Amendment No. 2 to Form S-1

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARYPRELIMINARY PROSPECTUS Subject to Completion January 11, 2016 3,600,000 Shares Common Stock Elevate Credit, Inc. is offering 3,600,000 shares of its common stock. This is our initial public offering and no public market currently exists for our shares. We anticipate that the initial public offering price of our common stock will be between $20 and $22 per share. / Our common stock has been approved for listing on the New York Stock Exchange under the symbol “ELVT.” Each of Kenneth E. Rees, our Chief Executive Officer and Chairman of our Board of Directors, Christopher Lutes, our Chief Financial Officer, and Linda Stinson, one of our significant stockholders, have indicated an intent to purchase shares of our common stock in this offering in the range of $250 thousand - $500 thousand with respect to Mr. Rees and $100 thousand - $250 thousand with respect to Mr. Lutes and in the amount of $500 thousand with respect to Mrs. Stinson. These shares, if purchased, will be through a directed share program, as described in this prospectus, at the initial public offering price. Each of Mr. Rees, Mr. Lutes and Mrs. Stinson are existing stockholders. Additionally, entities affiliated with Victory Park Management, LLC, or “VPC,” one of our lenders, have indicated an intent to purchase up to $2.5 million of our common stock in this offering at the initial public offering price. Such entities do not currently hold any shares of our common stock. Entities affiliated with Technology Crossover Ventures, which may also be deemed affiliated with John C. Rosenberg, have indicated an intent to purchase $7.5 million of our common stock in this offering at the initial public offering price. Such entities affiliated with Technology Crossover Ventures and John C. Rosenberg are existing stockholders and John C. Rosenberg is a member of our board of directors. Because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these potential investors and any of these potential investors could determine to purchase more, less or no shares in this offering. Any shares not so purchased will be offered by the underwriters to the general public on the same basis as other shares offered pursuant to this prospectus. / We are an “emerging growth company” under the federal securities laws and are therefore subject to reduced public company reporting requirements. Investing in our common stock involves risks. See “Risk factors” beginning on page 18. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if the prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total Public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ (1) See “Underwriting” beginning on page 195 for additional information regarding underwriting compensation. We have granted the underwriters the right to purchase up to an additional 540,000 shares of common stock. The underwriters expect to deliver the shares of common stock to purchasers on , 2016. UBS Investment Bank Jefferies Stifel William Blair BB&T Capital Markets

1 Originations and customers from 2002 through 2015, attributable to the combined current and predecessor direct and branded products.

2 Based on US population with a TransRisk Score of less than 700, Americans over 18 treated as “unscorable” by traditional credit scoring models and the UK population comprising the “non-standard” credit market.

responsible online credit o down over time Financial wellness features Flexible payment terms Good Today, Better Tomorrow

You should rely only on the information contained in this prospectus or contained in any free writing prospectus prepared by or on behalf of us. Neither we nor the underwriters have authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or any related free writing prospectus. This prospectus is an offer to sell only the shares offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of its delivery. Our business, financial condition, results of operations and prospects may have changed since that date.

Through and including , 2016 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

We were incorporated in Delaware in January 2014. Prior to May 1, 2014, we operated as a separately identifiable line of business of Think Finance, Inc., or “TFI,” our predecessor company. On May 1, 2014, TFI contributed the assets and liabilities associated with its direct lending and branded products business to us, and distributed its interest in our company to its stockholders. We refer to this as the “Spin-Off.” Unless expressly indicated or the context requires otherwise, the terms “Elevate,” “company,” “we,” “us” and “our” in this prospectus refer to Elevate Credit, Inc. and, where appropriate, our wholly owned subsidiaries, as well as the direct lending and branded product business of TFI for periods prior to the Spin-Off. Financial and operational information for periods before the Spin-Off refer solely to the direct lending and branded product business of TFI. For further information regarding the Spin-Off, see “Business—Our History.”

Our products are Rise and Elastic in the US and Sunny in the UK. Rise is an installment loan product that operates under individual state laws and may have significantly different rates, terms and conditions in each of the states in which Rise is offered. In Texas and Ohio, we do not make Rise loans directly, but rather act as a Credit Services Organization (which is also known as a Credit Access Business in Texas), or, collectively, “CSO,” and the loans are originated by an unaffiliated third party. Texas and Ohio are currently the only states in which Rise is offered pursuant to a CSO program. Our other US product, Elastic, is an open-end line of credit that is originated by a third-party lender under a contractual relationship whereby we provide marketing and technology services to support the lender’s origination of Elastic lines of credit. Unless expressly indicated or the context requires otherwise, and to simplify the disclosures contained herein, “Elevate’s products,” “our products,” “Elevate’s customers,” and “our customers,” as well as these products being “offered” by us and similar or related phrases, refer to these three products and their customers irrespective of whether Elevate directly originates the credit to the customer or whether such credit is originated by a third party.

Prospectus summary

This summary overview of the key aspects of the offering identifies those aspects of the offering that are the most significant. This summary is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary may not contain all the information you should consider before investing in our common stock. You should carefully read this prospectus in its entirety before investing in our common stock, including the sections titled “Risk factors” and “Management’s discussion and analysis of financial condition and results of operations” and our combined and consolidated financial statements and related notes included elsewhere in this prospectus. See “Certain conventions governing information in this prospectus” for detailed information on how we discuss our business.

OUR COMPANY

We provide technology-driven, progressive online credit solutions to non-prime consumers, typically defined as those with credit scores of less than 700. We use advanced technology and proprietary risk analytics to provide more convenient and more responsible financial options to our customers, who are not well-served by either banks or legacy non-prime lenders. We currently offer online installment loans and lines of credit in the United States, or the “US,” and the United Kingdom, or the “UK.” Our products, Rise, Elastic and Sunny, reflect our mission of “Good Today, Better Tomorrow” and provide customers with access to competitively priced credit and services while helping them build a brighter financial future with credit building and financial wellness features.

We have experienced rapid growth since launching our current generation of product offerings in 2013. Since their introduction, Rise, Elastic and Sunny, together, have provided approximately $1.2 billion in credit to approximately 450,000 customers and generated strong revenue growth. Our revenues for the year ended December 31, 2014 grew 280% to $274 million from $72 million for the year ended December 31, 2013 and revenues for the nine months ended September 30, 2015 grew 67% compared to the nine months ended September 30, 2014. Our operating losses for the years ended December 31, 2014 and 2013 were $61 million and $52 million, respectively and were $4 million and $51 million for the nine months ended September 30, 2015 and 2014, respectively.

Our products in the US and the UK are:



Product type	Installment	Installment	Line of credit
Geographies served(1)	15 states	UK	40 states
Loan size	$500 to $5,000	£100 to £2,500	$500 to $3,500
Loan term(2)	4-26 months	6-14 months	Up to 10 months
Pricing(3)	36% to 365% annualized	10.5% to 24% monthly	Initially $5 per $100 borrowed plus up to 5.0% of outstanding principal per billing period
Other fees	None	None	None
Weighted average effective APR(1)(4)	176%	255%	88%

(1)

As of or for the nine months ended September 30, 2015. Includes loans originated through Credit Services Organization, or “CSO,” programs.

(2)

Elastic term is based on minimum principal payments of 10% of last draw amount per month.

(3)

In Texas and Ohio, Rise charges a CSO fee instead of interest. See “Management’s discussion and analysis of financial condition and results of operations—Key Financial and Operating Metrics—Revenue growth—Revenues.” Rise interest rates may differ significantly by state. See “Regulatory Environment—APR by geography” for a breakdown of the APR for each of our products. Rise interest rates of 36% are available to qualified customers based on on-time repayment history.

(4)

Elastic is a fee-based product. The number shown is based on a calculation of an effective APR.

We differentiate ourselves in the following ways:

Online products that are “Good Today, Better Tomorrow.” We provide customers access to competitively priced credit when they need it and reward successful payment history with rates on subsequent loans (installment loan products) that can decrease over time. In addition, our products offer responsible lending features including credit bureau reporting, free credit monitoring (for US customers), online financial literacy videos and tools, amortizing loan balances, flexible repayment schedules, and no prepayment penalties or punitive fees.

Industry-leading advanced technology and proprietary risk analytics. We have developed proprietary automated underwriting capabilities that allow us to make data-driven decisions on loan applications in seconds. To best serve a broad set of non-prime consumers, we have developed a unique approach that we call “segment-optimized analytics.” This approach utilizes proprietary credit scoring models for each of the customer segments and channels we serve to underwrite and assess risk and uses targeted fraud models to identify potential fraud. We apply both cutting-edge and traditional analytical techniques and a vast array of data sources, while complying with applicable lending laws. As a result of our proprietary technology and risk analytics, over 90% of loan applications are fully automated with no manual review required. We are currently utilizing the 11th generation of our proprietary credit scoring model that has been developed by our team of over 35 data scientists.

Integrated multi-channel marketing strategy. We use an integrated multi-channel marketing strategy to directly reach potential customers. Our marketing strategy includes coordinated direct mail programs, TV campaigns, search engine marketing and digital campaigns, as well as strategic partnerships. We believe our direct-to-consumer approach allows us to focus on higher quality, lower cost customer acquisitions while maximizing reach and brand awareness. Approximately 85% of our customers are sourced from direct marketing channels. We continue to invest in new marketing channels, including social media, which we believe will provide us with further competitive advantages and support our ongoing growth. We expect to continue to expand growth in our channels based on improved customer targeting analytics and increasingly sophisticated response models that allow us to expand our marketing reach while maintaining target customer acquisition costs.

Our seasoned management team has, on average, over 15 years of technology and financial services experience and has worked together for an average of over six years in the non-prime consumer credit industry. Our management team has overseen the origination of $2.6 billion in credit to 1.3 million consumers for the combined current and predecessor direct and branded products that were contributed to Elevate in the Spin-Off. In addition, our management team achieved stable credit performance through the recent financial crisis, maintaining total principal losses as a percentage of loan originations of between 17% and 20% each year from 2006 through 2011. See “Business—Advanced Analytics and Risk Management—History of stable credit quality through the economic downturn.”

INDUSTRY OVERVIEW

Non-prime consumers represent the largest segment of the credit market. We provide credit to non-prime consumers, many of whom face reduced credit options and increased financial pressure due to macro-economic changes over the past few decades. We believe that this segment of the population represents a massive and underserved market of approximately 170 million consumers in the US and UK—a larger population than the market for prime credit. The profile of our typical customer for our US and UK products indicates that our customer base, which we refer to as the “New Middle Class,” is middle-income and has a mainstream demographic profile, in line with the average of the populations of the US and UK, respectively, in terms of income, educational background and homeownership.

The New Middle Class has an unmet need for credit. Due to wage stagnation over the past several decades and the further impact of the recent financial crisis, the New Middle Class is characterized by a lack of savings and significant income volatility. As a result, our customer base often must rely on short-term credit to fund unexpected expenses, like car and home repairs or medical emergencies.

Banks do not adequately serve the New Middle Class. Following the recent financial crisis, most banks tightened their underwriting standards and increased their minimum FICO score requirements for borrowers, leaving non-prime borrowers with severely reduced access to traditional credit. Despite the improving economy, banks continue to underserve the New Middle Class. We estimate that revolving credit available to non-prime US borrowers has been reduced by approximately $143 billion since 2008. This has had a profound impact on non-prime consumers in the US and UK who typically have little to no savings. Often, the only credit-like product offered by banks that is available to non-prime borrowers is overdraft protection, which provides credit at extremely high rates.

Legacy non-prime lenders are not innovative. As a result of limited access to credit products from banks, the New Middle Class has historically had to rely on a variety of legacy non-prime lenders, such as storefront installment lenders, payday lenders, title lenders, pawn and rent-to-own providers that typically do not offer consumers the convenience of online and mobile access. While legacy non-prime credit products may fulfill a borrower’s immediate funding needs, many of these products have significant drawbacks for consumers, including a potential “cycle of debt,” higher interest rates, punitive fees and aggressive collection tactics. Additionally, legacy non-prime lenders do not typically report to major credit bureaus, so non-prime consumers often remain in a “cycle of non-prime” and rarely improve their financial options.

Consumers are embracing the internet for their personal finances. Consumers are increasingly turning to online solutions to fulfill their personal finance needs. We believe this growth is an indication of borrower preferences for online financial products that are more convenient and easier to use than products provided by legacy brick-and-mortar lenders.

OUR SOLUTIONS

Our innovative online credit solutions provide immediate relief to customers today and can help them build a brighter financial future. Our mission of “Good Today, Better Tomorrow” is central to our innovative product design. We offer a number of financial wellness and consumer-friendly features that we believe are unmatched in the non-prime lending market.

We use advanced technology and proprietary risk analytics to provide more convenient, competitively priced financial solutions to our customers, who are not well-served by either banks or legacy non-prime lenders. We believe we are one of the first to develop a risk-based pricing model utilizing technology and risk analytics focused on the non-prime credit industry. As a result, we believe we are leading the next generation of more responsible online credit providers for the New Middle Class.

Our products provide the following key benefits:

Competitive pricing and no hidden or punitive fees. Our US products offer rates that we believe are typically 50% lower than many generally available alternatives from legacy non-prime lenders, such as payday lenders, which have an average APR of almost 400%. Our products offer rates on subsequent loans (installment loan products) that can decrease over time based on successful loan payment history. For instance, as of September 30, 2015, approximately 60% of Rise customers in good standing had received a rate reduction. In addition, in order to help our customers facing financial hardships, we have eliminated “punitive” fees, including returned payment fees and late charges, among others.

Access and convenience. We provide convenient, easy-to-use products via online and mobile platforms. Consumers are able to apply using an online application, which takes only minutes to complete. Credit determinations are made in seconds and over 90% of loan applications are fully automated with no manual review required. Funds are typically available next-day in the US and same-day in the UK.

Flexible payment terms and responsible lending features. Customers can select a repayment schedule that fits their needs with no prepayment penalties. In addition, our products feature amortizing principal balances over the term of the loan, in contrast to balloon payments required by many legacy non-prime lenders, which often result in repeated refinancings and can lead to a cycle of debt. To ensure that consumers fully understand the product and their alternatives, we provide extensive “Know Before You Owe” disclosures as well as an industry-leading five-day period for customers to rescind their loan at no cost. Consistent with our goal of being sensitive to the unique needs of non-prime consumers, we also offer flexible solutions to help customers facing issues impacting their ability to make scheduled payments. Our solutions include notifications before payment processing, extended due dates, grace periods, payment plans and settlement offers.

Financial wellness features. Our products include credit building and financial wellness programs, such as credit reporting, free credit monitoring (in the US) and online financial literacy videos and tools. Our goal is to help our customers improve their financial options and behaviors at no additional charge.

OUR COMPETITIVE ADVANTAGES

Using our technology platform and proprietary risk analytics, we are able to offer our customers innovative credit solutions that place us as a leader among a new generation of more responsible, online non-prime lenders. We believe the following are our key competitive advantages:

Differentiated online products for non-prime consumers. We are committed to our mission of “Good Today, Better Tomorrow.” Our products are “good today” due to their convenience, cost and flexibility. However, we go even further in creating credit products that can help enable customers to have a “better tomorrow.” Based on successful payment history, rates on subsequent loans (installment loan products) can decrease over time, and we provide a path to prime credit for struggling consumers by reporting to credit bureaus, providing free credit monitoring (for US products), and offering online financial literacy videos and tools to help build better financial management skills.

Leading risk analytics. As a result of our extensive experience and track record in the industry, we have developed a unique approach to underwriting non-prime credit using segment-optimized analytics. Unlike simplistic scoring approaches that may be adequate for prime and near-prime consumers, our approach allows us to serve a broad set of customer segments within the non-prime market and across the numerous channels we use to reach them. Our team of over 35 data scientists utilizes thousands of data inputs to continually optimize our proprietary credit scoring model, which is currently in its 11th generation. See “Business—Advanced Analytics and Risk Management—Segment-optimized analytics—Segment specific credit scores.” Across the portfolio of products we currently offer, we have maintained stable credit quality as evidenced by credit loss rates of under 20% on the original principal loan balances. See “Management’s discussion and analysis of financial condition and results of operations—Key Financial and Operating Metrics—Credit quality.” Furthermore, our proprietary credit and fraud scoring models allow not only for the scoring of a broad range of non-prime consumers, but also across a variety of products, channels, geographies and regulatory requirements.

Innovative and flexible technology platform. Investment in our flexible and scalable technology platform has enabled us to rapidly grow and innovate new products—notably supporting the launch of our current generation of product offerings in 2013. Our proven technology platform provides for highly automated loan originations and cost-effective servicing. In addition, our platform is adaptable to allow us to deliver customizable online loan products to meet changing consumer preferences and respond to a dynamic regulatory environment. Further, our open architecture allows us to easily integrate best-in-class third party providers, including strategic partners, data sources and outsourced vendors, into our platform.

Integrated multi-channel marketing approach. We use an integrated multi-channel marketing strategy to market directly to potential customers, which includes coordinated direct mail programs, TV campaigns, search engine marketing and digital campaigns, and strategic partnerships with affiliates. We have created unique capabilities to effectively identify and attract qualified customers, which supports our long-term growth objectives at target customer acquisition costs. We believe this approach allows us to focus on higher quality, lower cost customer acquisition while maximizing reach and enhancing brand awareness.

Seasoned management team with strong industry track record. We have a seasoned team of senior executives with an average of over 15 years of experience in technology and financial services, led by Ken Rees, a financial services industry veteran with over 20 years of experience, who is regarded as one of the leading advocates of responsible credit in the non-prime lending space. The team oversaw the origination of $2.6 billion in credit to 1.3 million consumers for the combined current and predecessor products that were contributed to Elevate in the Spin-Off.

OUR GROWTH STRATEGY

To achieve our goal of being the preeminent online lender to the New Middle Class, we intend to execute the following strategies:

Continue to grow our current products into dominant brands. The current generation of Rise, Elastic and Sunny were launched in 2013. Given strong consumer demand and organic growth potential, we believe that significant opportunities exist to expand these three products within their current markets via existing marketing channels. As non-prime consumers become increasingly familiar and comfortable with online financial services, we also plan to capture the new business generated as they migrate away from less convenient legacy brick-and-mortar lenders.

Widen the spectrum of borrowers served. We continue to evaluate new product and market opportunities that fit into our overall strategic objective of delivering next-generation online credit products that span the non-prime credit spectrum. For example, we are evaluating products with lower rates that would be more focused on the needs of near-prime consumers. In addition, we are continually focused on improving our analytics to effectively underwrite and serve consumers within those segments of the non-prime credit spectrum that we do not currently reach.

Increase operating leverage by expanding our relationship with existing customers. Customer acquisition cost is one of the most significant expenses for online lenders. We will seek to expand our strong relationships with existing customers by providing qualified customers with new loans on improved terms or offering other products and services without incurring significant additional costs. We believe we can, as a result, provide improved products and services to our customers while, at the same time, achieving better operating leverage.

Expand strategic partnerships. Our progressive non-prime credit solutions have attracted top-tier affiliate partners. We intend to continue growing our existing affiliate partnerships and will evaluate

opportunities to enter into new partnerships with affiliates and retailers and potentially enable non-prime customers to purchase their goods and services on credit. We expect these partnerships to provide us with access to a broad range of potential new customers, with low customer acquisition costs.

Expansion in select markets. We will explore pursuing strategic opportunities to expand into additional international and domestic markets. However, we plan to take a disciplined approach to international expansion, utilizing customized products and in-market expertise. As reflected in our approach to entering the UK market, we believe that local teams with products developed for each unique local market will ultimately be the most successful. We currently do not expect to undertake any international expansion in the near term.

RECENT DEVELOPMENTS

Preliminary 2015 and fourth quarter results

Our audited consolidated financial statements for the year ending December 31, 2015, as well as our financial results for the quarter ended December 31, 2015, are not yet available. The following expectations regarding our results for the year and quarter ended December 31, 2015 are solely management’s estimates based on currently available information. Our independent auditor has not yet completed its review of our results for the year or quarter ended December 31, 2015, and does not express an opinion or any other form of assurance with respect to this information. Our actual results and the final results we report for these periods may differ materially from the preliminary results reported below. This summary information is not a comprehensive statement of our financial results for this period. Please see “Risk Factors,” “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of certain factors that could result in differences between the preliminary financial data reported below and the final results we report for these periods. Certain of our metrics are non-GAAP financial measures. We believe that such metrics are useful in period-to-period comparisons of our core business. However, non-GAAP financial measures are not an alternative to any measure of financial performance calculated and presented in accordance with GAAP. See “—Reconciliation of Non-GAAP Financial Measures for Preliminary 2015 and Fourth Quarter Results” for a reconciliation of our non-GAAP metrics to GAAP.


	As of and for the years ended December 31,
	2015						2014			$ Change						% Change
Unaudited Financial Data (dollars in millions)	Low			High			Actual			Low			High			Low			High
Combined loans receivable – principal	$	354		$	357		$	202		$	152		$	155			75	%		77	%
Revenues		433			435			274			159			161			58	%		59	%
Net loss		(20	)		(19	)		(55	)		35			36			64	%		65	%
Adjusted EBITDA		16			18			(53	)		69			71
Adjusted EBITDA margin		4	%		4	%		(19	)%		23	%		23	%

	For the three months ended December 31,
	2015						2014			$ Change						% Change
Unaudited Financial Data (dollars in millions)	Low			High			Actual			Low			High			Low			High
Revenues	$	133		$	135		$	94		$	39		$	41			41	%		44	%
Net income (loss)		—			1			(11	)		11			12
Adjusted EBITDA		13			15			(8	)		21			23
Adjusted EBITDA margin		10	%		11	%		(9	)%		19	%		20	%

We expect to report ending combined loans receivable—principal as of December 31, 2015 in a range of approximately $354 million to $357 million, as compared to ending combined loans receivable—principal of $202 million as of December 31, 2014. The increase in ending combined loans receivable—principal was primarily attributable to an increase in customers outstanding as we continue to expand our customer base across all products.

We expect to report revenues in a range of approximately $433 million to $435 million for the year ended December 31, 2015 and in a range of approximately $133 million to $135 million for the three months ended December 31, 2015, as compared to revenues of $274 million for the year ended December 31, 2014 and $94 million for the three months ended December 31, 2014. The increase in annual and quarterly revenues was primarily attributable to significant loan growth across all our loan portfolios during 2015.

We expect to report a net loss in a range of approximately $19 million to $20 million for the year ended December 31, 2015 and net income in a range of approximately $0 million to $1 million for the three months ended December 31, 2015, as compared to a net loss of $55 million for the year ended December 31, 2014 and $11 million for the three months ended December 31, 2014. The change in annual and quarterly net income (loss) was primarily attributable to the improved gross profit that resulted from an increase in our loan portfolio and continued scaling of our business.

We expect to report Adjusted EBITDA in a range of approximately $16 million to $18 million for the year ended December 31, 2015 and in a range of approximately $13 million to $15 million for the three months ended December 31, 2015, as compared to Adjusted EBITDA of $(53) million for the year ended December 31, 2014 and $(8) million for the three months ended December 31, 2014. We expect our Adjusted EBITDA margin to be approximately 4% for the year ended December 31, 2015 and in a range of 10%-11% for the three months ended December 31, 2015 compared to an Adjusted EBITDA margin of (19%) for the year ended December 31, 2014 and (9%) for the three months ended December 31, 2014. The improvement in annual and quarterly Adjusted EBITDA was primarily attributable to a lower net loss for the annual period and net income for the quarterly period as discussed above.

Reconciliation of non-GAAP financial measures for preliminary 2015 and fourth quarter results

For definitions of the non-GAAP financial measures reconciled below, see “Management’s discussion and analysis of financial condition and results of operations—Non-GAAP Financial Measures.”

Adjusted EBITDA


	For the years ended December 31,									For the three months ended December 31,
	2015						2014			2015						2014
Unaudited Financial Data (dollars in millions)	Low			High			Actual			Low			High			Actual
Net income (loss)	$	(20	)	$	(19	)	$	(55	)	$	—		$	1		$	(11	)
Adjustments:
Net interest expense		37			37			13			12			12			6
Foreign currency losses		2			2			2			1			1			1
Depreciation and amortization expense		9			9			8			2			2			2
Non-operating income		(6	)		(6	)		—			—			—			—
Income tax benefit		(6	)		(5	)		(21	)		(2	)		(1	)		(6	)

Adjusted EBITDA	$	16		$	18		$	(53	)	$	13		$	15		$	(8	)

Adjusted EBITDA margin


	For the years ended December 31,									For the three months ended December 31,
	2015						2014			2015						2014
Unaudited Financial Data (dollars in millions)	Low			High			Actual			Low			High			Actual
Adjusted EBITDA	$	16		$	18		$	(53	)	$	13		$	15		$	(8	)
Revenues		433			435			274			133			135			94
Adjusted EBITDA Margin		4	%		4	%		(19	)%		10	%		11	%		(9	)%

Combined loan information


	December 31,
	2015						2014
Unaudited Financial Data (dollars in millions)	Low			High			Actual
Company Owned Loans:
Loans receivable – principal, current, company owned	$	271		$	272		$	148
Loans receivable – principal, past due, company owned		40			41			29

Loans receivable – principal, total, company owned		311			313			177
Loans receivable – finance charges, company owned		22			22			16

Loans receivable – company owned		333			335			193
Allowance for loan losses on loans receivable, company owned		(60	)		(59	)		(45	)

Loans receivable, net, company owned	$	273		$	276		$	148

Third Party Loans Guaranteed by the Company:
Loans receivable – principal, current, guaranteed by company	$	40		$	41		$	23
Loans receivable – principal, past due, guaranteed by company		3			3			2

Loans receivable – principal, total, guaranteed by company		43			44			25
Loans receivable – finance charges, guaranteed by company		—			—			—

Loans receivable – guaranteed by company		43			44			25
Liability for losses on loans receivable, guaranteed by company		(6	)		(6	)		(4	)

Loans receivable, net, guaranteed by company	$	37		$	38		$	21

Combined Loans Receivable:
Combined loans receivable – principal, current	$	311		$	313		$	171
Combined loans receivable – principal, past due		43			44			31

Combined loans receivable – principal		354			357			202
Combined loans receivable – finance charges		22			22			16

Combined loans receivable	$	376		$	379		$	218

RISKS AFFECTING US

Our business is subject to numerous risks and uncertainties, including those highlighted in “Risk factors” beginning on page 16. These risks include, but are not limited to, the following:

We have a limited operating history in an evolving industry, which makes it difficult to accurately assess our future growth prospects.

Our historical information does not necessarily represent the results we would have achieved as a stand-alone company and may not be a reliable indicator of our future results.

Our recent growth rate may not be indicative of our ability to continue to grow, if at all, in the future.

We have a history of losses and may not achieve consistent profitability in the future.

The consumer lending industry continues to be subjected to new laws and regulations in many jurisdictions that could restrict the consumer lending products and services we offer, impose additional compliance costs on us, render our current operations unprofitable or even prohibit our current operations.

Regulators and payment processors are scrutinizing certain online lenders’ access to the Automated Clearing House system to disburse and collect loan proceeds and repayments, and any interruption or limitation on our ability to access this critical system would materially adversely affect our business.

If the information provided by customers to us is incorrect or fraudulent, we may misjudge a customer’s qualification to receive a loan, and any inability to effectively identify, manage, monitor and mitigate fraud risk on a large scale could cause us to incur substantial losses, and our operating results, brand and reputation could be harmed.

Because of the non-prime nature of our customers, we have historically experienced a high rate of net charge-offs as a percentage of revenues, and our ability to price appropriately in response to this and other factors is essential. We rely on our proprietary credit and fraud scoring models in the forecasting of loss rates. If we are unable to effectively forecast loss rates, it may negatively impact our operating results.

We currently depend on debt financing to finance most of the loans we originate. Our business could be adversely affected by a lack of sufficient debt financing at acceptable prices or disruptions in the credit markets, which could reduce our access to credit.

Risks related to our association with Think Finance, Inc., or “TFI.”

Other risks related to litigation, compliance, regulation and this offering.

CORPORATE INFORMATION

We were incorporated in Delaware in January 2014. Prior to May 1, 2014, we operated as a separate identifiable line of business of TFI. On May 1, 2014 were spun off from TFI.

Our principal executive offices are located at 4150 International Plaza, Suite 300, Fort Worth, Texas 76109, and our telephone number is (817) 928-1500. Our website is www.elevate.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

Elevate, Elastic, Rise, Sunny and other trademarks or service marks of Elevate appearing in this prospectus are the property of Elevate. Trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. We have omitted the ^® and ™ designations, as applicable, for the trademarks used in this prospectus.

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 and are therefore subject to reduced public company reporting requirements. We will remain an emerging growth company until the earliest to occur of: the last day of the fiscal year in which we have more than $1.0 billion in annual revenues; the date we qualify as a “large accelerated filer” with at least $700 million of equity securities held by non-affiliates; the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; and the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

The offering

Common stock offered by us

3,600,000 shares

Common stock to be outstanding after this offering

30,401,632 shares

Option to purchase additional shares to be offered by us

540,000 shares

Use of proceeds

We expect to use approximately $56.3 million of the net proceeds to repay a portion of the outstanding amount under our financing agreement and the remainder for general corporate purposes, including to fund a portion of the loans made to our customers. See “Use of proceeds.”

Directed share program

At our request, the underwriters have reserved up to 5% of the common stock being offered by this prospectus for sale at the initial public offering price to our directors, director nominees, officers, employees and other individuals associated with us and members of their families. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares of common stock. Participants in the directed share program who purchase more than $1 million of shares shall be subject to a 25-day lock-up with respect to any shares sold to them pursuant to that program. Any shares sold in the directed share program to our directors, director nominees or executive officers shall be subject to 180-day lock-ups. Any of these lock-up agreements will have similar restrictions to the lock-up agreements described herein. See “Underwriting—Directed Share Program.”

Exchange listing

Our common stock has been approved for listing on the New York Stock Exchange, or “NYSE,” under the symbol “ELVT”.

The number of shares of our common stock to be outstanding after this offering is based on 26,801,632 shares of our common stock outstanding as of September 30, 2015 and excludes 4,360,575 shares of common stock reserved and common stock available for issuance under our 2014 Equity Incentive Plan, or “2014 Plan,” which comprises:

4,018,007 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2015, with a weighted average exercise price of $3.75 per share and per share exercise prices ranging from $2.12 to $8.29;

342,567 shares of common stock issuable upon the exercise of options available for grant.

Summary historical and pro forma financial data

The following tables summarize our combined and consolidated financial data. You should read the summary combined and consolidated financial data set forth below in conjunction with our combined and consolidated financial statements, the notes to our combined and consolidated financial statements and “Management’s discussion and analysis of financial condition and results of operations” contained elsewhere in this prospectus.

The combined and consolidated statements of operations data for the years ended December 31, 2014 and 2013 are derived from our audited combined and consolidated financial statements included elsewhere in this prospectus. The combined and consolidated statements of operations data for the nine months ended September 30, 2015 and 2014 and consolidated balance sheet data as of September 30, 2015 are derived from our unaudited condensed combined and consolidated interim financial statements included elsewhere in this prospectus. The unaudited combined and consolidated financial data for the nine months ended September 30, 2015 and 2014 and as of September 30, 2015 includes all adjustments, consisting only of normal recurring accruals that are necessary in the opinion of our management for a fair presentation of our financial position and results of operations for these periods. Our historical results are not necessarily indicative of the results that may be expected in any future period.

Prior to May 1, 2014, we operated as a separately identifiable line of business of Think Finance, Inc., or “TFI,” our predecessor company. On May 1, 2014, TFI contributed the assets and liabilities associated with its direct lending and branded products business to us and distributed its interest in our company to its stockholders, which we refer to as the “Spin-Off.” Our combined financial statements for periods prior to the Spin-Off reflect the historical results of operations and historical basis of assets and liabilities of the direct lending business that was contributed to us. The combined statements of operations for periods prior to the Spin-Off include expense allocations for general overhead and corporate functions historically provided to the direct lending business. These allocations were made based on a specifically identifiable basis or using allocations methods such as revenues, headcount or other reasonable methods and have been included in our combined financial statements for periods prior to May 1, 2014. Prior to May 1, 2014, all intercompany transactions between us and TFI have been included within the combined and consolidated financial statements and are considered to be effectively settled through contributions or distributions within TFI’s net investment at the time the transactions were recorded. Beginning May 1, 2014, all material intercompany transactions have been eliminated.


	For the years ended December 31,						For the nine months ended September 30,
Combined and consolidated statements of operations data (dollars in thousands)	2014			2013			2015			2014
							(unaudited)
Revenues	$	273,718		$	72,095		$	300,306		$	179,694
Cost of sales:
Provision for loan losses		170,908			41,723			161,013			114,512
Direct marketing costs		60,166			23,811			47,807			42,073
Other cost of sales		10,603			6,305			10,694			7,754

Total cost of sales		241,677			71,839			219,514			164,339

Gross profit		32,041			256			80,792			15,355

Operating expenses:
Compensation and benefits		48,010			21,257			44,529			34,273
Professional services		18,662			13,205			17,999			13,561
Selling and marketing		7,366			6,557			5,878			4,305
Occupancy and equipment		8,043			4,802			7,088			6,008
Depreciation and equipment		8,317			5,329			6,476			6,401
Other		2,766			1,510			2,642			2,220

Total operating expenses		93,164			52,660			84,612			66,768

Operating loss		(61,123	)		(52,404	)		(3,820	)		(51,413	)

Net interest expense		(12,939	)		(60	)		(24,205	)		(6,827	)
Foreign currency transaction (loss) gain		(1,408	)		(237	)		(1,240	)		—
Non-operating income		—			572			5,531			—

Total other (expense) income		(14,347	)		275			(19,914	)		(6,827	)

Loss before taxes		(75,470	)		(52,129	)		(23,734	)		(58,240	)
Income tax (benefit) expense		(20,710	)		(8,771	)		(3,579	)		(14,223	)

Loss from continuing operations		(54,760	)		(43,358	)		(20,155	)		(44,017	)

Income (loss) from discontinued operations, net of tax		135			(1,499	)		—			169

Net loss	$	(54,625	)	$	(44,857	)	$	(20,155	)	$	(43,848	)

Basic and diluted loss per share	$	(4.64	)	$	(3.86	)	$	(1.62	)	$	(3.77	)
Pro forma net loss per share of common stock – basic and diluted(1)		(2.11	)		(1.74	)		(0.76	)		(1.70	)
As adjusted(2)		(1.85	)		(1.53	)		(0.67	)		(1.49	)
Basic and diluted weighted average shares outstanding		11,779,485			11,607,832			12,456,682			11,643,365
Weighted average shares of common stock used in computing pro forma net loss per share – basic and diluted(1)		25,878,010			25,706,357			26,555,207			25,741,890

(1)

Pro forma basic and diluted net loss per share of common stock have been calculated assuming (i) the conversion of all outstanding shares of convertible preferred stock at both December 31, 2014 and September 30, 2015 into an aggregate of 5,639,410 shares (prior to the 2.5-for-1 forward stock split) of common stock as of the beginning of the applicable period or at the time of issuance, if later and (ii) the application of the 2.5-for-1 forward stock split to all common stock after such conversion.

(2)

Pro forma net loss per share of common stock, as adjusted, gives effect to (i) the sale by us of 3,600,000 shares of our common stock in this offering; (ii) the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 5,639,410 shares (prior to the 2.5-for-1 forward stock split) of our common stock; (iii) the application of the 2.5-for-1 forward stock split to all common stock after such conversion and (iv) the use of proceeds from this offering to repay a portion of the amounts outstanding under the Victory Park Capital credit facility, or the “VPC Facility,” as described in “Use of proceeds,” as if the offering and those transactions had occurred on September 30, 2015. The number of shares is computed based on an assumed initial public offering price of $21.00 per share, the midpoint of the price range set forth on the cover page of this prospectus.


	As of and for the years ended December 31,						As of and for the nine months ended September 30,
Other financial and operational data (dollars in thousands, except as noted)	2014			2013			2015			2014
							(unaudited)
Adjusted EBITDA(1)	$	(52,806	)	$	(47,075	)	$	2,656		$	(45,012	)
Free cash flow(2)		(47,358	)		(46,736	)		(25,607	)		(42,152	)
Number of new customer loans		202,656			93,425			176,825			149,199
Number of loans outstanding		146,046			81,081			206,934			131,339
Customer acquisition cost per new loan (in dollars)		297			255			270			282

Net charge-offs(3)	$	138,559		$	30,649		$	143,161		$	90,581
Additional provision for loan losses(3)		32,349			11,074			17,852			23,931

Provision for loan losses	$	170,908		$	41,723		$	161,013		$	114,512

Past due combined loans receivable – principal as a percentage of combined loans receivable – principal(4)		15	%		11	%		14	%		15	%
Net charge-offs as a percentage of revenues		51	%		43	%		48	%		50	%
Total provision for loan losses as a percentage of revenues		62	%		58	%		54	%		64	%
Combined loan loss reserve(5)	$	48,491		$	16,826		$	66,011		$	40,480
Combined loan loss reserve as a percentage of combined loans receivable(5)		22	%		21	%		20	%		23	%
Effective APR of combined loan portfolio		202	%		251	%		181	%		204	%
Ending combined loans receivable – principal(4)	$	201,660		$	72,753		$	304,086		$	161,805

(1)

Adjusted EBITDA is not a financial measure prepared in accordance with GAAP. Adjusted EBITDA represents our net loss, adjusted to exclude: net interest expense primarily associated with notes payable under the VPC Facility used to fund our loans; foreign currency gains and losses associated with our UK operations; depreciation and amortization expense on fixed assets and intangible assets; adjustments to contingent consideration payable related to companies previously acquired prior to the Spin-Off; miscellaneous gains and losses associated with the sale of assets related to discontinued operations; and income taxes. See “Management’s discussion and analysis of financial condition and results of operations—Non-GAAP Financial Measures” for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated in accordance with GAAP.

(2)

Free cash flow is not a financial measure prepared in accordance with GAAP. Free cash flow represents our net cash from operating activities adjusted for the principal loan net charge-offs and capital expenditures incurred during the period. See “Management’s discussion and analysis of financial condition and results of operations—Non-GAAP Financial Measures” for more information and a reconciliation of free cash flow to net cash provided by (used in) operating activities.

(3)

Net charge-offs and additional provision for loan losses are not a financial measure prepared in accordance with GAAP. Net charge-offs include the amount of principal and accrued interest on loans that are more than 60 days past due, or sooner if we receive notice that the loan will not be collected, such as a bankruptcy notice or identified fraud, offset by any recoveries. Additional provision for loan losses is the amount of provision for loan losses needed for a particular period to adjust the combined loan loss reserve to the appropriate level in accordance with our underlying loan loss reserve methodology. See “Management’s discussion and analysis of financial condition and results of operations—Non-GAAP Financial Measures” for more information and for a reconciliation to provision for loan losses, the most directly comparable financial measure calculated in accordance with GAAP.

(4)

Combined loans receivable is defined as loans owned by the company plus loans originated and owned by third-party lenders pursuant to our CSO programs. See “Management’s discussion and analysis of financial condition and results of operations—Non-GAAP Financial Measures” for more information and for a reconciliation of Combined loans receivable to loans receivable, net, the most directly comparable financial measure calculated in accordance with GAAP.

(5)

Combined loan loss reserve is defined as the loan loss reserve for loans owned by the company plus the loan loss reserve for loans originated and owned by third-party lenders and guaranteed by the company. See “Management’s discussion and analysis of financial condition and results of operations—Non-GAAP Financial Measures” for more information and for a reconciliation of Combined loan loss reserve to loan loss reserve, the most directly comparable financial measure calculated in accordance with GAAP.


	As of September 30, 2015
Selected consolidated balance sheet data (dollars in thousands)	Actual		Pro forma(1)		Pro forma as adjusted(2)
	(unaudited)
Cash and cash equivalents	$	33,106	$	33,106		43,106
Loans receivable, net of allowance for loan losses of $60,409		230,285		230,285		230,285
Total assets		362,036		362,036		372,036
Total liabilities		331,181		331,181		274,873
Total convertible preferred stock		6		—		—
Total stockholders’ equity		30,855		30,855		97,163

(1)

The pro forma column reflects (i) the conversion of all outstanding shares of convertible preferred stock at September 30, 2015 into 5,639,410 shares (prior to the 2.5-for-1 forward stock split) of common stock immediately prior to the closing of this offering and (ii) the application of the 2.5-for-1 forward stock split to all common stock after such conversion. The outstanding shares of our preferred stock were originally distributed to stockholders of TFI in connection with the Spin-Off. Each share of preferred stock will convert into one share of common stock without the payment of additional consideration. The conversion of the convertible preferred stock reduces total convertible preferred stock par value by $6,000 while increasing common stock by the same amount.

(2)

The pro forma as adjusted column reflects (i) the pro forma adjustments described in footnote (1) above, (ii) the sale by us of 3,600,000 shares of common stock in this offering at an assumed initial public offering price of $21.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discount and commissions and estimated offering expenses payable by us and (iii) the use of proceeds from this offering to repay a portion of the amounts outstanding under our VPC Facility as described in “Use of proceeds.” A $1.00 increase (decrease) in the assumed initial public offering price of $21.00 per share would increase (decrease) each of pro forma as adjusted cash and cash equivalents, working capital and total assets by $3.3 million and decrease (increase) pro forma as adjusted total stockholders’ (deficit) equity by approximately $3.3 million, assuming the number of shares we are offering, as set forth on the cover page of this prospectus, remains the same, after deducting the underwriting discount and commissions and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price, number of shares offered and other terms of this offering determined at pricing.

At Elevate, we know that now more than ever there is a need to rethink traditional approaches to consumer credit. Decades-long macroeconomic trends and the recent financial crisis have resulted in a growing “New Middle Class” with little to no savings, urgent credit needs and limited options. Banks haven’t stepped up to serve this market and legacy non-prime lenders haven’t innovated. We believe that Elevate provides the answer.

We use technology and advanced analytics to provide consumers the relief they need today and the tools and resources to help them build a brighter financial future. We call this “Good Today, Better Tomorrow.”

The rapid growth we’ve achieved stems from our unique perspective on the New Middle Class. We understand they are more than a single-dimensional credit score. They deserve access to credit, fair pricing, a path to lower rates and better credit, and to achieve their long-term financial goals—all through convenient online and mobile channels. With our innovative products, technology and analytics, we’re leading the path to progress.

Serving non-prime consumers represents a vast and untapped market opportunity. Banks have pulled away from non-prime consumers since the recession while more recent innovations in non-bank financial services have primarily focused on the needs of prime consumers. To make matters worse, “dead-end” products offered by legacy non-prime lenders can trap consumers in a “cycle of debt” and never solve for an even more pervasive problem we call the “cycle of non-prime.” We believe the New Middle Class deserves better. Where marketplace lenders are providing better options for prime consumers, online small business lenders are streamlining and enhancing access to credit for small businesses, and other technology-enabled lenders are rethinking the student loan market, Elevate is leading the transformation of the underserved non-prime credit market.

We believe we offer investors a tremendous opportunity to invest in a platform with a proven ability to grow, scale and innovate. We also think it’s important that before you invest you understand the core beliefs that drive our business:

We believe the highest cost credit is no credit at all. Eliminating access to credit by forcing non-prime consumers to borrow from family and friends is irresponsible and ignores the real-world challenges and needs facing the New Middle Class. Our goal is to responsibly serve as many non-prime consumers as possible while maintaining sustainable margins and without compromising our commitment to lowering rates for our customers.

We believe non-prime credit needs to be priced to risk. Serving non-prime customers means accepting a higher likelihood of default. However, instituting overly restrictive credit criteria or adding punitive fees and aggressive collections practices that create even more hardships for consumers is not the answer. At Elevate, we utilize risk-based pricing to achieve target margins with simple and transparent pricing. This means that our customers will pay the rate appropriate for their risk but won’t face hidden or punitive fees, and as a result, most of the credit we offer will be priced above rates generally available to prime consumers. Our goal is to balance the need to provide access to responsible credit with the need for sustainable profits.

We believe that further improvements in technology, analytics and scale should benefit our customers. We are continually investing in advanced analytics that allow us to improve our underwriting capabilities. In addition, because we are a 100% online and mobile business, as we

continue to grow we expect to generate economies of scale. We are committed to using these improvements to benefit our borrowers in the form of lower rates. As a result, we do not expect operating margins to grow above 20% over the long term. This is part of our commitment as a responsible lender, but also an important discipline that supports long-term growth and competitive differentiation.

We believe in “Good Today, Better Tomorrow.” The New Middle Class deserves responsible online and mobile credit products that meet their needs today and also provide them with a path to improve their financial future. Our products are competitively priced and convenient, have flexible payment options, and don’t have hidden or punitive fees. In addition, they have rates that can go down over time, are reported to credit bureaus, offer free credit score monitoring and provide financial wellness tools—all to help our customers build their brighter tomorrow. We believe this approach is the right thing to do and will result in a more successful long-term relationship with our customers.

We believe the need for non-prime credit is here to stay. Ongoing changes in the regulatory environment will not eliminate the need for non-prime credit, but rather will evolve the way it is provided. Moreover, consumers continue to demand more convenience and speed of delivery for credit. Innovation is in our DNA, and we believe that nimble, technology-enabled lenders like Elevate will be able to adapt, thrive and continue to grow in a dynamic regulatory environment and serve expanding consumers expectations for credit.

Delivering on these core beliefs is powered by our people and a corporate culture driven by Elevate’s four company values: Think Big, Do the Right Thing, Win Together, and Raise the Bar. These are not just words on paper, they inspire us to innovate, adapt and always focus on improving the financial options available to the New Middle Class.

Thank you for reading this letter. We are proud to serve the New Middle Class, and I hope you share our excitement about the incredible opportunity we have to provide the next generation of responsible, technology-driven credit solutions for non-prime consumers and build a successful, lasting company.

Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and all other information contained in this prospectus, including our combined and consolidated financial statements and the related notes, before investing in our common stock. The risks and uncertainties described below are not the only ones we face, but include the most significant factors currently known by us that make the offering speculative or risky. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that affect us. If any of the following risks materialize, our business, financial condition and results of operations could be materially harmed. In that case, the trading price of our common stock could decline, and you may lose some or all of your investment.

We have a limited operating history in an evolving industry, which makes it difficult to accurately assess our future growth prospects.

We were incorporated as a wholly owned subsidiary of Think Finance, Inc., or “TFI,” our predecessor company, in January 2014 and became a stand-alone company in May 2014 following the Spin-Off and, as such, have a very limited operating history as a stand-alone company. Although our management team has many years of experience in the non-prime lending industry, we also operate in an evolving industry that may not develop as expected. Assessing the future prospects of our business is challenging in light of both known and unknown risks and difficulties we may encounter. Growth prospects in non-prime lending can be affected by a wide variety of factors including:

We may not be able to successfully address these factors, which could negatively impact our growth, harm our business and cause our operating results to be worse than expected.

Our historical information does not necessarily represent the results we would have achieved as a stand-alone company and may not be a reliable indicator of our future results.

We have a very limited operating history as a stand-alone company. See “—We have a limited operating history in an evolving industry, which makes it difficult to accurately assess our future growth prospects” above. As a result of the Spin-Off, TFI contributed the assets and liabilities associated with its direct lending and branded products business to us. The historical financial information we have included in this prospectus may not reflect what our results of operations, financial position and cash flows would have been had we been a stand-alone company during the periods presented. This is primarily because:

Following this offering, we also will be responsible for the additional costs associated with being a public company, including costs related to corporate governance and having listed and registered securities. Therefore, our financial statements may not be indicative of our future performance as a stand-alone public company. For additional information about our past financial performance and the basis of presentation of our financial statements, please see “Summary historical and pro forma financial data,” “Selected historical consolidated financial data,” “Management’s discussion and analysis of financial condition and results of operations” and our financial statements and the notes thereto included elsewhere in this prospectus.

Our recent growth rate may not be indicative of our ability to continue to grow, if at all, in the future.

Our revenues grew to $274 million in the year ended December 31, 2014 from $72 million in the year ended December 31, 2013 and to $300 million for the nine months ended September 30, 2015 from $180 million for the nine months ended September 30, 2014. It is possible that, in the future, even if our revenues continue to increase, our rate of revenue growth could decline, either because of external factors affecting the growth of our business or because we are not able to scale effectively as we grow. If we cannot manage our growth effectively, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We have a history of losses and may not achieve consistent profitability in the future.

We generated net losses of $55 million in the year ended December 31, 2014, $45 million in the year ended December 31, 2013, $20 million for the nine months ended September 30, 2015 and $44 million for the nine months ended September 30, 2014, respectively. As of September 30, 2015, we had an accumulated deficit of $54 million. We will need to generate and sustain increased revenues in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.

As we grow, we expect to continue to expend substantial financial and other resources on:

These expenditures are expected to increase and may adversely affect our ability to achieve and sustain profitability as we grow. In addition, we record our provision for loan losses as an expense to account for the possibility that some loans may not be repaid in full. We expect the aggregate amount of loan loss provision to grow as we increase the number and total amount of loans we make to new customers.

Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenues enough to offset our higher operating expenses. We may incur losses in the future for a number of reasons, including the other risks described in this prospectus, unforeseen expenses, difficulties, complications and delays and other unknown events. If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease.

Both state and federal governments in the US and regulatory bodies in the UK may seek to impose new laws, regulatory restrictions or licensing requirements that affect the products or services we offer, the terms on which we may offer them, and the disclosure, compliance and reporting obligations we must fulfill in connection with our lending business. They may also interpret or enforce existing requirements in new ways that could restrict our ability to continue our current methods of operation or to expand operations, impose significant additional compliance costs and may have a negative effect on our business, prospects, results of operations, financial condition or cash flows. In some cases these measures could even directly prohibit some or all of our current business activities in certain jurisdictions, or render them unprofitable or impractical to continue.

In recent years, consumer loans, and in particular the category commonly referred to as “payday loans,” have come under increased regulatory scrutiny that has resulted in increasingly restrictive regulations and legislation that makes offering consumer loans in certain states in the US or the UK less profitable or unattractive. Laws or regulations in some states in the US require that all borrowers of certain short-term loan products be reported to a centralized database and limit the number of loans a borrower may receive or have outstanding. See “—The CFPB has announced that it will soon promulgate new rules affecting the consumer lending industry, and these or subsequent new rules and regulations may significantly restrict the conduct of our US consumer lending business.”

Certain consumer advocacy groups and federal and state legislators and regulators have advocated that laws and regulations should be tightened so as to severely limit, if not eliminate, some kinds of non-prime loan products and services, and this has resulted in both the executive and legislative branches of the US federal government and state governmental bodies pursuing legislation that could further regulate consumer loan products and services such as those that we offer. The US Congress, as well as state legislatures and other state and federal governmental authorities have debated, and may in the future adopt, legislation or regulations that could, among other things, place a cap (or decrease a current cap) on the interest or fees that we can charge or a cap on the effective annual percentage rate that limits the amount of interest or fees that may be charged, limit origination fees for loans, require changes to

underwriting or collections practices, require short-term lenders to be bonded or require lenders to report consumer loan activity to databases designed to monitor or restrict consumer borrowing activity, impose “cooling off” periods between the time a loan is paid off and another loan is obtained, require an ability to repay analysis before loans can be originated or prohibit us from providing any of our consumer loan products in the US to active duty military personnel, active members of the National Guard or members on active reserve duty and their immediate dependents. For instance, the rules under the Military Lending Act, or “MLA,” were recently amended to restrict the interest rate and other terms that can be offered to certain active duty military personnel and their spouses and dependents. The amended MLA rules became effective on October 1, 2015 and will apply to transactions consummated or established after October 3, 2016 for all credit products subject to the rules except credit cards, which have a later operative date. The MLA, as amended, covers the Elastic and Rise products and will restrict our ability to offer our products to military personnel and their dependents when the amendments become operative in October 2016. Failure to comply with the MLA may limit our ability to collect principal, interest, and fees from borrowers and may result in civil and criminal liability that could harm our business.

Significant new laws and regulations have also been adopted in the UK, and additional new laws and regulations will continue to be imposed. See “—The UK has imposed, and continues to impose, increased regulation of the short-term high-cost credit industry with the stated expectation that some firms will exit the market” below for additional information.

We cannot currently assess the likelihood of any future unfavorable federal, state, local or foreign legislation or regulations being proposed or enacted that could affect the products and services we offer. We closely monitor proposed legislation in jurisdictions where we offer loan products. Additional legislative or regulatory provisions could be enacted that could severely restrict, prohibit or eliminate our ability to offer a consumer loan product. In addition, under statutory authority, US state regulators have broad discretionary power and may impose new licensing requirements, interpret or enforce existing regulatory requirements in different ways or issue new administrative rules, even if not contained in state statutes, that could adversely affect the way we do business and may force us to terminate or modify our operations in particular states or affect our ability to obtain new licenses or renew the licenses we hold.

In order to serve our non-prime customers profitably we need to sufficiently price the risk of the transaction into the annual percentage rate, or “APR,” of our loans. If individual states or the US federal government or regulators in the UK impose rate caps lower than those at which we can operate our current business profitably or otherwise impose stricter limits on non-prime lending, we would need to exit such states or dramatically reduce our rate of growth by limiting our products to customers with higher creditworthiness.

Legislation that would create low rate caps or that would otherwise adversely impact Rise, our installment loan product, is occasionally introduced in the legislatures of some of the states where we have a license to originate loans. If one of the states where we are currently offering or hope in the future to offer Rise loans changes its legislation in a way that would make it difficult or impossible to offer this product at acceptable margins, we may choose to exit the state or alter our expansion plans, which would reduce our revenues and operating margins. A regulatory change that reduces the rate that can be charged in a state or across the US or UK would cause us to reduce the number of customers we serve and/or lead to higher losses as a percentage of revenues and/or higher customer acquisition costs.

Similarly, if Elevate products were required to receive and review additional documentation from consumers such as bank statements, photo identification or pay stubs, this added inconvenience may result in lower consumer applications and loans, which would adversely affect our growth.

Furthermore, legislative or regulatory actions may be influenced by negative perceptions of us and our industry, even if such negative perceptions are inaccurate, attributable to conduct by third parties not affiliated with us (such as other industry members) or attributable to matters not specific to our industry.

Any of these or other legislative or regulatory actions that affect our consumer loan business at the national, state, international and local level could, if enacted or interpreted differently, have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows and prohibit or directly or indirectly impair our ability to continue current operations.

When making loans in the US, we use the Automated Clearing House, or “ACH,” system to deposit loan proceeds into our customers’ bank accounts. This includes loans that we originate as well as Elastic loans (originated by Republic Bank & Trust Company, or “Republic Bank”) and Rise loans made through the credit services organization, or “CSO,” programs. These products also depend on the ACH system to collect amounts due by withdrawing funds from customers’ bank accounts when the customer has provided authorization to do so. ACH transactions are processed by banks, and if these banks cease to provide ACH processing services or are not allowed to do so, we would have to materially alter, or possibly discontinue, some or all of our business if alternative ACH processors are not available.

It has been reported that actions by the US Department of Justice, or the “Justice Department,” the Federal Deposit Insurance Corporation, or the “FDIC,” and certain state regulators, referred to as Operation Choke Point, appear to be intended to discourage banks and ACH payment processors from providing access to the ACH system for certain short-term consumer loan providers that they believe are operating illegally, cutting off their access to the ACH system to either debit or credit customer accounts (or both). According to published reports, the Justice Department issued subpoenas to banks and payment processors and the FDIC and other regulators were reported to have used bank oversight examinations to discourage banks from providing access to the ACH system to certain online lenders. In August 2013, the Department of Financial Services of the State of New York, or the “NYDFS,” sent letters to approximately 35 online short-term consumer loan companies (which did not include us as we do not offer consumer loans in New York) demanding that they cease and desist offering illegal payday loans to New York consumers and also sent letters to over 100 banks, as well as the National Automated Clearing House Association, or “NACHA,” which oversees the ACH network, requesting that they work with the NYDFS to cut off ACH system access to New York customer accounts for illegal payday lenders. NACHA, in turn, requested that its participants review origination activity for these 35 online short-term consumer loan companies and advise NACHA whether it had terminated these lenders’ access to the ACH system or, if not, the basis for not doing so. NACHA also requested that participants review ACH origination activities related to other online loan companies and to terminate any ACH system access that would violate NACHA rules, which would include, according to NACHA, any authorizations to use the ACH system to pay illegal short-term consumer loans that are unenforceable under state law. Maryland’s Division of Financial Regulation has also been reported to have taken steps to stop banks in Maryland from processing illegal payday loans in its state, and the California Department of Business Oversight is reported to have similarly directed state-licensed banks and credit unions to monitor transactions with any unlicensed lenders.

This heightened regulatory scrutiny by the Justice Department, the FDIC and other regulators has caused some banks and ACH payment processors to cease doing business with consumer lenders who are

operating legally, without regard to whether those lenders are complying with applicable laws, simply to avoid the risk of heightened scrutiny or even litigation. These actions have reduced the number of banks and payment processors who provide ACH payment processing services and could conceivably make it increasingly difficult to find banking partners and payment processors in the future and/or lead to significantly increased costs for these services. If we are unable to maintain access to needed services on favorable terms, we would have to materially alter, or possibly discontinue, some or all of our business if alternative processors are not available.

Furthermore, NACHA announced certain rule amendments effective September 18, 2015, which reduced the return rate threshold for unauthorized debit entries and established an inquiry process for administrative and over all debit return rates. Return rates in excess of the guidelines prescribed by the rule may trigger an inquiry and review process by NACHA.

If we lost access to the ACH system because our payment processor was unable or unwilling to access the ACH system on our behalf we would experience a significant reduction in customer loan payments. Although we would notify consumers that they would need to make their loan payments via physical check, debit card, or other method of payment a large number of customers would likely go into default because they are expecting automated payment processing. Similarly, if regulatory changes limited our access to the ACH system or reduced the number of times ACH transactions could be re-presented, we would experience higher losses.

For the loans we originate through Rise and Sunny, our growth is largely predicated on effective loan underwriting resulting in acceptable customer profitability. This is equally important for the Rise loans in Texas and Ohio and the Elastic lines of credit originated by unaffiliated third parties. See “Management’s discussion and analysis of financial condition and results of operations—Components of Our Results of Operations—Revenues.” Lending decisions by such originating lenders are made using our proprietary credit and fraud scoring models, which we license to them. Lending decisions are based partly on information provided by loan applicants. To the extent that these applicants provide information in a manner that is unverifiable, the credit score delivered by our proprietary scoring methodology may not accurately reflect the associated risk. In addition, data provided by third party sources is a significant component of the decision methodology and this data may contain inaccuracies. Our resources, technologies and fraud prevention tools, which are used to originate loans or lines of credit, as applicable, under Rise, Sunny and Elastic, may be insufficient to accurately detect and prevent fraud. Inaccurate analysis of credit data that could result from false loan application information could harm our reputation, business and operating results.

In addition, our proprietary credit and fraud scoring models use identity and fraud checks analyzing data provided by external databases to authenticate each customer’s identity. The level of our fraud charge-offs and results of operations could be materially adversely affected if fraudulent activity were to significantly increase. Online lenders are particularly subject to fraud because of the lack of face-to-face interactions and document review. If applicants assume false identities to defraud the company or consumers simply have no intent to repay the money they have borrowed the related portfolio of loans will exhibit higher loan losses. We have recently and may in the future incur substantial losses and our business operations could be disrupted if we or the originating lenders are unable to effectively identify,

manage, monitor and mitigate fraud risk using our proprietary credit and fraud scoring models. In the three months ended June 30, 2015, we made changes to our fraud control environment in connection with a new marketing strategy that we were testing, which, when combined with certain factors, including certain staffing constraints, had unintended consequences resulting in certain fraudulent loans being originated. We increased our reserve for loan losses by $6 million in the six months ended June 30, 2015 as a result of these loans. We believe we have identified and, by improving our control environment and hiring additional staff, remediated the root causes of the vulnerability that principally contributed to this instance of fraud.

Since fraud is perpetrated by increasingly sophisticated individuals and “rings” of criminals, it is important for us to continue to update and improve the fraud detection and prevention capabilities of our proprietary credit and fraud scoring models. If these efforts are unsuccessful then credit quality and customer profitability will erode. If credit and/or fraud losses increased significantly due to inadequacies in underwriting or new fraud trends, new customer originations may need to be reduced until credit and fraud losses returned to target levels, and business could contract.

It may be difficult or impossible to recoup funds underlying loans made in connection with inaccurate statements, omissions of fact or fraud. Loan losses are currently the largest cost as a percentage of revenues across each of Rise, Sunny and Elastic. If credit or fraud losses were to rise, this would significantly reduce our profitability. High profile fraudulent activity could also lead to regulatory intervention, negatively impact our operating results, brand and reputation and require us, and the originating lenders, to take steps to reduce fraud risk, which could increase our costs.

Any of the above risks could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our net charge-offs as a percentage of revenues for the years ended December 31, 2014 and 2013 and for the nine months ended September 30, 2015 were 51%, 43% and 48%, respectively. Because of the non-prime nature of our customers, it is essential that our products are appropriately priced, taking this and all other relevant factors into account. In making a decision whether to extend credit to prospective customers, and the terms on which we or the originating lenders are willing to provide credit, including the price, we and the originating lenders rely heavily on our proprietary credit and fraud scoring models, which comprise an empirically derived suite of statistical models built using third party data, data from customers and our credit experience gained through monitoring the performance of customers over time. Our proprietary credit and fraud scoring models are based on previous historical experience. Typically, however, our models will become less effective over time and need to be rebuilt regularly to perform optimally. This is particularly true in the context of our preapproved direct mail campaigns. If our proprietary credit and fraud scoring models are not rebuilt or if they do not perform up to target standards the products will experience increasing defaults or higher customer acquisition costs.

Our proprietary credit and fraud scoring models are also highly reliant on access to third party data sources. If these data sources are not available at time of credit decisioning or if the companies that have aggregated this data are no longer able or willing to provide this data to us, our products will experience higher defaults or higher customer acquisition costs. Similarly, if the data becomes corrupted in some

fashion or is improperly processed by our underwriting systems we, and the originating lenders, will experience reduced underwriting accuracy and consequently higher defaults or customer acquisition costs.

If our proprietary credit and fraud scoring models fail to adequately predict the creditworthiness of customers, or if they fail to assess prospective customers’ financial ability to repay their loans, or if any portion of the information pertaining to the prospective customer is false, inaccurate or incomplete, and our systems do not detect such falsities, inaccuracies or incompleteness, or any or all of the other components of the credit decision process described herein fails, higher than forecasted losses may result. Furthermore, if we are unable to access the third party data used in our proprietary credit and fraud scoring models, or access to such data is limited, the ability to accurately evaluate potential customers using our proprietary credit and fraud scoring models will be compromised, and we may be unable to effectively predict probable credit losses inherent in the resulting loan portfolio, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Additionally, if we make errors in the development and validation of any of the models or tools used to underwrite loans, such loans may result in higher delinquencies and losses. Moreover, if future performance of customer loans differs from past experience, which experience has informed the development of our proprietary credit and fraud scoring models, delinquency rates and losses could increase.

If our proprietary credit and fraud scoring models were unable to effectively price credit to the risk of the customer, lower margins would result. Either our losses would be higher than anticipated due to “underpricing” products or customers may refuse to accept the loan if products are perceived as “overpriced.” Additionally, an inability to effectively forecast loss rates could also inhibit our ability to borrow from our debt facilities, which could further hinder our growth and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We primarily rely on debt financing to support the growth of our originated portfolios, Rise and Sunny. However, we cannot guarantee that financing will continue to be available beyond the current maturity date of our debt facilities, on reasonable terms or at all. Presently our debt financing for Rise and Sunny comes from a single source, Victory Park Management, LLC, or “VPC,” an affiliate of Victory Park Capital. If VPC became unwilling or unable to provide debt financing to us at prices acceptable to us we would need to secure additional debt financing or reduce loan originations significantly. As the volume of loans that we make to customers increases, we may require the expansion of our borrowing capacity on our existing debt facilities or the addition of new sources of capital. For example, on December 16, 2015, we and VPC entered into an amendment to our debt facility to increase the maximum loan to value ratio for purposes of certain covenants and calculating the borrowing base for the December 31, 2015 testing date due to an increased volume of loans. The availability of these financing sources depends on many factors, some of which are outside of our control.

We may also experience the occurrence of events of default or breaches of financial or performance covenants under our debt agreements, which are currently secured by all our assets. Any such occurrence or breach could result in the reduction or termination of our access to institutional funding or increase our cost of funding. Certain of these covenants are tied to our customer default rates, which may be

significantly affected by factors, such as economic downturns or general economic conditions beyond our control and beyond the control of individual customers. In particular, loss rates on customer loans may increase due to factors such as prevailing interest rates, the rate of unemployment, the level of consumer and business confidence, commercial real estate values, the value of the US dollar, energy prices, changes in consumer and business spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. Increases in the cost of capital would reduce our net profit margins.

Similarly, the loan portfolio for Elastic, which is originated by a third-party lender, gets funding as a result of the purchase of a participation interest in the loans it originates from Elastic SPV, Ltd., or “Elastic SPV,” a Cayman Island entity that purchases such participations. Elastic SPV has a loan facility with VPC for its funding, for which we provide credit support, and we have entered into a credit default swap facility with Elastic SPV that provides protection for loan losses. A voluntary or involuntary halt to this program would result in the originating lender halting further loan originations until a new financing partner could be identified.

In the event of a sudden or unexpected shortage of funds in the banking system, we cannot be sure that we will be able to maintain necessary levels of funding without incurring high funding costs, a reduction in the term of funding instruments or the liquidation of certain assets. If we were to be unable to arrange new or alternative methods of financing on favorable terms, we may have to curtail our origination of loans or recommend that the originating lenders curtail their origination of credit, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

In the future, we may seek to access the debt capital markets to obtain capital to finance growth. However, our future access to the debt capital markets could be restricted due to a variety of factors, including a deterioration of our earnings, cash flows, balance sheet quality, or overall business or industry prospects, adverse regulatory changes, a disruption to or deterioration in the state of the capital markets or a negative bias toward our industry by market participants. Disruptions and volatility in the capital markets could also cause banks and other credit providers to restrict availability of new credit. Due to the negative bias toward our industry, commercial banks and other lenders have restricted access to available credit to participants in our industry, and we may have more limited access to commercial bank lending than other businesses. Our ability to obtain additional financing in the future will depend in part upon prevailing capital market conditions, and a potential disruption in the capital markets may adversely affect our efforts to arrange additional financing on terms that are satisfactory to us, if at all. If adequate funds are not available, or are not available on acceptable terms, we may not have sufficient liquidity to fund our operations, make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges and this, in turn, could adversely affect our ability to advance our strategic plans. Additionally, if the capital and credit markets experience volatility, and the availability of funds is limited, third parties with whom we do business may incur increased costs or business disruption and this could adversely affect our business relationships with such third parties, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Any decrease in our access to preapproved marketing lists from credit bureaus or other developments impacting our use of direct mail marketing could adversely affect our ability to grow our business.

We market Rise and Sunny and provide marketing services to the originating lender in connection with Elastic. Direct mailings of preapproved loan offers to potential loan customers comprise one of the most important marketing channels for both the loans we originate, as well as those originated by third-party

lenders. We estimate that approximately 56% and 99.5% of new Rise and Elastic loan customers, respectively, in the nine months ended September 30, 2015 obtained loans as a result of receiving such preapproved loan offers. Our marketing techniques identify candidates for preapproved loan mailings in part through the use of preapproved marketing lists purchased from credit bureaus. If access to such preapproved marketing lists were lost or limited due to regulatory changes prohibiting credit bureaus from sharing such information or for other reasons, our growth could be significantly adversely affected. If the cost of obtaining such lists increases significantly, it could substantially increase customer acquisition costs and decrease profitability.

Similarly, federal or state regulators or legislators could limit access to these preapproved marketing lists with the same effect.

In addition, preapproved direct mailings may become a less effective marketing tool due to over-penetration of direct mailing lists. Any of these developments could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We rely in part on relationships with marketing affiliates to originate our loans. These relationships are generally non-exclusive and subject to termination, and the growth of our customer base could be adversely affected if any of our marketing affiliate relationships are terminated or the number of referrals we receive from marketing affiliates is reduced.

We rely on strategic marketing affiliate relationships with certain companies for referrals of some of the customers to whom we issue loans, and our growth depends in part on the growth of these referrals. In 2014 and 2013 and for the nine months ended September 30, 2015 and 2014, loans issued to Rise customers referred to us by our strategic partners constituted 12%, 8%, 15% and 8% of total Rise loan originations, respectively. Additionally, in 2014 and 2013 and for the nine months ended September 30, 2015 and 2014, loans issued to Sunny customers through strategic partners constituted 41%, 37%, 26% and 43% of total Sunny loan originations, respectively. Many of our marketing affiliate relationships do not contain exclusivity provisions that would prevent such marketing affiliates from providing customer referrals to competing companies. In addition, the agreements governing these partnerships, generally, contain termination provisions, including provisions that in certain circumstances would allow our partners to terminate if convenient, that, if exercised, would terminate our relationship with these partners. These agreements also contain no requirement that a marketing affiliate refer us any minimum number of customers. There can be no assurance that these marketing affiliates will not terminate our relationship with them or continue referring business to us in the future, and a termination of any of these relationships or reduction in customer referrals to us could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our success and future growth depend significantly on our successful marketing efforts, and if such efforts are not successful, our business and financial results may be harmed.

We intend to continue to dedicate significant resources to marketing efforts, including for the Elastic product, particularly as we continue to grow, introduce new loan products and expand into new states. Our ability to attract qualified borrowers depends in large part on the success of these marketing efforts and the success of the marketing channels we use to promote our products. Our marketing channels include social media and the press, online affiliations, search engine optimization, search engine marketing, offline partnerships, preapproved direct mailings and television advertising. If any of our current marketing channels become less effective, if we are unable to continue to use any of these

channels, if the cost of using these channels were to significantly increase or if we are not successful in generating new channels, we may not be able to attract new borrowers in a cost-effective manner or convert potential borrowers into active borrowers. If we are unable to recover our marketing costs through increases in website traffic and in the number of loans made by visitors to product websites, or if we discontinue our broad marketing campaigns, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We are dependent on third parties to support several key aspects of our business, and the failure of such parties to continue to provide services to us in the current manner and at the current rates would adversely affect our revenues and results of operations.

The Elastic line of credit product, which is originated by a third-party lender and contributed approximately 0.03% and 3.3% of our revenues for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively, and the portions of the Rise installment loan product that we offer through CSO programs, which contributed approximately 17.0% and 13.0% of our revenues for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively, depend in part on the willingness and ability of unaffiliated third party lenders to make loans to customers. Additionally, as described above, our business, including our Elastic loans and Rise loans made through the CSO programs, depends on the ACH system, and ACH transactions are processed by third-party banks. See “—Regulators and payment processors are scrutinizing certain online lenders’ access to the Automated Clearing House system to disburse and collect loan proceeds and repayments, and any interruption or limitation on our ability to access this critical system would materially adversely affect our business.” We also utilize many other third parties to provide services to facilitate lending, loan underwriting, payment processing, customer service, collections and recoveries, as well as to support and maintain certain of our communication systems and information systems.

The loss of the relationship with any of these third party lenders and service providers, and an inability to replace them or the failure of any of these third parties to provide its products or services, to maintain its quality and consistency or to have the ability to provide its products and services, could disrupt our operations, cause us to terminate product offerings, result in lost customers and substantially decrease the revenues and earnings of our business. Our revenues and earnings could also be adversely affected if any of those third party providers make material changes to the products or services that we rely on or increase the price of their services.

Elevate uses third parties for the majority of its collections and recovery activities. If those parties were unable or unwilling to provide those services for Elevate products we would experience higher defaults until those functions could be adequately staffed and trained internally.

Any of these events could result in a loss of revenues and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

The profitability of the line of credit product we offer, Elastic, could be adversely affected by policy or pricing decisions made by the originating lender.

We do not originate and do not ultimately control the pricing or functionality of Elastic, the line of credit product we offer. Instead, Republic Bank, which originates the loans, has licensed our technology and underwriting services and makes all key decisions regarding Elastic marketing, underwriting, product features and pricing. We generate revenues from the Elastic product through marketing and technology licensing fees paid by Republic Bank, and through a credit default swap agreement we entered into with Elastic SPV, which purchases participations in Elastic loans from Republic Bank. If Republic Bank

changes its pricing, underwriting or marketing of Elastic in a way that decreases revenues or increases losses, then the profitability of each loan could be reduced. Although this would not reduce the revenues that we receive for marketing and technology licensing services, it would reduce the revenues that we receive from our credit default swap agreement with Elastic SPV.

Any of the above changes could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our ability to continue to offer Elastic would be adversely affected by a degradation in our relationship with Republic Bank.

The structure of the Elastic product exposes us to risks associated with being reliant on Republic Bank as the originating lender. If our relationship with Republic Bank were to degrade, or if Republic Bank were to terminate the various agreements associated with the Elastic product, we may not be able to find another suitable originating lender and new arrangements, if any, may result in significantly increased costs to us. Because line of credit products are relatively more difficult to establish under state law, any inability to find another originating lender would adversely affect our ability to continue to offer Elastic, which in turn could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Decreased demand for non-prime loans as a result of increased savings or income could result in a loss of revenues or decline in profitability if we are unable to successfully adapt to such changes.

The demand for non-prime loan products in the markets we serve could decline due to a variety of factors, such as regulatory restrictions that reduce customer access to particular products, the availability of competing or alternative products or changes in customers’ financial conditions, particularly increases in income or savings. For instance, an increase in state or federal minimum wage requirements could decrease demand for non-prime loans. Additionally, a change in focus from borrowing to saving (such as has happened in some countries) would reduce demand. Should we fail to adapt to a significant change in our customers’ demand for, or access to, our products, our revenues could decrease significantly. Even if we make adaptations or introduce new products to fulfill customer demand, customers may resist or may reject products whose adaptations make them less attractive or less available. Such decreased demand could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

A decline in economic conditions could result in decreased demand for our loans or cause our customers’ default rates to increase, harming our operating results.

Uncertainty and negative trends in general economic conditions in the US and abroad, including significant tightening of credit markets and a general decline in the value of real property, historically have created a difficult environment for companies in the lending industry. Many factors, including factors that are beyond our control, may impact our consolidated results of operations or financial condition or affect our borrowers’ willingness or capacity to make payments on their loans. These factors include: unemployment levels, housing markets, rising living expenses, energy costs and interest rates, as well as major medical expenses, divorce or death that affect our borrowers. If we experience an economic downturn or if the US economy is unable to sustain its recovery from the most recent financial crisis, or if we become affected by other events beyond our control, we may experience a significant reduction in revenues, earnings and cash flows, difficulties accessing capital and a deterioration in the value of our investments. We may also become exposed to increased credit risk from customers and third parties who have obligations to us or to the originating lenders with respect to Elastic, or Rise, as it relates to the

loans in Texas and Ohio. Moreover, non-prime borrowers have historically been and will likely continue to be more severely affected by adverse macroeconomic conditions.

Credit quality is driven by the ability and willingness of customers to make their loan payments. If customers face rising unemployment or reduced wages, defaults may increase. Similarly, if customers experience rising living expenses (for instance due to rising gas, energy, or food costs) they may be unable to make loan payments. An economic slowdown could also result in a decreased number of loans being made to customers due to higher unemployment or an increase in loan defaults in our loan products. The underwriting standards used for our products may need to be tightened in response to such conditions, which would likely reduce loan balances, and collecting defaulted loans could become more difficult, which could lead to an increase in loan losses. If a customer defaults on a loan, the loan enters a collections process where, including as a result of contractual agreements with the originating lenders, our systems and collections teams initiate contact with the customer for payments owed. If a loan is subsequently charged off, the loan is generally sold to a third party collection agency and the resulting proceeds from such sales comprise only a small fraction of the remaining amount payable on the loan.

There can be no assurance that economic conditions will remain favorable for our business or that demand for loans or default rates by customers will remain at current levels. Reduced demand for loans would negatively impact our growth and revenues, while increased default rates by customers may inhibit our access to capital, hinder the growth of the loan portfolio attributable to our products and negatively impact our profitability. Either such result could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We are operating in a highly competitive environment and face increasing competition from a variety of traditional and new lending institutions, including other online lending companies. This competition could adversely affect our business, prospects, results of operations, financial condition or cash flows.

We have many competitors. Our principal competitors are consumer loan companies, CSOs, online lenders, credit card companies, consumer finance companies, pawnshops and other financial institutions that offer similar financial services. Many other financial institutions or other businesses that do not now offer products or services directed toward our traditional customer base could begin doing so. Significant increases in the number and size of competitors for our business could result in a decrease in the number of loans that we fund, resulting in lower levels of revenues and earnings in these categories. Many of these competitors are larger than us, have significantly more resources and greater brand recognition than we do, and may be able to attract customers more effectively than we do.

Competitors of our business may operate, or begin to operate, under business models less focused on legal and regulatory compliance, which could put us at a competitive disadvantage. Additionally, negative perceptions about these models could cause legislators or regulators to pursue additional industry restrictions that could affect the business model under which we operate. To the extent that these models gain acceptance among consumers, small businesses and investors or face less onerous regulatory restrictions than we do, we may be unable to replicate their business practices or otherwise compete with them effectively, which could cause demand for the products we currently offer to decline substantially.

When new competitors seek to enter one of our markets, or when existing market participants seek to increase their market share, they sometimes undercut the pricing and/or credit terms prevalent in that market, which could adversely affect our market share or ability to exploit new market opportunities. Elevate products compete at least partly based on rate comparison with other credit products used by

non-prime consumers. However, non-prime consumers by definition have a higher propensity for default and as a result need to be charged higher rates of interest to generate adequate profit margins. If existing competitors significantly reduced their rates or lower priced competitors enter the market and offer credit to customers at a lower rates, the pricing and credit terms we or the originating lenders offer could deteriorate if we or the originating lenders act to meet these competitive challenges. Any such action may result in lower customer acquisition volumes and higher costs per new customer.

“Near-prime” competitors may aggressively target customers with lower rate offers. The number of “prime” oriented technology-enabled lenders has grown dramatically following the success of providers such as Lending Club and Prosper. Although these new entrants have largely focused on higher FICO score customers, if a well-funded new entrant targeted “near-prime” consumers with lower rate loans, the overall credit quality of the portfolio of loans attributable to our products could erode, with the better quality consumers migrating to new products.

We may be unable to compete successfully against any or all of our current or future competitors. As a result, our products could lose market share and our revenues could decline, thereby affecting our ability to generate sufficient cash flow to service our indebtedness and fund our operations. Any such changes in our competition could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Customer complaints or negative public perception of our business could result in a decline in our customer growth and our business could suffer.

Our reputation is very important to attracting new customers to our platform as well as securing repeat lending to existing customers. While we believe that we have a good reputation and that we provide customers with a superior experience, there can be no assurance that we will continue to maintain a good relationship with customers or avoid negative publicity.

In recent years, consumer advocacy groups and some media reports have advocated governmental action to prohibit or place severe restrictions on short-term and high-cost consumer loans. Such consumer advocacy groups and media reports generally focus on the annual percentage rate for this type of consumer loan, which is compared unfavorably to the interest typically charged by banks to consumers with top-tier credit histories. The finance charges assessed by us, the originating lenders and others in the industry can attract media publicity about the industry and be perceived as controversial. If the negative characterization of the types of loans we offer, including those originated through third-party lenders, becomes increasingly accepted by consumers, demand for any or all of our consumer loan products could significantly decrease, which could materially affect our business, prospects, results of operations, financial condition or cash flows. Additionally, if the negative characterization of these types of loans is accepted by legislators and regulators, we could become subject to more restrictive laws and regulations applicable to consumer loan products that could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

In addition, our ability to attract and retain customers is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities. Negative perceptions or publicity regarding these matters—even if related to seemingly isolated incidents, or even if related to practices not specific to short-term loans, such as debt collection—could erode trust and confidence and damage our reputation among existing and potential customers, which would make it difficult to attract new customers and retain existing customers, significantly decrease the demand for our products, result in increased regulatory scrutiny, and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our business depends on the uninterrupted operation of our systems and business functions, including our information technology and other business systems, as well as the ability of such systems to support compliance with applicable legal and regulatory requirements.

Our business is highly dependent upon customers’ ability to access our website and the ability of our employees and those of the originating lenders, as well as third party service providers, to perform, in an efficient and uninterrupted fashion, necessary business functions, such as internet support, call center activities and processing and servicing of loans. Problems with the IQ Technology Platform running our systems, or a shut-down of or inability to access the facilities in which our internet operations and other technology infrastructure are based, such as a power outage, a failure of one or more of our information technology, telecommunications or other systems, cyber-attacks on, or sustained or repeated disruptions of, such systems could significantly impair our ability to perform such functions on a timely basis and could result in a deterioration of our ability to underwrite, approve and process loans (or support such functions with regard to Elastic lines of credit), provide customer service, perform collections activities, or perform other necessary business functions. Any such interruption could reduce new customer acquisition and negatively impact growth, which would have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

In addition, our systems and those of third parties on whom we rely must consistently be capable of compliance with applicable legal and regulatory requirements and timely modification to comply with new or amended requirements. Any systems problems going forward could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We are subject to cybersecurity risks and security breaches and may incur increasing costs in an effort to minimize those risks and to respond to cyber incidents.

Our business involves the storage and transmission of consumers’ proprietary information, and security breaches could expose us to a risk of loss or misuse of this information, litigation and potential liability. We are entirely dependent on the secure operation of our websites and systems as well as the operation of the internet generally. While we have incurred no material cyber-attacks or security breaches to date, a number of other companies have disclosed cyber-attacks and security breaches, some of which have involved intentional attacks. Attacks may be targeted at us, our customers, or both. Although we devote significant resources to maintain and regularly upgrade our systems and processes that are designed to protect the security of our computer systems, software, networks and other technology assets and the confidentiality, integrity and availability of information belonging to us and our customers, our security measures may not provide absolute security. Despite our efforts to ensure the integrity of our systems, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently or are not recognized until launched, and because cyber-attacks can originate from a wide variety of sources, including third parties outside the company such as persons who are involved with organized crime or associated with external service providers or who may be linked to terrorist organizations or hostile foreign governments. These risks may increase in the future as we continue to increase our mobile and other internet-based product offerings and expand our internal usage of web-based products and applications or expand into new countries. If an actual or perceived breach of security occurs, customer and/or supplier perception of the effectiveness of our security measures could be harmed and could result in the loss of customers, suppliers or both. Actual or anticipated attacks and risks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third party experts and consultants.

A successful penetration or circumvention of the security of our systems could cause serious negative consequences, including significant disruption of our operations, misappropriation of our confidential information or that of our customers, or damage to our computers or systems or those of our customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us. In addition, our applicants provide personal information, including bank account information when applying for loans. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication to effectively secure transmission of confidential information, including customer bank account and other personal information. Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by us to protect transaction data being breached or compromised. Data breaches can also occur as a result of non-technical issues.

Our servers are also vulnerable to computer viruses, physical or electronic break-ins, and similar disruptions, including “denial-of-service” type attacks. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches, including any breach of our systems or by persons with whom we have commercial relationships that result in the unauthorized release of consumers’ personal information, could damage our reputation and expose us to a risk of loss or litigation and possible liability. In addition, many of the third parties who provide products, services or support to us could also experience any of the above cyber risks or security breaches, which could impact our customers and our business and could result in a loss of customers, suppliers or revenues.

Any of these events could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our ability to collect payment on loans and maintain accurate accounts may be adversely affected by computer viruses, physical or electronic break-ins, technical errors and similar disruptions.

The automated nature of our platform may make it an attractive target for hacking and potentially vulnerable to computer viruses, physical or electronic break-ins and similar disruptions. Despite efforts to ensure the integrity of our platform, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, in which case there would be an increased risk of fraud or identity theft, and we may experience losses on, or delays in the collection of amounts owed on, a fraudulently induced loan. In addition, the software that we have developed to use in our daily operations is highly complex and may contain undetected technical errors that could cause our computer systems to fail. Because each loan made involves our proprietary credit and fraud scoring models, and over 90% of loan applications are fully automated with no manual review required, any failure of our computer systems involving our proprietary credit and fraud scoring models and any technical or other errors contained in the software pertaining to our proprietary credit and fraud scoring models could compromise the ability to accurately evaluate potential customers, which would negatively impact our results of operations. Furthermore, any failure of our computer systems could cause an interruption in operations and result in disruptions in, or reductions in the amount of, collections from the loans we made to customers. If any of these risks were to materialize, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our platform and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.

Our platform and internal systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors or bugs. Some errors may only be discovered after the code has been released for external or internal use. Errors or other design defects within the software on which we rely may result in a negative experience for borrowers, delay introductions of new features or enhancements, result in errors or compromise our ability to protect borrower data or our intellectual property. Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of borrowers, loss of revenues or liability for damages, any of which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Security breaches of customers’ confidential information that we store may harm our reputation and expose us to liability.

We store customers’ bank information, credit information and other sensitive data. Any accidental or willful security breaches or other unauthorized access could cause the theft and criminal use of this data. Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third party action, employee error, malfeasance or otherwise, or if design flaws in our software are exposed and exploited, and, as a result, a third party obtains unauthorized access to customer data, our relationships with customers will be severely damaged, and we could incur significant liability.

Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and our third party hosting facilities may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, many states have enacted laws requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause customers to lose confidence in the effectiveness of our data security measures. Any security breach, whether actual or perceived, would harm our reputation, and result in lost customers, which could in turn have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Credit and other information that we receive from third parties about a borrower may be inaccurate or may not accurately reflect the borrower’s creditworthiness, which may cause us to inaccurately underwrite loans.

We obtain credit information from consumer reporting agencies, such as TransUnion, Experian or Equifax, and underwrite Rise and Sunny loans based on our proprietary credit and fraud scoring models. Originating lenders use our proprietary credit and fraud scoring models in underwriting Elastic lines of credit and Rise loans in Texas and Ohio. Our proprietary credit and fraud scoring models take into account reported credit score, other information reported by consumer reporting agencies and the requested loan amount, in addition to a variety of other factors.

A credit score assigned to a borrower may not reflect that borrower’s actual creditworthiness because the credit score may be based on outdated, incomplete or inaccurate consumer reporting data, and we do not verify the information obtained from the borrower’s credit report. Additionally, there is a risk that, following the date of the credit report that we obtain and review, a borrower may have:

If large numbers of borrowers default on loans that are not decisioned correctly, this could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

To date, we have derived our revenues from a limited number of products and markets. Our efforts to expand our market reach and product portfolio may not succeed, may put pressure on our margins and may reduce our revenue growth.

We originate Rise installment loans in the US, other than in Texas and Ohio, and Sunny installment loans in the UK. We earn revenues associated with the Rise loans originated by third-party lenders in Texas and Ohio, which we guarantee, and consolidate revenues attributable to purchased participations in Elastic lines of credit, which are also originated by a third-party lender, through a credit default swap agreement. Many of our competitors offer a more diverse set of products to small businesses and in additional international markets. While we intend to eventually broaden the scope of the products from which we derive revenues, there can be no assurance that we will be successful in such efforts.

When new customers are acquired, from an accounting point of view, we must recognize marketing costs and loan origination and data costs, and we incur a provision for loan losses, including with regard to Elastic loan participations that are purchased from the originating lender by a third party, which we protect from loan losses pursuant to a credit default swap arrangement. Hence, new customer acquisition does not typically yield positive margins for at least six months. As a result, rapid growth tends to compress margins in the near-term until growth rates slow down.

Rise, a state-licensed product, offers different rates and terms based on state law. In states with lower maximum rates we have more stringent credit criteria and generally lower initial customer profitability due to higher customer acquisition costs and higher losses as a percentage of revenues. While these states can have significant growth potential they typically deliver lower profit margins.

In order to support the rapid growth of the company we may need to hire more staff which would increase operating expenses. In particular, growth may require additional technology staff, analysts in risk management, compliance personnel and customer support and collections staff. Although the company outsources most of its customer support and collections staff, additional volumes would lead to increased costs in these areas.

We may elect to pursue aggressive growth over margin expansion in order to increase market share and long-term revenue opportunities.

Failure to broaden the scope of the products we offer to potential customers may inhibit the growth of repeat business from our customers and harm our operating results. There also can be no guarantee that

we will be successful with respect to our current efforts in the UK, as well as any further expansion beyond the US and the UK, if we decide to attempt such expansion, which may inhibit the growth of our business and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We earn a substantial majority of our revenues from interest payments on the loans we make to our customers. Financial institutions and other funding sources provide us with the capital to fund these installment loans and lines of credit and charge us interest on funds that we draw down. In the event that the spread between the rate at which we lend to our customers and the rate at which we borrow from our lenders decreases, our financial results and operating performance will be harmed. The interest rates we charge to our customers and pay to our lenders could each be affected by a variety of factors, including access to capital based on our business performance, the volume of loans we make to our customers, competition and regulatory requirements. These interest rates may also be affected by a change over time in the mix of the types of products we sell to our customers and a shift among our channels of customer acquisition. Our VPC funding facilities are variable rate in nature and tied to the 3-month LIBOR rate. Thus any increase in the 3-month LIBOR rate will result in an increase in our net interest expense. Interest rate changes may also adversely affect our business forecasts and expectations and are highly sensitive to many macroeconomic factors beyond our control, such as inflation, recession, the state of the credit markets, changes in market interest rates, global economic disruptions, unemployment and the fiscal and monetary policies of the federal government and its agencies. Regulatory or legislative changes may reduce our ability to charge our current rates in all states and products. Also, competitive threats may cause us to reduce our rates. This would reduce profit margins unless there was a commensurate reduction in losses. Any material reduction in our interest rate spread could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our allowance for loan losses is determined based upon both objective and subjective factors and may not be adequate to absorb loan losses. If we experience rising credit or fraud losses, our results of operations would be adversely affected.

We face the risk that customers will fail to repay their loans in full. We reserve for such losses by establishing an allowance for loan losses, the increase of which results in a charge to our earnings as a provision for loan losses. We have established a methodology designed to determine the adequacy of our allowance for loan losses. While this evaluation process uses historical and other objective information, the classification of loans and the forecasts and establishment of loan losses are also dependent on our subjective assessment based upon our experience and judgment. Actual losses are difficult to forecast, especially if such losses stem from factors beyond our historical experience. As a result, there can be no assurance that our allowance for loan losses will be sufficient to absorb losses or prevent a material adverse effect on our business, financial condition and results of operations. Losses are the largest cost as a percentage of revenues across all of our products. Fraud and customers not being able to repay their loans are both significant drivers of loss rates. If we experienced rising credit or fraud losses this would significantly reduce our earnings and profit margins and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Increased customer acquisition costs and/or data costs would reduce our margins.

Although losses are our largest cost, if customer acquisition costs or other servicing costs increased this would reduce our profit margins. Marketing costs would be negatively affected by increased competition or stricter credit standards that would reduce customer fund rates. We could also experience increased

marketing costs due to higher fees from credit bureaus for preapproved direct mail lists, search engines for search engine marketing, or fees for affiliates, and these increased costs would reduce our profit margins.

We purchase significant amounts of data to facilitate our proprietary credit and fraud scoring models. If there was an increase in the cost of data or if the company elected to purchase from new data providers there would be a reduction in our profit margins.

Any such reduction in our profit margins could result in a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our success is dependent, in part, upon our officers and key employees, and if we are not able to attract and retain qualified officers and key employees, or if one of our officers or key employees is temporarily unable to fully contribute to our operations, our business could be materially adversely affected.

Our success depends, in part, on our officers, which is a relatively small group of individuals. Many members of the senior management team have significant industry experience, and we believe that our senior management would be difficult to replace, if necessary. Because the market for qualified individuals is highly competitive, we may not be able to attract and retain qualified officers or candidates. In addition, increasing regulations on, and negative publicity about, the consumer financial services industry could affect our ability to attract and retain qualified officers. Kenneth E. Rees, our Chief Executive Officer, is a competitive cyclist. If he were injured in a cycling accident, or otherwise, and unable to be fully active in the business while recuperating, that could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our future success also depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them. The loss of any of our senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all. We cannot ensure that we will be able retain the services of any members of our senior management or other key employees. Our officers and key employees may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. While all key employees have signed non-disclosure, non-solicitation and non-compete agreements, they may still elect to leave the company or even retire any time. Loss of key employees could result in delays to critical initiatives and the loss of certain capabilities and poorly documented intellectual property.

If we do not succeed in attracting and retaining our officers and key employees, our business could be materially and adversely affected.

Our US loan business is seasonal in nature, which causes our revenues and earnings to fluctuate.

Our US loan business is affected by fluctuating demand for the products and services we offer and fluctuating collection rates throughout the year. Demand for our consumer loan products in the US has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds. This results in significant increases and decreases in portfolio sizes and profit margins from quarter to quarter. In particular, we typically experience a reduction in our credit portfolios and an

increase in profit margins in the first quarter of the year. When we experience higher growth in the second quarter through fourth quarters, portfolio balances tend to grow and profit margins are compressed. Our cost of sales for the non-prime loan products we offer in the US, which represents our provision for loan losses, is lowest as a percentage of revenues in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds, and increases as a percentage of revenues for the remainder of each year. This seasonality requires us to manage our cash flows over the course of the year. If our revenues or collections were to fall substantially below what we would normally expect during certain periods, our ability to service debt and meet our other liquidity requirements may be adversely affected, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

If internet search engine providers change their methodologies for organic rankings or paid search results, or our organic rankings or paid search results decline for other reasons, our new customer growth or volume from returning customers could decline.

Our new customer acquisition marketing and our returning customer relationship management is partly dependent on search engines such as Google, Bing and Yahoo! to direct a significant amount of traffic to our desktop and mobile websites via organic ranking and paid search advertising. We bid on certain keywords from search engines as well as use their algorithms to place our listings ahead of other lenders.

Our paid search activities may not produce (and in the past have not always produced) the desired results. Internet search engines often revise their methodologies. The volume of customers we receive through organic ranking and paid search could be adversely affected by any such changes in methodologies or policies by search engine providers, by:

In addition, search engines could implement policies that restrict the ability of companies such as us to advertise their services and products, which could prevent us from appearing in a favorable location or any location in the organic rankings or paid search results when certain search terms are used by the consumer. Our online marketing efforts are also susceptible to actions by third parties that negatively impact our search results such as spam link attacks, which are often referred to as “black hat” tactics. Our sites have experienced meaningful fluctuations in organic rankings and paid search results in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of consumers directed to our web and mobile sites could harm our business and operating results.

Finally, our competitors’ paid search, pay per click or search engine marketing activities may result in their sites receiving higher paid search results than ours and significantly increasing the cost of such advertising for us. We have little to no control over these potential changes in policy and methodologies relating to search engine results, and any of the changes described above could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Failure to keep up with the rapid technological changes in financial services and e-commerce, or changes in the uses and regulation of the internet could harm our business.

The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial and lending institutions to better serve customers and reduce costs. Our future success will depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as to create additional efficiencies in our operations. We may not be able to effectively implement new technology-driven products and services as quickly as some of our competitors or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry could harm our ability to compete with our competitors.

Additionally, the business of providing products and services such as ours over the internet is dynamic and relatively new. We must keep pace with rapid technological change, consumer use habits, internet security risks, risks of system failure or inadequacy, and governmental regulation and taxation, and each of these factors could adversely impact our business. In addition, concerns about fraud, computer security and privacy and/or other problems may discourage additional consumers from adopting or continuing to use the internet as a medium of commerce. Also, to expand our customer base, we must appeal to and acquire consumers who historically have used traditional means of commerce to conduct their financial services transactions. If these consumers prove to be less profitable than our previous customers, and we are unable to gain efficiencies in our operating costs, including our cost of acquiring new customers, our business could be adversely impacted.

Any such failure to adapt to changes could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Our ability to conduct our business and demand for our loans could be disrupted by natural or man-made catastrophes.

Catastrophes, such as fires, hurricanes and tornados, floods, earthquakes, or other natural disasters, terrorist attacks, computer viruses and telecommunications failures, could adversely affect our ability to market or service loans. Natural disasters and acts of terrorism, war, civil unrest, violence or human error could also cause disruptions to our business or the economy as a whole, which could negatively affect customers’ demand for our loans. Despite any precautions we may take, system interruptions and delays could occur if there is a natural disaster that affects our offices or one of the data center facilities we lease. As we rely heavily on our servers, computer and communications systems and the internet to conduct our business and provide high-quality customer service, such disruptions could harm our ability to market our products, accept and underwrite applications, provide customer service and undertake collections activities and cause lengthy delays which could harm our business, results of operations and financial condition. We have implemented a disaster recovery program that allows us to move production to a back-up data center in the event of a catastrophe. Although this program is functional, we do not currently serve network traffic equally from each data center, and are not able to switch instantly to our backup center in the event of failure of the main server site. If our primary data center shuts down, there will be a period of time that our loan products or services, or certain of such loan products or services, will remain inaccessible to our users or our users may experience severe issues accessing such loan products and services. Our business interruption insurance may not be sufficient to compensate us for losses that may result from interruptions in our service as a result of system failures.

Any of these events could also cause consumer confidence to decrease in one or more of the markets we serve, which could result in a decreased number of loans being made to customers. As a result of these issues, any of these occurrences could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We may be unable to protect our proprietary technology and analytics or keep up with that of our competitors.

The success of our business depends to a significant degree upon the protection of our proprietary technology, including our proprietary credit and fraud scoring models, which we use for pricing loans. We seek to protect our intellectual property with non-disclosure agreements and through standard measures to protect trade secrets. However, we may be unable to deter misappropriation of our proprietary information, detect unauthorized use or take appropriate steps to enforce our intellectual property rights. If competitors learn our trade secrets (especially with regard to marketing and risk management capabilities) it could be difficult to successfully prosecute to recover damages. A third party may attempt to reverse engineer or otherwise obtain and use our proprietary technology without our consent. The pursuit of a claim against a third party for infringement of our intellectual property could be costly, and there can be no guarantee that any such efforts would be successful. Our failure to protect our software and other proprietary intellectual property rights or to develop technologies that are as good as our competitors’ could put us at a disadvantage relative to our competitors. Any such failures could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We may be subject to intellectual property disputes, which are costly to defend and could harm our business and operating results.

We may face allegations that we have infringed the trademarks, copyrights, patents or other intellectual property rights of third parties, including from our competitors or non-practicing entities. Patent and other intellectual property litigation may be protracted and expensive, and the results are difficult to predict and may require us to stop offering certain products or product features, acquire licenses, which may not be available at a commercially reasonable price or at all, or modify such products, product features, processes or websites while we develop non-infringing substitutes.

In addition, we use open source software in our technology platform and plan to use open source software in the future. From time to time, we may face claims from parties claiming ownership of, or demanding release of, the source code, potentially including our valuable proprietary code, or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our platform, any of which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Current and future litigation or regulatory proceedings could cause management distraction, harm our reputation and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We, our officers and certain of our subsidiaries have been and may become subject to lawsuits that could cause us to incur substantial expenditures, generate adverse publicity and could significantly impair our business, force us to cease doing business in one or more jurisdictions or cause us to cease offering or alter one or more products. Additionally, our Chief Executive Officer is party to civil suits in Pennsylvania and Vermont. In August 2015, a Vermont class action civil lawsuit initiated by two citizens of Vermont was amended to add defendants Kenneth E. Rees, TFI, TC Loan Service, LLC, TC Decision Sciences, LLC, Tailwind Marketing, LLC, Sequoia Capital Operations, LLC, and Technology Crossover

Ventures related to TFI’s role in providing services to third party tribal lenders. Plaintiffs assert violations of several statutes, including the Consumer Financial Protection Act of 2010, Federal Trade Commission Act, Electronic Funds Transfer Act, Vermont Consumer Fraud Act, Racketeer Influenced and Corrupt Organizations Act and violations of the common law theory of unjust enrichment. The allegations in the Pennsylvania civil suit are similar to those in the Vermont civil suit.

We may also be subject to litigation in the future and an adverse ruling in or a settlement of any such future litigation against us, our executive officers or another lender, or against our Chief Executive Officer in connection with either current litigation, could harm our reputation, cause us to have to refund fees and/or interest collected, forego collection of the principal amount of loans, pay treble or other multiple damages, pay monetary penalties and/or modify or terminate our operations in particular jurisdictions.

Defense of any lawsuit, even if successful, could require substantial time and attention of our management and could require the expenditure of significant amounts for legal fees and other related costs. We and others are also subject to regulatory proceedings, and we could suffer losses as a result of interpretations of applicable laws, rules and regulations in those regulatory proceedings, even if we are not a party to those proceedings. Any of these events could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We may be unable to use some or all of our net operating loss carryforwards, which could materially and adversely affect our reported financial condition and results of operations.

At December 31, 2014, we had US and UK net operating loss carryforwards, or “NOLs,” of $14.3 million and $40.7 million, respectively, available to offset future taxable income, due to prior period losses. If not utilized, the US NOL will begin to expire in 2034. The UK NOL can be carried forward indefinitely. Realization of these NOLs depends on future income, and there is a risk that our existing carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could materially and adversely affect our results of operations.

Under Section 382 of the Internal Revenue Code of 1986, as amended, or the “Code,” our ability to utilize NOLs or other tax attributes, such as research tax credits, in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders, who own at least 5% of our stock, increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. We have not completed a Section 382 analysis through September 30, 2015. If we have previously had, or have in the future, one or more Section 382 “ownership changes,” including in connection with this offering, or if we do not generate sufficient taxable income, we may not be able to utilize a material portion of our NOLs, even if we achieve profitability. If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully utilize our NOLs. This could materially and adversely affect our results of operations.

Third parties may seek to hold us responsible for liabilities of TFI that we did not assume in our agreements.

In connection with our separation from TFI, TFI has generally agreed to retain all liabilities that did not historically arise from our business. Third parties may seek to hold us responsible for TFI’s retained

liabilities, including third party claims arising from TFI’s business and retained assets. For instance, the Pennsylvania civil suit described in “Business—Legal Proceedings” originally included Elevate as a named party, even though the purported claim is based on TFI’s retained business. Under the separation and distribution agreement, we are responsible for the debts, liabilities and other obligations related to the business or businesses that we own and operate. See “Certain relationships and related party transactions—Spin-Off Agreements with TFI—Separation and distribution agreement.” Under our agreements with TFI, TFI has agreed to indemnify us for claims and losses relating to its retained liabilities. However, if any of those liabilities are significant and we are ultimately held liable for such liabilities, we cannot assure you that we will be able to recover the full amount of our losses from TFI.

Although we do not anticipate liability for any obligations not expressly assumed by us pursuant to the separation and distribution agreement, it is possible that we could be required to assume responsibility for certain obligations retained by TFI should TFI fail to pay or perform its retained obligations. For instance, the Spin-Off could be challenged under various state and federal fraudulent conveyance laws. An unpaid creditor or an entity vested with the power of such creditor (such as a trustee or debtor-in-possession in a bankruptcy) could claim that the distribution left TFI insolvent or with unreasonably small capital or that TFI intended or believed it would incur debts beyond its ability to pay such debts as they mature and that TFI did not receive fair consideration or reasonably equivalent value in the Spin-Off. The measure of insolvency for purposes of such fraudulent conveyance laws will vary depending on which jurisdiction’s law is applied. Generally, however, an entity would be considered insolvent if either the fair saleable value of its assets is less than the amount of its liabilities (including the probable amount of contingent liabilities), or it is unlikely to be able to pay its liabilities as they become due. We do not know what standard a court would apply to determine insolvency; however, if a court were to conclude that the Spin-Off constituted a fraudulent conveyance, then such court could void the distribution as a fraudulent transfer and could impose a number of different remedies, including without limitation, returning our assets or your shares in our company to TFI, voiding our liens and claims (if any) against TFI, or providing TFI with a claim for money damages against us in an amount equal to the difference between the consideration received by TFI and the fair market value of our company at the time of the distribution.

Certain members of management, directors and stockholders may face actual or potential conflicts of interest as a result of owning shares of, or having positions as directors of TFI.

Some of our officers and directors own both TFI common stock and our common stock. This ownership overlap could create, or appear to create, potential conflicts of interest when our officers and directors face decisions that could have different implications for us and TFI. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between us and TFI regarding the terms of the agreements governing the distribution and our relationship with TFI thereafter or in the strategy for defending or resolving any litigation in which both TFI and Elevate are involved. Existing and past agreements between TFI and Elevate include the separation and distribution agreement, intellectual property assignment agreement, data sharing and support agreement, tax sharing agreement and sublease agreements. Potential conflicts of interest may also arise because one of our directors, Stephen J. Shaper, is currently a member of the board of directors of TFI. See “Certain relationships and related party transactions.”

We do not have a non-competition agreement with TFI to restrict TFI from competing with us, and TFI is not required to offer corporate opportunities to us.

We do not have any noncompetition agreement or arrangement with TFI. TFI is free to compete with us in any activity or line of business. Additionally, TFI continues to offer its licensed technology platform,

which includes the proprietary intellectual property included in our IQ Technology Platform as it existed as of January 1, 2015, to customers offering financial services and is not restricted from competing in the online financial services business. We will not have any interest or expectancy in any business activity, opportunity, transaction or other matter in which TFI engages or seeks to engage merely because we engage in the same or similar lines of business. In addition, TFI will have no duty to communicate its knowledge of, or offer, any potential business opportunity, transaction or other matter to us, and TFI is free to pursue or acquire such business opportunity, including opportunities that would be in direct competition with us.

We could be subject to fines or corrective orders based on a Civil Investigative Demand issued by the CFPB to TFI.

In June 2012, prior to the Spin-Off, TFI received a Civil Investigative Demand from the Consumer Finance Protection Bureau, or “CFPB.” The purpose of the Civil Investigative Demand was to determine whether small-dollar online lenders or other unnamed persons engaged in unlawful acts or practices relating to the advertising, marketing, provision, or collection of small-dollar loan products, in violation of parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the “Dodd-Frank Act,” the Truth in Lending Act, the Electronic Funds Transfer Act, the Gramm-Leach-Bliley Act, or any other federal consumer financial law and to determine whether CFPB action to obtain legal or equitable relief would be in the public interest. While TFI’s business is distinct from our business, we cannot predict the final outcome of this Civil Investigative Demand or to what extent any obligations arising out of such final outcome will be applicable to our company or business, if at all. It is possible that if the CFPB determines any violations occurred we could receive fines or orders for corrective action as a successor to some of TFI’s businesses.

We, our marketing affiliates and Republic Bank, which originates Elastic, the line of credit product we offer, are subject to complex federal, state and local lending and consumer protection laws, and if we fail to comply with applicable laws, regulations, rules and guidance, our business could be adversely affected.

We, our marketing affiliates and Republic Bank, which originates Elastic, the line of credit product we offer, must comply with US federal, state and local regulatory regimes, including those applicable to consumer credit transactions. Certain US federal and state laws generally regulate interest rates and other charges and require certain disclosures. In particular, we may be subject to laws such as:

We may not always have been, and may not always be, in compliance with these laws. Compliance with these laws is also costly, time-consuming and limits our operational flexibility.

Failure to comply with these laws and regulatory requirements applicable to our business may, among other things, limit our or a collection agency’s ability to collect all or part of the principal of or interest on loans. As a result, we may not be able to collect on unpaid principal or interest. In addition, non-compliance could subject us to damages, revocation of required licenses, class action lawsuits, administrative enforcement actions, rescission rights held by investors in securities offerings and civil and criminal liability, which may harm our business and may result in borrowers rescinding their loans.

Where applicable, we seek to comply with state small loan, loan broker, CSO, servicing and similar statutes. In all US jurisdictions with licensing or other requirements that we believe may be applicable to us, we comply with the relevant requirements by acquiring the necessary licenses or authorization and submitting appropriate registrations in connection therewith. Nevertheless, if we are found to not have complied with applicable laws, we could lose one or more of our licenses or authorizations or face other sanctions or penalties or be required to obtain a other licenses or authorizations in such jurisdiction, which may have an adverse effect on our ability to perform our servicing obligations or make products or services available to borrowers in particular states, which may harm our business.

Our products currently have usage caps and limitations on lending based on internally developed “responsible lending guidelines.” If those policies become more restrictive due to legislative or regulatory changes at either the local, state, US federal, or UK regulatory level these products would experience declining revenues per customer.

The CFPB may have examination authority over our US consumer lending business that could have a significant impact on our US business.

In July 2010, the US Congress passed the Dodd-Frank Act. Title X of the Dodd-Frank Act created the CFPB, which regulates US consumer financial products and services, and gave it regulatory, supervisory and enforcement powers over certain providers of consumer financial products and services, including authority to examine such providers.

The CFPB has begun exercising supervisory review over and examining certain non-bank providers of consumer financial products and services, including providers of consumer loans similar to us. The CFPB has not examined our lending products, or our services and practices. The CFPB’s examination authority permits CFPB examiners to inspect the books and records of providers, and ask questions about their business practices. The examination procedures include specific modules for examining marketing activities, loan application and origination activities, payment processing activities and sustained use by consumers, collections, accounts in default, consumer reporting activities and third party relationships. As a result of these examinations, we could be required to change our products, our services or our practices, whether as a result of another party being examined or as a result of an examination of us, or we could be subject to monetary penalties, which could materially adversely affect us.

Furthermore, because the CFPB is a relatively new entity, its practices and procedures regarding civil investigations, examination, enforcement and other matters relevant to us and other CFPB-regulated entities are subject to further development and change. Where the CFPB holds powers previously assigned to other regulators or may interpret laws previously interpreted by other regulators, the CFPB may not continue to apply such powers or interpret relevant concepts consistent with previous regulators’ practice. This may adversely affect our ability to anticipate the CFPB’s expectations or interpretations in our interaction with the CFPB.

The CFPB also has broad authority to prohibit unfair, deceptive and abusive acts and practices and to investigate and penalize financial institutions that violate this prohibition. In addition to having the authority to obtain monetary penalties for violations of applicable federal consumer financial laws (including the CFPB’s own rules), the CFPB can require remediation of practices, pursue administrative proceedings or litigation and obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief). Also, where a company has violated Title X of the Dodd-Frank Act or CFPB regulations implemented thereunder, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions to remedy violations of Title X of the Dodd-Frank Act or CFPB regulations implemented thereunder after consulting with the CFPB. If the CFPB or one or more state attorneys general or state regulators believe that we have violated any of

the applicable laws or regulations, they could exercise their enforcement powers in ways that could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Regulators in both the US and the UK have imposed very large fines on both large and small financial services companies including well-established global financial institutions. Although we have had numerous state examinations, we have not been examined by the CFPB or the Financial Conduct Authority, or the “FCA,” the company’s regulator in the UK. These examinations are expected as soon as 2016 and could result in fines or changes to business practices that would reduce profit margins for the company.

The CFPB has announced that it will soon promulgate new rules affecting the consumer lending industry, and these or subsequent new rules and regulations may significantly restrict the conduct of our US consumer lending business.

On April 24, 2013, the CFPB issued a report entitled “Payday Loans and Deposit Advance Products: A White Paper of Initial Findings,” indicating that it had “engaged in an in-depth review of short-term small dollar loans, including payday loans.” This 2013 report discusses the initial findings of the CFPB regarding short-term payday loans, a category which the CFPB and some other regulators use to include certain of our loan products, as well as loans provided by non-bank financial institutions at storefront locations and deposit account advances offered by depository institutions. While this 2013 report stated that “these products may work for some consumers for whom an expense needs to be deferred for a short period of time,” this 2013 report also stated that its “findings raised substantial consumer protection concerns” related to the sustained use of payday loans and deposit account advances. This report also indicated that the CFPB planned to analyze the effectiveness of limitations, such as cooling-off periods between payday loans, “in curbing sustained use and other harms.” In furtherance of that report, on March 25, 2014, the CFPB held a hearing on payday lending and issued a subsequent report entitled “CFPB Data Point: Payday Lending,” presenting “the results of several analyses of consumers’ use of payday loans.” This 2014 report presents the CFPB’s findings as to borrowers’ loan sequences, which refers to a series of loans a borrower may take out following an initial loan. The CFPB found that payday borrowing typically involves multiple renewals following an initial loan, rather than distinct loans separated by at least 15 days. This 2014 report states that for the majority of loan sequences, there is no reduction in the principal amount between the first and last loan in the sequence. In both the 2013 and 2014 reports and subsequent statements, the CFPB reiterated its commitment to use its various tools to protect consumers from unlawful acts and practices in connection with the offering of consumer financial products and services. Both the 2013 and 2014 reports indicated that online payday loans were not the focus of such reports, but the CFPB has indicated that it is currently analyzing borrowing activity by consumers using online payday loans.

The CFPB announced on March 26, 2015 that it is in the late stages of formulating rules regarding certain consumer loans which will ensure that consumers can get the credit they need without long-term impact to their financial futures. These rules will likely impose limitations on certain short term loans with high interest rates and, depending on the nature and scope of the proposed rules, might affect the loans and services we offer. Additionally, on October 7, 2015, the CFPB announced that it is considering two rulemaking proposals that would limit the use of pre-dispute arbitration clauses in consumer financial service contracts. Rules limiting such clauses could result in increased litigation costs for us. If the CFPB adopts rules or regulations that significantly restrict the conduct of our business, any such rules or regulations could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows or could make the continuance of all or part of our US business impractical or unprofitable. Any new rules or regulations adopted by the CFPB could also result in significant compliance costs.

Republic Bank, the originator of loans for the Elastic product, is regulated by the FDIC, which could require Republic Bank to make changes to or terminate the product.

The Elastic line of credit product is offered by Republic Bank using technology, underwriting and marketing services provided by Elevate. Republic Bank is supervised and examined by the FDIC. If the FDIC considers some aspects of the Elastic product inappropriate, it could require the lender to change the way the product is offered or require the lender to terminate the program entirely.

The UK has imposed, and continues to impose, increased regulation of the short-term high-cost credit industry with the stated expectation that some firms will exit the market.

In the UK, we are subject to regulation by the FCA, pursuant to the Financial Services and Markets Act 2000, or the “FSMA,” the Consumer Credit Act 1974, as amended, or the “CCA,” and secondary legislation passed under it, among other rules and regulations including the FCA Handbook, which collectively serve to transpose the obligations under the European Consumer Credit Directive into UK law. In December 2012, the UK Parliament passed the Financial Services Act 2012, or the “FSA Act 2012,” which created a new regulatory framework for the supervision and regulation of the consumer credit industry in the UK, including the consumer lending industry in which we operate. The FSA Act 2012 mandated that in April 2014, the FCA take over responsibility for regulating consumer credit from the Office of Fair Trading, or the “OFT,” and it also made changes to the relevant legislation including the CCA and the FSMA.

The FCA regulates consumer credit and related activities pursuant to the FSMA and the FCA Handbook, which includes prescriptive rules and regulations and carries across many of the laws set out in the CCA and its secondary legislation, as well as guidance in a number of key areas, including Irresponsible Lending and Debt Collection, issued by the OFT, or the “Guidance.” The regulations under the FCA consumer credit regime are more prescriptive than the former UK consumer credit regime and in many instances the Guidance has been transposed into rules. The FSMA gives the FCA the power to authorize, supervise, examine and bring enforcement actions against providers of consumer credit, as well as to make rules for the regulation of consumer credit. On February 28, 2014, the FCA issued the Consumer Credit Sourcebook, or the “CONC,” contained in the FCA Handbook. The CONC incorporates prescriptive regulations for consumer loans such as those that we offer, including mandatory affordability checks on borrowers, limiting the number of refinances, or “rollovers,” to two, restricting how lenders can advertise, banning advertisements that the FCA deems misleading, and introducing a limit of two unsuccessful attempts on the use of continuous payment authority (which provides a creditor the ability to directly debit a customer’s account for payment using their bank card details when authorized by the customer to do so) to pay off a loan. Certain provisions of the CONC took effect on April 1, 2014, and other provisions for high-cost short-term credit providers, such as the limits on rollovers, continuous payment authority and advertising, took effect on July 1, 2014.

In addition, on December 18, 2013, the UK passed the Financial Services (Banking Reform) Act, which included an amendment to the FSMA that required the FCA to introduce rules “with a view to securing an appropriate degree of protection for borrowers against excessive charges” on “high-cost short-term” consumer loans. On July 15, 2014, the FCA issued a consultation paper that proposed a cap on the total cost of high-cost short-term credit and requested comments on the proposal. The consultation paper proposed a maximum interest rate of 0.8% of principal per day, and a limit on the total fees, including interest (including post-default interest) and all other charges (including late repayment fees which are capped at £15) to an aggregate amount not to exceed 100% of the principal amount loaned. The FCA requested comments on the proposal and issued its final rules (which can be found at CONC section 5A)

on November 11, 2014. The final rule was largely the same as the proposed rule and required us to make changes to our loan products in the UK. As a result of the final rule, we discontinued offering line of credit accounts to new customers in the UK and effective January 1, 2015, we discontinued draws on existing accounts in the UK. Once UK customers have paid off their outstanding line of credit balance, they may apply for an installment loan. We also made the Sunny product an installment loan product. The final rule became effective on January 2, 2015, as required by the 2013 amendment to the FSMA. In addition, on February 24, 2015, the FCA issued a consultation paper (CP15/6) that, among other things, proposed to remove the exemption from the requirement that providers of high-cost short-term credit include a risk warning in financial promotions and to amend its rules to allow firms to use continuous payment authority to collect repayments where a customer is in arrears or default and the lender is exercising forbearance, without having to enter into a formal modifying agreement. The FCA requested comments on the proposals by May 6, 2015. Changes have not been made to implement the proposals as yet but the FCA has indicated in the meantime it would not expect to take supervisory or enforcement action against firms that use continuous payment authority as a repayment mechanism in circumstances where the firm is exercising forbearance in relation to a customer in arrears or default, simply because it is not incorporated as a contractual term.

During the years ended December 31, 2014 and 2013, our UK operations represented 25% and 30%, respectively, of our consolidated total revenues. The results for the year ended December 31, 2014 do not include the full impact of the changes described above, and the results for the year ended December 31, 2013 do not include any impact of the changes described above. The results for each of these periods are not indicative of our future results of operations and cash flows from our operations in the UK.

These changes that we have implemented or are required to implement in the future as a result of such legislative and regulatory activities could have a material adverse effect on our UK business, as further described below under “—Due to restructuring of the consumer credit regulatory framework in the UK, we are required to obtain full authorization from our UK regulators to continue providing consumer credit and perform related activities in the UK, and there is no guarantee that we will receive full authorization to continue offering consumer loans in the UK.”

Additionally, in June 2013, the OFT referred the payday lending industry in the UK to the Competition Commission, which is now the Competition & Markets Authority, or the “CMA,” for a market investigation. The CMA gathered data from industry participants, including us, in connection with its review of the UK payday lending industry to determine whether certain features of the payday lending industry prevent, restrict or distort competition (which is also referred to as having an adverse effect on competition) and, if so, what remedial action should be taken.

On June 11, 2014, the CMA released a provisional findings report in which it indicated that it believes that many payday lenders fail to compete on price and indicated that it will look at potential ways to increase price competition. The CMA also announced the expansion of its review of the payday lending industry to include lead generators. The CMA announced its provisional decision on remedies on October 9, 2014, and published its final report on February 24, 2015, supplemented by its final order, to implement the changes, on August 13, 2015. The CMA will order online lenders to provide details of their products on at least one price comparison website which is authorized by the FCA and include a hyperlink from their website to at least one such price comparison website on which its loans are featured. The CMA will also order online and storefront lenders to provide existing customers with a summary of their cost of borrowing. In addition, the CMA recommended that the FCA take steps to improve the disclosure of late fees and other additional charges, help customers compare competing loan products without unduly affecting their ability to access credit, improve real-time data sharing between

lenders and credit reference agencies and ensure that lead generators explain how they operate much more clearly to customers. It is expected that the FCA will consult in late 2015 on the measures to be introduced in response to the CMA’s recommendations and will likely publish its standards in late 2015 or early 2016, with the changes becoming effective by the end of 2016. The CMA will work closely with the FCA to implement the recommendations. The remedies that are likely to be implemented by the FCA could have a negative effect on our operations in the UK.

Our advertising and marketing materials and disclosures have been and continue to be subject to regulatory scrutiny, particularly in the UK.

In the jurisdictions where we operate, our advertising and marketing activities and disclosures are subject to regulation under various industry standards, consumer protection laws, and other applicable laws and regulations. Consistent with the consumer lending industry as a whole (see “—The consumer lending industry continues to be subjected to new laws and regulations in many jurisdictions that could restrict the consumer lending products and services we offer, impose additional compliance costs on us, render our current operations unprofitable or even prohibit our current operations” above), our advertising and marketing materials have come under increased scrutiny. In the UK, for example, consumer credit firms are subject to the financial promotions regime set out in the FSMA (Financial Promotions) Order 2005 and specific rules in the CONC, part 3, such as the inclusion of a risk warning on certain advertising materials. The FCA has also decided to adopt certain elements of industry codes as FCA rules on a case by case basis. Our advertising and marketing materials in the UK are reviewed both by the FCA and the Advertising Standards Authority. We have in some cases been required to withdraw, amend or add disclosures to such materials, or have done so voluntarily in response to inquiries or complaints. In addition, on February 24, 2015, the FCA issued a consultation paper that, among other things, proposes a requirement that providers of high-cost short-term credit include a risk warning in all financial promotions (i.e., removing the exemption which provided that such warnings could be omitted where, owing to space constraints, it was not reasonably practicable to include them). The FCA requested comments on the proposals by May 6, 2015 but has yet to formally respond on the proposal, albeit it is likely to be implemented at some stage in the future. Going forward, there can be no guarantee that we will be able to advertise and market our business in the UK or elsewhere in a manner we consider effective. Any inability to do so could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Several lawsuits have sought to re-characterize certain loan marketers and service providers as lenders. If litigation on similar theories were successful against us, we could be subject to state usury and consumer protection laws in a greater number of states, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.

Several lawsuits in the US, including some filed by state attorneys general, have challenged relationships between federally chartered banks or state chartered banks supervised and insured by the Federal Deposit Insurance Corporation and non-bank lenders and service providers like Elevate, claiming that the originating lender is not the “true lender” and that the loans offered pursuant to such relationships are not covered by the protections of the National Bank Act, Section 27 of the Federal Deposit Insurance Act or otherwise, but are instead subject to state usury and consumer protection laws.

While the case law involving whether an originating lender or a third party servicer is the “true lender” is not well developed and courts have come to different conclusions and applied different analyses, a determination of which party is the “true lender” is significant because if an originating lender is deemed not to be the “true lender,” the non-bank lenders and third party service providers risk having the loans

be subjected to a consumer’s state usury and consumer protection laws. The federal courts that have opined on the “true lender” issue have looked primarily to who is the lender indicated on the borrower’s loan documents. Most state courts consider a number of other factors when analyzing whether the originating lender or a third party is the “true lender,” including looking at the economics of the transaction to determine, among other things, who has the predominate economic interest in the loan being made. Additional state consumer protection laws would be applicable to us if we were re-characterized as a lender with respect to Elastic, or Rise in Ohio or Texas. The loans could be deemed to be void and unenforceable in some states, the right to collect finance charges could be affected, and we could be subject to fines and penalties from state and federal regulatory agencies as well as claims by borrowers, including class actions by private plaintiffs. Even if we were not required to change our business practices to comply with applicable state laws and regulations or cease doing business in some states, we could be required to register or obtain licenses or other regulatory approvals that could impose a substantial cost on us. If Republic Bank or the CSO lenders in Ohio or Texas were subject to such a lawsuit, they may elect to terminate their relationship voluntarily, and if they lost the lawsuit, they could be forced to modify or terminate the program.

The Second Circuit recently held in Madden v. Midland Funding, LLC that a third party purchaser of a loan from a national bank does not enjoy the ability to “export” the interest rate of the originating bank, but rather is restricted to the usury rate of the state where the borrower resides. The court overturned the long standing “valid at inception” doctrine, which provides that a loan that is assigned to a non-bank party retains the legality it had when it was originated by a national or state-chartered bank. The Second Circuit declined a rehearing en banc of the decision, and it is unknown if the case will be heard by the Supreme Court.

Neither Elevate nor any of its affiliates purchase loans in connection with our business. Rather, we either make the loans directly or, in the case of Elastic, the originating lender makes the loans and sells a participation to Elastic SPV, and therefore different facts exist with respect to our business than those at issue in the Madden case.

The failure to comply with debt collection regulations could subject us to fines and other liabilities, which could harm our reputation and business.

The FDCPA regulates persons who regularly collect or attempt to collect, directly or indirectly, consumer debts owed or asserted to be owed to another person. Many states impose additional requirements on debt collection communications, and some of those requirements may be more stringent than the federal requirements. Moreover, regulations governing debt collection are subject to changing interpretations that differ from jurisdiction to jurisdiction. We use third party collections agencies to collect on debts incurred by consumers of our credit products. Regulatory changes could make it more difficult for collections agencies to effectively collect on the loans we originate.

Non-US jurisdictions also regulate debt collection. For example, in the UK, due to new rules under the CONC we have made adjustments to some of our business practices, including our collections processes, which could possibly result in lower collections on loans made by us and has resulted in a decrease in the number of new customers that we are able to approve. In addition, the concerns expressed to us by the OFT and the FCA relate in part to debt collection. We could be subject to fines, written orders or other penalties if we, or parties working on our behalf, are determined to have violated the FDCPA, the CONC or analogous state or international laws, which could have a material adverse effect on our reputation, business, prospects, results of operations, financial condition or cash flows.

Due to restructuring of the consumer credit regulatory framework in the UK, we are required to obtain full authorization from our UK regulators to continue providing consumer credit and perform related activities in the UK, and there is no guarantee that we will receive full authorization to continue offering consumer loans in the UK.

As a result of recent regulatory changes, we are required to apply for and obtain full authorization from the FCA to continue to provide consumer credit in the UK. Elevate International, LLC, the entity in the UK that operates the Sunny product, applied for the authorization from the FCA on February 25, 2014 and, pending the determination of that application, we continue to operate under an interim permission. In order to obtain full authorization, and as a threshold condition to maintaining our interim permission to provide consumer credit in the UK, we are required to demonstrate that we satisfy, and will continue to satisfy, certain minimum standards set out in the FSMA, including certain specified “threshold conditions,” and this may result in additional costs to us that could be significant. The FCA must approve certain individuals conducting “controlled functions” with respect to the operation and management of our UK business. All of these changes will result in additional costs to us. We are in frequent communication with the FCA regarding our activities in the UK. The FCA has the power to revoke our interim permission to conduct a consumer credit business if it determines we do not meet the threshold conditions. Additionally, the FCA could elect to impose additional conditions that could delay the authorization process, further increase our compliance costs or require further changes to the conduct of our UK business that could have a material adverse effect on our UK operations.

The FCA is expected to complete the process of reviewing applications of previous OFT license holders, such as us, for full authorization by April 1, 2016, and there is no guarantee that we will receive full authorization for our UK business. If we do not receive full authorization for our UK lending business, we will have to cease that business.

Our business is subject to complex and evolving US and international laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

We receive, transmit and store a large volume of personally identifiable information and other sensitive data from customers and potential customers. Our business is subject to a variety of laws and regulations in the US and the UK that involve user privacy issues, data protection, advertising, marketing, disclosures, distribution, electronic contracts and other communications, consumer protection and online payment services. The introduction of new products or expansion of our activities in certain jurisdictions may subject us to additional laws and regulations. In addition, international data protection, privacy, and other laws and regulations can be more restrictive than those in the US. US federal and state and international laws and regulations, which can be enforced by private parties or government entities, are constantly evolving and can be subject to significant change, and the US government, including the Federal Trade Commission, or the “FTC,” and the Department of Commerce, has announced that it is reviewing the need for greater regulation of the collection of information concerning consumer behavior on the internet, including regulation aimed at restricting certain targeted advertising practices. In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving e-commerce industry in which we operate, and may be interpreted and applied inconsistently from country to country and inconsistently with our current or past policies and practices.

A number of proposals are pending before federal, state, and international legislative and regulatory bodies that could significantly affect our business. For example, the European Commission is currently

considering a data protection regulation that may include operational requirements for companies that receive personal data that are different than those currently in place in the European Union, and that may also include significant penalties for non-compliance. Similarly, there have been a number of recent legislative proposals in the US, at both the federal and state level, that could impose new obligations in areas such as privacy. In addition, some countries are considering legislation requiring local storage and processing of data that, if enacted, would increase the cost and complexity of delivering our services. These existing and proposed laws and regulations can be costly to comply with and can delay or impede the development of new products, the expansion into new markets, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to inquiries or investigations, claims or other liabilities, including demands that we modify or cease existing business practices or pay fines, penalties or other damages.

In the US the FCRA regulates the collection, dissemination and use of consumer information, including consumer credit information. Compliance with the FCRA and related laws and regulations concerning consumer reports has recently been under regulatory scrutiny. The FCRA requires us to provide a Notice of Adverse Action to a loan applicant when we deny an application for credit, which, among other things, informs the applicant of the action taken regarding the credit application and the specific reasons for the denial of credit. The FCRA also requires us to promptly update any credit information reported to a consumer reporting agency about a consumer and to allow a process by which consumers may inquire about credit information furnished by us to a consumer reporting agency. Historically, the FTC has played a key role in the implementation, oversight, enforcement and interpretation of the FCRA. Pursuant to the Dodd-Frank Act, the CFPB has primary supervisory, regulatory and enforcement authority of FCRA issues. Although the FTC also retains its enforcement role regarding the FCRA, it shares that role in many respects with the CFPB. The CFPB has taken a more active approach than the FTC, including with respect to regulation, enforcement and supervision of the FCRA. Changes in the regulation, enforcement or supervision of the FCRA may materially affect our business if new regulations or interpretations by the CFPB or the FTC require us to materially alter the manner in which we use personal data in our credit underwriting.

In the UK, we are subject to the requirements of the Data Protection Act 1998, or the “DPA,” and are required to be fully registered as a data-controller under the DPA and comply with industry guidance published by the regulator, the Information Commissioner. There are also strict rules on the use of credit reference data under the CCA regulations and the CONC. We are also subject to laws limiting the transfer of personal data from the European Economic Area to non-European Economic Area countries or territories. There are also strict rules on the instigation of electronic communications such as email, text message and telephone calls under the Privacy and Electronic Communications (EC Directive) Regulations 2003, which impose consent rules regarding unsolicited direct marketing, as well as the monitoring of devices.

The oversight of the FCRA by both the CFPB and the FTC and any related investigation or enforcement activities or our failure to comply with the DPA may have a material adverse impact on our business, including our operations, our mode and manner of conducting business and our financial results.

Judicial decisions, CFPB rule-making or amendments to the Federal Arbitration Act could render the arbitration agreements we use illegal or unenforceable.

We include arbitration provisions in our consumer loan agreements. These provisions are designed to allow us to resolve any customer disputes through individual arbitration rather than in court and explicitly provide that all arbitrations will be conducted on an individual and not on a class basis. Thus, our arbitration agreements, if enforced, have the effect of shielding us from class action liability. Our

arbitration agreements do not generally have any impact on regulatory enforcement proceedings. We take the position that the arbitration provisions in our consumer loan agreements, including class action waivers, are valid and enforceable; however, the enforceability of arbitration provisions is often challenged in court. If those challenges are successful, our arbitration and class action waiver provisions could be unenforceable, which could subject us to additional litigation, including additional class action litigation.

In addition, the US Congress has considered legislation that would generally limit or prohibit mandatory arbitration agreements in consumer contracts and has enacted legislation with such a prohibition with respect to certain mortgage loan agreements and also certain consumer loan agreements to members of the military on active duty and their dependents. Further, the Dodd-Frank Act directed the CFPB to study consumer arbitration and report to the US Congress, and it authorized the CFPB to adopt rules limiting or prohibiting consumer arbitration, consistent with the results of its study. In March 2015, the CFPB released its final report on consumer arbitration that indicates it may propose rules that prohibit or limit the use of arbitration provisions in consumer loan agreements. The CFPB is currently establishing a Small Business Regulatory Enforcement Fairness Act panel to review its proposals relating to arbitration this fall. A rule could be proposed after such a panel meets and provides its report to the CFPB. Any rule adopted by the CFPB would apply to arbitration agreements entered into more than six months after the final rule becomes effective (and not to prior arbitration agreements).

Any judicial decisions, legislation or other rules or regulations that impair our ability to enter into and enforce consumer arbitration agreements and class action waivers could significantly increase our exposure to class action litigation as well as litigation in plaintiff-friendly jurisdictions, which would be costly and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We use marketing affiliates to assist us and the originating lender in obtaining new customers, and if such marketing affiliates do not comply with an increasing number of applicable laws and regulations, or if our ability to use such marketing affiliates is otherwise impaired, it could adversely affect our business.

We depend in part on marketing affiliates as a source of new customers for us and, with respect to the Elastic product, for the originating lender. Our marketing affiliates place our advertisements on their websites that direct potential customers to our websites. As a result, the success of our business depends in part on the willingness and ability of marketing affiliates to provide us customer referrals at acceptable prices.

If regulatory oversight of marketing affiliates relationships is increased, through the implementation of new laws or regulations or the interpretation of existing laws or regulations, our ability to use marketing affiliates could be restricted or eliminated.

Marketing affiliates’ failure to comply with applicable laws or regulations, or any changes in laws or regulations applicable to marketing affiliates relationships or changes in the interpretation or implementation of such laws or regulations, could have an adverse effect on our business and could increase negative perceptions of our business and industry. Additionally, the use of marketing affiliates could subject us to additional regulatory cost and expense. If our ability to use marketing affiliates were to be impaired, our business, prospects, results of operations, financial condition or cash flows could be materially adversely affected.

RISKS RELATED TO THIS OFFERING, THE SECURITIES MARKETS AND OWNERSHIP OF OUR COMMON STOCK

The price of our common stock may be volatile and the value of your investment could decline.

Technology stocks have historically experienced high levels of volatility. The trading price of our common stock following this offering may fluctuate substantially. Following the completion of this offering, the market price of our common stock may be higher or lower than the price you pay, depending on many factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:

In addition, if the market for technology and financial services stocks or the stock market in general experiences loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, operating results and financial condition.

Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.

Sales of a substantial number of shares of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate. Based on the total number of outstanding shares of our common stock as of September 30, 2015, upon completion of this offering, we will have 30,401,632 shares of common stock outstanding, assuming no exercise of our outstanding options. All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act of 1933, or the “Securities Act,” except for any shares held by our affiliates as defined in Rule 144 under the Securities Act.

Subject to certain exceptions described under “Underwriting,” we and all of our directors and officers and substantially all of our equity holders have agreed not to offer, sell or agree to sell, directly or indirectly, any shares of common stock without the permission of UBS Securities LLC, Jefferies LLC and Stifel, Nicolaus & Company, Incorporated for a period of 180 days from the date of this prospectus. When the lock-up period expires, we and our locked-up security holders will be able to sell our shares in the public market. In addition, the underwriters may, in their sole discretion, release all or some portion of the shares subject to lock-up agreements prior to the expiration of the lock-up period. See “Shares eligible for future sale” for more information. Sales of a substantial number of such shares upon expiration, or the perception that such sales may occur, or early release of the lock-up, could cause our share price to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

Upon completion of this offering, the holders of an aggregate of 14,098,525 shares of our common stock (including shares issuable pursuant to the exercise of options to purchase common stock), or their permitted transferees, will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the offer and sale of all shares of common stock that we may issue under our equity compensation plans.

We may issue our shares of common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition, investments or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

We cannot assure you that a market will develop for our common stock or what the market price of our common stock will be.

Although we are applying for approval to list our common stock on the New York Stock Exchange, we cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. We cannot predict the prices at which our common stock will trade. The initial public offering price of our common stock was determined by negotiations with the underwriters and may not bear any relationship to the market price at which our common stock will trade after this offering or to any other established criteria of the value of our business.

We have broad discretion in the use of the net proceeds that we receive in this offering.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our stock and thereby enable access to the public equity markets by our employees and stockholders, obtain additional capital and increase our visibility in the marketplace. We expect to use approximately $56.3 million of the net proceeds to repay a portion of the outstanding amount under our financing agreement and the remainder for general corporate purposes, including to fund a portion of the loans made to our customers. Accordingly, our management will have broad discretion over the specific use of the net proceeds that we receive in this offering that we do not use to repay indebtedness and might not be able to obtain a significant return, if any, on investment of such net proceeds. Investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds. If we do not use the net proceeds that we receive in this offering effectively, then our business, operating results and financial condition could be harmed.

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

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, or the “Exchange Act,” the listing standards of the New York Stock Exchange and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or the “JOBS Act.” Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and operating results and maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenues-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

However, for so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until we are no longer an “emerging growth company.”

We would cease to be an “emerging growth company” upon the earliest of: (i) the first fiscal year following the fifth anniversary of this offering, (ii) the first fiscal year after our annual gross revenues are $1 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our Audit Committee, Compensation Committee, Risk Management Committee and as qualified executive officers.

If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline.

The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us should downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts should cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. In addition, pursuant to our financing agreement, we are prohibited from paying cash dividends without the prior consent of VPC. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution of $18.41 per share, based on the initial public offering price of $21.00 per share, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, because the price that you pay will be substantially greater than the pro forma net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of capital stock. You will experience additional dilution upon exercise of options to purchase common stock under our equity incentive plans or if we otherwise issue additional shares of our common stock. See “Dilution.”

Anti-takeover provisions in our charter documents and Delaware law may delay or prevent an acquisition of our company.

Our restated certificate of incorporation and restated bylaws, as we expect they will be in effect upon the completion of this offering, contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. The provisions, among other things:

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or the “DGCL,” which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us in certain circumstances.

Any provision of our restated certificate of incorporation or restated bylaws, as we expect they will be in effect upon the completion of this offering, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our Amended and Restated Certificate of Incorporation that will be in effect upon the completion of the IPO designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our Amended and Restated Certificate of Incorporation, as we expect it will be in effect upon the completion of this offering provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action

asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the DGCL or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. By becoming a stockholder in our company, you will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provision in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

If we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

Ensuring that we have adequate disclosure controls and procedures, including internal controls over financial reporting, in place so that we can produce accurate financial statements on a timely basis is costly and time-consuming and needs to be reevaluated frequently. We are in the process of documenting, reviewing and, if appropriate, improving our internal controls and procedures in anticipation of becoming a public company and being subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the “Sarbanes-Oxley Act,” which will require annual management assessments of the effectiveness of our internal controls over financial reporting and, when we cease to be an emerging growth company under the JOBS Act, a report by our independent auditors addressing these assessments. Our management may conclude that our internal controls over financial reporting are not effective if we fail to cure any identified material weakness or otherwise. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may conclude that our internal controls over financial reporting are not effective. In the future, our independent registered public accounting firm may not be satisfied with our internal controls over financial reporting or the level at which our controls are documented, designed, operated or reviewed, or it may interpret the relevant requirements differently from us. In addition, during the course of the evaluation, documentation and testing of our internal controls over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Securities and Exchange Commission, or the “SEC,” for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. Any such deficiencies may also subject us to adverse regulatory consequences. If we fail to achieve and maintain the adequacy of our internal controls over financial reporting, as these standards may be modified, supplemented or amended from time to time, we may be unable to report our financial information on a timely basis, may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act, and may suffer adverse regulatory consequences or violations of listing standards. Any of the above could also result in a negative reaction in the financial markets due to a loss of investor confidence in the reliability of our financial statements.

This prospectus contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in “Prospectus summary,” “Risk factors,” “Management’s discussion and analysis of financial condition and results of operations” and “Business.” Forward-looking statements include information concerning our strategy, future operations, future financial position, future revenues, projected expenses, margins, prospects and plans and objectives of management. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

We believe that these statements constitute “forward-looking statements” within the meaning of Rule 175 under the Securities Act of 1933, as amended, and Rule 3b-6 under the Securities Exchange Act of 1934, as amended. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in “Risk factors” and elsewhere in this prospectus. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this prospectus. You should read this prospectus and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

This prospectus contains estimates, statistical data, and other information concerning our industry, including market size and growth rates, that are based on industry publications, surveys and forecasts, including those by the CFPB, Friends Provident Foundation, CFI Group and other publicly available sources. The industry and market information included in this prospectus involves a number of assumptions and limitations.

The sources of industry and market data contained in this prospectus are listed below:

The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk factors” and elsewhere in this prospectus. These and other factors could cause our actual results to differ materially from those expressed in the estimates made by the independent parties and by us.

We estimate that the net proceeds from our sale of 3,600,000 shares of common stock in this offering at an assumed initial public offering price of $21.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses, will be approximately $66.3 million, or $76.9 million if the underwriters’ option to purchase additional shares is exercised in full. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from this offering by $3.3 million, assuming the number of shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions.

We expect to use approximately $56.3 million of the net proceeds to repay a portion of the outstanding amount under the VPC Facility and the remainder for general corporate purposes, including to fund a portion of the loans made to our customers.

Pursuant to our financing agreement, the outstanding borrowings under the agreement were used to finance customer loan growth for our Rise and Sunny products. Our financing agreement will mature on January 30, 2018 and, as of September 30, 2015, the $247.3 million outstanding under our financing agreement bears interest at the 3-month LIBOR rate plus 13-18%. See “Management’s discussion and analysis of financial condition and results of operations—Liquidity and Capital Resources—Debt facilities—VPC Facility.”

We will have broad discretion over the uses of the net proceeds in this offering. Pending these uses, we intend to invest the net proceeds from this offering in short-term, investment-grade interest-bearing securities such as money market accounts, certificates of deposit, commercial paper and guaranteed obligations of the US government.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future. In addition, pursuant to our financing agreement, we are prohibited from paying cash dividends without the prior consent of VPC. Any future determination to declare dividends will be made at the discretion of our Board of Directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant.

The following table sets forth our consolidated cash and cash equivalents and capitalization as of September 30, 2015 on:

The number of shares of our common stock set forth in the table above excludes 4,360,575 shares of common stock reserved and common stock remaining available for issuance under our 2014 Equity Incentive Plan, or “2014 Plan,” which comprises:

The information above is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s discussion and analysis of financial condition and results of operations” and our financial statements and the related notes appearing elsewhere in this prospectus.

If you invest in our common stock, your interest will be diluted to the extent of the difference between the amount per share paid by purchasers of shares of common stock in this initial public offering and the pro forma as adjusted net tangible book value per share of common stock immediately after this offering.

As of September 30, 2015, our pro forma net tangible book value was approximately $12.3 million, or $0.46 per share of common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the shares of common stock outstanding at September 30, 2015 assuming the conversion of all outstanding shares of our convertible preferred stock into common stock.

After giving effect to (i) our sale of 3,600,000 shares of common stock in this offering at an assumed initial public offering price of $21.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses, and (ii) the use of proceeds from this offering to repay a portion of the amounts outstanding under our VPC Facility as described in “Use of proceeds,” our pro forma as adjusted net tangible book value at September 30, 2015 would have been approximately $78.6 million, or $2.59 per share of common stock. This represents an immediate increase in pro forma as adjusted net tangible book value of $2.13 per share to existing stockholders and an immediate dilution of $18.41 per share to new investors purchasing shares in this offering.

A $1.00 increase (decrease) in the assumed initial public offering price of $21.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, would increase (decrease) our pro forma net tangible book value, as adjusted to give effect to this offering, by $0.11 per share and the dilution in pro forma as adjusted net tangible book value per share to new investors in this offering by $0.89 per share, assuming the number of shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses.

If the underwriters exercise their option to purchase additional shares in full, the following will occur:

The following table summarizes, on a pro forma as adjusted basis as of September 30, 2015, assuming the conversion of all outstanding shares of our convertible preferred stock into common stock, the total number of shares of common stock purchased from us, the total consideration paid to us, and the average price per share paid to us by existing stockholders and by new investors purchasing shares in this offering at the initial public offering price of $21.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses:

Each $1.00 increase (decrease) in the assumed public offering price of $21.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, would increase (decrease) total consideration paid by new investors, total consideration paid by all stockholders and the average price per share paid by all stockholders by $3.6 million, $3.6 million and $0.10, respectively, assuming the number of shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses.

To the extent that any options become exercisable, new investors will experience further dilution. In addition, we may grant more options in the future.

You should read the following selected combined and consolidated financial data below in conjunction with “Management’s discussion and analysis of financial condition and results of operations” and the combined and consolidated financial statements, related notes and other financial information included elsewhere in this prospectus.

Prior to May 1, 2014, we operated as a separately identifiable line of business of TFI. On May 1, 2014, TFI contributed the assets and liabilities associated with its direct lending and branded products business to us and distributed its interest in our company to its stockholders. Our combined financial statements for periods prior to the Spin-Off reflect the historical results of operations and historical basis of assets and liabilities of the direct lending business that was contributed to us. The combined statements of operations for periods prior to the Spin-Off include expense allocations for general overhead and corporate functions historically provided to the direct lending business. These allocations were made based on a specifically identifiable basis or using allocation methods such as revenues, headcount or other reasonable methods and have been included in our combined financial statements for periods prior to May 1, 2014. Prior to May 1, 2014, all intercompany transactions between us and TFI have been included within the combined and consolidated financial statements and are considered to be effectively settled through contributions or distributions within TFI’s net investment at the time the transactions were recorded. Beginning May 1, 2014, all material intercompany transactions have been eliminated.

The following tables show our unaudited consolidated quarterly statement of operations data for each of our seven most recently completed quarters, as well as the percentage of revenue for each line item shown. This information has been derived from our unaudited combined and consolidated financial statements, which, in the opinion of management have been prepared on the same basis as our audited combined and consolidated financial statements and include all adjustments necessary for the fair presentation of the financial information for the quarters presented. Historical results are not necessarily indicative of the results to be expected in future periods, and operating results for a quarterly period are not necessarily indicative of the operating results for a full year. The information should be read in conjunction with the combined and consolidated financial statements and related notes included elsewhere in this prospectus.

Our gross revenue has generally increased over the seven quarters ended September 30, 2015. This growth has been primarily attributable to an increase in the finance charges, driven by increases in combined loans receivable – principal balances during the respective quarters. As expected, total cost of sales has generally increased quarter-to-quarter in absolute dollars as our loan originations and combined loans receivable – principal balances have increased. The decrease in revenue and total cost of sales from December 31, 2014 to March 31, 2015 was due to the seasonality of our business as both originations and combined loans receivable – principal balances typically decrease during first quarter of the next year.

Generally, our total operating expenses have increased quarter-to-quarter for the seven quarters ended September 30, 2015, primarily due to increased personnel-related costs reflecting the increase in our headcount to support our growth. Despite the increases in absolute dollar amounts, total operating expenses as a percentage of revenue has generally decreased for each quarter as we have achieved greater economies of scale.

Management’s discussion and analysis of financial condition and results of operations

You should read the following discussion and analysis of our financial condition and results of operations together with our combined and consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. We generally refer to loans, customers and other information and data associated with each of Rise, Elastic and Sunny as Elevate’s loans, customers, information and data, irrespective of whether Elevate directly originates the credit to the customer or whether such credit is originated by a third party. See “Certain Conventions Governing Information in this Prospectus—Presentation of information related to our products” for detailed information.

We provide technology-driven, progressive online credit solutions to non-prime consumers. We use advanced technology and proprietary risk analytics to provide more convenient and more responsible financial options to our customers, who are not well-served by either banks or legacy non-prime lenders. We currently offer online installment loans and lines of credit in the US and the UK. Our products, Rise, Elastic and Sunny, reflect our mission of “Good Today, Better Tomorrow” and provide consumers with access to competitively priced credit and services while helping them build a brighter financial future with credit building and financial wellness features.

On May 1, 2014, Think Finance, Inc., or “TFI,” completed a tax-free spin-off, or the “Spin-Off,” of our company by contributing the assets and liabilities associated with its direct lending and branded products business to us. TFI retained the assets and liabilities associated with its licensed technology platform line of business. The direct lending and branded products business contributed to us included Rise installment loans in the US, Sunny installment loans in the UK, Elastic lines of credit originated by a third party lender in the US, and our US and UK legacy short-term consumer loan products (loans which were migrated to our Rise and Sunny products, respectively) and a rent-to-own product (which we ceased offering in 2014).

The financial results included in this Management’s discussion and analysis of financial condition and results of operations, or “MD&A,” include amounts prior to the Spin-Off that have been derived from the consolidated financial statements and accounting records of TFI, using the historical results of operations and historical basis of assets and liabilities of the direct lending and branded products business. In preparing these financial results, we have made certain assumptions or used methodologies to allocate various expenses from TFI to us. These allocations were made on a specifically identifiable basis where expenses could be tied directly to Elevate products or using allocation methods such as revenues, headcount or other reasonable methods. We believe the assumptions and methodologies used in these allocations are reasonable. However, these financial results may not necessarily reflect our financial results had we been a stand-alone company during all of the periods presented.

We earn revenues on the Rise and Sunny installment loans and on the Elastic lines of credit offered to customers. For all three products, our revenues, which primarily consist of finance charges, are driven by

Management’s discussion and analysis of financial condition and results of operations

our average loan balances outstanding and by the average annual percentage rate, or “APR,” associated with those outstanding loan balances. We calculate our average loan balances by taking a simple daily average of the ending loan balances outstanding for each period. We present certain key metrics and other information on a “combined” basis to reflect information related to loans originated by us and loans originated by Republic Bank, as well as loans originated by third-party lenders pursuant to CSO programs, which loans originated through CSO programs are not recorded on our balance sheet in accordance with GAAP. See “—Key Financial and Operating Metrics” and “—Non-GAAP Financial Measures.”

We have experienced rapid growth since launching our current generation of product offerings in 2013. Since their introduction, Rise, Elastic and Sunny, together, have provided approximately $1.2 billion in credit to approximately 450,000 customers and generated strong growth in revenues and loans outstanding. Our revenues for the year ended December 31, 2014 grew 280% compared to revenues for 2013 and revenues for the nine months ended September 30, 2015 grew 67% compared to the nine months ended September 30, 2014. Our combined loan principal balances grew 177% in 2014, from $72.8 million as of December 31, 2013 to $201.7 million as of December 31, 2014, and grew an additional 51% in the nine months ended September 30, 2015 to $304.1 million. For additional information about our combined loan balances please see “—Non-GAAP Financial Measures—Combined loan information.”

We use our working capital and our credit facility with Victory Park Management, LLC, or “VPC,” to fund the loans we make to our customers. Prior to January 2014, we funded all of our loans to customers out of our existing cash flows. On January 30, 2014, we entered into an agreement with VPC to provide a credit facility, or the “VPC Facility,” with a maximum borrowing amount of $250 million to fund our Rise installment loans. On August 15, 2014, the VPC Facility was amended to provide a credit facility with a maximum total borrowing amount of $315 million in order to add funds for our UK Sunny product and for working capital. On May 20, 2015, the VPC Facility was further amended to increase the maximum total borrowing amount to $335 million. See “—Liquidity and Capital Resources—Debt facilities.”

The Elastic line of credit product is originated by a third-party lender, Republic Bank, which initially provides all of the funding for that product. Republic Bank retains 10% of the balances of all loans originated and sells a 90% loan participation in the Elastic lines of credit. We purchased these loan participations ourselves through June 30, 2015 and thus earned 90% of the revenues and incurred 90% of the losses associated with the Elastic product through that date. Due to the significant growth in Elastic, commencing July 1, 2015, a new structure was implemented such that the loan participations are sold by Republic Bank to Elastic SPV, Ltd., or “Elastic SPV.” Elastic SPV receives its funding from VPC in a separate financing facility, the “ESPV Facility,” which was finalized on July 13, 2015. We do not own Elastic SPV but, effective July 1, 2015, we entered into a credit default protection agreement with Elastic SPV whereby we agreed to provide credit protection to the investors in Elastic SPV against Elastic loan losses in return for a credit premium. As a result of this agreement, Elastic SPV is a variable interest entity and we are required to consolidate the financial results of Elastic SPV in our consolidated financial results beginning July 1, 2015. The presentation of this new Elastic SPV structure does not differ from the presentation of the previous structure reflected in our financial statements, as we continue to present revenue and losses on 90% of the Elastic lines of credit originated by Republic Bank that are sold to Elastic SPV within our consolidated financial statements.

Management’s discussion and analysis of financial condition and results of operations

Our management assesses our financial performance and future strategic goals through key metrics based primarily on the following three themes:

As discussed above, we regularly monitor a number of metrics in order to measure our current performance and project our future performance. These metrics aid us in developing and refining our growth strategies and in making strategic decisions.

Certain of our metrics are non-GAAP financial measures. We believe that such metrics are useful in period-to-period comparisons of our core business. However, non-GAAP financial measures are not an alternative to any measure of financial performance calculated and presented in accordance with GAAP. See “—Non-GAAP Financial Measures” for a reconciliation of our non-GAAP metrics to GAAP.

Management’s discussion and analysis of financial condition and results of operations

Revenues. Our revenues are composed of finance charges, CSO acquisition fees (which are fees we receive from customers who obtain a loan through the CSO program for the credit services, including the loan guaranty, we provide) and non-sufficient funds fees (which we expect to discontinue by the end of 2015) on Rise installment loans, finance charges on Sunny installment loans and revenues earned on the Elastic lines of credit. See “—Components of our Results of Operations—Revenues.”

Ending and average combined loans receivable – principal. We calculate the average combined loans receivable – principal by taking a simple daily average of the ending combined loans receivable – principal for each period. Key metrics that drive the ending and average combined loans receivable – principal include the amount of loans originated in a period and the average customer loan balance. All loan balance metrics include only the 90% participation in the related Elastic line of credit advances (we exclude the 10% held by Republic Bank), but include the full loan balances on CSO loans, which are not presented on our balance sheet.

Combined loans originated. The amount of loans originated in a period is driven primarily by loans to new customers as well as new loans to prior customers, including refinancings of existing loans to customers in good standing.

Average customer loan balance and effective APR of combined loan portfolio. The average loan amount and its related APR are based on the product and the underlying credit quality of the customer. Generally, better credit quality customers are offered higher loan amounts at lower APRs. Additionally, new customers have more potential risk of loss than prior or existing customers due to lack of payment history and the potential for fraud. As a result, newer customers typically will have lower loan amounts and higher APRs to compensate for that additional risk of loss. The effective APR is calculated based on the actual amount of revenue generated from a customer loan divided by the average outstanding balance for the loan, and can be lower than the stated APR on the loan due to waived finance charges and other reasons. For example, a Rise customer may receive a $2,000 installment loan with a term of 24 months

Management’s discussion and analysis of financial condition and results of operations

and a stated rate of 180%. In this example, the customer’s monthly installment loan payment would be $310.86. As the customer can prepay the loan balance at any time with no additional fees or early payment penalty, the customer pays the loan in full in month eight. The customer’s loan earns interest of $2,337.81 over the eight month period and has an average outstanding balance of $1,948.17. The effective APR for this loan is 180% over the eight month period calculated as follows:

In addition, as an example for Elastic, if a customer makes a $2,500 draw on the customer’s line of credit and this draw required bi-weekly minimum payments of 5% (equivalent to 20 bi-weekly payments), and if all minimum payments are made, the draw would earn finance charges of $1,148. The effective APR for the line of credit in this example is 109% over the payment period and is calculated as follows:

The actual amount of revenue we realize on a loan portfolio is also impacted by the amount of prepayments and charged-off customer loans in the portfolio. For a single loan, on average, we typically expect to realize approximately 60% of the revenues that we would otherwise realize if the loan were to fully amortize at the stated APR. From the Rise example above, if we waived $400 of interest for this customer, the effective APR for this loan would decrease to 149%.

Number of new customer loans. We define a new customer loan as the first loan made to a customer for each of our products (so a customer receiving a Rise installment loan and then at a later date taking their first cash advance on an Elastic line of credit would be counted twice). The number of new customer loans is subject to seasonal fluctuations. New customer acquisition is typically slowest during the first six months of each calendar year, primarily in the first quarter, compared to the latter half of the year, as our existing and prospective US customers usually receive tax refunds during this period and, thus, have less of a need for loans from us. Further, many US customers will use their tax refunds to prepay all or a portion of their loan balance during this period, so our overall loan portfolio typically decreases during the first quarter of the calendar year. Overall loan portfolio growth and the number of new customer loans tends to accelerate during the summer months (typically June and July), at the beginning of the school year (typically late August to early September) and during the winter holidays (typically late November to early December).

Customer acquisition cost per new loan. A key expense metric we monitor related to loan growth is our CAC. This metric is the amount of direct marketing costs incurred during a period divided by the number of new customer loans originated during that same period. New loans to former customers are not included in our calculation of CAC (except to the extent they receive a loan through a different product) as we believe we incur no material direct marketing costs to make additional loans to a prior customer through the same product.

Recent trends. Our revenues for the first nine months of 2015 totaled $300.3 million, up 67% from the first nine months of 2014. The growth in revenues during the first nine months of 2015 was driven by a 89% increase in our average combined loan balance as we continued to expand our customer base. The number of customer loans outstanding at September 30, 2015 increased 58% over the prior year amount. We were able to continue to grow our customer base while maintaining a CAC that remained within our historical levels of $250 to $300. Additionally, the average customer loan balance increased 19% from the prior period, totaling approximately $1,500. We expect this trend in average customer loan balance to continue as our loan portfolio continues to grow and mature with more existing and

Management’s discussion and analysis of financial condition and results of operations

repeat customers. The growth in loan balances drove the increase in revenues in the nine months ended September 30, 2015, offset in part by a decrease in the average APR on the loan portfolio, which declined to 181% during the first nine months of 2015 from 204% during the first nine months of 2014. This decrease in the average APR resulted both from an overall maturation of the loan portfolio, which we expect to continue over time, as well as a decline in the average APR for Sunny, due to the new regulatory rate cap implemented on January 1, 2015 in the UK, and the effect of an increased portion of our portfolio being attributable to Elastic since late 2014. Elastic has an average effective APR of approximately 90% compared to Rise, which has an average APR of approximately 180%. See “Risk factors—Risks Related to Our Business and Industry—Our recent growth rate may not be indicative of our ability to continue to grow, if at all, in the future.”

In reviewing the credit quality of our loan portfolio, we break out our total provision for loan losses that is presented on our income statement under GAAP into two separate items—net charge-offs and additional provision for loan losses. Net charge-offs are indicative of the credit quality of our underlying portfolio, while additional provision for loan losses is subject to more fluctuation based on loan portfolio growth and the effect of normal seasonality on our business. The additional provision for loan losses is the amount needed to adjust the combined loan loss reserve to the appropriate amount at the end of each month based on our loan loss reserve methodology.

Management’s discussion and analysis of financial condition and results of operations

Net charge-offs. Net charge-offs comprise gross charge-offs offset by recoveries on prior charge-offs. Gross charge-offs include the amount of principal and accrued interest on loans that are more than 60 days past due, or sooner if we receive notice that the loan will not be collected, such as bankruptcy notice or identified fraud. Any payments received on loans that have been charged off are recorded as recoveries and reduce the amount of gross charge-offs. Recoveries are typically less than 10% of the amount charged off, and thus, we do not view recoveries as a key credit quality metric. Historically, we have generally incurred net charge-offs as a percentage of revenues of between 43% and 51%.

Net charge-offs as a percentage of revenues can vary based on several factors, such as whether or not we experience significant growth or lower the APR of our products. Additionally, although a more seasoned portfolio will typically result in lower net charge-offs as a percentage of revenues, we do not intend to drive down this ratio significantly below our historical ratios and would instead seek to offer our existing products to a broader new customer base to drive additional revenues.

Additional provision for loan losses. Additional provision for loan losses is the amount of provision for loan losses needed for a particular period to adjust the combined loan loss reserve to the appropriate level in accordance with our underlying loan loss reserve methodology.

Additional provision relates to an increase in future inherent losses in the loan portfolio as determined by our loan loss reserve methodology. This increase could be due to a combination of factors such as an increase in the size of the loan portfolio or a worsening of credit quality or increase in past due loans. It is also possible for the additional provision for loan losses for a period to be a negative amount, which would reduce the amount of the combined loan loss reserve needed (due to a decrease in the loan portfolio or improvement in credit quality). The amount of additional provision for loan losses is seasonal in nature, mirroring the seasonality of our new customer acquisition and overall loan portfolio growth, as discussed above. The combined loan loss reserve typically decreases during the first quarter or first half of the calendar year due to a decrease in the loan portfolio from year end. Then, as the rate of growth for the loan portfolio starts to increase during the second half of the year, additional provision for loan losses is typically needed to increase the reserve for future losses associated with the loan growth. Because of this, our provision for loan losses can vary significantly throughout the year without a significant change in the credit quality of our portfolio.

The following provides an example of the application of our loan loss reserve methodology and the break out of the provision for loan losses between the portion associated with replenishing the reserve due to net charge-offs and the amount related to the additional loan loss provision. If the beginning combined loan loss reserve were $25 million, and we incurred $10 million of net charge-offs during the period and the ending combined loan loss reserve needed to be $30 million according to our loan loss reserve methodology, our total provision for loan losses would be $15 million, comprising $10 million in net charge-offs (provision needed to replenish the combined loan loss reserve) plus $5 million of additional provision related to an increase in future inherent losses in the loan portfolio identified by our loan loss reserve methodology.

Management’s discussion and analysis of financial condition and results of operations

Loan loss reserve methodology. Our loan loss reserve methodology is calculated separately for each product and, in the case of Rise (for non-CSO and CSO program loans), is calculated separately based on the state in which each customer resides to account for varying state license requirements that affect the amount of the loan offered, repayment terms and other factors. For each product, loss factors are calculated based on the delinquency status of customer loan balances: current, 1 to 30 days past due or 31 to 60 days past due. These loss factors for loans in each delinquency status are based on average historical loss rates by product (or state) associated with each of these three delinquency categories. Hence, another key credit quality metric we monitor is the percentage of past due combined loans receivable – principal, as an increase in past due loans will cause an increase in our combined loan loss reserve and related additional provision for loan losses to increase the reserve. For customers that are not past due, we further stratify these loans into loss rates by payment number, as a new customer that is about to make a first loan payment has a significantly higher risk of loss than a customer who has successfully made ten payments on an existing loan with us. Based on this methodology, we have historically seen our combined loan loss reserve as a percentage of combined loans receivable fluctuate between approximately 20% and 23% depending on the overall mix of new, former and past due customer loans.

Recent trends. For the first nine months of 2015, net charge-offs as a percentage of revenues was 48%, consistent with our historical range of 43% to 51%. This was slightly lower than the 50% for the first nine months of 2014 and the 51% for the full year 2014. Additional provision for loan losses for the first nine months of 2015 totaled $17.9 million. The $46.5 million increase in the total loan loss provision during the first nine months of 2015 as compared to the first nine months of 2014 primarily resulted from the strong growth in loans we experienced during the second and third quarter of 2015 and the resultant increase in net charge-offs associated with this growth in new customers. For the nine months ended September 30, 2015, our overall loan loss reserve as a percentage of combined loans receivable declined slightly to 20%, from 22% at December 31, 2014, due to a slight decrease in the percentage of past due combined loans receivable, which declined to 14% from 15% at December 31, 2014. The loss factors by delinquency category used to calculate the loan loss reserve at September 30, 2015 and December 31, 2014 declined slightly due to improvements in credit quality and maturation of the loan portfolio.

Management’s discussion and analysis of financial condition and results of operations

Additionally, we also look at cumulative credit losses by vintage as a percentage of combined principal-originated. As the below table shows, our cumulative credit losses for each quarterly vintage since the third quarter of 2013 (with the launch of Rise and Sunny) have trended under 20%.

Management’s discussion and analysis of financial condition and results of operations

Gross margin is calculated as revenues minus cost of sales, or gross profit, expressed as a percentage of revenues, and operating margin is calculated as operating income (loss) expressed as a percentage of revenues. We expect our margins to increase as we continue to scale our business. Over the long term, we also expect direct marketing costs and operating expenses to decrease to approximately 10% and 20% of revenues, respectively, as revenues continue to increase as our loan portfolio grows.

Recent operating margin trends. For the first nine months of 2015 our operating margin was (1)%, better than (22)% for full year 2014 and better than (29)% for the first nine months of 2014. This increase was due to a decline in both additional provision for loan losses and direct marketing costs as a percentage of revenues, as well as to a decline in operating expenses as a percentage of revenues. Additional provision for loan losses declined due to the loan portfolio growing only 51% during the first three quarters of 2015 compared to 122% during the first three quarters of 2014, resulting in the combined loan loss reserve increasing $17.5 million in the first nine months of 2015 versus $23.7 million in the first nine months of 2014. As the percentage of loan growth continues to decline compared to the overall size of the loan portfolio, we expect our related additional provision for loan losses as a percentage of revenues will continue to decline as well. Direct marketing costs declined to 16% of revenues for the first nine months of 2015, from 23% a year earlier, driven by more efficient marketing spend resulting in a lower CAC on increased new customer loans, which were up 19% for the first nine months of 2015 compared to 2014. The efficiencies were also derived from the scaling of our business, as revenues increased 67% and average combined loans receivable – principal increased by 89%, while direct marketing costs were up only 14%. As we continue to further scale our business, we believe our direct marketing costs as a percentage of revenues will continue to decline to approximately 10% of

Management’s discussion and analysis of financial condition and results of operations

revenues. However, for the remainder of 2015, we believe this percentage will continue to be largely consistent with that of the first nine months of 2015, as we continue to acquire new customers within our target CAC. Operating expenses as a percentage of revenues declined from 37% during the first nine months of 2014 to 28% during the first nine months of 2015. A majority of our operating expenses is compensation and benefits associated with our employees. Approximately two-thirds of TFI’s employees moved over to Elevate in the Spin-Off, as these employees were involved with the direct lending business. The loan products that drive our revenues were all relatively new at the time of the Spin-Off—having been launched in 2013. As a result, we incurred a large amount of operating expenses as we launched these newer products. As we continue to further scale our business, we believe our operating expenses as a percentage of revenues will continue to decline to approximately 20% of revenues.

We believe that the inclusion of the following non-GAAP financial measures in this prospectus can provide a useful measure for period-to-period comparisons of our core business and useful information to investors and others in understanding and evaluating our operating results. However, non-GAAP financial measures are not a measure calculated in accordance with United States generally accepted accounting principles, or GAAP, and should not be considered an alternative to any measures of financial performance calculated and presented in accordance with GAAP. Other companies may calculate these non-GAAP financial measures differently than we do.

Management believes that Adjusted EBITDA is a useful supplemental measure in analyzing the operating performance of the business and provides greater transparency into the results of operations of our core business.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

Management’s discussion and analysis of financial condition and results of operations

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated:

Free cash flow, or “FCF,” represents our net cash provided by operating activities, adjusted to include:

The following table presents a reconciliation of net cash provided by (used in) operating activities to FCF for each of the periods indicated:

We break out our total provision for loan losses into two separate items—first, the amount related to net charge-offs, and second, the additional provision for loan losses needed to adjust the combined loan loss reserve to the appropriate amount at the end of each month based on our loan loss methodology. We believe this presentation provides more detail related to the components of our total provision for loan losses when analyzing the gross margin of our business.

Management’s discussion and analysis of financial condition and results of operations

The information presented in the tables below on a combined basis are non-GAAP measures based on a combined portfolio of loans, which includes the total amount of outstanding loans receivable that we own and that are on our balance sheet plus outstanding loans receivable originated and owned by third parties that we guarantee pursuant to CSO programs in which we participate. See “—Basis of Presentation and Critical Accounting Policies—Allowance and liability for estimated losses on consumer loans” and “—Basis of Presentation and Critical Accounting Policies—Liability for estimated losses on credit service organization loans.”

We believe these non-GAAP measures provide investors with important information needed to evaluate the magnitude of potential loan losses and the opportunity for revenue performance of the combined loan portfolio on an aggregate basis. We also believe that the comparison of the combined amounts from period to period is more meaningful than comparing only the amounts reflected on our balance sheet since both revenues and cost of sales as reflected in our financial statements are impacted by the aggregate amount of loans we own and those CSO loans we guarantee.

Our use of total combined loans and fees receivable has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

As of each of the period ends indicated, the following table presents a reconciliation of:

Management’s discussion and analysis of financial condition and results of operations


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x (do not check if a smaller reporting company)	Smaller reporting company	¨


	As of September 30, 2015
(dollars in thousands)	Actual			Pro forma			Pro forma as adjusted(1)(2)
Cash and cash equivalents	$	33,106		$	33,106		$	43,106

Financing agreement	$	297,300		$	297,300		$	240,992

Convertible preferred stock:
Series A preferred stock, par value $0.0001, 2,957,059 shares authorized, issued and outstanding at September 30, 2015, no shares issued and outstanding pro forma and pro forma as adjusted		3			—			—
Series B preferred stock, par value $0.0001, 2,682,351 shares authorized, issued and outstanding at September 30, 2015, no shares issued and outstanding pro forma and pro forma as adjusted		3			—			—

Total convertible preferred stock		6			—			—
Stockholders’ (deficit) equity:
Common stock, par value $0.0004, 41,676,750 shares authorized and 12,703,107 shares issued and outstanding, actual; 41,676,750 shares authorized and 26,801,632 shares issued and outstanding, pro forma; and 41,676,750 shares authorized and 30,401,632 shares issued and outstanding, pro forma as adjusted		5			11			12
Additional paid-in capital		85,555			85,555			151,862
Accumulated other comprehensive loss, net of taxes		(455	)		(455	)		(455	)
Accumulated deficit		(54,256	)		(54,256	)		(54,256	)

Total stockholders’ equity		30,855			30,855			97,163

Total capitalization	$	328,155		$	328,155		$	338,155


	Shares purchased					Total consideration						Weighted average price per share
	Number		Percent			Amount			Percent			Weighted average price per share
Existing stockholders		26,801,632		77.9	%	$	85,864,097	(1)		48.6	%	$	3.20
Exercised options		4,018,007		11.7			15,059,492			8.5			3.75
New investors(2)		3,600,000		10.4	%		75,600,000			42.9		$	21.00

Total		34,419,639		100.0	%	$	176,523,589			100.0	%


	Three months ended
(dollars in thousands, except as noted)	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014			March 31, 2015			June 30, 2015			September 30, 2015
Revenues	$	43,877		$	58,685		$	77,132		$	94,024		$	89,506		$	91,368		$	119,432
Cost of sales:
Provision for loan losses		24,867			39,917			49,728			56,396			39,284			50,210			71,519
Direct marketing costs		12,133			13,907			16,033			18,094			9,866			17,151			20,790
Other cost of sales		2,460			2,020			3,274			2,849			2,606			3,791			4,297

Total cost of sales		39,460			55,844			69,035			77,339			51,756			71,152			96,606

Gross profit		4,417			2,841			8,097			16,685			37,750			20,216			22,826

Operating expenses
Compensation and benefits		11,133			11,162			11,978			13,737			13,921			15,013			15,595
Professional services		3,623			4,233			5,705			5,100			4,747			6,107			7,145
Selling and marketing		952			1,453			1,900			3,061			2,490			1,890			1,498
Occupancy and equipment		1,499			2,707			1,803			2,034			2,333			2,265			2,490
Depreciation and amortization		1,942			2,247			2,212			1,916			2,068			2,142			2,266
Other		477			1,198			545			546			569			1,030			1,043

Total operating expenses		19,626			23,000			24,143			26,394			26,128			28,447			30,037

Operating (loss) income		(15,209	)		(20,159	)		(16,046	)		(9,709	)		11,622			(8,231	)		(7,211	)

Net interest expense		(874	)		(2,033	)		(3,920	)		(6,112	)		(6,755	)		(7,172	)		(10,278	)
Foreign currency transaction (loss) gain		—			—			—			(1,408	)		(1,459	)		1,950			(1,731	)
Non-operating income		—			—			—			—			—			5,528			3

Total other (expense) income		(874	)		(2,033	)		(3,920	)		(7,520	)		(8,214	)		306			(12,006	)

(Loss) income before taxes		(16,083	)		(22,192	)		(19,966	)		(17,229	)		3,408			(7,925	)		(19,217	)
Income tax (benefit) expense		(3,498	)		(5,049	)		(5,676	)		(6,486	)		2,509			(1,932	)		(4,156	)

(Loss) income from continuing operations		(12,585	)		(17,143	)		(14,290	)		(10,743	)		899			(5,993	)		(15,061	)

Income (loss) from discontinued operations, net of tax		11			138			20			(34	)		—			—			—

Net (loss) income	$	(12,574	)	$	(17,005	)	$	(14,270	)	$	(10,777	)	$	899		$	(5,993	)	$	(15,061	)

Adjustments to arrive at Adjusted EBITDA:
Net (loss) income	$	(12,574	)	$	(17,005	)	$	(14,270	)	$	(10,777	)	$	899		$	(5,993	)	$	(15,061	)
Net interest expense		874			2,033			3,920			6,112			6,755			7,172			10,278
Foreign currency (gains) losses		—			—			—			1,408			1,459			(1,950	)		1,731
Depreciation and amortization expense		1,942			2,247			2,212			1,916			2,068			2,142			2,266
Adjustment to contingent consideration		—			—			—			—			—			(5,528	)		(3	)
(Gain) loss on discontinued operations		(11	)		(138	)		(20	)		34			—			—			—
Income tax (benefit) expense		(3,498	)		(5,049	)		(5,676	)		(6,486	)		2,509			(1,932	)		(4,156	)

Adjusted EBITDA	$	(13,267	)	$	(17,912	)	$	(13,834	)	$	(7,793	)	$	13,690		$	(6,089	)	$	(4,945	)


Number of new customer loans		39,602			54,922			54,675			53,457			29,944			62,548			84,333
Number of loans outstanding		94,539			114,813			131,339			146,046			131,577			163,736			206,934
Customer acquisition costs per new loan (in dollars)	$	306		$	253		$	293		$	338		$	329		$	274		$	247

Net charge-offs	$	13,330		$	31,799		$	45,452		$	47,978		$	45,694		$	38,180		$	59,287
Additional provision for loan losses		11,537			8,118			4,276			8,418			(6,410	)		12,030			12,232

Provision for loan losses	$	24,867		$	39,917		$	49,728		$	56,396		$	39,284		$	50,210		$	71,519

Past due combined loans receivable – principal as a percentage of combined loans receivable – principal		20	%		16	%		15	%		15	%		14	%		12	%		14	%
Net charge-offs as a percentage of revenue		30	%		54	%		59	%		51	%		51	%		42	%		50	%
Effective APR of combined loan portfolio		212	%		203	%		200	%		199	%		189	%		189	%		169	%


	3 Months Ended
(as a percentage of revenues)	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014			March 31, 2015			June 30, 2015			September 30, 2015
Revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales:
Provision for loan losses		56.7			68.0			64.5			60.0			43.9			55.0			59.9
Direct marketing costs		27.7			23.7			20.8			19.2			11.0			18.8			17.4
Other cost of sales		5.6			3.4			4.2			3.0			2.9			4.1			3.6

Total cost of sales		89.9			95.2			89.5			82.3			57.8			77.9			80.9

Gross profit		10.1			4.8			10.5			17.7			42.2			22.1			19.1

Operating expenses
Compensation and benefits		25.4			19.0			15.5			14.6			15.6			16.4			13.1
Professional services		8.3			7.2			7.4			5.4			5.3			6.7			6.0
Selling and marketing		2.2			2.5			2.5			3.3			2.8			2.1			1.3
Occupancy and equipment		3.4			4.6			2.3			2.2			2.6			2.5			2.1
Depreciation and amortization		4.4			3.8			2.9			2.0			2.3			2.3			1.9
Other		1.1			2.0			0.7			0.6			0.6			1.1			0.9

Total operating expenses		44.7			39.2			31.3			28.1			29.2			31.1			25.1

Operating (loss) income		(34.7	)		(34.4	)		(20.8	)		(10.3	)		13.0			(9.0	)		(6.0	)

Net interest expense		(2.0	)		(3.5	)		(5.1	)		(6.5	)		(7.5	)		(7.8	)		(8.6	)
Foreign currency transaction (loss) gain		0.0			0.0			0.0			(1.5	)		(1.6	)		2.1			(1.4	)
Non-operating income		0.0			0.0			0.0			0.0			0.0			6.1			0.0

Total other (expense) income		(2.0	)		(3.5	)		(5.1	)		(8.0	)		(9.2	)		0.3			(10.1	)

(Loss) income before taxes		(36.7	)		(37.8	)		(25.9	)		(18.3	)		3.8			(8.7	)		(16.1	)
Income tax (benefit) expense		(8.0	)		(8.6	)		(7.4	)		(6.9	)		2.8			(2.1	)		(3.5	)

(Loss) income from continuing operations		(28.7	)		(29.2	)		(18.5	)		(11.4	)		1.0			(6.6	)		(12.6	)

Income (loss) from discontinued operations, net of tax		0.0			0.2			0.0			0.0			0.0			0.0			0.0

Net (loss) income		(28.7	%)		(29.0	%)		(18.5	%)		(11.5	%)		1.0	%		(6.6	%)		(12.6	%)


Assumed initial public offering price per share	$	21.00
Pro forma net tangible book value per share as of September 30, 2015			$	0.46
Increase per share attributable to this offering				2.13

Pro forma as adjusted net tangible book value per share after this offering		2.59

Net tangible book value dilution per share to new investors in this offering	$	18.41


	As of and for the years ended December 31,						As of and for the nine months ended September 30,
Other financial and operational data (dollars in thousands, except as noted)	2014			2013			2015			2014
							(unaudited)
Adjusted EBITDA(1)	$	(52,806	)	$	(47,075	)	$	2,656		$	(45,012	)
Free cash flow(2)		(47,358	)		(46,736	)		(25,607	)		(42,152	)
Number of new customer loans		202,656			93,425			176,825			149,199
Number of loans outstanding		146,046			81,081			206,934			131,339
Customer acquisition cost per new loan (in dollars)		297			255			270			282

Net charge-offs(3)	$	138,559		$	30,649		$	143,161		$	90,581
Additional provision for loan losses(3)		32,349			11,074			17,852			23,931

Provision for loan losses	$	170,908		$	41,723		$	161,013		$	114,512

Past due combined loans receivable – principal as a percentage of combined loans receivable – principal(4)		15	%		11	%		14	%		15	%
Net charge-offs as a percentage of revenues		51	%		43	%		48	%		50	%
Total provision for loan losses a percentage of revenues		62	%		58	%		54	%		64	%
Combined loan loss reserve(5)	$	48,491		$	16,826		$	66,011		$	40,480
Combined loan loss reserve as a percentage of combined loans receivable(5)		22	%		21	%		20	%		23	%
Effective APR of combined loan portfolio		202	%		251	%		181	%		204	%
Ending combined loans receivable – principal(4)	$	201,660		$	72,753		$	304,086		$	161,805


	As of and for the years ended December 31,						As of and for the nine months ended September 30,
Revenue growth metrics (dollars in thousands, except as noted)	2014			2013			2015			2014
							(unaudited)
Revenues	$	273,718		$	72,095		$	300,306		$	179,694
Period-over-period revenue growth		280	%		N/A			67	%		N/A
Ending combined loans receivable – principal(1)		201,660			72,753			304,086			161,805
Average combined loans receivable – principal(1)(2)		134,491			28,411			221,427			117,192
Total combined loans originated – principal		508,692			164,590			532,187			341,933
Average customer loan balance (in dollars)(3)		1,367			893			1,472			1,240
Number of new customer loans		202,656			93,425			176,825			149,199
Number of loans outstanding		146,046			81,081			206,934			131,339
Customer acquisition cost per new loan (in dollars)		297			255			270			282
Effective APR of combined loan portfolio		202	%		251	%		181	%		204	%


($2,337.81 interest earned / $1,948.17 average balance outstanding) x 12 months per year = 180%
8 months


($1,148.00 fees earned / $1,369.05 average balance outstanding) x 26 bi-weekly periods per year = 109%
20 payments


	As of and for the years ended December 31,						As of and for the nine months ended September 30,
Credit quality metrics (dollars in thousands)	2014			2013			2015			2014
							(unaudited)
Net charge-offs(1)	$	138,559		$	30,649		$	143,161		$	90,581
Additional provision for loan losses(1)		32,349			11,074			17,852			23,931

Provision for loan losses	$	170,908		$	41,723		$	161,013		$	114,512

Past due combined loans receivable – principal as a percentage of combined loans receivable – principal(2)		15	%		11	%		14	%		15	%
Net charge-offs as a percentage of revenues(1)		51	%		43	%		48	%		50	%
Total provision for loan losses as a percentage of revenues		62	%		58	%		54	%		64	%
Combined loan loss reserve(3)	$	48,491		$	16,826		$	66,011		$	40,480
Combined loan loss reserve as a percentage of combined loans receivable(3)		22	%		21	%		20	%		23	%


Example (dollars in thousands)
Beginning combined loan loss reserve			$	25,000
Less: Net charge-offs				(10,000	)
Provision for loan losses:
Provision for net charge-offs	$	10,000
Additional provision for loan losses		5,000

Total provision for loan losses				15,000

Ending combined loan loss reserve balance			$	30,000


	For the years ended December 31,						For the nine months ended September 30,
Margin metrics (dollars in thousands)	2014			2013			2015			2014
							(unaudited)
Revenues	$	273,718		$	72,095		$	300,306		$	179,694
Net charge-offs(1)		(138,559	)		(30,649	)		(143,161	)		(90,581	)
Additional provision for loan losses(1)		(32,349	)		(11,074	)		(17,852	)		(23,931	)
Direct marketing costs		(60,166	)		(23,811	)		(47,807	)		(42,073	)
Other cost of sales		(10,603	)		(6,305	)		(10,694	)		(7,754	)

Gross profit		32,041			256			80,792			15,355
Operating expenses		(93,164	)		(52,660	)		(84,612	)		(66,768	)

Operating loss	$	(61,123	)	$	(52,404	)	$	(3,820	)	$	(51,413	)

As a percentage of revenues:
Net charge-offs		51	%		43	%		48	%		50	%
Additional provision for loan losses		11			15			6			13
Direct marketing costs		22			33			16			23
Other cost of sales		4			9			3			4

Gross margin		12			—			27			9
Operating expenses		34			73			28			37

Operating margin		(22	)%		(73	)%		(1	)%		(28	)%


	For the years ended December 31,						For the nine months ended September 30,
(dollars in thousands)	2014			2013			2015			2014
							(unaudited)
Net loss	$	(54,625	)	$	(44,857	)	$	(20,155	)	$	(43,848	)
Adjustments:
Net interest expense		12,939			60			24,205			6,827
Foreign currency losses		1,408			237			1,240			—
Depreciation and amortization expense		8,317			5,329			6,476			6,401
Non-operating income		—			(572	)		(5,531	)		—
(Gain) loss on discontinued operations		(135	)		1,499			—			(169	)
Income tax benefit		(20,710	)		(8,771	)		(3,579	)		(14,223	)

Adjusted EBITDA	$	(52,806	)	$	(47,075	)	$	2,656		$	(45,012	)