PAGAYA TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2023 AND DECEMBER 31, 2022
(In thousands)
| | | | | | | | | | | |
| March 31, | | December 31, |
| 2023 | | 2022 |
| Assets | (Unaudited) | | (Audited) |
| Current assets: | | | |
| Cash and cash equivalents | $ | 289,387 | | | $ | 309,793 | |
| Restricted cash | 22,542 | | | 22,539 | |
| | | |
| Fees and other receivables (including related party receivables of $49,295 and $49,427 of March 31, 2023 and December 31, 2022, respectively) | 58,469 | | | 59,219 | |
| Investments in loans and securities | 3,274 | | | 1,007 | |
| Prepaid expenses and other current assets (including related party assets of $16,369 and $18,783 as of March 31, 2023 and December 31, 2022, respectively) | 25,550 | | | 27,258 | |
| Total current assets | 399,222 | | | 419,816 | |
| Restricted cash | 4,833 | | | 4,744 | |
| | | |
| Fees and other receivables (including related party receivables of $39,169 and $38,332 as of March 31, 2023 and December 31, 2022, respectively) | 39,869 | | | 38,774 | |
| Investments in loans and securities | 503,892 | | | 462,969 | |
| Equity method and other investments | 26,881 | | | 25,894 | |
| Right-of-use asset | 59,170 | | | 61,077 | |
| Property and equipment, net | 34,126 | | | 31,663 | |
| Goodwill | 9,782 | | | — | |
| | | |
| Intangible assets | 4,471 | | | — | |
| Prepaid expenses and other assets | 114 | | | 142 | |
| Total non-current assets | 683,138 | | | 625,263 | |
| Total Assets | $ | 1,082,360 | | | $ | 1,045,079 | |
| Liabilities and Shareholders’ Equity | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 2,738 | | | $ | 1,739 | |
| Accrued expenses and other liabilities (including related party liabilities of $692 and $636 as of March 31, 2023 and December 31, 2022, respectively) | 27,513 | | | 49,496 | |
| Operating lease liability - current | 7,988 | | | 8,530 | |
| Secured borrowing - current | 45,807 | | | 61,829 | |
| Income taxes payable - current | 11,675 | | | 6,424 | |
| Total current liabilities | 95,721 | | | 128,018 | |
| Non-current liabilities: | | | |
| Warrant liability | 1,210 | | | 1,400 | |
| Revolving credit facility | 95,000 | | | 15,000 | |
| Secured borrowing - non-current | 118,430 | | | 77,802 | |
| Operating lease liability - non-current | 46,399 | | | 49,097 | |
| Income taxes payable - non-current | 8,637 | | | 7,771 | |
| Deferred tax liabilities, net - non-current | 523 | | | 568 | |
| Total non-current liabilities | 270,199 | | | 151,638 | |
| Total liabilities | 365,920 | | | 279,656 | |
| | | |
| Shareholders’ equity (deficit): | | | |
| | | |
| Additional paid-in capital | 1,004,346 | | | 968,432 | |
| Accumulated other comprehensive income (loss) | (1,259) | | | (713) | |
| Accumulated deficit | (475,170) | | | (414,199) | |
| Total Pagaya Technologies Ltd. shareholders’ equity | 527,917 | | | 553,520 | |
| Noncontrolling interests | 188,523 | | | 211,903 | |
| Total shareholders’ equity | 716,440 | | | 765,423 | |
| Total Liabilities and Shareholders’ Equity | $ | 1,082,360 | | | $ | 1,045,079 | |
PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(In thousands, except share and per share data)
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2023 | | 2022 | | | | |
| Revenue | | | (Unreviewed) | | | | |
| Revenue from fees (including related party revenues of $153,793 and $158,324 for the three months ended March 31, 2023 and 2022, respectively) | $ | 175,254 | | | $ | 158,325 | | | | | |
| Other Income | | | | | | | |
| Interest income | 10,397 | | | 12,209 | | | | | |
| Investment income (loss) (1) | 987 | | | — | | | | | |
| Total Revenue and Other Income | 186,638 | | | 170,534 | | | | | |
| Costs and Operating Expenses | | | | | | | |
| Production costs | 125,057 | | | 92,280 | | | | | |
| Research and development | 21,131 | | | 23,626 | | | | | |
| Sales and marketing | 14,300 | | | 13,046 | | | | | |
| General and administrative | 51,126 | | | 51,594 | | | | | |
| Total Costs and Operating Expenses | 211,614 | | | 180,546 | | | | | |
| Operating Income (Loss) | (24,976) | | | (10,012) | | | | | |
| Other income (loss), net | (66,980) | | | 313 | | | | | |
| Income (Loss) Before Income Taxes | (91,956) | | | (9,699) | | | | | |
| Income tax expense (benefit) | 6,667 | | | (186) | | | | | |
| Net Loss Including Noncontrolling Interests | (98,623) | | | (9,513) | | | | | |
| Less: Net income (loss) attributable to noncontrolling interests | (37,652) | | | 8,759 | | | | | |
| Net Loss Attributable to Pagaya Technologies Ltd. | $ | (60,971) | | | $ | (18,272) | | | | | |
| Per share data: | | | | | | | |
| Net loss attributable to Pagaya Technologies Ltd. | $ | (60,971) | | | $ | (18,272) | | | | | |
| Less: Undistributed earnings allocated to participated securities | — | | | (5,984) | | | | | |
| | | | | | | |
| Net loss attributed to Pagaya Technologies Ltd. | $ | (60,971) | | | $ | (24,256) | | | | | |
| Net loss per share attributable to Pagaya Technologies Ltd.: | | | | | | | |
| Basic and Diluted (2) | $ | (0.09) | | | $ | (0.12) | | | | | |
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| Weighted average shares outstanding: | | | | | | | |
| Basic and Diluted (2) | 711,070,368 | | | 204,605,121 | | | | | |
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(1) Includes income from proprietary investments.
(2) Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022.
PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(In thousands)
| | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2023 | | 2022 | | |
| | | (Unreviewed) | | |
| Net Income (Loss) Including Noncontrolling Interests | $ | (98,623) | | | $ | (9,513) | | | |
| Other Comprehensive Income (Loss): | | | | | |
| Unrealized gain (loss) on securities available for sale, net | 15,792 | | | — | | | |
| Comprehensive Income (Loss) Including Noncontrolling Interests | (82,831) | | | (9,513) | | | |
| Less: Comprehensive income (loss) attributable to noncontrolling interests | (21,314) | | | — | | | |
| Comprehensive Income (Loss) Attributable to Pagaya Technologies Ltd. | $ | (61,517) | | | $ | (9,513) | | | |
PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
FOR THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(In thousands, except share amounts)
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| Redeemable Convertible Preferred Shares | | Ordinary Shares
| | Additional Paid-In Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings (Accumulated Deficit) | | Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit) | | Non-Controlling Interests | | Total Shareholders’ Equity |
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| | |
| Shares(1) | | Amount | | Shares(1) | | Amount | |
| Balance – December 31, 2021 | 406,399,029 | | | $ | 307,047 | | | 194,345,791 | | | $ | — | | | $ | 113,170 | | | $ | — | | | $ | (111,878) | | | $ | 1,292 | | | $ | 176,060 | | | $ | 177,352 | |
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| Issuance of ordinary shares upon exercise of share options | | | | | 7,082,231 | | | | | 208 | | | | | | | 208 | | | | | 208 | |
| Share-based compensation | | | | | | | | | 16,635 | | | | | | | 16,635 | | | | | 16,635 | |
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| Contributions of interests in consolidated VIEs | | | | | | | | | | | | | | | — | | | 8,547 | | | 8,547 | |
| Return of capital to interests in consolidated VIEs | | | | | | | | | | | | | | | — | | | (29,658) | | | (29,658) | |
| Net income (loss) | | | | | | | | | | | | | (18,272) | | | (18,272) | | | 8,759 | | | (9,513) | |
| Balance – March, 2022 (Unreviewed) | 406,399,029 | | | $ | 307,047 | | | 201,428,023 | | | $ | — | | | $ | 130,013 | | | $ | — | | | $ | (130,150) | | | $ | (137) | | | $ | 163,708 | | | $ | 163,571 | |
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| Redeemable Convertible Preferred Shares | | Ordinary Shares
(Class A and Class B)
| | Additional Paid-In Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings (Accumulated Deficit) | | Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit) | | Non-Controlling Interests | | Total Shareholders’ Equity |
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| | |
| Shares(1) | | Amount | | Shares(1) | | Amount | |
| Balance – December 31, 2022 | — | | | $ | — | | | 683,311,591 | | | $ | — | | | $ | 968,432 | | | $ | (713) | | | $ | (414,199) | | | $ | 553,520 | | | $ | 211,903 | | | $ | 765,423 | |
| Issuance of ordinary shares upon exercise of warrants | | | | | 195,655 | | | | | | | | | | | — | | | | | — | |
| Issuance of ordinary shares upon exercise of share options | | | | | 2,059,317 | | | | | 484 | | | | | | | 484 | | | | | 484 | |
| Issuance of ordinary shares upon vesting of RSUs | | | | | 324,948 | | | | | | | | | | | — | | | | | — | |
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| Share-based compensation | | | | | | | | | 17,296 | | | | | | | 17,296 | | | | | 17,296 | |
| Issuance of ordinary shares in connection with the acquisition of Darwin Homes, Inc. | | | | | 18,181,746 | | | | | 18,134 | | | | | | | 18,134 | | | | | 18,134 | |
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| Contributions of interests in consolidated VIEs | | | | | | | | | | | | | | | — | | | 10,128 | | | 10,128 | |
| Return of capital to interests in consolidated VIEs | | | | | | | | | | | | | | | — | | | (12,194) | | | (12,194) | |
| Other comprehensive income (loss) | | | | | | | | | | | (546) | | | | | (546) | | | 16,338 | | | 15,792 | |
| Net income (loss) | | | | | | | | | | | | | (60,971) | | | (60,971) | | | (37,652) | | | (98,623) | |
| Balance – March 31, 2023 | — | | | $ | — | | | 704,073,257 | | | $ | — | | | $ | 1,004,346 | | | $ | (1,259) | | | $ | (475,170) | | | $ | 527,917 | | | $ | 188,523 | | | $ | 716,440 | |
(1) Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022.
PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED March 31, 2023 AND 2022
(In thousands) | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 | | |
| Cash flows from operating activities | | | (Unreviewed) | | |
| Net loss including noncontrolling interests | $ | (98,623) | | | $ | (9,513) | | | |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | | |
| Equity method income (loss) | (987) | | | — | | | |
| Depreciation and amortization | 3,516 | | | 477 | | | |
| Share-based compensation | 16,367 | | | 16,635 | | | |
| Fair value adjustment to warrant liability | (190) | | | 469 | | | |
| Write-off of capitalized software | 1,549 | | | — | | | |
| Impairment loss on available-for-sale debt securities | 68,347 | | | — | | | |
| Change in operating assets and liabilities: | | | | | |
| Fees and other receivables | (345) | | | (1,220) | | | |
| Deferred tax assets, net | — | | | (3,513) | | | |
| Deferred tax liabilities, net | (45) | | | — | | | |
| Prepaid expenses and other assets | 3,528 | | | 43 | | | |
| Right-of-use asset | 2,197 | | | 1,852 | | | |
| Accounts payable | 999 | | | (6,709) | | | |
| Accrued expenses and other liabilities | (22,573) | | | (1,350) | | | |
| Operating lease liability | (3,530) | | | (2,473) | | | |
| Income tax payable | 6,117 | | | 2,479 | | | |
| Net cash used in operating activities | (23,673) | | | (2,823) | | | |
| Cash flows from investing activities | | | | | |
| Proceeds from the sale/maturity/prepayment of: | | | | | |
| Investments in loans and securities | 25,985 | | | 27,313 | | | |
| Short-term deposits | — | | | 5,020 | | | |
| Equity method and other investments | — | | | — | | | |
| Cash and restricted cash acquired from Darwin Homes, Inc. | 1,608 | | | — | | | |
| Payments for the purchase of: | | | | | |
| Investments in loans and securities | (121,732) | | | (73,991) | | | |
| Property and equipment | (5,526) | | | (1,513) | | | |
| Equity method and other investments | — | | | (747) | | | |
| | | | | |
| Net cash used in investing activities | (99,665) | | | (43,918) | | | |
| Cash flows from financing activities | | | | | |
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| Proceeds from secured borrowing | 82,031 | | | 53,337 | | | |
| Proceeds received from noncontrolling interests | 10,128 | | | 8,547 | | | |
| Proceeds from revolving credit facility | 100,000 | | | — | | | |
| Proceeds from exercise of stock options | 484 | | | 208 | | | |
| | | | | |
| Distributions made to noncontrolling interests | (12,194) | | | (29,658) | | | |
| Distributions made to revolving credit facility | (20,000) | | | — | | | |
| Distributions made to secured borrowing | (57,425) | | | (1,860) | | | |
| Payments for deferred offering costs | — | | | (1,532) | | | |
| Net cash provided by financing activities | 103,024 | | | 29,042 | | | |
| Net increase in cash, cash equivalents and restricted cash | (20,314) | | | (17,699) | | | |
| Cash, cash equivalents and restricted cash, beginning of period | 337,076 | | | 204,575 | | | |
| Cash, cash equivalents and restricted cash, end of period | $ | 316,762 | | | $ | 186,876 | | | |
| Reconciliation of cash, cash equivalents, and restricted cash within the consolidated statements of financial position to the amounts shown in the statements of cash flow above: | | | | | |
| Cash and cash equivalents | $ | 289,387 | | | $ | 183,504 | | | |
| Restricted cash - current | 22,542 | | | — | | | |
| Restricted cash - non-current | 4,833 | | | 3,372 | | | |
| Total cash, cash equivalents, and restricted cash | $ | 316,762 | | | $ | 186,876 | | | |
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