{"url_path":"/sec/pgyww/10-k/2026/item-16","section_key":"item-16","section_title":"Item 16 Form 10-K Summary","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-06-01","source_url":"https://www.sec.gov/Archives/edgar/data/1883085/0001883085-26-000036-index.html","accession_number":"0001883085-26-000036","cik":"0001883085","ticker":"PGY","issuer_name":"Pagaya Technologies Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1883085/0001883085-26-000036-index.html","primary_entity_key":"0001883085","primary_entity_name":"Pagaya Technologies Ltd."},"word_count":25533,"has_tables":true,"body_markdown":"Item 16. Form 10-K Summary\n\nNone.\n\n99\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nSIGNATURES\n\nThe registrant hereby certifies that it meets all of the requirements for filing on Form 10-K and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.\n\nPAGAYA TECHNOLOGIES LTD.\n\nDate: June 1, 2026\nBy:/s/ Gal Krubiner\n\nName:Gal Krubiner\n\nTitle:Chief Executive Officer\n\nDate: June 1, 2026\nBy:\n/s/ Evangelos Perros\n\nName:\nEvangelos Perros\n\nTitle:Chief Financial Officer\n\n100\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nCONSOLIDATED FINANCIAL STATEMENTS\n\nAS OF DECEMBER 31, 2025\n\nINDEX\n\nINDEX TO FINANCIAL STATEMENTS\n\nPage\n\n[Report of Independent Registered Public Accounting Firm (PCAOB ID:](#iab92c5b483164dd6bfa8efca5afa979f_160)1281[)](#iab92c5b483164dd6bfa8efca5afa979f_160)\n\nF-[2](#iab92c5b483164dd6bfa8efca5afa979f_160)\n\n[Consolidated Balance Sheets](#iab92c5b483164dd6bfa8efca5afa979f_163)\n\nF-[6](#iab92c5b483164dd6bfa8efca5afa979f_163)\n\n[Consolidated Statements of Operations](#iab92c5b483164dd6bfa8efca5afa979f_178)\n\nF-[7](#iab92c5b483164dd6bfa8efca5afa979f_178)\n\n[Consolidated Statements of Comprehensive Income (Loss)](#iab92c5b483164dd6bfa8efca5afa979f_184)\n\nF-[8](#iab92c5b483164dd6bfa8efca5afa979f_184)\n\n[Consolidated Statements of Changes in Redeemable Convertible Preferred Shares](#iab92c5b483164dd6bfa8efca5afa979f_193)\n\nF-[9](#iab92c5b483164dd6bfa8efca5afa979f_193)\n\n[Consolidated Statements of Cash Flows](#iab92c5b483164dd6bfa8efca5afa979f_202)\n\nF-[11](#iab92c5b483164dd6bfa8efca5afa979f_202)\n\n[Notes to Consolidated Financial Statements](#iab92c5b483164dd6bfa8efca5afa979f_208)\n\nF-[13](#iab92c5b483164dd6bfa8efca5afa979f_208)\n\nF-1\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n        \n\n \n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\n\nTel: +972-3-6232525\n\nFax: +972-3-5622555\n\ney.com\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and the Board of Directors of Pagaya Technologies Ltd.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Pagaya Technologies Ltd. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in redeemable convertible preferred shares and shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 2, 2026, expressed an unqualified opinion thereon.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as\n\nF-2\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\na whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nValuation of Investments in Securities – Level 3 Investments\n\nDescription of the Matter\n\nAt December 31, 2025, the Company’s Level 3 investments in certificates and subordinated notes at fair value totaled $872,976 thousand. As described in Notes 2 and 10 to the consolidated financial statements, investments in securities categorized as Level 3 investments include subordinated notes and certificates which are measured at fair value on a recurring basis (the \"investments\"). The estimate of fair value of these investments requires significant judgment. The Company uses a discounted cash flow model to estimate the fair value of these investments based on the present value of estimated future cash flows. The cash flow model uses unobservable inputs and reflects management's best estimates of the assumptions a market participant would use to calculate fair value of the particular investment. Primary inputs that require significant judgment include discount rates, net credit loss expectations, expected prepayment rates and consideration of any optional redemption features in the Company's investments.\n\nWe identified the valuation of Level 3 investments as a critical audit matter due to the significant judgments involved in estimating fair value, including the selection of valuation methodologies and the development of unobservable inputs. This required a high degree of auditor judgment and extensive audit effort, including the involvement of fair value specialists.\n\nHow We Addressed the Matter in Our Audit\n\nWe obtained an understanding, tested the design and operating effectiveness of controls over the Company’s Level 3 investments valuation process. This included controls over management’s assessment of the valuation methodologies and the unobservable inputs and assumptions used in determining fair value.\n\nOur audit procedures related to the estimation of the fair value of Level 3 investments included evaluating the appropriateness of the valuation methodologies used for Level 3 investments, testing the accuracy and completeness of the data used in estimating fair value, and, for a sample of the Company’s Level 3 investments, independently developing fair value estimates with the involvement of our valuation specialists and comparing them to the Company’s estimates. In developing our independent fair value estimates, we considered current economic conditions, historical results and trends of the significant assumptions related to the underlying assets of the investments.\n\n/s/KOST FORER GABBAY & KASIERER\n\nA Member of EY Global\n\nWe have served as the Company's auditor since 2018.\n\nTel-Aviv, Israel\n\nMarch 2, 2026\n\nexcept for the presentation of long-term assets as described in Note 19B. and subsequent events as described in Note 20, as to which the date is June 1, 2026\n\nF-3\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n \n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\n\nTel: +972-3-6232525\n\nFax: +972-3-5622555\n\ney.com\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and the Board of Directors of Pagaya Technologies Ltd.\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited Pagaya Technologies Ltd.'s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Pagaya Technologies Ltd. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in redeemable convertible preferred shares and shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated March 2, 2026 expressed an unqualified opinion thereon.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.\n\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nF-4\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/KOST FORER GABBAY & KASIERER\n\nA Member of EY Global\n\nTel-Aviv, Israel\n\nMarch 2, 2026\n\nF-5\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nCONSOLIDATED BALANCE SHEETS\n\nAS OF DECEMBER 31, 2025 AND 2024 (In thousands, except share amounts)\n\nDecember 31,December 31,\n\n20252024\n\nAssets\n\nCash and cash equivalents$235,329 $187,921 \n\nRestricted cash and cash equivalents53,020 38,597 \n\nFees receivables (1)(2)153,250 127,114 \n\nInvestments in loans and securities (1)945,269 778,409 \n\nEquity method and other investments13,518 21,933 \n\nRight-of-use assets30,578 36,876 \n\nProperty, equipment and software, net30,221 37,974 \n\nGoodwill22,903 23,062 \n\nIntangible assets, net7,661 12,821 \n\nOther assets (2)54,165 26,365 \n\nTotal Assets$1,545,914 $1,291,072 \n\nLiabilities and Shareholders’ Equity\n\nAccounts payable$3,931 $6,992 \n\nAccrued expenses and other liabilities74,635 45,362 \n\nOperating lease liabilities34,212 37,064 \n\nIncome taxes payable and other tax liabilities18,687 41,217 \n\nWarrant liability4,723 893 \n\nSecured borrowing193,892 176,089 \n\nExchangeable notes148,782 146,342 \n\nLong-term debt481,598 321,317 \n\nTotal Liabilities960,460 775,276 \n\nRedeemable convertible preferred shares, no par value, 6,666,666 shares authorized, 2,027,147 and 5,000,000 shares issued and outstanding as of December 31, 2025 and 2024, respectively; aggregate liquidation preference of $60,814 and $150,000 as of December 31, 2025 and 2024, respectively.\n30,103 74,250 \n\nShareholders’ equity:\n\nClass A ordinary shares, no par value, 666,666,666 shares authorized, 70,747,357 and 61,227,672 shares issued and outstanding as of December 31, 2025 and 2024, respectively.\n— — \n\nClass B ordinary shares, no par value, 166,666,666 shares authorized, 11,288,577 and 12,652,310 shares issued and outstanding as of December 31, 2025 and 2024, respectively.\n— — \n\nAdditional paid-in capital1,390,990 1,282,022 \n\nAccumulated other comprehensive loss(48,319)(11,488)\n\nAccumulated deficit(862,654)(944,043)\n\nTotal Pagaya Technologies Ltd. shareholders’ equity480,017 326,491 \n\nNoncontrolling interests75,334 115,055 \n\nTotal shareholders’ equity555,351 441,546 \n\nTotal Liabilities, Redeemable Convertible Preferred Shares, and Shareholders’ Equity$1,545,914 $1,291,072 \n\n(1) Accrued interest receivable of $14.3 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to “Investment in loans and securities” to conform to the current period’s presentation.\n\n(2) Includes related party fee receivables of $106.9 million and $99.4 million, and related party other assets of $42.6 million and $15.2 million, as of December 31, 2025 and 2024, respectively. See Note 17 for additional information regarding transactions with related parties.\n\nF-6\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\nFOR YEAR ENDED DECEMBER 31, 2025, 2024 AND 2023\n\n(In thousands, except share and per share data)\n\n202520242023\n\nRevenue\n\nRevenue from fees (1)$1,261,341 $1,004,550 $772,814 \n\nOther Income\n\nInterest income48,434 32,291 38,748 \n\nInvestment (loss) income(8,415)(4,593)489 \n\nTotal Revenue and Other Income1,301,360 1,032,248 812,051 \n\nProduction costs749,169 597,652 508,944 \n\nTechnology, data and product development75,213 76,571 74,383 \n\nSales and marketing53,591 50,404 49,773 \n\nGeneral and administrative159,560 240,781 203,351 \n\nTotal Costs and Operating Expenses1,037,533 965,408 836,451 \n\nOperating Income (Loss)263,827 66,840 (24,400)\n\nGains and (losses) on investments in loans and securities (2)(107,030)(404,150)(131,315)\n\nOther expenses, net (2)(80,417)(83,612)(25,453)\n\nGains and (losses) from extinguishment of debt (2)(24,755)(200)— \n\nIncome (Loss) Before Income Taxes51,625 (421,122)(181,168)\n\nIncome tax (benefit) expense(19,745)24,576 15,571 \n\nNet Income (Loss) Including Noncontrolling Interests71,370 (445,698)(196,739)\n\nLess: Net income (loss) attributable to noncontrolling interests(10,019)(44,292)(68,301)\n\nNet Income (Loss) Attributable to Pagaya Technologies Ltd.$81,389 $(401,406)$(128,438)\n\nEarnings (loss) per share attributable to Pagaya Technologies Ltd. ordinary shareholders:\n\nBasic$0.99 $(5.66)$(2.14)\n\nDiluted$0.93 $(5.66)$(2.14)\n\nWeighted average shares outstanding:\n\nBasic78,336,095 70,879,807 60,038,893 \n\nDiluted83,097,227 70,879,807 60,038,893 \n\n(1) Includes related party revenues of $652.7 million, $679.1 million and $622.2 million for years ended December 31, 2025, 2024 and 2023, respectively. See Note 17 for additional information regarding transactions with related parties.\n\n(2) Prior period amounts have been reclassified to conform to the current period’s presentation.\n\nThe accompanying notes are an integral part of these consolidated financial statements\n\nF-7\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)\n\nFOR YEAR ENDED DECEMBER 31, 2025, 2024 AND 2023\n\n(In thousands)\n\n202520242023\n\nNet Income (Loss) Including Noncontrolling Interests$71,370 $(445,698)$(196,739)\n\nOther Comprehensive Income (Loss):\n\nUnrealized non-credit related adjustments to investment securities(40,771)(12,753)7,999 \n\nComprehensive Income (Loss) Including Noncontrolling Interests$30,599 $(458,451)$(188,740)\n\nLess: Comprehensive loss attributable to noncontrolling interests(13,959)(45,113)(61,459)\n\nComprehensive Income (Loss) Attributable to Pagaya Technologies Ltd.$44,558 $(413,338)$(127,281)\n\nF-8\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nCONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY\n\nFOR YEAR ENDED DECEMBER 31, 2025, 2024 AND 2023\n\n(In thousands, except share amounts)\n\nRedeemable Convertible Preferred SharesOrdinary Shares\n(Class A and Class B)Additional Paid-In CapitalAccumulated Other Comprehensive (Loss) IncomeAccumulated DeficitTotal Pagaya Technologies Ltd. Shareholders’ EquityNon-Controlling InterestsTotal Shareholders’ Equity\n\nShares\nAmount\nShares\nAmount\n\nBalance – December 31, 2022— $— 56,942,632 $— $968,432 $(713)$(414,199)$553,520 $211,903 $765,423 \n\nIssuance of ordinary shares upon exercise of warrants— — 99,711 — — — — — — — \n\nIssuance of ordinary shares upon exercise of share options— — 925,240 — 4,334 — — 4,334 — 4,334 \n\nIssuance of ordinary shares upon vesting of RSUs— — 962,679 — — — — — — — \n\nIssuance of preferred shares, net of issuance costs of $750\n5,000,000 74,250 — — — — — — — — \n\nShare-based compensation— — — — 78,721 — — 78,721 — 78,721 \n\nReversal of issuance costs associated with the Business Combination and PIPE Investment— — — — 4,401 — — 4,401 — 4,401 \n\nIssuance of ordinary shares in connection with the acquisition of Darwin Homes, Inc.— — 1,525,827 — 18,134 — — 18,134 — 18,134 \n\nIssuance of ordinary shares from the Equity Financing Purchase Agreement— — 1,587,157 — 27,892 — — 27,892 — 27,892 \n\nReclassification of investments— — — — — (1,881)— (1,881)18,341 16,460 \n\nContributions of interests in consolidated VIEs— — — — — — — — 19,955 19,955 \n\nReturn of capital to interests in consolidated VIEs— — — — — — — — (64,371)(64,371)\n\nOther comprehensive income (loss)— — — — — 3,038 — 3,038 (11,499)(8,461)\n\nNet loss— — — — — — (128,438)(128,438)(68,301)(196,739)\n\nBalance – December 31, 20235,000,000 $74,250 62,043,246 $— $1,101,914 $444 $(542,637)$559,721 $106,028 $665,749 \n\nIssuance of ordinary shares upon exercise of share options— — 586,847 — 2,640 — — 2,640 — 2,640 \n\nIssuance of ordinary shares upon vesting of RSUs— — 2,371,735 — — — — — — — \n\nIssuance of ordinary shares upon employee stock purchase plan— — 59,145 — 665 — — 665 — 665 \n\nShare-based compensation— — — — 68,646 — — 68,646 — 68,646 \n\nIssuance of ordinary shares, net of issuance cost of $5,312\n— — 7,500,000 — 89,956 — — 89,956 — 89,956 \n\nF-9\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nIssuance of ordinary shares from the Equity Financing Purchase Agreement— — 814,569 — 12,232 — — 12,232 — 12,232 \n\nAcquisition of Theorem Technology, Inc.— — 504,440 5,969 — — 5,969 — 5,969 \n\nContributions of interests in consolidated VIEs— — — — — — — — 63,960 63,960 \n\nReturn of capital to interests in consolidated VIEs— — — — — — — — (9,820)(9,820)\n\nOther comprehensive loss— — — — — (11,932)— (11,932)(821)(12,753)\n\nNet loss— — — — — — (401,406)(401,406)(44,292)(445,698)\n\nBalance – December 31, 20245,000,000 $74,250 73,879,982 $— $1,282,022 $(11,488)$(944,043)$326,491 $115,055 $441,546 \n\nIssuance of ordinary shares upon exercise of warrants— — 1,309,157 — — — — — — — \n\nIssuance of ordinary shares upon exercise of share options— — 769,167 — 5,759 — — 5,759 — 5,759 \n\nIssuance of ordinary shares upon vesting of RSUs— — 3,005,532 — — — — — — — \n\nIssuance of ordinary shares upon employee stock purchase plan— — 99,243 — 1,164 — — 1,164 — 1,164 \n\nIssuance of ordinary shares upon conversion of preferred shares(2,972,853)(44,147)2,972,853 44,147 — — 44,147 — 44,147 \n\nShare-based compensation— — — — 57,898 — — 57,898 — 57,898 \n\nReturn of capital to interests in consolidated VIEs— — — — — — — — (25,762)(25,762)\n\nOther comprehensive loss— — — — — (36,831)— (36,831)(3,940)(40,771)\n\nNet income— — — — — — 81,389 81,389 (10,019)71,370 \n\nBalance – December 31, 20252,027,147 $30,103 82,035,934 $— $1,390,990 $(48,319)$(862,654)$480,017 $75,334 $555,351 \n\nThe accompanying notes are an integral part of these consolidated financial statements\n\nF-10\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\nFOR YEAR ENDED DECEMBER 31, 2025, 2024 AND 2023\n\n(In thousands)\n\n202520242023\n\nCash flows from operating activities\n\nNet income (loss) including noncontrolling interests$71,370 $(445,698)$(196,739)\n\nAdjustments to reconcile net income (loss) to net cash used in operating activities:\n\nEquity method and other investments loss (income)8,415 4,593 (488)\n\nDepreciation and amortization30,077 28,753 19,127 \n\nShare-based compensation54,118 61,497 71,055 \n\nFair value adjustment to warrant liability3,830 (2,349)1,842 \n\n(Gains) and losses on investments in loans and securities (1)108,907 408,098 134,510 \n\nWrite-off of capitalized software and other assets4,919 3,245 2,475 \n\nAmortization of deferred costs11,253 3,739 — \n\nLosses (gains) from extinguishment of debt17,883 — — \n\nLosses (gains) on foreign exchange1,115 4,189 (1,320)\n\nOther non-cash items— 367 — \n\nChange in operating assets and liabilities:\n\nFees receivables (1)(26,283)(23,041)(25,464)\n\nAccrued interest on investments (1)(42,824)(21,738)(26,512)\n\nRight-of-use assets6,298 1,115 3,854 \n\nOther assets(13,350)(9,239)12,912 \n\nAccounts payable3,420 5,678 (448)\n\nAccrued expenses and other liabilities28,518 6,861 (17,770)\n\nOperating lease liability(6,517)522 (3,712)\n\nIncome taxes(22,529)21,159 5,019 \n\nNet cash provided by (used in) operating activities238,620 47,751 (21,659)\n\nCash flows from investing activities\n\nProceeds from the maturity and prepayment of investments in loans and securities (1)273,039 132,423 203,297 \n\nProceeds from the sales of investments in loans and securities79,176 114,117 — \n\nProceeds from equity method and other investments— 31 — \n\nCash and restricted cash acquired from Darwin Homes, Inc. — — 1,608 \n\nPurchases of investments in loans and securities(632,182)(693,941)(566,173)\n\nPurchases of property, equipment and software(13,902)(17,737)(20,189)\n\nPurchases of intangible assets— (5,500)— \n\nPurchases of equity method and other investments— (175)— \n\nPurchases of other assets (2)(16,000)— — \n\nAcquisition of Theorem Technology, Inc., net of cash acquired159 (9,094)— \n\nNet cash used in investing activities(309,710)(479,876)(381,457)\n\nCash flows from financing activities\n\nProceeds from sale of ordinary shares, net of issuance costs— 89,956 — \n\nProceeds from long-term debt500,000 341,845 — \n\nProceeds from exchangeable notes— 152,000 — \n\nProceeds from issuance of redeemable convertible preferred shares, net— — 74,250 \n\nProceeds from secured borrowing355,968 265,656 338,472 \n\nProceeds received from noncontrolling interests— 63,960 19,955 \n\nProceeds from revolving credit facility— 59,000 130,000 \n\nProceeds from exercise of stock options, warrants and contributions to ESPP6,923 3,305 4,334 \n\nProceeds from issuance of ordinary shares from the Equity Financing Purchase Agreement— 11,865 27,892 \n\nDistributions made to noncontrolling interests(25,762)(9,820)(43,767)\n\nPayments made to revolving credit facility— (149,000)(55,000)\n\nPayments made to secured borrowing(341,350)(361,428)(206,390)\n\nPayments made to long-term debt(353,690)(14,000)— \n\nF-11\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nDebt issuance costs(12,488)(16,651)— \n\nSettlement of share-based compensation in satisfaction of tax withholding requirements— — (650)\n\nNet cash provided by financing activities129,601 436,688 289,096 \n\nEffect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents 3,320 (586)(515)\n\nNet increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents 61,831 3,977 (114,535)\n\nCash and cash equivalents, and restricted cash and cash equivalents, beginning of period226,518 222,541 337,076 \n\nCash and cash equivalents, and restricted cash and cash equivalents, end of period$288,349 $226,518 $222,541 \n\nReconciliation of cash and cash equivalents, and restricted cash and cash equivalents within the consolidated balance sheet to the amounts shown in the statements of cash flow above:\n\nCash and cash equivalents$235,329 $187,921 $186,478 \n\nRestricted cash and cash equivalents53,020 38,597 36,063 \n\nTotal cash and cash equivalents, and restricted cash and cash equivalents $288,349 $226,518 $222,541 \n\nSupplemental disclosures of cash flow information\n\nCash paid for income taxes (3)$2,495 $4,908 $9,174 \n\nCash paid for interest expense91,794 80,321 17,779 \n\nCash paid for operating leases13,119 13,056 14,103 \n\nSupplemental disclosure of non-cash activities\n\nInitial recognition (derecognition) of right-of-use assets and operating lease liability$(113)$(17,737)$(1,839)\n\nIn-kind distributions— — 20,603 \n\nIssuance of ordinary shares in connection with acquisitions— 5,969 18,134 \n\nStock-based compensation included in capitalized internal-use software3,780 7,149 8,315 \n\nContingent consideration liability in connection with the acquisition of Theorem183 6,090 — \n\n(1) Accrued interest receivable previously reported within “Fee receivables” in the prior periods has been reclassified to “Investment in loans and securities” to conform to the current period’s presentation.\n\n(2) Represents an investment in an affiliate by settling its third-party debt using restricted cash collateralized on the Company's balance sheets.\n\n(3) See Note 16 for additional information regarding the income taxes paid by jurisdiction.\n\nThe accompanying notes are an integral part of these consolidated financial statements\n\nF-12\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nPAGAYA TECHNOLOGIES LTD.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nNOTE 1 - BUSINESS DESCRIPTION\n\nPagaya Technologies Ltd. and its consolidated subsidiaries (together “we” “our” “Pagaya” or the “Company”) is a technology company that deploys sophisticated data science and proprietary AI technology to drive better results for financial services and other service providers, their customers, and asset investors. Services providers integrated with Pagaya’s network, which are referred to as “Partners,” range from high-growth financial technology companies to incumbent banks and financial institutions, auto finance providers and residential real estate service providers. Partners have access to Pagaya’s network in order to assist with extending financial products to their customers, in turn helping those customers fulfill their financial needs and dreams. These assets originated by Partners with the assistance of Pagaya’s AI technology are eligible to be acquired by (i) funds managed or advised by Pagaya or one of its affiliates, (ii) securitization vehicles sponsored or administered by Pagaya or one of its affiliates, (iii) special purpose vehicles established by third-party investors to facilitate the purchase of assets under forward flow agreements and (iv) other similar vehicles (“Financing Vehicles”).\n\nPagaya Technologies Ltd. was founded in 2016 and is organized under the laws of the State of Israel. Pagaya has its primary offices in Israel and the United States.\n\nNOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\nBasis of Presentation and Principles of Consolidation\n\nThe accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”) if any.\n\nAll intercompany accounts and transactions have been eliminated.\n\nVariable Interest Entities\n\nA VIE is a legal entity that has a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. The Company’s variable interest arises from contractual ownership or other monetary interests in the entity, which may change with fluctuations in the fair value of the VIE’s net assets. A VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and an obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates a VIE when it is deemed to be the primary beneficiary. The Company assesses whether or not it is the primary beneficiary of a VIE at initial involvement and on an ongoing basis. Refer to Note 6 for additional information.\n\nUse of Estimates\n\nThe preparation of consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.\n\nSignificant estimates and assumptions made in the accompanying consolidated financial statements, which Management believes are critical in understanding and evaluating the Company’s reported financial results include, but are not limited to the valuation of certain financial instruments and allowance for credit losses. The Company bases its estimates or assumptions on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods.\n\nSegment Reporting\n\nThe Company manages its operations and allocates resources as a single operating segment. Further, the Company manages, monitors and reports its financials as a single reporting segment. The Company’s chief operating decision-maker is its Chief Executive Officer who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates one reportable segment.\n\nF-13\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nForeign Currency\n\nThe functional and reporting currency of the Company is the U.S. Dollar as it is the currency of the primary economic environment in which Pagaya’s operations are conducted. The monetary assets and liabilities denominated in currencies other than the U.S. Dollar are accordingly remeasured into U.S. Dollars at exchange rates in effect at the end of each period in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”). All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the consolidated statements of operations within other expenses, net, as appropriate. During the year ended December 31, 2025, 2024, and 2023 the Company has recorded $1.1 million losses, $4.2 million losses and $1.3 million gains, respectively, on the consolidated statements of operations.\n\nCash and Cash Equivalents, and Restricted Cash and Cash Equivalents\n\nCash and cash equivalents consist of checking, money market and savings accounts held at financial institutions or highly liquid investments purchased with an original maturity of three months or less. Cash equivalents are stated at carrying value, which approximates fair value.\n\nRestricted cash and cash equivalents consist primarily of: (i) deposits restricted by standby letters of credit for lease facilities; and (ii) funds held in accounts as collateral for certain guarantees that the Company provide within the ordinary course of business, including certain securitization transactions. The Company has no ability to draw on such funds as long as the funds remain restricted under the applicable agreements. See Note 15 for additional information.\n\nConcentrations of Credit Risk and Significant Customers\n\nFinancial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents, restricted cash and cash equivalents and fees receivable. Cash and cash equivalents are principally maintained with major financial institutions, which management assesses to be of high credit quality. The Company has not experienced any losses on these deposits.\n\nThe Company’s fees receivable balances are predominantly with agreements with customers, and these are subject to normal credit risks which management believes to be not significant.\n\nSignificant customers are those which represent 10% or more of the Company’s total revenue for each respective period presented. For the year ended December 31, 2025, no single customer accounted for 10% or more of the Company’s total revenue. During the year ended December 31, 2024 and December 31, 2023, one customer individually represented greater than 10% of total revenue and collectively totaled approximately 13% and 11%, respectively.\n\nFair Value Measurement\n\nASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, when available. If such quoted market prices are not available, fair value is based upon models that use, as inputs, observable market-based parameters to the greatest extent possible.\n\nAdditionally, ASC 820 established a fair value hierarchy to categorize the use of inputs into the following three levels:\n\nLevel 1—Quoted prices, unadjusted, for identical assets or liabilities in active markets.\n\nLevel 2—Pricing inputs are other than quoted prices in active markets and include 1) quoted prices for similar assets or liabilities in active markets, 2) quoted prices for identical or similar assets or liabilities in markets that are not active, and 3) or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means.\n\nLevel 3—Pricing inputs are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.\n\nAssets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.\n\nF-14\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nManagement believes that the carrying amount of cash and cash equivalents, and restricted cash and cash equivalents, fees receivable, accounts payables, and accrued expenses and other liabilities approximate their fair value due to the short-term maturities of these instruments.\n\nInvestments in Loans and Securities\n\nA wholly-owned subsidiary (“Sponsor”) previously sponsors securitization transactions (the “Securitizations”), each through a separate trust structure with an asset portfolio consisting of unsecured consumer loans, auto loans, point-of-sale loans or real estate assets. Each Securitization’s asset portfolio was structured by the Sponsor, which is also the administrator of each Securitization. The Sponsor, directly and indirectly through affiliates, retained at least 5% of the economic risk in the Securitizations to comply with risk retention required by Title 17 U.S. Code of Federal Regulations Part 246, Credit Risk Retention, promulgated by Securities and Exchange Commission.\n\nInvestments in Loans and Securities Available for Sale\n\nInvestments in loans and securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability and the yield of alternative investments will be classified as available for sale (“AFS”). These investments are carried at fair value estimated using the following when available: public market prices, dealer quotes, and prices obtained from independent pricing services that may be derivable from observable and unobservable market inputs. The Company incorporates these market-based inputs into an internal discounted cash flow model to determine the fair value estimate for these investments.\n\nGenerally these investments are held at fair value with changes in fair value recorded in unrealized non-credit related adjustments to investment securities within other comprehensive income (loss), excluding the portion relating to any credit loss. As of the end of each reporting period, management reviews each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not management intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any decline in fair value which management identifies as a credit loss will be recognized as an allowance for credit losses through gains and (losses) on investments in loans and securities. To the extent management intends to sell or may be required to sell a security in an unrealized loss position, the Company (1) reverses any previously recorded allowance for credit losses with an offsetting entry to reduce the amortized cost basis of the security and (2) writes-off any remaining portion of the amortized cost basis to equal its fair value, with this change recorded through gains and (losses) on investments in loans and securities. See Note 5 for additional information.\n\nImpaired loans and investments are classified as non-accrual status. Non-accrual loans and investments are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan or investment has sufficient collateral value and is in the process of collection.\n\nInvestments in securities, under the fair value option\n\nThe fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument are reported in earnings at each subsequent reporting date. We elect the fair value option to measure certain securities, as we believe that fair value best reflects the economic transaction of investing in these instruments. The Company’s fair value estimate for these securities is based on a discounted cash flow methodology, while also considering market data as it becomes available. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within gains and (losses) on investments in loans and securities in the consolidated statements of operations.\n\nEquity Method and Other Investments\n\nThe Company uses the equity method of accounting for investments in entities that the Company does not control but has the ability to exercise significant influence over the financial and operating policies of the investee. Under the equity method of accounting, the Company’s share of the investee’s underlying net income or loss is recorded as investment income or loss on the consolidated statements of operations. Distributions received from the investment reduce the Company’s carrying value of the investee.\n\nF-15\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nThe Company elected to account for its equity investments over which it does not exercise control or significant influence using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. The investments are reviewed periodically to determine if their respective values have appreciated or have been impaired, and adjustments are recorded as necessary. During the year ended December 31, 2025, 2024 and 2023, the Company recorded a loss of $8.4 million and $4.6 million and income of $0.5 million, respectively, related to revaluation of its investments in privately held companies. See Note 5 for additional information.\n\nProperty, Equipment and Software, Net\n\nProperty, equipment and software are stated at historical cost, less accumulated depreciation and amortization. Depreciation of property, equipment and software is calculated using the straight-line method over the estimated useful lives of the assets. Useful lives by asset category are as follows:\n\nComputer and software\n3 to 7 years\n\nFurniture and equipment\n3 to 7 years\n\nInternal-use software\n2 years\n\nLeasehold improvementsShorter of remaining lease term or estimated useful life\n\nMaintenance and repairs that do not enhance or extend the asset’s useful life are expensed as incurred. Major replacements, improvements and additions are capitalized. Upon the sale or retirement of property, equipment and software, the cost and the related accumulated depreciation or amortization are removed from the consolidated financial statements, with any resulting gain or loss included in the consolidated statements of operations.\n\nProperty, equipment and software is tested for impairment when there is an indication that the carrying value of an asset group may not be recoverable. Carrying values are not recoverable when the undiscounted cash flows estimated to be generated by the assets are less than their carrying values. When an asset is determined not to be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset over its respective fair value and recorded in the period the determination is made.\n\nInternal-Use Software\n\nInternally developed software is capitalized upon completion of the preliminary project stage, when it becomes probable that the project will be completed, and the software will be used as intended. Capitalized costs primarily consist of salaries and payroll related costs for employees directly involved in development efforts. Costs related to the preliminary project stage and activities occurring after the implementation of the software are expensed as incurred. Costs incurred for software upgrades are capitalized if they result in additional functionalities or substantial enhancements. Capitalized internal-use software is included in property, equipment and software, net, in the consolidated balance sheets, and amortization expense is included in technology, data and product development expenses in the consolidated statements of operations. The Company reviews on a regular basis list of projects that are in process and if the project is to be abandoned or discontinued the capitalized costs associated with that project are expensed immediately.\n\nGoodwill and Intangible Assets\n\nGoodwill represents the fair value of an acquired business in excess of the fair value of the identified net assets acquired. Goodwill is tested for impairment at the reporting unit level annually or whenever indicators of impairment exist. Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value. The Company may assess goodwill for impairment initially using a qualitative approach, referred to as “step zero”, to determine whether conditions exist to indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If management concludes, based on its assessment of relevant events, facts and circumstances, that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis will be performed to determine if there is any impairment. The Company may alternatively elect to initially perform a quantitative assessment and bypass the qualitative assessment. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Therefore, if the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. The Company’s annual impairment testing date is October 1.\n\nF-16\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nDefinite-lived intangible assets are amortized on a straight-line basis over their useful lives. The Company's long-lived assets and identifiable intangibles that are subject to amortization are reviewed for impairment in accordance with ASC 360, “Property, Plant, and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include any significant changes in the manner of the Company's use of the assets and significant negative industry or economic trends. Upon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over fair value.\n\nSee Note 3 for further discussion of goodwill and intangible assets, including those recognized in connection with recent business combinations.\n\nWarrants\n\nThe Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.\n\nThis assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.\n\nFor warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are recorded at their initial fair value on the date of issuance and remeasured each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a non-cash other income or expense, included in other expenses, net in the consolidated statements of operations.\n\nRevenue Recognition\n\nThe Company’s revenue consists of two components: revenue from fees and revenue from other income, which is comprised of interest income and investment income.\n\nThe amount of revenue from fees recognized reflects the consideration that the Company expects to receive in exchange for services provided. The Company applied the following five steps:\n\n1. Identification of the contract with the customer:\n\nThe Company determines a contract with a customer exists when each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, a conclusion has been reached that the customer has the ability and intent to pay, and the contract has commercial substance.\n\n2. Identification of the performance obligations in the contract:\n\nPerformance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct and separately identifiable, whereby the customer can benefit from the services.\n\n3. Determination of the transaction price:\n\nThe transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms and conditions vary by contract.\n\n4. Allocation of the transaction price to the performance obligations in the contract:\n\nIf the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation.\n\nF-17\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n5. Recognition of revenue when, or as, a performance obligation is satisfied:\n\nRevenue is recognized at the time the related performance obligation is satisfied by transferring the promised delivery of service to the customer.  \n\nSee Note 4 for additional information.\n\nInterest Income\n\nInterest income is recognized based on projected cash flows according to ASC 325-40, Beneficial Interests in Securitized Financial Assets. The Company accrues interest income on investments based on the effective interest rate of the investments and records it as interest income as earned. Loans and securities that have reached a delinquency of 90 days or more, or where management has doubts about collectability, are classified as non-accrual status. Investments are returned to accrual status when sufficient cash payments have been received in management’s judgment supports estimated future collections. As of December 31, 2025 and 2024, the Company has recorded $25.8 million and $13.7 million of accrued interest receivable in fees receivables on the consolidated balance sheets, respectively. Interest income earned from cash and cash equivalents is recorded on an accrual basis to the extent such interest is earned and expected to be collected.\n\nProduction Costs\n\nProduction costs are primarily comprised of fees the Company incurs to Partners when network volume is acquired by Financing Vehicles as the Partners are responsible for marketing and customer interaction, and facilitating the flow of additional application flow.\n\nTechnology, Data and Product Development Costs\n\nTechnology, data and product development costs are primarily engineering and product development expenses which primarily consists of payroll and other employee-related expenses, including share-based compensation expenses, for the engineering and product development teams as well the costs of systems and tools used by these teams. These costs, net of amounts capitalized, are recognized in the period incurred. The capitalized internal-use software is amortized on a straight-line method over the estimated useful life in technology, data and product development costs and included in technology, data and production development in the consolidated statements of operations.\n\nGains and (losses) on investments in loans and securities\n\nGains and (losses) on investments in loans and securities primarily reflects changes in fair value that management identifies as credit losses or reversals of previously recognized credit losses on available for sale investment securities, including remeasurements of any loans or investments accounted for under the fair value option and any gain or loss realized upon sale or termination of such investments. As of the end of each reporting period, management reviews each available for sale security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not management intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any decline (or recovery) in fair value which management identifies as a credit loss (or a reversal of previously recognized credit loss) is recognized as loss (or gain) on investments in loans and securities.\n\nLeases\n\nThe Company accounts for its leases under ASC 842, Leases. Under this guidance, lessees classify arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the consolidated balance sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, including insurance and property tax, are recorded when incurred. The Company accounts for any subleases on a gross basis with sublease income presented in Other expenses, net on the consolidated statement of operations.\n\nIn calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term.\n\nF-18\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nShare-Based Compensation\n\nThe Company grants options and restricted stock units to employees and nonemployees. The Company measures options based on the estimated grant date fair values, which the Company determines using the Black-Scholes option-pricing model. The Company measures the fair value of restricted stock units based on the market value of the underlying shares at the date of grant. The Company records the resulting expense in the consolidated statements of operations using the straight-line method over the period of service required to vest in the award, which is generally two to four years. The Company accounts for forfeitures as they occur.\n\nThe Company also grants options to restricted shares to certain employees and directors. The Company measures options to restricted shares based on the estimated grant date fair values, which the Company determines using the Monte Carlo simulation model implemented in a risk-neutral valuation framework. The Company records the resulting expense in the consolidated statements of operations using the straight-line method over the period of service required to vest in the award, which is generally two to four years. The Company accounts for forfeitures as they occur.\n\nIncome Taxes\n\nThe Company uses the liability method of accounting for income taxes, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the deferred tax assets and liabilities are determined based on the differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws expected to apply to taxable income when the differences are expected to reverse.\n\nThe Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under other assets and income tax payable and other tax liabilities, respectively.\n\nASC 740, “Income Taxes” (“ASC 740”) states that a tax benefit from an uncertain tax position may be recognized (1) when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent (on a cumulative basis) likely to be realized upon ultimate settlement with the related tax authority.\n\nThe Company records unrecognized tax benefits as liabilities in accordance with ASC 740 and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from management’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.\n\nThe Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.\n\nBasic and Diluted Net Income (Loss) per Ordinary Share\n\nThe Company calculates net income (loss) per share using the two-class method required for participating securities. The two-class method requires income (loss) available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.\n\nThe Company’s redeemable convertible preferred shares contractually entitle the holders of such shares to participate in distribution but does not contractually require the holders of such shares to participate in the Company’s losses. Accordingly, for the periods where the Company is in a net loss position, the Company does not allocate any net loss attributable to ordinary shareholders to the redeemable convertible preferred shares.\n\nThe Company calculates basic net income (loss) per share attributable to ordinary shareholders by dividing net income (loss) attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period.\n\nThe Company calculates diluted net income (loss) per share attributable to ordinary shareholders by dividing net income (loss) attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding after giving consideration to\n\nF-19\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nthe dilutive effect of the redeemable convertible preferred shares, share options, and preferred shares warrants that are outstanding during the period.\n\nNoncontrolling Interests\n\nNoncontrolling interests represent the portion of equity in consolidated entities not attributable, directly or indirectly, to the Company. These interests are reported as a separate component of equity in the consolidated balance sheets. Net income or loss is attributed to both the Company and the noncontrolling interests in the Consolidated Statements of Operations.\n\nComprehensive Income\n\nThe Company accounts for comprehensive income in accordance with ASC 220, \"Comprehensive Income\". Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income relate to unrealized gains and losses on available for sale investments.\n\nUnclassified Balance Sheet\n\nEffective for the quarterly period ended September 30, 2025, the Company has voluntarily changed its balance sheet presentation to an unclassified format. Management believes this change in accounting principle is preferable because it conforms the Company's financial reporting with the predominant practice of its peers within the financial technology industry and provides a presentation consistent with the financial metrics used to evaluate the business, thereby enhancing comparability and relevance for investors. In accordance with applicable accounting guidance, this change has been applied retrospectively to all prior periods presented. The change had no impact on previously reported total assets, total liabilities, stockholders' equity or results of operations.\n\nEmerging Growth Company Status\n\nThe Company is considered a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act for filings beginning with this Annual Report, because on the last business day of the second quarter in 2025, the aggregate market value of the Company’s ordinary Class A shares held by non-affiliate shareholders exceeded $700 million. As a result, we ceased to be an emerging growth company as of December 31, 2025. Due to the loss of emerging growth company status, the Company is no longer be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and our independent registered public accounting firm evaluated and reported on the effectiveness of our internal controls over financial reporting in its report included in this Annual Report. The transition to large accelerated filer status subjected the Company to accelerated filing deadlines and additional disclosure requirements, which further aligned our reporting with other large US companies for even greater transparency.\n\nReclassification\n\nCertain prior year amounts have been reclassified to conform to the current period presentation. The reclassification adjustments primarily relate to changes to the presentation of certain expenses in the consolidated statements of operations. Specifically, the Company has added new financial statement line items labeled “Gains and (losses) on investments in loans and securities” and “Gains and (losses) from extinguishment of debt” and reclassified the corresponding amounts from “General and administrative expenses” and “Other expenses, net” in the prior period financial statements to conform to the current period presentation.\n\nRecently Adopted Accounting Pronouncements\n\nIn December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require entities to disclose specific categories in the effective tax rate reconciliation and provide additional information for reconciling items where the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income/loss by the applicable statutory income tax rate. In addition, entities are required to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by jurisdictions. The adoption of the guidance did not have a material impact on the Company’s financial statements but resulted in expanded disclosures in the\n\nF-20\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nNotes to the consolidated financial statements. The Company prospectively adopted the provisions of this ASU. See Note 16 for additional information.\n\nRecently Issued Accounting Pronouncements Not Yet Adopted\n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain expense captions presented in the consolidated statements of operations as well as disclosure about selling expense. The effective date for this update was amended by ASU 2025-01 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, and is now effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact of these amendments on its consolidated financial statement disclosures.\n\nIn November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326). The amendments in this update expand the use of the gross-up approach to certain acquired loans beyond purchased financial assets with credit deterioration. The new guidance is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The amendments in this update must be adopted prospectively to loans that are acquired on or after the initial application date. The Company is currently evaluating the impact of these amendments on its consolidated financial statement disclosures.\n\nIn September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. ASU 2025-06 guidance is effective for annual periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently evaluating the impact of these amendments on its consolidated financial statement disclosures.\n\nIn December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements. which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of these amendments on its consolidated financial statement disclosures.\n\nNOTE 3 - BUSINESS COMBINATIONS\n\nAcquisition of Darwin Homes, Inc.\n\nOn January 5, 2023 (“Darwin acquisition date”), the Company completed the acquisition of Darwin Homes, Inc. (“Darwin”), a leading real estate investment management platform based in Austin, Texas that offers a comprehensive, tech-enabled solution for acquiring, renovating, and managing single-family rental properties. Darwin is a wholly-owned subsidiary of the Company and the results of Darwin for the period from January 5, 2023 to December 31, 2023 are included in the Company’s results of operations for the year ended December 31, 2023. Pro forma results of operations have not been presented because the effects of the acquisition was not material to the Company's consolidated statements of operations.\n\nThe Company acquired 100% of Darwin’s equity through an all-stock transaction with a market value of approximately $18 million as of the Darwin acquisition date. In addition to the purchase consideration, the Company also granted approximately $12 million of cash and equity awards to Darwin employees which are recognized as compensation expense over their requisite\n\nF-21\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nservice periods. Acquisition related costs of $0.1 million were expensed as incurred and are included in general and administrative expenses in the consolidated statement of operations.\n\nDarwin Net Assets Acquired\n\nThe assets acquired and liabilities assumed have been included in the consolidated financial statements as of the Darwin acquisition date. Total assets acquired included identified intangible assets of $5.1 million. The Company recognized an asset for goodwill, determined as the excess of the purchase price over the net fair value of the assets acquired and liabilities assumed, that amounted to $10.9 million. Goodwill generated from this business combination is attributed to synergies between the Company's and Darwin's respective products and services.\n\nAn assessment of the fair value of identified intangible assets and their respective lives as of the acquisition date are as follows:\n\nEstimated Useful LifeFair Value\n\nTrade name2$1,400 \n\nDeveloped technology23,700 \n\nTotal $5,100 \n\nIdentified intangible assets in the table above are amortized on a straight-line basis over the estimated useful lives. The Company believes that the straight-line method of amortization is the most appropriate methodology as it is supported by the pattern in which the economic benefits of the intangible assets are consumed.\n\nAcquisition of Theorem Technology, Inc.\n\nOn October 22, 2024 (“Theorem acquisition date”), the Company completed the acquisition of Theorem Technology, Inc. (“Theorem”), a Silicon Valley-based institutional asset manager focused exclusively on the consumer credit space, managing assets for global institutional investors since its founding in 2014. Theorem is a wholly-owned subsidiary of the Company and the results of Theorem for the period from October 22, 2024 to December 31, 2024 are included in the Company’s results of operations for the year ended December 31, 2024. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Company's consolidated statements of operations.\n\nThe Company acquired 100% of Theorem’s equity for approximately $17.5 million, consisting of $10.0 million cash and 504,440 of the Company’s Class A Ordinary Shares (valued at $7.5 million as of the closing date), with an additional estimated contingent consideration at fair value of $6.1 million to be paid in cash and/or the Company’s Class A Ordinary Shares based on achievement of certain performance objectives defined in the purchase agreement. Contingent consideration is remeasured at fair value through the consolidated statement of operations over the one-year performance period. As of December 31, 2025 and December 31, 2024, the fair value of the contingent consideration liability was $0.2 million and $6.1 million, respectively. Acquisition related costs of $0.1 million were expensed as incurred and are included in general and administrative expenses in the consolidated statement of operations.\n\nTheorem Net Assets Acquired\n\nThe assets acquired and liabilities assumed have been included in the consolidated financial statements as of the Theorem acquisition date. Total assets acquired included identified intangible assets of $8.3 million. The Company recognized an asset for goodwill of $12.1 million, determined as the excess of the purchase price over the net fair value of the assets acquired and liabilities assumed. Goodwill generated from this business combination is attributed to synergies between the Company's and Theorem's respective products and services. The goodwill is not expected to be deductible for income tax purposes.\n\nAn assessment of the fair value of identified intangible assets and their respective lives as of the acquisition date are as follows:\n\nEstimated Useful LifeFair Value\n\nInvestment management agreements2$6,200 \n\nDeveloped technology31,800 \n\nTrade name3300 \n\nTotal $8,300 \n\nF-22\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nIdentified intangible assets in the table above are amortized on a straight-line basis over the estimated useful lives. The Company believes that the straight-line method of amortization is the most appropriate methodology as it is supported by the pattern in which the economic benefits of the intangible assets are consumed.\n\nNOTE 4 - REVENUE\n\nRevenue from fees is comprised of Network AI fees and Contract fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees. AI integration fees are earned for the creation and delivery of assets that comprise Network Volume. The Company utilizes multiple funding channels to enable the purchase of network assets from Partners, such as asset backed securitizations (“ABS”), and forward flow arrangements. Capital markets execution fees are earned from the market pricing of ABS transactions, as well as upon the execution of forward flow transactions, while contract fees are management, performance and similar fees. These fees are the result of agreements with customers and are recognized in accordance with FASB Accounting Standards Codification 606, “Revenue from Contracts with Customers” (“ASC 606”).\n\nRevenue is recognized in accordance with ASC 606 with revenue recorded on a gross basis when the Company is a principal in the transaction with customers, and recorded on a net basis when the Company is acting as an agent on behalf of another. The Company generally recognizes revenue on a gross basis because the Company is primarily responsible for integrating the various services fulfilled by Partners and is ultimately responsible to the Financing Vehicles for the fulfillment of the related services. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records revenue on a net basis.\n\nNetwork AI Fees\n\nNetwork AI fees, comprised of AI integration fees and capital markets execution fees, totaled $1,131.3 million, $916.1 million and $696.0 million for the year ended December 31, 2025, 2024 and 2023, respectively. The Company recognizes Network AI fees primarily at a point in time when the related performance obligation is satisfied and the payment term is generally 30 days. From time to time the Company may provide certain incentives to a customer. When the Company determines that an incentive is consideration payable, which is not in exchange for distinct goods or services, to a customer, the incentive is recorded as a reduction of revenue. Expenses to third parties for services that are integrated with the Company’s technology are recorded in the consolidated statements of operations as Production Costs.\n\nContract Fees\n\nContract fees include administration and management fees, performances fees, and servicing fees. Contract fees totaled $130.0 million, $88.5 million and $76.8 million for the year ended December 31, 2025, 2024 and 2023, respectively. All of these fees are recognized over the service period for the Financing Vehicles managed or administered by the Company and the payment term is monthly as a fixed percentage of the entity’s assets, except for the portion of management fees that are recognized at the point in time based on contract terms. The Company includes variable consideration in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur; to date, adjustments to these estimates have not resulted in a significant reversal of previously recognized revenue.\n\nPerformance fees are earned when certain Fund Financing Vehicles exceed contractual return thresholds. They are recognized only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. An estimate is made by the Company based on a variety of factors including market conditions and expected loan performance. In the following period, the true performance is measured and then adjusted to ensure that the fees accurately represent actual performance of Financing Vehicles. As such, there are revenues that result from performance obligations satisfied in the previous year. During the year ended December 31, 2025, $1.0 million worth of fees were recognized, which represent performance obligations satisfied in the previous year that were greater than the original estimate. During the year ended December 31, 2024 and 2023, $2.5 million and $3.6 million respectively, worth of fees were reversed, which represent performance obligations satisfied in the previous year that were less than the original estimate.\n\nServicing fees for the Financing Vehicles, which primarily involve collecting payments and providing reporting on the loans within the securitization vehicles, are recognized over the service period and the payment is received monthly from the Financing Vehicles. These duties have been considered to be agent responsibilities and does not include acting as a loan servicer. Accordingly, servicing fees are recorded on a net basis.\n\nF-23\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nTotal Revenue From Fees\n\nThe Company determines its contracts generally do not include a significant financing component since the Company's selling prices are not subjected to billing terms nor is its purpose to receive financing from its customers or to provide customers with financing. In addition, as a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between payment and the transfer of services is expected to be one year or less.\n\nOnce revenue is recognized, it is recorded on the consolidated balance sheets in fees receivables until the payment is received from the customer. The timing of the recognition depends on the type of service as described above.  \n\nYear Ended December 31,\n\n202520242023\n\n(in thousands)\n\nServices transferred at a point in time$1,120,513 $949,025 $734,924 \n\nServices transferred over time140,828 55,525 37,890 \n\nTotal revenue from fees, net$1,261,341 $1,004,550 $772,814 \n\nThe timing of the revenue recognition may differ from the timing of payment from customers. The Company records a receivable when revenue is recognized prior to payment, and when the Company has an unconditional right to payment. The Company records a contract liability when payment is received prior to the time at which the satisfaction of the service obligation occurs. As of December 31, 2025, contract assets and contract liabilities from contracts with customers amounted to $13.0 million and $8.0 million, respectively, included in other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets. The Company had no material contract assets, contract liabilities, or deferred contract costs recorded as of December 31, 2024. See Note 7 for additional information.\n\nNOTE 5 - INVESTMENTS\n\nAs of December 31, 2025 and 2024, our investments in loans and securities portfolio consisted of (i) investments held at fair value with changes in fair value recorded in unrealized non-credit related adjustments on available for sale securities, excluding the portion relating to any credit loss; (ii) investments in loans and securities held at fair value, with changes in fair value recorded in earnings, for which we elected the fair value option; and (iii) loans held for investment at amortized cost, less an allowance for potential uncollectible amounts. Below is a disaggregated presentation of our investments in loans and securities, including fair value adjustments, accrued interest income and net of the allowance for credit losses, as applicable (in thousands):\n\nCarrying Value\n\nDecember 31, 2025December 31, 2024\n\nInvestments in securities, available for sale\n\nSecuritization notes, available for sale (1)\n$395,717 $240,273 \n\nSecuritization certificates, available for sale (1)\n471,661 533,243 \n\nTotal867,378 773,516 \n\nInvestments in loans and securities under the fair value option\n\nSecuritization notes (1)12,473 — \n\nSecuritization certificates (1)60,840 — \n\nOther loans\n4,578 — \n\nTotal77,891 — \n\nInvestments in loans, at amortized cost\n\nOther loans, at amortized cost\n— 4,893 \n\nTotal investments in loans and securities$945,269 $778,409 \n\nF-24\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n(1) $504.3 million and $414.8 million were held by the Company for regulatory risk retention purposes as of December 31, 2025 and 2024, respectively.\n\nInvestments in Securities Available for Sale\n\nThe amortized cost, gross unrealized gains and losses and fair value of Investments in Securities Available for Sales (“AFS securities”) as of December 31, 2025 and 2024 were as follows (in thousands). The Company has determined that it is the primary beneficiary of certain VIEs that were established to purchase investments in Pagaya sponsored ABS notes and certificates. The portion of these consolidated VIEs that the Company does not own, is accounted for as noncontrolling interest in the consolidated financial statements. Refer to Note 6 for additional information.\n\nAs of December 31, 2025\n\nInvestments in securities, available for sale(1):\nAmortized\nCostGross\nUnrealized\nGainsGross Unrealized Non-Credit Related AdjustmentsAllowance for Credit LossesFair\nValue\n\nSecuritization notes$395,216 $970 $(469)$— $395,717 \n\nSecuritization certificates874,170 6,489 (23,120)(385,878)471,661 \n\nTotal$1,269,386 $7,459 $(23,589)$(385,878)$867,378 \n\n(1) Includes accrued interest receivable of $25.8 million.\n\nAs of December 31, 2024\n\nInvestments in securities, available for sale(2):\nAmortized\nCostGross\nUnrealized\nGainsGross Unrealized Non-Credit Related AdjustmentsAllowance for Credit LossesFair\nValue\n\nSecuritization notes$240,396 $386 $(509)$— $240,273 \n\nSecuritization certificates1,048,734 7,926 (14,676)(508,741)533,243 \n\nTotal$1,289,130 $8,312 $(15,185)$(508,741)$773,516 \n\n(2) Includes accrued interest receivable of $13.7 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation.\n\nThe following tables set forth the fair value and gross unrealized losses on investments in AFS securities without an allowance for credit losses aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, as of the dates indicated (in thousands):\n\nAs of December 31, 2025\n\nLess than or equal to 1 yearGreater than 1 yearTotal\n\nInvestments in securities, available for sale:\nFair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses\n\nSecuritization notes$36,797 $(442)$5,504 $(27)$42,301 $(469)\n\nAs of December 31, 2024\n\nLess than or equal to 1 yearGreater than 1 yearTotal\n\nInvestments in securities, available for sale:\nFair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses\n\nSecuritization notes$66 $(1)$27,295 $(508)$27,361 $(509)\n\nF-25\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nThe following table sets forth the amortized cost and fair value of AFS securities by contractual maturities, as of the date indicated (in thousands):\n\nAs of December 31, 2025\n\nWithin 1 yearGreater than 1 year, less than or equal to 5 yearsTotal\n\nInvestments in securities, available for sale:(1):\nAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value\n\nSecuritization notes$15,279 $15,602 $379,938 $380,115 $395,217 $395,717 \n\nSecuritization certificates42,698 13,495 831,471 458,166 874,169 471,661 \n\nTotal\n$57,977 $29,097 $1,211,409 $838,281 $1,269,386 $867,378 \n\nAs of December 31, 2024\n\nWithin 1 yearGreater than 1 year, less than or equal to 5 yearsTotal\n\nInvestments in securities, available for sale:(1)(2):\nAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value\n\nSecuritization notes$9,907 $9,903 $230,489 $230,370 $240,396 $240,273 \n\nSecuritization certificates11,554 11,554 1,037,180521,6891,048,734533,243\n\nTotal\n$21,461 $21,457 $1,267,669 $752,059 $1,289,130 $773,516 \n\n(1) Based on contractual maturities of corresponding repurchase agreements. See Note 8 for additional information.\n\n(2) Includes accrued interest receivable of $13.7 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation.\n\nThe following table sets forth gross proceeds and related investment gains and losses, as well as losses on write-downs and the allowance for credit losses of AFS securities, for the periods indicated (in thousands):\n\nYear Ended December 31,\n\n20252024\n\nInvestments in securities, available for sale:\n\nProceeds from sales/maturities/prepayments$321,848 $242,285 \n\nGross investment gains from sales(9,339)(7,922)\n\nReductions (additions) to allowance for credit losses\n122,863 (410,062)\n\nThe following tables set forth the activity in the allowance for credit losses for AFS securitization certificates, as of the dates indicated (in thousands):\n\nYear Ended December 31,\n\nInvestments in securitization certificates, available for sale:\n20252024\n\nBalance, beginning of period$(508,741)$(98,679)\n\nAdditions to allowance on securities without a previous allowance\n(90,401)(347,189)\n\nReductions for securities redeemed, prepaid or sold during the period\n242,393 — \n\nAdditions to allowance on securities with a previous allowance\n(29,129)(62,873)\n\nBalance, end of period$(385,878)$(508,741)\n\nRefer to Note 10 for additional information regarding the allowance for credit losses for investments.\n\nInvestments in loans and securities, under the fair value option\n\nThe fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We elected the fair value option to measure certain loans and securities, as we believe that fair value best reflects the economic transaction of investing in certain new loans and securities. We determined the fair value of\n\nF-26\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\ncertain loans and securities using a discounted cash flow methodology, while also considering market data as it became available. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within the gains and (losses) on investments in loans and securities in the consolidated statements of operations. We report the changes in fair value within (gains) and losses on investments in loans and securities in the consolidated statements of cash flow.\n\nThe following table presents activities of investments in securities for which we elected the fair value option. See Note 10 for the assumptions used in our fair value model (in thousands):\n\nYear Ended December 31,\n\nInvestments in securities under the fair value option20252024\n\nBalance, beginning of period$— $— \n\nPurchases78,358 — \n\nPrincipal payments(27,313)— \n\nChange in fair value22,268 — \n\nBalance, end of period (1)\n$73,313 $— \n\n(1) The balance excludes $4.6 million of other loans accounted for under the fair value option.\n\nRefer to Note 10 for additional information regarding the discounted cash methodology used for investments in loans and securities for which we elected the fair value option\n\nEquity Method and Other Investments\n\nThe following investments, including those accounted for under the equity method, are included within Equity method and other investments in the consolidated balance sheets as of December 31, 2025 and December 31, 2024 (in thousands):\n\nCarrying Value\n\nDecember 31, 2025December 31, 2024\n\nInvestments in Pagaya SmartResi F1 Fund, LP (1)$8,324 $12,530 \n\nOther (2)5,194 9,403 \n\nTotal$13,518 $21,933 \n\n(1) The Company owns approximately 5.4% and is the general partner of Pagaya Smartresi F1 Fund LP.\n\n(2) Represents the Company’s proprietary investments. Income (loss) from these investments is included in Investment (loss) income in the consolidated statements of operations.\n\nNOTE 6 - CONSOLIDATION AND VARIABLE INTEREST ENTITIES\n\nThe Company has variable interests in securitization vehicles that it sponsors. The Company consolidates VIEs when it is deemed to be the primary beneficiary. In order to be primary beneficiary, the Company must have a controlling financial interest in the VIE. This is determined by evaluating if the Company has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant.\n\nConsolidated VIEs\n\nAs of December 31, 2025 and December 31, 2024, the Company determined that it is the primary beneficiary of Pagaya Structured Holdings LLC, Pagaya Structured Holdings II LLC, and Pagaya Structured Holding III LLC (“Risk Retention Entities”). These entities were established by Pagaya to purchase investments in ABS notes and certificates issued by Pagaya-sponsored ABS entities. Pagaya owns a 20% interest in these entities, and the remaining 80% ownership shares are held by affiliate entities. As these entities are consolidated, we present 100% of the assets and liabilities on our consolidated balance sheets. The 80% ownership interest not owned by the Company in each of these consolidated VIEs is accounted for as a noncontrolling interest in the consolidated balance sheets. Any income or loss associated with the consolidated VIEs’ activities is reported within the corresponding line items of the consolidated statements of operations, with the results of the 80% ownership interest not owned by the Company presented as net income (loss) attributable to noncontrolling interests.\n\nF-27\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nAs sponsor of securitization transactions, the Company is subject to risk retention requirements and established the Risk Retention Entities to meet these requirements. Below is a summary of assets and liabilities from the Company’s involvement with consolidated VIEs (i.e., Risk Retention Entities) (in thousands):\n\n \n\nAssets(1)LiabilitiesNet Assets\n\nAs of December 31, 2025\n$93,404 $— $93,404 \n\nAs of December 31, 2024\n$142,584 $— $142,584 \n\n(1) Assets comprised of the note and certificates to comply with risk retention requirements.\n\nUnconsolidated VIEs\n\nThe Company determined that it is not the primary beneficiary of the trusts which hold the loans and issue securities associated with the securitization transactions the Company sponsors. The Company does not have the power to direct or control the activities which most significantly affect the performance of the trusts, which was determined to be servicing loans.\n\nThe Company’s maximum exposure to loss from its involvement with unconsolidated VIEs represents the estimated loss that would be incurred under severe, hypothetical circumstances, for which the Company believes the possibility is remote, such as where the value of securitization notes and senior and residual certificates the Company holds as part of the risk retention requirement declines to zero.\n\nBelow is a summary of the Company’s direct interest in (i.e., not held through Risk Retention Entities) variable interests in nonconsolidated VIEs (in thousands):\n\nCarrying AmountMaximum Exposure to LossVIE Assets\n\nAs of December 31, 2025\n$847,290 $847,290 $13,070,284 \n\nAs of December 31, 2024\n$628,038 $628,038 $10,708,146 \n\nFrom time to time, the Company may, but is not obligated to, purchase assets from the Financing Vehicles. Such repurchases can occur at the Company’s discretion, subject to contractual requirements and limitations. See Note 17 for additional information.\n\nNOTE 7 - BALANCE SHEET COMPONENTS\n\nProperty, equipment and software, net\n\nProperty, equipment and software, net, consist of the following as of December 31, 2025 and 2024 (in thousands):\n\n \n\nDecember 31,December 31,\n\n20252024\n\nInternal-use software $101,945 $85,808 \n\nComputer and software6,860 5,406 \n\nFurniture and equipment938 878 \n\nLeasehold improvements1,112 1,080 \n\nProperty, equipment and software, gross110,855 93,172 \n\nLess: accumulated depreciation and amortization(80,634)(55,198)\n\nProperty, equipment and software, net$30,221 $37,974 \n\nThe Company capitalized $16.1 million, $24.3 million and $28.1 million, of internally developed costs during the year ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and December 31, 2024, internally developed software costs balances, included in property, equipment and software, net, are $27.8 million and $36.1 million, respectively.\n\nDepreciation and amortization expense was $30.1 million, $28.8 million and $19.1 million for the year ended December 31, 2025, 2024 and 2023, respectively.\n\nF-28\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nDuring each of the year ended December 31, 2025, 2024 and 2023, the Company wrote off certain internally developed software, and reported $0.5 million, $3.2 million, $2.5 million, respectively, of impairment loss in the consolidated statements of operations. No impairment losses related to property, equipment and software were recorded during the year ended December 31, 2025, 2024 and 2023.\n\nIntangible Assets\n\nAcquired intangible assets subject to amortization consist of investment management agreements, license, developed technology and trade name are recorded net of amortization and included within intangible assets on the consolidated balance sheets. The gross and net carrying values and accumulated amortization are as follows (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nGross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value\n\nInvestment management agreements$6,200 $(3,014)$3,186 $6,200 $(387)$5,813 \n\nLicense5,500 (2,292)3,208 5,500 (458)5,042 \n\nDeveloped technology5,500 (4,413)1,087 5,500 (3,813)1,687 \n\nTrade name1,700 (1,520)180 1,700 (1,421)279 \n\nTotal intangible assets$18,900 $(11,239)$7,661 $18,900 $(6,079)$12,821 \n\nAmortization expense was and $5.2 million, $3.5 million and $2.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nExpected future amortization expense for intangible assets is as follows (in thousands):\n\nDecember 31, 2025\n\n2026$5,719 \n\n20271,942 \n\n  Total$7,661 \n\nOther assets\n\nF-29\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nOther assets, consist of the following as of December 31, 2025 and 2024 (in thousands):\n\nDecember 31,December 31,\n\n20252024\n\nPrepaid expenses$6,930 $7,557 \n\nRelated party assets (1)42,558 14,637 \n\nOther assets4,677 4,171 \n\nTotal other assets$54,165 $26,365 \n\n(1) Related party assets include $13.0 million of contract assets as of December 31, 2025. No such contract assets existed as of December 31, 2024.\n\nAccrued expenses and other liabilities\n\nAccrued expenses and other liabilities consist of the following as of December 31, 2025 and 2024 (in thousands):\n\nDecember 31,December 31,\n\n20252024\n\nEmployee payables$17,381 $16,327 \n\nRelated party payables (1)10,610 2,969 \n\nInterest payables22,896 7,171 \n\nContingent consideration from the Theorem acquisition183 6,090 \n\nOther liabilities23,565 12,805 \n\nTotal accrued expenses and other liabilities$74,635 $45,362 \n\n(1) Related party payables include $8.0 million of contract liabilities as of December 31, 2025. No such contract liabilities existed as of December 31, 2024.\n\nNOTE 8 - BORROWINGS\n\nThe following table sets forth the Company’s outstanding borrowings as of the date indicated (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nSecured borrowing$193,892 $176,089 \n\nExchangeable notes$148,782 $146,342 \n\nLong-term debt$481,598 $321,317 \n\nThe Company was in compliance with all covenants as of December 31, 2025 and December 31, 2024.\n\nSecured Borrowing\n\nSecured borrowings are comprised of risk retention master repurchase agreements and receivable facilities. Interest expenses related to secured borrowings totaled $22.2 million for the year ended December 31, 2025, compared to $47.1 million for the year ended December 31, 2024.\n\nDuring the third quarter of 2025, the Company has repaid $153.9 million of secured borrowing, following the issuance of the 2030 Notes. As a result of these transactions, the Company has incurred a loss of $1.4 million related to the write-off of deferred issuance costs reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations.\n\nThe following table sets forth the Company’s outstanding secured borrowings as of the date indicated (in thousands, except percentage):\n\nF-30\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nDecember 31, 2025December 31, 2024\n\nOutstanding Balance\n\nInterest Rate (1)\n\nOutstanding Balance\n\nInterest Rate (1)\n\nRisk Retention Master Repurchase - Recourse\n$53,722 13%$115,298 17%\n\nRisk Retention Master Repurchase - Non-Recourse\n53,584 6%28,987 7%\n\nReceivables Facility - Recourse\n22,427 8%— —%\n\nReceivables Facility - Non-Recourse\n64,159 6%31,804 8%\n\nTotal principal balance under secured borrowings\n$193,892 $176,089 \n\n(1) The interest rate is weighted based on the outstanding principal balance and interest rates in effect as of December 31, 2025 and 2024\n\nRisk Retention Master Repurchase\n\nIn normal course of business, the Company, through consolidated VIEs, enters into repurchase agreements to finance the Company’s risk retention balance in notes and certificates retained from securitization transactions. Under these agreements, the Company pledges financial instruments as collateral. These agreements with counterparties generally contain contractual provisions allowing the counterparty the right to sell or repledge the collateral. Pledged securities owned that can be sold or repledge by the counterparty are included in Investments in loans and securities in our balance sheet. As of December 31, 2025 and December 31, 2024, the outstanding principal balance under the repurchase agreements was $107.3 million and $144.3 million, respectively, with a weighted average interest rate of approximately 10% and 15%, respectively. The average remaining contractual maturities of the repurchase agreements were greater than 90 days as of both December 31, 2025 and December 31, 2024.\n\nReceivables Facility\n\nIn April 2025, Pagaya Structured Products LLC, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement (the “LSA Agreement”) with certain lenders. This agreement established a 24-month Capitalized Interest Amounts Facility (the “CIA Facility”) with a maximum principal amount of $24 million to finance eligible capitalized interest amounts related to sponsored securitization transactions. Additionally, in June 2025, Pagaya Structured Products LLC entered into a 30-month Accrued Loan Purchasing Fee Receivables Facility (the “ALPF Facility”) with a maximum principal amount of $65 million, to finance certain eligible receivables from sponsored securitization transactions. Borrowings under the CIA Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 4.00%, while borrowings under the ALPF Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 1.9%. As of December 31, 2025, the combined outstanding principal balance under the CIA Facility and ALPF Facility was $86.6 million, which is recorded within secured borrowing on the consolidated balance sheets.\n\nIn June 2025, Pagaya Receivables LLC, a wholly-owned subsidiary of the Company, repaid the outstanding balance of a 3-year loan facility (the “SVB Receivables Facility”) and terminated the related Loan and Security Agreement, which was originally executed in October 2022. Borrowings under the SVB Receivables Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 0.00% floor) plus a margin of 3.50%. As of December 31, 2024, the outstanding principal balance under the SVB Receivable Facility was $31.8 million, which is recorded within secured borrowing on the consolidated balance sheets. As of December 31, 2025, there was no outstanding balance under the SVB Receivable Facility, and the facility was no longer in effect.\n\nExchangeable Notes\n\nOn October 1, 2024, the Company, through a wholly owned subsidiary of the Company, issued $160 million aggregate principal amount of its 6.125% Exchangeable Notes due 2029 (the “2029 Notes”). The issuance was in connection with a purchase agreement dated September 26, 2024, with certain initial purchasers. The 2029 Notes bear interest at a rate of 6.125% per annum, payable semiannually in arrears on April 1 and October 1 of each year, beginning April 1, 2025. The 2029 Notes will mature on October 1, 2029, unless earlier repurchased, redeemed, or exchanged.\n\nThe initial exchange rate of the 2029 Notes is 71.4669 Class A Ordinary Shares per $1,000 principal amount of 2029 Notes (equivalent to an initial exchange price of approximately $13.99 per Class A Ordinary Share). The exchange rate is subject to customary adjustments upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest. In addition, if certain corporate events that constitute a “make-whole fundamental change” (as defined in the 2029 Notes Indenture)\n\nF-31\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\noccur, then the Company will, in certain circumstances, increase the exchange rate for 2029 Notes exchanged during a specified period of time.\n\nPrior to the close of business on the business day immediately preceding July 2, 2029, the 2029 Notes will be exchangeable at the option of the holders only upon the satisfaction of one or more specified conditions. These conditions include, among others, the sale price of the Class A Ordinary Shares exceeding 130% of the initial exchange price for a specified number of trading days (such condition, the “Sales Price Contingent Exchange Condition”). On or after July 2, 2029 until the close of business on the second scheduled trading day immediately preceding October 1, 2029, the 2029 Notes will be exchangeable at the option of the holders at any time regardless of the specified conditions.\n\nDuring the third quarter of 2025, the Sales Price Contingent Exchange Condition was met as the closing sale price of the Company’s Class A Ordinary Shares exceeded 130% of the exchange price for the required period and, as a result, noteholders have been entitled to exchange their 2029 Notes. As of December 31, 2025, no holders have elected to exchange their 2029 Notes.\n\nThe 2029 Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the option of the Company at any time, and from time to time, on or after October 5, 2027 and on or before the 41st scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the 2029 Notes are “Freely Tradable” (as defined in the 2029 Notes Indenture), and all accrued and unpaid additional interest, if any, has been paid in full as of the first interest payment date occurring on or before the related “Redemption Notice Date” (as defined in the 2029 Notes Indenture); and (ii) the last reported sale price per Class A Ordinary Share exceeds 130% of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the related Redemption Notice Date; and (2) the trading day immediately before the Redemption Notice Date. However, the Company may not redeem less than all of the outstanding 2029 Notes unless at least $50.0 million aggregate principal amount of 2029 Notes are outstanding and not called for redemption as of the related Redemption Notice Date. In addition, calling any 2029 Note for redemption will constitute a make-whole fundamental change with respect to such 2029 Note called for redemption, in which case the exchange rate applicable to the exchange of such 2029 Note called for redemption will be increased in certain circumstances if it is exchanged during the related “Redemption Exchange Period” (as defined in the 2029 Notes Indenture).\n\nIf the Company undergoes a “Fundamental Change” (as defined in the 2029 Notes Indenture), subject to certain conditions and except as set forth in the Indenture, holders may require the Company to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.\n\nThe Company accounted for the issuance of the 2029 Notes as a single liability at par as the conversion feature does not require bifurcation as a derivative under ASC 815 and the 2029 Notes were not issued at a substantial premium. Debt issuance costs, consisting of underwriting fees and third-party offering costs, totaled $6.2 million. Original Issue Discount (“OID”) totaled $8.0 million. Both issuance costs and OID are amortized to interest expense using the effective interest method over the contractual term of the 2029 Notes. For year ended December 31, 2025 and 2024, the Company recorded $12.4 million and $3.1 million of interest expense, respectively, which included $2.4 million and $0.6 million related to the amortization of debt issuance costs and OID. The effective interest rate of the 2029 Notes is 8.7%.\n\nThe estimated fair value of the 2029 Notes as of December 31, 2025 and December 31, 2024 was approximately $292.4 million and $163.4 million, respectively, which represent Level 2 valuations in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the 2029 Notes in an over-the-counter market.\n\nLong-Term Debt\n\nSenior Notes\n\nOn July 28, 2025, the Company, through Pagaya US Holding Company LLC (“Pagaya US”), issued $500 million aggregate principal amount of 8.875% Senior Unsecured Notes due 2030 (the “2030 Notes”). The 2030 Notes will accrue interest at a rate of per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. The 2030 Notes will mature on August 1, 2030, unless earlier repurchased or redeemed.\n\nF-32\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nThe 2030 Notes will be redeemable at the option of the Company. At any time prior to August 1, 2027, the Company may redeem the 2030 Notes, in whole or in part, at its option at a redemption price equal to 100% of the principal amount of the 2030 Notes plus a make-whole premium described in the 2030 Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. On and after August 1, 2027, the Company may redeem the 2030 Notes, in whole or in part, at the redemption prices set forth in the 2030 Notes Indenture.\n\nThe following table details the Company’s 2030 Notes as of December 31, 2025 (in thousands):\n\nDecember 31, 2025\n\nPrincipal amount$493,085 \n\nLess: Unamortized issuance costs(11,487)\n\nCarrying amount$481,598 \n\nThe Company recorded $20.3 million of interest expense, including $1.1 million of amortization of debt issuance costs, for the three months ended December 31, 2025.\n\nIn December 2025, the Company repurchased $6.9 million aggregate principal amount of the outstanding 2030 Notes at a price equal to 87.4% of the principal amount. The Company paid total consideration of $6.0 million, excluding accrued interest, resulting in a $0.7 million net gain on extinguishment of debt. This gain is net of the written-off carrying value, which included associated pro rata unamortized debt issuance costs, is reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations. Following the repurchase, the remaining aggregate principal amount of the 2030 Notes outstanding was $493.1 million as of December 31, 2025.\n\nCredit Agreement\n\nOn February 2, 2024, the Company entered into a certain Credit Agreement (the “Credit Agreement”) which provides for a 5-year senior secured revolving credit facility (the “Revolving Credit Facility”) in an initial principal amount of $25 million which subsequently increased to $35 million, and a 5 year senior secured term loan facility (the “Term Loan Facility,” and together with the Revolving Credit Facility, the “Facilities”) in an initial principal amount of $255 million. Borrowings under the Facilities bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to a 2.00% floor) plus a margin of 6.50% or (ii) an adjusted term Secured Overnight Financing Rate (subject to a 1.00% floor) plus a margin of 7.50%.\n\nIn November 2024, the Company entered into Amendment No. 2 (the “Amendment”) to the Credit Agreement. Pursuant to the Amendment, the Company incurred incremental term loans in an aggregate principal amount $100 million, bringing the total principal amount of the Term Loan Facility to $355 million. The Company also increased an aggregate principal amount of the Revolving Credit Facility of $15 million, bringing the total principal amount of the Revolving Credit Facility to $50 million. In February 2025, the Company further increased the aggregate principal amount of the Revolving Credit Facility by $8 million, resulting in a total principal amount of $58 million. As of December 31, 2024, the Company had letters of credit issued in the amount of $24.3 million and $25.7 million of remaining capacity available under the Revolving Credit Facility.\n\nIn July 2025, the Company fully paid off the outstanding principal balance under the Credit Agreement using the proceeds from the issuance of the 2030 Notes, as discussed above. As a result of this transaction and the repayment of outstanding balance under the Credit Agreement, the Company has incurred a loss of $23.9 million during the year ended December 31, 2025, related to the write-off of deferred issuance costs and an early payment penalty, reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations. As of December 31, 2025, there was no outstanding balance under the Credit Agreement, and the Credit Agreement was no longer in effect.\n\n2025 Revolving Credit Facility\n\nOn October 1, 2025, the Company refinanced the Revolving Credit Facility by way of terminating Credit Agreement and entering into a new three-year revolving credit facility (the “2025 Revolving Credit Facility”) with a syndicate of financial institutions. The 2025 Revolving Credit Facility provides a committed borrowing capacity of $132 million. Borrowings under the 2025 Revolving Credit Facility bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to 1.00% floor) plus a margin of 2.50% and (ii) an adjusted term SOFR (subject to 1.00% floor) plus a margin of 3.50%, a reduction from the prior revolving credit facility’s rate of SOFR plus 7.50%. A commitment fee accrues on any unused portion of the commitments under the 2025 Revolving Credit Facility at a rate per annum of 0.25% and is payable quarterly in arrears. The terms and conditions of the 2025 Revolving Credit Facility include customary covenants and restrictions.\n\nF-33\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nAs of December 31, 2025, the Company had letters of credit issued in the amount of $115.9 million and $16.1 million of remaining capacity available under the 2025 Revolving Credit Facility.\n\nNOTE 9 - WARRANT LIABILITY\n\nFollowing the 1-for-12 reverse share split effective March 2024, each warrant entitles the holder to purchase 1/12 of a Class A Ordinary Share (or equivalently, 12 warrants are required to obtain 1 Class A Ordinary Share), and the redemption trigger prices described below have been adjusted accordingly.\n\nPublic Warrants — Public Warrants may only be exercised for a whole number of shares. The Public Warrants became exercisable on July 22, 2022. The Public Warrants will expire on June 22, 2027 or upon liquidation.\n\nThe Company will not be obligated to deliver any Class A ordinary shares, no par value (“Class A Ordinary Shares”), of the Company pursuant to the exercise of a public warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A Ordinary Shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No public warrant will be exercisable, and the Company will not be obligated to issue a Class A Ordinary Share upon exercise of a public warrant unless the Class A Ordinary Share, issuable upon such warrant exercise, has been registered, qualified, or deemed to be exempt under the securities laws of the state of residence of the registered holder of the public warrants.\n\nRedemption of Public Warrants for Cash\n\nThe Company may redeem the outstanding warrants:\n\n•if, and only if, the closing price of the Class A Ordinary Shares equals or exceeds $216.00 per share (as adjusted for the reverse share split) for any 20 trading days within a 30 trading day period ending three business days before the Company sends the notice of redemption to the warrant holders;\n\n•in whole and not in part;\n\n•at a price of $0.01 per warrant; and\n\n•upon not less than 30 days’ prior written notice of redemption to each warrant holder.\n\nIf and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.\n\nRedemption of Public Warrants when the per share price of Class A Ordinary Shares equals or exceeds $120.00\n\nThe Company may redeem the outstanding warrants:\n\n•if, and only if, the last reported sale price of the Class A Ordinary Shares equals or exceeds $120.00 per share (as adjusted for the reverse share split) for any 20 trading days within a 30 trading-day period ending on, and including, the third trading day prior to the date on which we send the notice of redemption to the warrant holders;\n\n•in whole and not in part; and\n\n•for cash at a price of at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their public warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table included in the Warrant Agreement, based on the redemption date and the “fair market value” of the Class A Ordinary Shares as described in the Warrant Agreement.\n\nIf the Company calls the Public Warrants for redemption as described above under “—Redemption of Public Warrants for Cash,” management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the Warrant Agreement. The exercise price and number of Class A Ordinary Shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, recapitalization, reorganization, merger, or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Class A Ordinary Shares at a price below its exercise price. Additionally, in no event will the Company be required to net-cash settle the warrants.\n\nThese warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the consolidated balance sheets. The warrant liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within other expenses, net in the consolidated statements of operations.\n\nF-34\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nNOTE 10 - FAIR VALUE MEASUREMENT\n\nFASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, when available. If such quoted market prices are not available, fair value is based upon a discounted cash flow model that uses, as inputs, observable market-based parameters to the greatest extent possible.\n\nThe Company determines the fair value of its financial instruments and conducts an ongoing assessment of the techniques used to ensure their appropriateness, consistent application and the reasonableness of the assumptions. In determining the fair value of each investment security and loan, the Company reviews performance characteristics of the underlying loan pool including origination vintage, borrower credit quality, macroeconomic environment, etc. The Company determines the fair value for each investment security and loan by then estimating significant assumptions including discount rate, cumulative net loss rate and prepayment rate which are reviewed and approved by management.\n\nThe Company also engages a third-party valuation service provider to estimate a range of fair values for all significant investments in loans and securities. The Company reviews and validates its significant assumptions with reference to historical performance and expectations of future performance including: discount rate, cumulative net loss rate and prepayment rate. Finally, the Company reviews and validates that the fair value used for financial reporting is within the range of fair value estimates by the third-party service provider for the same significant investment in loans and securities.\n\nFinancial instruments are categorized in the fair value hierarchy based on the significance of unobservable inputs and assumptions in the overall fair value measurement. Financial instruments classified as Level 3 within the fair value hierarchy do not trade in an active market with readily observable prices. Accordingly, the Company uses significant unobservable inputs to measure the fair value of these assets. The Company has determined that its certificates, loans and certain subordinated notes meet the definition of Level 3 assets, as their fair value measurements are characterized by a lack of observable market data and a reliance on management's assumptions.\n\nFinancial Assets and Liabilities Recorded at Fair Value\n\nThe following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):\n\nDecember 31, 2025\n\nLevel 1Level 2Level 3Total\n\nAssets:\n\nInvestments in loans and securities (Notes)$— $67,715 $340,475 $408,190\n\nInvestments in loans and securities (Certificates)— — 532,501 532,501\n\nInvestments in loans and securities (Loans)— — 4,578 $4,578\n\nLiabilities:\n\nWarrant liability$4,723$—$—$4,723\n\nOther liabilities (1)— — 13,112 13,112\n\nDecember 31, 2024\n\nLevel 1Level 2Level 3Total\n\nAssets:\n\nInvestments in loans and securities (Notes) (2)$— $115,220 $125,053 $240,273\n\nInvestments in loans and securities (Certificates) (2)— — 533,243 533,243 \n\nLiabilities:\n\nWarrant liability$890$3$—$893\n\nOther liabilities (1)— — 6,090 6,090 \n\n(1) Included in “Accrued expenses and other liabilities” in the consolidated balance sheets. See Note 15 for additional information.\n\nF-35\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n(2) Accrued interest receivable of $14.3 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation.\n\nAssets and Liabilities Measured at Fair Value on a Recurring Basis (Level 1 and 2)\n\nWarrant liability (Level 1 and 2)\n\nThe Company used the value of the Public Warrants (Level 1) as an approximation of the value of the Private Warrants as they are substantially similar to the Public Warrants, but not directly traded or quoted on an active market.\n\nThe following tables summarize the Warrant liability activity for the year ended December 31, 2025, 2024 and 2023 (in thousands):\n\nBalance as of December 31, 2023$3,242 \n\nChange in fair value(2,349)\n\nBalance as of December 31, 2024$893 \n\nChange in fair value3,830 \n\nBalance as of December 31, 2025$4,723 \n\nAssets and Liabilities Measured at Fair Value on a Recurring Basis (Level 3)\n\nInvestments in Loans and Securities (Level 3)\n\nAs of December 31, 2025, investments in loans and securities categorized as level 3 investments include loans and securities under the fair value option and securities classified as available for sale which are measured at fair value on a recurring basis. These assets are measured at fair value using a discounted cash flow model, and presented within investments in loans and securities on the consolidated balance sheets. The estimate of fair value of these investments requires significant judgment. The Company uses a discounted cash flow model to estimate the fair value of these investments based on the present value of estimated future cash flows. The cash flow model uses unobservable inputs and reflects management's best estimates of the assumptions a market participant would use to calculate fair value of the particular investment. Primary inputs that require significant judgment include discount rates, net credit loss expectations, expected prepayment rates and consideration of any optional redemption features in the Company's investments.\n\nFor securities classified as available for sales, changes in the fair value, other than declines in fair value due to credit, are reflected in other comprehensive income (loss) on the consolidated statements of comprehensive loss. Declines in fair value due to credit are reflected in gains and (losses) on investments in loans and securities on the consolidated statements of operations.\n\nFor loans accounted for under the fair value options, all changes in fair value are recognized in the period in which they occur within the gains and (losses) on investments in loans and securities in the consolidated statements of operations.\n\nThe following tables summarize the activity related to the fair value of the investments in loans and securities for the year ended December 31, 2025 and 2024 (in thousands):\n\nF-36\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nBalance as of December 31, 2023$624,073 \n\nTransfer from level 210,469 \n\nAdditions607,398 \n\nCash received(180,567)\n\nGain on sale of investments in loans and securities7,920 \n\nChange in accrued interest on investments12,921 \n\nChange in fair value(13,858)\n\nCredit-related impairment loss(410,060)\n\nBalance as of December 31, 2024$658,296 \n\nTransfer from level 242,577 \n\nAdditions550,154 \n\nCash received(294,467)\n\nGain on sale of investments in loans and securities 12,417 \n\nLoss on sale of investments in loans and securities(26,836)\n\nChange in accrued interest on investments40,083 \n\nChange in fair value(9,746)\n\nCredit-related impairment loss(94,924)\n\nBalance as of December 31, 2025$877,554 \n\nSignificant unobservable inputs used for our Level 3 fair value measurement of the securities are the discount rate, net credit loss rate, prepayment rate and consideration of any optional redemption features in our investment securities. The discount rate reflects management’s estimate of the market-required return for similar financial instruments, to convert estimated future cash flows to a present value. The net credit loss rate is management’s estimate of potential loans losses, net of recoveries, from borrower defaults. The prepayment rate estimate is the proportion of principal received in advance of the contractual terms of the loan, which can impact the future interest cash flows of the investments and the investments expected duration. Because these inputs represent increased risk or accelerated capital return, they maintain an inverse relationship with valuation; accordingly, an increase in the discount, credit risk, or prepayment rates, in isolation, would result in a lower fair value measurement.The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the securities as of December 31, 2025 and 2024:\n\nDecember 31, 2025\nDecember 31, 2024\n\nUnobservable InputMinimumMaximumWeighted AverageMinimumMaximumWeighted Average\n\nDiscount rate5.0 %15.0 %15.0 %5.0 %15.0 %15.0 %\n\nLoss rate4.9 %33.1 %17.0 %5.8 %34.1 %19.5 %\n\nPrepayment rate0.0 %40.0 %14.2 %— %40.0 %9.4 %\n\nFinancial Assets and Liabilities Not Recorded at Fair Value\n\nThe Company believes that the carrying amount of cash, cash equivalents and restricted cash, fees receivables, accounts payables and other current liabilities approximate their fair value due to the short-term maturities of these instruments.\n\nThe below tables contain information about assets that are not measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):\n\nF-37\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nDecember 31, 2025\n\nFair Value\n\nCarrying\nValueLevel 1Level 2Level 3Total\n\nAssets:\n\nCash and cash equivalents, and restricted cash and cash equivalents$288,349 $288,349 $— $— $288,349 \n\nFees receivables153,250 — 69,864 83,386 153,250 \n\nLiabilities:\n\nSecured borrowings$193,892 $— $— $191,983 $191,983 \n\nExchangeable notes148,782 — 292,445 — 292,445 \n\nLong-term debt481,598 — 430,616 — 430,616 \n\nDecember 31, 2024\n\nFair Value\n\nCarrying\nValueLevel 1Level 2Level 3Total\n\nAssets:\n\nCash and cash equivalents, and restricted cash and cash equivalents$226,518 $226,518 $— $— $226,518 \n\nFees receivables (1)127,114 — 63,143 63,971 127,114 \n\nInvestments in loans and securities (Loans)4,893 — — 4,893 4,893 \n\nLiabilities:\n\nSecured borrowings$176,089 $— $— $177,554 $177,554 \n\nExchangeable notes146,342 — 163,360 — 163,360 \n\nLong-term debt321,317 — — 366,396 366,396 \n\n \n\n(1) Accrued interest receivable of $14.3 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to “Investment in loans and securities” to conform to the current period’s presentation.\n\nNOTE 11 - ORDINARY SHARES AND ORDINARY SHARE WARRANTS\n\nAs of December 31, 2025, 839,999,998 shares with no par value are authorized, of which, 6,666,666 shares are designated as Preferred Shares, 666,666,666 shares are designated as Class A Ordinary Shares, and 166,666,666 shares are designated as Class B Ordinary Shares. As of December 31, 2025, the Company had 2,027,147 Preferred Shares outstanding, 70,747,357 Class A Ordinary Shares outstanding and 11,288,577 Class B Ordinary Shares outstanding.\n\nThe rights of the holders of each class of Ordinary Shares are identical, except with respect to voting. Each share of Class A Ordinary Share is entitled to one vote per share. Each share of Class B Ordinary Share is entitled to 10 votes per share. Shares of\n\nF-38\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nClass B Ordinary Share may be converted at any time at the option of the stockholder and automatically convert upon sale or transfer to Class A Ordinary Share.\n\nAs of December 31, 2025 and 2024, the Company had reserved ordinary shares for future issuance as follows:\n\nDecember 31, 2025\n\nDecember 31, 2024\n\nShare options3,197,7134,042,901\n\nOptions to restricted shares19,884,98519,948,408\n\nRSUs2,150,1733,009,918\n\nOrdinary share warrants2,076,0082,372,858\n\nRedeemable convertible preferred shares2,027,1475,000,000\n\nExchangeable notes11,434,70411,434,704\n\nShares available for future grant of equity awards(1)9,836,2038,121,438\n\nShares reserved for issuance under the ESPP733,470832,713 \n\nTotal shares of ordinary share reserved51,340,403 54,762,940 \n\n(1) Reflects the application of the automatic increase of shares reserved under the Company's 2022 Share Incentive Plan (the \"2022 Plan\") pursuant to the terms of the 2022 Plan.\n\nOrdinary Share Warrants\n\nThe Company has accounted for the ordinary share warrants as equity-classified warrants as they met the requirements for equity classification under ASC 815, including whether the ordinary share warrants are indexed to the Company’s own ordinary shares. For warrants that do not meet all the criteria for equity classification, the warrants are recorded at their initial fair value on the date of issuance and remeasured each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a non-cash other income or expense in the accompanying consolidated statements of operations.\n\nAs of December 31, 2025, there were 433,942 warrants expiring in March 2031 with an exercise price of $0.00006 per share, 192,900 warrants expiring in June 2030 with an exercise price of $0.0006 per share, 220,000 warrants expiring in March 2032 with an exercise price of $0.12 per share, and 1,229,166 warrants expiring in June 2027 with an exercise price of $138 per share.\n\nRedeemable Convertible Preferred Shares\n\nIn May 2023, the Company issued 5,000,000 Preferred Shares at $15.00 per share (the “Original Issue Price”) to Oak HC/FT Partners V, L.P., Oak HC/FT Partners V-A, L.P. and Oak HC/FT Partners V-B, L.P for gross total proceeds of $75 million. For accounting purposes, upon issuance of the Preferred Share, the Company recorded $74.25 million ($75 million net of direct offering costs of $0.75 million) as mezzanine equity (temporary equity) on the consolidated balance sheets because it is contingently redeemable outside of the control of the Company. In September 2025, a total of 2,972,853 Preferred Shares were converted into 2,972,853 Class A Ordinary Shares at the option of the holders. This conversion resulted in a reduction of the Preferred Shares outstanding and a corresponding increase in the Company's Class A Ordinary Shares. The conversion was accounted for by reclassifying the carrying value of the converted Preferred Shares from mezzanine equity to permanent equity. Following this conversion, 2,027,147 Preferred Shares remain outstanding as of December 31, 2025.\n\nThe terms and preferences of the preferred shares are summarized as follows:\n\nConversion Features\n\nEach one Preferred Share shall be convertible into one Class A Ordinary Share at the option of the holder thereof, at any time.\n\nAt any time on or after the sixth anniversary of the issuance of the Preferred Shares, if the Preferred Shares have not already been converted, if and only if so elected by the Company, all Preferred Shares that remain outstanding shall automatically convert, with each Preferred Share then outstanding converting into the following number of Class A Ordinary Shares, based on the volume weighted average trading price of the Class A Ordinary Shares for 30 trading days immediately preceding the date of a written notice to the holders of the Preferred Shares of the Company’s election to automatically convert all then outstanding Preferred Shares (“30-Day VWAP Average”):\n\n•if the 30-Day VWAP Average is equal to or greater than two times the Original Issue Price, one Class A Ordinary Share; or\n\nF-39\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n•if the 30-Day VWAP Average is less than two times the Original Issue Price but greater than 25% of the Original Issue Price, a number of Class A Ordinary Shares equal to (a) two times the Original Issue Price divided by (b) the 30-Day VWAP Average.\n\nIf, based on the 30-Day VWAP Average, the value of a Preferred Share, on an as-converted basis, represents a return of the Original Issue Price ranging from a multiple of 3.5 to 2.5 of the Original Issue Price (“MOIP”) from the 2nd anniversary of the closing date to the 5th anniversary of the closing date, respectively, the Company shall have the right, but not the obligation, within five trading days thereafter, to notify the holders of the then outstanding Preferred Shares of the Company’s election to automatically convert without any further action by the holder thereof on the tenth trading day following the achievement of the MOIP, each Preferred Share then outstanding into one Class A Ordinary Share.\n\nLiquidation\n\nIn the event of a Liquidation Event, the assets or proceeds available for distribution to the shareholders (the “Distributable Assets”) shall be distributed in the following order and preference:\n\nFirst, the holders of Preferred Shares then outstanding shall be entitled to receive, from the Distributable Assets, prior and in preference to any distribution in respect of the Ordinary Shares, an amount for each Preferred Share held by them (the “Preference Amount”) equal to the greatest of\n\n•(i) the sum of the Original Issue Price of such share plus an amount equal to 3.0% of the Original Issue Price for each full semi-annual period for which such Preferred Share has been outstanding (without compounding);\n\n•(ii) the amount such holder would actually receive for each Preferred Share if such Preferred Share had been converted into Ordinary Shares immediately prior to such Liquidation Event; or\n\n•(iii) two times the Original Issue Price.\n\nSecond, after payment in full of the Preference Amount in respect of all Preferred Shares then outstanding, the remaining Distributable Assets, if any, shall be distributed on a pro-rata basis among the holders of Pagaya Ordinary Shares.\n\nIn the event that the Distributable Assets are insufficient to pay in full the Preference Amount in respect of each Preferred Share then outstanding, then all of such Distributable Assets shall be distributed on a pari passu basis among the holders of the Preferred Shares in proportion to the respective full Preference Amount otherwise payable to such holders.\n\nDividends\n\nPreferred Shares, Class A Ordinary Shares and Class B Ordinary Shares shall be treated equally and ratably, on a per share basis with respect to any dividend or distribution paid or distributed by the Company. As of December 31, 2025, the Company has not paid cash dividends and has no foreseeable plans to pay cash dividends in the future.\n\nVoting\n\nEach holder of Preferred Shares shall have one vote for each Ordinary Share into which the Preferred Shares held by such holder could be converted, as of the applicable record date set for the vote on any matter, whether the vote thereon is conducted by a show of hands, by written ballot or by any other means.\n\nRedemption\n\nPreferred Shares are not redeemable at the election of the holder, except that in the event of a change in control resulting from the sale or transfer of the Company’s securities, which qualifies as a Liquidation Event.\n\nThe Company classifies its Preferred Shares as temporary equity because they may become redeemable due to certain change in control events that are outside the Company’s control, including a merger, acquisition, or sale of assets of the Company. The Company has not adjusted the carrying values of the Preferred Shares to its redemption value because redemption was not probable as of the balance sheet dates presented. The Company will adjust the carrying value of the Preferred Shares to its redemption value if redemption becomes probable in the future.\n\nOrdinary Share Offering\n\nOn March 13, 2024, the Company priced an offering of 7,500,000 of its Class A Ordinary Shares, no par value, pursuant to an underwriting agreement (the “Underwriting Agreement”) with Citigroup Global Markets Inc. and Jefferies LLC as\n\nF-40\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nrepresentatives of the several underwriters. The proceeds from the offer and sale of the securities are approximately $90.0 million, after deducting the underwriting discount and fees and offering expenses payable by the Company.\n\nNOTE 12 - SHARE BASED COMPENSATION\n\nShare Options—Granted share options expire at the earlier of termination of employment or ten years from the date of grant. Share options generally vest over four years of the employment commencement date or with 25% vesting on the twelve-month anniversary of the employment commencement date, and the remaining on a pro-rata basis each quarter over the next three years. Any options, which are forfeited or not exercised before expiration, become available for future grants.  \n\nThe following table summarizes the Company’s share option activity during the year ended December 31, 2025:\n\nNumber of OptionsWeighted Average Exercise PriceWeighted Average\nRemaining Contractual\nTerm (Years)Aggregate\nIntrinsic Value (000’s)\n\nBalance, December 31, 20244,042,901 $7.5 6.7$7,335 \n\nGranted2,500 9.7 \n\nExercised(734,988)7.2 \n\nForfeited(112,700)32.2 \n\nBalance, December 31, 20253,197,713 $6.7 5.7$45,031 \n\nVested and exercisable, December 31, 20252,647,978$5.0 5.1$41,795 \n\nThe weighted-average grant date fair value of employee options granted, aggregate intrinsic value of options exercised, and fair value of share options vested for the year ended December 31, 2025 was $9.67, $9.6 million and $7.9 million, respectively.\n\nShare-based compensation expense is based on the grant-date fair value on a straight-line basis for graded awards with only service conditions, which is generally the option vesting term of four years. The fair value of each option on the date of grant is determined using the Black Scholes-Merton (BSM) option pricing model using the single-option award approach with the assumptions set forth in the table below.\n\nAt December 31, 2025, unrecognized compensation expense related to unvested share options was approximately $5.6 million, which is expected to be recognized over a remaining weighted-average period of 1.3 years.\n\nFair Value of Ordinary Shares—The fair value of each ordinary share was based on the closing price of the Company’s publicly traded ordinary shares as reported on the date of the grant.\n\nExpected Volatility—Expected volatility of share options was calculated based on the Company’s volatility as well as the implied volatilities from market comparisons of certain publicly traded companies and other factors.\n\nRisk-Free Interest Rate—The risk-free interest rate is determined using a U.S. Treasury zero-coupon bonds for the period that coincides with the expected term set forth.\n\nExpected Term— The expected term of share options represents the weighted average period the share options are expected to be outstanding. For option grants that are considered to be “plain vanilla”, the Company has opted to use the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options.\n\nExpected Dividend Yield—The dividend yield is based on the Company’s historical and future expectation of dividends payouts. Historically, the Company has not paid cash dividends and has no foreseeable plans to pay cash dividends in the future.\n\nF-41\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nThe assumptions used to estimate the fair value of share options granted for the year ended December 31, 2025 were as follows:\n\n2025\n\nExpected volatility105.4 %\n\nExpected term (in years)\n5.6\n\nRisk free interest\n4.1%\n\nDividend yield\n0.00\n\nRestricted Stock Units (RSUs)—RSUs generally vest over two years of the employment commencement date with 50% vesting on the twelve-month anniversary of the employment commencement date, and the remaining on a pro-rata basis each quarter over the remaining twelve months. RSUs granted are forfeited at termination of employment. Any RSUs, which are forfeited or not exercised before expiration, become available for future grants.  \n\nThe following table summarizes the Company’s RSU activity during the year ended December 31, 2025:\n\nNumber of RSUsWeighted Average Grant Date Fair Value Per Share\n\nUnvested at December 31, 20243,009,918 $12.0 \n\nGranted2,662,406 13.6 \n\nVested(2,838,979)11.6 \n\nForfeited(683,172)11.9 \n\nUnvested at December 31, 20252,150,173 $14.5 \n\nAt December 31, 2025, unrecognized compensation expense related to RSUs was approximately $24.9 million, which is expected to be recognized over a remaining weighted-average period of 0.8 years.\n\nOptions to Restricted Shares\n\nIn March 2021, the Company granted 18.7 million options to purchase restricted shares (the “First Awards”) at an exercise price of approximately $18.95 per share to certain directors and employees. These First Awards will vest upon the earlier of the following vesting conditions to occur of (i) a Transaction (defined as (a) a sale of all or substantially all assets or shares of the Company; or (b) a merger, consolidation, amalgamation or like transaction; or (c) a scheme of arrangement for the purpose of effecting such sale, merger, consolidation, amalgamation or other transaction) and (ii) Public Event (defined as an IPO or a SPAC) (each, a “Qualifying Event”). The Qualifying Event, further, contains additional market-based vesting conditions driven by the total value of the Company. The First Awards do not get accelerated upon any events. Any Awards that do not vest on such date (if such date is triggered by a Qualifying Event) will remain eligible for vesting following a Qualifying Event. However, any Awards that do not vest on or before the earlier to occur of a Transaction and the expiration date (10 years from the grant date) shall be forfeited.\n\nIn December 2021, the Company granted 0.4 million options to purchase restricted shares (the “Second Awards”) at an exercise price of approximately $40.59 per share to certain directors. These Second Awards will vest upon the earlier of the following vesting conditions to occur of a Qualifying Event. The Second Awards do not get accelerated upon any events. Any Awards that do not vest on such date (if such date is triggered by a Qualifying Event) will remain eligible for vesting following a Qualifying Event. However, any Awards that do not vest on or before the earlier to occur of a Transaction and the expiration date (10 years from the grant date) shall be forfeited.\n\nIn December 2021, the Company granted 0.6 million options to purchase restricted shares (the “Third Awards”) at an exercise price of approximately $37.38 per share to certain employees. These Third Awards will vest upon the following: (i) The Valuation-Based Vesting Condition may be satisfied at any date on or after March 31, 2022 based on the Total Value of the Company on such date (which shall be determined based on an independent third party valuation or, if the Company’s shares are publicly traded, based on the average trading price of a share of the Company over a period of sixty (60) days). Any options or shares received in connection with the exercise of an option that have not satisfied the Valuation-Based Vesting Condition on or prior to the tenth anniversary of the Grant Date (or such shorter period required by applicable law or for tax efficiency purposes) (the \"Expiration Date\") shall expire or be forfeited without consideration, as applicable, on the Expiration Date, and (ii) The Time-Based Vesting Condition shall be satisfied over a period of four (4) years commencing as of March 31, 2022, such that\n\nF-42\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\n25% of the options shall vest and become exercisable on March 31, 2023, 25% shall vest and become exercisable on March 31, 2024, 25% shall vest and become exercisable on March 31, 2025 and the remaining 25% shall vest and become exercisable on March 31, 2026 (rounded to the nearest number at each vesting date).\n\nThe following table summarized the Company’s options to restricted shares activity during the year ended December 31, 2025:\n\nNumber of OptionsWeighted Average Exercise PriceWeighted Average\nRemaining Contractual\nTerm (Years)Aggregate\nIntrinsic Value (000’s)\n\nBalance, December 31, 202419,948,408 $19.4 6.2$— \n\nGranted— \n\nExercised(34,179)15.3 \n\nForfeited(29,244)32.0 \n\nBalance, December 31, 202519,884,985 $19.3 5.2$30,967 \n\nVested and exercisable, December 31, 202516,539,026 $19.3 5.2$26,643 \n\nAt December 31, 2025, unrecognized compensation expense related to options to restricted shares was approximately $5.8 million, which is expected to be recognized over a remaining weighted-average period of 1.0 years.\n\nEmployee Stock Purchase Plan—The Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of our Class A Ordinary Shares at a discounted price, normally through payroll deductions, subject to the terms of the ESPP and applicable law. During the year ended December 31, 2025, 99,243 shares were issued under the ESPP. As of December 31, 2025, 733,470 shares of Class A Ordinary Shares were reserved for issuance under the ESPP. Compensation expense related to the ESPP was $0.6 million for the year ended December 31, 2025.\n\nShare-Based Compensation Expense\n\nThe following table presents the components and classification of share-based compensation for the year ended December 31, 2025, 2024 and 2023 (in thousands):\n\n202520242023\n\nTechnology, data and product development$4,965 $8,695 $12,375 \n\nSelling and marketing21,142 14,666 13,216 \n\nGeneral and administrative28,011 38,136 45,464 \n\nTotal$54,118 $61,497 $71,055 \n\nNOTE 13 - EMPLOYEE BENEFITS\n\nSeverance pay — Under Israeli employment laws, Israeli employees of the Company are included under Section 14 of the Severance Pay Law, 5723-1963 (“Section 14”). According to Section 14, these employees are entitled to monthly payments made by the Company on their behalf with insurance companies. For the year ended December 31, 2025, 2024 and 2023, the Company incurred severance related expenses of $3.0 million, $3.1 million and $3.1 million, respectively.\n\nPayments in accordance with Section 14 release the Company from any future severance payments with respect to those employees. The obligation to make the monthly deposits at a rate of 8.3% of their monthly salary is expensed as incurred. In addition, the aforementioned deposits are not recorded as an asset in the consolidated balance sheets, and there is no liability recorded as the Company does not have a future obligation to make any additional payments.\n\nNOTE 14 - LEASES\n\nThe Company leases facilities under operating leases with various expiration dates through 2032. The Company leases office space in New York and Israel.\n\nF-43\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nThe security deposits for the leases are $1.9 million and $3.3 million as of December 31, 2025 and December 31, 2024, respectively, which have been recognized as restricted cash and cash equivalents in the consolidated balance sheets.\n\nThe Company’s operating lease expense consists of rent and variable lease payments. Variable lease payments such as common area maintenance were included in operating expenses. Rent expense for the Company’s short-term leases was immaterial for the periods presented. Operating lease expense was as follows (in thousands):\n\nYear Ended December 31,\n\n202520242023\n\nRent expense$11,191$11,993$13,016\n\nVariable lease payments$448$365$280\n\nSublease income (1)\n$5,233$4,023$4,053\n\n(1) The Company entered into sublease agreements for certain leased office space, and the amounts were included in other expenses, net in the consolidated statement of operations.\n\nSupplemental information related to the Company’s operating leases was as follows ($ in thousands):\n\nAs of December 31, 2025As of December 31, 2024\n\nWeighted-average remaining lease term (in years)5.15.8\n\nWeighted-average discount rate9.0 %9.1 %\n\nYear Ended December 31,\n\n202520242023\n\nOperating lease right-of-use assets recognized in exchange for new operating lease obligations (1)\n$(113)$(17,737)$(1,839)\n\n(1) During the year ended December 31, 2025 and 2024, $0.1 million and $17.7 million of operating lease right-of-use assets and corresponding lease liability were derecognized as a result of early termination which was accounted for as a lease modification.\n\nMaturities of the Company’s operating lease liabilities as of December 31, 2025 were as follows (in thousands):\n\n2026$10,085 \n\n20278,629 \n\n20285,924 \n\n20296,022 \n\n20306,022 \n\nThereafter5,521 \n\nTotal42,203 \n\nLess: imputed interest(7,991)\n\nTotal operating lease liabilities$34,212 \n\nNOTE 15 - COMMITMENTS AND CONTINGENCIES\n\nLegal Proceedings — From time to time the Company is subject to legal proceedings and claims in the ordinary course of business. The results of such matters often cannot be predicted with certainty. In accordance with applicable accounting guidance, the Company establishes an accrued liability for legal proceeding and claims when those matters present loss contingencies which are both probable and reasonably estimable. All such liabilities arising from current legal and regulatory\n\nF-44\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nmatters, to the extent such matters existed, have been recorded in accrued expenses and other liabilities on the consolidated balance sheets and these matters are immaterial.\n\nContractual Obligations and Commitments — From time to time, the Company entered into a purchase commitment with our third-party cloud computing web services provider. As of December 31, 2025, the total remaining contractual obligations are approximately $10.7 million, of which $6.3 million is for the next 12 months. The Company may pay more than the minimum purchase commitment based on usage. Additionally, the Company has contractual obligations related to its lease for corporate office space. See Note 14 for details regarding when these obligations are due.\n\nIn October 2024, the Company completed the acquisition of Theorem Technology, Inc. (“Theorem”), a Silicon Valley-based institutional asset manager focused exclusively on the consumer credit space, managing assets for global institutional investors since its founding in 2014. The Company acquired 100% of Theorem’s equity for approximately $17.5 million, consisting of $10.0 million cash and 504,440 of the Company’s Class A Ordinary Shares ($7.5 million worth as of the closing date), with an additional contingent consideration based on achievement of certain performance objectives defined in the purchase agreement. The Company established contingent consideration liability is reported at fair value, which is determined based on the present value of an expected payment under the arrangement, using an option pricing model based on a number of assumptions, including certain unobservable assumptions discounted at an estimated market interest rate. The fair value of the liability is updated each reporting period, with changes in fair value reported within “Other expenses, net.” The fair value of the contingent consideration liability was $0.2 million and $6.1 million as of December 31, 2025 and December 31, 2024, respectively.\n\nGuarantees and Indemnifications — In the ordinary course of business, the Company may provide indemnifications or loss guarantees of varying scope and terms to customers and other third parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap.\n\nFor our forward flow agreements, we may be subject to a contractual performance requirement. Where applicable, this requirement is measured periodically over the life of the underlying loans. If the loans’ performance is below the contractual requirement, the counterparty may have first loss up until a contractual agreed limit. If the loans’ performance is below the counterparty’s first loss limit, or if there is no first loss limit, then Pagaya would be required to make a payment to the counterparty such that the loans purchased would have achieved the contractual performance requirement. There is a contractual maximum loss for Pagaya’s loss protection with the counterparty taking full risk of loss beyond Pagaya’s loss protection. Our guarantee of contractual loss protection for the buyer meets the accounting definition of a derivative, and therefore we recognize, at inception and each reporting period, a liability for the fair value of the estimated loss protection payments, if any.\n\nAs of December 31, 2025, there have been no known events or circumstances that have resulted in a material indemnification liability and the Company did not incur material costs to defend lawsuits or settle claims related to these indemnifications. As of December 31, 2025, the unfunded maximum potential amount of undiscounted future payments the Company could be required to make under these guarantees totaled $120.2 million. Additionally, in accordance with the guarantee contracts, the Company is required to fund segregated cash balances to provide protection in the event the Company is not able to meet its contractual commitments. As of December 31, 2025, $46.0 million has been segregated and recognized within restricted cash and cash equivalents, of which $12.9 million has been accrued within accrued expenses and other liabilities in the consolidated balance sheets in accordance with these contractual requirements.\n\nNOTE 16 - INCOME TAXES\n\nCorporate Income Tax - Ordinary taxable income in Israel is subject to a corporate tax rate of 23%.\n\nOrdinary taxable income in Israel is subject to a corporate tax rate of 23%. However, the Company has received an approval from the Israeli Tax authorities on November 18, 2021 for Preferred Technological Enterprise (“PTE”) status. The Company is eligible for PTE status which is implemented commencing 2020. Income from a PTE is subject to 12% tax rate. The Company is currently in the process of obtaining a renewal of its PTE status.\n\nForeign Exchange Regulations in Israel\n\nUnder the Foreign Exchange Regulations, the Company calculates its tax liability in U.S. Dollars according to certain orders. The tax liability, as calculated in U.S. Dollars is translated into NIS according to the exchange rate as of December 31st of each year.  \n\nF-45\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nOne Big Beautiful Bill Act\n\nOn July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S. which contains a broad range of tax reform provisions affecting businesses. The Company took an accelerated deduction following the enactment of new tax law. The OBBBA legislation is not expected to have a material impact on our effective tax rate, deferred tax position, or results of operations in 2026.\n\nNon-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. The components of income (loss) before income taxes are as follows (in thousands):\n\nDecember 31,\n\n202520242023\n\nDomestic (Israel)$(74,582)$(8,480)$(53,292)\n\nForeign126,207 (412,642)(127,876)\n\nTotal income (loss) before income taxes$51,625 $(421,122)$(181,168)\n\nThe income tax (benefit) expense consists of (in thousands):\n\nDecember 31,\n\n202520242023\n\nCurrent:\n\nDomestic$(57)$(247)$593\n\nForeign(19,499)24,74116,601\n\nTotal current(19,556)24,49417,194\n\nDeferred:\n\nDomestic(189)82(461)\n\nForeign——(1,162)\n\nTotal deferred(189)82(1,623)\n\nTotal income tax provision$(19,745)$24,576 $15,571 \n\nEffective Tax Rate\n\nThe following table presents the reconciliation between Company’s statutory tax and effective income taxes the for the year ended December 31, 2025 after the adoption of ASU 2023-09 (in thousands):\n\nF-46\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nDecember 31, 2025\n\nAmountPercent\n\nTheoretical income taxes at Israel statutory rate$11,874 23 %\n\nForeign tax effects:\n\n    United States:\n\n        State and local income taxes, net of federal income tax effect(3,158)(6)%\n\n        Statutory tax rate difference(3,081)(6)%\n\n        Interest expense adjustments(7,183)(14)%\n\n        Base Erosion and Anti-Abuse Tax (BEAT)6,255 12 %\n\n        Change in valuation allowances(25,404)(49)%\n\n        Non-deductible compensations3,294 6 %\n\n        Contingent consideration(1,241)(2)%\n\n        Other(247)— %\n\n    Cayman Islands2,814 5 %\n\n    Other foreign jurisdictions16 — %\n\nChange in valuation allowances6,420 12 %\n\n(Nontaxable) or nondeductible items:\n\n    Share-based payment awards5,690 11 %\n\nStatutory tax rate difference (Preferred technological enterprise)4,874 9 %\n\nChanges in unrecognized tax benefits(20,592)(40)%\n\nOther adjustments(76)— %\n\nEffective income tax benefit$(19,745)NM*\n\nThe following tables presents the reconciliation between Company’s statutory tax and effective income taxes the years ended December 31, 2024 and 2023 prior to the adoption of ASU 2023-09 (in thousands):\n\nDecember 31,\n\n20242023\n\nLoss before income taxes$(421,122)$(181,168)\n\nIsrael statutory income tax rate23 %23 %\n\nTheoretical income taxes at statutory rate(96,858)(41,669)\n\nPreferred technological enterprise benefit949 5,891 \n\nDeferred tax assets for which valuation allowance was provided82,602 16,067 \n\nPermanent differences10,033 7,643 \n\nUncertain tax positions9,035 13,500 \n\nPrior year taxes(1,416)(2,312)\n\nSubsidiaries taxed at a different tax rate17,594 16,443 \n\nChanges in valuation allowance\n— (1,162)\n\nOther adjustments\n2,637 1,170 \n\nEffective income tax\n$24,576 $15,571 \n\nEffective tax rateNM*NM*\n\n*NM = Not meaningful.\n\nDeferred Tax Assets and Liabilities\n\nDeferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2025 and 2024, a\n\nF-47\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nvaluation allowance was provided reducing the deferred tax assets due to uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.\n\nAs of December 31, 2025 and 2024, deferred tax assets and deferred tax liabilities presented in the consolidated balance sheets are comprised as follows (in thousands):\n\nDecember 31,\n\n20252024\n\nCarry forward tax losses$19,854 $13,912 \n\nResearch and development cost5,657 8,930 \n\nCompensations and benefits7,218 9,748 \n\nOperating lease liability4,847 5,525 \n\nInvestments credit loss64,327 96,324 \n\nInterest expense (Section 163j)— 8,082 \n\nOther comprehensive income10,911 2,715 \n\nCapital loss1,262 948 \n\nEquity method and other investments3,228 1,062 \n\nOther3,837 983 \n\nDeferred tax assets before valuation allowance121,141 148,229 \n\nValuation allowance111,648 140,020 \n\nDeferred tax assets9,493 8,209 \n\nIntangible assets(1,066)(1,838)\n\nRight-of-use assets(4,305)(5,401)\n\nCapitalized research and development costs(3,759)— \n\nEquity method and other investments— (904)\n\nProperty, equipment and software(335)(246)\n\nOther(28)(9)\n\nDeferred tax liabilities(9,493)(8,398)\n\nDeferred tax liabilities, net$— $(189)\n\nAs of December 31, 2025 the Company has an accumulated tax loss carry forward of approximately $110.7 million in Israel and $32.3 million federal and state losses in the U.S which can be offset with the limitation as described in Section 382 of the IRS Code due to U.S subsidiary prior change in ownership. These losses do not have an expiration date.\n\nUncertain Tax Positions\n\nA reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows (in thousands):\n\nDecember 31,\n\n20252024\n\nUncertain tax positions, beginning of the year$31,170 $22,135 \n\n(Decrease) increase in tax positions for prior years(25,724)(13,001)\n\nIncreases related to current year tax positions5,543 21,622 \n\nRevaluation(411)414 \n\nUncertain tax positions, end of year$10,578 $31,170 \n\nAs of December 31, 2025 and 2024, unrecognized tax benefits of $10.6 million and $31.2 million, respectively, if recognized, would affect our effective tax rate in a future period. The Company currently does not expect uncertain tax positions to change significantly over the next twelve months.\n\nF-48\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nThe Company accrued interest and penalties related to uncertain tax positions recorded during the years ended December 31, 2025, 2024, and 2023. The amounts were immaterial.\n\nCash Income Taxes Paid (Net of Refunds)\n\nThe components of income taxes paid (net of refunds) for the year ended December 31, 2025 are as follows (in thousands):\n\nDecember 31, 2025\n\nDomestic (Israel)$114 \n\nForeign (U.S.)2,381 \n\nTotal\n$2,495 \n\nTax Assessments\n\nThe Company files income tax return in various jurisdictions with varying statue of limitations. As of December 31, 2025, the Company have received final tax assessments in Israel through 2020. In 2025, the Company is currently subject to tax audits in Israel and federal and state tax audits in U.S. The tax audits are ongoing and to date, no material issues have been raised and no adjustments have been proposed.\n\nPillar Two Taxation\n\nOn October 8, 2021, the Organisation for Economic Co-operation and Development (“OECD”)/G20 inclusive framework (the “Inclusive Framework”) on Base Erosion and Profit Shifting published a statement updating and finalizing the key components\n\nof a two-pillar plan on global tax reform. The Inclusive Framework plan has now been agreed to by more than 140 OECD\n\nmembers. While many countries have adopted some or all aspects of these rules, some countries have not adopted any or all of\n\nthem, and many interpretive questions remain that are expected to be addressed in future guidance. In December 2025, Israel enacted Pillar Two legislation to implement a 15% global minimum tax on multinational enterprise groups with consolidated revenues exceeding €750 million in at least two of the four preceding fiscal years, effective from January 1, 2026. The Company is evaluating the effects of the legislation on our effective tax rate and cash tax position.\n\nNOTE 17 - TRANSACTIONS WITH RELATED PARTIES\n\nIn the ordinary course of business, the Company may enter into transactions with directors, principal officers, their immediate families, and affiliated companies in which they are principal shareholders (commonly referred to as related parties). The Company has transactions with the securitization vehicles and other Financing Vehicles which are also related parties.\n\nAs of December 31, 2025, the total fee receivables from related parties are $106.9 million, which consist of $85.9 million from securitization vehicles and $21.0 million from other Financing Vehicles. As of December 31, 2024, the total fee receivables from related parties are $99.4 million, which consists of $79.0 million from securitization vehicles and $20.4 million from other Financing Vehicles.\n\nAs of December 31, 2025 and 2024, the Company had amounts due from related parties $42.6 million and $15.2 million, respectively, which are included within other assets on the consolidated balance sheets. These amounts are entirely attributable to transactions with Financing Vehicles. Additionally, as of December 31, 2025 and 2024, the Company had amounts due to related parties of $10.6 million and $3.0 million, respectively, which are included within accrued expenses and other liabilities on the consolidated balance sheets.\n\nFor the year ended December 31, 2025, the total revenue from related parties is $652.7 million, which consists of $621.9 million from securitization vehicles and $30.9 million from other Financing Vehicles. For the year ended December 31, 2024, the total revenue from related parties is $679.1 million, which consists of $639.4 million from securitization vehicles and $39.7 million from other Financing Vehicles. For the year ended December 31, 2023, the total revenue from related parties is $622.2 million, which consists of $569.8 million from securitization vehicles and $52.4 million from other Financing Vehicles.\n\nFor the year ended December 31, 2025 and 2024, the Company purchased approximately $13.2 million and $39.9 million of loan principal from the Financing Vehicles, and recognized a loss of approximately $6.2 million and $36.4 million with respect to\n\nF-49\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nthese loans, respectively. For the year ended December 31, 2023, the Company did not purchase any loans from the Financing Vehicles.\n\nNOTE 18 - EARNINGS (LOSS) PER SHARE\n\nEarnings (loss) per share is presented in conformity with the two-class method required for multiple classes of ordinary share and participating securities.\n\nBasic earnings per share is computed using the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of share options, restricted stock units and other contingently issuable shares. The dilutive effect of outstanding share options, restricted stock units and other contingently issuable shares is reflected in diluted earnings per share by application of the treasury stock method.\n\nThe Company has two classes of ordinary share: Class A and Class B. The computation of the diluted earnings per share of Class A Ordinary Shares assumes the conversion of Class B Ordinary Shares, while the diluted earnings per share of Class B Ordinary Shares does not assume the conversion of those shares. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A Ordinary Shares and Class B Ordinary Shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and result in an identical earnings (loss) per share for each class under the two-class method.\n\nThe Preferred Shares are a participating security, whereby if a dividend is declared to the holders of ordinary shares, the holders of Preferred Shares would participate to the same extent as if they had converted the Preferred Shares to ordinary shares. Net loss is attributed to ordinary shareholders and participating securities based on their participation rights. Net loss attributable to ordinary shareholders is not allocated to the Preferred Shares as the holders of the Preferred Shares do not have a contractual obligation to share in any losses.\n\nThe following table sets forth the calculation of basic and diluted earnings (loss) per share attributable to ordinary shareholders for the year ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share data):\n\nYear Ended December 31, 2025\n\nBasic EPS:\n\nNumerator:\n\n  Net income attributable to Pagaya Technologies Ltd.$81,389 \n\n  Less: Undistributed earnings allocated to preferred shares4,105 \n\n  Net income attributable to Pagaya Technologies Ltd. ordinary shareholders, basic$77,284 \n\nDenominator:\n\n  Weighted average shares used for earnings per ordinary share, basic78,336,095\n\n  Earnings per share attributable to ordinary shareholders, basic$0.99 \n\nDiluted EPS:\n\nNumerator:\n\n  Net income attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted$77,284 \n\nDenominator:\n\n  Shares used in computation of basic earnings per share78,336,095 \n\n  Ordinary share warrants 785,890 \n\n  Share options3,031,605 \n\n  Unvested RSUs943,637 \n\n  Weighted average shares used for earnings per ordinary share, diluted83,097,227 \n\n  Earnings per share attributable to ordinary shareholders, diluted$0.93 \n\nF-50\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nYear Ended December 31, 2024Year Ended December 31, 2023\n\nNumerator:\n\nNet loss attributable to Pagaya Technologies Ltd. ordinary shareholders, basic and diluted$(401,406)$(128,438)\n\nDenominator:\n\nWeighted average shares used for net loss per ordinary share, basic and diluted70,879,80760,038,893\n\nNet loss per share attributable to ordinary shareholders, basic and diluted$(5.66)$(2.14)\n\nEPS for Class B ordinary shares and EPS for preferred shares are not presented separately, as under the two-class method, the EPS for Class A, Class B and preferred shares are the same.\n\nThe following potentially dilutive outstanding securities as of December 31, 2025, 2024 and 2023 were excluded from the computation of diluted earnings (loss) per share because their effect would have been anti-dilutive for the periods: \n\nDecember 31,\n\n202520242023\n\nShare options— 3,740,789 3,895,087 \n\nOptions to restricted shares— 19,948,408 20,046,080 \n\nRSUs425,251 3,009,918 3,034,203 \n\nOrdinary share warrants1,229,166 2,016,321 2,016,326 \n\nRedeemable convertible preferred shares— 5,000,000 5,000,000 \n\nExchangeable notes11,434,704 11,434,704 — \n\nNet potential dilutive outstanding securities13,089,121 45,150,140 33,991,696 \n\nNOTE 19 - SEGMENTS AND GEOGRAPHICAL INFORMATION\n\nSegment Information\n\nThe Company manages, monitors, and reports its financial performance as a single operating segment. The Company's chief operating decision-maker (CODM), who is the Chief Executive Officer, assesses performance, makes operating decisions, and allocates resources based on consolidated financial information. In accordance with Accounting Standards Update 2023-09, which requires public entities to disclose significant segment expense categories and amounts for each reportable segment, the following disclosures are provided for the Company's single reportable segment:\n\nYear Ended December 31,\n\n202520242023\n\n(in thousands)\n\nPersonnel related costs\n$150,319 $175,631 $189,965 \n\nNon-personnel related costs138,045 192,125 137,542 \n\nTotal (1)$288,364 $367,756 $327,507 \n\n(1) Total of personnel and non-personnel related costs represent the total of technology, data and product development, sales and marking, and general and administrative expenses in the consolidated statements of operations.\n\nPersonnel related costs include salaries, wages, bonuses, employee benefits, payroll taxes, and other related expenses associated with our workforce. Non-personnel related costs encompass expenses such as rent, utilities, depreciation and amortization, marketing and advertising, professional services, and other operational costs not directly linked to personnel.\n\nThe Company does not have additional reportable segments, and therefore, all financial information is presented on a consolidated basis. The Company's assets are not allocated to segments for internal reporting purposes but are managed on a consolidated basis. However, for the purposes of geographical disclosure, long-lived assets are allocated based on where they are located.\n\nF-51\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nGeographical Information\n\nA. Revenue from Fees\n\nThe following table sets forth revenue from fees generated by geographic area (in thousands):  \n\nDecember 31,\n\n202520242023\n\nUnited States$1,261,341$1,004,550$772,814\n\nIsrael———\n\nCayman———\n\nTotal revenue from fees$1,261,341$1,004,550$772,814\n\nB. Long-Term Assets\n\nThe Company’s long-term assets, excluding intangible assets, are primarily based in the United States with 95% and 92% of total as of December 31, 2025 and 2024, respectively. The following tables provide long-term assets, including long-lived assets of right-of-use and property and equipment, net, yet excluding intangible assets, by geographic area (in thousands):\n\nDecember 31, 2025\n\nUnited StatesIsrael\n\nRight-of-use assets\n$5,415 $25,163 \n\nProperty and equipment, net\n4,717 25,504 \n\nOther long-term assets, excluding intangible assets\n1,028,371 7,303 \n\nTotal long-term assets, excluding intangible assets$1,038,503 $57,970 \n\n% of total\n95 %5 %\n\nDecember 31, 2024\n\nUnited StatesIsrael\n\nRight-of-use assets\n$8,389 $28,487 \n\nProperty and equipment, net\n4,957 33,017 \n\nOther long-term assets, excluding intangible assets\n819,415 9,445 \n\nTotal long-term assets, excluding intangible assets$832,761 $70,949 \n\n% of total\n92 %8 %\n\nF-52\n\n[Table of](#iab92c5b483164dd6bfa8efca5afa979f_7)[Contents](#iab92c5b483164dd6bfa8efca5afa979f_7)\n\nNOTE 20 - SUBSEQUENT EVENTS\n\n2030 Notes Repurchase\n\nDuring the first quarter of 2026, the Company repurchased $7.4 million of the outstanding 2030 Notes at a price equal to 87.3% of the principal amount. The Company paid total consideration of $6.5 million, excluding accrued interest, resulting in a $0.8 million gain on extinguishment of debt.\n\nDuring the second quarter of 2026, the Company repurchased $3.8 million of the outstanding 2030 Notes at a price equal to 78.5% of the principal amount. The Company paid total consideration of $3.0 million, excluding accrued interest, resulting in a $0.7 million net gain on extinguishment of debt.\n\nThese gains are net of the written-off carrying value, which included associated pro rata unamortized debt issuance cost. Following the repurchase, the remaining aggregate principal amount of the 2030 Notes outstanding was $481.9 million.\n\nRevolving Credit Facility Repayment\n\nDuring the first quarter of 2026, the Company drew down $114.7 million under its revolving credit facility, which was repaid in full during the second quarter of 2026. There were no penalties associated with the extinguishment of the revolving credit facility balance.\n\nProceeds from Secured Borrowings\n\nDuring the second quarter of 2026, the Company received $65.0 million in proceeds from secured borrowings under its existing repurchase agreements.\n\nF-53"}