 % n.a 88.0 % - 92.0 % 90.0 % Total / Weighted average (F) $ 369,983 7.6 % 13.7 % 1.7 % (A) Significant increases (decreases) in the discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. (B) Significant increases (decreases) in the CPR, in isolation, would result in a significantly lower (higher) fair value measurement. (C) Significant increases (decreases) in the CDR, in isolation, would result in a significantly lower (higher) fair value measurement. (D) Significant increases (decreases) in the servicing rate in excess of servicing costs, in isolation, would result in a significantly higher (lower) fair value measurement. Values represent the weighted average total mortgage servicing amount, net of subservicing costs. (E) Significant increases (decreases) in the severity, in isolation, would result in a significantly lower (higher) fair value measurement. (F) Unobservable inputs were weighted by respective fair value of each class. (G) HELOC loans are measured at estimated fair value using a discounted cash flow valuation methodology, more specifically a residential mortgage cash flow model. (H) Personal loans are measured at estimated fair value using a discounted cash flow valuation methodology, more specifically a loan cash flow model. (I) Personal unsecured loans included in “Other” are measured at estimated fair value using a discounted cash flow valuation methodology, more specifically a loan cash flow model. The Company uses an estimated recovery from collections and recent sales to fair value personal loans that are 30 days past due; the fair value of such loans at September 30, 2025 and December 31, 2024 were not material. 51 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Significant Valuation Input Sensitivity The following tables summarize the estimated change in fair value of assets carried at fair value and classified within Level 3 of the fair value hierarchy for the unobservable inputs in “—Significant Valuation Inputs” at September 30, 2025. Each of the following sensitivity analyses is hypothetical and is provided for illustrative purposes only. There are certain limitations inherent in the sensitivity analyses presented. In particular, the results are calculated by stressing a particular economic assumption independent of changes in any other assumption; in practice, changes in one factor may result in changes in another, which might counteract or amplify the sensitivities. Also, changes in the fair value based on the following variations in an assumption generally may not be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. -2% -1% +1% +2% $ % $ % $ % $ % Discount Rate Marketable Securities Residual interest securities $ 780 3.9 % $ 380 1.9 % $ ( 360 ) ( 1.8 ) % $ ( 703 ) ( 3.5 ) % Servicing Assets HELOC loans 5,920 6.2 2,874 3.0 ( 2,702 ) ( 2.8 ) ( 5,261 ) ( 5.5 ) Mortgage loans 238 12.6 114 6.1 ( 105 ) ( 5.6 ) ( 202 ) ( 10.8 ) Loans Held for Sale HELOC loans 16,052 3.4 10,890 2.3 ( 14,240 ) ( 3.0 ) ( 29,376 ) ( 6.2 ) Personal loans 62,297 0.7 62,155 0.5 ( 61,446 ) ( 0.7 ) ( 61,042 ) ( 1.3 ) -20% -10% +10% +20% $ % $ % $ % $ % CPR Marketable Securities Residual interest securities $ 1,001 5.0 % $ 513 2.6 % $ ( 464 ) ( 2.3 ) % $ ( 884 ) ( 4.4 ) % Servicing Assets HELOC loans 6,044 6.3 2,922 3.1 ( 2,740 ) ( 2.9 ) ( 5,309 ) ( 5.6 ) Mortgage loans 125 6.7 61 3.3 ( 59 ) ( 3.1 ) ( 115 ) ( 6.1 ) Loans Held for Sale HELOC loans 815 0.2 488 0.1 ( 544 ) ( 0.1 ) ( 1,245 ) ( 0.3 ) Personal loans — — — — — — — — CDR Marketable Securities Residual interest securities 274 1.4 136 0.7 ( 135 ) ( 0.7 ) ( 269 ) ( 1.4 ) Servicing Assets HELOC loans — — — — — — — — Loans Held for Sale HELOC loans 1,599 0.3 807 0.2 ( 819 ) ( 0.2 ) ( 1,628 ) ( 0.4 ) Personal loans — — — — — — — — Servicing Rate Servicing Assets HELOC loans 8,002 8.4 4,001 4.2 ( 4,001 ) ( 4.2 ) ( 8,002 ) ( 8.4 ) 52 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Marketable Securities The following table summarizes activities involving the Company’s marketable securities that are measured at fair value and classified within Level 3 of the fair value hierarchy for the nine months ended September 30, 2025 and 2024: Balance at December 31, 2023 $ 11,952 Purchases (A) 16,527 Sales ( 872 ) Principal payments ( 1,002 ) Change in fair value (B) 870 Balance at September 30, 2024 27,475 Balance at December 31, 2024 34,506 Purchases (A) 12,333 Principal payments ( 9,430 ) Change in fair value (B) 897 Balance at September 30, 2025 $ 38,306 (A) Includes premiums paid on the purchased notes. (B) Included in “Gain on sale of loans, net” in the Condensed Consolidated Statements of Operations. Assets and Liabilities Not Measured at Fair Value on a Recurring Basis The following table summarizes information about the liabilities that are not measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024: September 30, 2025 Carrying Value Fair Value Level 1 Level 2 Level 3 Total Liabilities Financed Retained Interests (A) $ 199,129 $ — $ 198,444 $ — $ 198,444 Total liabilities $ 199,129 $ — $ 198,444 $ — $ 198,444 December 31, 2024 Carrying Value Fair Value Level 1 Level 2 Level 3 Total Liabilities Financed Retained Interests (A) $ 128,101 $ — $ 127,327 $ — $ 127,327 Total liabilities $ 128,101 $ — $ 127,327 $ — $ 127,327 (A) Financed retained interests classified as Level 2 in the fair value hierarchy were valued with a discounted cash flow model using collateral contractual terms and discount rates of similar instruments that include default and prepayment expectations as observable inputs. Debt not carried at fair value, including financed retained interests, is presented at the face amount, net of debt issuance costs that are amortized over the contractual term using the effective interest method. The carrying value of debt associated with the warehouse facilities and servicing rights financing approximates the fair value due to their relatively short maturities. 53 FIGURE TECHNOLOGY SOLUTIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in tables in thousands, except share and per share data, ratios or as otherwise noted) Assets Measured at Fair Value on a Non-recurring Basis Digital Assets The Company held HASH at cost, totaling $ 1.5 million and $ 1.5 million at September 30, 2025 and December 31, 2024, respectively, as intangible assets presented within “Digital assets” in the Condensed Consolidated Balance Sheets. In connection with a valuation that management performed with the assistance of a third-party specialist during the Reorganization, the Company determined an impairment indicator existed for the HASH it held. Therefore, the Company recognized an impairment charge of $ — million and $ 5.9 million, equal to the difference between the fair value and costs basis of HASH, in “Other income, net” in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2024, respectively. There were no impairment charges during the three and nine months ended September 30, 2025. NOTE 13 – INCOME TAXES The Company calculates the provision for income taxes during interim periods by applying an estimated annual effective tax rate to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Our effective tax rate may be subject to fluctuations during the year due to impacts from the following items: (i) changes in forecasted pre-tax and taxable income or loss, (ii) changes in statutory law or regulations in jurisdictions where we operate, (iii) audits or settlements with taxing authorities, and (iv) changes in valuation allowance assumptions. The Company’s income tax provision for the three and nine months ended September 30, 2025 is a benefit of $ 31.5 million and $ 26.9 million, respectively, and expense of $ 1.3 million and $ 1.8 million, respectively, for the three and nine months ended September 30, 2024. The income tax benefit for the three and nine months ended September 30, 2025, primarily represents a discrete benefit from the recognition of deferred tax assets following the Recombination and additional R&D credits identified upon completion of the R&D tax credit study. In July 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The changes introduced by the OBBB Act did not have a material impact on our annual effective tax rate for 2025. At September 30, 2025 the Company maintained a partial valuation allowance against its federal and state deferred tax assets, compared to a full valuation at December 31, 2024. The partial release during the three months ended September 30, 2025 is triggered by the Recombination combined with strong year to date and forecasted earnings. Management will continue to assess the realizability of deferred tax assets in future periods. The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition at the effective date to be recognized. The Company’s operations and resulting income taxes are calculated as if the Company filed a combined, separate federal income tax return until the Recombination. All tax years since inception are subject to examination by tax authorities, though the Company is currently not under examination by any federal or state jurisdiction. 54 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. U.S. Dollars appearing in tables are presented in thousands unless otherwise indicated. Business Overview Figure is building the future of capital markets using blockchain-based technology. Figure’s proprietary technology powers next-generation lending, trading and investing activities in areas such as consumer credit and digital assets. Our application of the blockchain ledger allows us to better serve our end-customers, improve speed and efficiency, and enhance standardization and liquidity. Using our technology, we continue to develop dynamic, vertically-integrated marketplaces across the approximately $2 trillion consumer credit market and the rapidly growing approximately $4 trillion cryptocurrency and digital asset market. As a result, Figure has grown quickly in a capital-efficient manner since our founding, and more recently we have achieved strong and growing profitability, with net income of $119.2 million and Adjusted EBITDA of $169.8 million for the nine months ended September 30, 2025, compared to net income of $14.0 million and Adjusted EBITDA of $86.0 million for the nine months ended September 30, 2024, and accumulated deficit of $202.2 million and total stockholders’ equity of $1.2 billion as of September 30, 2025, compared to accumulated deficit of $320.9 million and total stockholders’ equity of $363.4 million, as of December 31, 2024. See the section titled “Non-GAAP Financial Measures” for information regarding our use of Adjusted Net Revenue and Adjusted EBITDA and a reconciliation of such non-GAAP financial measures to our most directly comparable financial measures calculated and presented in accordance with GAAP. The infrastructure supporting capital markets today is fragmented and operates on legacy systems which employ antiquated processes for loan approvals and transaction processing. This creates process and cost inefficiencies in serving consumer credit markets and limits the development of alternative marketplaces. Furthermore, the manual elements underpinning the records of ownership and transfer of financial and real assets constrain liquidity, maintain elevated costs, and are error-prone. Figure aims to address these challenges by using blockchain-based technology to innovate beyond legacy processes. We built a transformative, scaled and fast growing technology platform that displaces trust with truth in the financial ecosystem. Our platform also supports legacy systems, and our goal is to shift customer adoption towards blockchain-based solutions. Furthermore, our technology significantly reduces complexity and increases speed for market participants across the application, underwriting, funding and subsequent capital markets processes. Using our Loan Origination System (“LOS”), the time it takes to fund a home equity loan from application has been reduced to a median of 10 days from an industry median of approximately 42 days (based on data from industry sources) as of September 30, 2025. In comparison, for asset classes outside of mortgages, such as personal loans, there are many loan originators that utilize digitized, fast and automated processes that can fund as fast as same-day or often in as little as three to five days. Additionally, the average production cost per loan was reduced to approximately $730 for the year ended December 31, 2024 from a mortgage industry average of $11,230 for the quarter ended December 31, 2024, according to the MBA. This is a result of our entirely automated application process that takes as little as five minutes to complete and as few as five days to fund. Our platform automates income verification and offers customers the ability to redraw without incurring closing or out-of-pocket costs. Additionally, our platform employs an automatic valuation model, replacing the traditional, time-consuming appraisal process, and utilizes a digital lien matching process instead of the traditional analog title search. It also facilitates remote closings, including remote notaries, in jurisdictions where permitted by applicable laws. Importantly, we have brought a liquid capital market for loans behind this low cost, automated and blockchain-based origination engine. Our technology enables the immutable recording of all assets and their key information on Provenance Blockchain. Provenance Blockchain, an independent Layer 1 blockchain, provides the scale, security, speed and cost structure to facilitate activity across the broad financial services landscape as a record of truth for assets. Using loans as an example, this authenticity record provides a validation mechanism to support the traditional, off-chain processes we use for tracking and monitoring loan transactions. This record provides verified information regarding the chain of ownership for all of the loans originated on our platform. Adoption of our technology has scaled significantly with every asset passing through 55 Figure’s system being recorded on Provenance Blockchain and accumulating over $60 billion in both real-world and digital asset transactions from our launch in late 2018. According to data from RWA.xyz, our real-world assets total value locked is approximately $13 billion as of September 30, 2025 and our share of tokenized private credit is approximately 75% based on the value of outstanding loans originated as of September 30, 2025. Further, 91% of loans originated through our LOS, which include loans originated by Figure as well as by our partners, for the three months ended September 30, 2025 utilized our DART platform, our lien and eNote registry that is built on Provenance Blockchain, compared to only 2% of loan originations for the year ended December 31, 2024. Loans originated by our partners utilizing DART accounted for 93% of Partner-branded loans and 70% of all loans originated by our LOS (including wholesale (brokered) transactions) for the three months ended September 30, 2025. We pay a minimal amount in the form of HASH for our use of the Provenance Blockchain. HASH is the utility token of the Provenance Blockchain and therefore gas fees (usage fees) are paid in HASH. A small amount of HASH is required to complete each transaction, and we pay these fees on behalf of all participants for any activity they complete with our assets. The average gas fee has been less than one HASH since 2018, which is equivalent to approximately $0.03 as of September 30, 2025. We began addressing the consumer credit market in 2018 with our Figure-branded product, which catered to direct-to-consumer home equity loans. We then expanded further through Partner-branded strategies, in which a growing number of partners use our technology to independently originate home equity loans. For the three months ended September 30, 2025, we facilitated approximately $2.4 billion of home equity lending, representing an increase of 67% compared to the three months ended September 30, 2024. For the year ended December 31, 2024, we facilitated approximately $5 billion of home equity lending, representing an increase of 51% compared to the year ended December 31, 2023. As of September 30, 2025 we had 246 active partners. Our relationship with our partners is based on our partners’ right to use our solutions. Once a partner is approved and onboarded, the partner enters into a contractual agreement with us for the right to use our LOS and Figure Connect marketplace in exchange for fees. These agreements typically have a fixed term with auto-renewals unless notice is given to terminate, are non-exclusive and do not obligate our partners to use our solutions. In June 2024, we launched Figure Connect, an electronic marketplace that employs blockchain technology, to directly connect sellers and buyers of loans. Since June 2024, approximately $2.4 billion in HELOC volume was transacted on Figure Connect by third parties and 33 total marketplace participants (across loan originators, buyers and investors) were onboarded as of September 30, 2025. With our technology applicable to the broader capital markets, we are expanding beyond our foundational solutions by developing trading and investing products. One example is Figure Exchange, a digital asset marketplace that provides customers advantages for crypto-trading, such as cross-asset collateralization for margin lending. Another example is YLDS, a groundbreaking interest-bearing peer-to-peer transferable stablecoin that is both native to a public blockchain and a debt security registered with the SEC. YLDS has many use cases resulting from its status as a security, including yielding collateral for institutions, cross-border payments and serving as the de-facto currency of Figure Exchange. For the nine months ended September 30, 2025, we did not generate revenue from Figure Exchange and revenue generated from YLDS was not material. A newer pillar of our value proposition is the Democratized Prime platform, which disrupts the traditional prime brokerage infrastructure by allowing users to lend their assets or excess cash into the ecosystem at a market-clearing rate. Democratized Prime is a DeFi marketplace connecting sources and uses of capital, and a many-to-many marketplace, where common borrowers face off against common lenders. Lenders have pro-rata exposure to all borrowers and make their decision on participating and on the desired loan interest rate based on a combination of (i) the liquidity of the collateral, (ii) the volatility of the collateral, (iii) the over-collateralization amount, and (iv) the quality of the collateral. In the case of Figure HELOC loans, there is a weekly Bid Wanted In Competition (“BWIC”) for these loans that provides liquidity; should there be a breach of loan-to-value ratio, the relevant loans will be liquidated through the BWIC process. As of September 30, 2025, t he applicable fees and associated revenue for Democratized Prime is 50 basis points of outstanding balance and are paid by the borrow er. As of September 30, 2025, Democratized Prime had not generated material revenue as we have provided the initial assets to support the platform while we build out funding distribution. W e expect Democratized Prime to grow as users begin to recognize its benefits. We believe that we have established a regulatory and licensing apparatus which sets us apart from our competitors and enables us to continue expanding our diverse product offering. We currently have more than 180 lending and servicing licenses, 48 money transmitter licenses, and are an SEC-registered broker-dealer with authority to operate an ATS, the operations of which are conducted in accordance with SEC and FINRA rules and regulations. 56 We generate revenue from the volume transacted on our marketplaces and through the use of our proprietary technology. We earn volume-based fees from partners and users who utilize our technology solutions to transact in our ecosystem. Within this usage-based model, we target positive unit economics in each of our solutions. In addition to our growing stream of ecosystem and technology fees, we also earn origination, gain on sale, and servicing revenue from assets generated through our LOS. During the nine months ended September 30, 2025, HELOCs comprised over 99% of our total loan originations. For the year ended December 31, 2024, approximately 82% of our total net revenue was generated from origination fees, gain on sale of loans, servicing fees and interest income from assets generated through our LOS from both Figure and our network of partners. For the nine months ended September 30, 2025, this represented approximately 74% of total net revenue, as revenue from Figure Connect and other new products grew faster than the solely LOS-driven revenue sources. Recent Developments On September 12, 2025, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 36,225,000 shares of its Class A common stock, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $25.00 per share. The IPO resulted in net proceeds to the Company of $663.4 million after deducting the underwriting discounts and commissions. In connection with the IPO, all shares of outstanding convertible preferred stock, including 2,010,410 shares of Series E preferred stock issued upon the exercise of outstanding warrants, automatically converted to 113,910,905 shares of Class A common stock, and a total of 39,393,047 shares of our Class A common stock held by the Controlling Party and his permitted transferees were converted into an equivalent number of shares of Class B common stock, of which 1,500,000 shares were subsequently converted back to Class A and sold in connection with the IPO. Key Operating Metrics We review several key performance measures, discussed below, to evaluate our business and results, measure performance, identify trends, formulate plans, and make strategic decisions. We believe that the presentation of such metrics is useful to our investors and counterparties because they are used to measure and model the performance of companies similar to us using similar metrics. The following table sets forth key performance measures that we use to evaluate our business for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2025 2024 2025 2024 Ecosystem Volume (1) $ 2,538,237 $ 1,837,036 $ 6,040,155 $ 4,343,926 Consumer Loan Marketplace Volume (2) 2,469,446 1,450,472 5,672,576 3,956,643 Partner-Branded Volume (3) 1,867,618 963,808 4,320,761 2,608,966 Figure-Branded Volume (4) 601,828 486,664 1,351,815 1,347,677 Digital Asset Marketplace Volume (5) 68,791 386,564 367,579 387,283 Figure Connect Volume (6) 1,131,334 — 2,375,900 — Net Revenue 156,365 101,007 346,952 257,030 Net Income (Loss) 89,822 27,427 119,203 14,026 Adjusted Net Revenue (7) 156,034 110,034 357,172 262,546 Adjusted EBITDA (7) 86,386 49,437 169,827 85,988 _______________ (1) Ecosystem Volume consists of Consumer Loan Marketplace Volume and Digital Asset Marketplace Volume. (2) We define Consumer Loan Marketplace Volume as the total U.S. dollar equivalent value of originations of HELOCs, DSCR,and personal loans on our LOS. We believe this measure is an indication of our scale and represents a potential revenue opportunity from the technology used for consumer credit loan originations. (3) We define Partner-Branded Volume as the total U.S. dollar equivalent value of loans originated using our LOS under our partners’ brands. Partner-Branded volume is inclusive of Figure Connect Volume. (4) We define Figure-Branded Volume as the total U.S. dollar equivalent value of loans originated using our LOS under our brand. (5) We define Digital Asset Marketplace Volume as the total U.S. dollar equivalent value of matched trades transacted between a buyer and seller through Figure Exchange. We believe this measure is an indication of our scale and represents a potential opportunity for our digital asset offering. (6) We define Figure Connect Volume as the total U.S. dollar equivalent value of Consumer Loan Marketplace Volume originated by third-party sellers through our Figure Connect marketplace. We believe this measure is a reflection of the underlying growth of our Figure Connect ecosystem. (7) For definitions of Adjusted Net Revenue and Adjusted EBITDA and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.” 57 Trends and Other Factors Affecting Our Performance Market and Competitive Factors Currently, our revenue is substantially derived from our HELOC product offering and from our LOS technology offering. The HELOC market is supported by positive trends across the housing market, largely from growing home equity balances and a mortgage borrower population that is characterized by low fixed-rate first lien mortgages, for which a cash-out refinancing is a less attractive alternative. Historically, consumers have primarily accessed home equity lending products primarily through banks and other depository institutions, but in 2023, positive trends in the market landscape emerged as banks began to de-emphasize the product. Additionally, leading non-depository lenders that specialized in traditional mortgage products lacked the ability to effectively offer a consumer-friendly HELOC product to meet the demand of potential borrowers seeking to leverage their increased home equity value as a potential financing alternative. We believe the HELOC market will remain strong, as historically high housing values coupled with a historically low sales market have led consumers to search for ways to utilize the untapped equity in their homes. Figure continues to develop technology to provide its partners with solutions for any interest rate environment, and we expect the impact of rates on our business to decrease. We expect to continue to see new entrants in the market because of the significant size of the potential market opportunity and a broadly underserved universe of potential borrowers in the HELOC market. This trend has continued recently, most notably with originators of agency mortgages entering the market as mortgage refinance activity slowed. However, many of these entrants have struggled to gain traction, which we believe is due to their lack of technology, product expertise and capital markets capabilities necessary to effectively participate. With our suite of products and solutions centered around the vision of promoting efficiency and liquidity in financial markets we feel we are uniquely positioned to provide the infrastructure to support an efficiently functioning HELOC market. This has been evidenced by our performance to date: in 2024, we were the leading originator of HELOCs among non-depository lenders, in addition to providing the technology to power other originators through our Partner-branded strategies. Continued Expansion of our Ecosystem and Product Offerings We continue to expand our product offerings through the release of new consumer lending products centered around the proven technology utilized in HELOC origination and entrance into the broader capital markets, including a marketplace that allows partners to trade and invest in products across multiple asset classes. In addition to our HELOC product, we provide technology platforms giving consumers exposure to a variety of assets in an efficient and secure way. We intend to continue broadening our network of partners that originate with Figure’s technology. While our current roster of partners includes many of the largest mortgage originators across the country, we believe that we have significant room to grow those relationships as we drive adoption across their sales force and engrain our technology in their core offerings. Additionally, we see a substantial opportunity to further expand the group of companies that we partner with as our technology offering would benefit a diverse constituency (including mortgage originators, banks, credit unions, mortgage servicers and other consumer lenders). Our relationship with our partners is based on our partners’ right to use our solutions. Once a partner is approved and onboarded, the partner enters into a contractual agreement with us for the right to use our LOS and Figure Connect marketplace in exchange for fees. These agreements typically have a fixed term with auto-renewals unless notice is given to terminate, are non-exclusive and do not obligate our partners to use our solutions. As we launch new products, we expect to generate significant momentum by capitalizing on our proven track record, reputation and to our established network of partners to support our ability to quickly scale in adjacent products. Regulatory Environment Our business is subject to regulations, which may expose us to significant regulatory risk and cause additional legal costs to ensure compliance. The existing legal framework that governs the financial markets is continuously reviewed and regularly amended, resulting in enforcement of new laws and regulations that apply to our business. The current regulatory environment in the United States may be subject to future legislative and regulatory changes driven by U.S. and global issues and priorities, including the recent change in U.S. administration and Congress, which may lead to material changes to existing laws, rules and regulations, guidance and enforcement stances. The impact of any changes in the legal or regulatory landscape on us and our operations remains uncertain. Compliance with regulations both now and in the future may require us to dedicate additional financial and operational resources, which may adversely affect our profitability. In addition, compliance with regulations may require our clients to dedicate significant financial and operational resources, which may negatively affect their ability to pay our fees and use our platforms and, as a result, our profitability. However, under certain circumstances regulation may increase demand for our platforms and solutions, and we believe we are well positioned to benefit from any potential increased digital transformation needs due to regulatory changes as market participants seek platforms that meet regulatory requirements and solutions that help them comply with their regulatory 58 obligations. In recent years, we have also expended significant managerial, operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions in which we operate. We expect to continue to incur costs to satisfy our legal and compliance obligations, which our unregulated or less regulated competitors have not had to and will not incur. Technology and Cybersecurity Environment Offering a secure, efficient technology platform is essential to maintaining our level of competitiveness in the market and attracting new partners and marketplace participants. We believe that the demand for our platform and services will increase with the introduction of new products. We plan to continue to focus on and invest in technology infrastructure initiatives and continually improve and expand our platform to further enhance our market position. We experience cyber-threats and attempted security breaches. If these were successful, these cybersecurity incidents could impact revenue and operating income and increase costs. We therefore continue to make investments to strengthen our cybersecurity infrastructure, which may result in increased costs. Impact of Macroeconomic Cycles Macroeconomic cycles can impact our financial performance and demand for our products. Consumer demand for loans, our partners’ willingness to originate new loans using our technology, investor appetite for credit-oriented investment opportunities, and credit performance can fluctuate in an economic slowdown. However, we believe the flexibility inherent in our platform will allow us to align our strategy with the market opportunity through cycles. Further, our technology-driven underwriting approach has proven effective, and our loans have demonstrated strong credit performance since inception. Seasonality We experience seasonal fluctuations in our business as a result of consumer spending patterns which we expect to mimic the seasonality of our general business in the near term. Historically, our origination volume has been the strongest during the second and third quarters due to increases in home improvements and our origination volume is at its lowest during the first and fourth quarters. Adverse events that occur during our second and third quarters could have a disproportionate effect on our financial results for the fiscal year. Effects of Inflation While inflation may impact our revenues and operating expenses, we believe the effects of inflation, if any, on our results of operations and financial condition have not been significant during the three and nine months ended September 30, 2025 and 2024. However, there can be no assurance that our results of operations will not be materially impacted by inflation in the future. 59 Loan Characteristics The following table sets forth the LOS Volume and the weighted-average characteristics of loans we originated or purchased for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2025 2024 2025 2024 HELOC Loans (1) Partner-branded Loan Term (in months) 303 328 306 329 Customer Interest Rate 9.2 % 10.6 % 9.4 % 11.0 % Customer FICO Score 755 751 756 752 Loan Balance $ 93 $ 92 $ 92 $ 92 Figure-branded Loan Term (in months) 293 295 294 290 Customer Interest Rate 9.0 % 10.5 % 9.3 % 10.7 % Customer FICO Score 747 738 748 738 Loan Balance $ 90 $ 72 $ 88 $ 69 (1) HELOC loans subject to monthly, amortizing borrower payments and may be prepaid and redrawn within a limited period of time. Personal, mortgage, and other loans are not considered significant. Basis of Presentation The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of our company and our subsidiaries. Our subsidiaries are entities in which our company holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. For the purposes of the Condensed Consolidated Financial Statements, the basis of presentation of such subsidiaries is GAAP. All intercompany accounts and transactions have been eliminated. As detailed in Note 1 of the Condensed Consolidated Financial Statements, the Recombination that was effective on August 29, 2025 recombined FTI and FMH through a series of transactions into a single operating entity. Prior to the Recombination, the Company operated and managed its business through FTI and FMH, including their respective subsidiaries, as two distinct legal entities and disclosed operating segments based on each legal entity. Following the Recombination, the Company operates as a single operating and reportable segment. The legacy executive management teams have been consolidated into one executive team, and the Company’s CODM is its Chief Executive Officer. Accordingly, the Condensed Consolidated Financial Statements have been retrospectively recast to reflect the results as if FTI and FMH were a single consolidated entity as of the earliest period presented. See Notes 1 and 2 of the accompanying Condensed Consolidated Financial Statements for more information. This change did not impact on our consolidated financial position, results of operations, cash flows, or stockholders’ equity. Prior period segment disclosures have been recast to conform to the current period presentation. Components of Results of Operation Net Revenue Our net revenue is primarily derived from ecosystem and technology fees, loan originations and sales, including interest income earned thereon, and loan servicing. Ecosystem and Technology Fees Through our Partner-branded channel, we earn volume-based technology and processing fees, based on the principal balance of each loan originated on our LOS and the principal balance of loans transacted on Figure Connect. Such fees arise from contracts entered into with partners to provide access to a cloud-based lending marketplace platform that is developed by us. Our platform enables partners, who are retail and wholesale lenders, to originate loans branded under the partners’ name, by having access to a suite of services such as submission of loan applications, verifying information 60 provided within submitted applications, risk underwriting, delivery of electronic loan offers, and electronic loan documentation signed by the borrower. We also earn a fee for arranging and facilitating the securitization of HELOCs based on the outstanding principal balance of the transferred HELOCs, which is fully earned on the securitization closing date. Program fees are paid by the trust as the fees are earned and paid upon closing. Origination Fees Origination fees consist of the fees that we earn from originating loans upon the customer’s initial loan draw. Origination fees include loan origination fees and other fees collected from the customer at the time a loan is funded. Origination fees are currently calculated as a percentage of the customer’s initial loan balance and are recognized as revenue at a specified point in time, once a customer’s loan application has been approved, a credit decision has been reached, and the loan has been funded and processed. These fees are earned through both our Figure-branded channel as well as our Partner-branded channel through wholesale brokers. Servicing Fees and Other Revenue Servicing fees and other revenue consist of the fees that we earn from managing loan portfolios on behalf of the owners of those portfolios. Servicing fees are calculated based on a contractual percentage of the outstanding principal under servicing arrangements and are charged monthly pursuant to our servicing agreements for activities we perform throughout the loan term, including collection, processing and reconciliations of payments received, investor reporting, and customer support. We act as servicer for the majority of the loans facilitated through our platform. Gain on Sale of Loans Gain on sale of loans consists of the net proceeds from the difference between the proceeds received at the sale of loans to third-party buyers, and the unpaid principal balance of such loans, including adjustments for changes in fair value for loans sold during the period. These realized and unrealized gains or losses and fair value adjustments are recognized through both our Figure-branded and Partner-branded channels based on the fair value of the loan originated by us, or purchased from partners, generally represented by the consideration paid relative to the loans’ estimated fair value at each quarter end or consideration received upon sale. We have elected the fair value option for both the Figure-branded loans we originate as well as the Partner-branded loans we purchase from our partners that we hold for sale. Loans held for sale consist of loans we intend to sell, including HELOCs, personal loan products, and mortgage loans we previously originated or purchased. HELOCs and mortgage loans are secured by first or junior liens on customers’ real property. Any changes in fair value relating to loans held for sale are included in our results of operations as net fair value adjustments. Interest Income We earn interest income primarily from three sources: • Loans — We accrue interest income on loans we hold based on the unpaid principal balance (“UPB”) outstanding at contractual interest rates. We place loans on nonaccrual status when they become 90 days past due (30 days past due for collateralized personal loans) or when we doubt full recovery of interest and principal. Loans are considered past due when contractually required principal or interest payments have not been made on the due dates. When a loan is placed on nonaccrual status, the accrued and unpaid interest is reversed as a reduction of interest income and accrued interest receivable. Interest income is subsequently recognized only to the extent cash payments are received or when the loan has been placed back in accrual status. Loans are restored to accrual status when the loan becomes current and we expect repayment of the remaining contractual principal and interest. We also recognize cash received on non-accrual loans as interest income after all contractual principal is repaid. • Marketable Securities — We recognize interest income on the debt securities we hold where we expect to collect all contractual cash flows, and the debt security cannot be contractually prepaid in such a way that we would not recover substantially all of our recorded investment, based on the stated coupon rate and the outstanding principal amount of the debt security. We recognize interest income on beneficial interests based on the investment’s accretable yield, which represents the difference between the expected undiscounted cash flows and the carrying value of the investment. We recognize the accretable yield as interest income on a prospective level yield basis over the life of the expected cash flows. Changes in the amount or timing of actual or expected cash flows may change the accretable yield, and we adjust interest income recognized in future periods using a recalculated level 61 yield applied to the then-current carrying value. Increases (decreases) in the amount of cash flows or acceleration (deceleration) of cash flows, in isolation, generally increase (decrease) the interest income recognized in future periods. • YLDS — We accrue interest income monthly for cash equivalents held by Figure Certificate Corp. for which we pay SOFR less 50 basis points to certificates held in the form of YLDS. • Cash and Cash Equivalents — We accrue interest income monthly for cash held at depository institutions and investments in short-term instruments such as money-market funds. Gain on Servicing Asset We routinely sell HELOCs, and in the past we have also sold personal loans, mortgage loans and Figure Pay credit loans, with servicing rights retained. During the three and nine months ended September 30, 2025, HELOCs comprised over 98% and 99% of our total loan originations, respectively. Figure Pay credit loans are short duration, installment loans that consumers can use at their discretion. Loan servicing activities include account maintenance, collections, processing payments from customers, and distributions to third-party loan owners. During each reporting period, a servicing asset is recognized when the benefits of servicing are determined to be greater than adequate compensation for the servicing activities that we perform, and conversely, a servicing liability is recognized if the benefits of servicing are determined to be less than adequate compensation for the servicing activities that we perform. We carry servicing assets at fair value. Any changes in the fair value are included in our results of operations as net fair value adjustments. These gains are recognized through both our Figure-branded and Partner-branded channels. Operating Expenses Operating expenses consist of general and administrative, technology and product development, operations and processing, sales and marketing and interest expenses. General and Administrative General and administrative expenses primarily consist of payroll and other personnel-related costs, including stock-based compensation, legal and compliance, finance and accounting, human resources and facilities teams, professional services fees, facilities, and travel expenses. We expect general and administrative expenses to increase in the near-term as we continue to grow our business as well as a result of our transition to being a public reporting company. Technology and Product Development Technology and product development expenses primarily consist of payroll and other personnel-related costs, including stock-based compensation, for our product, engineering, and design team, which is responsible for maintenance, bug fixes and software updates among others, as well as the costs of systems and tools used by these personnel. We expect technology and product development expenses to increase as we continue to grow our business and expand our product, engineering, and design teams as we continue to enhance and expand our technology and product offerings. Operations and Processing Operations and processing expenses primarily consist of payroll and other personnel-related costs, including stock-based compensation for personnel engaged in onboarding, loan servicing, customer support and other related operational teams. These expenses also include the costs of third-party systems and tools we use as part of the loan origination process, including information verification, fraud detection, and payment processing activities. We expect operations and processing expenses to increase as we continue to grow our business and expand our product offerings. Sales and Marketing Sales and marketing expenses primarily consist of costs incurred across various advertising channels, including expenses associated with advertising campaigns, and building overall brand awareness. Sales and marketing expenses also include payroll and other personnel-related costs, including stock-based compensation expense, for our sales and marketing personnel. Interest Expense Interest expense consists of the costs we incur on our borrowings, amortization of fees, and other costs associated with our debt obligations. 62 Other Expense We have contractual agreements with loan buyers to repurchase loans under certain circumstances, including in the event of borrower delinquencies within the first 30 to 90 days of loan origination. We record a loss on those loans based on the fair value at the date on which we identify the repurchase obligation. Other income, net Other income, net includes unrealized and realized gains (losses) resulting from transactions of certain digital assets, litigation settlements, adjustments to non-equity method investments, foreign exchange rate gains (losses) and other non-income based state and local taxes. Results of Operations Consolidated Statements of Operations The following table sets forth our Condensed Consolidated Statements of Operations for the periods presented: Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Net Revenue Ecosystem and technology fees $ 35,691 $ 7,323 $ 28,368 387.4 % $ 79,445 $ 19,830 $ 59,615 300.6 % Servicing fees 7,882 6,483 1,399 21.6 22,537 18,389 4,148 22.6 Interest income 17,864 12,772 5,092 39.9 50,502 32,475 18,027 55.5 Origination fees 21,415 18,940 2,475 13.1 50,142 51,244 (1,102) (2.2) Gain on sale of loans, net 63,561 57,434 6,127 10.7 131,896 116,069 15,827 13.6 Gain (loss) on servicing asset, net 9,332 (2,057) 11,389 n.m. 11,502 18,580 (7,078) (38.1) Other revenue 620 112 508 453.6 928 443 485 109.5 Total net revenue 156,365 101,007 55,358 54.8 346,952 257,030 89,922 35.0 Expenses General and administrative 36,366 15,890 20,476 128.9 % 71,603 78,428 (6,825) (8.7) % Technology and product development 15,915 16,080 (165) (1.0) % 49,349 46,407 2,942 6.3 % Operations and processing 18,217 11,333 6,884 60.7 % 45,342 33,275 12,067 36.3 % Sales and marketing 22,144 15,031 7,113 47.3 % 54,077 40,979 13,098 32.0 % Interest expense 12,450 14,761 (2,311) (15.7) % 35,798 41,951 (6,153) (14.7) % Other (income) expense (1,445) 1,775 (3,220) n.m. 2,268 5,951 (3,683) (61.9) % Total expenses 103,647 74,870 28,777 38.4 % 258,437 246,991 11,446 4.6 % Operating income 52,718 26,137 26,581 101.7 % 88,515 10,039 78,476 781.7 % Other income, net Other income, net 5,641 2,543 3,098 121.8 % 3,812 5,775 (1,963) (34.0) % Total other income, net 5,641 2,543 3,098 121.8 % 3,812 5,775 (1,963) (34.0) % Income before income taxes 58,359 28,680 29,679 103.5 % 92,327 15,814 76,513 483.8 % Income tax provision (31,463) 1,253 (32,716) n.m. (26,876) 1,788 (28,664) n.m. Net income 89,822 27,427 62,395 227.5 % 119,203 14,026 105,177 749.9 % Net income attributable to noncontrolling interests in consolidated subsidiaries 246 88 158 179.5 % 505 2,288 (1,783) (77.9) % Net income attributable to Figure Technology Solutions, Inc. $ 89,576 $ 27,339 $ 62,237 227.6 % $ 118,698 $ 11,738 $ 106,960 911.2 % Net Revenue Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Technology offering fees $ 15,548 $ 5,179 $ 10,369 200.2 % $ 35,195 $ 15,332 $ 19,863 129.6 % Ecosystem fees 16,248 — 16,248 n.m. 35,501 — 35,501 n.m. Program fees 3,895 2,144 1,751 81.7 8,749 4,498 4,251 94.5 Total ecosystem and technology fees $ 35,691 $ 7,323 $ 28,368 387.4 % $ 79,445 $ 19,830 $ 59,615 300.6 % 63 Ecosystem and technology fees Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Ecosystem and technology fees increased $28.4 million, or 387.4%, primarily due to a $26.6 million increase in ecosystem and technology offering fees due to the growth in loan volume transacted on our Connect platform. Additionally, there was a $1.8 million increase in program fees due to a $505.1 million increase in the volume of securitizations for which we earn program fees. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Ecosystem and tec hnology fees increased $59.6 million, or 300.6%, primarily due to a $55.4 million increase in ecosystem and technology fees due to the growth in loan volume transacted on our Connect platform. Additionally, there was a $4.3 million increase in program fees d ue to a $871.5 million increase in the volume of securitizations for which we earn program fees. Servicing fees Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Servicing fees increased $1.4 million, or 21.6%, which corresponds to a $4.0 billion, or 55%, increase in the servicing portfolio unpaid principal HELOC loan balance of $11.3 billion serviced at September 30, 2025, compared to $7.3 billion at September 30, 2024, partially o ffset by a decrease of 5 basis points in the weighted average servicing fee rate from 35 basis points to 30 basis points. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Servicing fees increased $4.1 million, or 22.6%, which co rresponds to a $4.0 billion, or 55%, increase in the servicing portfolio unpaid principal HELOC loan balance of $11.3 billion serviced at September 30, 2025, comp ared to $7.3 billion at September 30, 2024 , partially offset by a decrease of 6 basis points in the weighted average servicing fee rate from 37 basis points to 31 basis points. Interest income Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Interest income increased $5.1 million, or 39.9%, when comparing the three months ended September 30, 2025 to the three months ended September 30, 2024, primarily due to a $1.9 million increase in interest earned on marketable securities held as we have progressively securitized loans on our platform and retained certain interests therein, in addition to a $1.0 million increase in interest earned on HELOC and personal loans we hold as we have originated or purchased progressively more loans and a $1.9 million increase in interest earned on cash balances. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Interest income increased $18.0 million, or 55.5%, when comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024, primarily due to an $8.1 million increase in interest earned on marketable securities held as we have progressively securitized loans on our platform and retained certain interests, in addition to a $5.6 million increase in interest earned on HELOC and personal loans we hold as we have originated or purchased progressively more loans and a $3.8 million increase in interest earned on cash balances. Origination fees Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Net origination fees increased $2.5 million or 13.1%, primarily due to a $115.2 million increase, or 23.7%, in Figure-branded volume, for which we earn higher origination fees relative to Partner-branded origination fees. This was partially offset by a decrease in the weighted average origination rate we generated on our Figure-branded volume. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Net origination fees decreased $1.1 million or 2.2%, primarily due to a $1.3 million decrease in Figure-branded origination fees which was primarily due to a decrease in the weighted average origination fee rate on Figure-branded volume over the period. 64 Gain on sale of loans, net Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Realized gain (loss) Whole loan sales $ 51,720 $ 28,156 $ 23,564 83.7 % $ 99,513 $ 65,458 $ 34,055 52.0 % Securitized loans 8,266 13,257 (4,991) (37.6) 27,720 18,738 8,982 47.9 Derivatives (2,447) — (2,447) n.m. (5,766) — (5,766) n.m. $ 57,539 $ 41,413 $ 16,126 38.9 $ 121,467 $ 84,196 $ 37,271 44.3 Unrealized gain (loss) Loans 2,349 15,147 (12,798) (84.5) 7,573 29,303 (21,730) (74.2) Marketable securities 943 874 69 7.9 3,174 2,570 604 23.5 Derivatives 2,730 — 2,730 n.m. (318) — (318) n.m. $ 6,022 $ 16,021 $ (9,999) (62.4) $ 10,429 $ 31,873 $ (21,444) (67.3) $ 63,561 $ 57,434 $ 6,127 10.7 $ 131,896 $ 116,069 $ 15,827 13.6 Three months ended September 30, 2025 compared to the three months ended September 30, 2024 The gain on sale of loans we earned increased $6.1 million, or 10.7%, as a result o f an increase o f $18.6 million i n realized gains on whole loan sales and securitization s resulting from an increase in the UPB sold from $1.1 billion to $1.7 billion for the three months ended September 30, 2024 a nd 2025, respectively. Changes in unrealized gains were primarily due to a $12.8 million decrease in the fair value of loans not yet sold as a result of less HELOC loans held in our portfolio for the three months ended September 30, 2025. We recognized a realized loss on derivatives of $2.4 million and an unrealized gain on derivatives of $2.7 million during the three months ended September 30, 2025, while w e did not have any derivatives during the three months ended September 30, 2024. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 The gain on sale of loans we earned increased $15.8 million, or 13.6%, as a result of an increase of $43.0 million in the realized gains on securitizations resulting from a 0.5% increase in the weighted average price of loans sold, in addition to an increase in the UPB sold from $3.3 billion to $4.1 billion for the nine months ended September 30, 2024 and 2025, respectively. Changes in unrealized gains were primarily due to a $21.7 million decrease in the fair value of loans not yet sold as a result of less HELOC loans held in our portfolio for the nine months ended September 30, 2025. We recognized realized and unrealized losses on de rivatives of $5.8 million and $0.3 million, respectively, during the nine months ended September 30, 2025, while w e did not have any derivatives during the nine months ended September 30, 2024. Gain (loss) on servicing asset, net Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Additions $ 16,822 $ 11,833 $ 4,989 42.2 % $ 41,903 $ 37,845 $ 4,058 10.7 % Realization of cash flows (7,821) (4,863) (2,958) 60.8 (20,180) (13,749) (6,431) 46.8 Change in valuation inputs and assumptions 331 (9,027) 9,358 n.m. (10,220) (5,516) (4,704) 85.3 $ 9,332 $ (2,057) $ 11,389 n.m. $ 11,503 $ 18,580 $ (7,077) (38.1) Three months ended September 30, 2025 compared to the three months ended September 30, 2024 The gain on servicing asset, net increased $11.4 million resulting from an increase in the UPB of loans sold from $1.1 billion to $1.7 billion increasing the servicing portfolio and generating an incremental $5.0 million of servicing assets versus the prior period. Additionally, there were net positive changes in valuation inputs and assumptions including lower conditional prepayment rates and constant default rates during the three months ended September 30, 2025 . Conversely, for the three months ended September 30, 2024 there were negative changes in valuation inputs and assumptions including increased conditional prepayment rates and constant default rates. These increases are offset by higher realizations of cash flows of $3.0 million due to an expanded servicing portfolio that increased $3.6 billion as of September 30, 2025 compared to September 30, 2024 . 65 Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 The gain on servicing asset, net decreased $7.1 million, or 38.1%, primarily due to a $6.4 million increase in the realization of cash flows derived from a larger servicing portfolio and a $4.7 million decrease resulting from changes in valuation inputs and assumptions which is primarily a decrease in the weighted average servicing fee rate from 35 to 30 basis points during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2025. The decreases are offset by a $4.1 million increase in new servicing assets retained on the increase of UPB of loans sold from $3.3 billion to $4.1 billion for the nine months ended September 30, 2024 and 2025, respectively, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Other revenue Components of other revenue did not materially change as fees, and the net assets on which we charge those fees, were consistent during the three and nine months ended September 30, 2025 and 2024. Figure-branded Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Ecosystem and technology fees $ 957 $ 725 $ 232 32.0 % $ 2,077 $ 1,483 $ 594 40.1 % Origination fees 19,562 16,589 2,973 17.9 44,334 45,647 (1,313) (2.9) Gain on sale of loans, net 22,455 19,270 3,185 16.5 45,849 39,310 6,539 16.6 $ 42,974 $ 36,584 $ 6,390 17.5 $ 92,260 $ 86,440 $ 5,820 6.7 Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Figure-branded origination fees increased $3.0 million, or 17.9%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 , as a result of a 24% increase in Figure-branded volume. Figure-branded gain on sale of loans, net increased by $3.2 million, or 16.5%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, also as a result of increased Figure-branded volume. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Figure-branded origination fees decreased by $1.3 million, or 2.9%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, as a result of an 11 basis point decrease in the weighted average origination fee rate. Figure-branded gain on sale of loans, net increased by $6.5 million, or 16.6%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, as a result of an increase in the weighted average price of loans of 16.1%. Partner-branded Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Ecosystem and technology fees $ 34,733 $ 6,640 $ 28,093 423.1 % $ 77,368 $ 18,347 $ 59,021 321.7 % Origination fees 1,853 2,351 (498) (21.2) 5,808 5,597 211 3.8 Gain on sale of loans, net 41,106 38,164 2,942 7.7 86,047 76,759 9,288 12.1 $ 77,692 $ 47,155 $ 30,537 64.8 $ 169,223 $ 100,703 $ 68,520 68.0 Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Partner-branded ecosystem and technology fees increased by $28.1 million, or 423.1%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a $29.4 million increase in ecosystem and technology offering fees transacted on our Connect platform. Partner-branded origination fees decreased by $0.5 million, or 21.2%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, due to a 21% decrease in the net fees earned from wholesale brokers within the Partner-branded channel. Partner-branded gain on sale of loans, net increased by $2.9 million, or 7.7%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, as a result of an increase in Partner-branded volume of 94%, partially offset by a decrease in Partner-branded volume not on Connect which earns higher gain on sale of 24%. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 66 Partner-branded ecosystem and technology fees increased by $59.0 million, or 321.7%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 primarily due to a $62.3 million increase in ecosystem and technology offering fees transacted on our Connect platform . Partner-branded origination fees increased by $0.2 million, or 3.8%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to a 3.8% increase in the net fees earned from wholesale brokers within the Partner-branded channel. Partner-branded gain on sale of loans, net increased by $9.3 million, or 12.1%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, as a result of an increase in Partner-branded volume of 66%, partially offset by a decrease in Partner-branded volume not on Connect which earns higher gain on sale of 25%. Operating Expenses General and administrative Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Compensation and benefits $ 8,750 $ 6,005 $ 2,745 45.7 % $ 21,808 $ 15,691 $ 6,117 39.0 % Equity-based compensation 16,850 3,844 13,006 338.3 20,370 31,874 (11,504) (36.1) Professional services 6,011 2,171 3,840 176.9 15,621 10,468 5,153 49.2 Impairment of capitalized software — — — n.m. — 8,591 (8,591) n.m. Other expenses 4,755 3,870 885 22.9 13,804 11,804 2,000 16.9 $ 36,366 $ 15,890 $ 20,476 128.9 $ 71,603 $ 78,428 $ (6,825) (8.7) Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Our general and administrative expenses increased $20.5 million, or 128.9%, primarily consisting of an increase in equity-based compensation expense of $13.0 million, due to the recognition of stock-based compensation awards that satisfied the liquidity condition in connection with the IPO. The increase is also due to increased compensation and benefits expenses of $2.7 million due to increased headcount as well as one-time bonuses associated with the IPO, and a $3.8 million increase in professional services during the quarter. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Our general and administrative expenses decreased $6.8 million, or 8.7%. This primarily consisted of a decrease in stock-based compensation expense of $11.5 million, due to stock based compensation award modification expense related to the Reorganization in the prior year that did not impact the current year. The decrease is partially offset by increased compensation and benefits expense of $6.1 million due to increased headcount. Further, we wrote off capitalized software c osts of $8.6 million during the nine months ended September 30, 2024 that we no longer intended to use for its intended purpose or that became obsolete. Technology and product development Three Months Ended September 30, Change Nine Months Ended September 30, Change ($ in thousands) 2025 2024 $ % 2025 2024 $ % Compensation and benefits $ 5,824 $ 6,303 $ (479) (7.6) % $ 19,019 $ 18,969 $ 50 0.3 % Equity-based compensation 2,822 3,064 (242) (7.9) 9,560 6,311 3,249 51.5 Software 2,542 2,660 (118) (4.4) 7,802 7,314 488 6.7 Amortization 4,301 3,831 470 12.3 12,381 13,255 (874) (6.6) Other expenses 426 222 204 91.9 587 558 29 5.2 $ 15,915 $ 16,080 $ (165) (1.0) % $ 49,349 $ 46,407 $ 2,942 6.3 % Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Technology and product development expenses decreased $0.2 million, or 1.0%, primarily due to a $0.5 million decrease in compensation and benefits primarily due to a higher amount of compensation and benefits capitalized in the current period. Equity-based compensation expense decreased $0.2 million primarily related to a decrease in warrants granted to a convertible preferred shareholder in exchange for services. The decrease was partially offset by an increase in amortization of $0.5 million, due to increased capitalized software balances subject to amortization during the three months ended September 30, 2025. 67 Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 The $2.9 million, or 6.3%, increase in technology and product development expenses reflects a $3.2 million increase in equity-based compensation expense primarily due to an increase in warrant expense of $3.8 million, offset by a reduction in employee option grants of $0.6 million. This increase is offset by decreased amortization expense of $0.9 million for the nine months ended September 30, 2025 due to lower capitalized software balances subject to amortization during the first six months of 2025. Operations and processing Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Operations and processing expenses increased $6.9 million, or 60.7%, primarily due to an increase in recording service fees of $4.1 million, an increase of $1.5 million in compensation and benefits expense due to increased headcount of 34.7% and $1.0 million increase in outsourced customer service costs as a result of our use of outsourced customer service starting in June 2024. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Operations and processing expenses increased $12.1 million, or 36.3%, primarily due to an increase in recording service fees of $6.1 million, a $2.8 million increase in professional service fees, and a $2.4 million increase in compensation and benefits expenses due to increased headcount of 17.3%. Sales and marketing Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Sales and marketing expenses increased $7.1 million, or 47.3%, primarily due to a $5.7 million increase in product advertising costs, as well as an $0.8 million increase in compensation and benefits due to an increase in headcount of 37.2%. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Sales and marketing expenses increased $13.1 million, or 32.0%, primarily due to an $8.6 million increase in product advertising costs, as well as a $2.9 million increase in compensation and benefits due to an increase in headcount of 45.5%. Interest expense Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Interest expense decreased $2.3 million, or 15.7%, primarily due to a $2.2 million decrease related to the change in average SOFR rates on warehouse facilities and reduced exit fees paid to warehouse facilities of $2.6 million. These decreases were partially offset by an increase in retained interest financing of $1.8 million. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Interest expense decreased $6.2 million, or 14.7%, primarily due to a $11.6 million decrease in exit fees paid to warehouse facilities, and a $3.5 million decrease related to the change in average SOFR rates on warehouse facilities. Those impacts are offset by a $5.5 million increase in retained interest financing costs due to securitization volume, and a $3.6 million increase in interest expense related to the MSR facility that we entered into during the second half of 2024. Other income, net Three Months Ended September 30, Change Nine Months Ended September 30, Change 2025 2024 $ % 2025 2024 $ % Change in fair value of digital assets held for sale $ 2,645 $ 673 $ 1,972 293.0 % $ (3,073) $ 5,889 $ (8,962) n.m. Digital asset impairment — — — n.m. — (5,851) 5,851 n.m. Change in value of fund investment 1,098 985 113 11.5 (475) 2,099 (2,574) n.m. Staking rewards and realized gains 2,129 358 1,771 494.7 6,747 358 6,389 1784.6 Other (231) 527 (758) n.m. 613 3,280 (2,667) (81.3) $ 5,641 $ 2,543 $ 3,098 121.8 $ 3,812 $ 5,775 $ (1,963) (34.0) 68 Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Other income, net increased $3.1 million, primarily driven by a $2.0 million increase due to the change in fair value of digital assets during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily due to the change in fair value of Solana tokens in the three months ended September 30, 2025 relative to the three months ended September 30, 2024, and a $0.1 million increase in other income primarily due to the change in ratable value of the related fund. Additionally, there was an increase of $1.8 million in staking rewards and gain on sales of digital assets that we earned thereon, compared to the three months ended September 30, 2024 . Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Other income, net decreased $2.0 million , primarily driven by a $9.0 million decrease in the change in fair value of Solana tokens, as well as a $2.6 million decrease in the ratable value of the related fund for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 . These were offset by an impairment of $5.9 million of HASH held for sale during the nine months ended September 30, 2024 due to a decline in the observable fair value of HASH transacted at the time of the Reorganization , that did not occur in the nine months ended September 30, 2025 , and a $6.4 million increase in staking rewards and gain on sale of digital assets that we earned during the nine months ended September 30, 2025, whereas we did not earn as much staking rewards during the nine months ended September 30, 2024. Income Tax Provision Three months ended September 30, 2025 compared to the three months ended September 30, 2024 Income tax expense decreased by $32.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The provision for income taxes includes U.S. federal, state and local taxes. The effective tax rate for the three months ended September 30, 2025 was approximately (53.9)%, compared to 4.4% for the three months ended September 30, 2024. The effective tax rate differed from the U.S. federal statutory rate of 21.0% for the three months ended September 30, 2025 primarily due to a discrete benefit arising from the Company’s reassessment of deferred tax asset realizability following the Recombination. The effective tax rate differed from the U.S. federal statutory rate for the three months ended September 30, 2024 of 21.0% primarily due to utilization of net operating losses and tax credits related to our research and development activities. Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 Income tax expense decreased by $28.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The provision for income taxes includes U.S. federal, state and local taxes. The effective tax rate for the nine months ended September 30, 2025 was approximately (29.1)%, compared to 11.3% for the nine months ended September 30, 2024. The effective tax rate differed from the U.S. federal statutory rate of 21.0% for the nine months ended September 30, 2025 primarily due to a discrete benefit arising from the Company’s reassessment of deferred tax asset realizability following the Recombination. The effective tax rate differed from the U.S. federal statutory rate for the three months ended September 30, 2024 of 21.0% primarily due to utilization of net operating losses and tax credits related to our research and development activities. Noncontrolling Interests in Consolidated Subsidiaries Third-party investors hold interests in entities that we consolidate, and to whom we allocate the net income or loss of those entities. During the three and nine months ended September 30, 2025 and 2024, we allocated aggregate net income or loss to those third-party investors. Changes in Financial Position The following table sets forth a summary of selected line items from our Condensed Consolidated Balance Sheets for the periods indicated, and the changes between such periods. These selected line items have been prepared on the same basis as our Condensed Consolidated Financial Statements. In the opinion of management, the financial information set forth in the table below reflects all normal recurring adjustments necessary for the fair statement of changes in the selected line items for these periods. The following selected line items should be read together with our consolidated financial statements and related notes. 69 September 30, 2025 December 31, 2024 $ Change % Change Assets Current assets: Cash and cash equivalents $ 1,097,123 $ 287,256 $ 809,867 281.9 % Restricted cash 64,590 57,777 6,813 11.8 Loans held for sale, at fair value 389,032 395,922 (6,890) (1.7) Digital assets 102,913 77,862 25,051 32.2 Accounts receivable, net 46,238 20,998 25,240 120.2 Loan servicing asset, at fair value 100,000 88,497 11,503 13.0 Marketable securities, at fair value 239,694 163,489 76,205 46.6 Digital assets, non-current 7,272 9,704 (2,432) (25.1) Liabilities Current liabilities: Payables to third-party loan owners 336,547 212,619 123,928 58.3 Debt, current 268,923 305,294 (36,371) (11.9) Other current liabilities 117,385 70,401 46,984 66.7 Debt, non-current 197,827 167,882 29,945 17.8 Assets Cash, cash equivalents and restricted cash Cash and cash equivalents increased by $809.9 million, or 281.9%, as of September 30, 2025, compared to December 31, 2024, and restricted cash increased $6.8 million, or 11.8% . Refer to “—Liquidity and Capital Resources—Cash Flows” for the drivers in the change of cash, cash equivalents and restricted cash provided by operating, investing and financing activities during the period. Loans held for sale, at fair value Loans held for sale, at fair value decreased by $6.9 million, or 1.7%, as of September 30, 2025, compared to December 31, 2024, primarily due to originations of $2.6 billion and purchases of $2.2 billion offset by loan sales of $4.5 billion and principal payments of $324.6 million. We generally hold loans for a short period of time and the timing of loan sales and securitizations may impact the amounts carried at each period-end. Typically, the loan volumes we experience include seasonal variation that impact the growth of loans on our balance sheet during a fiscal year. Additionally, we anticipate activity on our Connect platform to grow, which may reduce the quantity of loans that we carry on our balance sheet over time. Digital assets, current and non-current Digital assets, current and non-current, increased $22.6 million, or 25.8%, as of September 30, 2025, compared to December 31, 2024, which represents the change in digital assets we hold for sale and the gross change of digital assets we hold as collateral. We recognize offsetting liabilities and changes thereon for digital assets held as collateral and do not record any net assets, gains, or losses thereon unless we are unable to liquidate collateral timely and are otherwise unable to collect amounts owed. We have not experienced any such losses to date. Digital assets held as collateral, gross of offsetting liabilities, increased $20.6 million during the nine months ended September 30, 2025, due to an increase of $25.8 million in both the quantity and price of Bitcoin holdings, partially offset by a $5.2 million decrease in both the quantity and price of Ethereum holdings. D igital assets held for sale increased $2.0 million during the nine months ended September 30, 2025 primarily du e to an increase in USDT held of $1.0 million and an increase in USDC held of $1.7 million. These increases were partially offset by a $0.3 million decrease in the value of Solana tokens held and a $0.3 million decrease in other digital assets due to changes in fair value. Non-current digital assets consist of locked Solana tokens that will unlock on a predefined schedule. See Note 3 in the Condensed Consolidated Financial Statements for further discussion on digital assets. Accounts receivable, net 70 Accounts receivable, net increased $25.2 million, or 120.2%, as of September 30, 2025 compared to December 31, 2024, primarily driven by overall increased Figure Connect volumes. Management continues to monitor customer credit exposure and collection trends. Loan servicing asset, at fair value Loan servicing asset, at fair value, increased $11.5 million, or 13.0%, as of September 30, 2025 compared to December 31, 2024, reflecting a $41.9 million increase, or 11%, in the unpaid principal balance of loans serviced during the nine months ended September 30, 2025, partially offset by a $20.2 million decrease in servicing fee collections and a $10.2 million reduction in the estimated fair value of servicing assets held based upon lower servicing rate assumptions. See Note 4 in the Condensed Consolidated Financial Statements for further discussion on loan servicing assets. Marketable securities, at fair value Marketable securities, at fair value increased $76.2 million, or 46.6%, as of September 30, 2025, compared to December 31, 2024, primarily due to new securitizations that closed during the period in which the Company generally retained 5% of the total fair value contributed into securitizations, in the form of marketable securities. The newly retained marketable securities are partially offset by the scheduled paydown of existing marketable securities. Liabilities Payables to third-party loan owners Payables to third-party loan owners increased $123.9 million, or 58.3%, as of September 30, 2025, compared to December 31, 2024, primarily due to a net increase in scheduled loan collections from a corresponding $3.2 billion, or 40%, increase in the unpaid principal balance of loans within our servicing portfolio. Debt, current and non-current Debt, current decreased by $36.4 million or 11.9%, primarily due to the 13.2% decrease in HELOC loans held for sale, at fair value as a result of loan sales outpacing originations. Debt, non-current increased by $29.9 million, or 17.8%, primarily due to the increase in retained interests primarily as a result of new securitizations that closed during the quarter. Other current liabilities Other current liabilities increased $47.0 million, or 66.7%, as of September 30, 2025 compared to December 31, 2024, primarily driven by a $36.8 million, or 52.2%, increase due to Kickstart loan purchases from partners. Additionally, crypto collateral held increased $20.6 million, or 31.9%, due to an increase in the fair value of the crypto assets. Liquidity and Capital Resources Sources and Uses of Funds We maintain a capital-efficient model by utilizing a diverse set of funding sources. When we originate a loan directly or purchase a loan originated by our origination partners, we often utilize warehouse credit facilities with certain lenders to finance our lending activities or loan purchases. We sell the loans we originate or purchase from our origination partners to whole loan buyers and securitization investors, and earn servicing fees from continuing to act as the servicer on the loans. We proactively manage the allocation of loans on our platform across various funding channels based on several factors including, but not limited to, internal risk limits and policies, capital market conditions and channel economics. Our excess funding capacity and long-term relationships with a diverse group of existing funding partners help provide flexibility as we optimize our funding to support the growth in loan volume. For those loans sold through Figure Connect, we also collect fees as a source of funds. Our principal sources of liquidity are cash and cash equivalents, digital assets, available for sale securities, available capacity from warehouse and revolving credit facilities, securitization trusts, forward flow loan sale arrangements, and cash flows from our operations. On September 12, 2025, we closed our IPO of our Class A common stock. The total net proceeds received were approximately $663.4 million after deducting underwriting discounts and commissions, and before offering expenses payable by us. We intend to use the net proceeds for general corporate purposes, including working capital, operating expenses, and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies. 71 As of September 30, 2025, we had $1.1 billion in cash and cash equivalents, $64.6 million in restricted cash, $25.2 million in digital assets held for sale at fair value, excluding digital assets held as collateral, and approximately $1.4 billion in available funding debt capacity, excluding purchase commitments from third-party loan buyers. As of December 31, 2024, we had $287.3 million in cash and cash equivalents, $57.8 million in restricted cash, $23.1 million in digital assets held for sale at fair value, excluding digital assets held as collateral, and $1.7 billion in available funding debt capacity, excluding purchase commitments from third-party loan buyers. We believe our principal sources of liquidity are sufficient to meet both our existing operating, working capital, and capital expenditure requirements and our currently planned growth for at least the next 12 months. Other Funding Sources In connection with asset-backed securitizations, we sponsor and establish trusts (deemed to be variable interest entities (“VIEs”)) to ultimately purchase loans facilitated by our platform. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria. We consolidate securitization VIEs when we are deemed to be the primary beneficiary and therefore have the power to direct the activities that most significantly affect the VIEs’ economic performance and a variable interest that could potentially be significant to the VIE. Where we consolidate the securitization trusts, if any, the loans held in the securitization trusts are included in loans held for investment, and the notes sold to third-party investors are recorded in notes issued by securitization trusts in the consolidated balance sheets. We did not consolidate any securitization VIEs at September 30, 2025 or December 31, 2024. Refer to Note 9 in the notes to the consolidated financial statements for further details. Debt Obligations Warehouse Credit Facilities We fund substantially all of the loans we close on a short-term basis primarily through our warehouse credit facilities and from our operations. Loan production activities generally require short-term liquidity in excess of amounts generated by our operations. The loans we originate are financed through several warehouse credit facilities. Our borrowings are in turn generally repaid with the proceeds we receive from loan sales. We maintain warehouse credit facilities with separate third-party lenders through FL LLC, Figure REIT, Inc., Figure Markets Credit LLC, and their subsidiaries. Our warehouse credit facilities are primarily in the form of master repurchase agreements and loan participation agreements. Loans financed under these facilities are generally financed at approximately 80% to 100% of the principal balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan). Loans financed at less than 100% of the principal balance require us to fund the balance from cash generated from our operations. Once closed, the underlying loan that is held for sale is pledged as collateral for the borrowing or advance that was made under our warehouse credit facilities. In most cases, the loans will remain in one of the warehouse credit facilities for only a short time, generally less than one month, until the loans are sold. During the time the loans are held for sale, we earn interest 72 income from the customer on the underlying loan. This income is partially offset by the interest and fees we pay due to borrowings from the warehouse credit facilities. Borrowing capacity of committed debt facilities as of September 30, 2025 include the following: September 30, 2025 Final Stated Maturity Borrowing Capacity Balance Outstanding Available Financing Funding Debt Warehouse Facility 1 July 2025 $ — $ — $ — Warehouse Facility 2 May 2026 150,000 21,270 128,730 Warehouse Facility 3 October 2025 100,000 — 100,000 Warehouse Facility 4 January 2026 335,300 59,647 275,653 REIT Warehouse December 2026 200,000 42,106 157,894 Warehouse Facility 6 May 2026 250,000 — 250,000 Warehouse Facility 7 August 2025 — — — Warehouse Facility 8 n.a. — — — Warehouse Facility 9 March 2025 — — — Warehouse Facility 10 April 2026 300,000 17,637 282,363 Warehouse Facility 11 June 2027 200,000 60,946 139,054 Digital Asset Loan Facility October 2026 30,000 9,893 20,107 MSR Financing Lender 1 June 2026 40,000 40,000 — Financed Retained Interests Retained Interest Facility Various 250,000 199,129 50,871 $ 1,855,300 $ 450,628 $ 1,404,672 Warehouse Facility 8 matured in December 2024, and Warehouse Facilities 1, 3, 7, and 9 matured in 2025. In April 2025, we entered into Warehouse Facility 10 and the Digital Asset Loan Facility, both of which mature in 2026. We also entered into Warehouse Facility 11 in June 2025 that matures in June 2027, and Warehouse Facility 2 was extended to May 2026. In August 2025, we extended the term of the REIT Warehouse to December 2026. Refer to Note 6 in the Condensed Consolidated Financial Statements for further details. Other than as noted above, our warehouse credit facilities bear floating interest rates, are payable on a monthly basis, and contain certain financial covenants, such as minimum tangible net worth, minimum liquidity, maximum leverage ratios, required range of net income or loss during specified periods, and periodic financial reporting requirements. Failure to comply with these covenants may result in an acceleration of payment on outstanding principal and accrued interest. As of September 30, 2025 and December 31, 2024 we were in compliance with the applicable covenants under each of our warehouse credit facilities. Our future capital requirements will depend on many factors, including, but not limited to, our continued access to debt facilities on terms that are favorable to us, our growth, our ability to attract and retain customers, the continuing market acceptance of our offerings, the timing and extent of spending to support our efforts to develop our platform and the expansion of sales and marketing activities. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. From time to time, we may explore additional financing sources and means to lower our cost of capital, which could include equity, equity-linked, and debt financing. We cannot assure you that any additional financing will be available to us on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. 73 Cash Flows The following table summarizes our consolidated cash flows for the periods indicated: Nine Months Ended September 30, ($ in thousands) 2025 2024 Net cash provided by (used in) operating activities $ 49,297 $ (214,365) Net cash used in investing activities (20,827) (30,968) Net cash provided by financing activities 788,210 370,841 Net Cash from Operating Activities Net cash provided by operating activities was $49.3 million for the nine months ended September 30, 2025, which consisted of net income of $119.2 million, an increase in working capital adjustments of $24.3 million, and a decrease in non-cash adjustments of $94.2 million. The working capital adjustments were driven by proceeds from loan sales, net of repurchases of $4.6 billion, partially offset by originations of loans held for sale of $2.6 billion and purchases of loans held for sale of $4.6 billion. Additionally, working capital was impacted by an increase in principal payments on loans held for sale of $324.6 million. The decrease in non-cash adjustments was primarily driven by gain on sale of loans of $126.1 million, and gains on servicing assets, net, of $11.5 million, partially offset by $22.7 million in stock based compensation, and $12.4 million related to amortization of internally developed software. Net cash used in operating activities was $214.4 million for the nine months ended September 30, 2024, which consisted of net income of $14.0 million, offset by a decrease in working capital adjustments of $159.9 million, and a decrease in non-cash adjustments of $68.5 million. The working capital adjustments were driven by originations of loans held for sale of $2.4 billion and purchases of loans held for sale of $1.6 billion, partially offset by proceeds from loan sales, net of repurchases of $3.6 billion. Additionally, working capital was positively impacted by an increase in principal payments on loans held for sale of $334.8 million, and negatively impacted by purchases of marketable securities of $81.6 million. The decrease in non-cash adjustments was primarily driven by gain on sale of loans of $116.1 million, and gains on servicing assets, net, of $18.6 million, partially offset by $34.5 million in stock based compensation, $13.3 million related to amortization of internally developed software, and $8.6 million related to impairment of internally developed software costs. Net Cash from Investing Activities Net cash used in investing activities was $20.8 million for the nine months ended September 30, 2025, primarily due to $9.9 million in purchases of digital assets, partially offset by $12.6 million of proceeds from digital asset sales. Additionally, investing activities included $16.1 million in capitalization of internally developed software costs. Net cash used in investing activities was $31.0 million for the nine months ended September 30, 2024, primarily due to $25.8 million in purchases of digital assets, partially offset by $10.8 million of proceeds from digital asset sales. Additionally, investing activities included $12.5 million in capitalization of internally developed software costs. Net Cash from Financing Activities Net cash provided by financing activities was $788.2 million for the nine months ended September 30, 2025, during which we received proceeds from debt of $4.2 billion, partially offset by $4.2 billion related to principal payments on debt. Additionally, we raised $663.4 million from the issuance of common stock in connection with the IPO , net of offering costs. Additionally, financing activities were impacted by an increase of $123.1 million related to proceeds from servicing activity on behalf of third-party loan owners. Net cash provided by financing activities was $370.8 million for the nine months ended September 30, 2024, during which we received proceeds from debt of $3.5 billion, partially offset by $3.2 billion related to principal payments on debt. Additionally, financing activities were impacted by an increase of $60.4 million related to proceeds from servicing activity on behalf of third-party loan owners, and $71.8 million in proceeds from the issuance of preferred stock. Other Changes in Financial Position Noncontrolling interest was $8.7 million at September 30, 2025, an increase of $0.5 million from December 31, 2024, primarily due to an increase in net income attributable to the noncontrolling interest. 74 Other Factors Affecting Liquidity and Capital Resources Operating Lease Obligations Our operating lease obligations consist of our lease of real property from third parties under noncancellable operating leases, including the lease of its current office spaces. Operating lease expense for our office space was $1.9 million and $2.0 million for the nine months ended September 30, 2025 and 2024, respectively. Our office leases are scheduled to expire between 2025 and 2031. Available Liquidity and Capital Resources As of September 30, 2025, our cash, cash equivalents, and restricted cash was $1.2 billion, which included $326.9 million of cash held for the benefit of third parties. As of December 31, 2024, our cash, cash equivalents, and restricted cash was $345.0 million, which included $209.9 million of cash held for the benefit of third parties. The restricted cash held by us primarily relates to cash held by us on behalf of third-party loan sellers or buyers that represent collection of principal and interest from loan borrowers that we remit to those third parties as servicer of those loans. Non-GAAP Financial Measures In order to better help understand our financial performance, we use several key performance metrics that should be viewed independently of GAAP items, as these metrics are not intended to be combined with those items. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP. Adjusted Net Revenue Adjusted Net Revenue is a non-GAAP financial measure used by our management to evaluate operating performance. Accordingly, we believe this measure provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, Adjusted Net Revenue provides a useful measure for period-to-period comparisons of our business, as it removes the effect of a non-cash, non-realized adjustment that is included in net revenue. Adjusted Net Revenue is defined as net revenue excluding the change in fair value of MSR associated with changes in our estimates that management has determined are not reflective of our operating performance. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure used by our management to evaluate operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe this measure provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, Adjusted EBITDA provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash items, variable charges, non-recurring items, unrealized gains or losses or other similar non-cash items that are included in net income or expenses associated with the early stages of the business that are expected to ultimately terminate, pursuant to the terms of certain existing contractual arrangements or expected to continue at levels materially below the historical level, or that otherwise do not contribute directly to management’s evaluation of its operating results. Adjusted EBITDA is defined as net income excluding interest expense incurred in connection with our debt obligations other than debt associated with our funding of loans held for sale, income taxes, amortization and depreciation expense, stock-based compensation expense, non-cash changes in certain financial instruments, and other items that management has determined are not reflective of our operating performance. 75 The following table presents a reconciliation of net revenue to Adjusted Net Revenue and net income to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2025 2024 2025 2024 Total Net Revenue $ 156,365 $ 101,007 $ 346,952 $ 257,030 Plus: Valuation Changes in Fair Value of MSRs (331) 9,027 10,220 5,516 Adjusted Net Revenue $ 156,034 $ 110,034 $ 357,172 $ 262,546 Net Income (Loss) $ 89,822 $ 27,427 $ 119,203 $ 14,026 Plus: Valuation Changes in Fair Value of MSRs (331) 9,027 10,220 5,516 Plus: Change in Fair Value of Digital Assets and Related Investments (3,745) (1,658) 3,546 (7,988) Plus: Impairment of Capitalized Software — — — 8,591 Plus: Impairment of Digital Assets — 1 — 5,851 Plus: Services Exchanged for Issuance of Warrants 2,459 2,572 7,863 4,019 Plus: Registration Costs 2,430 — 4,277 — Plus: Restructuring Costs 689 — 3,672 2,497 Plus: Stock-Based Compensation Expense 17,469 4,533 22,730 34,526 Plus: Amortization of Internally Developed Software Costs 4,304 3,811 12,381 13,255 Plus: Non-Funding Interest Expense 4,752 2,471 12,811 3,907 Plus: Income Tax Provision (31,463) 1,253 (26,876) 1,788 Adjusted EBITDA $ 86,386 $ 49,437 $ 169,827 $ 85,988 Adjusted EBITDA Margin 55.4 % 44.9 % 47.5 % 32.8 % Critical Accounting Policies and Estimates Our Condensed Consolidated Financial Statements and the related notes are prepared in accordance with GAAP. The preparation of the Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, operating results, and cash flows will be affected. We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For more information, see Note 2 to our Condensed Consolidated Financial Statements. Valuation of Loans, Securities, and Servicing Assets Details of our processes for determining fair value are set out in Note 2 of our Condensed Consolidated Financial Statements. Estimating fair value requires the application of significant judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to us. Assets and liabilities valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs are classified at level 3, the lowest level in the fair value hierarchy defined under GAAP, and judgments used to estimate fair value of those assets and liabilities are more significant than those required when estimating the fair value of assets and liabilities classified within levels 1 and 2. In arriving at an estimate of fair value for an asset or liability within level 3, we must first determine the appropriate valuation model or other valuation technique to use. Second, the lack of observability of certain significant inputs requires us to assess relevant empirical data in deriving valuation inputs including, for example, prepayment speeds, default rates, loss severities, discount rates, and valuations of comparable assets and liabilities. The methods used to estimate fair value may not result in an amount that is indicative of net realizable value or reflective of future fair values. Changes in market conditions, as well as changes in the assumptions or methodology used to determine fair value, could result in a significant increase or decrease in fair value. Refer to Note 2 of our Condensed Consolidated Financial Statements for a further discussion of the valuation of level 3 instruments, including unobservable inputs used, and Note 12 of our Condensed Consolidated Financial Statements for 76 quantification of the significant inputs used to value level 3 assets and liabilities, as well as sensitivities of their effects on fair value. Interest Income We recognize interest income on certain assets, including certain interests retained in securitizations, using the prospective effective yield method in accordance with GAAP. This method requires we estimate the future expected cash flows over the life of the asset and to compute an effective yield that amortizes any purchase discount or premium into interest income over the expected term. Estimating future cash flows involves significant judgment and is inherently uncertain, including assumptions of prepayment rates, default rates, loss severity, and timing of cash flows, all of which can be influenced by changes in economic conditions, interest rates, and borrower behavior. We regularly review and, if necessary, update our cash flow projections to reflect changes in these assumptions. When such updates occur, we adjust the effective yield prospectively, which affects the amount of interest income recognized in future periods. Changes in our estimates of future cash flows can have a material impact on our financial results. For example, an increase in expected prepayment speeds would generally accelerate the recognition of any purchase discount into interest income, while an increase in expected credit losses would reduce the expected cash flows and thus lower the effective yield, decreasing interest income in future periods. Internally Developed Software We capitalize software development costs based on the intended use of the software. Costs for software developed for external-use are expensed during the research and development phase until technological feasibility has been established, which requires judgment and is typically when all high-risk development issues have been resolved through coding and testing, which generally occurs shortly before release to production. After that point, qualifying costs are capitalized until the product is ready for its intended use and amortized to cost of revenue over the estimated useful life; this estimate is subjective and dependent upon our expectations regarding the continued use of the software for its intended purpose. For internal-use software, costs are capitalized during the application development stage and expensed during preliminary project and post-implementation phases. Once the software is ready for use, capitalized costs are amortized on a straight-line basis over the estimated useful life and presented within technology and product development expenses. Capitalized software costs are evaluated for impairment at least quarterly or sooner if indicators of impairment arise. Estimates of Our Equity Value Prior to the IPO, our equity did not historically trade on active markets and the value of our equity relied upon significant judgment and estimates based on unobservable inputs. We historically estimated the fair value of our equity, with assistance from independent third-party valuation consultants, as determined in accordance with the guidelines outlined by the American Institute of Certified Public Accountants. The valuation of our equity involved estimates based on (a) the expectation of future cash flows that we will generate, discounted to the present using a rate based on rates of return available from alternative investments of similar type, quality, and risk and (b) application of a valuation multiple derived from a comparison of us to publicly traded comparable entities’ valuation (as adjusted for observable differences in growth, profitability, risk, and operations). Equity-Based Compensation We grant equity-based compensation awards that vest contingent upon time-based service and/ or performance conditions based upon a qualifying sale of our equity, achieving certain contractual thresholds, or market conditions tied to the our share price. We generally expense the grant-date fair value of these equity-based compensation awards over the required service period, but not before we deem applicable performance conditions probable. As awards with a market condition have the market condition incorporated into the fair value, we recognize the full compensation cost (based on grant-date fair value) over the service period, even if the market condition is ultimately not achieved. Income Taxes We are subject to income taxes in the United States. The evaluation of our uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex laws, including the realizable portions of our net operating loss deductions and research and development tax credits. Although we believe our reserves are reasonable, no assurance can be given that the final outcome of these uncertainties will not be different from that which is reflected in our reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our financial condition and operating results. 77 Consolidation of Variable Interest Entities (“VIE”) The determination of whether or not to consolidate a VIE under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests. To make these judgments, we conduct an analysis, on a case-by-case basis, of whether we are the primary beneficiary, the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, and are therefore required to consolidate the entity. Management continually reconsiders whether we should consolidate a VIE. Upon the occurrence of certain events, management will reconsider its conclusion regarding the status of an entity as a VIE. Legal and Other Contingencies The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our Condensed Consolidated Financial Statements. Emerging Growth Company Status As an “emerging growth company,” the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We have elected to use this extended transition period under the JOBS Act. As a result, our Condensed Consolidated Financial Statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our Class A common stock less attractive to investors. Recent Accounting Pronouncements See Note 2 to our Condensed Consolidated Financial Statements for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk is the exposure to loss resulting from changes in interest rates, credit spreads, foreign currency exchange rates, commodity prices, equity prices, and other market-based risks. The primary market risks that we are exposed to are interest rate risk, prepayment speed risk, credit spread risk and credit risk through loans and securities held on our Condensed Consolidated Balance Sheets, access to the securitization markets, investor demand for loans facilitated through our platform, and availability of funding under our current credit facilities. These risks are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. All of our market risk sensitive assets, liabilities and derivative positions are for non-trading purposes only. Our inability or failure to manage market risks could harm our business, financial condition, or results of operations. For a further understanding of how market risk may affect our financial position or results of operations, please refer to “Critical Accounting Policies and Estimates.” Credit Risk Credit risk refers to the risk of loss arising from individual customer default due to inability or unwillingness to meet their financial obligations during the period that we own the loans. The performance of certain financial instruments, including loans, on our Condensed Consolidated Balance Sheets are dependent on the credit performance of loans facilitated by us. To manage this risk, we use software technology to actively monitor customer payment performance and upon delinquency or signs of a delinquency, troubleshoot payment issues and engage in customer communication to encourage timely payments. We actively monitor the payments made by borrowers on our loans, and via third-party data we also monitor the payment and delinquency activity of loans in the first-lien position on the properties for which our loans are in the second- or third-lien position. We also monitor the balances of the loans in the first-lien position to determine the amount of equity available in the home, which impacts our credit risk management strategy. Many of our origination partners have their loans serviced by us, and therefore these loans benefit from the same credit risk monitoring technology and procedures. The fair values of these loans are estimated based on a discounted cash flow model which involves the use of significant unobservable inputs and assumptions. These instruments are sensitive to changes in credit risk. 78 Interest Rate Risk Changes in interest rates, including changes in expected interest rates, affect (a) our net interest income, which is the difference between the interest income earned on assets and the interest expense incurred in connection with our debt obligations, and (b) the price of our investments and loans as impacted by yields required by the marketplace participants on interest rate instruments. Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. The interest rates charged on the loans that we and our partners originate are determined based upon a margin above a market benchmark at the time of onboarding. Increases in the market benchmark would result in increases in the interest rates on new loans. Increased interest rates may adversely impact the spending levels of our individual customers and their ability and willingness to borrow money. Higher interest rates lead to higher payment obligations, which may reduce the ability of individual customers to remain current on their obligations and, therefore, lead to increased delinquencies, defaults, customer bankruptcies and charge-offs, and decreasing recoveries, all of which could have a material adverse effect on our business. We are subject to margin calls on our repurchase agreements, and changes in interest rates may impact our cost of borrowing. Future funding activities under the revolving credit facilities may increase our exposure to interest rate risk, as the interest rates payable on such funding are tied to short-term market rates. Furthermore, we may, from time to time, be a party to derivative agreements or financing arrangements that are subject to margin calls based on the value of such instruments. We seek to maintain adequate cash reserves and other sources of available liquidity to meet any margin calls resulting from decreases in value related to, in management's opinion, a reasonably possible change in interest rates. Crypto Risk Volatility in digital assets could significantly impact our business. Negative market sentiment towards digital assets could decrease demand for our products and services, including the utilization of Figure Exchange, and impact our revenue. Changes in regulations regarding crypto and digital assets could cause us to modify our business practices or cease offering certain services leading to increased costs or loss of revenue. Security breaches or technological vulnerabilities in the underlying blockchain networks could erode customer trust and negatively impact our reputation and business operations in the event of potential loss of digital assets due to hacking, theft or loss of private keys. Fluctuations in the liquidity of digital assets could affect our ability to execute transactions and manage our holdings effectively, potentially leading to financial losses. Liquidity Risk We may not be able to timely trade our servicing assets, retained interests in securitized loans, and certain digital assets restricted from sale as they are not generally traded on public, liquid markets and may be subject to legal and other restrictions on resale and/ or otherwise less liquid than publicly-traded securities. The illiquidity of our assets may make it difficult for us to sell such assets if the need or desire arises, including in response to changes in economic and other conditions. ITEM 4. CONTROLS AND PROCEDURES Limitations on Effectiveness of Controls and Procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level as a result of the material weaknesses described below. Material Weaknesses and Remediation Plan 79 As previously disclosed, as of December 31, 2024, the following material weaknesses existed: • We did not design or maintain an effective control environment commensurate with our financial reporting requirements; specifically, we did not maintain adequate resources in the accounting and finance functions with requisite knowledge, skills, and experience to accurately apply GAAP; and • We did not maintain effective risk assessment and monitoring; specifically, we did not maintain adequate accounting function personnel to perform appropriate identification of risk points, and to design, implement, and monitor the effectiveness of internal controls addressing the risk points identified. These material weaknesses contributed to several additional material weaknesses. Specifically, we did not (i) design and maintain controls over technical accounting transactions to achieve adequate and timely analysis, (ii) effectively review manual aspects of recording loan assets to ensure that they were properly reflected on our balance sheet, or (iii) adequately review deliverables from management’s valuation specialists. We have not identified a material misstatement to our financial statements resulting from the material weaknesses described above. We are in the process of implementing a plan to remediate the material weaknesses described above. Our remediation plan includes the hiring of additional accounting and financial reporting personnel and implementing additional policies, procedures and controls, all of which have and will continue to cause us to incur additional costs. When we are satisfied the internal control over financial reporting associated with the material weaknesses has been effectively designed and operated within our Company for a sufficient period of time, we will determine if we have remediated our material weaknesses. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting . 80 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS From time to time, we are, and from time to time in the future may be, subject to legal proceedings and claims arising in the ordinary course of our business. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations. ITEM 1A. RISK FACTORS Investing in our Class A common stock involves a high degree of risk. Before making an investment decision, you should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Condensed Consolidated Financial Statements and related notes thereto included elsewhere in this Form 10-Q. Our business, results of operations, financial condition, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, results of operations, financial condition, and prospects could be adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. The risks and uncertainties described below are not guarantees that no such conditions exist as of the date of this Form 10-Q and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part. Business, Financial, and Operational Risks We have a history of losses, we may not be able to maintain profitability in the future, and there is no assurance that our revenue and business model will be successful. We have a history of net losses. We expect our costs will increase over time, and while we had net income of $20 million for the year ended December 31, 2024, we may continue to generate losses in the future as we invest significant additional funds towards growing our business and operating as a public company. Such losses may fluctuate significantly from quarter to quarter. We have expended and expect to continue to expend substantial financial and other resources on product development, including investments in our product, engineering, data, and design teams and the development of new products and new functionality for our existing products and our platform; our technology infrastructure, including systems architecture, management tools, scalability, availability, performance, security, and disaster recovery measures; our sales, marketing, and partner management organizations; acquisitions or strategic investments; and general administration, including legal and accounting expenses. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flows on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, and results of operations could be adversely affected. If we fail to effectively manage our growth, our business, financial condition, and results of operations could be adversely affected. We have grown rapidly since our inception and expect to continue to experience rapid growth in the future. This growth has placed, and may continue to place, significant demands on our management and our operational and financial infrastructure. We have made, and intend to continue to make, substantial investments in our technology, customer service, risk, sales, and marketing infrastructure. Our ability to manage our growth effectively and to integrate new technologies, personnel, and strategic acquisitions and priorities into our existing business will require us to continue to expand our operational and financial infrastructure and retain, attract, train, motivate, and manage key employees. Continued growth could strain our ability to develop and improve our operational, financial, and management controls, enhance our reporting systems and procedures, recruit, train, and retain highly skilled personnel, and maintain customer and brand satisfaction. Additionally, if we do not effectively manage the growth of our business and operations, the quality of our platform and the efficiency of our operations could suffer, which could adversely affect our growth, business, financial condition, and results of operations. Our revenue growth rate and financial performance in prior years may not be indicative of future performance. 81 We have grown rapidly in the past, and our historical revenue growth rate and financial performance may not be indicative of our future performance. Our revenue for any previous quarterly or annual periods should not be relied upon as an indication of our revenue or revenue growth in future periods. Our future growth will be impacted by, among other things: adverse macroeconomic conditions; changing interest rates; our ability to deploy alternative loan products, including in response to changing conditions in the HELOC market; market acceptance of our online lending products, including our HELOC product, digital assets-secured personal loan product, and new product offerings; our ability to meet demand for funding; sales of loans held on our balance sheet at a loss; our ability to successfully finance and sell our loans; growth in our network of partners; increasing competition; credit market volatility; increasing regulatory costs and challenges; prices of digital assets and volume of transactions conducted on Figure Exchange; and our failure to capitalize on growth opportunities. Our limited operating history makes it difficult to evaluate our current business and prospects and may increase the risk of your investment. We have experienced rapid growth in recent years. Our limited operating history may make it difficult to evaluate our business and prospects, including our ability to plan for and model future growth. We face numerous challenges to our success, including our ability to: ■ accurately forecast our revenue or volume, and to plan our operating expenses; ■ develop and maintain a scalable, high-performance technology infrastructure that can efficiently and reliably process an increased number of HELOC originations and other product offerings, as well as the deployment of new features and services; ■ maintain or increase the volume of HELOC originations and other product offerings, such as our digital assets-secured personal loan product, enabled through our platform; ■ enter into and maintain existing relationships with our network of partners; ■ successfully attract new customers to our platform; ■ successfully identify, negotiate, execute, and integrate strategic acquisitions and partnerships; ■ successfully compete with current and future competitors; ■ successfully build our brand and protect our reputation from negative publicity; ■ increase the effectiveness of our marketing strategies; ■ successfully adjust our proprietary technology, products, and services in a timely manner in response to changing macroeconomic conditions and fluctuations in the credit market; ■ successfully introduce new products and services; ■ adapt to rapidly evolving trends in the way our consumers and our network of partners interact with technology; ■ comply with and successfully adapt to complex and evolving regulatory environments; ■ protect against fraud and online theft; ■ avoid interruptions or disruptions in our service; ■ effectively secure and maintain the confidentiality of the information received, accessed, stored, provided, used, and otherwise processed across our systems and our third-party vendors; ■ successfully obtain and maintain funding and liquidity to support continued growth and general corporate purposes; ■ attract, integrate, and retain qualified employees; and ■ effectively manage growth in our personnel and operations. We also face risks from the underperformance of any assets we have originated and/or serviced to date, which include HELOCs, personal loans, student loans, and closed-end mortgages, as well as risks from the future underperformance of 82 any assets we originate. In addition, the price of digital assets and associated demand for buying, selling, and trading digital assets have historically been subject to significant volatility. There is no assurance that any supported digital asset will maintain its value or that there will be meaningful levels of trading activity. If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business, financial condition, and results of operations could be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more predictable market. Our inability to accurately evaluate our business and prospects could adversely affect our business, financial condition, and results of operations. Substantially all of our revenue is derived from our HELOC product, and we are thus particularly susceptible to fluctuations in the HELOC market. Our current product offerings may also not be sufficiently broad to attract and retain partners. While we plan to continue to invest in developing additional loan product offerings, the vast majority of our revenue is currently derived from our HELOC product. A wide variety of factors could impact the market for HELOCs, including macroeconomic conditions, competition, regulatory developments, and other developments in the credit market. Our success will depend in part on the continued demand for HELOCs, and if such demand does not experience further growth or grows more slowly than we expect, our business, financial condition, and results of operations could be adversely affected. In addition, our partners may in the future seek commercial relationships with competitors that are able to offer them a broader array of credit products. Over time, in order to preserve and expand our relationships with our existing partners and expand our network of partners, it may become increasingly important for us to be able to offer a wider variety of products than we currently provide. We are also susceptible to competitors that may be able to provide more competitive pricing than we can, or intentionally underprice their loan products, even if such pricing practices lead to losses. Such practices by competitors would negatively affect the overall demand for HELOCs facilitated by our technology. Failure to accurately predict demand or growth with respect to our existing and new product offerings could adversely affect our business, financial condition, and results of operations. Moreover, our existing or new product offerings may be less profitable than we expect, increase our costs, decrease our operating margins, or take longer than anticipated to achieve target margins. Further, our development efforts with respect to new product offerings could distract management from current operations and could divert capital and other resources from our existing business. In addition, the profile of potential borrowers using our new product offerings may not be as attractive as the profile of the borrowers that we currently serve, which may lead to higher levels of delinquencies or defaults than we have historically experienced. If we do not realize the expected benefits of our investments, our business, financial condition, and results of operations could be adversely affected. Our success and ability to develop our lending business depend on retaining and expanding our reach through both our Figure-branded and Partner-branded strategies. If we or our partners fail to add new customers, our business, financial condition, and results of operations could be adversely affected. The current model for our lending business is primarily based on our ability to enable our partners to originate, and our borrowers to obtain, HELOCs using our technology in a seamless, timely, and hassle-free transaction that funds quickly. We have experienced significant growth in recent years; however, we may not be able to continue to grow our business, and our network of partners and our consumer base could shrink over time. Our ability to attract borrowers, and in turn attract partners to offer our products to their customers, depends, in large part, on our ability to continue to provide, and be perceived as providing, seamless and superior customer experiences and expeditious funding. In order to maintain this ability and perception, we may be required to incur costs related to improving our platform capabilities and customer service, increasing our marketing and advertising spend, as well as reducing the interest rates on our loan products either more or more quickly than our competitors, any of which could result in lower revenues or lower profitability. We may not be able to promote awareness of our Figure-branded products and achieve widespread market acceptance of our business model to increase access to our platform. We have incurred significant expenses on and devoted considerable resources to branding and marketing activities and user traffic acquisition, and we may continue to do so in the future. If any of our marketing channels become less effective, or if the cost of these channels were to significantly increase, we may not be able to attract new borrowers in a cost-effective manner or convert prospective borrowers into borrowers. 83 Additionally, changes in the way third-party platforms operate, including changes in our participation on such platforms, could make the maintenance and promotion of our products and services more expensive or more difficult. Further, there is no assurance that any of these actions will achieve their desired effect. If we fail to remain competitive on customer experience or pricing, our business, financial condition, and results of operations could be adversely affected. Our business depends, in part, on the success of our Partner-branded strategies and our network of partners being able to deliver our products, and our ability to grow our business depends on our ability to continue our relationships with our network of partners. We are dependent upon our partners and their use of our Partner-branded offerings. If we are not able to retain our existing partners or expand our network of partners in a cost-effective manner, or if our partners fail to maintain their utilization of our products and services, we will not be able to continue to grow our business. Our ability to retain and grow our relationships with our partners depends on their willingness to work with us. The attractiveness of our platform to partners depends upon, among other things: our brand and reputation, the amount of fees that we charge, our ability to adapt to our customers’ needs and implement technological changes, our ability to sustain our value proposition to our partners, products and services offered by competitors, and our ability to perform under and maintain our agreements with partners. Our partners do not have any long-term contractual financial commitments to us, and there are de minimis fixed fees in our contracts with partners. Therefore, our partners may cease their use of our platform at any time without incurring any material termination charges. Further, any downturn in the financial services industry, a disruption or significant change in the capital markets, including government-sponsored enterprise involvement in the purchase and securitization of similar lending products, or change in interest rates may cause our partners to end or reduce their relationship with us. Our partners have no obligation to use our platform and generally only pay us when they use it. As a result, our partners may, at any time, seek to renegotiate pricing or other contract terms that are less favorable to us or otherwise ask to modify their agreement terms in a manner that is cost prohibitive to us. Our relationships with partners may decline or fluctuate as a result of a number of factors, including the attractiveness of our products to their customers, the value of originating products on our platform compared to the origination of other similar products, their satisfaction with our pricing or our platform, or their ability to continue their operations or spending levels. In addition, our partners’ regulators may require that they terminate or otherwise limit their business with us, or impose regulatory pressure limiting their ability to do business with us. If any of our partners were to stop working with us, suspend, limit, or cease their operations, successfully renegotiate less favorable pricing terms with us, or otherwise terminate their relationships with us, the number of loans and other transactions enabled through our platform could decrease and our business, financial condition, and results of operations could be adversely affected. We could in the future have disagreements or disputes with any of our partners, which could negatively impact or threaten our relationship with them. In our agreements with partners, we make representations, warranties, and covenants concerning our compliance with certain procedures and guidelines related to laws and regulations applicable to the services to be provided by us to our partners. If those representations and warranties are not accurate when made or if we fail to perform a covenant, we may be liable for any resulting damages, including potentially any losses associated with impacted transactions, and our reputation and ability to continue to attract partners could be adversely affected. Additionally, our partners may engage in mergers, acquisitions, or consolidations with each other, our competitors, or third parties, any of which could be disruptive to our existing and prospective partner relationships. If we are unable to maintain existing relationships partners and develop new customer relationships with financial institutions to expand our network of partners for any reason, our business, financial condition, and results of operations could be adversely affected. We have significant partner concentration, with a limited number of partners accounting for a substantial portion of our loan originations. We derive a significant portion of our loan origination volume from our major partners. Our top 10 partners contributed 56% and 52% of our origination volume for the nine months ended September 30, 2025, and the year ended December 31, 2024, respectively. Relying heavily on a limited number of partners for a large percentage of total loan origination presents inherent risks. We cannot predict the future volume of loan originations from these partners. If any of our largest partners reduce their loan origination volume or terminate their relationship with us, it could materially and negatively impact our revenues, results of operations, and financial condition. To mitigate these risks, we are actively working to expand our partner base and reduce reliance on a few significant partners. However, there is no assurance of success in these efforts, and our financial performance may continue to be significantly influenced by our major partners. 84 Our growth depends, in part, on the success of our strategic relationships to attract potential customers for our HELOC products on other products, and our ability to grow our business depends on our ability to continue these relationships. We depend on a number of strategic relationships to attract additional customers to our products. For example, through a number of strategic relationships, we purchase leads or otherwise advertise (e.g., on the provider’s website and/or via e-mail, or in the provider’s retail stores), on a non-exclusive basis, to consumers who may view the content and/or be customers of the lead or advertising platform providers. In some cases, we may offer consumers incentives to obtain HELOCs from us based on the consumers’ status as an enrollee or customer of a particular advertising platform. These incentives include gift cards to major retailers, offered to consumers upon the completion of specific tasks, such as securing a funded loan or completing a survey. These gift cards have no cash value and are not redeemable for interests in our Company or our affiliates. These incentives fall outside the scope of Section 8 of RESPA, which regulates payments in exchange for referrals. The gift cards are a benefit solely to the consumer and have the effect of reducing the cost of credit. Because we provide the gift cards unilaterally and not in exchange for or in anticipation of referrals, and no third party receives anything of value for influencing a consumer’s choice of settlement service provider, such practices do not constitute a violation of RESPA. Identifying strategic partners, and negotiating and documenting relationships with them, requires significant time and resources. In addition, there is significant competition to develop relationships with these strategic partners, and our competitors may be effective in providing incentives to favor their products or platforms or to prevent or reduce our ability to advertise our offerings and our platform to consumers. If we are unsuccessful in maintaining our relationships with strategic partners and identifying new strategic partners and establishing relationships with them in a timely manner, our ability to compete in the marketplace or to grow our revenue could be impaired and our results of operations may be materially and adversely affected. Additionally, certain of our relationships may require extensive time and resources to establish and, once established, would require time and resources to terminate and unwind. To minimize any disruption associated with such a termination, certain of our relationships include transition service and wind-down periods. We cannot guarantee we will be successful in establishing these relationships or, if necessary, terminating and unwinding these relationships, and establishing or terminating these relationships could require substantial time and attention from our management team. Additionally, we cannot assure you that we will be able to successfully replace a terminated relationship with a new relationship. If we are unable to effectively manage our strategic partner relationships, this could materially and adversely affect our business, financial condition, and results of operations. We are also subject to legal and regulatory risks associated with these relationships, including changes in law or interpretations of law that could result in increased scrutiny of these relationships, require restructuring of these relationships, and/or diminish the value of these relationships. If we do not compete effectively in our target markets, our business, financial condition, and results of operations could be adversely affected. The consumer lending market is highly competitive and increasingly dynamic as emerging technologies continue to enter into the lending ecosystem. With the introduction of new technologies and the influx of new entrants, competition may persist and intensify in the future, which could have an adverse effect on our business, financial condition, and results of operations. Our inability to compete effectively could result in reduced loan volumes, reduced average size of loans facilitated on our platform, reduced fees, increased marketing and customer acquisition costs, or the failure of our platform to achieve or maintain more widespread market acceptance, any of which could adversely affect our business, financial condition, and results of operations. Consumer lending is a vast and competitive market, and we compete to varying degrees with all other sources of consumer credit, which can include banks, non-bank lenders, including retail-based lenders, and other financial technology lending platforms. Although HELOCs often have more attractive interest rates than credit card debt, we compete with the convenience and ubiquity that credit cards represent. Many of our competitors operate with different business models, have different funding sources, have different cost structures or regulatory obligations, or participate selectively in different market segments. They may ultimately prove more successful or more adaptable to new regulatory, economic, technological, and other developments, including utilizing new data sources or credit models. We may also face competition from banks or companies that have not previously competed in the consumer lending market, including companies with access to vast amounts of consumer-related information that could be used in the development of their own credit risk models. Our current or potential competitors may be better at developing new products due to their large and experienced data science and engineering teams, who are able to respond more quickly to 85 new technologies. Many of our current or potential competitors have significantly more resources, such as financial, technical, and marketing resources, than we do and may be able to devote greater resources to the development, promotion, sale, and support of their platforms and distribution channels. We face competition in areas such as compliance capabilities, commercial financing terms, costs of capital, interest rates, fees (and other financing terms) available to our partners’ customers, approval rates, model efficiency, speed, simplicity of loan origination, ease-of-use, marketing expertise, service levels, products and services, technological capabilities and integration, customer experience, brand and reputation, and terms available to our base of loan purchasers on the secondary market. Our competitors may also have longer operating histories, lower commercial financing costs or costs of capital, more extensive customer bases, more diversified products and customer bases, operational efficiencies, more versatile or extensive technology platforms, greater brand recognition and brand loyalty, broader customer relationships in Figure-branded and Partner-branded channels, more extensive and/or more diversified base of loan purchasers on the secondary market than we have, greater capacity to fund loans through their balance sheets, and more products and services than we have. Furthermore, our existing and potential competitors may decide to modify their pricing and business models to compete more directly with us. Our ability to compete will also be affected by our ability to provide our partners with a commensurate or more extensive suite of loan technologies than those offered by our competitors. In addition, current or potential competitors, including financial technology lending platforms and existing or potential partners, may also acquire or form strategic alliances with one another, which could result in our competitors being able to offer more competitive loan terms due to their access to lower-cost capital. Such acquisitions or strategic alliances among our competitors or potential competitors could also make our competitors more adaptable to a rapidly evolving regulatory environment. To remain competitive, we may need to increase our regulatory compliance expenditures or our ability to compete could be adversely affected. In addition, the digital asset industry is highly innovative, rapidly evolving, and characterized by significant competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. We expect competition for Figure Exchange to further intensify in the future as existing and new competitors introduce new products or enhance existing products. We compete against a number of companies operating both within the United States and abroad, and both those that focus on traditional financial services and those that focus on digital asset-based services. Our current and contemplated competitors fall into the following categories: ■ companies focused on the digital asset market, including (i) direct competitors with Figure Exchange who are also required to adhere to the same or similar local regulations as us and (ii) competitors who are not subject to or do not adhere to the same local rules and regulations as us or who operate in jurisdictions with less stringent local rules and regulations. As a result, many of our competitors are potentially able to more quickly adapt to trends, support a greater number of digital assets, and develop new digital asset-based products and services due to their different standard of regulatory compliance or scrutiny; ■ traditional financial technology and brokerage firms that have entered the digital asset market in recent years and offer overlapping features targeted at our customers; and ■ digital asset-focused companies and traditional financial incumbents that offer point or siloed solutions specifically targeted at institutional customers. Further, the recent change in administration may lead to a more favorable federal regulatory environment for digital assets, which may encourage more traditional financial institutions to enter the digital asset industry. Such financial institutions may have significantly greater financial, technical, marketing and other resources than we do, which may allow them to more efficiently identify and capitalize upon opportunities and trends, transition and adapt their products and services, and devote greater resources to marketing and advertising, all of which could adversely affect our ability to compete effectively. As noted above, our competition to date for Figure Exchange includes companies, in particular those located outside the United States, who are not required to or do not comply with the same regulatory compliance standards as us or who are subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions, as well as DeFi protocols, each of which also may be subject to less stringent regulatory and compliance requirements, or none at all. The business models of such competitors rely on or benefit from being unregulated or only regulated in a small number of lower compliance jurisdictions, whilst also offering their products in highly regulated jurisdictions, including the United States, without necessarily complying with the relevant regulatory requirements in such jurisdictions. 86 To date, and although there have been a small number of enforcement actions by U.S. and foreign regulators against such offshore platforms, developers of DeFi protocols, many of these competitors have been able to operate from offshore while offering large numbers of products and services to consumers, including in the United States, Europe, and other highly regulated jurisdictions, without complying with the relevant licensing and other requirements in these jurisdictions, and seemingly without penalty. Due to our regulated status in several jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and services, including products and services that our unregulated or less regulated competitors are able to offer to a group that includes many of our customers, or expand our offerings to new jurisdictions where we are currently not allowed to offer products, which may adversely impact our business, financial condition, and results of operations. In recent years, we have also expended significant managerial, operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions in which we operate. Such costs have increased as we expanded our products and services that we offer. We expect to continue to incur significant costs to satisfy our legal and compliance obligations, which our unregulated or less regulated competitors have not had to and will not incur. Additionally, due to the broad nature of our products and services, we also compete with, and expect additional competition from, digital and mobile payment companies and other traditional financial services companies. Many innovative start-up companies and larger companies have made, and continue to make, significant investments in research and development in digital asset markets, and we expect these companies to continue to develop similar or superior products and technologies that compete with Figure Exchange. Further, more traditional financial and non-financial services businesses may choose to offer digital asset-based services in the future as the industry gains adoption. Our current and potential competitors may establish cooperative relationships among themselves or with third parties that may further enhance their resources. Our existing competitors for Figure Exchange have, and our potential competitors are expected to have, various competitive advantages over us, such as: ■ the ability to offer products and services globally. Incumbents were able to operate while jurisdictions worked to develop local legislation and had the resources to pursue licenses around the globe simultaneously; ■ the ability to offer certain products and services that we do not support or offer on our platform (due to constraints from regulatory authorities, our banking partners, and other factors) such as tokens that constitute securities or derivative instruments under U.S. or foreign laws; ■ greater name recognition, longer operating histories, larger customer bases, and larger market shares; ■ larger sales and marketing budgets and organizations; ■ more established marketing, banking, financial, and compliance relationships; ■ greater customer support resources; ■ greater resources to make acquisitions; ■ larger and more mature intellectual property portfolios; ■ greater number of applicable licenses or similar authorizations; and ■ operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings. If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, financial condition, and results of operations could be adversely affected. We expect to introduce and develop new products and services, and if these products or services are not successful or we are unable to manage the related risks, our business, financial condition, and results of operations could be adversely affected. We are continuing to invest in the development of new products and services. For example, we launched Figure Exchange in March 2024, Figure Connect in June 2024, YLDS in February 2025, and Democratized Prime in June 2025. New 87 initiatives are inherently unpredictable and risky, as each involves unproven business strategies, new regulatory requirements, and new financial products and services with which we, and in some cases our customers, may have limited or no prior development or operating experience. We cannot be sure that we will be able to develop, commercially market, and achieve market acceptance of any new products and services, including Figure Exchange, Figure Connect, YLDS, and Democratized Prime. In addition, our investment of resources to develop new products and services may either be insufficient or result in expenses that are excessive in light of revenue actually derived from these new products and services. It is also possible that such investment of resources may need to be delayed or deferred. Furthermore, failure to accurately predict demand or growth with respect to our new products and services could have an adverse impact on our reputation and business, and our new products and services may be less profitable than we expect, increase our costs, decrease our operating margins, or take longer than anticipated to achieve target margins. For example, if the profile of borrowers using any new products and services is different from that of those currently served by our HELOC product or other loan products, our proprietary algorithms may not be able to accurately evaluate the credit risk of such borrowers, and our partners and loan purchasers in our loan funding programs may in turn experience higher levels of delinquencies or defaults. In addition, our recently launched products Figure Connect, Figure Exchange, YLDS, and Democratized Prime have increased our regulatory compliance obligations and increased our costs. Any new products or services may raise new and potentially complex regulatory compliance obligations, which would increase our costs and may cause us to change our business in unexpected ways. Further, our development efforts with respect to these initiatives could distract management from current operations and will divert capital and other resources from our existing business. We may also have difficulty with securing adequate funding for any such new loan products and services originated on our platform, and if we are unable to do so, our ability to develop and grow these new offerings and services will be impaired. If we are unable to effectively manage the foregoing risks, our business, financial condition, and results of operations could be adversely affected. If we cannot keep pace with rapid digital asset industry changes to provide new and innovative products and services, the use of our products and services, and consequently our net revenue, could decline, which could adversely impact our business, financial condition, and results of operations. The digital asset industry has been characterized by many rapid, significant, and disruptive products and services in recent years. These include decentralized applications, DeFi, yield farming, non-fungible tokens, play-to-earn games, lending, staking, token wrapping, governance tokens, innovative programs to attract customers such as transaction fee mining programs, initiatives to attract traders such as trading competitions, airdrops and giveaways, staking reward programs, “layer 2” blockchain networks, and novel digital asset fundraising and distribution schemes, such as “initial exchange offerings.” We expect new digital asset products, services, and technologies to continue to emerge and evolve, which may be superior to, or render obsolete, the products and services that we currently provide or utilize. For example, disruptive technologies such as generative artificial intelligence (“AI”) may fundamentally alter the use of our products or services in unpredictable ways. We cannot predict the effects of new services and technologies on our business. However, our ability to grow our customer base and net revenue will depend heavily on our ability to innovate and create successful new products and services, both independently and in conjunction with third-party developers. In particular, developing and incorporating new products and services into our business may require substantial expenditures, take considerable time, and ultimately may not be successful. Any new products or services could fail to attract customers, generate revenue, or perform or integrate well with third-party applications and platforms. In addition, our ability to adapt and compete with new products and services may be inhibited by regulatory requirements and general uncertainty in the law and regulatory expectations, constraints by our banking partners and payment processors, third-party intellectual property rights, or other factors. Moreover, we must continue to enhance our technical infrastructure and other technology offerings to remain competitive and maintain a platform that has the required functionality, performance, capacity, security, and speed to attract and retain customers, including large, institutional, high-frequency, and high-volume traders. As a result, we expect to incur significant costs and expenses to develop and upgrade our technical infrastructure to meet the evolving needs of the industry. Our success will depend on our ability to develop and incorporate new offerings and adapt to technological changes and evolving industry practices. If we are unable to do so in a timely or cost-effective manner, our business and our ability to successfully compete, to retain existing customers, and to attract new customers may be adversely affected. 88 Negative publicity and unfavorable media coverage could adversely affect our business, financial condition, and results of operations. Negative publicity about us, our partners, the financial services technology industry, or the digital assets industry, including with respect to the transparency, fairness, user experience, quality, reliability, and the security of our platform, effectiveness of our credit decisioning or scoring models, effectiveness of our collection efforts, changes to our platform, loss of access to data related to assets and trades recorded on Provenance Blockchain due to causes such as fraudulent or accidental transactions, technology failures or disruptions, security breaches or incidents, our ability to grow our customer base at a rate expected by the market, our ability to effectively manage and resolve customer complaints, our ability to manage customer accounts in compliance with regulatory requirements which may not be clear, our or our partners’ privacy, data and security practices, use of loan proceeds by certain borrowers or other companies in our industry for illegal purposes, litigation, regulatory activity, misconduct by our employees, partners or wholesale brokers, vendors, other service providers, or others in the financial services technology industry, and the experience of our customers or our partners and their customers with our platform or services, even if inaccurate, could adversely affect our reputation and the confidence in, and the use of, our platform, which could harm our reputation and cause disruptions to our platform. Any such reputational harm could further affect the behavior of our customers and partners, including their willingness to use our platform, which could adversely affect our business, financial condition, and results of operations. We rely on our management team and will require additional key personnel to grow our business, and the loss of key management members or key employees, or an inability to hire key personnel, could adversely affect our business, financial condition, and results of operations. We believe our success has depended, and continues to depend, on the efforts and talents of our senior management, who have significant experience in the financial services and technology industries, are responsible for our core competencies, and would be difficult to replace. Our future success depends on our continuing ability to attract, develop, motivate, and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them. Our future success will depend, in part, on the ability of our executives and board members that were appointed in connection with the Recombination to quickly expand their knowledge of our operations, which will be critical to their ability to make informed decisions about our business and strategies, particularly given the competitive environment in which we operate. Certain of the companies against which we compete for experienced talent have greater financial and other resources, different risk profiles, longer histories in the industry, and greater ability to provide valuable cash or stock incentives to potential recruits than we do. Competition for this experienced talent is strong and our failure to attract, train, retain, and motivate such additional executives and board members could hinder or delay our strategic planning and execution, as well as adversely affect our ability to attract and retain other experienced and talented employees. The transition of our board of directors and senior management team as a result of the Recombination may compromise our ability to compete effectively. In addition, the loss of any of our senior management or key employees could adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all, and our other employees may be required to take on additional responsibilities. Furthermore, many candidates evaluate year-over-year stock growth trends for a sense of the potential long-term value of their proposed stock awards or have recently begun to discount the value of growth stocks on the whole. Volatility in the market price of our Class A common stock could harm our ability to attract and retain talent. Our executive officers and other employees are at-will employees, which means they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. We cannot ensure that we will be able to retain the services of any members of our senior management or other key employees. If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business, financial condition, and results of operations could be adversely affected. Our business is subject to the risks of natural disasters, power outages, telecommunications failures, public health crises and similar events, and to interruptions by human-made problems such as war, terrorism, cyberattacks and other actions, which may impact the demand for our products or our customers’ ability to repay their loans. Events beyond our control may damage our ability to maintain our platform and provide services to our customers. Such events include, but are not limited to, hurricanes, earthquakes, fires, floods, and other natural disasters, pandemics, power outages, telecommunications failures, and similar events. Despite any precautions we may take, system interruptions and delays could occur if there is a natural disaster, if a third-party provider closes a facility we use without adequate notice for financial or other reasons, or if there are other unanticipated problems at our leased facilities. Because we rely heavily on our servers, computer and communications systems, and the internet to conduct our business and provide high-quality service to our customers, disruptions could harm our ability to effectively run our business. Moreover, our customers, including partners, and other service providers face similar risks, which could directly or indirectly impact our business, 89 financial condition, and results of operations. We currently use Google Cloud Platform (“GCP”). While other providers are available, we would be unable to switch instantly to another system in the event of failure to access GCP. This means that an outage of GCP could result in our system being unavailable for a significant period of time. Terrorism, cyberattacks, and other criminal, tortious, or unintentional actions could also give rise to significant disruptions to our operations. In addition, the long-term effects of climate change on the global economy and in particular our industry are unclear; however, we recognize that there are inherent climate-related risks wherever business is conducted. For example, our offices may be vulnerable to the adverse effects of climate change. We are headquartered in New York, New York and have additional offices located in Charlotte, North Carolina, San Francisco, California, and Reno, Nevada, regions that are prone to events such as seismic activity and/or severe weather and that have experienced and may continue to experience climate-related events and at an increasing rate. Examples include drought and water scarcity, warmer temperatures, wildfires, and air quality impacts and power shutoffs associated with wildfire prevention. The increasing intensity of drought throughout California and annual periods of wildfire danger increase the probability of planned power outages. In addition, acts of war and other armed conflicts, disruptions in global trade, travel restrictions, quarantines, terrorism, and other civil, political, and geopolitical unrest could cause disruptions in our business and lead to interruptions, delays, or loss of critical data. Although we maintain a disaster response plan and insurance, such events could disrupt our business, the business of our customers or third-party suppliers, and may cause us to experience losses and additional costs to maintain and resume operations. Our business interruption insurance may not be sufficient to compensate us for losses that may result from interruptions in our service as a result of system failures or other disruptions. Comparable natural and other risks may reduce demand for our products or cause our customers to suffer significant losses and/or incur significant disruption in their respective operations, which may affect their ability to satisfy their obligations to us. All of the foregoing could adversely affect our business, financial condition, and results of operations. The use of blockchain technology in the primary and secondary loan markets is still in relatively early stages of growth, and if these markets do not continue to accept our blockchain-supported platform, or if these markets accept our platform more slowly than we expect, or if the markets for our platform fail to grow as large as we expect, our business, financial condition, and results of operations could be adversely affected. Use of, and reliance on, blockchain technology in the lending industry is still at an early stage among participants, and we do not know whether financial services firms will continue to use our platform in the future, or whether the primary and secondary loan markets will change in ways we do not anticipate. Many financial services firms have invested substantial personnel and financial resources in legacy software, and these institutions may be reluctant, unwilling, or unable to adapt their existing systems to our platform. Furthermore, these financial services firms may be reluctant, unwilling, or unable to use our software due to various concerns, such as their familiarity with blockchain technology, the security of their data, the reliability of the delivery model, and uncertainty as to the regulatory treatment of blockchain technology. These concerns or other considerations may cause current and prospective counterparties to choose alternative products or firms, which could adversely affect our business, financial condition, and results of operations. Our future success also depends on our ability to sell additional products, services, and functionality to our current and prospective partners, as well as to facilitate distribution of those products effectively into the capital markets. As we create new products and services and enhance our existing products and services, these applications and enhancements may not be attractive to customers, partners, or counterparties, or we may encounter difficulties in achieving interoperability between our new products and services and our existing products and services. In addition, promoting and selling new and enhanced products and platform and processing functionality may require increasingly costly sales and marketing efforts, and if customers and our partners choose not to adopt this functionality, our business, financial condition, and results of operations could be adversely affected. The future development and growth of the digital asset market is subject to a variety of factors that are difficult to predict and evaluate. If the digital asset market does not grow as we expect, our business, financial condition, and results of operations could be adversely affected. Digital assets built on blockchain technology were only introduced in 2008 and remain in the early stages of development. Digital assets are a new asset class that, as of yet, have not been widely adopted, particularly by institutional investors and corporate securities issuers. Figure Exchange will rely on the acceptance and use by such investors and issuers of digital assets to create demand for our products and services. Though we believe that the anticipated benefits of digital assets will create such demand, there can be no assurance that this will occur, or if it does occur, that it will be in the near term. In addition, different digital assets and digital asset networks are designed for different purposes. Bitcoin, for instance, was designed to serve as a peer-to-peer electronic cash system, while the Ethereum network was designed to be a smart contract and decentralized application platform. Many other digital asset networks—ranging from cloud computing to tokenized securities networks—have only recently been established or begun to emerge. The further growth and development of any 90 digital assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of digital assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including: ■ many digital asset networks have limited operating histories and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective digital assets and underlying blockchain networks, any of which could adversely affect their respective digital assets; ■ many digital asset networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce software bugs, security risks, or adversely affect the respective digital asset networks; ■ several large networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability, and energy usage issues. If these issues are not successfully addressed, or are unable to receive widespread adoption, the underlying digital assets could be adversely affected; ■ security issues, software bugs, and software errors have been identified with many digital assets and their underlying blockchain networks or protocols, some of which have been exploited by malicious actors. There are also inherent security weaknesses in some digital assets, such as when creators of certain digital asset networks use procedures that could allow hackers to counterfeit tokens. Any weaknesses identified with a digital asset could adversely affect its price, security, liquidity, and adoption. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the compute or staking power on a digital asset network, as has happened in the past, it may be able to manipulate transactions, which could cause financial losses to holders, damage the network’s reputation and security, and adversely affect its value; ■ the emergence of quantum computing and its potential for shortening the time required by governments, criminals, and unauthorized third parties to factor and derive the very large seed numbers (e.g., private keys) associated with current public key cryptography poses a future risk to current approaches to blockchain cryptography that protect many digital assets from theft or loss; ■ the development of new technologies for mining, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation of mining power in a small number of large mining farms, could reduce the security of blockchain networks, lead to increased liquid supply of digital assets, and reduce a digital asset’s price and attractiveness; ■ if rewards and transaction fees for miners or validators on any particular digital asset network are not sufficiently high to attract and retain miners or validators, a digital asset network’s security and speed may be adversely affected, increasing the likelihood of a malicious attack; ■ if the costs of electricity, environmental restrictions, and regulations make it uneconomic for miners to operate or maintain blockchain networks, the overall security and efficiency of digital asset networks may be adversely affected, potentially impacting their reliability and attractiveness to users and investors; ■ many digital assets have concentrated ownership or an “admin key,” allowing a small group of holders to have significant or unilateral control and potentially collusive influence over key decisions relating to their digital asset networks, such as governance decision and protocol changes, which could impact the market price of such digital assets; ■ the governance of many decentralized blockchain networks and protocols is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any particular digital asset network or protocols, a lack of incentives for developers to maintain or develop the network, and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs, or changes, or stymie such network or protocol’s utility and ability to respond to challenges and grow; ■ many digital asset networks and protocols are in the early stages of developing partnerships and collaborations, all of which may not succeed and adversely affect the usability and adoption of the respective digital assets; 91 ■ digital assets have only recently become selectively accepted as a means of payment by retail and commercial outlets, and use of digital assets by consumers to pay such retail and commercial outlets remains limited. Banks and other established financial institutions may refuse to (i) process funds for digital asset transactions; (ii) process wire transfers to or from digital asset exchanges, digital asset-related companies, and service providers; or (iii) maintain accounts for persons or entities transacting in digital assets. As a result, the prices of various digital assets are largely determined by speculators, miners and validators, thus contributing to price volatility, which makes retailers less likely to accept digital assets as a form of payment in the future; ■ banks may choose to not provide or cease providing banking services to businesses that provide digital asset-related services or that accept digital assets as payment, which could harm our banking infrastructure, limit us from operating in certain jurisdictions or limit product or service offerings, dampen liquidity in the market, and damage public perception of digital assets generally or any one digital asset in particular and their or our utility as a payment system. These actions could decrease the price of digital assets generally or individually; ■ there is a lack of liquid markets in certain digital assets, and these markets are subject to possible manipulation; ■ certain digital assets have concentrated ownership, and large sales or distributions by significant holders of such digital assets, or “whales,” could have an adverse effect on the market price of such digital assets; ■ the characteristics of digital assets have been, and may in the future continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion, and ransomware scams; ■ governments, quasi-government and other regulatory bodies may impose additional regulation on digital assets and blockchain technology, and the regulatory environment for digital assets is changing and unpredictable; ■ consumer demographics, public tastes and preferences, and general economic conditions may change and affect the acceptance and popularity of digital assets; and ■ forks of digital assets may occur at any time. A fork can lead to a disruption of networks and our information and technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any of which can further lead to assets being unavailable for a period of time or temporary or even permanent loss of assets. Various other technical issues have also been uncovered from time to time that have or could have resulted in disabled functionalities, exposure of certain users’ personal information, theft of users’ assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, user, and development communities. If any such risks or other risks materialize, and in particular if they are not resolved, the development and growth of digital assets may be significantly affected and, as a result, our business, financial condition, and results of operations could be adversely affected. Many participants in the financial industry (including regulators) and other industries may oppose the development of products and services that utilize blockchain technology. The market participants who oppose such products and services may include entities with significantly greater resources, including financial resources and political influence, than we have. Our ability to operate and achieve our commercial goals could be adversely affected by any actions of any such market participants that result in additional regulatory requirements, legal challenges or other activities that make it more difficult for us to operate. The blockchain industry as a whole has been characterized by rapid changes and innovations and is constantly evolving. Although it has experienced significant growth in recent years, the slowing or stopping of the development, general acceptance and adoption and usage of blockchain technology and digital assets may adversely impact our business, financial condition, and results of operations. We may need additional capital, and we cannot be certain that additional financing will be available on favorable terms, or at all. Historically, we have funded our operations and capital expenditures primarily through direct and indirect contributions from FT, cash generated from our operations, and debt financing for capital purchases. Although we currently anticipate that our existing cash and cash equivalents will be sufficient to meet our cash needs for at least the next 12 months, our anticipated cash needs may be greater than our resources and we may require additional financing. We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans, operating performance, and the condition of the capital markets at the time we seek financing. We cannot assure you that additional financing will be available to us on favorable terms when required, or at all. If we raise 92 additional funds through the issuance of equity or equity-linked securities, those securities may have rights, preferences, or privileges senior to the rights of our Class A common stock, and our stockholders may experience dilution. If we raise additional funds by incurring indebtedness, then we may be subject to increased fixed payment obligations and could be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely affect our ability to conduct our business. Any future indebtedness we may incur may result in terms that could be unfavorable to our investors. To the extent that we seek to grow through future acquisitions or other strategic investments or alliances, we may not be able to do so effectively. We may in the future seek to grow our business by exploring potential acquisitions or other strategic investments or alliances. However, we may not be successful in identifying businesses or opportunities that meet our acquisition or expansion criteria. In addition, even if a potential acquisition target or other strategic investment opportunity is identified, we may not be successful in completing such acquisition or integrating such new business or other investment. We may face significant competition for acquisition and other strategic investment opportunities from other well-capitalized companies that have greater financial resources and access to debt and equity capital to secure such acquisitions or investments than we do. As a result of such competition, we may be unable to acquire certain assets or businesses or take advantage of other strategic investment opportunities that we deem attractive, the purchase price for a given strategic opportunity may be significantly elevated, or certain other terms or circumstances may be substantially more onerous. Moreover, we are subject to regulatory risk in connection with potential acquisitions or other strategic investments or alliances, including changes in law or interpretations of law that could result in increased scrutiny, require restructuring, and/or diminish the value of these acquisitions, investments, or alliances. There can be no assurance that we will be able to manage our expanding operations, including from acquisitions, investments, or alliances, and any failure to do so could adversely affect our business, financial condition, and results of operations. Loan Specific Risks If loans originated by us or through our platform and purchased by us do not perform, or significantly underperform, we may incur financial losses on the loans we hold on our balance sheet, which could adversely affect our business, financial condition, and results of operations, as well as result in the loss of confidence of our funding sources. We retain a significant amount of loans on our balance sheet funded through warehouse credit facilities. Of the $389 million of loans on our balance sheet as of September 30, 2025, $211 million, or 54%, of these loans were funded through our warehouse credit facilities. Of the $396 million of loans on our balance sheet as of December 31, 2024, $305 million, or 77%, of these loans were funded through our warehouse credit facilities. For these loans and any future loans originated by us or loans originated by our partners using our technology and purchased by us that may be held for investment on our balance sheet, we bear the entire credit risk in the event of customer default. An increase in customer defaults on the HELOCs held on our balance sheet could have an adverse effect on our business given that a substantial percentage of such loans have liens with greater priority than those we hold. As of September 30, 2025 and December 31, 2024, we did not hold the first lien on 80% and 91%, respectively, of the HELOCs on our balance sheet. In addition, non-performance, or even significant underperformance, of the loan receivables that we own could have an adverse effect on our business, financial condition, and results of operations. Digital assets-secured personal loans are subject to the volatility of the digital assets markets. Significant fluctuations in the value of the digital assets securing the loans can trigger margin calls, requiring borrowers to provide additional collateral or make payments. Failure to meet margin calls can result in the liquidation of the borrower’s digital assets, potentially leading to financial losses and borrower dissatisfaction. Additionally, our funding model relies on a variety of funding arrangements, including warehouse credit facilities, term securitizations, and whole loan sales. Any significant underperformance of the loans facilitated through our platform may adversely impact our relationship with such funding sources and result in their loss of confidence in us, which could lead to the termination of our existing funding arrangements and adversely affect our business, financial condition, and results of operations. Increases in borrower default rates on loans could make us and our loans less attractive to loan purchasers, lenders under warehouse credit facilities and investors in securitizations, which may adversely affect our access to financing and our business, financial condition, and results of operations. Increases in borrower default rates, due to deteriorating economic conditions or other factors, could make us and our loans less attractive to our existing or prospective funding sources, including loan purchasers on the secondary market, 93 securitization investors and lenders under debt warehousing facilities. The volatility of digital assets markets could exacerbate default risks on digital assets-secured personal loans, as significant fluctuations in collateral value may lead to borrower defaults or margin calls that are unmet, resulting in forced liquidations. These factors could further impact the attractiveness of our loans to existing or prospective funding sources. If our existing funding sources do not achieve their desired financial returns or if they suffer losses, they or prospective funding sources may increase the cost of providing future financing or refuse to provide future financing or purchase loans on terms acceptable to us or at all. Our HELOC securitizations are non-recourse to us and are collateralized by the pool of HELOCs pledged to the relevant securitization issuer. While we are not obligated to support the performance of the loans once securitized and the related securitization entities are variable interest entities that are not consolidated in our financial statements, the performance of these loans may nonetheless impact the credit ratings assigned to the securities issued by our securitization trusts. For example, if the loans securing our securitizations underperform relative to expectations, rating agencies may place the related bonds on watch, downgrade their ratings on such bonds, or revise their rating methodologies in a manner that reflects negatively on the underlying loan quality. Although these rating actions pertain to the securitization trusts and not to our corporate credit directly, they may influence how rating agencies, warehouse lenders, institutional loan purchasers, or other market participants assess our loan origination and servicing practices. As a result, negative loan performance or adverse rating actions could increase the cost of, or reduce access to, future financing—including warehouse credit facilities and loan sales—or limit the ability of our securitization trusts to issue securities on terms acceptable to us or at all. While we are able to temporarily hold loans on our balance sheet upon an increase in borrower default rates, a substantial increase in the volume of borrower defaults would negatively impact our financial condition. Consequently, if we were to be unable to arrange new or alternative methods of financing on favorable terms, we may have to curtail or cease our origination of loans, which would adversely affect our business, financial condition, and results of operations. Our HELOCs and other loans we make, such as digital assets-secured personal loans, are subject to federal, state and local laws that regulate various aspects of lending, including disclosures, interest rates and other charges, and if we exceed applicable limitations on interest, loan charges, and other fees or fail to provide required disclosures, our business, financial condition, and results of operations could be significantly adversely affected, including but not limited to, through litigation (including damages), investigation, enforcement and other regulatory and legal action and penalties. Our HELOCs and other loans we make, such as digital assets-secured personal loans, are subject to applicable federal, state and local laws that regulate, among other things, interest rates and other charges, require specific disclosures, regulate specific practices, and require licensing of various participants in the transaction. In addition, other federal, state and local laws, public policy, and general principles of equity relating to the protection of consumers, unfair, deceptive, and abusive practices, and debt collection practices apply to the origination, ownership, servicing, or collection of the HELOCs and other loans we make. Title V of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“Title V”, “DIDMCA”), section 501, generally preempts state usury limitations on certain loans, mortgages, credit sales, or advances secured by a first lien on residential real property made after March 31, 1980. The Office of the Comptroller of the Currency (the “OCC”), as successor to the Federal Home Loan Bank Board, was authorized to issue rules and regulations implementing Title V. While the statute authorized states to reimpose interest rate limits by adopting legislation or a constitutional provision before April 1, 1983, only fifteen states have done so. Even where Title V has not been so rejected, states retain the authority to limit certain other loan charges and other aspects of extending credit. Certain states have taken action to reimpose interest rate limits and/or limit these other loan charges or regulate other aspects of loans. Importantly, to the extent that a HELOC is secured by a subordinate lien on the related property, that HELOC will not qualify for preemption of state usury laws under Title V, as preemption under section 501 of Title V generally applies only to first liens. Further, as a non-depository lender, we do not directly qualify for the interest rate preemption authority available to federally chartered or state-chartered banks under federal banking law (e.g., under section 85 of the National Bank Act, which applies to national banks, or section 521 of DIDMCA, which applies to state-chartered banks and has been the subject to recent state opt-out legislation and court challenges). As a result, our HELOCs and other loans we make may be subject to applicable state and local law limitations, including with respect to interest rates, loan charges, and other fees. If we were to charge interest, fees, or other amounts that exceed applicable limitations, fail to deliver required disclosures to borrowers, or otherwise fail to comply with applicable federal, state, and local laws, the HELOCs or other loans we make, such as digital assets-secured personal loans, could be deemed unenforceable, in whole or in part. We might be unable to collect all or part of the principal, interest, or other amounts incurred by the customer, the customer could be entitled to refunds of amounts previously paid, and our securitization trusts and related entities, and any of their respective assignees, could be subject to litigation (including damages), investigation, enforcement and other regulatory and legal 94 action and penalties. These consequences could adversely affect our business, financial condition, and results of operations. Unfavorable changes in state and local laws regulating lending, including interest rates and other charges, particularly in the states in which we have a high concentration of loan originations, could also adversely affect our business, financial condition, and results of operations. If a court or regulator determines that our HELOCs cannot be characterized as a fixed-rate extension of “open-end credit” under the TILA or state law, we would be subject to the more prescriptive closed-end mortgage laws and rules, as well as laws and rules applicable to variable-rate HELOCs, which would have a material adverse effect on our business, financial condition, and results of operations. Our HELOCs are characterized as “open-end credit” for purposes of the TILA because we contemplate that they will be used for repeated draws. However, it is possible that a court or regulator could recharacterize our HELOCs as closed-end credit. In such case, the HELOCs would be subject not only to TILA and Regulation Z’s ability to repay requirements, but also to a variety of other federal and state regulatory requirements that otherwise would not apply, including the TILA-RESPA Integrated Disclosure Rule, which was promulgated by the Consumer Financial Protection Bureau (the “CFPB”) and requires integrated loan estimate and closing disclosure forms to be provided to borrowers of closed-end mortgage loans, and the Loan Originator Compensation Rule, which was also promulgated by the CFPB and prohibits the payment to or receipt by loan originators of compensation that is based on a term of a closed-end consumer credit transaction secured by a dwelling or based on a proxy for such a term. In addition to TILA and Regulation Z, state laws may separately impose ability to repay requirements or other substantive restrictions, including under state licensing, mortgage lending, mortgage servicing, and usury laws, on closed-end mortgage loans that our HELOCs may not satisfy if they were to be re-characterized as extensions of closed-end credit. The proceeds of each of our HELOCs are fully drawn at account opening, with borrowers having the ability to take additional draws as the initial and any subsequent draws are repaid. Draw periods on the HELOCs generally last between two and five years after origination. Additionally, each draw (including the initial draw) is amortized from the draw date to the maturity date, and the interest rate for each draw is fixed, with the rate for draws after the initial draw being set based on a designated index and margin. The foregoing characteristics could potentially lead to scrutiny regarding whether the HELOCs may be “closed-end” or variable-rate credit. Accordingly, there can be no guarantee that a court or regulator would not determine that the HELOCs constitute an extension of closed-end credit. To the extent that a HELOC is recharacterized as closed-end credit or the originator of such HELOC is found to have structured the HELOC as open-end credit for the purpose of evading otherwise applicable regulatory requirements, all or part of the principal of or interest on the HELOC may not be collectable, the HELOC may be able to be rescinded by the borrower, the borrower may be entitled to a refund of amounts previously paid and we, our securitization trusts and related entities, and any of their respective assignees could be subject to litigation (including damages), investigation, enforcement and other regulatory and legal action and penalties. In addition, each draw (including the initial draw) is amortized from the draw date to the maturity date, and the interest rate for each draw is fixed, with the rate for draws after the initial draw being set based on a designated index and margin. Because the rate applicable to each draw does not vary after the draw is made, we originate our HELOCs in compliance with legal requirements applicable to fixed-rate HELOCs, which, in certain cases, may differ from the legal requirements that apply to variable-rate HELOCs. If a court or regulator were to recharacterize our HELOCs as a variable-rate HELOC, the HELOC may be able to be rescinded by the borrower, the borrower may be entitled to a refund of amounts previously paid and we, our securitization trusts and related entities, and any of their respective assignees could be subject to litigation (including damages), investigation, enforcement and other regulatory and legal action and penalties. Any such recharacterization of the HELOCs as either closed-end credit or variable-rate credit would affect all of the HELOCs that we have originated to date and would have a material adverse effect on our business, financial condition, and results of operations. Borrowers may prepay a loan at any time without penalty, which could reduce our servicing fees and deter our partners and loan purchasers from investing in our loans. A borrower may decide to prepay all or a portion of the remaining principal amount on a loan at any time without penalty. If the entire or a significant portion of the remaining unpaid principal amount of a loan is prepaid, we would not receive a servicing fee, or we would receive a significantly lower servicing fee associated with such prepaid loan. Prepayments may occur for a variety of reasons, including if interest rates decrease after a loan is made. If a significant volume of prepayments occurs, the amount of our servicing fees would decline, which could adversely affect our business, financial condition, and results of operations. Our models are designed to predict prepayment rates. However, if there is a significant volume of prepayments that our models do not accurately predict, returns targeted by our partners and loan purchasers in our loan funding programs would be adversely affected, and our ability to attract new partners and loan purchasers in our loan funding programs would be negatively affected. 95 The management and security of digital assets collateral presents risk of potential loss of the collateral and attendant legal and reputational consequences. We rely on third-party custodial service providers, or self-custody via decentralized Multi-Party Computation (“MPC”) wallets, to hold the digital asset collateral we receive in respect of digital asset-secured personal loans. At present, we entrust the collateral for digital asset-secured loans to Anchorage Digital Bank National Association (“Anchorage”), a qualified custodian. Anchorage is chartered and regulated by the Office of the Comptroller of the Currency. Our relationship with Anchorage is governed by a Master Custody Service Agreement. The material terms of the Master Custody Services Agreement and First Amendment thereto are summarized below. This summary is not a complete description of all provisions of the Master Custody Services Agreement and is qualified in its entirety by reference to the Master Custody Services Agreement, which is on file with the SEC. When we issue a digital asset-secured personal loan to a customer, we establish a new order form with Anchorage to manage the collateral associated with the loan. These agreements generally have a fixed one-year term and automatically renew for additional one-year terms unless either party terminates the agreement at least 30 days before the end of the then current term. Anchorage is entitled to an annual fee of 0.35% of the market value of the collateral, which is assessed as a 0.0292% monthly fee based on the market value of the collateral. While Anchorage is a federally regulated entity, we remain exposed to various risks as a result of our reliance on a third-party custodian to manage and hold the collateral in respect of our digital asset-secured loans. There are inherent risks associated with the security and management of digital assets, and we are therefore exposed to risks of loss stemming from the operational and cybersecurity systems and controls of such custodians. For example, cybersecurity threats or operational errors experienced by such custodians could result in the loss or compromise of some or all of the digital asset collateral they hold on our behalf. Were such a loss to occur, there is no guarantee that we would have full recourse against such custodian for the value of the collateral lost and we could be left in an unsecured position with respect to our digital asset loans. Moreover, such an event may also result in us incurring liability to return equivalent collateral to our borrowers. Such incidents could expose us to significant legal disputes and damage our reputation, potentially leading to financial losses and a loss of trust from our customers and investors. Declines in the value of the collateral for our digital assets-secured loans can lead to margin calls, affecting borrowers’ ability to manage their loans, exposes us to the financial, legal, and reputational risks associated with potential system failures, data inaccuracies, and cybersecurity threats, and potentially leading to financial losses for us. Our digital assets-secured personal loans are structured with fixed interest rates and fees based on the loans’ initial loan-to-value ratios. If the value of the digital assets collateral decreases significantly, the loan-to-value ratio can rise, triggering a margin call, which requires borrowers to either add more collateral or make payments to restore the loan-to-value ratio to its original level. Failure to meet margin calls can result in the liquidation of the borrower’s digital assets, potentially leading to financial losses for us if the collateral is insufficient to repay the borrower’s debt and borrower dissatisfaction. Reliance on technology for digital assets-secured loans exposes us to the financial, legal, and reputational risks associated with potential system failures, data inaccuracies, and cybersecurity threats. Our management of digital assets-secured loans is heavily dependent on advanced technology systems, including real-time pricing of collateral. This reliance introduces several risks, such as system failures that could disrupt loan processing and management, data inaccuracies that might lead to incorrect assessments of collateral value or borrower status, and cybersecurity threats that could compromise sensitive information. These vulnerabilities could adversely affect our operations, lead to financial losses, and impact our reputation and ability to retain and attract customers. Our loan underwriting processes rely on automation and on data from third-party vendors, and, if that data is inaccurate or if the technology supporting that automation fails or is deployed incorrectly, our business may suffer losses due to poor loan performance or loss of customers or loan purchasers on the secondary market. Our origination platform relies on automation to process data we receive from third-party vendors in connection with the underwriting process. Third-party vendors provide the data used by our platform to verify the creditworthiness of potential borrowers. This data may include, but is not limited to, (i) certain applicant depository accounts, (ii) payroll information from providers, (iii) tax return information, when provided, or (iv) other documents uploaded by the applicant. For loans underwritten based on the borrower’s income, we underwrite each loan based on the lower of the stated income amount provided by the borrower and the verified income amount, but the third-party data may be inaccurate, or our algorithms may not account for certain scenarios, resulting in the overstatement of such applicant’s income during the underwriting process. If we fail to adequately predict the creditworthiness of borrowers due to the design of our models or programming or other errors, and we do not detect and account for such errors, or any of the other components of our credit decision process fails, we may experience higher than forecasted loan losses. We also rely on data we receive from third-party vendors about lien data and value of the collateral. If this information is incorrect, we may experience higher than 96 forecasted loan losses and may not be able to attract and retain our partners. Any of the foregoing could result in sub-optimally priced loans, incorrect approvals or denials of loans, or higher than expected loan losses, which in turn could adversely affect our ability to attract new borrowers, partners and loan purchasers to our platform, increase the number of our loans or maintain or increase the average size of loans facilitated on our platform. Our models also target and optimize other aspects of the lending process, such as customer acquisition, fraud detection, default timing, loan stacking, prepayment timing, and fee optimization, and our continued improvements to such models have allowed us to facilitate loans inexpensively and virtually instantly, with a high degree of borrower satisfaction and an insignificant impact on loan performance. However, such applications of our models may prove to be less predictive than we expect, or than they have been in the past, for a variety of reasons, including inaccurate assumptions or other errors made in constructing such models, incorrect interpretations of the results of such models, and failure to timely update model assumptions and parameters. Additionally, such models may not be able to effectively account for matters that are inherently difficult to predict and beyond our control, such as macroeconomic conditions, credit market volatility, interest rate fluctuations, and digital assets market volatility, which often involve complex interactions between a number of dependent and independent variables and factors. Material errors or inaccuracies in our data and/or models could lead us to make inaccurate or sub-optimal operational or strategic decisions, which could adversely affect our business, financial condition, and results of operations. If we do not make accurate credit and pricing decisions or effectively forecast our loss rates, our business, financial condition, and results of operations could be adversely affected. In making a decision whether to extend credit to prospective customers, we rely upon data, including data obtained from third parties, to assess our ability to extend credit within our risk appetite and overall risk level to determine lending exposure and loan pricing. If the decision components, rapidly deteriorating macroeconomic conditions or analytics are either unstable, biased, or missing key pieces of information, the wrong decisions will be made, which will negatively affect our business. If our credit decisioning strategy fails to adequately predict the creditworthiness of our borrowers, including a failure to predict a borrower’s true credit risk profile and ability to repay their loan, higher than expected loss rates will impact the fair value of our loans. Additionally, if any portion of the information pertaining to the prospective borrower is false, inaccurate, or incomplete, and our systems did not detect such falsities, inaccuracies, or incompleteness, or any of the other components of our credit decision process fails, we may experience higher than forecasted losses, including losses attributable to fraud. Furthermore, we rely on credit reporting agencies to obtain credit reports and other information in making underwriting and pricing decisions. If one of these third parties experiences an outage, if we are unable to access the third-party data used in our decision strategy, or if our access to such data is limited for any reason, our ability to originate loans may be reduced and our volume may suffer. We may also be unable to accurately evaluate potential borrowers or effectively predict credit losses inherent in our loan portfolio, which could adversely affect our business, financial condition, and results of operations. Additionally, if we make errors in the development, validation, or implementation of any of the underwriting models or tools that we use for the loans securing our debt warehouses or included in securitization transactions or whole loan sales, such loans may experience higher delinquencies and losses, which would negatively impact our debt warehouse financing terms and future securitization and whole loan sale transactions. We rely upon the accuracy and completeness of information about borrowers, and any misrepresented information or fraud could adversely affect our financial condition and reputation. We use a combination of our own proprietary technology and third-party systems to determine if a loan applicant is creditworthy, and to detect and prevent fraud, including borrower identity theft. We are unable, however, to prevent every instance of fraud that may be engaged in by our borrowers and any loan broker or originator that misrepresents facts about a loan, including the information contained in the loan application. If any of this information is intentionally or negligently misrepresented and such misrepresentation is not detected prior to the acquisition or closing of the loan, the value of the loan could be significantly lower than expected, resulting in a loan being approved in circumstances where it would not have been had we been provided with accurate data. A loan subject to a material misrepresentation is typically unsalable or subject to repurchase if it is sold before detection of the misrepresentation. In addition, it is often difficult to collect monetary losses that we may have suffered as a result of persons or entities making a misrepresentation. The technology and other controls and processes we created to help us identify misrepresented information in our LOS were designed to obtain reasonable, not absolute, assurance that such information is identified and addressed appropriately. Accordingly, such controls may fail to detect all misrepresented information in our LOS. 97 High-profile fraudulent activity also could negatively impact our brand and reputation, which could impact our business. In addition, certain fraudulent activity could lead to regulatory intervention and/or increased oversight, which could increase our costs and adversely affect our business, financial condition, and results of operations. While we take precautions to prevent borrower identity fraud, our borrowers have been, and may again be, subject to identity fraud, which may adversely affect the performance of the loans facilitated through our platform. Identity theft and the related provision of false identifying information is the most prevalent form of fraud that we encounter. There is a risk of fraudulent activity associated with our platform, borrowers, partners, and third-party vendors that handle borrower information. While we take precautions to prevent borrower identity fraud, our resources, technologies, and fraud prevention tools may be insufficient to accurately detect and prevent fraud. We have been, and may again be, obligated to repurchase loans facilitated through our platform in certain cases of confirmed identity theft, and the level of fraud-related charge-offs on the loans facilitated through our platform could be adversely affected if fraudulent activity were to significantly increase. We bear the risk of borrower fraud in a transaction involving borrower identity fraud, and we generally have no recourse to collect the amount owed by the borrower. High-profile fraudulent activity or significant increases in fraudulent activity could also lead to regulatory intervention, negative publicity, and the erosion of trust from our borrowers and partners, and could materially and adversely affect our business, financial condition, and results of operations. Our underwriting may not accurately predict the likelihood of default for all loans, which could result in substantial losses that adversely affect our business, financial condition, and results of operations. We originate HELOCs and other loans according to our internal guidelines using our proprietary technology. Our underwriting guidelines may not always correlate with, or accurately predict, creditworthiness or the underlying loan defaults. A borrower’s ability to repay their loan could be adversely impacted by numerous factors, including a change in the borrower’s employment, financial condition, or other negative local or macroeconomic conditions. Deterioration in a borrower’s financial condition and prospects may be accompanied by deterioration in the value of the collateral for the loan. In addition, some of the loans we originate have been, and in the future could be, made to self-employed borrowers, or to borrowers who do not live in the home subject to a HELOC. For example, during the nine months ended September 30, 2025, 8% of the total principal amount of the loans we originated were made to borrowers who do not live in the home subject to the HELOC they obtained. Loans to such borrowers may be higher-risk because the borrower may be more likely to default on their loans, and/or abandon the property in a default, either of which could increase our financial exposure. Further, the volatility of digital assets markets could exacerbate default risks on our digital assets-secured personal loans, as significant fluctuations in collateral value may lead to borrower defaults or margin calls that are unmet, resulting in forced liquidations. The above-referenced loans may be more expensive to service because they require more frequent interaction with borrowers and greater monitoring and oversight. Additionally, these higher-risk loans may be subject to increased scrutiny by state and federal regulators and lead to higher compliance and regulatory costs, which could result in a further increase in servicing costs. We may not be able to pass along any of the additional expenses we incur in servicing these higher-risk loans to investors. The greater cost of servicing higher-risk loans could adversely affect our business, financial condition, and results of operations. The unique features of our LOS, including reliance on online notaries, AVMs, and lien data may expose us to a greater risk of loss, which could harm our partners and investor relationships and our business, financial condition, and results of operations. Certain aspects of our LOS, including our reliance on remote online notaries (in place of in-person notaries), AVMs (in place of appraisals or other valuation methods), and lien data (in place of title searches a