EX-99.3 4 ex993-unauditedcondensedco.htm EX-99.3 Document

PAGAYA TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022 (In thousands)
September 30,December 31,
20232022
Assets(Unaudited)(Audited)
Current assets:
Cash and cash equivalents$252,578 $309,793 
Restricted cash26,280 22,539 
Fees and other receivables (including related party receivables of $50,934 and $49,427 as of September 30, 2023 and December 31, 2022, respectively)
67,460 59,219 
Investments in loans and securities249 1,007 
Prepaid expenses and other current assets (including related party assets of $18,395 and $18,783 as of September 30, 2023 and December 31, 2022, respectively)
27,353 27,258 
Income tax receivable4,073 — 
Total current assets377,993 419,816 
Restricted cash5,320 4,744 
Fees and other receivables (including related party receivables of $34,980 and $38,332 as of September 30, 2023 and December 31, 2022, respectively)
35,393 38,774 
Investments in loans and securities665,405 462,969 
Equity method and other investments26,550 25,894 
Right-of-use assets54,587 61,077 
Property and equipment, net40,680 31,663 
Goodwill10,945 — 
Intangible assets3,189 — 
Prepaid expenses and other assets145 142 
Total non-current assets842,214 625,263 
Total Assets$1,220,207 $1,045,079 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$1,299 $1,739 
Accrued expenses and other liabilities (including related party liabilities of $668 and $636 as of September 30, 2023 and December 31, 2022, respectively)
29,332 49,496 
Operating lease liability - current6,213 8,530 
Secured borrowing - current44,193 61,829 
Income taxes payable - current591 6,424 
Total current liabilities81,628 128,018 
Non-current liabilities:
Warrant liability5,163 1,400 
Revolving credit facility100,000 15,000 
Secured borrowing - non-current227,356 77,802 
Operating lease liability - non-current41,116 49,097 
Income taxes payable - non-current18,261 7,771 
Deferred tax liabilities, net - non-current581 568 
Total non-current liabilities392,477 151,638 
Total Liabilities474,105 279,656 
Redeemable convertible preferred shares, no par value, 80,000,000 shares authorized, 60,000,000 shares issued and outstanding as of September 30, 2023; aggregate liquidation preference of $150,000 as of September 30, 2023.
74,250 — 
Shareholders’ equity:
Class A ordinary shares, no par value, 8,000,000,000 shares authorized, 561,622,225 and 508,377,199 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.
— — 
Class B ordinary shares, no par value, 2,000,000,000 shares authorized, 151,827,730 and 174,934,392 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.
— — 
Additional paid-in capital1,060,166 968,432 
Accumulated other comprehensive income (loss)3,985 (713)
Accumulated deficit(528,219)(414,199)
Total Pagaya Technologies Ltd. shareholders’ equity535,932 553,520 
Noncontrolling interests135,920 211,903 
Total shareholders’ equity671,852 765,423 
Total Liabilities, Redeemable Convertible Preferred Shares, and Shareholders’ Equity$1,220,207 $1,045,079 
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PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(In thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenue
Revenue from fees (including related party revenues of $157,590 and $171,300 for the three months ended September 30, 2023 and 2022, respectively, and $459,581 and $492,300 for the nine months ended September 30, 2023 and 2022)
$201,447 $185,614 $562,386 $507,241 
Other Income
Interest income10,375 13,666 30,965 43,127 
Investment income (loss) (1)(65)4,675 656 5,670 
Total Revenue and Other Income211,757 203,955 594,007 556,038 
Production costs128,792 129,115 374,462 326,375 
Research and development 18,039 38,643 56,833 127,379 
Sales and marketing11,339 26,579 40,197 90,229 
General and administrative53,425 73,790 157,567 236,863 
Total Costs and Operating Expenses211,595 268,127 629,059 780,846 
Operating Income (Loss)
162 (64,172)(35,052)(224,808)
Other income (loss), net
(47,260)3,233 (131,135)9,846 
Loss Before Income Taxes(47,098)(60,939)(166,187)(214,962)
Income tax expense (benefit)
(1,158)6,065 10,515 25,604 
Net Loss Including Noncontrolling Interests(45,940)(67,004)(176,702)(240,566)
Less: Net income (loss) attributable to noncontrolling interests(24,188)7,785 (62,682)27,757 
Net Loss Attributable to Pagaya Technologies Ltd.$(21,752)$(74,789)$(114,020)$(268,323)
Per share data:
Net loss attributable to Pagaya Technologies Ltd. shareholders$(21,752)$(74,789)$(114,020)$(268,323)
Less: Undistributed earnings allocated to participated securities— — — (12,205)
Net loss attributable to Pagaya Technologies Ltd. ordinary shareholders$(21,752)$(74,789)$(114,020)$(280,528)
Net loss per share attributable to Pagaya Technologies Ltd.:
Basic and Diluted (2)
$(0.03)$(0.11)$(0.16)$(0.73)
Weighted average shares outstanding:
Basic and Diluted (2)
728,563,796 679,431,901 715,411,921 381,831,895 
(1) Includes income from proprietary investments.

(2) Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022.


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PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(In thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net Loss Including Noncontrolling Interests$(45,940)$(67,004)$(176,702)$(240,566)
Other Comprehensive Income:
Unrealized gain on securities available for sale, net5,084 — 27,911 — 
Comprehensive Loss Including Noncontrolling Interests$(40,856)$(67,004)$(148,791)$(240,566)
Less: Comprehensive income (loss) attributable to noncontrolling interests(21,126)7,785 (39,469)27,757 
Comprehensive Loss Attributable to Pagaya Technologies Ltd.$(19,730)$(74,789)$(109,322)$(268,323)

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PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY
FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(In thousands, except share amounts)

Redeemable Convertible Preferred SharesOrdinary Shares
(Class A and Class B)
Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit)Non-Controlling InterestsTotal Shareholders’ Equity
Shares(1)AmountShares(1)Amount
Balance – June 30, 202360,000,000 $74,250 708,909,068 $— $1,027,687 $1,963 $(506,467)$523,183 $179,940 $703,123 
Issuance of ordinary shares upon exercise of share options2,075,050 — 1,108 1,108 1,108 
Issuance of ordinary shares upon vesting of RSUs602,816 — — — 
Issuance of ordinary shares in connection with the acquisition of Darwin Homes, Inc.128,182 — — — 
Issuance of ordinary shares from the Equity Financing Purchase Agreement1,734,839 3,793 3,793 3,793 
Share-based compensation23,177 23,177 23,177 
Reversal of issuance costs associated with the Business Combination and PIPE Investment4,401 4,401 4,401 
Contributions of interests in consolidated VIEs— 3,942 3,942 
Return of capital to interests in consolidated VIEs— (26,836)(26,836)
Other comprehensive income (loss)2,022 2,022 3,062 5,084 
Net income (loss)(21,752)(21,752)(24,188)(45,940)
Balance – September 30, 202360,000,000 $74,250 713,449,955 $— $1,060,166 $3,985 $(528,219)$535,932 $135,920 $671,852 
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Redeemable Convertible Preferred SharesOrdinary Shares
(Class A and Class B)
Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit)Non-Controlling InterestsTotal Shareholders’ Equity
Shares(1)AmountShares(1)Amount
Balance – December 31, 2022— $— 683,311,591 $— $968,432 $(713)$(414,199)$553,520 $211,903 $765,423 
Issuance of ordinary shares upon exercise of warrants195,655 — — — 
Issuance of ordinary shares upon exercise of share options6,464,223 — 2,538 2,538 2,538 
Issuance of ordinary shares upon vesting of RSUs3,433,719 — — — 
Issuance of preferred shares, net of issuance costs of $750
60,000,000 74,250 — — — — 
Share-based compensation62,868 62,868 62,868 
Reversal of issuance costs associated with the Business Combination and PIPE Investment4,401 4,401 4,401 
Issuance of ordinary shares in connection with the acquisition of Darwin Homes, Inc. 18,309,928 — 18,134 18,134 18,134 
Issuance of ordinary shares from the Equity Financing Purchase Agreement1,734,839 3,793 3,793 3,793 
Reclassification of warrants— — — 
Reclassification of investments(1,881)(1,881)18,341 16,460 
Contributions of interests in consolidated VIEs— 19,235 19,235 
Return of capital to interests in consolidated VIEs— (55,749)(55,749)
Other comprehensive income (loss)6,579 6,579 4,872 11,451 
Net income (loss)(114,020)(114,020)(62,682)(176,702)
Balance – September 30, 202360,000,000 $74,250 713,449,955 $— $1,060,166 $3,985 $(528,219)$535,932 $135,920 $671,852 
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Redeemable Convertible Preferred SharesOrdinary Shares
Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit)Non-Controlling InterestsTotal Shareholders’ Equity
Shares(1)AmountShares(1)Amount
Balance – June 30, 2022653,914,375 $— $878,255 $— $(305,412)$572,843 $172,193 $745,036 
Issuance of ordinary shares upon exercise of warrants21,170,017 — — 
Issuance of ordinary shares upon exercise of share options5,573,732 1,034 1,034 1,034 
Issuance of ordinary shares upon vesting of RSUs91,655 — — 
Issuance of ordinary shares related to commitment shares46,536 1,000 1,000 1,000 
Share-based compensation67,092 67,092 67,092 
Contributions of interests in consolidated VIEs— 63,466 63,466 
Return of capital to interests in consolidated VIEs— (16,894)(16,894)
Net income (loss)(74,789)(74,789)7,785 (67,004)
Balance – September 30, 2022— $— 680,796,315 $— $947,381 $— $(380,201)$567,180 $226,550 $793,730 

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Redeemable Convertible Preferred SharesOrdinary Shares
Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit)Non-Controlling InterestsTotal Shareholders’ Equity
Shares(1)AmountShares(1)Amount
Balance – December 31, 2021406,399,029 $307,047 194,345,791 $— $113,170 $— $(111,878)$1,292 $176,060 $177,352 
Issuance of ordinary shares upon exercise of warrants21,170,017 — — 
Issuance of ordinary shares upon exercise of share options15,606,239 1,480 1,480 1,480 
Issuance of ordinary shares upon vesting of RSUs96,326 — — 
Issuance of ordinary shares related to commitment shares46,536 1,000 1,000 1,000 
Issuance of ordinary shares in connection with the Business Combination and PIPE Investment, net of issuance costs of $57,400
(406,399,029)(307,047)449,531,406 581,359 581,359 581,359 
Share-based compensation229,797 229,797 229,797 
Reclassification of warrants20,575 20,575 20,575 
Contributions of interests in consolidated VIEs— 92,988 92,988 
Return of capital to interests in consolidated VIEs— (70,255)(70,255)
Net income (loss)(268,323)(268,323)27,757 (240,566)
Balance – September 30, 2022— $— 680,796,315 $— $947,381 $— $(380,201)$567,180 $226,550 $793,730 
(1) Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022.
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PAGAYA TECHNOLOGIES LTD.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 (In thousands)
Nine Months Ended September 30,
20232022
Cash flows from operating activities
Net loss including noncontrolling interests$(176,702)$(240,566)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity method income (loss)(655)(5,670)
Depreciation and amortization13,161 4,077 
Share-based compensation57,312 223,007 
Fair value adjustment to warrant liability3,763 (9,408)
Write-off of capitalized software1,935 — 
Issuance of ordinary shares related to commitment shares— 1,000 
Impairment loss on available-for-sale debt securities115,644 10,706 
Tax benefit related to release of valuation allowance(1,162)— 
Gain on foreign exchange(302)— 
Change in operating assets and liabilities:
Fees and other receivables(7,666)(31,832)
Deferred tax assets, net— (2,820)
Deferred tax liabilities, net13 — 
Prepaid expenses and other assets1,812 (18,530)
Right-of-use assets6,435 2,322 
Accounts payable(374)(9,097)
Accrued expenses and other liabilities(16,682)23,250 
Operating lease liability(6,433)(6,204)
Income tax receivable / payable529 21,885 
Net cash used in operating activities(9,372)(37,880)
Cash flows from investing activities
Proceeds from the sale/maturity/prepayment of:
Investments in loans and securities134,101 88,538 
Short-term deposits— 5,020 
Equity method and other investments— 453 
Cash and restricted cash acquired from Darwin Homes, Inc. 1,608 — 
Payments for the purchase of:
Investments in loans and securities(436,242)(261,806)
Property and equipment(15,555)(18,266)
Equity method and other investments— (5,749)
Net cash used in investing activities(316,088)(191,810)
Cash flows from financing activities
Proceeds from sale of ordinary shares in connection with the Business Combination and PIPE Investment, net of issuance costs— 291,872 
Proceeds from secured borrowing314,276 94,094 
Proceeds received from noncontrolling interests19,235 92,988 
Proceeds from revolving credit facility110,000 26,000 
Proceeds from exercise of stock options2,538 1,480 
Distributions made to noncontrolling interests(39,321)(70,255)
Payments made to revolving credit facility(25,000)(26,000)
Payments made to secured borrowing(182,358)(18,245)
Settlement of share-based compensation in satisfaction of tax withholding requirements(650)— 
Proceeds from issuance of ordinary shares from the Equity Financing Purchase Agreement3,793 — 
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs74,250 — 
Net cash provided by financing activities276,763 391,934 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(4,201)— 
Net increase (decrease) in cash, cash equivalents and restricted cash(52,898)162,244 
Cash, cash equivalents and restricted cash, beginning of period337,076 204,575 
Cash, cash equivalents and restricted cash, end of period$284,178 $366,819 
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Reconciliation of cash, cash equivalents, and restricted cash within the consolidated statements of financial position to the amounts shown in the statements of cash flow above:
Cash and cash equivalents$252,578 $327,896 
Restricted cash - current26,280 34,161 
Restricted cash - non-current5,320 4,762 
Total cash, cash equivalents, and restricted cash$284,178 $366,819 
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