What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-15 compared with 2023-03-14 · 250 added, 280 removed, 784 unchanged (40% of the section changed)

4 unchanged sentences

We have audited the accompanying consolidated balance sheets of Oportun Financial Corporation and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and 2021, and the results of its operations and its cash flows for each of two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 15, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

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The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Loans Receivable at Fair Value — Refer to Notes 2 and 15 to the financial statements

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fair Value of Financial Instruments — Fair Value Estimate of Unsecured Personal Loans — Refer to Notes 2 and 14 to the financial statements

Critical Audit Matter Description

The Company’s loans receivable at fair value were at $3,144 million as of December 31, 2022.

The loans receivable at fair value were valued as Level 3 financial instruments.

Level 3 financial instruments are valued utilizing pricing inputs that are unobservable and significant to the entire fair value measurement.

The Company estimates the fair value of the Level 3 loans receivable using a discounted cash flow model based on estimated future cash flows, which considers various inputs that require significant judgment.

The Company’s loans receivable at fair value were valued as Level 3 financial instruments.

The Company estimates the fair value of the Level 3 loans receivable using a discounted cash flow model based on estimated future cash flows, which considers unobservable inputs that require significant judgment.

The model uses inputs that are not observable and inherently judgmental and reflect management’s best estimates of the assumptions a market participant would use to calculate fair value.

We identified the Company’s unsecured personal loans receivable at fair value portfolio as a critical audit matter because of the subjective process in determining significant inputs, assumptions, and judgments used to estimate the fair value.

Auditing management’s assessment of unsecured personal loans receivable at fair value involved exercising subjective and complex judgments, required specialized skills and knowledge, and required an increased extent of audit effort, including obtaining audit evidence of the data sources used to estimate fair value and understanding the assumptions applied and the nature of significant inputs utilized.

We identified the Company’s fair value estimate of unsecured personal loans as a critical audit matter because of the subjective process in determining significant inputs used to estimate the fair value.

Auditing management’s estimate of unsecured personal loans receivable at fair value involved exercising subjective and complex judgments, required specialized skills and knowledge, and required an increased extent of audit effort, including obtaining audit evidence of the data sources used to estimate fair value and understanding the assumptions applied and the nature of significant inputs utilized.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of unsecured personal loans receivable at fair value included the following, among others:

Our audit procedures related to the Company’s fair value estimate of unsecured personal loans receivable included the following, among others:

• We tested the effectiveness of management’s controls covering the overall estimate and the review of the accuracy and completeness of the underlying unsecured personal loan data utilized in the model calculations.

• We subjected the significant unobservable inputs to sensitivity analyses to evaluate changes in the fair value that would result from changes in the assumptions.

• We tested the accuracy and completeness of the significant unobservable inputs used in the valuation of unsecured personal loans receivable at fair value by detail testing the segmentation of the portfolio and underlying payment history and historical performance of the unsecured personal loans.

• We tested the accuracy and completeness of the source information derived from the Company’s loan data, which is used in the valuation model.

• We evaluated the valuation model and related assumptions, including significant unobservable inputs, and underlying loan data used by management.

• With the assistance of our fair value specialists, we developed independent estimates of the unsecured personal loans receivable at fair value and compared our estimates to the Company’s estimates.

• We performed a retrospective review of management’s ability to accurately estimate the unsecured personal loans receivable at fair value by comparing modeled monthly cash flows to actual past performance.

/s/ Deloitte & Touche LLP

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Loans receivable at fair value 2,962,352 3,175,449

Interest and fees receivable, net 31,796 20,916

Capitalized software and other intangibles, net 114,735 139,801

Goodwill — 104,014

Right of use assets - operating 21,105 30,448

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Asset-backed notes at fair value 1,780,005 2,387,674

Asset-backed borrowings at amortized cost 581,468 —

Acquisition and corporate financing 258,746 222,879

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Common stock, additional paid-in capital 584,555 547,799

Retained earnings 6,102 83,846

Retained earnings (accumulated deficit) ( 173,849 ) 6,102

Treasury stock at cost, 272,023 and 272,023 shares at December 31, 2023 and December 31, 2022

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Income (loss) before taxes ( 253,653 ) ( 75,286 )

Income tax expense 2,458 15,377

Income tax expense (benefit) ( 73,702 ) 2,458

Net income (loss) $ ( 179,951 ) $ ( 77,744 )

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For the Years Ended December 31, 2023 and 2022

Shares Par Value Additional Paid-in Capital Retained Earnings Treasury Stock Total Stockholders' Equity

Common Stock Warrants

Shares Par Value Additional Paid-in Capital Shares Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Treasury Stock Total Stockholders' Equity

Balance – January 1, 2023 33,354,607 $ 7 $ 547,799 — $ — $ 6,102 $ ( 6,309 ) $ 547,599

Issuance of common stock upon exercise of stock options, net of shares withheld 37,314 — ( 46 ) — — — — ( 46 )

Repurchase of stock options ( 2,706 ) — ( 28 ) — — ( 28 )

Stock-based compensation expense — — 20,024 — — — — 20,024

Vesting of restricted stock units, net of shares withheld 1,077,132 — ( 2,653 ) — — — — ( 2,653 )

Issuance of warrants to purchase common stock in connection with debt financing — — — 4,193,453 19,431 — — 19,431

Net loss — — — — — ( 179,951 ) — ( 179,951 )

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Balance – January 1, 2022 32,004,396 $ 6 $ 526,338 — $ — $ 83,846 $ ( 6,309 ) $ 603,881

Issuance of common stock upon exercise of stock options 240,047 — 3,272 — — 3,272

Issuance of common stock upon exercise of stock options, net of shares withheld 546,312 1 ( 4,636 ) — — — — ( 4,635 )

Repurchase of stock options ( 2,706 ) — ( 28 ) — — — — ( 28 )

Stock-based compensation expense — — 30,125 — — — — 30,125

Vesting of restricted stock units, net of shares withheld 806,605 — ( 4,000 ) — — — — ( 4,000 )

Issuance of equity on business acquisition 3,522,182 — 73,181 — — 73,181

Net income — — — 47,414 — 47,414

Net loss — — — — — ( 77,744 ) — ( 77,744 )

Balance – December 31, 2022 33,354,607 $ 7 $ 547,799 — $ — $ 6,102 $ ( 6,309 ) $ 547,599

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Cash flows from operating activities

Net income (loss) $ ( 77,744 ) $ 47,414

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net loss $ ( 179,951 ) $ ( 77,744 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 54,885 47,533

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Stock-based compensation expense 18,593 27,620

Deferred tax provision, net — 16,451

Other, net ( 53,195 ) 30,336

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Cash flows from investing activities

Originations of loans ( 2,762,828 ) ( 1,842,211 )

Originations and purchases of loans held for investment

( 1,580,134 ) ( 2,762,828 )

Proceeds from loan sales originated as held for investment 4,055 249,271

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Capitalization of system development costs ( 31,261 ) ( 48,892 )

Acquisition of Digit, net of acquirer's cash received — ( 111,652 )

Other, net ( 1,442 ) ( 5,995 )

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Borrowings under secured financing 245,700 1,972,000

Borrowings under asset-backed notes, acquisition and corporate financing 1,262,059 1,479,332

Repayments of secured financing ( 274,751 ) ( 2,050,000 )

Repayments of asset-backed notes, acquisition and corporate financing ( 232,675 ) ( 875,007 )

Borrowings under asset-backed notes at fair value — 1,262,059

Repayments of asset-backed notes at fair value ( 707,619 ) ( 232,675 )

Borrowings under asset-backed borrowings at amortized cost 626,405 —

Repayments of asset-backed borrowings at amortized cost ( 33,615 ) —

Borrowings under acquisition and corporate financing 73,355 —

Repayments of acquisition and corporate financing ( 28,442 ) —

Payments of deferred financing costs ( 2,719 ) ( 8,189 )

Net payments related to stock-based activities ( 2,699 ) ( 8,665 )

Net cash provided by financing activities 934,530 745,709

Net cash provided by (used in) financing activities ( 104,385 ) 934,530

Net increase in cash and cash equivalents and restricted cash 2,199 10,857

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Right of use assets obtained in exchange for operating lease obligations $ 1,835 $ 4,161

Net issuance of stock related to Digit acquisition $ — $ 73,181

Non-cash investment in capitalized assets $ ( 305 ) $ 2,672

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Organization and Description of Business

Oportun Financial Corporation (together with its subsidiaries, "Oportun" or the "Company") is a digital banking platform that puts its members’ financial goals within reach.

With intelligent borrowing, savings, budgeting, and spending capabilities, the Company empowers members with the confidence to build a better financial future.

Oportun takes a holistic approach to serving its members and view as its purpose to responsibly meet their current capital needs, help grow its members' financial profiles, increase their financial awareness and put them on a path to a financially healthy life.

With its acquisition of Hello Digit, Inc.

("Digit") on December 22, 2021, the Company can now offer access to a comprehensive suite of digital banking products, offered either directly or through partners, including lending, savings and investing powered by A.I.

and tailored to each member's goals to make achieving financial health automated.

The Company's credit products include personal loans, secured personal loans and credit cards.

The Company's digital banking products include automated savings, digital banking, long-term investing and retirement savings.

Oportun Financial Corporation (together with its subsidiaries unless the context indicates otherwise, "Oportun," the "Company,") is a mission driven fintech that puts its members’ financial goals within reach.

With intelligent borrowing, savings, and budgeting capabilities, the Company empowers members with the confidence to build a better financial future.

Oportun takes a holistic approach to serving its members and views as its purpose to responsibly meet their current capital needs, help grow its members' financial profiles, increase their financial awareness and put them on a path to a financially healthy life.

Oportun offers access to a comprehensive suite of products powered by A.I., offered either directly or through partners, including unsecured and secured lending, and savings.

The Company is headquartered in San Carlos, California.

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therefore, actual results could differ from those estimates and assumptions.

Business Combinations - The Company accounts for business combinations using the acquisition method of accounting which requires the fair values of the assets acquired and the liabilities assumed to be recognized in the consolidated financial statements.

Assets acquired and liabilities assumed in a business combination are recognized at their estimated fair value as of the acquisition date.

Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset or liability.

The excess purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.

The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period, with the corresponding offset to goodwill.

Acquisition-related costs, such as legal and consulting fees, are recognized separately from the business combination and are expensed as incurred.

Consolidation and Variable Interest Entities ‑ The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

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As of December 31, 2023, 46 %, 26 %, 9 %, 5 % and 3 % of the owned principal balance related to borrowers from California, Texas, Florida, Illinois and New Jersey, respectively.

Owned principal balance related to borrowers from each of the remaining states of operation continues to be at or below 3 %.

As of December 31, 2021, 49 %, 27 %, 7 % and 6 % of the owned principal balance related to borrowers from California, Texas, Florida and Illinois, respectively, and the owned principal balance related to borrowers from each of the remaining states was at or below 3 %.

Owned principal balance related to borrowers from each of the remaining states of operation continues to be at

or below 3 %.

As of December 31, 2022, 45 %, 26 %, 9 %, 5 % and 4 % of the owned principal balance related to borrowers from California, Texas, Florida, Illinois and New Jersey, respectively, and the owned principal balance related to borrowers from each of the remaining states was at or below 3 %.

Cash and Cash Equivalents ‑ Cash and cash equivalents consist of unrestricted cash balances and short-term, liquid investments with a maturity date of three months or less at the time of purchase.

Digit's savings platform connects to members’ checking accounts and analyzes their income and spending patterns to find amounts that can safely be set aside towards savings goals.

Digit calculates these amounts by identifying upcoming bills and regular spending habits to ensure optimal amounts are flagged for savings and transferred to savings accounts.

The funds in these saving accounts are owned by Digit members and are not the assets of the Company.

The Oportun savings platform connects to members’ checking accounts and analyzes their income and spending patterns to find amounts that can safely be set aside towards savings goals.

The Company calculates these amounts by identifying upcoming bills and regular spending habits to ensure optimal amounts are flagged for savings and transferred to savings accounts.

The funds in these saving accounts are owned by Oportun members and are not the assets of the Company.

Therefore, these funds are not included in the Consolidated Balance Sheets.

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Based on the agreements entered into with Pathward, N.A.

(formerly known as MetaBank, N.A.) for all loans originated and retained by Pathward, Pathward receives a fixed interest rate.

for all loans originated and retained by Pathward, Pathward receives a fixed interest rate.

Oportun bears the risk of credit loss and has the benefit of any excess interest proceeds after satisfying various obligations under the agreements.

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The Company performs impairment testing for goodwill annually or more frequently if an event or change in circumstances indicates that goodwill may be impaired.

The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying

The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value.

If the Company concludes the fair value is less than its carrying value a quantitative test is performed.

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There were no goodwill impairment charges during the year ended December 31, 2023.

For further discussion, refer to Note 7, Capitalized Software, Other Intangibles and Goodwill .

Intangible Assets other than Goodwill - At the time intangible assets are initially recognized, a determination is made with regard to each asset as it relates to its useful life.

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An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount.

The Company determined that there were no events or changes in circumstances that indicated our long-lived assets were impaired for the years ended December 31, 2022 and 2021, except as disclosed in Note 7, Capitalized Software, Other Intangibles and Goodwill .

Asset-Backed Notes at Fair Value ‑ The Company elected the fair value option to account for all asset-backed notes.

The Company determined that there were no events or changes in circumstances that indicated our long-lived assets were impaired for the years ended December 31, 2023 and 2022, except as disclosed.

Asset-Backed Notes at Fair Value ‑ Prior to 2023, the Company elected the fair value option to account for all asset-backed notes.

The Company calculates the fair value of the asset-backed notes using independent pricing services and broker price indications, which are based on quoted prices for identical or similar notes, which are Level 2 input measures.

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Changes in fair value are recorded in Net decrease in fair value in the Consolidated Statements of Operations in the period of the fair value changes.

Asset-Backed Borrowings at Amortized Cost - Beginning 2023, t he Company elected the amortized cost method to account for newly issued asset-backed borrowings.

The Company determines amortized cost using the effective interest method, which allocates interest expense over the expected life of the financial instrument.

Premiums, discounts and debt issuance costs are presented as part of the net carrying amount of the debt on issuance.

Premiums are amortized from the carrying amount of the debt as a reduction to interest expense over the term.

Discounts and debt issuance costs are accreted into the carrying amount of the debt and included in interest expense.

Acquisition Financing ‑ The Acquisition Financing is an asset-backed note carried at amortized cost.

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Generally, the Company’s loans require semi-monthly or biweekly borrower payments of interest and principal.

Fees on loans include billed late fees offset by charged-off fees and provision for uncollectible fees.

Fees on loans include billed late fees offset by charged-off fees.

The Company charges borrowers a late fee if a scheduled installment payment becomes delinquent.

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When a loan is charged off, uncollected late fees are also written off.

For Loans Receivable at Fair Value, interest income includes (i) billed interest and late fees, plus (ii) origination fees recognized at loan disbursement, less (iii) charged-off interest and late fees, less (iv) provision for uncollectible interest and late fees.

Additionally, direct loan origination expenses are recognized in operating expenses as incurred.

For Loans Receivable at Fair Value, loan origination fees and costs are recognized when incurred.

Interest income on our personal loan receivables is recognized based upon the amount the Company expects to collect from its borrowers.

Interest income on our personal loans receivable is recognized based upon the amount the Company expects to collect from its borrowers.

When a loan becomes delinquent for a period of 90 days or more, interest income continues to be recorded until the loan is charged off.

Delinquent loans are charged off at month-end during the month it becomes 120 days’ delinquent.

For personal loans receivable, the Company mitigates the risk of income recorded for loans that are delinquent for 90 days or more by establishing a 100 % provision and the provision for uncollectible interest and late fees is offset against interest income.

Previously accrued and unpaid interest is also charged off in the month the Company receives a notification of bankruptcy, a judgment or mediated agreement by the court, or loss of life, unless there is evidence that the principal and interest are collectible.

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• The transferor does not maintain effective control of the transferred assets.

For the years ended December 31, 2022 and 2021 all of the Company's loan sales met the requirements for sale treatment.

The Company records the gain on the sale of a loan at the sale date in an amount equal to the proceeds received less outstanding principal, accrued interest, late fees and net deferred origination costs.

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Documentation fees to which the Company expects to be entitled are variable consideration because loan volume originated over the contractual term is not known at the contract’s inception.

Documentation fees associated with loans purchased from Pathward are presented within interest income.

The transaction fee is determined each time a loan is issued based on that loan’s initial principal amount and is recognized when performance is complete and upon the successful origination of a borrower's loan.

Sublease income is the rental income from subleasing a portion of our existing right of use assets.

Interest on member accounts represents income earned on member savings accounts held at partner banks.

Other income includes marketing incentives paid directly to us by the merchant clearing company based on transaction volumes, interest earned on cash and cash equivalents and restricted cash, and gain (loss) on asset sales.

Interest expense ‑ Interest expense consists of interest expense associated with the Company’s asset-backed notes, Corporate Financing and Secured Financing, and it includes the amortization of deferred origination costs for the Corporate Financing and Secured Financing facilities as well as fees for the unused portion of the Secured Financing facility.

Interest expense ‑ Interest expense consists of interest expense associated with the Company’s Secured Financing, asset-backed notes at fair value, asset-backed borrowings at amortized cost, and Acquisition and Corporate Financing, and it includes the amortization of deferred origination costs for the Corporate Financing and Secured Financing facilities as well as fees for the unused portion of the Secured Financing facility.

The Company elected the fair value option for all asset-backed notes.

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For grants and awards with just a service condition, the Company recognizes stock-based compensation expenses using the straight-line basis over the requisite service period net of forfeitures.

For grants and awards with both service and performance conditions, the Company recognizes expenses using the accelerated attribution method.

As a result of shares vesting as part of the Company's stock-based plans shares are surrendered to the Company to satisfy the tax withholding obligations and the Company pays the associated payroll taxes and the shares go back to the plan for future use .

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It is computed by dividing net income attributable to common stockholders by the weighted-average common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive.

Accounting Standards to be Adopted

Income Taxes - In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

This ASU requires entities to disclose in their rate reconciliation table additional categories or information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold and requires annual disclosure of income taxes paid to be disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold.

The ASU is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company has evaluated the effect of the new guidance and determined the ASU expands tax disclosures but it will not have a material impact on the consolidated financial statements.

Segment Reporting - In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

The ASU enhances disclosures about significant segment expenses, provides new segment disclosure requirements for entities with a single reportable segment, enhances interim disclosure requirements, clarifies circumstances in which an entity is permitted to disclose multiple segment measures of profit or loss and other disclosure requirements.

The ASU is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The Company has evaluated the effect of the new guidance and determined that the expanded segment disclosures will apply but it will not have a material impact on the consolidated financial statements.

Recently Adopted Accounting Standards

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Variable interest entities ("VIEs") are legal entities that either have an insufficient amount of equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of equity investment at risk lack the ability to direct the entity's activities that most significantly impact economic performance through voting or similar rights, or do not have the obligation to absorb the expected losses or the right to receive expected residual returns of the entity.

For all VIEs in which we are involved, we assess whether we are the primary beneficiary of the VIE on an ongoing basis.

In circumstances where we have both the power to direct the activities that most significantly impact the VIEs performance and the obligation to absorb losses or the right to receive the benefits of the VIE that could be significant, we would conclude that we are the primary beneficiary of the VIE, and we consolidate the VIE.

In situations where we are not deemed to be the primary beneficiary of the VIE, we do not consolidate the VIE and only recognize our interests in the VIE.

For all VIEs in which the Company is involved, it assesses whether it is the primary beneficiary of the VIE on an ongoing basis.

In circumstances where the Company has both the power to direct the activities that most significantly impact the VIEs performance and the obligation to absorb losses or the right to receive the benefits of the VIE that could be significant, it would conclude that it is the primary beneficiary of the VIE, and it consolidates the VIE.

In situations where the Company is not deemed to be the primary beneficiary of the VIE, it does not consolidate the VIE and only recognizes its interests in the VIE.

In addition, on June 16, 2023 and August 3, 2023, the Company entered into forward flow whole loan sale agreements that are considered secured borrowings and are not considered VIEs.

See Note 8, Borrowings for additional information on the secured borrowing under the caption of asset-backed borrowings at amortized cost.

Consolidated VIEs

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Loans receivable at fair value 2,539,186 3,112,000

Interest and fee receivable 30,443 19,869

Total VIE assets 2,630,652 3,203,395

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Asset-backed notes at fair value 1,780,005 2,387,674

Asset-backed borrowings at amortized cost

Acquisition financing (1)

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Structured Loan Sales - On March 31, 2022, the Company participated in a securitization whereby the Company and funds managed by Ellington Management Group both contributed collateral and were co-sponsors of the transaction, which totaled $ 400.0 million in issued asset-backed notes.

As part of the securitization, the Company sold loans to OPTN Funding Grantor Trust 2022-1 through the issuance of amortizing asset-backed notes secured by a pool of its unsecured and secured personal installment loans.

As part of the securitization, the Company sold loans to OPTN Funding Grantor Trust 2022-1 ("Grantor Trust") through the issuance of amortizing asset-backed notes secured by a pool of its unsecured and secured personal installment loans.

The Company also sold its share of the residual interest in the pool.

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The Company received $ 245.0 million of net proceeds and by selling both its notes and residual interest, the Company derecognized these loans from its Consolidated Balance Sheets.

Other Loan Sales - The Company enters into agreements to sell certain populations of its personal loans and credit card receivables from time to time.

Other Loan Sales - The Company enters into agreements to sell certain populations of its personal loans and credit card receivables from time to time, including non-performing loans and credit card receivables originated as held for investment.

The sold loans were accounted for under the fair value option.

During the year ended December 31, 2022, the Company sold loans that had an aggregate unpaid principal balance, including unpaid interest and fees, of approximately $ 66.2 million, and a cumulative fair value mark of $( 61.9 ) million.

The Company received $ 4.3 million of net proceeds.

The loan sales qualified for sale accounting treatment and the Company derecognized these loans from its Consolidated Balance Sheets when the loans were sold.

Whole Loan Sale Program ‑ In November 2014, the Company entered into a whole loan sale agreement with an institutional investor.

Pursuant to the agreement, the Company sold at least 10 % of its unsecured loan originations, with an option to sell an additional 5 %, subject to certain eligibility criteria and minimum and maximum volumes.

The Company chose not to renew the arrangement and allowed the agreement to expire on its terms on March 4, 2022.

Whole Loan Sale Program ‑ The Company enters into whole loan sale agreements with third parties in which we agree to sell newly originated unsecured personal loans and secured personal loans.

The originations of loans sold and held for sale during the year ended December 31, 2023 was $ 56.6 million and the Company recorded a gain on sale of $ 8.5 million and servicing revenue of $ 9.6 million.

The originations of loans sold and held for sale during the year ended December 31, 2022 was $ 52.7 million and the Company recorded a gain on sale of $ 5.7 million and servicing revenue of $ 17.4 million.

On December 22, 2021, the Company completed its acquisition of Digit.

Digit is a digital banking platform that provides automated savings, investing and banking tools.

Digit members can keep and integrate their existing bank accounts into the platform, or they can make Digit their primary banking relationship by opening new accounts via Digit’s bank partner.

By acquiring Digit, Oportun has further expanded its A.I.

and digital banking capabilities, adding to its services to provide consumers a holistic offering built to address their financial needs.

The total consideration the Company provided for Digit was approximately $ 205.3 million, comprised of $ 73.2 million in equity and $ 132.1 million in cash, subject to customary adjustments.

The Company acquired 100 % of the voting interests of Digit.

(in thousands) 2021

Fair value of Oportun common stock issued to Digit stockholders (1)

Cash paid to common and preferred stockholders, warrant holders, and vested option holders (2)

Total purchase consideration (3)

( 1) The fair value is based on 3,522,182 shares of Company common stock at $ 20.72 per share, which represents the mid-point of the trading price of Oportun shares on December 22, 2021.

The mid-point was used because the transaction closed during the trading day.

$ 0.2 million relates to replacement restricted stock units awarded to Digit unvested option holders.

(2) $ 1.3 million of the cash paid is being held in escrow as security for purpose of securing any amounts payable by the selling parties on account of indemnification obligations, purchase price adjustments, and other amounts payable under the merger agreement.

(3) The total consideration as reported herein differs from the amounts previously disclosed due to changes in the underlying value of the stock between the date of the definitive agreement and the closing of the acquisition.

The number of shares of Company common stock comprising the stock portion of the consideration was determined using the stock price as of the signing of the definitive agreement.

The acquisition has been accounted for as a business combination.

The purchase consideration was allocated to the tangible and intangible assets and liabilities acquired and assumed as of the acquisition date, with the excess recorded to goodwill as shown below.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date:

(in thousands) 2021

Acquired intangible assets

Developed technology 48,500

Cash and cash equivalents 20,499

Other assets acquired and liabilities assumed, net ( 2,981 )

Total purchase consideration

The goodwill of $ 104.0 million arising from the acquisition consists largely of revenue synergies expected from combining the operations of the Company and Digit.

The goodwill is not deductible for U.S.

federal income tax purposes.

We recognized a $ 108.5 million non-cash impairment charge for the year ended December 31, 2022.

For details regarding the impairment charge, refer to Note 7, Capitalized Software, Other Intangibles and Goodwill .

The table below summarizes the acquired intangible assets and developed technology, with estimated useful lives, as of the acquisition date:

Estimated fair values (in thousands) Estimated useful life (years)

Member relationships $ 34,500 7.0

Trade name 800 3.0

Developed technology 48,500 7.0

Total acquired intangibles and developed technology $ 83,800

The fair values of the acquired intangibles and developed technology were determined using the following methodologies:

We valued the developed technology using the multi-period excess earnings method under the income approach.

Member relationships were valued using the with-and-without method under the income approach.

Trade names were valued by applying the relief-from-royalty method under the income approach.

The acquired intangibles and developed technology have a total weighted average amortization period of 7.0 years.

The unaudited pro forma information does not necessarily reflect the actual results of operations of the combined entities that would have been achieved, nor are they necessarily indicative of future results of operations.

The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Digit, including additional depreciation and amortization adjustments for the fair value of the assets acquired and liabilities assumed.

The pro forma net loss for the year ended December 31, 2021 was adjusted to exclude nonrecurring acquisition-related costs of $ 29.7 million.

(in thousands) 2021

Total revenues

Net income (loss) attributable to shareholders

The Company recognized acquisition and integration related costs of approximately $ 29.7 million and $ 10.6 million in the years ended December 31, 2022 and 2021, respectively, which are included in the General, administrative and other expense in the Consolidated Statements of Operations.

Capitalized Software, Other Intangibles and Goodwill

Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:

8 unchanged sentences

System development costs capitalized in the years ended December 31, 2023 and 2022 were $ 31.0 million and $ 51.5 million, respectively.

The Company recognized a non-cash pre-tax impairment charge of $ 5.6 million related to the write-off of embedded finance, investing and retirement products.

The non-cash impairment charge is included in Technology and Facilities in the Consolidated Statements of Operations.

Acquired developed technology was $ 48.5 million and is related to the acquisition of Digit.

11 unchanged sentences

27,468 $ 35,677

On March 8, 2023, the Company revealed its rebranding of Oportun and Oportun Savings (formerly known as Digit) as a single brand.

Therefore, the Company wrote off its $ 0.8 million Digit trademark.

Amortization of intangible assets for the years ended December 31, 2023 and 2022 was $ 7.7 million and $ 7.9 million.

1 unchanged sentence

(in thousands) Fiscal Years

Thereafter 4,780

The Company recorded goodwill of $ 104.0 million arising from the acquisition of Digit on December 22, 2021.

The Company recorded increases to goodwill of $ 4.5 million, during the twelve months ended December 31, 2022, as part of the twelve-month measurement period.

These increases were primarily due to changes in deferred taxes resulting from the filing of Digit's pre-acquisition tax returns.

Goodwill represents the difference between the purchase price and the estimated fair value of identifiable assets acquired and liabilities assumed.

The Company performs impairment tests related to its goodwill on an annual basis or when certain triggering events or circumstances are identified that would more likely than not reduce the estimated fair value of the goodwill below its carrying amount.

In response to a sustained decline in the Company’s share price primarily driven by macroeconomic conditions, the Company conducted a quantitative test of its goodwill as of September 30, 2022.

The Company considered the income approach, the guideline public company multiples approach and the market approach in determining a fair value for the Company which was determined to be the only reporting unit for purposes of testing the goodwill.

Given the uncertain macroeconomic environment there was a wide range of indications of fair value across the approaches.

Although the corresponding value was the lowest in the range, the Company utilized the market approach because it was based on market observable inputs.

The market approach estimates fair value using the market capitalization of the Company as a basis.

As of September 30, 2022, the market capitalization plus the estimated control premium was less than the carrying value of the Company.

As a result, the Company recognized a non-cash pre-tax impairment charge of $ 108.5 million during the year ended December 31, 2022 to write down the carrying value of goodwill.

The non-cash impairment charge is included in Goodwill impairment in the Consolidated Statements of Operations for the year ended December 31, 2022.

There were no goodwill impairment charges during the year ended December 31, 2021.

The following table represents the changes in goodwill since December 31, 2021:

(in thousands) Goodwill

Balance as of December 31, 2021 $ 104,014

Measurement adjustments during period

Impairment ( 108,472 )

Balance as of December 31, 2022

Other assets consist of the following:

3 unchanged sentences

Total fixed assets, net $ 6,991 $ 10,524

Loans held for sale $ 50 $ 491

Prepaid expenses $ 15,758 $ 24,167

1 unchanged sentence

Current tax assets 4,731 8,245

Receivable from banking partner 4,050 2,878

Derivative asset 9,307 725

Other 18,720 15,848

Total other assets $ 107,680 $ 64,180

Depreciation and amortization expense for the years ended December 31, 2022 and 2021 was $ 5.2 million and $ 9.4 million, respectively.

Depreciation and amortization expense related to fixed assets for the years ended December 31, 2023 and 2022 was $ 4.3 million and $ 5.2 million, respectively.

S ecured Financing

The following table presents information regarding the Company's Secured Financing facilities:

5 unchanged sentences

$ 68,409 $ 76,574

Oportun PLW Trust 600,000 September 1, 2024 LIBOR (minimum of 0.00 % ) + 2.17 %

Oportun PLW Trust (3)

600,000 September 1, 2024 Adjusted SOFR + 2.17 %

221,542 240,994

Total secured financing $ 700,000 $ 289,951 $ 317,568

(1) The interest rate on the Secured Financing - CCW facility is LIBOR (minimum of 1.00 %) plus 6.00 % on the first $ 18.8 million of principal outstanding and LIBOR (minimum of 0.00 %) plus 3.41 % on the remaining outstanding principal balance.

(1) At December 31, 2022, the facility amount and the original maturity date on the Secured Financing - CCW facility (Oportun CCW Trust) were $ 150.0 million and December 1, 2023, respectively.

(2) The interest rate on the Secured Financing - CCW facility (Oportun CCW Trust) is adjusted SOFR plus 3.41 % on the outstanding principal balance as of December 31, 2023.

The interest rate on the CCW was LIBOR (minimum of 1.00 %) plus 6.00 % on the first $ 18.8 million of principal outstanding and LIBOR (minimum of 0.00 %) plus 3.41 % on the remaining outstanding principal balance as of December 31, 2022.

(3) On June 29, 2023, the interest rate on the Secured Financing - PLW facility (Oportun PLW Trust) transitioned from LIBOR (minimum 0.00 % ) plus 2.17 % to Adjusted SOFR plus 2.17 %.

On March 8, 2023, the Credit Card Warehouse (Oportun CCW Trust) was amended.

This amendment, among other things, extends the revolving period by a year, to December 31, 2024, and reduces the commitment amount from $ 150.0 million to $ 120.0 million.

On December 22, 2023, Oportun CCW Trust, a subsidiary of the Company, and Wilmington Trust, National Association, as indenture trustee, securities intermediary and depositary bank, entered into the Seventh Amendment to Indenture (the “Seventh CCW Indenture Amendment”) and other related documents (together with the Seventh CCW Indenture Amendment, the “Seventh CCW Amendment”) related to the Company’s asset-backed variable funding facility secured by certain credit card receivables (the “Credit Card Warehouse Facility”).

The Seventh CCW Amendment provides for the reduction in the size of its Credit Card Warehouse Facility from $ 120 million to $ 100 million in connection with the Company’s strategic review of its credit card portfolio, in addition to certain other immaterial changes.

Asset-backed Notes at Fair Value

The following table presents information regarding asset-backed notes:

25 unchanged sentences

Asset-backed notes recorded at fair value:

Oportun Issuance Trust (Series 2022-3) $ 300,000 $ 310,993 $ 285,218 $ 301,967 8.43 % N/A

Oportun Issuance Trust (Series 2022-2) 400,000 410,212 313,689 344,218 7.03 % N/A

Oportun Issuance Trust (Series 2022-A) 400,000 410,211 380,313 414,293 5.44 % 2 years

Oportun Issuance Trust (Series 2021-C) 500,000 512,762 435,951 518,929 2.48 % 3 years

10 unchanged sentences

The weighted average interest rate for Series 2022-2 and Series 2022-3 will change over time as the notes pay sequentially (in class priority order).

(4) The revolving period for Series 2019-A ended on August 1, 2022 and the asset-backed notes have been amortizing since then.

(4) The revolving period for Series 2019-A ended on August 1, 2022 and Series 2021-A ended on March 1, 2023.

These asset-backed notes have been amortizing since then.

Series 2022-2 and Series 2022-3 are both amortizing deals with no revolving period.

Asset-backed Borrowings at Amortized Cost

The following table represents information regarding the Company's Asset-backed borrowings at amortized cost:

December 31, 2023

Asset-backed borrowings at amortized cost

Pledged Asset (1)

Associated Liability

(in thousands)

Asset-backed borrowings recorded at amortized cost:

Oportun CL Trust 2023-A

$ 197,390 $ 195,057

Other Asset Backed Borrowings

382,712 386,411

Total asset-backed borrowings recorded at amortized cost:

$ 580,102 $ 581,468

(1) The amount of pledged assets are recognized within the Loans Receivable at Fair Value within the Consolidated Balance Sheet.

On June 16, 2023, and August 3, 2023, the Company entered into forward flow whole loan sale agreements and has agreed to sell up to $ 300 million and $ 400 million of its personal loan originations over the next twelve months, respectively.

The Company will continue to service these loans upon transfer of the receivables.

While the economics of these transactions are structured as a whole loan sale, the transfer of these loans receivable does not qualify as a sale for accounting purposes.

Accordingly, the related assets remain on the Company's balance sheet and cash proceeds received are reported as a secured borrowing under the caption of asset-backed borrowings at amortized cost with related interest expense recognized over the life of the related borrowing.

As part of these agreements, as of December 31, 2023, the Company transferred loans receivable totaling $ 220.5 million and $ 195.8 million, respectively.

On October 20, 2023, the Company entered into a Receivables Loan and Security Agreement (the “Receivables Loan and Security Agreement”), pursuant to which the Company borrowed $ 197 million.

Borrowings under the Receivables Loan and Security Agreement accrue interest at a weighted average interest rate equal to 10.05 %.

Acquisition and Corporate Financing

The following table presents information regarding the Company's Acquisition and Corporate Financings:

5 unchanged sentences

(in thousands)

Oportun Financial Corporation $ 150,000 September 14, 2026 SOFR (minimum of 0.00 % + 9.00 %

Oportun Financial Corporation (1)

$ 150,000 September 14, 2026 SOFR (minimum of 0.00 % + 12.00 %

$ 204,100 $ 141,957

Oportun RF, LLC 116,000 May 1, 2024 SOFR (minimum of 0.00 %) + 8.00 %

Oportun RF, LLC (2)

116,000 October 10, 2024 SOFR (minimum of 0.00 %) + 11.00 %

54,646 80,922

Total acquisition and corporate financing $ 266,000 $ 258,746 $ 222,879

(1) The Acquisition Financing Facility (Oportun RF, LLC) was amended on May 24, 2022 and upsized for an additional $ 20.9 million and was amended again on July 28, 2022 and upsized for an additional $ 9.1 million.

(2) Pursuant to an amendment on November 2, 2022, the maturity date of the Acquisition Financing Facility (Oportun RF, LLC) was changed from October 2024 to June 2024.

The Acquisition Financing Facility was further amended on December 2, 2022 to change the maturity date to May 2024.

(3) The interest rate on the Acquisition Financing Facility (Oportun RF, LLC) was LIBOR (minimum of 0.00 %) plus 8.00 % as of December 31, 2021.

On May 24, 2022 the Company completed the issuance of $ 400.0 million of two-year asset-backed notes in a private asset-backed securitization secured by a pool of its unsecured and secured personal installment loans (the “2022-A Securitization”).

The 2022-A Securitization included four classes of fixed rate notes:

Class A, Class B, Class C and Class D notes.

The Class A, Class B and Class C notes were priced with a weighted average yield of 5.68 % per annum.

The Class D notes were initially retained by an affiliate of the Company and subsequently sold to third parties on July 28, 2022.

Also on May 24, 2022, and subsequently on July 28, 2022, pursuant to amended indentures, Oportun RF, LLC, a wholly owned subsidiary of the Company issued an additional $ 20.9 million and $ 9.1 million asset-backed floating rate variable funding notes, and asset-backed residual certificates, both of which are secured by certain cash flows from the Company's securitizations and guaranteed by Oportun, Inc., increasing the size of the Acquisition Financing facility to $ 119.5 million The amendments also replaced the interest rate based on LIBOR with an interest rate based on SOFR plus 8.00 %.

The Acquisition Financing facility was scheduled to pay down based on an amortization schedule with a final payment in May 2024.

Subsequently, on February 10, 2023, the Acquisition Financing facility was further amended, including among other things, revising the interest rate to SOFR plus 11.00 % and adjusting the amortization schedule to defer $ 42.0 million in principal payments through July 2023, with final payment in October 2024.

On July 22, 2022 the Company completed the issuance of $ 400.0 million of Series 2022-2 fixed rate asset-backed notes in a private asset-backed securitization transaction secured by a pool of unsecured and secured installment loans.

The notes were priced with a weighted average yield of 8.00 % per annum and weighted average interest rate over the term of the transaction of 7.77 % per annum.

On September 14, 2022, the Company entered into a credit agreement to borrow $ 150.0 million of a senior secured term loan (the “Corporate Financing”).

The term loan bears interest, payable in cash, at an amount equal to 1-month term SOFR plus 9.00 %.

The term loan is scheduled to mature on September 14, 2026, and is not subject to amortization.

Certain prepayments of the term loan is subject to a prepayment premium.

The obligations under the credit agreement are secured by the assets of the Company and certain of its subsidiaries guaranteeing the term loan, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by the Company, subject to customary exceptions.

On March 10, 2023 we upsized and amended our Corporate Financing facility to be able to borrow up to an additional $ 75 million.

At closing and as part of the Incremental Tranche A-1, we borrowed $ 20.8 million and will receive an additional $ 4.2 million in Incremental Tranche A-2 loans on or about March 27, 2023.

We may borrow up to an aggregate additional amount of $ 50.0 million on an uncommitted basis, in two $ 25.0 million tranches, expected to be available, if provided by the applicable lenders, on or about April 21, 2023 and June 23, 2023, respectively.

The term loan now bears interest at an amount payable in cash equal to 1-month term SOFR plus 9.00 % plus an amount payable in cash or in kind, at the Company’s option, equal to 3.00 %.

On November 3, 2022, the Company completed the issuance of $ 300 million of Series 2022-3 fixed rate asset-backed notes in a private asset-backed securitization transaction secured by a pool of unsecured and secured installment loans.

The notes were priced with a weighted average yield of 10.94 % per annum and weighted average interest rate of 9.51 % per annum.

On March 8, 2023, the Credit Card Warehouse was amended.

This amendment, among other things, extends the revolving period by a year, to December 31, 2024, and reduces the commitment from $ 150.0 million to $ 120.0 million.

As of December 31, 2022 and 2021, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition Financing and Corporate Financing facilities and asset-backed notes.

(1) The Corporate Financing (Oportun Financial Corporation) was upsized and amended on March 10, 2023 to provide the ability to be able to borrow up to an additional $ 75.0 million.

The interest rate on the Corporate Financing was SOFR (minimum of 0.00 %) plus 9.00 % as of December 31, 2022.

(2) The Acquisition Financing facility (Oportun RF, LLC) was amended and upsized several times in 2022 increasing the size of the facility to $ 119.5 million and amending the maturity date.

The maturity date and interest rate of the Acquisition Financing facility was May 1, 2024 and SOFR (minimum of 0.00 %) plus 8.00 % as of December 31, 2022.

Amendments to Acquisition Financing

On February 10, 2023, the Acquisition Financing facility (Oportun RF, LLC) was further amended, to among other things, revise the interest rate to SOFR plus 11.00 % and adjust the amortization schedule to defer $ 42.0 million in principal payments through July 2023, with final payment in October 2024.

On December 20, 2023, the Acquisition Financing facility (Oportun RF, LLC) was further amended to provide for the exclusion of certain events with respect to Oportun Funding XIV, LLC, a subsidiary of the Company, including a Rapid Amortization Event (as defined in the Sixth RF Indenture Amendment), the release of the RF Issuer’s (as defined in the Sixth RF Indenture Amendment) lien on certain residual certificates and notes, and makes certain other immaterial changes.

On March 8, 2024, the Acquisition Financing facility (Oportun RF, LLC) was further amended to provide for a three-month principal payment holiday for the months of March, April and May 2024, in amounts equal to $ 5.7 million per month.

In addition, the amendment extended the term of the Acquisition Financing facility to January 10, 2025.

Amendments to Corporate Financing

On March 10, 2023 (the “Second Amendment Closing Date”), the Company amended its Corporate Financing (Oportun Financial Corporation) facility by entering into an Amendment No.

2 (the “Second Amendment”) by and among the Company, as borrower, the subsidiaries of the Company party thereto as guarantors, certain funds associated with Neuberger Berman Specialty Finance as lenders, and Wilmington Trust, National Association, as administrative agent and collateral agent (the “Agent”), which amended the Credit Agreement, dated as of September 14, 2022 (as amended, supplemented or otherwise modified, including by the Second Amendment, the “Amended Credit Agreement”), by and among the Company, the lenders from time to time party thereto and the Agent.

On the Second Amendment Closing Date, the Company borrowed $ 20.8 million of incremental term loans (the “Incremental Tranche A-1 Loans”) and borrowed an additional $ 4.2 million of incremental term loans (the “Incremental Tranche A-2 Loans”) on March 27, 2023.

Pursuant to the Second Amendment, the Company issued warrants (the “Warrants”) to the lenders providing the Incremental Tranche A-1 Loans to purchase 1,980,242 shares of the Company’s common stock at an exercise price of $ 0.01 per share.

On March 27, 2023, in connection with the funding of the Incremental Tranche A-2 Loans, the Company issued Warrants to the lenders providing the Incremental Tranche A-2 Loans to purchase 116,485 shares of the Company’s common stock at an exercise price of $ 0.01 per share.

On May 5, 2023, under the Amended Credit Agreement, the Company borrowed an additional $ 25.0 million of incremental term loans (the "Incremental Tranche B Loans") and issued Warrants to the lenders to purchase 1,048,363 shares of the Company's common stock at an exercise price of $ 0.01 per share.

The Company determined that the terms of the new debt instrument upon issuance of Tranche B was substantially different when compared to the Original Credit Agreement resulting in an insignificant net loss on debt extinguishment.

Accordingly, the Company extinguished the carrying value of the Corporate Financing prior to issuance of Tranche B and recorded the new Corporate Financing upon issuance of Tranche B at fair value of $ 179.5 million.

This resulted in an insignificant net loss on extinguishment.

On June 30, 2023, under the Amended Credit Agreement, the Company borrowed an additional $ 25.0 million of incremental term loans (the "Incremental Tranche C Loans") and issued Warrants to the lenders to purchase 1,048,363 shares of the Company's common stock at an exercise price of $ 0.01 per share.

The loans (the “Loans”) and other obligations under the Amended Credit Agreement are secured by the assets of the Company and certain of its subsidiaries guaranteeing the Loans, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by the Company, subject to customary exceptions.

Following the Second Amendment Closing Date, the Loans bear interest at (a) an amount equal to 1-month term SOFR plus 9.00 % plus (b) an amount payable in cash or in kind, at the Company's option, equal to 3.00 %.

The Loans are scheduled to mature on September 14, 2026, and are not subject to amortization.

Certain prepayments of the Loans are subject to a prepayment premium.

On March 12, 2024, the Company entered into an Amendment No.

3 to the Corporate Financing (the “Third Amendment”), by and among the Company, as borrower, the subsidiaries of the Company party thereto as guarantors, certain affiliates of Neuberger Berman Specialty Finance as lenders, and the Agent.

The Third Amendment includes modifications to the minimum asset coverage ratio covenant levels, provides for an interest rate step-up of 3.00 % per annum for certain months beginning in August 2024 in which the asset coverage ratio is less than 1.00 to 1.00, and requires certain principal payments in amounts equal to $ 5.7 million per month to be made on the last business day of each of March, April and May 2024.

In addition, the Third Amendment requires principal payments equal to 100 % of the net cash proceeds of any indebtedness junior in priority to the obligations under the Corporate Financing.

See Note 10, Stockholders' Equity for additional information on the Warrants.

Debt Covenants - As of December 31, 2023 and 2022, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition Financing and Corporate Financing and asset-backed notes.

Other Liabilities

7 unchanged sentences

Deferred tax liabilities — 30,575

Current tax liabilities and other 9,570 8,372

Current tax liabilities

Total other liabilities $ 68,938 $ 100,028

5 unchanged sentences

As of December 31, 2022, 33,626,630 and 33,354,607 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

Warrants - On March 10, 2023, pursuant to the Second Amendment of the Corporate Financing, the Company issued detachable Warrants to the lenders providing the Incremental Tranche A-1 Loans to purchase 1,980,242 shares of the Company’s common stock at an exercise price of $ 0.01 per share.

On May 5, 2023, in connection with the funding of the Incremental Tranche B Loans, the Company issued Warrants to the lenders providing the Incremental Tranche B loans to purchase 1,048,363 shares of the Company's common stock at an exercise price of $ 0.01 per share.

On June 30, 2023, in connection with the funding of the Incremental Tranche C Loans, the Company issued Warrants to the lenders providing the Incremental Tranche C Loans to purchase 1,048,363 shares of the Company’s common stock at an exercise price of $ 0.01 per share.

Equity Compensation and Other Benefits

6 unchanged sentences

All other awards may be granted to the employees, including officers, non-employee directors and consultants and the employees and consultants of the Company's affiliates.

The maximum number of shares of our common stock that may be issued under the 2019 Plan will not exceed 9,072,159 shares, of which, 1,802,994 were available for future awards as of December 31, 2022.

The total number of shares of common stock authorized under the 2019 Plan is 13,471,733 shares.

The remaining maximum number of shares of our common stock, net of vested and exercised shares, that may be issued under the 2019 Plan will not exceed 9,698,886 shares, of which, 3,192,145 were available for future awards as of December 31, 2023.

The number of shares of the Company's common stock reserved for issuance under its 2019 Plan will automatically increase on January 1 of each year for the remaining term of the plan, by 5 % of the total number of shares of its common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Board prior to the applicable January 1st.

12 unchanged sentences

Generally, all regular employees, including executive officers, employed by the Company or by any of its designated affiliates, will be eligible to participate in the ESPP and may contribute, normally through payroll deductions, up to 15 % of their earnings (as defined in the ESPP) for the purchase of common stock under the ESPP.

Unless otherwise determined by the Board, common stock will be purchased for the accounts of

employees participating in the ESPP at a price per share equal to the lower of (a) 85 % of the fair market value of a share of the Company's common stock on the first date of an offering or (b) 85 % of the fair market value of a share of the common stock on the date of purchase.

Unless otherwise determined by the Board, common stock will be purchased for the accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85 % of the fair market value of a share of the Company's common stock on the first date of an offering or (b) 85 % of the fair market value of a share of the common stock on the date of purchase.

2021 Inducement Equity Incentive Plan

Effective December 30, 2021, the Company adopted the 2021 Inducement Equity Incentive Plan (the “2021 Inducement Plan”), pursuant to which the Company reserved 1,105,000 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

The maximum number of shares of our common stock that may be issued under the 2021 Inducement Plan will not exceed 563,955 shares, of which, 39,635 were available for future awards as of December 31, 2022.

The remaining maximum number of shares of our common stock that may be issued under the 2021 Inducement Plan net of vested and exercised shares, will not exceed 940,512 shares, of which, 518,558 were available for future awards as of December 31, 2023.

The 2021 Inducement Plan was approved by the Company’s Board without stockholder approval in accordance with such rule.

38 unchanged sentences

Fair value of shares vested 3,500 3,863

(1) The amount reflected for the year ended December 31, 2022 is the net of cash received from options exercised of $ 1.6 million and the cash paid for employee tax withholding settled in shares of $ 6.2 million.

(1) The amount reflected for the years ended December 31, 2023 and 2022, is the net of cash received from options exercised of $ 0.8 million and $ 1.6 million, respectively, and the cash paid for employee tax withholding settled in shares of $ 0.8 million and $ 6.2 million, respectively.

As of December 31, 2023 and 2022, the Company’s total unrecognized compensation cost related to nonvested stock-based option awards granted to employees was, $ 2.6 million and $ 6.2 million, respectively, which will be recognized over a weighted-average vesting period of approximately 1.9 years and 2.6 years, respectively.

4 unchanged sentences

Stock-based compensation cost for RSUs is measured based on the fair market value of the Company’s common stock on the date of grant.

As part of the Digit acquisition in 2021, 501,906 shares of the Company’s restricted stock units were issued to certain Digit employees to replace the outstanding unvested stock options that were previously issued to the employees of Digit.

The RSUs are subject to the same service-based requirements as the historical stock option grants.

The Company awarded an additional 650,460 RSUs to certain Digit employees that vest upon satisfaction of time-based criterion of up to four years.

For grants with a one-year vesting term, 50 % will vest on the six-month anniversary of the vesting commencement date with the balance vesting in two successive equal quarterly installments thereafter.

For grants with a two-year vesting term, 25 % will vest on the six-month anniversary of the vesting commencement date with the balance vesting in six equal quarterly installments thereafter or 50 % will vest on the twelve-month anniversary of the vesting commencement date with the balance vesting in four successive equal quarterly installments thereafter.

For grants with a three-year vesting term, 16.667 % will vest on the six-month anniversary of the vesting commencement date, with the balance vesting in ten successive equal quarterly installments thereafter.

For grants with four-year vesting term, 12.5 % will vest on the six-month anniversary of the vesting commencement date, with the balance vesting in 14 successive equal quarterly installments thereafter.

A summary of the Company’s RSU activity under the 2015 Plan, 2019 Plan and 2021 Inducement Plan for the year ended December 31, 2023 is as follows:

21 unchanged sentences

Cash flows from the tax shortfalls or benefits for tax deductions resulting from the exercise of stock options in comparison to the compensation expense recorded for those options are required to be classified as cash from financing activities.

The Company recognized $ 8.1 million and $ 5.4 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense during the years ended December 31, 2022 and 2021, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 3.3 million and $( 0.2 ) million for the years ended December 31, 2022 and 2021, respectively.

The Company recognized $ 5.1 million and $ 8.1 million of income tax benefit in its Consolidated Statements of Operations related to stock-based compensation expense during the years ended December 31, 2023 and 2022, respectively.

Additionally, the total income tax expense recognized in the income statement for share-based compensation exercises was $ 3.5 million and $ 3.3 million for the years ended December 31, 2023 and 2022, respectively.

Retirement Plan

2 unchanged sentences

The Company provides for an employer 401(k) contribution match of up to 4 % of an employee’s eligible compensation.

The total amount contributed by the Company for the years ended December 31, 2022 and 2021 was $ 6.4 million and $ 3.7 million, respectively.

In addition, the Company provides a contribution to various savings funds for India and Mexico-based employees.

The total expense related to the employer match and contributions recognized by the Company for the years ended December 31, 2023 and 2022 was $ 6.2 million and $ 6.4 million, respectively.

All employee and employer contributions will be invested according to participants’ individual elections.

13 unchanged sentences

Subscription revenue 25,569 31,186

Interest on members accounts

Other income 23,639 15,774

18 unchanged sentences

Total provision for income taxes $ ( 73,702 ) $ 2,458

Income tax expense was $ 2.5 million and $ 15.4 million for the years ended December 31, 2022 and 2021, which represents an effective tax rate of ( 3.3 )% and 24.5 %, respectively.

Income tax expense (benefit) was $( 73.7 ) million and $ 2.5 million for the years ended December 31, 2023 and 2022, which represents an effective tax rate of 29.1 % and ( 3.3 )%, respectively.

A reconciliation of income tax expense with the amount computed by applying the statutory U.S.

9 unchanged sentences

Change in unrecognized tax benefit reserves 3,038 1,326

Net operating loss carryback tax rate differential — ( 172 )

Return to provision adjustment ( 5,674 ) ( 5,798 )

Non-deductible acquisition costs — 1,458

Goodwill impairment — 22,779

7 unchanged sentences

Deferred tax assets:

Accrued expenses and reserves $ 3,361 $ 3,356

Net operating loss & credit carryforward $ 68,677 $ 41,169

Leases 7,494 10,174

Share-based compensation 6,618 8,335

CARES Act payroll taxes — 536

Net operating loss & credit carryforward 41,169 23,916

System development costs

Accrued expenses and reserves 3,032 3,361

Other 972 245

Total deferred tax assets $ 92,412 $ 63,284

1 unchanged sentence

Deferred tax liabilities:

System development costs $ ( 11,803 ) $ ( 22,323 )

Fair value adjustment - Bonds Payable $ ( 24,930 ) $ ( 53,210 )

Fair value adjustment - Loans Receivable ( 7,095 ) ( 12,077 )

Right of use assets ( 5,574 ) ( 8,163 )

Depreciation and amortization ( 4,232 ) ( 6,813 )

Fair value adjustment - Loans Receivable ( 12,077 ) ( 30,718 )

Fair value adjustment - Bonds Payable ( 53,210 ) ( 1,838 )

Other — ( 234 )

Derivative instrument

System development costs — ( 11,803 )

Total deferred tax liabilities $ ( 44,289 ) $ ( 92,066 )

3 unchanged sentences

The Company continues to assert that both its historical and current earnings in its foreign subsidiaries are permanently reinvested and therefore no deferred taxes have been provided.

On December 22, 2021, the Company completed the acquisition of Digit, in which Digit became a wholly-owned subsidiary of the Company, triggering an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended.

This transaction was considered a stock acquisition for tax purposes.

The tax attributes acquired were updated during the year due to the twelve-month measurement period.

Digit has a $ 53.3 million federal net operating loss carryforward, all of which is available to offset future taxable income during the carryforward periods based on limitations under IRC Section 382.

The Company also acquired state NOLs of $ 27.4 million.

The Company has not recorded a valuation allowance on the federal or state net operating loss balances as it believes that it is more likely than not that the deferred tax assets will be realized.

As of December 31, 2023, the Company had federal net operating loss carryforwards of $ 189.1 million, of which $ 17.7 million expires beginning in 2033 and $ 171.4 million carries forward indefinitely.

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Interest and penalties related to the Company’s unrecognized tax benefits accrued as of December 31, 2023 and 2022 were $ 1.2 million and $ 0.9 million, respectively.

The Company’s policy is to recognize interest and penalties associated with income taxes in income tax expense.

The Company does not expect to release any of the uncertain tax positions within the next twelve months.

The Company’s policy is to recognize interest and penalties associated with income taxes in income tax expense and the Company recognized $ 0.3 million for both years ended December 31, 2023 and 2022, respectively.

The Company expects to release $ 3.6 million of the uncertain tax positions within the next twelve months due to the expiration of various statute of limitations at the end of 2024.

The total amount of unrecognized tax benefits that would impact the effective tax rate, if recognized, is $ 6.8 million.

11 unchanged sentences

Loans receivable - credit cards 111,145 109,166 131,343 116,252

Total loans receivable $ 3,098,609 $ 3,143,653 $ 2,272,864 $ 2,386,807

Total loans receivable at Fair Value

$ 2,935,487 $ 2,962,352 $ 3,130,405 $ 3,175,449

Asset-backed notes $ 1,874,406 $ 1,780,005 $ 2,582,025 $ 2,387,674

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The following tables present quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for Loans Receivable at Fair Value.

The personal loan receivables balance at fair value as of 12/31/2022, consists of $ 2,903.2 million of unsecured personal loan receivables and $ 124.2 million of secured personal loan receivables.

The personal loans receivable balance at fair value as of December 31, 2023 consists of $ 2,726.6 million of unsecured personal loans receivable and $ 126.6 million of secured personal loans receivable.

December 31, 2023 December 31, 2022

Personal Loan Receivables Minimum Maximum Weighted Average (2)

Personal Loans Receivable

Minimum Maximum Weighted Average (2)

Remaining cumulative charge-offs (1)

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(1) Figure disclosed as a percentage of outstanding principal balance.

(2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by risk (type of borrower, original loan maturity terms) .

(3) The weighted average amounts disclosed for remaining cumulative charge-offs, average life and discount rate and the minimum and maximum discount rate as of December 31, 2021 differ from what was previously disclosed for comparability to amounts disclosed as of December 31, 2022.

The amounts disclosed previously as of December 31, 2021 included aggregated inputs for both personal loan receivables and credit card receivables.

This disclosure has been disaggregated as of December 31, 2022.

December 31, 2022 December 31, 2021

(2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by risk (type of customer, original loan maturity terms) .

The Company has derivative instruments in connection with its bank partnership program with Pathward, N.A.

related to excess interest proceeds it expects to receive on loans retained by Pathward, N.A.

Based on the agreement underlying the bank partnership program, for all loans originated and retained by Pathward, Pathward receives a fixed interest rate.

The Company bears the risk of credit loss and has the benefit of any excess interest proceeds after satisfying various obligations under the agreement.

The fair value of the derivative instrument was $ 9.3 million as of December 31, 2023.

The underlying cash flows were $ 12.2 million as of December 31, 2023.

The fair value of the derivative instrument and underlying cash flows were not material as of December 31, 2022.

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for derivative instruments presented within Other Assets in the Consolidated Balance Sheets:

December 31, 2023*

Low High Weighted Average

Remaining cumulative charge-offs 1.09 % 30.38 % 10.56 %

Remaining cumulative prepayments 0.01 % 3.89 % 0.92 %

Average life (years) 0.36 2.00 1.64

Discount rate 17.00 % 17.00 % 17.00 %

* Inputs as of December 31, 2022 were not disclosed as the balance was not yet material

December 31, 2023

December 31, 2022

Credit Card Receivables Range Range

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When multiple inputs are used within the valuation techniques for loans, a change in one input in a certain direction may be offset by an opposite change from another input.

For personal loan receivables, the Company developed an internal model to estimate the fair value of loans receivable held for investment.

To generate future expected cash flows, the model combines receivable characteristics with assumptions about borrower behavior based on the

Company’s historical loan performance.

For personal loans receivable, the Company developed an internal model to estimate the fair value of loans receivable held for investment.

To generate future expected cash flows, the model combines receivable characteristics with assumptions about borrower behavior based on the Company’s historical loan performance.

These cash flows are then discounted using a required rate of return that management estimates would be used by a market participant.

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For credit card receivables, the Company uses historical data to derive assumptions about certain loan portfolio characteristics such as principal payment rates, interest yields and fee yields.

Similar to the model used for personal loan receivables, the Company engaged a third party to create an independent fair value estimate, which provides a range of fair values that are compared for reasonableness.

Similar to the model used for personal loans receivable, the Company engaged a third party to create an independent fair value estimate, which provides a range of fair values that are compared for reasonableness.

For the derivative, the Company uses a base set of cash flows derived from historical data and management assumptions.

From this base set of cash flows, funds that are projected to be released to the Company according to the contractual terms outlined in the waterfall agreement are calculated on an aggregate basis then discounted at a rate that is representative of equity yield.

The table below presents a reconciliation of Loans Receivable at Fair Value on a recurring basis using significant unobservable inputs:

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As of December 31, 2023, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 5.2 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 41.5 million.

As of December 31, 2021, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 3.5 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 20.7 million.

As of December 31, 2022, the aggregate fair value

of loans that are 90 days or more past due and in non-accrual status was $ 4.1 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 35.2 million.

Financial Instruments Disclosed But Not Carried at Fair Value

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Secured financing (Note 8) 290,949 285,231 — 285,231 —

Asset-backed borrowings at amortized cost (Note 8) (1)

580,101 580,101 — — 580,101

Acquisition and corporate financing (Note 8) 285,682 286,865 — 286,865 —

(1) As of December 31, 2023, the Company estimates the carrying value of asset-backed borrowings at amortized cost to approximate their fair value as the underlying cash flows and associated assumptions are reviewed and updated each period.

December 31, 2022

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Restricted cash 105,000 105,000 105,000 — —

Loans held for sale (Note 5) 491 547 — — 547

Accounts payable 9,670 9,670 9,670 — —

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• Loans held for sale ‑ The fair values of loans held for sale are based on a negotiated agreement with the purchaser.

• Secured financing and acquisition and corporate financing ‑ The fair values of the secured financing and acquisition and corporate financing facilities have been calculated using discount rates equivalent to the weighted-average market yield of comparable debt securities, which is a Level 2 input measure.

• Secured financing, acquisition and corporate financing ‑ The fair values of the secured financing and acquisition and corporate financing have been calculated using discount rates equivalent to the weighted-average market yield of comparable debt securities, which is a Level 2 input measure.

• Asset-backed borrowings at amortized cost ‑ The fair values of the asset-backed borrowings at amortized cost have been calculated by discounting the contractual cash flows at the interest rate the Company estimates such arrangement would bear if executed in the current market, which is a Level 3 input measure.

There were no transfers in or out of Level 3 assets and liabilities for the years ended December 31, 2023 and 2022.

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Leases - The Company’s leases are primarily for real property consisting of retail locations and office space and have remaining lease terms of 6 years or less.

During the first quarter of 2022, the Company made the decision to close an additional 27 retail locations in April 2022.

The Company incurred $ 1.4 million in expenses related to the accelerated amortization of right-of-use assets for the year ended December 31, 2022.

The retail location closures were substantially completed in the second quarter of 2022 and the Company does not expect any additional expenses to be incurred.

As a result of the retail network optimization plan, for the year ended December 31, 2021, the Company incurred $ 12.8 million in expenses related to retail location closures.

$ 5.2 million of the expenses related to the retail location closures for the year ended December 31, 2021 relate to the accelerated amortization of right-of-use assets and the renegotiation of lease liabilities.

The initial retail network optimization plan was substantially completed in the third quarter of 2021.

The Company has elected the practical expedient to keep leases with terms of 12 months or less off the balance sheet as no recognition of a lease liability and a right-of-use asset is required.

3 unchanged sentences

At the commencement date of a lease, the Company recognizes a lease liability equal to the present value of the lease payments and a right-of-use asset representing the Company’s right to use the underlying asset for the duration of the lease term.

The Company’s leases include options to extend or terminate the arrangement at the end of the original lease term.

Company’s leases include options to extend or terminate the arrangement at the end of the original lease term.

The Company generally does not include renewal or termination options in its assessment of the leases unless extension or termination for certain assets is deemed to be reasonably certain.

6 unchanged sentences

2024 $ 12,786

Thereafter 25

Total lease payments 30,473

1 unchanged sentence

Total leases $ 28,376

Total sublease income $ —

Net lease liabilities $ 37,947

Weighted average remaining lease term 2.7 years

8 unchanged sentences

Total leases $ 37,947

Sublease income

2022 $ ( 896 )

2023 and thereafter —

Total lease payments ( 896 )

Imputed interest 11

Total sublease income $ ( 885 )

Net lease liabilities $ 47,699

Weighted average remaining lease term 3.2 years

11 unchanged sentences

The Company chose not to renew the arrangement and allowed the agreement to expire on its terms on March 4, 2022.

In November 2022, the Company entered into a forward flow whole loan sale agreement with an institutional investor.

Pursuant to this agreement, the Company has a commitment to sell a minimum of $ 2.0 million of its unsecured loan originations each month, with an option to sell an additional $ 4.0 million each month, over an approximately one-year period, subject to certain eligibility criteria.

For details regarding the whole loan sale program, refer to Note 5, Loans Held for Sale .

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at December 31, 2023 and 2022 were $ 32.9 million and $ 45.0 million, respectively.

WebBank has a direct obligation to borrowers to fund such credit card commitments subject to the respective account agreements with such borrowers;

WebBank has a direct obligation to borrowers to fund such credit card commitments subject to the respective

account agreements with such borrowers;

however, pursuant to the Receivables Purchase Agreement between WebBank and Oportun, Inc., the Company has the obligation to purchase receivables from WebBank representing these unfunded amounts.

Regulatory Proceedings

On March 3, 2021, the Company received a Civil Investigative Demand (CID) from the CFPB.

The stated purpose of the CID is to determine whether small-dollar lenders or associated persons, in connection with lending and debt-collection practices, have failed to comply with certain federal consumer protection laws over which the CFPB has jurisdiction.

The Company received additional information requests related to the CID.

The information requests are focused on the Company's legal collection practices from 2019 to 2021 and hardship treatments offered to members during the COVID-19 pandemic.

On September 15, 2022, the Company received a Notice and Opportunity to Respond and Advise (“NORA”) letter from the staff of the CFPB in connection with the CID, stating that it is considering whether to recommend that the CFPB take legal action against the Company based on alleged violations focused on the Company's failure to timely dismiss certain lawsuits and the hardship treatments offered during the COVID-19 pandemic, including credit reporting related thereto.

On October 14, 2022, the Company provided the CFPB with its written response to the NORA letter disputing the allegations.

The Company is cooperating fully with the CFPB with respect to this matter and the Company believes that its business practices have been in full compliance with applicable laws.

Because the CFPB has broad authority to determine what it views as potentially unfair, deceptive or abusive acts or practices, at this time, the Company is unable to predict the ultimate outcome of this matter.

Digit received a CID from the CFPB in June 2020.

The CID was disclosed and discussed during the acquisition process.

The stated purpose of the CID is to determine whether Digit, in connection with offering its products or services, misrepresented the terms, conditions, or costs of the products or services in a manner that is unfair, deceptive, or abusive.

While the Company believes that the business practices of the Company, including Digit, have been in full compliance with applicable laws, in the interest of resolving this matter, on August 11, 2022, Digit agreed to a consent order with the CFPB resolving such CID.

In connection with such consent order, Digit agreed to implement a redress and compliance plan to pay at least $ 68,145 in consumer redress to consumers who may have been harmed and paid a $ 2.7 million civil penalty to the CFPB in the third quarter of 2022.

The Company had previously established a reserve for the redress and civil penalty in the second quarter of 2022 .

Mexico Value-added Tax - In October 2023, the Company's Mexico subsidiary received notice from Mexico’s Servicio de Administración Tributaria, the Mexican federal tax authority, for claims related to the alleged underpayment of value-added tax, including inflationary adjustments, fines and penalties for tax years 2017-2019.

The Company disputes that there were underpayments in any of those years, and intends to pursue all available administrative and legal avenues of appeal to assert its position.

No accrual related to this matter has been recorded as of December 31, 2023, as the Company believes it is not probable to be incurred.

However, it is reasonably possible the Company will be unsuccessful in asserting at least some of these claims, and for those claims, the Company believes it may be exposed to a liability ranging from zero to $ 3.8 million, consisting of $ 1.2 million of value-added tax and $ 2.6 million of inflationary adjustments, fines and penalties.

These estimates are subject to change based on the results of the administrative and legal appeal processes, however, timing of the resolution of this issue is unknown.

From time to time, the Company may bring or be subject to other legal proceedings and claims in the ordinary course of business, including legal proceedings with third parties asserting infringement of their intellectual property rights, consumer litigation, and regulatory proceedings.

The Company is not presently a party to any other legal proceedings that, if determined adversely to the Company, would individually or taken together have a material adverse effect on its business, financial condition, cash flows or results of operations.

Related Party Transactions

On September 14, 2022, the Company entered into an agreement to borrow $ 150.0 million of a senior secured term loan with certain funds associated with Neuberger Berman Specialty Finance (“Neuberger”).

On March 10, 2023, the Company upsized and amended its Corporate Financing and borrowed an additional $ 75.0 million over four separate tranches from March 10, 2023 to June 30, 2023.

In connection with the additional $ 75.0 million, the Company issued warrants to the lenders with each tranche to purchase a total of 4,193,453 shares of its common stock at an exercise price of $ 0.01 per share (the “Warrants”).

Following the issuance of the Warrants, Neuberger is now deemed to be a beneficial owner of greater than ten percent of the Company's outstanding stock pursuant to generally accepted accounting principles.

See Note 8, Borrowings for additional information on the Second Amendment of the Corporate Financing and Note 10, Stockholders' Equity for additional information on the Warrants.

In addition, on June 16, 2023, the Company entered into a forward flow whole loan sale agreement with Neuberger.

Pursuant to this agreement, the Company has agreed to sell up to $ 300.0 million of its personal loan originations over the next twelve months.

The Company will continue to service these loans upon transfer of the receivables.

As part of this agreement, during the year ended December 31, 2023, the Company transferred loans receivable totaling $ 220.5 million.

See Note 8, Borrowings – Asset-backed borrowings at amortized cost for additional information on the forward flow whole loan sale agreement.

For the year ended December 31, 2023, the Company recorded interest expense of $ 38.3 million related to the Corporate Financing agreement and $ 8.7 million related to the secured borrowing agreement.

The expected cash flows are used to calculate interest expense on the secured borrowing, using the effective interest method.

The Company also recorded $ 20.0 million of interest income in the Company’s Consolidated Statements of Operations for the year ended December 31, 2023 related to transferred loans.

Loans receivable at fair value underlying the secured borrowing with Neuberger was $ 200.8 million as of December 31, 2023.

The Company had Asset-backed borrowings at amortized costs of $ 201.8 million and corporate financing of $ 204.1 million due to Neuberger as of December 31, 2023.

The Company also had an insignificant amount of Interest and fee receivable, net, and Other liabilities in its Consolidated Balance Sheets as of December 31, 2023 related to these transactions.

The Company believes that it has executed all the transactions described herein on terms no less favorable to it than it could have obtained from unaffiliated third parties.

Subsequent Events

On February 9, 2023, the Company announced that it is taking a series of measures to streamline its operations, including reducing the size of its corporate staff by 10 %, impacting approximately 155 employees, and reducing its expenditures on external contractors.

In relation to these and other personnel related activities, management expects to incur non-recurring, pre-tax charges of $ 6 to $ 7 million in the first quarter of 2023.

The estimates of the charges and expenditures that the Company expects to incur in connection with these activities, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially from estimates.

The Company may also incur charges and expenditures not currently contemplated due to unanticipated events that may occur in connection with these measures.

On February 10, 2023, the Acquisition Financing facility was further amended.

This fifth amendment, among other things, revises the interest rate from SOFR plus 8.00 % to SOFR plus 11.00 % and adjusts the amortization schedule to defer $ 42.0 million in principal payments through July 2023, with a final payment in October 2024.

On March 8, 2023, the Credit Card Warehouse was further amended.

This amendment, among other things, extends the revolving period by a year, to December 31, 2024, and reduces the commitment from $150.0 million to $120.0 million.

On March 10, 2023 (the “Second Amendment Closing Date”), the Company amended its Corporate Financing facility by entering into an Amendment No.

2 (the “Second Amendment”) by and among the Company, as borrower, the subsidiaries of the Company party thereto as guarantors, certain affiliates of Neuberger Berman Specialty Finance as lenders, and Wilmington Trust, National Association, as administrative agent and collateral agent (the “Agent”), which amended the Credit Agreement, dated as of September 14, 2022 (as amended, supplemented or otherwise modified, including by the Second Amendment, the “Amended Credit Agreement”), by and among the Company, the lenders from time to time party thereto and the Agent.

On the Second Amendment Closing Date, the Company borrowed $ 20.8 million of incremental term loans (the “Incremental Tranche A-1 Loans”) and intends to borrow an additional $ 4.2 million of incremental term loans (the “Incremental Tranche A-2 Loans”) on or about March 27, 2023, which amount has been committed by the applicable lenders.

Under the Amended Credit Agreement, the Company may borrow up to an aggregate additional amount of $ 50.0 million on an uncommitted basis, in two $ 25.0 million tranches (the “Incremental Tranche B Loans” and the “Incremental Tranche C Loans”) expected to be available, if provided by the applicable lenders, on or about April 21, 2023 and June 23, 2023, respectively.

Following the Second Amendment Closing Date the Loans bear interest, at (a) an amount equal to 1-month term SOFR plus 9.00 % plus (b) an amount payable in cash or in kind, at the Company's option, equal to 3.00 %.

The Loans are scheduled to mature on September 14, 2026, and are not subject to amortization.

Certain prepayments of the Loans are subject to a prepayment premium.

On the Second Amendment Closing Date, pursuant to the Second Amendment, the Company issued warrants (the “Warrants”) to the lenders providing the Incremental Tranche A-1 Loans to purchase 1,980,242 shares of the Company’s common stock at an exercise price of $ 0.01 per share.

In addition, (a) in connection with the funding of the Incremental Tranche A-2 Loans, the Company will issue Warrants to the lenders providing the Incremental Tranche A-2 Loans to purchase 116,485 shares of the Company’s common stock, (b) in connection with the funding of the Incremental Tranche B Loans, the Company will issue Warrants to the lenders providing the Incremental Tranche B loans to purchase 1,048,363 shares of the Company's common stock, and (c) in connection with the funding of the Incremental Tranche C Loans, the Company will issue Warrants to the lenders providing the Incremental Tranche C Loans to purchase 1,048,363 shares of the Company’s common stock, in each case, at an exercise price of $ 0.01 per share.

The Company also entered into a Registration Rights Agreement with the applicable lenders on the Second Amendment Closing Date (the “Registration Rights Agreement”), which stipulates that the Company will file a registration statement with the Securities and Exchange Commission with respect to the shares underlying the Warrants.

On February 13, 2024, Oportun Financial Corporation (the “Company”) issued a press release announcing the issuance of $ 199.5 million two-year asset-backed notes (the “Notes”) by Oportun Issuance Trust 2024-1 (the “Issuer”) and secured by a pool of its unsecured and secured personal installment loans (the “2024-1 Securitization”).

The 2024-1 Securitization included four classes of fixed rate notes.

The Notes were offered and sold in a private placement in reliance on Rule 144A under the U.S.

Securities Act of 1933, as amended, and were priced with a weighted average yield of 8.600 % per annum and weighted average coupon of 8.434 % per annum.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data