May 28, 2019
Kathleen Layton
Assistant General Counsel
Oportun Financial Corp
2 Circle Star Way
San Carlos, CA 94070
Re: Oportun Financial Corp
Amendment No. 4 to
Draft Registration Statement on Form S-1
Submitted May 2, 2019
CIK No. 0001538716
Dear Ms. Layton:
We have reviewed your amended draft registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1 Submitted May 2, 2019
Prospectus Summary, page 1
1. You disclose in the Company Overview that you have "generated
significant free cash
flow for the past four years." Please tell us why you disclosed this
Non-GAAP financial
measure prominently in the Prospectus Summary instead of or along with a
GAAP
financial metric. Also, tell us how you meet the disclosure requirements
in Item
10(e)(i)(A) of Regulation S-K as you do not reference to the Non-GAAP
disclosures that
reconcile from net cash provided by operating activities to free cash
flow beginning on
page 80.
Kathleen Layton
FirstName LastNameKathleen Layton
Oportun Financial Corp
Comapany NameOportun Financial Corp
May 28, 2019
May 28, 2019 Page 2
Page 2
FirstName LastName
Risk Factors
Risks Relating to Our Business
We have elected the fair value option effective as of January 1, 2018..., page
25
2. We note your response to comment 1. You disclose in Note 14. Fair
Value of Financial
Instruments that the model inputs used to determine the fair value of
Level 3 financial
instruments are unobservable and inherently judgmental. Level 3
valuations of financial
instruments represent a significant percentage of your total assets
and total liabilities at
December 31, 2018. Please revise to disclose that loans receivable at
fair value
representing 71% of your total assets and asset-backed notes
representing 62% of your
total liabilities were valued based on Level 3 valuations at December
31, 2018 and that
since considerable judgment and assumptions are used to determine
unobservable Level 3
inputs, changes to these inputs could have a significant effect on
your fair value
measurements and your results of operations.
Risks Related to this Offering and Ownership of Our Common Stock
Our amended and restated certificate of incorporation to be effective..., page
63
3. We note that your forum selection provision identifies the federal
district courts of the
United States of America as the exclusive forum for resolving any
complaint asserting a
cause of action arising under the Securities Act. We note that Section
22 of the Securities
Act creates concurrent jurisdiction for federal and state courts over
all suits brought to
enforce any duty or liability created by the Securities Act or the
rules and regulations
thereunder. Please revise your prospectus to state that there is
uncertainty as to whether a
court would enforce such provision and that investors cannot waive
compliance with the
federal securities laws and the rules and regulations thereunder. We
note that this
provision does not apply to actions arising under the Exchange Act,
please also ensure that
the exclusive forum provision in the governing documents states this
clearly, or tell us
how you will ensure that investors and shareholders will be informed
in future filings that
the provision does not apply to any actions arising under the Exchange
Act.
Notes to Consolidated Financial Statements
Note 13. Income Taxes, page F-38
4. You disclose an effective tax rate of (21%) for 2016 in the amendment
filed May 2,
2019. The effective tax rate was (217%) for 2016 in the amendment
filed December 14,
2018. Please advise as to why the effective tax rate changed, or
revise as necessary.
Note 14. Fair Value of Financial Instruments, page F-41
5. We note your response to comment 1. Your loans receivable at fair
value represent 71%
of your total assets at December 31, 2018. You disclose in your risk
factors on page 23
that you could incur substantial losses and your business operations
could be disrupted if
you are unable to effectively identify, manage, monitor and mitigate
financial risks, such
Kathleen Layton
Oportun Financial Corp
May 28, 2019
Page 3
as credit risk, interest rate risk, prepayment risk, liquidity risk
and other market-related
risks. Prepayment risk is a significant unobservable input and based
on this disclosure is a
material financial risk. Please disclose the prepayment assumption
used in determining the
value of your loans receivable at fair value. Please refer to ASC
820-10-50-1C.
6. Your asset-backed notes represent 62% of your total liabilities at
December 31, 2018.
Please disclose the valuation technique and significant unobservable
inputs used to
determine the fair value of your asset-backed notes. Please refer to
ASC 820-10-50-1C.
You may contact David Irving at 202-551-3321 or Gus Rodriguez at
202-551-3752 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Erin Purnell at 202-551-3454 or Michael Clampitt at 202-551-3434 with
any other
questions.
FirstName LastNameKathleen Layton Sincerely,
Comapany NameOportun Financial Corp
Division of
Corporation Finance
May 28, 2019 Page 3 Office of
Financial Services
FirstName LastName