What changed in this filing

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Item 1. Financial Statements

2024-08-09 compared with 2024-05-10 · 164 added, 105 removed, 522 unchanged (34% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, December 31,

June 30, December 31,

Cash and cash equivalents $ 72,871 $ 91,187

1 unchanged sentence

Loans receivable at fair value 2,714,410 2,962,352

Credit cards receivable held for sale

Capitalized software and other intangibles, net 99,688 114,735

11 unchanged sentences

Stockholders' equity

Common stock, $ 0.0001 par value - 1,000,000,000 shares authorized at March 31, 2024 and December 31, 2023;

35,861,277 shares issued and 35,589,254 shares outstanding at March 31, 2024;

Common stock, $ 0.0001 par value - 1,000,000,000 shares authorized at June 30, 2024 and December 31, 2023;

35,994,744 shares issued and 35,722,721 shares outstanding at June 30, 2024;

34,741,076 shares issued and 34,469,053 shares outstanding at December 31, 2023

Common stock, additional paid-in capital 591,731 584,555

Retained deficit ( 200,288 ) ( 173,849 )

Treasury stock at cost, 272,023 shares at March 31, 2024 and December 31, 2023

Accumulated deficit ( 231,313 ) ( 173,849 )

Treasury stock at cost, 272,023 shares at June 30, 2024 and December 31, 2023

( 6,309 ) ( 6,309 )

5 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2024 2023 2024 2023

Interest income $ 231,373 $ 240,463 $ 461,963 $ 478,082

25 unchanged sentences

(in thousands, except share data)

For the Three Months Ended March 31, 2024

For the Six Months Ended June 30, 2024

Warrants Common Stock

5 unchanged sentences

Balance – March 31, 2024 4,193,453 $ 19,431 35,589,254 $ 7 $ 569,131 $ ( 200,288 ) $ ( 6,309 ) $ 381,972

Stock-based compensation expense — — — — 3,169 — — 3,169

Vesting of restricted stock units, net of shares withheld — — 133,467 — — — — —

Net loss — — — — — ( 31,025 ) — ( 31,025 )

Balance – June 30, 2024 4,193,453 $ 19,431 35,722,721 $ 7 $ 572,300 $ ( 231,313 ) $ ( 6,309 ) $ 354,116

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands, except share data)

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2023

Warrants Common Stock

6 unchanged sentences

Balance – March 31, 2023 2,096,727 $ 6,672 33,884,346 $ 7 $ 551,764 $ ( 95,988 ) $ ( 6,309 ) $ 456,146

Issuance of common stock upon exercise of stock options, net of shares withheld — — 26,458 — ( 95 ) — — ( 95 )

Stock-based compensation expense — — — — 4,754 — — 4,754

Vesting of restricted stock units, net of shares withheld — — 116,539 — ( 267 ) — — ( 267 )

Issuance of warrants to purchase common stock in connection with debt financing 2,096,726 12,759 — — — — — 12,759

Net loss — — — — — ( 14,899 ) — ( 14,899 )

Balance – June 30, 2023 4,193,453 $ 19,431 34,027,343 $ 7 $ 556,156 $ ( 110,887 ) $ ( 6,309 ) $ 458,398

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

19 unchanged sentences

Other, net ( 361 ) ( 994 )

Net cash provided by (used in) investing activities 36,461 ( 39,648 )

Net cash used in investing activities ( 26,978 ) ( 104,021 )

Cash flows from financing activities

4 unchanged sentences

Repayments of asset-backed borrowings at amortized cost

( 136,785 ) —

Borrowings under acquisition and corporate financing — 73,355

1 unchanged sentence

Payments of deferred financing costs ( 2,427 ) ( 1,550 )

Borrowings allocated to warrants — 6,632

Net payments related to stock-based activities ( 232 ) ( 1,726 )

Net cash used in financing activities ( 136,011 ) ( 76,818 )

Net decrease in cash and cash equivalents and restricted cash ( 9,463 ) ( 1,896 )

Net increase (decrease) in cash and cash equivalents and restricted cash 30,620 ( 1,482 )

Cash and cash equivalents and restricted cash, beginning of period 206,016 203,817

14 unchanged sentences

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2024

June 30, 2024

Organization and Description of Business

36 unchanged sentences

Basic and diluted earnings (loss) per share are calculated as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands, except share and per share data) 2024 2023 2024 2023

8 unchanged sentences

The following common share equivalent securities have been excluded from the calculation of diluted weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Stock options 2,347,491 3,062,442 2,445,681 3,162,156

20 unchanged sentences

The following table represents the assets and liabilities of consolidated VIEs recorded on the Company’s Condensed Consolidated Balance Sheets (Unaudited):

March 31, December 31,

June 30, December 31,

(in thousands) 2024 2023

19 unchanged sentences

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 three months ended March 31, 2024 was $ 22.2 million and the Company recorded a gain on sale of $ 1.5 million and servicing revenue of $ 1.6 million.

The originations of loans sold and held for sale during the three months ended March 31, 2023 was $ 10.0 million.

The gain on sale recorded during the three months ended March 31, 2023 was $ 1.4 million.

The originations of loans sold and held for sale during the three months ended June 30, 2024 was $ 28.4 million and the Company recorded a gain on sale of $ 2.1 million and servicing revenue of $ 1.6 million.

The originations of loans sold and held for sale during the three months ended June 30, 2023 was $ 15.6 million.

The gain on sale recorded during the three months ended June 30, 2023 was $ 2.3 million.

Servicing revenue during the same time period was $ 2.5 million.

The originations of loans sold and held for sale during the six months ended June 30, 2024 was $ 50.7 million and the Company recorded a gain on sale of $ 3.6 million and servicing revenue of $ 3.2 million.

The originations of loans sold and held for sale during the six months ended June 30, 2023 was $ 25.7 million.

The gain on sale recorded during the six months ended June 30, 2023 was $ 3.7 million.

Servicing revenue during the same time period was $ 5.6 million.

Oportun® Visa® Credit Card - On June 21, 2024, the Company entered into a nonbinding letter of intent with a third-party to sell the credit card receivable portfolio originated under the Company's credit card program.

Following the execution of the nonbinding letter of intent, the portfolio is considered to be held for sale and is presented within Credit cards receivable held for sale on the Condensed Consolidated Balance Sheet (Unaudited).

The Company has elected the fair value option for the credit card portfolio and, as a result, we recorded a net decrease in fair value of $ 36.2 million associated with the terms contained within the nonbinding letter of intent.

The Company has chosen to sell the credit card receivables portfolio because it believes it can achieve higher returns on its capital from allocating it to the Company's other products.

Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:

March 31, December 31,

June 30, December 31,

(in thousands) 2024 2023

5 unchanged sentences

Capitalized software, net

Amortization of system development costs and acquired developed technology for three months ended March 31, 2024 and 2023 was $ 10.2 million and $ 10.1 million, respectively.

System development costs capitalized in the three months ended March 31, 2024 and 2023 were $ 3.8 million and $ 10.6 million, respectively.

Acquired developed technology was $ 48.5 million and is related to the acquisition of Digit on December 22, 2021.

Amortization of system development costs and acquired developed technology for the three months ended June 30, 2024 and 2023 was $ 10.1 million and $ 10.6 million, respectively.

System development costs capitalized in the three months ended June 30, 2024 and 2023 were $ 5.4 million and $ 7.7 million, respectively.

Amortization of system development costs and acquired developed technology for the six months ended June 30, 2024 and 2023 was $ 20.4 million and $ 20.7 million, respectively.

System development costs capitalized in the six months ended June 30, 2024 and 2023 were $ 9.2 million and $ 18.3 million, respectively.

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

(“Digit”) on December 22, 2021.

Intangible Assets

The gross carrying amount and accumulated amortization, in total and by major intangible asset class are as follows:

March 31, December 31,

June 30, December 31,

(in thousands) 2024 2023

5 unchanged sentences

Total intangible assets, net $ 23,634 $ 27,468

Amortization of intangible assets for the three months ended March 31, 2024 and 2023 was $ 1.9 million and $ 1.6 million, respectively.

Amortization of intangible assets for the three months ended June 30, 2024 and 2023 was $ 1.9 million and $ 1.9 million, respectively.

Amortization of intangible assets for the six months ended June 30, 2024 and 2023 was $ 3.8 million and $ 3.5 million, respectively.

On March 8, 2023, the Company revealed its rebranding of Oportun and Digit as a single brand.

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

Expected future amortization expense for intangible assets as of March 31, 2024 is as follows:

Expected future amortization expense for intangible assets as of June 30, 2024 is as follows:

(in thousands) Fiscal Years

2024 (remaining nine months) $ 5,621

2024 (remaining six months) $ 3,704

Other assets consist of the following:

March 31, December 31,

June 30, December 31,

(in thousands) 2024 2023

3 unchanged sentences

Prepaid expenses $ 13,716 $ 15,758

Deferred tax assets 52,899 48,123

Deferred tax assets, net

71,615 48,123

Current tax assets 4,315 4,731

3 unchanged sentences

Total other assets $ 133,960 $ 107,680

Depreciation and amortization expense related to fixed assets for the three months ended March 31, 2024 and 2023 was $ 1.1 million and $ 1.3 million, respectively.

Depreciation and amortization expense related to fixed assets for the three months ended June 30, 2024 and 2023 was $ 1.0 million and $ 0.9 million, respectively, and for the six months ended June 30, 2024 and 2023 was $ 2.0 million, and $ 2.2 million, respectively.

The Company recognized an impairment of the right-of-use asset related to the leased office space in San Carlos, California due to a significant decrease in observed market rents for commercial office space, and the inability to find a sub-lessee given the remaining lease term and market conditions.

As a result, the Company disposed of all related fixed assets of $ 3.7 million and related accumulated depreciation of $ 3.5 million resulting in a loss on disposal of $ 0.2 million.

Secured Financing

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Variable Interest Entity Facility Amount Maturity Date Interest Rate Balance Balance

7 unchanged sentences

(1) As of December 31, 2023, the facility amount of the Secured Financing - CCW facility (Oportun CCW Trust) was $ 100.0 million.

On January 31, 2024, the Company entered into an amendment to the Credit Card Warehouse facility to reduce the commitment amount from $ 100.0 million to $ 80.0 million and adjusted the minimum payment rate requirement, advance rate, and the amount of other loan sales permissable.

Asset-backed Notes at Fair Value

The following table presents information regarding asset-backed notes:

March 31, 2024

The following table presents information regarding asset-backed notes at fair value:

June 30, 2024

Variable Interest Entity Initial note amount issued (1)

34 unchanged sentences

(3) Weighted average interest rate excludes notes retained by the Company.

There were no notes retained by the Company as of March 31, 2024.

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 2021-A ended on March 1, 2023.

There were no notes retained by the Company as of June 30, 2024.

The weighted average interest rate for Series 2022-A, 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 2021-A ended on March 1, 2023, Series 2021-B ended on May 1, 2024, and Series 2022-A ended on June 1, 2024.

These asset-backed notes have been amortizing since then.

2 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Balance Balance

12 unchanged sentences

$ 836,659 $ 836,893 $ 580,102 $ 581,468

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

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

On February 13, 2024, the Company announced the issuance of $ 199.5 million of Series 2024-1 fixed-rate asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the "2024-1 Securitization").

2 unchanged sentences

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.

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:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Entity Original Balance Maturity Date Interest Rate Balance Balance

7 unchanged sentences

Total acquisition and corporate financings $ 266,000 $ 230,382 $ 258,746

(1) The Corporate Financing facility (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.

(1) The Corporate Financing facility (Oportun Financial Corporation) was amended and upsized to $ 75.0 million on March 10, 2023.

(2) As of December 31, 2023, the maturity date of the Acquisition Financing facility (Oportun RF, LLC) was October 10, 2024.

1 unchanged sentence

On March 12, 2024, the Company entered into 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.

3 to the Corporate Financing (the “Third Amendment”).

The Third Amendment included modifications to the minimum asset coverage ratio covenant levels, provided 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 required 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 required principal payments equal to 100 % of the net cash proceeds of any future issuance of indebtedness junior in priority to the obligations under the Corporate Financing.

Amendments to Acquisition Financing

2 unchanged sentences

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

As of March 31, 2024, and December 31, 2023, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition and Corporate Financing facilities and asset-backed notes.

As of June 30, 2024, and December 31, 2023, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition and Corporate Financing facilities and asset-backed notes.

Other Liabilities

Other liabilities consist of the following:

March 31, December 31,

June 30, December 31,

(in thousands) 2024 2023

8 unchanged sentences

Stockholders' Equity

Preferred Stock - The Board has the authority, without further action by the Company's stockholders, to issue up to 100,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the Board.

There were no shares of undesignated preferred stock issued or outstanding as of March 31, 2024 or December 31, 2023.

Common Stock - As of March 31, 2024 and December 31, 2023, the Company was authorized to issue 1,000,000,000 shares of common stock with a par value of $ 0.0001 per share.

As of March 31, 2024, 35,861,277 and 35,589,254 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

Preferred Stock - The board of directors of the Company (the “Board”) has the authority, without further action by the Company's stockholders, to issue up to 100,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the Board.

There were no shares of undesignated preferred stock issued or outstanding as of June 30, 2024 or December 31, 2023.

Common Stock - As of June 30, 2024 and December 31, 2023, the Company was authorized to issue 1,000,000,000 shares of common stock with a par value of $ 0.0001 per share.

As of June 30, 2024, 35,994,744 and 35,722,721 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

As of December 31, 2023, 34,741,076 and 34,469,053 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

7 unchanged sentences

Stock-based Compensation - Total stock-based compensation expense included in the Condensed Consolidated Statements of Operations (Unaudited) is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

$ 2,942 $ 4,469 $ 6,924 $ 9,347

(1) Amounts shown are net of $ 0.3 million of capitalized stock-based compensation for the three months ended March 31, 2024 and net of $ 0.5 million of capitalized stock-based compensation for the three months ended March 31, 2023.

As of March 31, 2024, and December 31, 2023, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $ 1.9 million and $ 2.6 million, respectively, which will be recognized over a weighted-average vesting period of approximately 1.9 years for both periods.

As of March 31, 2024 and December 31, 2023, the Company's total unrecognized compensation cost related to time-based and performance-based unvested restricted stock unit awards granted to employees was $ 18.6 million and $ 24.8 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.0 years and 2.1 years, respectively.

(1) Amounts shown are net of $ 0.2 million and $ 0.5 million of capitalized stock-based compensation for the three and six months ended June 30, 2024, respectively, and net of $ 0.3 million and $ 0.7 million of capitalized stock-based compensation for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, and December 31, 2023, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $ 1.5 million and $ 2.6 million, respectively, which will be recognized over a weighted-average vesting period of approximately 1.7 years and 1.9 years, respectively.

As of June 30, 2024 and December 31, 2023, the Company's total unrecognized compensation cost related to time-based and performance-based unvested restricted stock unit awards granted to employees was $ 21.0 million and $ 24.8 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.2 years and 2.1 years, respectively.

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

The Company recognized $ 1.1 million and

$ 1.4 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 1.6 million and $ 2.4 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recognized $ 2.0 million and $ 2.6 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense during the six months ended June 30, 2024 and 2023, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 0.2 million and $ 1.7 million for the three and six months ended June 30, 2024, respectively.

The total income tax expense recognized in the income statement for share-based compensation exercises was $ 0.3 million and $ 2.7 million for the three and six months ended June 30, 2023, respectively.

Interest Income - Total interest income included in the Condensed Consolidated Statements of Operations (Unaudited) is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

Non-interest Income - Total non-interest income included in the Condensed Consolidated Statements of Operations (Unaudited) is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

Non-interest income

Gain on loan sales

$ 1,501 $ 1,326

Servicing fees $ 3,463 $ 3,544 $ 6,872 $ 7,224

1 unchanged sentence

Interest on member accounts

Other income 3,796 4,781

9,029 6,201 13,696 11,429

Gain on loan sales and other

1,094 10,054 6,391 16,161

Total non-interest income $ 19,023 $ 26,100 $ 38,915 $ 47,993

For the three months ended March 31, 2024 and 2023, the Company calculates its year-to-date income tax expense (benefit) by applying the estimated annual effective tax rate to the year-to-date income from operations before income taxes and adjusts the income tax expense (benefit) for discrete tax items recorded in the period.

During the three months ended March 31, 2024 and 2023, the Company recorded income tax benefit of $ 4.0 million and $ 39.4 million, respectively, related to continuing operations.

The Company’s reported effective tax rates were 13.2 % and 27.9 % for the three months ended March 31, 2024 and 2023, respectively.

Income tax benefit decreased by $ 35.4 million or 89.8 % , from $ 39.4 million for the three months ended March 31, 2023 to $ 4.0 million for the three months ended March 31, 2024, primarily as a result of having a smaller pretax loss for the three months ended March 31, 2024.

The Company's effective tax rates for the three months ended March 31, 2024 differ from the statutory tax rates primarily due to the impacts of the research and development tax credit and stock-based compensation.

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

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.

For the three and six months ended June 30, 2024 and 2023, the Company calculated its year-to-date income tax expense (benefit) by applying the estimated annual effective tax rate to the year-to-date income from operations before income taxes and adjusts the income tax expense (benefit) for discrete tax items recorded in the period.

During the three and six months ended June 30, 2024, the Company recorded income tax benefit of $ 18.1 million and $ 22.2 million, respectively, related to continuing operations, representing an effective tax rate of 36.9 % and 27.8 %, respectively.

Income tax benefit for the three and six months ended June 30, 2023 was $ 2.6 million and $ 42.0 million, representing an effective income tax rate of 14.7 % and 26.4 %, respectively.

Income tax benefit increased by $ 15.6 million or 605 %, from $ 2.6 million for the three months ended June 30, 2023 to $ 18.1 million benefit for the three months ended June 30, 2024, primarily as a result of having a larger pretax loss for the three months ended June 30, 2024.

Income tax benefit decreased by $ 19.9 million or 47 %, from $ 42.0 million for the six months ended June 30, 2023 to $ 22.2 million for the six months ended June 30, 2024, primarily as a result of having a lower pretax loss for the six months ended June 30, 2024.

The Company's effective tax rates for the three and six months ended June 30, 2024 and 2023 differ from the statutory tax rates primarily due to the impacts of the research and development tax credit, and stock-based compensation.

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

At the end of 2024, the Company expects it will no longer be subject to any significant U.S.

federal tax examinations by tax authorities for all years prior to 2021.

Thus, the Company expects to release $ 3.4 million of uncertain tax positions within the next twelve months due to the expiration of various statute of limitations.

In December 2021, the Organization for Economic Co-operation and Development Inclusive Framework on Base Erosion Profit Shifting released Model Global Anti-Base Erosion rules (“Model Rules”) under Pillar Two.

5 unchanged sentences

The table below compares the fair value of loans receivable and asset-backed notes to their contractual balances for the periods shown:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands) Unpaid Principal Balance Fair Value Unpaid Principal Balance Fair Value

2 unchanged sentences

Total Loans Receivable at Fair Value $ 2,656,551 $ 2,714,410 $ 2,935,487 $ 2,962,352

Credit cards receivable held for sale

89,713 55,720 — —

Asset-backed notes 1,648,456 1,583,088 1,874,406 1,780,005

3 unchanged sentences

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 loans receivable balance at fair value as of March 31, 2024, consists of $ 2,624.1 million of unsecured personal loans receivable and $ 120.3 million of secured personal loans receivable.

March 31, 2024 December 31, 2023

The personal loans receivable balance at fair value as of June 30, 2024, consists of $ 2,578.9 million of unsecured personal loans receivable and $ 135.5 million of secured personal loans receivable.

June 30, 2024 December 31, 2023

Personal Loans Receivable

9 unchanged sentences

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

March 31, 2024 December 31, 2023

Credit Card Receivables Range Range

June 30, 2024 December 31, 2023

Credit Card Receivables Range (2)

Remaining cumulative charge-offs (1)

20.24 % 20.16 %

Principal payment rate (1)

6.65 % 7.06 %

Average life (years) 1.07 1.00

Discount rate 9.10 % 10.20 %

Average life (years) N/A 1.00

Discount rate N/A 10.20 %

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

(2) As of June 30, 2024, the Company determined the fair value of the credit card receivables held for sale based on the terms outlined in the non-binding letter of intent.

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

2 unchanged sentences

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 as of March 31, 2024 and December 31, 2023, were $ 10.5 million and $ 9.3 million, respectively.

The underlying cash flows as of March 31, 2024 and December 31, 2023, were $ 13.6 million and $ 12.2 million, respectively.

The fair value of the derivative instrument as of June 30, 2024 and December 31, 2023, were $ 11.4 million and $ 9.3 million, respectively.

The underlying cash flows as of June 30, 2024 and December 31, 2023, were $ 14.2 million and $ 12.2 million, respectively.

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 Condensed Consolidated Balance Sheets (Unaudited):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Low High Weighted Average Low High Weighted Average

3 unchanged sentences

Discount rate 17.78 % 17.78 % 17.78 % 17.00 % 17.00 % 17.00 %

Fair value adjustments related to financial instruments where the fair value option has been elected are recorded through earnings for the three months ended March 31, 2024 and 2023.

Fair value adjustments related to financial instruments where the fair value option has been elected are recorded through earnings for the six months ended June 30, 2024 and 2023.

Certain unobservable inputs may (in isolation) have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input.

5 unchanged sentences

The Company also engaged a third party to create an independent fair value estimate for the Loans Receivable at Fair Value, which provides a set of fair value marks using the Company’s historical loan performance data and whole loan sale prices to develop independent forecasts of borrower behavior.

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.

On June 21, 2024, the Company entered into a nonbinding letter of intent with a third-party to sell the credit card receivable portfolio originated under the Company's credit card program.

Following the decision to sell the credit card receivable portfolio the Company used the agreed upon sale price to determine the fair value.

Prior to this decision, the Company used 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 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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

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Gross charge-offs ( 101,545 ) ( 115,200 ) ( 204,582 ) ( 222,606 )

Credit card receivables reclassified as held for sale

( 55,720 ) — ( 55,720 ) —

Net increase (decrease) in fair value ( 36,692 ) 14,186 ( 7,754 ) ( 23,133 )

Balance – end of period $ 2,714,410 $ 3,015,981 $ 2,714,410 $ 3,015,981

As of March 31, 2024, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 6.1 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 36.3 million.

As of June 30, 2024, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 4.7 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 34.2 million.

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.

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The following table presents the carrying value and estimated fair values of financial assets and liabilities disclosed but not carried at fair value and the level within the fair value hierarchy:

March 31, 2024

June 30, 2024

Carrying value Estimated fair value Estimated fair value

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Acquisition and corporate financing (Note 8) 251,392 247,890 — 247,890 —

(1) As of March 31, 2024, the Company estimates the carrying value of the Level 3 other 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.

(1) As of June 30, 2024, the Company estimates the carrying value of the Level 3 other 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, 2023

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• Secured financing, 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.

• 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 three months ended March 31, 2024 and 2023 and the year ended December 31, 2023.

• Asset-backed borrowings at amortized cost ‑ The fair values of the asset-backed borrowings at amortized cost include both securitizations carried at amortized cost and secured borrowings.

We obtain indicative pricing on comparable debt securities for securitizations carried at amortized cost, which is a Level 2 input measure.

Fair values of secured borrowings included in 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 three and six months ended June 30, 2024 and 2023 and the year ended December 31, 2023.

Leases, Commitments and Contingencies

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.

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

The Company recognized an impairment of the right-of-use asset related to the leased office space in San Carlos, California of $ 6.2 million due to a significant decrease in observed market rents for commercial office space, and the inability to find sub-lessee given the remaining lease term and market conditions.

The impairment charges were recognized in General, administrative and other in the Consolidated Statements of Operations.

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.

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The Company uses its contractual borrowing rate to determine lease discount rates.

As of March 31, 2024, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:

As of June 30, 2024, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:

(in thousands) Operating Leases

Lease expense

2024 (remaining nine months) $ 9,314

2024 (remaining six months) $ 6,212

Total lease payments 25,016

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Total leases $ 23,135

Sublease income

2024 (remaining six months) $ ( 241 )

2028 and thereafter

Total lease payments ( 1,586 )

Imputed interest 185

Total sublease income $ ( 1,401 )

Net lease liabilities $ 21,734

Weighted average remaining lease term 2.4 years

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Weighted average discount rate 4.72 %

Rental expenses under operating leases for the three months ended March 31, 2024 and 2023, w a s $ 3.9 million and $ 4.4 million, respectively.

Rental expenses under operating leases for the three and six months ended June 30, 2024, were $ 3.3 million, and $ 7.1 million, respectively, and for the three and six months ended June 30, 2023, were $ 4.7 million, and $ 9.1 million, respectively.

Purchase Commitments ‑ The Company has commitments to purchase information technology and communication services in the ordinary course of business, with various terms through 2027.

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In accordance with the agreements underlying the bank partnership program, Oportun has a commitment to purchase an increasing percentage of program loans originated by Pathward based on thresholds specified in the agreements.

Lending under the partnership was launched in August of 2021 and as of March 31, 2024, the Company has a commitment to purchase an additional $ 20.5 million of program loans based on originations through March 31, 2024.

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at March 31, 2024 and December 31, 2023 were $ 31.7 million and $ 32.9 million, respectively.

Lending under the partnership was launched in August of 2021.

After Pathward has met its retention requirement, the Company has a commitment to purchase all additional program loans.

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at June 30, 2024 and December 31, 2023 were $ 28.5 million and $ 32.9 million, respectively.

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

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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 March 31, 2024, as the Company believes it is not probable to be incurred.

No accrual related to this matter has been recorded as of June 30, 2024, 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.

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

See Note 8, Borrowings

for additional information on the Second Amendment of the Corporate Financing facility 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.

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

On April 26, 2024, we amended the agreement to extend the term and revised the commitment amount to sell $ 370.9 million of personal loan originations in aggregate through October 2024.

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

As part of this agreement, during the three months ended March 31, 2024 the Company transferred loans receivable totaling $ 0.4 million.

As part of this agreement, during the three and six months ended June 30, 2024 the Company transferred loans receivable totaling $ 70.2 million and $ 70.6 million, respectively.

See Liquidity and Capital Resources section for additional information on the forward flow whole loan sale agreement.

For the three months ended March 31, 2024, the Company recorded interest expense under these agreements of $ 11.5 million, primarily related to the Corporate Financing agreement and $ 6.5 million related to the secured borrowing agreement.

For the three months ended June 30, 2024 and 2023 the Company recorded interest expense under these agreements of $ 11.0 million and $ 9.0 million, respectively, primarily related to the Corporate Financing agreement and $ 7.2 million and $ 0.1 million, respectively, 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 $ 4.8 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2024 related to transferred loans.

The Company had corporate financing of $ 200.1 million and $ 204.1 million due to Neuberger as of March 31, 2024 and December 31, 2023 , respectively .

The Company also had an insignificant amount of interest payable in Other liabilities in its Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2024 related to this transaction.

The Company had loans receivable at fair value underlying the secured borrowing of $ 180.9 million and Asset-backed borrowings at amortized cost of $ 180.2 million, respectively, due to Neuberger as of March 31, 2024.

The Company also had an insignificant amount in Other liabilities in its Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2024 related to these transactions.

Related to transferred loans, the Company also recorded $ 14.7 million and $ 0.1 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the three months ended June 30, 2024 and 2023, respectively.

For the six months ended June 30, 2024 and 2023, the Company recorded interest expense under these agreements of $ 22.5 million and $ 15.3 million, respectively, primarily related to the Corporate Financing agreement and, $ 13.6 million and $ 0.1 million, respectively, 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.

Related to the transferred loans, the Company also recorded $ 19.5 million and $ 0.1 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, loans receivable at fair value underlying the secured borrowing with Neuberger was $ 227.8 million and $ 200.8 million, respectively, The Company had Asset-backed borrowings at amortized costs of $ 229.8 million and corporate financing of $ 192.0 million due to Neuberger as of June 30, 2024 and, $ 201.8 million and $ 204.1 million, respectively, as of December 31, 2023.

The Company also had an insignificant amount of Interest and fee receivable, net and Other liabilities in its Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2024 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

Secured Financing - On August 5, 2024, the Company entered into a new personal loan warehouse facility (the “PLW II Warehouse Facility”).

In connection with the PLW II Warehouse Facility, Oportun PLW II Trust, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement with certain lenders from time to time party thereto, Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW II Warehouse Facility has a three year term and a borrowing capacity of $245.2 million.

Borrowings under the Loan and Security Agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.08%.

The advance rate for the PLW II Warehouse Facility is 95.0%, subject to certain delinquency and liquidity triggers that could lower the advance rate to 92.0%.

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

What changed 10-Q

Item 1. Financial Statements