Subsequent Events

6 Months Ended

Jun. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated the impact of events that have occurred through the date these financial statements were issued and identified the following event that required disclosure.

Bitty Purchase Agreement: On July 31, 2024, OppFi-LLC and Opportunity Financial SMB, LLC, a Delaware limited liability company (the “Buyer”), each a subsidiary of the Company, entered into a Securities Purchase Agreement, dated as of July 31, 2024 (the “Purchase Agreement”), by and among OppFi-LLC, the Buyer, Blaze Capital Funding 5, LLC, a Wyoming limited liability company (the “Seller”), and the seller principals party thereto (collectively with the Seller, the “Seller Parties”), pursuant to which the Buyer acquired 35% of the outstanding equity securities of Bitty Holdings, LLC, a Delaware limited liability company (“Bitty”, and such acquisition, the “Acquisition”). The Acquisition closed on July 31, 2024 (the “Closing Date”). Bitty is a credit access company that offers revenue-based financing and other working capital solutions.

The aggregate consideration paid to the Seller in connection with the Acquisition consisted of (i) a cash payment of approximately $15.3 million and (ii) 734,851 OppFi Units, valued at approximately $2.7 million. In accordance with the OppFi A&R LLCA, the Company also issued 734,851 shares of Class V Voting Stock to OFS, which number of shares of Class V Voting Stock was equal to the number of OppFi Units issued to the Seller.

Pursuant to the Purchase Agreement, the Buyer has a right to purchase from the Seller an additional thirty percent (30%) of the equity securities of Bitty (the “First Call Option”) within a specific time period from the date that is three (3) years from the Closing Date, and (b) the right to purchase from the Seller all remaining equity securities of Bitty not held by the Buyer (the “Second Call Option” and together with the First Call Option, the “Call Options” and each, a “Call Option”) within a specific time period from the date that is six (6) years from the Closing Date, contingent upon the Buyer exercising the First Call Option. The aggregate purchase price for the equity securities, payable in cash unless otherwise agreed by the Seller and the Buyer, in (a) the First Call Option will be equal to thirty percent (30%) of the product of six times (6x) the trailing twelve (12) month post-tax earnings of Bitty as of June 30, 2027, and (b) the Second Call Option will be equal to thirty-five percent (35%) of the product of six times (6x) the trailing twelve (12) month post-tax earnings of Bitty as of June 30, 2030.

In the event the Buyer does not exercise the First Call Option or the Second Call Option, the Board of Managers of Bitty will have the right to initiate a process to effectuate a sale of 100% of the equity securities of Bitty through a bona fide sale or auction process, subject to the terms of the limited liability company agreement of Bitty.