# Offerpad Solutions Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Offerpad Solutions Inc.](/companies/opad.md) (CIK 1825024)
- Form: 10-Q
- Filed: 2025-05-05
- Accepted by EDGAR: May 5, 2025, 17:06 ET
- Period: 2025-03-31
- Accession: 0000950170-25-063692
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1825024/000095017025063692/opad-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1825024/000095017025063692/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $160.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $150.2m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $10.5m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $1.0m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$11.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $3.5m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $37.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$15.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.55 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.55 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 27,564,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$10.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $994.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $30.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $255.5m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $274.5m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $225.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $240.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $34.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 62,008 characters.

*The following discussion and analysis provides information that Offerpad’s management believes is relevant to an assessment and understanding of Offerpad’s consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025.*

*This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q. Offerpad’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part I, Item 1A of Offerpad’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.*

### Overview

### Our Business

Offerpad, dedicated to simplifying the process of buying and selling homes, is committed to providing comprehensive solutions that remove the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to B2B renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we have leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step, and have transacted on homes representing approximately $11.8 billion of aggregate revenue through March 31, 2025.

We are headquartered in Tempe, Arizona and operated in over 1,900 cities and towns in 27 metropolitan markets across 18 states as of March 31, 2025.

### Current Economic Conditions and Health of the U.S. Residential Real Estate Industry

Our business and operating results are impacted by the general economic conditions and the health of the U.S. residential real estate industry, particularly the single-family home resale market. Our business model primarily depends on a high volume of residential real estate transactions throughout the markets in which we operate. This transaction volume affects substantially all of the ways that we generate revenue, including our ability to acquire new homes and generate associated fees, and our ability to sell homes that we own.

The uncertain economic outlook and uneven residential real estate market conditions that challenged our operating results during 2024 continued into the first quarter of 2025, with the average thirty-year fixed mortgage rate generally remaining between the mid-6% range and 7%. The sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time. This uncertainty has been further amplified by macroeconomic and geopolitical concerns, which have been heightened by the trade-related tensions resulting from the recent tariff announcements made by the U.S. and other governments. The cumulative impact of these conditions, including without limitation future or additional tariffs or retaliatory tariffs, continues to cause uncertainty in the market and challenge consumer confidence, resulting in lower than normal real estate transaction volumes, and may impact the costs of materials and supplies used in our home renovations, which could in turn impact our margins.

These uncertain market conditions, combined with the impact of our intentional reduction in home acquisition pace during the second half of 2024 as part of our effort to balance our real estate inventory levels to optimize our return, are reflected in our operating results for the first quarter of 2025. We sold 460 homes during the first quarter of 2025, generating $160.7 million of revenue and $10.5 million of gross profit. Although our transaction volumes were lower during the first quarter of 2025 compared to recent periods, we achieved quarter-over-quarter improvement in our gross profit margin, along with both quarter-over-quarter and year-over-year improvement in our net loss, as we have continued to focus on cost reduction and operational efficiencies throughout the business.

Given the current market conditions, we remain focused on proactively optimizing our capital allocation across our highest performing and most efficient markets and using pricing adjustments and other incentives in an effort to drive consumer demand. These pricing adjustments have had a negative impact on our operating results over the past few years. Further, there continues to be an increased level of uncertainty regarding the near-term macroeconomic conditions, including the direction of mortgage interest rates, which have continued to stay around 7% during the early stages of the second quarter of 2025, and the impact of the global trade conditions. Although it remains difficult to predict the near-term direction of consumer demand for residential real estate due to the many different factors that impact such demand, we anticipate that the sustained elevated and volatile mortgage interest rate environment, economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the second quarter of 2025. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future.

### New York Stock Exchange Listing Notice

On April 10, 2025, we received written notice (the “NYSE Notification”) from the NYSE that we are not in compliance with Section 802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period and, at the same time, our last reported stockholders’ equity were each less than $50 million. The NYSE Notification has no immediate impact on the listing of our Class A common stock.

On April 18, 2025, we notified the NYSE that we intend to submit a plan to cure the deficiency and to return to compliance with the NYSE continued listing standards. As required by NYSE, within 45 days of our receipt of the NYSE Notification, we plan to submit a business plan advising the NYSE of the definitive action(s) we are taking or plan to take that would bring us into compliance with NYSE continued listing standards within 18 months of receipt of the NYSE Notification (the “Cure Period”). Pursuant to applicable NYSE rules, the NYSE will review the plan and, within 45 days of its receipt, determine whether we have made a reasonable demonstration of an ability to conform to the relevant standards in the Cure Period.

If the NYSE accepts the plan, our Class A common stock will continue to be listed and traded on the NYSE during the Cure Period, subject to our compliance with the other continued listing standards of the NYSE and continued periodic review by the NYSE of our progress with respect to its plan. If the plan is not submitted on a timely basis or is not accepted by the NYSE, the NYSE could initiate delisting proceedings.

### Factors Affecting Our Performance

We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below.

### Market Penetration in Existing Markets

Residential real estate is one of the largest industries, with roughly $1.9 trillion in value of homes transacted in 2024 in the United States, and is highly fragmented with over 100,000 real estate brokerages, according to the National Association of Realtors (NAR). In 2024, we estimate that we captured roughly 0.4% market share of real estate transactions across our 26 active markets as of December 31, 2024. Given this high degree of fragmentation, we believe that bringing a solutions-oriented approach to the market with multiple buying and selling services to meet the unique needs of customers could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets, providing the backdrop to grow our overall market penetration as our offerings expand and evolve. By providing a consistent, transparent, and unique experience, we expect to continue to build upon our past success and further strengthen our brand and consumer adoption.

### Expansion into New Markets

Since our launch in 2015, we have expanded into 26 markets as of December 31, 2024, which covered roughly 23% of the 4.8 million homes sold in the United States in 2024. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach to our asset-light platform offerings, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through these other service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we began offering renovation services in two additional markets during 2024, followed by one additional market during the first quarter of 2025.

Although we recently expanded into three new markets, we have decelerated our market expansion plans in recent years given the uncertain economic outlook and uneven residential real estate market conditions, which has included uncertainty regarding the near-term macroeconomic conditions, including the direction of mortgage interest rates and the impact of global trade conditions. We intend to continue evaluating expansion plans on an ongoing basis in order to maintain our flexibility in assessing the overall timing of our expansion plan and appropriate market entry points in the future.

### B2B Renovate Business Services

Our B2B Renovate business services represent an important component of our asset-light platform offerings. Through this offering, we are able to leverage our existing logistics, operations, technology and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee. As we continue to develop our B2B Renovate business services offering, we believe these services could be a more significant component of our business over time.

### Direct+ institutional buyer program

Another component of our asset-light platform offerings includes our program that allows investors and single-family rental companies an opportunity to purchase homes from homeowners, matching investors with sellers. These transactions occur in several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing. We expect this program will allow us to help more homeowners sell their home and expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home.

### Agent Partnership Program

We have increased our focus on our partner network in recent years, which includes our homebuilder services, our agent partnership program and our agent referral network, to drive growth in our existing markets by expanding our reach and serving a greater number of customers. Our agent partnership program provides referral fees to agents who sell or select our cash offer. This program is designed to enable customers to utilize our services in a way that best suits their home-selling situation, while also serving as a valuable resource for real estate agents.

Additionally, under our enhanced agent partnership program, our partner agents and brokerages can request a cash offer on behalf of their clients, have the ability to list an acquired home prepared for resale, and can gain access to sellers in defined zones, and markets. Further, partner agents in the top tier of the program have access to sellers in defined zones and have the potential to list other Offerpad-owned homes in their zone.

We also have an integration with Realtor.com, allowing customers to request a cash offer from Offerpad directly through the Realtor.com website. We anticipate this integration will further expand our reach and diversify our lead sources.

### Ancillary products and services

We aim to deliver other additional products and services tied to the core real estate transaction in a smooth, efficient, digital driven platform, focused on transparency and ease of use. Although further developing these products and services will require significant investment, growing our current offerings and offering additional ancillary products and services, potentially including energy efficiency solutions, smart home technology, insurance, and home warranty services, we believe will strengthen our unit economics and allow us to better optimize pricing. Generally, the revenue and margin profiles of our ancillary products and services are different from our Cash Offer service that accounts for the substantial majority of our revenue, with most ancillary products and services having a smaller average revenue per transaction than our cash offering service, but a higher margin.

While we have offered a variety of ancillary products and services over time, our title and escrow services represent the most notable ancillary service that we currently provide. We have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional title and escrow closing services with a favorable economic impact principally in our Cash Offer service.

### Unit Economics

We view Contribution Margin and Contribution Margin after Interest (see “—Non-GAAP Financial Measures”) as key performance indicators for unit economic performance, which are currently primarily driven by our cash offer transactions. Future financial performance improvements are expected to be driven by expanding unit level margins through initiatives such as:

- Continued optimization of acquisition, renovation, and resale processes and strategies, as we increase our market penetration in existing markets;
- Effectively increasing and expanding our Cash Offer solution, optimizing customer and agent community engagement and increasing conversion of requests for home purchases; and
- Introducing and scaling additional ancillary products and services to complement our core Cash Offer solution.

### Operating Leverage

We utilize our technology and product teams to design systems and workflows to make our operations teams more efficient and able to support and scale with the business. Many positions are considered volume based, and as our business grows, we focus on developing more automation tools to gain additional leverage. Additionally, in periods when our business is growing, we expect to be able to gain operating leverage on portions of our cost structure that are more fixed in nature as opposed to purely variable. These types of costs include general and administrative expenses and certain marketing and information technology expenses, which generally grow at a slower pace than proportional to revenue growth.

### Real Estate Inventory Financing

Our business model requires significant capital to purchase real estate inventory. Real estate inventory financing is a key enabler to our growth and we rely on our non-recourse asset-backed financing facilities, which primarily consist of senior and mezzanine secured credit facilities to finance our home purchases. The loss of adequate access to these types of facilities, or the inability to maintain these types of facilities on favorable terms, would impair our performance. *See “—Liquidity and Capital Resources—Financing Activities.”*

### Seasonality

The residential real estate market is seasonal and varies from market to market. Typically, the greatest number of transactions occur in the spring and summer, with fewer transactions occurring in the fall and winter. Our financial results, including revenue, margins, real estate inventory, and financing costs, have historically had seasonal characteristics generally consistent with the residential real estate market, a trend we expect to continue in the future, subject to the market conditions discussed above.

### Risk Management

Our business model is based upon acquiring homes at a price which will allow us to provide a competitive offer to the consumer, while being able to add value through the renovation process, and relist the home so that it sells at a profit and in a relatively short period of time. We have invested significant resources into our underwriting and asset management systems. Our real estate operations team, including our pricing team, together with our software engineering and data science teams are responsible for underwriting accuracy, portfolio health, and workflow optimization. Our underwriting tools are constantly updated to adjust to the latest market conditions, leveraging inputs from our internal data systems, as well as third-party and other proprietary data sources. This allows us to assess and adjust to changes in the local housing market conditions based on our technology, analysis and local real estate experience, in order to mitigate our risk exposure. Further, our listed homes are typically in market-ready and move-in ready condition following the repairs and renovations we conduct.

Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our real estate inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter real estate inventory holding periods limit pricing exposure.

During 2024, the average holding period of homes sold remained steady at approximately 110 days during the first three quarters of the year, before increasing to 142 days during the fourth quarter of 2024. This increase continued into the first quarter of 2025, when our average real estate inventory holding period was 165 days. The increase in our average real estate inventory holding period over the past two quarters reflects our intentional reduction in home acquisition pace during the second half of 2024, along with the normal seasonal increase that occurs in the fall and winter months. The reduction in home acquisition pace allowed us to manage overall real estate inventory growth in light of the sustained elevated and volatile mortgage interest rate environment, which continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, challenging consumer demand for residential real estate.

Based on our current expectations, we anticipate our average real estate inventory holding period will decline in the second quarter of 2025 as we sell through our aged real estate inventory and our overall real estate inventory mix shifts and includes a higher composition of newer acquired homes. However, as the residential real estate market conditions remain volatile, we intend to continue balancing our home acquisition pace to manage our real estate inventory levels, and ultimately, our average real estate inventory holding period.

### Non-GAAP Financial Measures

In addition to our results of operations below, we report certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). These measures have limitations as analytical tools when assessing our operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income. We may calculate or present our non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures we report may not be comparable with those of companies in our industry or in other industries.

#### Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins)

To provide investors with additional information regarding our margins, we have included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. We believe that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across our markets. Each of these measures is intended to present the economics related to homes sold during a given period. We do so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. We believe these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period.

Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest (and related margins) are supplemental measures of our operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in real estate inventory at the end of the period, costs required to be recorded under GAAP in the same period.

Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.

#### Adjusted Gross Profit / Margin

We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net real estate inventory valuation adjustment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net real estate inventory valuation adjustment is calculated by adding back the real estate inventory valuation adjustment charges recorded during the period on homes that remain in real estate inventory at period end and subtracting the real estate inventory valuation adjustment charges recorded in prior periods on homes sold in the current period. We define Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue.

We view this metric as an important measure of business performance, as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort.

#### Contribution Profit / Margin

We calculate Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily composed of interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. The composition of our holding costs is described in the footnotes to the reconciliation table below. We define Contribution Margin as Contribution Profit as a percentage of revenue.

We view this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit helps management assess inflows and outflow directly associated with a specific resale cohort.

#### Contribution Profit / Margin After Interest

We define Contribution Profit After Interest as Contribution Profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from Adjusted Gross Profit, and minus (3) interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Our senior and mezzanine secured credit facilities and other senior secured debt are secured by our homes in real estate inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. See “—*Liquidity and Capital Resources—Financing Activities.”* We define Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.

We view this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with costs of financing.

The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit (Loss) and Contribution Profit (Loss) After Interest to our Gross Profit, which is the most directly comparable GAAP measure, for the periods indicated:

*(in thousands, except percentages and homes sold, unaudited)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| **Gross profit (GAAP)** | **$10,507** | **$22,595** |
| Gross margin | 6.5% | 7.9% |
| Homes sold | 460 | 847 |
| **Gross profit per home sold** | **$22.8** | **$26.7** |
| Adjustments: |  |  |
| Real estate inventory valuation adjustment - current period (1) | 1,743 | 623 |
| Real estate inventory valuation adjustment - prior period (2) | (2,211) | (645) |
| Interest expense capitalized (3) | 1,422 | 1,669 |
| **Adjusted gross profit** | **$11,461** | **$24,242** |
| Adjusted gross margin | 7.1% | 8.5% |
| Adjustments: |  |  |
| Direct selling costs (4) | (4,388) | (6,969) |
| Holding costs on sales - current period (5)(6) | (535) | (887) |
| Holding costs on sales - prior period (5)(7) | (690) | (483) |
| Other income, net (8) | 296 | 754 |
| **Contribution profit** | **$6,144** | **$16,657** |
| Contribution margin | 3.8% | 5.8% |
| Homes sold | 460 | 847 |
| **Contribution profit per home sold** | **$13.4** | **$19.7** |
| Adjustments: |  |  |
| Interest expense capitalized (3) | (1,422) | (1,669) |
| Interest expense on homes sold - current period (9) | (1,617) | (2,521) |
| Interest expense on homes sold - prior period (10) | (2,883) | (2,426) |
| **Contribution profit after interest** | **$222** | **$10,041** |
| Contribution margin after interest | 0.1% | 3.5% |
| Homes sold | 460 | 847 |
| **Contribution profit after interest per home sold** | **$0.5** | **$11.9** |

(1) Real estate inventory valuation adjustment – current period is the real estate inventory valuation adjustments recorded during the period presented associated with homes that remain in real estate inventory at period end.

(2) Real estate inventory valuation adjustment – prior period is the real estate inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.

(3) Interest expense capitalized represents all interest related costs, including senior and mezzanine secured credit facilities, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

(4) Direct selling costs represents selling costs incurred related to homes sold in the period presented. This primarily includes broker commissions and title and escrow closing fees.

(5) Holding costs primarily include insurance, utilities, homeowners association dues, property taxes, cleaning, and maintenance costs.

(6) Represents holding costs incurred on homes sold in the period presented and expensed to Sales, marketing, and operating on the Condensed Consolidated Statements of Operations.

(7) Represents holding costs incurred in prior periods on homes sold in the period presented and expensed to Sales, marketing, and operating on the Condensed Consolidated Statements of Operations.

(8) Other income, net principally represents interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments.

(9) Represents both senior and mezzanine interest expense incurred on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

(10) Represents both senior and mezzanine secured credit facilities interest expense incurred in prior periods on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

#### Adjusted Net Income (Loss) and Adjusted EBITDA

We also present Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which our management team uses to assess our underlying financial performance. We believe these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.

We calculate Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. We define Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.

We calculate Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to our operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

The following table presents a reconciliation of our Adjusted Net Income (Loss) and Adjusted EBITDA to our GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated:

*(in thousands, except percentages, unaudited)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| **Net loss (GAAP)** | **$(15,057)** | **$(17,515)** |
| Change in fair value of warrant liabilities | 257 | (344) |
| **Adjusted net loss** | **$(14,800)** | **$(17,859)** |
| Adjusted net loss margin | (9.2)% | (6.3)% |
| Adjustments: |  |  |
| Interest expense | 3,522 | 4,905 |
| Amortization of capitalized interest (1) | 1,422 | 1,669 |
| Income tax expense | 37 | 123 |
| Depreciation and amortization | 206 | 166 |
| Amortization of stock-based compensation | 1,782 | 3,867 |
| **Adjusted EBITDA** | **$(7,831)** | **$(7,129)** |
| Adjusted EBITDA margin | (4.9)% | (2.5)% |

(1) Amortization of capitalized interest represents all interest related costs, including senior and mezzanine interest related costs, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

### Results of Operations

The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

### Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| **Revenue** | $160,698 | $285,358 | $(124,660) | (43.7)% |
| Cost of revenue | 150,191 | 262,763 | (112,572) | (42.8)% |
| **Gross profit** | 10,507 | 22,595 | (12,088) | (53.5)% |
| Operating expenses: |  |  |  |  |
| Sales, marketing and operating | 13,828 | 22,452 | (8,624) | (38.4)% |
| General and administrative | 7,196 | 11,955 | (4,759) | (39.8)% |
| Technology and development | 1,020 | 1,773 | (753) | (42.5)% |
| Total operating expenses | 22,044 | 36,180 | (14,136) | (39.1)% |
| **Loss from operations** | (11,537) | (13,585) | 2,048 | (15.1)% |
| Other income (expense): |  |  |  |  |
| Change in fair value of warrant liabilities | (257) | 344 | (601) | (174.7)% |
| Interest expense | (3,522) | (4,905) | 1,383 | (28.2)% |
| Other income, net | 296 | 754 | (458) | (60.7)% |
| Total other expense | (3,483) | (3,807) | 324 | (8.5)% |
| **Loss before income taxes** | (15,020) | (17,392) | 2,372 | (13.6)% |
| Income tax expense | (37) | (123) | 86 | (69.9)% |
| **Net loss** | $(15,057) | $(17,515) | $2,458 | (14.0)% |

Offerpad Solutions Inc. \| First Quarter 2025 Form 10-Q \| 29

#### Revenue

Revenue decreased by $124.7 million, or 43.7%, to $160.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to lower sales volumes. We sold 460 homes during the three months ended March 31, 2025 compared to 847 homes during the three months ended March 31, 2024, representing a decrease of 45.7%. This decrease was primarily due to our intentional reduction in home acquisition pace during the second half of 2024 as we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current residential real estate market conditions. This reduction in home acquisition pace, which resulted in a fewer number of homes in real estate inventory during the first quarter of 2025, has allowed us to manage overall inventory growth in light of the sustained elevated and volatile mortgage interest rate environment, as the average thirty-year fixed mortgage rate generally remained between the mid-6% range and 7% during the first quarter of 2025. This mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, challenging consumer demand for residential real estate.

The decrease in homes sold was partially offset by a modest increase in the average resale home price from $332,000 in the three months ended March 31, 2024 to $340,000 in the three months ended March 31, 2025. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

#### Cost of Revenue and Gross Profit

Cost of revenue decreased by $112.6 million, or 42.8%, to $150.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily attributable to lower sales volumes, which was partially offset by an increase in the real estate inventory valuation adjustment.

Gross profit margin was 6.5% for the three months ended March 31, 2025 compared to 7.9% for the three months ended March 31, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $0.6 million during the three months ended March 31, 2024 to $1.7 million during the three months ended March 31, 2025. The decrease in gross profit margin was also due to an increase in the average real estate inventory holding period over the past two quarters, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our legacy real estate inventory.

#### Sales, Marketing and Operating

Sales, marketing and operating expense decreased by $8.6 million, or 38.4%, to $13.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to decreased average employee headcount, a decrease in variable costs associated with the decrease in homes sold, and a $2.1 million decrease in advertising expense as we continued to reposition and optimize our marketing efforts in response to the ongoing uneven residential real estate market conditions.

#### General and Administrative

General and administrative expense decreased by $4.8 million, or 39.8%, to $7.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to decreased average employee headcount and a decrease in fees associated with our credit facilities.

#### Technology and Development

Technology and development expense decreased by $0.8 million, or 42.5%, to $1.0 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to decreased average employee headcount.

#### Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities represents a loss of $0.3 million for the three months ended March 31, 2025 and a gain of $0.3 million for the three months ended March 31, 2024, as a result of the fair value adjustment of our warrant liabilities.

#### Interest Expense

Interest expense decreased by $1.4 million, or 28.2%, to $3.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to a $33.1 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $257.7 million during the three months ended March 31, 2024 to $224.6 million during the three months ended March 31, 2025. The decrease was also due to a 0.6% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt.

#### Other Income, Net

Other income, net principally represents interest income earned on our cash and cash equivalents during each of the three months ended March 31, 2025 and 2024. Other income, net also includes gains or losses from the disposal of property and equipment in both periods.

#### Income Tax Expense

We recorded income tax expense of less than $0.1 million and $0.1 million during the three months ended March 31, 2025 and 2024, respectively, and our effective tax rate was an expense of 0.2% and 0.7% for the respective periods. Our effective tax rate during the three months ended March 31, 2025 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.

### Segment Operating Performance

#### Revenue

Our Cash Offer solution represents the substantial majority of our business, generating over 95% of our consolidated revenue during each of the three months ended March 31, 2025 and 2024.

Cash Offer revenue decreased by $124.0 million, or 44.6%, to $153.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to lower sales volumes. We sold 460 homes during the three months ended March 31, 2025 compared to 847 homes during the three months ended March 31, 2024, representing a decrease of 45.7%. This decrease in homes sold was partially offset by a modest increase in the average resale home price from $332,000 in the three months ended March 31, 2024 to $340,000 in the three months ended March 31, 2025. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Other revenue decreased by $0.6 million, or 8.6%, to $6.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to a decrease in revenue associated with the transition from our historical listing service offering as we shifted our focus to our referral partner networks, which includes our homebuilder services, our agent partnership program and our agent referral network. This decrease in revenue was partially offset by a slight increase in B2B Renovate revenue due to a higher average renovation transaction value per home during three months ended March 31, 2025 compared to the three months ended March 31, 2024.

#### Cost of Revenue and Gross Profit

Our asset-light platform offerings included in Other generally earn a smaller average revenue per transaction than our Cash Offer service, but typically generate higher margins.

Cash Offer cost of revenue decreased by $111.9 million, or 43.4%, to $145.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily attributable to lower sales volumes, which was partially offset by an increase in the real estate inventory valuation adjustment.

Cash Offer gross profit margin was 5.3% for the three months ended March 31, 2025 compared to 7.3% for the three months ended March 31, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $0.6 million during the three months ended March 31, 2024 to $1.7 million during the three months ended March 31, 2025. The decrease in gross profit margin was also due to an increase in the average real estate inventory holding period over the past two quarters, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our legacy real estate inventory.

Other cost of revenue decreased by $0.7 million, or 12.9%, to $4.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily attributable to lower volumes associated with our historical listing service offering as we transitioned our focus to our partner network, which was partially offset by an increase in costs associated with our B2B Renovate business due to a higher average renovation transaction cost per home during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Other gross profit margin was 35.1% for the three months ended March 31, 2025 compared to 31.9% for the three months ended March 31, 2024. This increase in gross profit margin was primarily due to a shift in the product mix of the asset-light platform offerings included in Other during the first quarter of 2025 compared to the first quarter of 2024. Our Agent Partnership Program, which generally has higher margins compared to the other offerings included within Other, represented a larger component of Other gross profit during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

### Liquidity and Capital Resources

#### Overview

Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of March 31, 2025, we had cash and cash equivalents of $30.8 million and had a total undrawn borrowing capacity under our senior and mezzanine secured credit facilities of $813.6 million, $49.1 million of which is committed and $764.5 million uncommitted.

With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three months ended March 31, 2025, and may incur additional losses in the future. Since our launch in 2015, we have invested in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software and technology platform. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of asset-light platform services.

We expect our working capital requirements to continue to increase over the long term, as we seek to increase our real estate inventory and expand our operations. We believe our cash on hand, together with proceeds from the resale of homes and cash from future borrowings available under each of our existing credit facilities, or the entry into new debt financing arrangements or the issuance of equity instruments, will be sufficient to meet our short-term working capital and capital expenditure requirements for at least the next twelve months. However, our ability to fund our working capital and capital expenditure requirements depends on the residential real estate market conditions in the markets in which we operate and in the U.S. in general, and various other general economic, financial, competitive, legislative, regulatory, geopolitical and other conditions that may be beyond our control. Uncertain economic outlook and uneven residential real estate market conditions have impacted, and may continue to impact, our business negatively. Based on these and other current market conditions, we are seeking and plan to continue to seek additional financing. Volatility in the credit markets, rising interest rates and softened consumer demand for residential real estate may have an adverse effect on our ability to obtain debt financing on favorable terms or at all. If we are not able to obtain necessary capital to meet our business objectives, we may need to further stall, moderate or decelerate our expansion activities, which may include various restructuring alternatives and options, including more significant cost reductions, product and operational changes focused on reductions in working capital requirements, including pausing or reducing real estate inventory acquisitions, and other actions to enhance the preservation of cash. If we are able to raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

#### Financing Activities

Our financing activities primarily include borrowing under our senior secured credit facilities, mezzanine secured credit facilities and new issuances of equity (including the issuance of the pre-funded warrants, as discussed above). Historically, we have required access to external financing resources in order to fund growth, increase penetration in existing markets, expansion into new markets and other strategic initiatives, and we expect this to continue in the future. Our access to capital markets can be impacted by factors outside our control, including economic conditions.

Buying and selling high-valued assets, such as single-family residential homes, is very cash intensive and has a significant impact on our liquidity and capital resources. We use non-recourse secured credit facilities, consisting of both senior secured credit facilities and mezzanine secured credit facilities, to finance a significant portion of our real estate inventory and related home renovations. Our senior and mezzanine secured credit facilities, however, are not fully committed, meaning the applicable lender may not be obligated to advance new loan funds if they choose not to do so. Our ability to obtain and maintain access to these or similar kinds of credit facilities is significant for us to operate the business.

#### Senior Secured Credit Facilities

The following summarizes certain details related to our senior secured credit facilities (in thousands, except interest rates):

| As of March 31, 2025 | Borrowing Capacity Committed | Uncommitted | Total | Outstanding Amount | Weighted- Average Interest Rate | End of Revolving / Withdrawal Period | Final Maturity Date |
| --- | ---: | ---: | ---: | ---: | ---: | --- | --- |
| Senior financial institution 1 | $150,000 | $250,000 | $400,000 | $128,193 | 7.12% | December 2025 | June 2026 |
| Senior financial institution 2 | — | 200,000 | 200,000 | — | — | January 2026 | July 2026 |
| Senior financial institution 3 | — | 150,000 | 150,000 | — | 7.58% | January 2025 | April 2025 |
| Related party | 30,000 | 20,000 | 50,000 | 27,277 | 9.32% | March 2025 | September 2025 |
| Senior financial institution 4 | — | 30,000 | 30,000 | 9,530 | 10.16% | August 2025 | February 2026 |
| **Senior secured credit facilities** | $180,000 | $650,000 | $830,000 | $165,000 |  |  |  |

Offerpad Solutions Inc. \| First Quarter 2025 Form 10-Q \| 32

As of March 31, 2025, we had five senior secured credit facilities that we use to fund the purchase of homes and build our real estate inventory, four with separate financial institutions and one with a related party, which holds more than 5% of our Class A common stock. Borrowings under the senior secured credit facilities accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by facility. Each of our senior secured credit facilities also have interest rate floors. We may also pay fees on our senior secured credit facilities, including a commitment fee and fees on certain unused portions of the committed borrowing capacity under the respective credit agreements.

Borrowings under our senior secured credit facilities are collateralized by the real estate inventory financed by the senior secured credit facility. The lenders have legal recourse only to the assets securing the debt and do not have general recourse against us with limited exceptions. We have, however, provided limited non-recourse carve-out guarantees under our senior and mezzanine secured credit facilities for certain of the SPEs’ obligations. Each senior secured credit facility contains eligibility requirements that govern whether a property can be financed. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities.

During April 2025, the Company amended its credit facility with senior financial institution 3, which among other things, extends the revolving period for the facility to January 2026 and the final maturity date to April 2026.

#### Mezzanine Secured Credit Facilities

In addition to the senior secured credit facilities, we use mezzanine secured credit facilities which are structurally and contractually subordinated to the related senior secured credit facilities. The following summarizes certain details related to our mezzanine secured credit facilities (in thousands, except interest rates):

| As of March 31, 2025 | Borrowing Capacity Committed | Uncommitted | Total | Outstanding Amount | Weighted- Average Interest Rate | End of Revolving / Withdrawal Period | Final Maturity Date |
| --- | ---: | ---: | ---: | ---: | ---: | --- | --- |
| Related party facility 1 | $45,000 | $25,000 | $70,000 | $21,680 | 13.00% | June 2025 | December 2025 |
| Mezzanine financial institution 1 | — | 45,000 | 45,000 | — | — | January 2026 | July 2026 |
| Mezzanine financial institution 2 | — | 40,000 | 40,000 | — | 11.58% | January 2025 | April 2025 |
| Related party facility 2 | 8,000 | 14,000 | 22,000 | 6,725 | 13.00% | March 2025 | September 2025 |
| **Mezzanine secured credit facilities** | $53,000 | $124,000 | $177,000 | $28,405 |  |  |  |

As of March 31, 2025, we had four mezzanine secured credit facilities, two with separate financial institutions and two with a related party, which holds more than 5% of our Class A common stock. Borrowings under the mezzanine secured credit facilities accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by facility. Each of our mezzanine secured credit facilities also have interest rate floors. We may also pay fees on our mezzanine secured credit facilities, including a commitment fee and fees on certain unused portions of the committed borrowing capacity under the respective credit agreements.

Borrowings under our mezzanine secured credit facilities are collateralized by a second lien on the real estate inventory financed by the relevant credit facility. The lenders have legal recourse only to the assets securing the debt, and do not have general recourse against us with limited exceptions. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities.

During April 2025, the Company amended its credit facility with mezzanine financial institution 2, which among other things, extends the revolving period for the facility to January 2026 and the final maturity date to April 2026

#### Covenants for Senior Secured Credit Facilities and Mezzanine Secured Credit Facilities

Our secured credit facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these facilities and related financing documents require the Company to comply with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth).

As of March 31, 2025, the Company was in compliance with all covenants and no event of default had occurred. During 2025, including during the second quarter of 2025, the Company has obtained temporary waivers of a minimum liquidity covenant under the related party facilities described above in connection with discussions regarding the renewal of these facilities.

#### Senior Secured Debt - Other

The Company has a borrowing arrangement with a financial institution to support purchases of real estate inventory. Borrowings under this arrangement accrue interest at a rate based on a SOFR reference rate, plus a margin. As of March 31, 2025 and December 31, 2024, the weighted-average interest rate under the Company’s other senior secured debt was 9.02% and 9.24%, respectively.

### Cash Flows

The following summarizes our cash flows for the three months ended March 31, 2025 and 2024:

*($ in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash (used in) provided by operating activities | $(10,176) | $2,386 |
| Net cash used in investing activities | (994) | (323) |
| Net cash used in financing activities | (26,773) | (3,464) |
| **Net change in cash, cash equivalents and restricted cash** | $(37,943) | $(1,401) |

#### Operating Activities

Net cash (used in) provided by operating activities was ($10.2) million and $2.4 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, net cash used in operating activities primarily resulted from the $15.1 million net loss during the period, which included $1.8 million of non-cash stock-based compensation expense and a $1.7 million non-cash real estate inventory valuation adjustment. Net cash used in operating activities during the three months ended March 31, 2025 was also due to a $2.4 million increase in accounts receivable, primarily due to a higher number of home sales pending receipt of cash from the title company as compared to December 31, 2024. These items were partially offset by a $1.6 million decrease in real estate inventory as a result of sales volumes increasing at a higher rate compared to home acquisitions as we intentionally reduced our home acquisition pace during the second half of 2024 as part of our effort to balance our real estate inventory levels to optimize our returns.

For the three months ended March 31, 2024, net cash provided by operating activities primarily resulted from a $9.8 million decrease in real estate inventory as a result of sales volumes increasing at a higher rate compared to home acquisitions, and a $5.6 million decrease in accounts receivable due to a decreased number of home sales pending receipt of cash from the title company as compared to December 31, 2023. Net cash provided by operating activities during the three months ended March 31, 2024 was also impacted by the $17.5 million net loss during the period, which included $3.9 million of non-cash stock-based compensation expense.

#### Investing Activities

Net cash used in investing activities was $1.0 million and $0.3 million during the three months ended March 31, 2025 and 2024, respectively. Net cash used in investing activities during each of the respective periods principally represents purchases of property and equipment.

#### Financing Activities

Net cash used in financing activities was $26.8 million and $3.5 million during the three months ended March 31, 2025 and 2024, respectively. Net cash used in financing activities during the three months ended March 31, 2025 primarily consisted of $189.4 million of repayments of credit facilities and other debt, which was partially offset by $162.8 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $26.6 million was directly related to the decrease in financed real estate inventory during the period.

Net cash used in financing activities during the three months ended March 31, 2024 primarily consisted of $245.6 million of repayments of credit facilities and other debt, which was partially offset by $242.1 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $3.5 million was directly related to the decrease in financed real estate inventory during the period.

### Material Cash Requirements and Other Obligations

Information regarding our material cash requirements and other obligations is provided in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

There have been no material changes in our material cash requirements and other obligations since December 31, 2024 through March 31, 2025.

### Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Although we believe our estimates, judgments and assumptions are reasonable, actual results may differ from our estimates under different assumptions, judgments or conditions given the inherent uncertainty involved with such matters, which would impact our financial statements. We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

There have been no material changes to the critical accounting estimates included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Our significant accounting policies and methods used in the preparation of our condensed consolidated financial statements are described in *Note 1. Nature of Operations and Significant Accounting Policies* in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

### Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to *Note 1. Nature of Operations and Significant Accounting Policies* in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q.

## Market risk

As filed, 348 characters.

There have been no material changes to our exposure to market risk since December 31, 2024. For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

## Controls and procedures

As filed, 1,613 characters.

### Limitations on Effectiveness of Disclosure Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, as of March 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that occurred during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 323 characters.

The Company’s risk factors are described in Part I, Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to the Company’s risk factors since the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Filed May 5, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-063692. Last ingested by Listed: Nov 2, 2026, 19:34 ET. No prices; not investment advice.