What changed in this filing

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Item 1A. Risk Factors

2026-05-08 compared with 2025-11-05 · 107 added, 94 removed, 920 unchanged (18% of the section changed)

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These risks could cause the trading price of our common stock to decline, which could cause you to lose all or part of your investment.

You should carefully consider these risks, all of the other information in this report, including our consolidated financial statements, the notes thereto and the sections entitled “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and general economic and business risks before making a decision to invest in our common stock.

You should carefully consider these risks, all of the other information in this report, including our condensed and consolidated financial statements, the notes thereto and the sections entitled “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and general economic and business risks before making a decision to invest in our common stock.

While we believe the risks described below include all material risks currently known by us, it is possible that these may not be the only ones we face.

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• A breach of early payment triggers or covenants or other terms of our agreements with lenders could result in an early amortization, default, and/or acceleration of the related funding facilities.

• Our securitizations, warehouse facilities, and structured and whole loan sales may expose us to certain risks, and we can provide no assurance that we will be able to conduct such transactions in the future, which may require us to seek more costly financing.

• Our securitizations and structured and whole loan sales may expose us to certain risks, and we can provide no assurance that we will be able to conduct such transactions in the future, which may require us to seek more costly financing.

• We may need to raise additional funds in the future, including through equity, debt, or convertible debt financings, to support business growth and those funds may not be available on acceptable terms, or at all.

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• The collection, storage, use, disclosure, and other processing of personal information is an area of increasing complexity and scrutiny.

• Our business has in the past been subject to the regulatory framework applicable to registered investment advisers, including regulation by the SEC.

• Our bank partnership products may lead to regulatory risk and may increase our regulatory burden.

• Anti-money laundering, anti-terrorism financing and economic sanctions laws could have adverse consequences for us.

We have marked with an asterisk (*) those risks described below that reflect substantive changes from the risks described under Part I, Item 1A “Risk Factors” included in our 2024 Form 10-K.

Business, Financial and Operational Risks

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To the extent new entrants gain market share, the use of our products and services would decline.

Our long-term success depends on our ability to compete effectively against existing and

potential competitors that seek to provide banking and financial technology products and services.

Our long-term success depends on our ability to compete effectively against existing and potential competitors that seek to provide banking and financial technology products and services.

If we fail to compete effectively against these competitors, our revenues, results of operations, prospects for future growth and overall business will be materially and adversely affected.

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We are required to continuously develop and adapt our operations, systems, and infrastructure in response to the increasing sophistication of the consumer financial services market, evolving fraud and information security landscape, and regulatory developments relating to existing and planned business operations.

Although we have experienced rapid growth in our business and operations in the past, many economic and other factors outside of our control, including general economic and market conditions, public health outbreaks, consumer and commercial credit availability, the imposition of tariffs and other non-tariff trade barriers, inflation, fluctuating interest rates, unemployment, and consumer debt levels, may adversely affect our ability to sustain revenue growth consistent with recent history and we cannot assure you that our business will grow at our historical growth rates.

Although we have experienced rapid growth in our business and operations in the past, many economic and other factors outside of our control, including general economic and market conditions, public health outbreaks, consumer and commercial credit availability, the imposition of tariffs and other non-tariff trade barriers, increased energy and commodity price volatility, inflation, fluctuating interest rates, unemployment, and consumer debt levels, may adversely affect our ability to sustain revenue growth consistent with recent history and we cannot assure you that our business will grow at our historical growth rates.

In addition, in the past, the growth and expansion of our business has placed significant demands on our management, operational, risk management, technology, marketing, compliance and finance and accounting infrastructure, and resulted in increased expenses, and we may not be able to increase our revenue sufficiently to offset such higher expenses.

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If we are unable to accomplish these tasks, our future growth may be harmed.

In addition, we have previously engaged in a series of cost-saving measures in response to challenging macroeconomic conditions, including workforce reductions and other operational streamlining measures, and may engage in further cost-saving measures in the future.

In addition, we have previously engaged in a series of cost-saving measures in response to challenging macroeconomic and geopolitical conditions, including workforce reductions and other operational streamlining measures, and may engage in further cost-saving measures in the future.

Projections of the effectiveness of any cost-saving measures or other benefits associated with such measures were based on then-current business operations and market dynamics, and could be materially impacted by various factors, including significant economic, competitive and other uncertainties.

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However, there is no assurance that these sources of capital will continue to be available in the future on terms favorable to us or at all.

The availability of debt financing and other sources of capital depends on many factors, many of which are outside of our control.

The availability of debt financing and other sources of capital depends on numerous factors, many of which are outside of our control.

Conditions in the credit markets may experience disruption or deterioration, including as a result of fluctuating interest rates, which could make it difficult for us to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms.

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If our relationship with Pathward terminates, or if Pathward were to suspend, limit, or cease its operations or loan origination activities for any reason, and we are unable to engage another originating bank partner on a timely basis or at all, our business, results of operations and financial condition would be materially and adversely affected.

As of September 30, 2025, we relied on Pathward, N.A., or Pathward, to originate a substantial portion of our loan originations, with the remaining loans being originated directly by us under our lending and servicing licenses across 2 states in the United States.

In the three months ended September 30, 2025 and 2024, Pathward originated approximately 99% and 97% of aggregate personal loan originations, respectively.

In August 2025, we entered into an amended and restated program agreement, as amended, to extend our partnership with Pathward through 2029, which replaced the prior agreement in its entirety and governs the ongoing terms of our relationship.

As of March 31, 2026, we relied on Pathward to originate a substantial portion of our loan originations, with the remaining loans being originated directly by us under our lending and servicing licenses across 2 states in the United States.

In the three months ended March 31, 2026 and 2025, Pathward originated approximately 99% and 97% of aggregate personal loan originations, respectively.

In 2025, we entered into an amended and restated program agreement, as amended, to extend our partnership with Pathward through 2029, which replaced the prior agreement in its entirety and governs the ongoing terms of our relationship.

The amended and restated program agreement has an initial term of four years and will automatically renew for successive two-year periods following the initial four-year term, unless either party provides notice of its intent to not renew.

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If we need to enter into alternative arrangements with a different bank to replace or supplement our existing arrangement, we may not be able to negotiate a comparable alternative arrangement in a timely manner or at all and transitioning loan originations to a new bank may result in delays in the issuance of new loans.

In addition, if we are unable to enter into an alternative arrangement with a different bank to fully

replace or supplement our relationship with Pathward, we would potentially need to obtain additional state licenses to enable us to originate loans directly in the states where Pathward originates loans, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all.

For a further discussion of the risks and regulations applicable to our bank partnership with Pathward, see “Risk Factors—Our bank partnership products may lead to regulatory risk and may increase our regulatory burden, —We are, and intend in the future to continue, expanding into new geographic regions, and our failure to comply with applicable laws or regulations, or accurately predict demand or growth, related to these geographic regions could have an adverse effect on our business, —Security breaches and incidents may harm our reputation, adversely affect our results of operations, and expose us to liability.”

In addition, if we are unable to enter into an alternative arrangement with a different bank to fully replace or supplement our relationship with Pathward, we would potentially need to obtain additional state licenses to enable us to originate loans directly in the states where Pathward originates loans, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all.

comply with applicable laws or regulations, or accurately predict demand or growth, related to these geographic regions could have an adverse effect on our business, —Security breaches and incidents may harm our reputation, adversely affect our results of operations, and expose us to liability.”

Our results of operations and future prospects depend on our ability to retain existing members and attract new members.

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In particular, it is important that we continue to ensure that our members with loans remain loyal to us and we continue to extend loans to members who have successfully repaid their previous loans.

As of September 30, 2025 and 2024, members with repeat loans comprised 76% and 81%, respectively, of our Owned Principal Balance at End of Period.

As of March 31, 2026 and 2025, members with repeat loans comprised 79% and 78%, respectively, of our Owned Principal Balance at End of Period.

If our repeat loan rates decline, we may not realize consistent or improved operating results from our existing member base.

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We use estimates and assumptions in determining the fair value of our loans receivable held for investment and asset-backed notes.

Our Loans Receivable at Fair Value represented 87% of our total assets and our asset-backed notes represented 85% of our total liabilities as of September 30, 2025.

Our Loans Receivable at Fair Value represented 88% of our total assets and our Asset-backed notes at Fair Value represented 7% of our total liabilities as of March 31, 2026.

The fair value of our loans receivable held for investment are determined using Level 3 inputs and the fair value of our asset-backed notes are determined using Level 2 inputs.

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Factors outside our control, including interest rate changes and widening credit spreads, have required, and may continue to require us to make adjustments to the fair value of our loans receivable held for investment or our asset-backed notes, which may in turn adversely affect our results of operations or lead to volatility in our Net Revenue.

For example, elevated interest rates decrease the fair value of our loans receivable held

for investment, which decreases Net Revenue, but also decreases the fair value of our asset-backed notes, which increases Net Revenue.

For example, elevated interest rates decrease the fair value of our loans receivable held for investment, which decreases Net Revenue, but also decreases the fair value of our asset-backed notes, which increases Net Revenue.

Because the duration and fair value of our loans and asset-backed notes are different, the respective changes in fair value may not fully offset each other resulting in a negative impact on Net Revenue and increasing the volatility of our results of operations.

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general economic conditions or outlook, unemployment levels, housing markets, immigration patterns and policies, including enforcement practices, gas prices, energy costs, tariffs and other non-tariff trade barriers, inflation, government shutdowns, delays in tax refunds, financial distress caused by recent or potential bank failures, volatility or disruption in the capital markets, changes in interest rates, and other macroeconomic circumstances as well as events such as natural disasters, acts of war, terrorism, public health outbreaks or adverse health developments, political instability, social unrest, and catastrophes.

For example, uncertainty as to the impact of the imposition of tariffs or other restrictions on certain countries by the current U.S.

administration, as well as any potential retaliatory or responsive measures by impacted countries, could adversely impact trade or other relations, result in higher costs, and decrease the purchasing power of or spending by consumers and businesses, which could impact borrowing trends, loan repayment and create general market instability.

For example, the current U.S.

administration has imposed significant new tariffs on imports from numerous trading partners;

such tariffs and retaliatory measures by those trading partners have adversely impacted trade relations and created general market instability, and such effects may continue.

If any of these factors negatively affect our members or if we are unable to mitigate the risks associated with them, our business, financial condition and results of operations could be adversely affected.

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There can be no assurance that our forecasts of economic conditions, our assessments and monitoring of credit risk, and our efforts to mitigate credit risk through risk-based pricing, appropriate loan underwriting, management of loan delinquencies and charge-off rates are, or will be, sufficient to prevent an adverse impact to our business and financial results.

We recorded a net loss of $78.7 million for the year ended December 31, 2024, primarily due to a net decrease in fair value and increased cost of debt, and we recorded a net loss of $180.0 million for the year ended December 31, 2023, primarily due to a net decrease in fair value and increased cost of debt.

We recorded a net income of $25.2 million for the year ended December 31, 2025, primarily due to a net decrease in fair value and decreased operating expenses, and we recorded a net loss of $78.7 million for the year ended December 31, 2024, primarily due to a net decrease in fair value and increased cost of debt.

We also experienced net losses prior to 2024.

In 2023 and 2024, we announced that we were taking a series of measures to streamline our operations, including reducing the size of our corporate staff by approximately 40% and 12%, respectively.

These cost reduction efforts may adversely affect us in unforeseen ways, including interfering with our ability to achieve our business objectives;

We have in the past and may in the future take actions to streamline our operations, and such cost reduction efforts may adversely affect us in unforeseen ways, including interfering with our ability to achieve our business objectives;

challenging our ability to effectively manage all aspects of our business operations;

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Furthermore, many of our members have limited or no credit history and such borrowers have historically been, and may in the future be, disproportionately affected by adverse macroeconomic conditions.

In addition, the imposition of tariffs and other non-tariff trade barriers, inflation, fluctuating interest rates, unemployment, bankruptcy, major medical expenses, divorce, death, or other issues that affect our members have and could continue to affect our members’ willingness or ability to make payments on their loans.

In addition, the imposition of tariffs and other non-tariff trade barriers, increased energy and commodity price volatility, inflation, fluctuating interest rates, unemployment, bankruptcy, major medical expenses, divorce, death, or other issues that affect our members have and could continue to affect our members’ willingness or ability to make payments on their loans.

Our business is currently heavily concentrated on consumer lending and, as a result, we are more susceptible to fluctuations and risks particular to U.S.

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We are therefore limited in our ability to collect on these loans if a member is unwilling or unable to repay them for any reason.

We currently act as servicer with respect to the unsecured and secured consumer loans, by our bank partners, and for parties to whom we have sold our loans, including the loans that are sold as part of whole loan sales, contributed to asset-backed securitizations, and pledged in connection

with warehouse credit facilities.

Our ability to adequately service our loans is dependent on our ability to maintain appropriate staffing levels and sufficiently train new member services and collections staff, contact our members when they default, and leverage technologies to service and collect amounts owed with respect to loans.

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If our contact center operations become constrained for any reason, the effectiveness of our collection activities may be reduced.

Our net charge-off rate depends on the collectability of our loans and if we experience an unexpected significant increase in the number of members who fail to repay their loans or an increase in the principal amount of the loans that are not repaid, our revenue and results of operations could be adversely affected.

Furthermore, personal unsecured loans and credit card debt are generally dischargeable in bankruptcy.

could be adversely affected.

Furthermore, personal unsecured loans are generally dischargeable in bankruptcy.

If we experience an unexpected, significant increase in the number of members who successfully discharge their debt in a bankruptcy action, our results of operations could be adversely affected.

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• our borrowing costs and access to the capital markets;

• general economic, industry, and market conditions, including economic slowdowns, recessions, the imposition of tariffs and other non-tariff trade barriers, fluctuating interest and inflation rates, and tightening of credit markets and recent or potential bank failures.

• general economic, industry, and market conditions, including economic slowdowns, recessions, the imposition of tariffs and other non-tariff trade barriers, increased energy and commodity price volatility, fluctuating interest and inflation rates, and tightening of credit markets and recent or potential bank failures.

In addition, we experience significant seasonality in demand for our loans, which is generally lower in the first quarter.

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For example, in 2023, we announced the sunsetting of our checking account product, the sunsetting of our partnership with Sezzle, and the discontinuation of our investing and retirement products, in order to strategically realign our resources to focus on other products, as well as to reduce our expenses and simplify our business.

Further, on September 24, 2024, we signed a definitive agreement to sell our credit cards receivable portfolio, and we completed the sale of our credit cards receivable portfolio on November 12, 2024.

Further, on September 24, 2024, we signed a

definitive agreement to sell our credit cards receivable portfolio, and we completed the sale of our credit cards receivable portfolio on November 12, 2024.

Failure to achieve the anticipated benefits from the discontinuation or sale of these products could adversely affect our results of operations.

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Developing and incorporating new technologies, including A.I., into our products and services may require significant investment, take considerable time, and ultimately may not be successful.

The rapid evolution of A.I.

may require us to allocate additional resources to help implement A.I.

in order to minimize unintended or harmful impacts, and may also require us to make additional investments in the development of models or other systems, which may be costly.

We have and will continue to develop and incorporate A.I.

solutions and features into our models and our business, and these solutions and features may become more important to our operations, future growth or competitiveness over time.

We may rely on A.I.

solutions and features to help drive future growth and efficiency in our business, but there can be no assurance that we will realize the desired or anticipated benefits from A.I.

in a timely or cost-effective manner.

If we are not able to effectively implement technology-driven products and services as quickly as competitors or be successful in marketing these products and services to our members and strategic partners, demand for our products and services may decrease .

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or imposing obligations in connection with its use, including by addressing forms of automated decision-making.

For example, on September 23, 2025, the California Privacy Protection Agency’s regulations under the California Consumer Privacy Act (“CCPA”), which address, among other matters, obligations for businesses that use automated decision-making for “significant decisions” about California consumers, were approved.

These regulations become effective January 1, 2026, with phased compliance deadlines relating to automated decision-making commencing in 2027.

The CCPA and other state comprehensive privacy laws enacted to date contain certain exemptions for personal information that is subject to the Gramm-Leach-Bliley Act (“GLBA”).

In some cases, these laws also contain broader exemptions for entities, such as financial institutions, that are subject to the GLBA;

however, these exemptions may not exempt us completely from these laws, and their scope and interpretation remain subject to uncertainty.

For example, on September 23, 2025, the California Privacy Protection Agency’s regulations under the CCPA, which address, among other matters, obligations for businesses that use automated decision-making for “significant decisions” about California consumers, were approved.

These regulations became effective January 1, 2026, with phased compliance deadlines relating to automated decision-making commencing in 2027.

In addition, the California Privacy Protection Agency has begun coordinating with state attorneys general to enhance enforcement and policy development around privacy and artificial intelligence, underscoring that A.I.

governance remains a priority area of focus for both state and federal regulators.

It is likely that new laws and regulations will be adopted, or existing laws and regulations may be interpreted in new ways, that would affect our business, products and services and the way in which we use A.I., including with respect to fair lending laws.

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Harm to our reputation can also arise from many other sources, including employee or former employee misconduct, misconduct by outsourced service providers or other counterparties, failure by us or our partners to meet minimum standards of service and quality, and inadequate protection of member information and compliance failures and claims.

Our reputation may also be harmed if we fail to maintain our certification as a Community Development Financial Institution (“CDFI”).

Our reputation may also be harmed if we fail to maintain our certification as a Community Development Financial Institution.

Competition for our highly skilled employees is intense, and we may not be able to attract and retain the employees we need to support the growth of our business.

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Competition for these employees is intense and we may not be able to replace, attract and retain key personnel.

We do not maintain key-man insurance for every member of our senior management team.

The loss of the service of our senior management team or key team members, and the process to replace any of them, or the inability to attract additional qualified personnel as needed, all of which would involve significant time and expense, could harm our business.

We do not maintain key-man insurance for our senior management team.

Our key management personnel are at-will employees and, therefore, they could terminate their employment with us at any time.

Competition for executive management is high, and it may take months to find a candidate that meets our requirements.

Such recruiting efforts could divert the attention of our existing management team.

Accordingly, the loss of one or more of our key management personnel could have an adverse effect on our business.

If the management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis then our business and future growth prospects could be harmed.

We recently announced the appointment of Doug Bland as our Chief Executive Officer, following the transition of our former Chief Executive Officer.

Changes in our executive management team resulting from the hiring or departure of executives, including key personnel or members of senior management, could disrupt our operations and impact our ability to attract, integrate, retain and motivate employees, and have an adverse effect on our business.

In particular, it could adversely impact our internal control environment, divert employee and management attention from ongoing business activities and strategic objectives, negatively affect employee morale and retention, and damage company culture.

There can be no assurance that any of our other key personnel will remain with us, that the costs associated with retaining current key personnel and hiring new key personnel will be favorable or acceptable to us or that new key personnel will be as successful as their predecessors.

Our success and future growth depend on our branding and marketing efforts.

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• litigation, claims or other liabilities in connection with the acquired company.

We have previously divested certain assets and products lines and we may continue to do so in the future.

We have previously divested certain assets and product lines and we may continue to do so in the future.

For example, o n November 12, 2024, we completed the sale of our credit cards receivable portfolio.

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Despite our efforts, the possibility of fraudulent or other malicious activities and human error or malfeasance cannot be eliminated entirely and will evolve as new and emerging technology is deployed, including the increasing use of personal mobile and computing devices that are outside of our network and control environments.

These mobile technologies may be more susceptible to the fraudulent activities of organized criminal, perpetrators of fraud, hackers, terrorists and others.

These mobile technologies may be more susceptible to the fraudulent activities of organized criminals, perpetrators of fraud, hackers, terrorists and others.

Additionally, increasing our product and service offerings may introduce opportunities for fraudulent activity that we have not previously experienced.

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These systems may be subject to damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, rogue employees, power loss, telecommunications failures, technological errors or outages, and cybersecurity risks.

Like other financial and technology services firms, we have been and continue to be the subject of actual or attempted unauthorized access, mishandling or misuse of information, computer viruses, ransomware or other malware, and cyber-attacks that could obtain or disclose confidential information, destroy data, disrupt or degrade service, threaten the integrity and availability of our systems, distributed denial of service attacks, social engineering, security breaches and incidents, and infiltration, exfiltration or other similar events.

infiltration, exfiltration or other similar events.

Our adoption of remote working arrangements for our corporate and many of our contact center employees may result in increased consumer or employee privacy, security, and fraud concerns arising from the increased electronic transfer and other online activity.

For example, our employees are accessing our servers remotely through home or other networks to perform their job responsibilities and such security systems may be less secure than those used in our offices, which may subject us to increased security risks, including cybersecurity-related events, and expose us to risks of data or financial loss and associated disruptions to our business operations.

Techniques used in cybersecurity attacks to obtain unauthorized access, disable or sabotage information technology systems change frequently, as data breaches and other cybersecurity events have become increasingly commonplace, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflicts in Ukraine and the Middle East.

We have seen, and will

continue to see, industry-wide vulnerabilities, which could affect our or other parties’ systems.

We have seen, and will continue to see, industry-wide vulnerabilities, which could affect our or other parties’ systems.

We also have incorporated A.I.

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Any event that leads to unauthorized access, use, destruction, or disclosure of personal information or other sensitive information that we maintain, including our own proprietary business information and sensitive information such as personal information regarding our members or employees, could disrupt our business, harm our reputation, compel us to comply with applicable federal and/or state breach notification laws and foreign law equivalents, subject us to time consuming, distracting and expensive litigation, regulatory investigation and oversight, mandatory corrective action, require us to verify the correctness of data, or otherwise subject us to liability under laws, regulations and contractual obligations, including those that protect the privacy and security of personal information.

We also face indirect technology, cybersecurity and operational risks relating to the members and other third parties with whom we do business or upon whom we rely on, or whose technology we use to facilitate or enable our business activities, including suppliers, vendors, payment processors, and parties who have access to confidential information due to our agreements with them.

We also face indirect technology, cybersecurity and operational risks relating to the members and other third parties with whom we do business or upon whom we rely, or whose technology we use to facilitate or enable our business activities, including suppliers, vendors, payment processors, and parties who have access to confidential information due to our agreements with them.

The use of bank partnerships could leave us exposed to additional information security risks arising from the interaction between our and any partners’ information technology infrastructure, and the sharing between us of member information.

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However, we cannot be certain that our coverage will continue to be available on economically reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not deny coverage as to any future claim.

The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business and financial condition.

The successful assertion of one or more large claims against us that exceed available insurance coverage, or the

occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business and financial condition.

Our retail locations also process physical member loan documentation that contain confidential information about our members, including financial and personal information.

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Further, the concentration of our outstanding receivables in one or more states would have a disproportionate effect on us if governmental authorities in any of those states take action against us or take action affecting how we conduct our business.

As of September 30, 2025, 35.3%, 25.4%, 11.2%, 5.9% and 4.2% of our Owned Principal Balance at End of Period related to members from California, Texas, Florida, Illinois and New Jersey, respectively.

As of March 31, 2026, 36.2%, 27.0%, 12.4%, 6.6% and 4.8% of our Owned Principal Balance at End of Period related to members from California, Texas, Florida, Illinois and New Jersey, respectively.

If any of the events noted in these risk factors were to occur in or have a disproportionate impact in regions where we operate or plan to commence operations, it may negatively affect our business in many ways, including increased delinquencies and loan losses or a decrease in future originations.

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Third-party data sources, including credit bureau data and other alternative data sources, are aggregated by our risk engine to be used in our credit risk models to score applicants, make credit decisions, and in our verification processes to confirm member-reported information.

If the information that we receive from third parties about a member is inaccurate or does not accurately reflect the member’s creditworthiness, this may cause us to provide loans to higher risk members than we intended through our underwriting process

and/or inaccurately price the loans we make.

In addition, this information may not always be complete, up-to-date or properly evaluated.

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For example, in connection with the secured personal loan product, we work with third parties that provide information and/or services in connection with valuation, title management and title processing, repossessions, and remarketing.

These types of third-party relationships are subject to increasingly demanding regulatory requirements and attention by our partner banks' federal bank regulators (the Federal Reserve Board, the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation) and our consumer financial services regulators, including state regulators and the CFPB, which could increase the scope of management involvement and decreasing the benefit that we receive from using third-party vendors.

These types of third-party relationships are subject to increasingly demanding regulatory requirements and attention by our partner banks' federal bank regulators (the Federal Reserve Board, the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation) and our consumer financial services regulators, including state regulators, the CFPB, and requirements under the FTC’s Safeguards Rule to impose and oversee contractual information security obligations on certain qualifying third parties, which could increase the scope of management involvement and decrease the benefit that we receive from using third-party vendors.

We could be adversely impacted to the extent our vendors and partners fail to comply with the legal requirements applicable to the particular products or services being offered.

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In 2024, following the bankruptcy of a fintech platform, regulators have expanded expectations for third-party oversight by banks engaged in bank partnership programs.

If regulators conclude that our bank partners have not met the heightened standards for oversight of their third-party service providers, any resulting regulatory action could have an adverse effect on their ability to fulfill their contractual obligations to us which could adversely affect our business, financial condition and results of operations.

If regulators conclude that our bank partners have not met the heightened

standards for oversight of their third-party service providers, any resulting regulatory action could have an adverse effect on their ability to fulfill their contractual obligations to us which could adversely affect our business, financial condition and results of operations.

In some cases, third-party vendors are the sole source, or one of a limited number of sources, of the services they provide to us.

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As we continue to evolve our business, including from the integration of employees and businesses acquired in connection with previous or future acquisitions or from our cost-saving measures , we may find it difficult to maintain these valuable aspects of our corporate culture and our long-term mission.

Operating as a remote-first company may make it difficult for us to preserve our corporate culture and could negatively impact on workforce morale and productivity.

Operating as a remote-first company may make it difficult for us to preserve our corporate culture and could negatively impact workforce morale and productivity.

Any failure to preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation and teamwork, and effectively focus on and pursue our mission and corporate objectives.

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Our international operations involve inherent risks which could result in harm to our business.

As of September 30, 2025, we had 1,560 employees in Mexico, including employees related to our two contact centers.

As of March 31, 2026, we had 1,578 employees in Mexico, including employees related to our two contact centers.

These employees provide certain English/Spanish bilingual support related to member-facing contact center activities, administrative and technology support of the contact centers and back-office support services.

In addition, we have a technology development center in India, where we had 216 employees as of September 30, 2025.

In addition, we have a technology development center in India, where we had 205 employees as of March 31, 2026.

We have also previously engaged vendors that utilized employees or contractors based outside of the U.S.

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A significant natural disaster, such as an earthquake, fire, hurricanes, flood or other catastrophic event (many of which are becoming more acute and frequent as a result of climate change), or interruptions by strikes, crime, terrorism, social unrest, cyber-attacks, computer viruses, internal or external system failures, telecommunications failures, a failure of banking or other financial institutions, pandemics or other public health crises, power outages or disruptions, political instability, geopolitical unrest, war, or other large-scale conflicts or unpredictable occurrences, could have an adverse effect on our business, results of operations and financial condition.

For example, a significant natural disaster in Northern California or any other location in which we have offices or facilities or employees working remotely, could adversely affect our business operations, financial condition and prospects, and our insurance coverage may be insufficient to compensate us for losses that may occur.

For example, a significant natural disaster in Northern California or any

other location in which we have offices or facilities or employees working remotely, could adversely affect our business operations, financial condition and prospects, and our insurance coverage may be insufficient to compensate us for losses that may occur.

Our IT systems are backed up regularly to highly available, alternate data centers in a different region, and we have conducted disaster recovery testing of our mission critical systems.

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For example, during parts of the COVID-19 pandemic, we temporarily closed a few of our retail locations due to public health orders or other concerns, which we believe resulted in lower Aggregate Originations.

While all of our retail locations are currently open, it is possible

that we will have to temporarily close retail locations as necessary due to public health orders or other concerns relating to any public health crisis.

While all of our retail locations are currently open, it is possible that we will have to temporarily close retail locations as necessary due to public health orders or other concerns relating to any public health crisis.

The closure of retail locations could further adversely affect our loan originations, member experience, results of operations and financial condition.

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To support our collateral requirements under our financing agreements, we use a random selection process to take loans off our warehouse line to pledge to our securitizations.

An inability to originate enough loans to meet the collateral requirements in our financing arrangements, could result in the early amortization, default and/or acceleration of our existing facilities.

An inability to originate enough loans to meet the

collateral requirements in our financing arrangements could result in the early amortization, default and/or acceleration of our existing facilities.

Moreover, we currently act as servicer with respect to the unsecured consumer loans held by our subsidiaries.

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If collections were insufficient to repay the amounts due under our securitizations and our revolving debt facilities, the applicable lenders, trustees and noteholders could seek remedies, including against the collateral pledged under such facilities.

Any of these events would negatively impact our liquidity, including our ability to

originate new loans, and require us to rely on alternative funding sources.

Any of these events would negatively impact our liquidity, including our ability to originate new loans, and require us to rely on alternative funding sources.

If we were unable to arrange new or alternative methods of financing on favorable terms, we might have to curtail the origination of loans, and we may be replaced by our back-up servicer or another successor servicer.

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In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing.

For more information on covenants, requirements and events, see Note 8, Borrowings of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

For more information on covenants, requirements and events, see Note 8, Borrowings to the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

Our securitizations and structured and whole loan sales may expose us to certain risks, and we can provide no assurance that we will be able to conduct such transactions in the future, which may require us to seek more costly financing.

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Demand for our loans at the current premiums may be impacted by factors outside our control, including availability of loan pools, demand by investors for loan assets and attractiveness of returns offered by competing investment alternatives offered by other loan originators with more attractive characteristics than our loan pools and loan purchaser interest.

If we are unable to sell additional loans or obtain other financing, our revenue and liquidity may be negatively impacted and we may not be able to grow our business as planned and we may have to further curtail our originations.

If we are unable to sell additional loans or obtain other financing, our

revenue and liquidity may be negatively impacted and we may not be able to grow our business as planned and we may have to further curtail our originations.

Our results of operations are affected by our ability to sell our loans for a premium over their net book value.

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We may also be obligated to indemnify parties or pay substantial settlement costs, including royalty payments, and to modify applications or refund fees.

Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time consuming, and may divert the attention of our management and key personnel from our business operations.

Even if we were to prevail in such a dispute, any

litigation regarding our intellectual property could be costly and time consuming, and may divert the attention of our management and key personnel from our business operations.

Moreover, it has become common in recent years for individuals and groups to purchase intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies such as ours.

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and require us to maintain various policies, procedures and internal controls.

Federal and state agencies have broad enforcement powers over us, including powers to periodically examine and continuously monitor our operations and to investigate our business practices and broad discretion to deem particular practices unfair, deceptive, abusive or otherwise not in accordance with the law.

Federal and state agencies have broad enforcement powers over us, including powers to periodically examine and continuously monitor our operations and to investigate our business practices.

These agencies have broad discretion to deem particular practices unfair, deceptive, abusive or otherwise not in accordance with the law.

State attorneys general have a variety of legal mechanisms at their disposal to enforce state and federal consumer financial laws.

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State attorneys general also have a variety of legal mechanisms at their disposal to enforce state and federal consumer financial laws and have enforcement authority under state law with respect to unfair or deceptive practices.

Generally, under these statutes, state attorneys general may conduct investigations, bring actions, and recover civil penalties or obtain injunctive relief against entities engaging in unfair, deceptive, or fraudulent acts.

Generally, under these statutes, state attorneys general may conduct investigations, bring actions, and recover civil penalties or obtain injunctive relief against

entities engaging in unfair, deceptive, or fraudulent acts.

Attorneys general may also coordinate among themselves or with other regulators to enter into coordinated actions or settlements.

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It could also result in a default or early amortization event under certain of our debt facilities and reduce or terminate availability of debt financing to us to fund originations.

To the extent it is determined that any loan we make was not originated

in accordance with all applicable laws as we are required to represent under our securitization and other debt facilities and in loan sales to investors, we could be obligated to repurchase for cash or swap for qualifying assets, any such loan determined not to have been originated in compliance with legal requirements.

To the extent it is determined that any loan we make was not originated in accordance with all applicable laws as we are required to represent under our securitization and other debt facilities and in loan sales to investors, we could be obligated to repurchase for cash or swap for qualifying assets, any such loan determined not to have been originated in compliance with legal requirements.

We may not have adequate liquidity and resources to make such cash repurchases or swap for qualifying assets.

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In addition, a number of participants in the consumer financial services industry have been the subject of putative class action lawsuits, state attorney general actions and other state regulatory actions, federal regulatory enforcement actions, including actions relating to alleged unfair, deceptive or abusive acts or practices, violations of state licensing and lending laws, including state usury laws, actions alleging violations of the Americans with Disabilities Act, discrimination on the basis of race, ethnicity, gender or other prohibited bases, and allegations of noncompliance with various state and federal laws and regulations relating to originating and servicing consumer finance loans and other consumer financial services and products.

The current regulatory environment, increased regulatory compliance efforts, and enhanced regulatory enforcement have resulted in significant operational and compliance costs and may prevent us from providing certain products and services.

The current federal and state regulatory environment, increased regulatory compliance efforts, and enhanced regulatory enforcement have resulted in significant operational and compliance costs and may prevent us from providing certain products and services.

There is no assurance that these regulatory matters or other factors will not, in the future, affect how we conduct our business or adversely affect our business.

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We use internet-based loan processes to obtain application information, distribute certain legally required notices to applicants and borrowers, and to obtain electronically signed loan documents in lieu of paper documents with wet borrower signatures obtained in person.

These processes may entail greater risks than would paper-based loan origination processes, including risks regarding the sufficiency of notice for compliance with consumer protection laws, risks that borrowers may challenge the authenticity of their signature or of the loan documents, risks that a court of law may not enforce electronically signed loan documents and risks that, despite controls, unauthorized changes are made to the electronic loan documents.

If any of those factors were to cause any loans, or any of the terms of the loans, to be unenforceable against the borrowers, or impair our ability to service our loans, the value of our loan assets would decrease significantly to us and to our whole loan purchasers, securitization investors and warehouse lenders.

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While historically, we have not been subject to CFPB supervisory authority, it is possible that we may become subject to additional regulatory scrutiny and compliance costs going forward through supervision by the CFPB.

The CFPB may also request, through examination or investigation, reports concerning our organization, business conduct, markets and activities and if the CFPB were to determine that we were engaging in activities that pose risks to consumers, may conduct on-site examinations of our business on a periodic basis.

The CFPB may also request, through examination or investigation, reports concerning our organization, business conduct, markets and activities and if the CFPB were to determine that we were engaging in activities that pose risks to consumers, it may conduct on-site examinations of our business on a periodic basis.

In addition, the CFPB maintains an online complaint system that allows consumers to log complaints with respect to various consumer finance products, including the credit products we offer.

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We collect, store, use, disclose, and otherwise process a large volume of personal information about individuals (including members and employees).

New laws and regulations concerning the processing of personal information continue to be vigorously debated and enacted at all levels of government across the United States and around the globe while existing laws, such as the GLBA, are being amended or reinterpreted to account for the rapidly evolving data economy.

The CCPA, as augmented and otherwise amended by the California Privacy Rights Act of 2020, imposes significant requirements on businesses processing consumer personal information, principally around enabling and honoring consumer choices related to such processing.

New laws and regulations concerning the processing of personal information continue to be vigorously debated and enacted at all levels of government across the United States and around the globe while existing laws, such as the Gramm-Leach-Bliley Act (“GLBA”) are being amended or reinterpreted to account for the rapidly evolving data economy.

The California Consumer Privacy Act (“CCPA”) , as augmented and otherwise amended by the California Privacy Rights Act of 2020, imposes significant requirements on businesses processing consumer personal information, principally around enabling and honoring consumer choices related to such processing.

Regulations under the CCPA have now been finalized addressing, among other matters, the use of automated decision-making technology (“ADMT”) in “significant decisions”.

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Further, future laws may not include such exemptions.

governance remains a priority area of focus for both state and federal regulators.

Violations of the CCPA can result in civil penalties assessed by the California Attorney General or the California Privacy Protection Agency and individual plaintiffs may pursue statutory damages in a private right of action for certain data breaches.

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On July 29, 2025, the Eastern District of Kentucky issued an Order granting the stay of litigation requested by the CFPB while it works to promulgate a new rule-making process to revise the rule’s scope, definitions and timing.

Compliance deadlines remain in place for now, but the ultimate obligations could change materially.

At this time the substance and timing of the revised rule is uncertain, and it is possible it could adversely affect our business.

Compliance deadlines are uncertain since the CFPB has been enjoined from enforcing the rule and the April 1, 2026 deadline for the largest institutions has passed without action from the CFPB, and the rule’s ultimate substantive obligations could change materially.

Because the substance and timing of the revised rule are uncertain at this time, it is possible it could adversely affect our business.

federal government also is contemplating federal privacy legislation.

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Our bank partnership products may lead to regulatory risk and may increase our regulatory burden.

We currently have bank partnership programs with Pathward, N.A., to offer unsecured personal loans, secured personal loans, and provide deposit accounts, and other transaction services to our members.

We currently have bank partnership programs with Pathward to offer unsecured personal loans, secured personal loans, and provide deposit accounts, and other transaction services to our members.

State and federal agencies have broad discretion in their interpretation of laws and their interpretation of requirements related to bank partnership programs and may elect to alter standards or the interpretation of the standards applicable to these programs.

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To the extent that the SEC staff publishes new or different guidance with respect to these matters, we may be required to adjust our business operations accordingly.

If we are deemed to be an investment company, we may attempt to seek exemptive relief from the SEC, which could impose significant costs and delays on our business.

If we are deemed to be an investment company, we may attempt to

seek exemptive relief from the SEC, which could impose significant costs and delays on our business.

We may not receive such relief on a timely basis, if at all, and such relief may require us to modify or curtail our operations.

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persons such as employees and contractors, as well as third-party vendors and consultants engaged to support our business activities.

In all cases, the sharing of software and/or

technology is solely for the internal use of the company or for the use by business partners to provide services to us, including software development.

In all cases, the sharing of software and/or technology is solely for the internal use of the company or for the use by business partners to provide services to us, including software development.

However, such shipments and transfers may be subject to U.S.

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The issuance of shares of our common stock upon exercise of our outstanding warrants issued in connection with our Corporate Financing, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

As of September 30, 2025, warrants to purchase 2,682,788 shares of our Common Stock issued in connection with our Corporate Financing, remain outstanding and exercisable.

As of March 31, 2026, warrants to purchase 2,682,788 shares of our common stock issued in connection with our Corporate Financing, remain outstanding and exercisable.

The exercise price of these warrants is $0.01 per share.

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• general economic conditions, such as tariffs and other non-tariff trade barriers, fluctuating interest and inflation rates, recessions, tightening of credit markets and recent or potential bank failures;

• developments relating to our reduction in force and other streamlining measures announced in 2023 and 2024;

• developments relating to any reductions in force or other streamlining measures;

• other risks and uncertainties described in these risk factors.

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We are currently evaluating the full impact of the OBBB Act on us.

In addition, many countries and the Organisation for Economic Co-operation and Development have reached an agreement to implement a 15% global minimum tax (“Pillar Two”).

Such proposed changes, as well as regulations and legal decisions interpreting and applying these changes, may have significant impacts on our effective tax rate, cash tax expenses and net deferred taxes in the future.

However, on June 28, 2025, the G7 released a joint statement that it had reached an understanding with the United States for a side-by-side system that would exempt U.S.-parented multinationals from certain provisions of Pillar Two;

however, no agreement regarding implementation of the proposal has been reached yet.

We will continue to monitor legislative and regulatory developments to assess the potential impacts that Pillar Two and any retaliatory taxes or actions may have on our business, operating results and financial condition.

In addition, many countries and the Organisation for Economic Co-operation and Development (the “OECD”) have reached an agreement to implement a 15% global minimum tax (“Pillar Two”).

However, on January 5, 2026, the OECD announced a side-by-side elective safe harbor that would exempt electing U.S.-parented multinationals from certain provisions of Pillar Two for fiscal years beginning on or after January 1, 2026, but does not provide an exemption from “qualified domestic minimum top-up taxes”, which have been implemented into the domestic laws in certain jurisdictions in which we operate.

We will continue to monitor legislative and regulatory developments to assess the potential impacts that Pillar Two may have on our business, operating results and financial condition.

Additionally, U.S.

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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2024, the Company had federal net operating loss carryforwards of $172.3 million, of which $17.7 million expires beginning in 2033 and $154.6 million carries forward indefinitely.

As of December 31, 2025, the Company had federal net operating loss carryforwards of $150.9 million, all of which carry forward indefinitely.

Additionally, the Company had state net operating loss carryforwards of $136.8 million which are set to begin expiring in 2031.

As of December 31, 2025, the Company had federal and California research and development tax credit carryforwards of $19.6 million and $8.4 million, respectively.

The federal research and development tax credit carryforwards expire beginning in 2041, and the California research and development tax credit carryforwards are not subject to expiration.

The federal research and development tax credit carryforwards expire beginning in 2041, and the California research and development tax credits are not subject to expiration.

Realization of these net operating loss and research and development tax credit carryforwards depends on future income, and there is a risk that some of our existing carryforwards could expire unused or may be unavailable to fully offset future income tax liabilities, which could adversely affect our results of operations.

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They may also have interests that differ from yours, and they may vote in a way with which you disagree or which may be adverse to your interests.

This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified Board members.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing standards of the Nasdaq Stock Market, and other applicable securities rules and regulations, including with regard to corporate governance practices and the establishment and maintenance of effective disclosure and financial controls.

Compliance with these rules and regulations increases

our legal and financial compliance costs, makes some activities more difficult, time-consuming or costly and increases demand on our systems and resources.

Compliance with these rules and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming or costly and increases demand on our systems and resources.

In addition, changing laws, regulations and standards or interpretations thereof relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.

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Certain of our executive officers may be entitled, pursuant to the terms of their employment arrangements, to accelerated vesting of their stock options following a change of control of our company under certain conditions.

In addition to the arrangements currently in place with some of our executive officers, we may enter into similar arrangements in the future with other officers.

In addition to the arrangements currently in place with some of our

executive officers, we may enter into similar arrangements in the future with other officers.

Such arrangements could delay or discourage a potential acquisition.

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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 1A. Risk Factors