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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________________________________
FORM 10-Q
__________________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________
Commission File Number 001-39550
__________________________________________________________________
OppFi_Logo_PRIMARY (1).gif
OppFi Inc.
(Exact name of registrant as specified in its charter)
__________________________________________________________________
 
Delaware
(State or other jurisdiction of incorporation or organization)
85-1648122
(I.R.S. Employer Identification No.)
130 E. Randolph Street. Suite 3400
Chicago, IL
(Address of principal executive offices)
60601
(Zip Code)
(312) 212-8079
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities Registered Pursuant to Section 12(b) of the Act:
 
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Class A common stock, par value $0.0001 per share OPFINew York Stock Exchange
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per shareOPFI WSNew York Stock Exchange
__________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of August 6, 2024, there were 86,252,677 shares of common stock, including 20,251,004 shares of Class A common stock, par value $0.0001 per share, 0 shares of Class B common stock, par value $0.0001 per share and 66,001,673 shares of Class V common stock, par value $0.0001 per share, outstanding.



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CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “possible,” “continue,” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to, the impact of general economic conditions, including economic slowdowns, inflation, interest rate changes, recessions, and tightening of credit markets on our business; the impact of challenging macroeconomic and marketplace conditions; the impact of stimulus or other government programs; whether we will be successful in obtaining declaratory relief against the Commissioner of the Department of Financial Protection and Innovation for the State of California; whether we will be subject to AB 539; whether our bank partners will continue to lend in California and whether our financing sources will continue to finance the purchase of participation rights in loans originated by our bank partners in California; our ability to scale and grow the Bitty business; the impact that events involving financial institutions or the financial services industry generally, such as actual concerns or events involving liquidity, defaults, or non-performance, may have on our business; risks related to the material weakness in our internal controls over financial reporting; our ability to grow and manage growth profitably and retain our key employees; risks related to new products; risks related to evaluating and potentially consummating acquisitions; concentration risk; risks related to our ability to comply with various covenants in our corporate and warehouse credit facilities; costs related to the business combination; changes in applicable laws or regulations; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; risks related to management transitions; risks related to the restatement of our financial statements and any accounting deficiencies or weaknesses related thereto and other risks contained in the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 27, 2024 (“2023 Annual Report”). Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.


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PART I. FINANCIAL INFORMATION
ITEM 1.     FINANCIAL STATEMENTS
OppFi Inc. and Subsidiaries    
Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
June 30,December 31,
20242023
Assets
Cash(1)
$46,622 $31,791 
Restricted cash(1)
34,215 42,152 
Total cash and restricted cash80,837 73,943 
Finance receivables at fair value(1)
430,482 463,320 
Finance receivables at amortized cost, net of allowance for credit losses of $3 and $346 as of June 30, 2024 and December 31, 2023, respectively
19 110 
Settlement receivable(1)
1,980 1,904 
Debt issuance costs, net(1)
3,718 3,834 
Property, equipment and software, net9,795 10,292 
Operating lease right-of-use assets11,361 12,180 
Deferred tax asset25,118 25,777 
Other assets(1)
9,783 10,183 
Total assets$573,093 $601,543 
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable(1)
$2,399 $4,442 
Accrued expenses(1)
25,602 22,006 
Operating lease liabilities14,171 15,061 
Senior debt, net(1)
301,774 332,667 
Note payable 1,449 
Warrant liabilities2,669 6,864 
Tax receivable agreement liability24,789 25,025 
Total liabilities371,404 407,514 
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $0.0001 par value (1,000,000 shares authorized with no shares issued and outstanding as of June 30, 2024 and December 31, 2023)
  
Class A common stock, $0.0001 par value (379,000,000 shares authorized with 21,074,448 shares issued and 19,600,819 shares outstanding as of June 30, 2024 and 19,554,774 shares issued and 18,850,860 shares outstanding as of December 31, 2023)
2 2 
Class B common stock, $0.0001 par value (6,000,000 shares authorized with no shares issued and outstanding as of June 30, 2024 and December 31, 2023)
  
Class V voting stock, $0.0001 par value (115,000,000 shares authorized with 91,286,966 and 91,898,193 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)
9 9 
Additional paid-in capital80,951 76,480 
Accumulated deficit(57,341)(63,591)
Treasury stock, at cost (1,473,629 and 703,914 shares as of June 30, 2024 and December 31, 2023, respectively)
(4,993)(2,460)
Total OppFi Inc.'s stockholders' equity18,628 10,440 
Noncontrolling interest183,061 183,589 
Total stockholders' equity201,689 194,029 
Total liabilities and stockholders' equity$573,093 $601,543 
(1) Includes amounts in consolidated variable interest entities ("VIEs") presented separately in the table below.
Continued on next page
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OppFi Inc. and Subsidiaries    
Consolidated Balance Sheets (Unaudited) - Continued
(in thousands)
The following table summarizes the consolidated assets and liabilities of VIEs, which are included in the Consolidated Balance Sheets. The assets below may only be used to settle obligations of VIEs and are in excess of those obligations.
June 30,December 31,
20242023
Assets of consolidated VIEs, included in total assets above
Cash$360 $368 
Restricted cash24,646 32,782 
Total cash and restricted cash25,006 33,150 
Finance receivables at fair value364,117 417,138 
Settlement receivable1,980 1,904 
Debt issuance costs, net3,718 3,834 
Other assets26 7 
Total assets$394,847 $456,033 
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable$1 $5 
Accrued expenses3,201 3,614 
Senior debt, net262,100 283,213 
Total liabilities$265,302 $286,832 
See notes to consolidated financial statements.
3

OppFi Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenue:
Interest and loan related income$125,076 $121,583 $251,355 $241,525 
Other revenue1,228 903 2,292 1,335 
126,304 122,486 253,647 242,860 
Change in fair value of finance receivables(40,019)(44,043)(104,121)(107,161)
Provision for credit losses on finance receivables(4)(3,866)(31)(3,936)
Net revenue86,281 74,577 149,495 131,763 
Expenses:
Salaries and employee benefits16,227 16,125 32,225 30,646 
Interest expense and amortized debt issuance costs10,964 11,231 22,394 22,602 
Direct marketing costs12,808 13,400 22,320 23,928 
Professional fees4,798 5,194 10,279 8,917 
Technology costs2,963 3,280 6,021 6,446 
Depreciation and amortization2,490 3,317 5,215 6,708 
Payment processing fees1,676 2,383 3,762 4,773 
Exit costs(33) 2,885  
Occupancy1,042 1,106 1,984 2,214 
Lower of cost or market adjustment on transfer of finance receivables from held for sale to held for investment (3,130) (2,983)
General, administrative and other3,859 3,337 7,639 6,448 
Total expenses56,794 56,243 114,724 109,699 
Income from operations29,487 18,334 34,771 22,064 
Other (expense) income:
Change in fair value of warrant liabilities(976)351 4,195 504 
Other income79 79 159 272 
Income before income taxes28,590 18,764 39,125 22,840 
Income tax expense914 688 1,318 834 
Net income27,676 18,076 37,807 22,006 
Net income attributable to noncontrolling interest24,610 15,934 29,204 19,613 
Net income attributable to OppFi Inc.$3,066 $2,142 $8,603 $2,393 
Earnings per share attributable to OppFi Inc.:
Earnings per common share:
Basic$0.16 $0.14 $0.44 $0.16 
Diluted$0.16 $0.14 $0.36 $0.16 
Weighted average common shares outstanding:
Basic19,675,93415,632,12019,440,68015,336,366
Diluted19,675,93415,873,75386,148,47715,533,467
See notes to consolidated financial statements.

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OppFi Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share data)
Class A Common StockClass V Voting StockAdditional Paid-AccumulatedTreasuryNoncontrollingTotal Stockholders’
SharesAmountSharesAmountin CapitalDeficitStockInterestEquity
Balance, March 31, 202419,311,623 $2 91,606,194 $9 $78,669 $(58,044)$(2,460)$179,116 $197,292 
Exchange of Class V shares319,228 — (319,228)— 435 11 — (446) 
Issuance of common stock under equity incentive plan912,852 — — — — — — —  
Stock-based compensation— — — — 2,092 — — — 2,092 
Tax withholding on vesting of restricted stock units(173,169)— — — (552)— — — (552)
Purchase of treasury stock(769,715)— — — — — (2,533)— (2,533)
Common stock dividend ($0.12 per share)
— — — — — (2,374)— — (2,374)
Member distributions— — — — — — — (20,219)(20,219)
Tax receivable agreement— — — — (216)— — — (216)
Deferred tax asset— — — — 523 — — — 523 
Net income— — — — — 3,066 — 24,610 27,676 
Balance, June 30, 202419,600,819 $2 91,286,966 $9 $80,951 $(57,341)$(4,993)$183,061 $201,689 
Balance, March 31, 202315,221,283$2 94,566,687$9 $67,179 $(63,292)$(2,460)$162,685 $164,123 
Exchange of Class V shares528,847(528,847)1,414157(1,571)
Issuance of common stock under equity incentive plan530,267
Stock-based compensation845845
Member distributions(7,505)(7,505)
Tax receivable agreement1,1461,146
Deferred tax asset305305
Net income2,14215,93418,076
Balance, June 30, 202316,280,397 $2 94,037,840 $9 $70,889 $(60,993)$(2,460)$169,543 $176,990 
Balance, December 31, 202318,850,860 $2 91,898,193 $9 $76,480 $(63,591)$(2,460)$183,589 $194,029 
Exchange of Class V shares611,227 — (611,227)— 1,120 21 — (1,141) 
Issuance of common stock under equity incentive plan1,069,564 — — — — — — —  
Issuance of common stock under employee stock purchase plan66,072 — — — 119 — — — 119 
Stock-based compensation— — — — 3,096 — — — 3,096 
Tax withholding on vesting of restricted stock units(227,189)— — — (741)— — — (741)
Purchase of treasury stock(769,715)— — — — — (2,533)— (2,533)
Common stock dividend ($0.12 per share)
— — — — — (2,374)— — (2,374)
Member distributions— — — — — — — (28,591)(28,591)
Tax receivable agreement— — — — 130 — — — 130 
Deferred tax asset— — — — 747 — — — 747 
Net income— — — — — 8,603 — 29,204 37,807 
Balance, June 30, 202419,600,819 $2 91,286,966$9 $80,951 $(57,341)$(4,993)$183,061 $201,689 
Balance, December 31, 202214,760,566$2 94,937,285$9 $65,501 $(63,546)$(2,460)$159,644 $159,150 
Exchange of Class V shares899,445(899,445)2,044160(2,204) 
Issuance of common stock under equity incentive plan530,267 
Issuance of common stock under employee stock purchase plan90,119157157 
Stock-based compensation1,9841,984 
Member distributions(7,510)(7,510)
Tax receivable agreement959959 
Deferred tax asset244244 
Net income2,39319,61322,006 
Balance, June 30, 202316,280,397 $2 94,037,840 $9 $70,889 $(60,993)$(2,460)$169,543 $176,990 
See notes to consolidated financial statements.
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OppFi Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended June 30,
20242023
Cash flows from operating activities:
Net income $37,807 $22,006 
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of finance receivables104,121 107,161 
Provision for credit losses on finance receivables31 3,936 
Depreciation and amortization5,215 6,708 
Debt issuance cost amortization1,148 1,278 
Stock-based compensation expense3,096 1,984 
Loss on disposition of equipment3 1 
Lower of cost or market adjustment on transfer of finance receivables from held for sale to held for investment (2,983)
Deferred income taxes1,243 249 
Tax receivable agreement liability adjustment57  
Change in fair value of warrant liabilities(4,195)(504)
Gain on forgiveness of debt (113)
Changes in assets and liabilities:
Accrued interest and fees receivable1,400 1,715 
Settlement receivable(76)(511)
Operating lease, net(71)(32)
Other assets400 38 
Accounts payable(2,043)(2,279)
Accrued expenses3,596 (88)
Net cash provided by operating activities151,732 138,566 
Cash flows from investing activities:
Finance receivables originated and acquired(336,893)(346,697)
Finance receivables repayments264,270 248,131 
Purchases of equipment and capitalized technology(4,721)(4,633)
Net cash used in investing activities(77,344)(103,199)
Cash flows from financing activities:
Member distributions(28,591)(7,510)
Payments of secured borrowing payable (643)
Net payments of senior debt - revolving lines of credit(21,113)(13,086)
Payment of senior debt - term loan(10,000) 
Payments of note payable(1,449)(1,616)
Payments for debt issuance costs(812)(231)
Proceeds from employee stock purchase plan119 157 
Payments of tax withholding on vesting of restricted stock units(741) 
Purchase of treasury stock(2,533) 
Dividend paid on common stock(2,374) 
Net cash used in financing activities(67,494)(22,929)
Net increase in cash and restricted cash6,894 12,438 
Cash and restricted cash
Beginning73,943 49,670 
Ending$80,837 $62,108 
Supplemental disclosure of cash flow information:
Interest paid on borrowed funds$21,592 $20,966 
Income taxes paid$391 $19 
Non-cash investing and financing activities:
Adjustments to additional paid-in capital as a result of tax receivable agreement$130 $959 
Adjustments to additional paid-in capital as a result of adjustment to deferred tax asset$747 $244 
Operating lease right of use asset recognized $ $159 
Operating lease liability recognized$ $159 
Reclassification of finance receivables held for sale to held for investment$ $2,637 
See notes to consolidated financial statements.
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OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)

Note 1. Organization and Nature of Operations

OppFi Inc. (“OppFi”), formerly FG New America Acquisition Corp. (“FGNA”), collectively with its subsidiaries (“Company”), is a tech-enabled, mission-driven specialty finance platform that broadens the reach of community banks to extend credit access to everyday Americans. OppFi’s primary products are offered by its OppLoans platform. OppFi’s products also previously included its payroll deduction secured installment loan product, SalaryTap, and credit card product, OppFi Card.

On July 20, 2021 (“Closing Date”), the Company completed a business combination pursuant to the Business Combination Agreement (“Business Combination Agreement”), dated as of February 9, 2021, by and among Opportunity Financial, LLC (“OppFi-LLC”), a Delaware limited liability company, OppFi Shares, LLC (“OFS”), a Delaware limited liability company, and Todd Schwartz (“Members’ Representative”), in his capacity as the representative of the members of OppFi-LLC (“Members”) immediately prior to the closing (“Closing”). The transactions contemplated by the Business Combination Agreement are referred to herein as the “Business Combination.” At the Closing, FGNA changed its name to “OppFi Inc.” OppFi’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”), and redeemable warrants exercisable for Class A Common Stock (“Public Warrants”) are listed on the New York Stock Exchange (“NYSE”) under the symbols “OPFI” and “OPFI WS,” respectively.

Following the Closing, the Company is organized in an “Up-C” structure in which substantially all of the assets and the business of the Company are held by OppFi-LLC and its subsidiaries, and OppFi’s only direct assets consist of Class A common units of OppFi-LLC (“OppFi Units”). As of June 30, 2024 and December 31, 2023, OppFi owned approximately 17.7% and 17.0% of the OppFi Units, respectively, and controls OppFi-LLC as the sole manager of OppFi-LLC in accordance with the terms of the Third Amended and Restated Limited Liability Company Agreement of OppFi-LLC (“OppFi A&R LLCA”). All remaining OppFi Units (“Retained OppFi Units”) are beneficially owned by the Members. OFS holds a controlling voting interest in OppFi through its ownership of shares of Class V common stock, par value $0.0001 per share, of OppFi (“Class V Voting Stock”) in an amount equal to the number of Retained OppFi Units and therefore has the ability to control OppFi-LLC.

Note 2. Significant Accounting Policies

Basis of presentation and consolidation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements pursuant to such rules and regulations.

These unaudited consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and the related notes as of and for the year ended December 31, 2023 included in the 2023 Annual Report. In the opinion of the Company’s management, these unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the results and financial position for the periods presented. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for the full year ending December 31, 2024.

The accompanying unaudited consolidated financial statements include the accounts of OppFi and OppFi-LLC with its wholly-owned subsidiaries and variable interest entities (“VIEs”) in which the Company is the primary beneficiary. As the primary beneficiary of the VIEs, the Company has consolidated the financial statements of the VIEs. All intercompany transactions and balances have been eliminated in consolidation.

Segments: Segments are defined as components of an enterprise for which discrete financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. OppFi’s Chief Executive Officer is considered to be the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company’s operations constitute a single reportable segment.

Use of estimates: The preparation of the unaudited consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The judgements, assumptions, and estimates used by management are based on historical experience, management’s experience and qualitative factors. The areas subject to significant estimation techniques are the determination of fair value of installment finance receivables and warrants, valuation allowance of deferred tax assets, stock-based compensation expense and income tax
7

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
provision. For the aforementioned estimates, it is reasonably possible the recorded amounts or related disclosures could significantly change in the near future as new information is available.

Accounting policies: There have been no changes to the Company's significant accounting policies from those described in Part II, Item 8 - Financial Statements and Supplementary Data in the 2023 Annual Report.

Participation rights purchase obligations: OppFi-LLC has entered into bank partnership arrangements with certain banks insured by the FDIC. As part of these bank partnership arrangements, the banks have the ability to retain a percentage of the finance receivables they have originated, and OppFi-LLC’s participation rights are reduced by the percentage of the finance receivables retained by the banks. For the six months ended June 30, 2024 and 2023, finance receivables originated through the bank partnership arrangements totaled 100% and 96%, respectively. As of June 30, 2024 and December 31, 2023, the unpaid principal balance of finance receivables outstanding for purchase was $18.0 million and $14.5 million, respectively.

Capitalized technology: The Company capitalized software costs associated with application development totaling $2.4 million and $2.5 million for the three months ended June 30, 2024 and 2023, respectively, and $4.4 million and $4.5 million for the six months ended June 30, 2024 and 2023, respectively. Amortization expense, which is included in depreciation and amortization on the consolidated statements of operations, totaled $2.4 million and $3.1 million for the three months ended June 30, 2024 and 2023, respectively, and $4.9 million and $6.3 million for the six months ended June 30, 2024 and 2023, respectively.

Noncontrolling interests: Noncontrolling interests are held by the Members, who retained 82.3% and 83.0% of the economic ownership percentage of OppFi-LLC as of June 30, 2024 and December 31, 2023, respectively. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation, the Company classifies the noncontrolling interests as a component of stockholders’ equity in the consolidated balance sheets. Additionally, the Company has presented the net income attributable to the Company and the noncontrolling ownership interests separately in the consolidated statements of operations.

Costs associated with exit activities: Costs associated with exit activities include contract termination costs and other costs associated with exit activities. In January 2024, the Company completed the previously disclosed wind down and exited its OppFi Card product. In accordance with the provisions of FASB ASC 420, Exit or Disposal Cost Obligations, the Company recognized a liability for $2.9 million for costs related to contracts associated with its OppFi Card product that will continue to be incurred under these contracts for their remaining term without economic benefit to the Company. The Company recorded these costs in exit costs on the consolidated statements of operations. As of June 30, 2024, the Company’s remaining liability totaled $2.4 million, which is included in accrued expenses on the consolidated balance sheets.

Emerging growth company: The Company is an emerging growth company as defined under the Jumpstart Our Business Startups Act of 2012 (“Jobs Act”). The Company is permitted to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements apply to private companies. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Recently adopted accounting pronouncements: None.

Accounting pronouncements issued and not yet adopted: In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The purpose of ASU 2020-04 is to provide optional guidance for a period of time related to accounting for reference rate reform on financial reporting. It is intended to reduce the potential burden of reviewing contract modifications related to discontinued rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. The purpose of ASU 2021-01 is to expand guidance on contract modifications and hedge accounting. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The purpose of ASU 2022-06 is to defer the effective date of the provisions of ASU 2020-04 from December 31, 2022 to December 31, 2024. The Company did not utilize the optional expedients and exceptions provided by ASU 2020-04 during the quarter ended June 30, 2024. This guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The purpose of ASU 2023-07 is to provide guidance on new segment disclosures, including significant segment expenses. The guidance is effective for annual reporting periods beginning after December 15, 2023 and interim periods within the annual reporting period beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The purpose of ASU 2023-09 is to provide guidance on the enhanced income tax disclosure requirements. The guidance requires an
8

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
entity to disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact on the Company’s consolidated financial statements.

Note 3. Finance Receivables

Finance receivables at fair value: The components of installment finance receivables at fair value as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

June 30,December 31,
20242023
Unpaid principal balance of finance receivables - accrual$363,638 $384,587 
Unpaid principal balance of finance receivables - non-accrual23,448 31,876 
Unpaid principal balance of finance receivables$387,086 $416,463 
Finance receivables at fair value - accrual$413,059 $444,120 
Finance receivables at fair value - non-accrual757 1,135 
Finance receivables at fair value, excluding accrued interest and fees receivable413,816 445,255 
Accrued interest and fees receivable16,666 18,065 
Finance receivables at fair value$430,482 $463,320 
Difference between unpaid principal balance and fair value$26,730 $28,792 

The Company’s policy is to discontinue and reverse the accrual of interest income on installment finance receivables at the earlier of 60 days past due on a recency basis or 90 days past due on a contractual basis. As of June 30, 2024 and December 31, 2023, the aggregate unpaid principal balance of installment finance receivables 90 days or more past due on a contractual basis was $11.9 million and $15.2 million, respectively. As of June 30, 2024 and December 31, 2023, the fair value of installment finance receivables 90 days or more past due on a contractual basis was $0.4 million and $0.5 million, respectively.

9

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Changes in the fair value of installment finance receivables at fair value for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Balance at the beginning of the period$412,038 $417,489 $463,320 $457,296 
Originations184,351 190,753 336,869 346,246 
Repayments(127,579)(118,511)(264,187)(247,715)
Accrued interest and fees receivable1,691 1,268 (1,399)(1,710)
Charge-offs, net(1)
(41,072)(44,204)(102,059)(102,958)
Net change in fair value(1)
1,053 161 (2,062)(4,203)
Balance at the end of the period$430,482 $446,956 $430,482 $446,956 
(1) Included in “Change in fair value of finance receivables” in the consolidated statements of operations.

The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk was $6.2 million and $14.6 million for the three months ended June 30, 2024 and 2023, respectively, and was $8.4 million and $18.8 million for the six months ended June 30, 2024 and 2023, respectively. The credit risk component was driven by the credit loss assumption applied in the discounted cash flow model, particularly the default rate. This assumption was primarily developed based on historical data of the installment loan portfolio.

Finance receivables at amortized cost, net: The components of finance receivables at amortized cost as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

June 30,December 31,
20242023
Finance receivables$21 $454 
Accrued interest and fees receivable1 2 
Allowance for credit losses(3)(346)
Finance receivables at amortized cost, net$19 $110 

In January 2024, the Company completed the wind down and exited its OppFi Card revolving charge account product; as a result, the Company charged-off its remaining OppFi Card finance receivables. As of June 30, 2024, the Company’s finance receivables measured at amortized cost were comprised solely of the SalaryTap finance receivables.

Changes in the allowance for credit losses on finance receivables at amortized cost for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Beginning balance $7 $47 $346 $96 
Provisions for credit losses on finance receivables4 3,866 31 3,936 
Finance receivables charged off(8)(1,505)(374)(1,624)
Recoveries of charge offs 3  3 
Ending balance$3 $2,411 $3 $2,411 

10

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The following is an assessment of the credit quality of finance receivables measured at amortized cost and presents the recency and contractual delinquency by year of origination as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024
Origination year2024202320222021Total
Recency delinquency
Current$ $ $6 $12 $18 
Delinquency
30-59 days  1  1 
60-89 days   2 2 
90+ days     
Total delinquency  1 2 3 
Finance receivables$ $ $7 $14 $21 
Contractual delinquency
Current$ $ $4 $ $4 
Delinquency
30-59 days  1 2 3 
60-89 days   1 1 
90+ days  2 11 13 
Total delinquency  3 14 17 
Finance receivables$ $ $7 $14 $21 

December 31, 2023
Origination year202320222021Revolving charge accountsTotal
Recency delinquency
Current$ $35 $73 $244 $352 
Delinquency
30-59 days 3 1 16 20 
60-89 days 1 11 9 21 
90+ days   61 61 
Total delinquency 4 12 86 102 
Finance receivables$ $39 $85 $330 $454 
Contractual delinquency
Current$ $32 $46 $244 $322 
Delinquency
30-59 days 3 8 16 27 
60-89 days 2 9 9 20 
90+ days 2 22 61 85 
Total delinquency 7 39 86 132 
Finance receivables$ $39 $85 $330 $454 

In accordance with the Company’s income recognition policy, finance receivables at amortized cost in non-accrual status as of June 30, 2024 and December 31, 2023 were $13 thousand and $30 thousand, respectively.

11

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 4. Property, Equipment and Software, Net

Property, equipment and software consisted of the following (in thousands):

June 30,December 31,
20242023
Capitalized technology$59,824 $55,405 
Furniture, fixtures and equipment4,259 3,964 
Leasehold improvements979 979 
Total property, equipment and software65,062 60,348 
Less accumulated depreciation and amortization(55,267)(50,056)
Property, equipment and software, net$9,795 $10,292 

Depreciation and amortization expense was $2.5 million and $3.3 million for the three months ended June 30, 2024 and 2023, respectively, and was $5.2 million and $6.7 million for the six months ended June 30, 2024 and 2023, respectively.

Note 5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):
June 30,December 31,
20242023
Accrual for services rendered and goods purchased$9,827 $6,899 
Accrued payroll and benefits6,081 8,900 
Accrued interest2,448 2,794 
Accrued exit costs2,364  
Other4,882 3,413 
Total$25,602 $22,006 

Note 6. Leases

The components of total lease cost for three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Operating lease cost$585 $599 $1,182 $1,162 
Variable lease expense435 496 769 993 
Short-term lease cost15 3 18 43 
Sublease income(79)(79)(159)(159)
Total lease cost$956 $1,019 $1,810 $2,039 

Supplemental cash flow information related to the leases for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$621 $616 $1,254 $1,195 


12

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The weighted average remaining lease term and discount rate as of June 30, 2024 and December 31, 2023 were as follows:

June 30,December 31,
20242023
Weighted average remaining lease term (in years)6.36.7
Weighted average discount rate5 %5 %

Future minimum lease payments as of June 30, 2024 were as follows (in thousands):

Year Amount
Remaining of 2024$1,217 
20252,482 
20262,557 
20272,633 
20282,712 
20292,794 
Thereafter2,144 
Total lease payments16,539 
Less: imputed interest(2,368)
Operating lease liabilities$14,171 

Note 7. Borrowing

The following is a summary of the Company’s outstanding borrowings as of June 30, 2024 and December 31, 2023, including borrowing capacity as of June 30, 2024 (in thousands):

PurposeBorrowerBorrowing CapacityJune 30, 2024December 31, 2023
Interest Rate as of June 30, 2024
Maturity Date
Senior debt, net
Revolving line of creditOpportunity Funding SPE V, LLC (Tranche B)$125,000 $62,500 $103,400 SOFRplus
6.75%
June 2026
Revolving line of creditOpportunity Funding SPE V, LLC (Tranche C)125,000 62,500 37,500 SOFRplus
7.50%
July 2027
Revolving line of creditOpportunity Funding SPE IX, LLC150,000 85,871 93,871 SOFRplus
7.50%
December 2026
Revolving line of creditGray Rock SPV LLC75,000 51,229 48,442 SOFRplus
7.45%
October 2026
Total revolving lines of credit475,000 262,100 283,213 
Term loan, netOppFi-LLC50,000 39,674 49,454 SOFRplus0.11%plus10%March 2025
Total senior debt, net$525,000 $301,774 $332,667 
Note payable
Financed insurance premiumOppFi-LLC$ $ $1,449 9.70%June 2024

Senior debt, net:

Revolving line of credit - Opportunity Funding SPE IX, LLC

On March 19, 2024, the Company entered into an amendment (the “First Amendment”) to its revolving credit agreement with UMB Bank, N.A. The First Amendment, among other things, removed a collateral performance trigger that the Company had previously been out of compliance with.

13

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Revolving line of credit - Gray Rock SPV LLC

On April 12, 2024, Gray Rock SPV LLC entered into an amendment (the “Fourth Amendment”) to its revolving line of credit agreement. The Fourth Amendment, among other things, extended the maturity date from April 15, 2025 to October 16, 2026 and increased the applicable margin rate from 7.25% to 7.45%.

Term loan, net

On May 30, 2024, the Company entered into an amendment (the “Eleventh Amendment”) to its senior secured multi-draw term loan agreement. The Eleventh Amendment, among other things, replaced the use of the synthetic LIBOR rates with Term Secured Overnight Financing Rate as the benchmark interest rate and amended the optional prepayments provision to allow the Company to voluntarily prepay in part, in minimum amounts of $10.0 million and increments of $10.0 million thereof.

Certain of the Company’s foregoing credit facilities that consist of term loans and revolving loan facilities are subject to provisions that provide for a cross-default in the event certain covenants under the relevant agreements are breached.

Total interest expense related to the Company’s senior debt, which is included in interest expense and amortized debt issuance costs in the consolidated statements of operations, was $10.4 million and $10.7 million for the three months ended June 30, 2024 and 2023, respectively, and was $21.2 million and $21.3 million for the six months ended June 30, 2024 and 2023, respectively. Additionally, the Company has capitalized $14.8 million in debt issuance costs in connection with the Company’s senior debt as of June 30, 2024. Amortized debt issuance costs associated with the Company’s senior debt, which is included in interest expense and amortized debt issuance costs in the consolidated statements of operations, were $0.6 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively, and were $1.2 million and $1.3 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024 and December 31, 2023, unamortized debt issuance costs associated with the Company’s senior debt totaled $4.0 million and $4.3 million, respectively, of which $3.7 million and $3.8 million related to the revolving lines of credit, respectively, and $0.3 million and $0.5 million related to the term loan, respectively.

Note payable: As of June 30, 2024, the borrowing under this note payable was paid in full. Total interest expense related to notes payable, which is included in interest expense and amortized debt issuance costs in the consolidated statements of operations, was $26 thousand and $26 thousand for the three months ended June 30, 2024 and 2023, respectively, and was $52 thousand and $51 thousand for the six months ended June 30, 2024 and 2023, respectively.

Secured borrowing payable: On February 16, 2023, the borrowings under the Company’s previous secured borrowing payable, with Opportunity Funding SPE II, LLC as borrower, were paid in full, of which borrowings totaling $0.1 million were forgiven. Subsequent to repayment, OppFi-LLC terminated the preferred return agreement. No interest expense was recognized related to secured borrowings for the three and six months ended June 30, 2024. No interest expense was recognized related to secured borrowings for the three months ended June 30, 2023. Interest expense related to this facility was $10 thousand for the six months ended June 30, 2023. For the three and six months ended June 30, 2024 and 2023, there were no amortized debt issuance costs related to the secured borrowing payable.

As of June 30, 2024, required payments for all borrowings, excluding revolving lines of credit, for each of the next five years were as follows (in thousands):

YearAmount
Remainder of 2024$ 
202540,000 
2026 
2027 
2028 
2029 
Total$40,000 

14

OppFi Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 8. Warrant Liabilities

As of June 30, 2024 and December 31, 2023, there were 11,887,500 Public Warrants and 3,451,937 Private Placement Warrants outstanding. As of June 30, 2024 and December 31, 2023, the Company recorded warrant liabilities of $2.7 million and $6.9 million, respectively, in the consolidated balance sheets. The change in fair value of the Public Warrants and Private Placement Warrants was increased by $0.6 million and $0.4 million, respectively, for the three months ended June 30, 2024 and was decreased by $3.1 million and $1.1 million, respectively, for six months ended June 30, 2024. The change in fair value of the Public Warrants and Private Placement Warrants was decreased by $0.3 million and $0.1 million, respectively, for the three months ended June 30, 2023 and was decreased by $0.4 million and $0.1 million, respectively, for six months ended June 30, 2023.

Note 9. Stockholders’ Equity

Share repurchase: On April 9, 2024, the Company announced that its Board of Directors (the “Board”) had authorized a program to repurchase (the “Repurchase Program”) up to $20.0 million in the aggregate of shares of the Company’s Class A Common Stock. Repurchases under the Repurchase Program may be made from time to time, on the open market, in privately negotiated transactions, or by other methods, at the discretion of the management of the Company and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Exchange Act and other applicable legal requirements, including restrictions in the Company’s existing credit facilities. Repurchases may be made pursuant to any trading plan that may be adopted in accordance with SEC Rule 10b5-1, which would permit Class A Common Stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing and amount of the repurchases will depend on market conditions and other requirements. The Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares and the Repurchase Program may be extended, modified, suspended, or discontinued at any time. For each share of Class A Common Stock that the Company repurchases under the Repurchase Program, OppFi-LLC, the Company’s direct subsidiary, will redeem one Class A common unit of OppFi-LLC held by the Company, decreasing the percentage ownership of OppFi-LLC by the Company and relatively increasing the ownership by the other members. The Repurchase Program will expire in April 2027.

During the three months ended June 30, 2024, the Company repurchased 769,715 shares of Class A Common Stock, which were held as treasury stock as of June 30, 2024, for an agg