# EDGAR Filing Document

**Accession Number:** 0001825024
**File Stem:** 0001193125-23-044822
**Filing Date:** 2023-2
**Character Count:** 78690
**Document Hash:** 0ee1b6d53944b3d1b2a2e64be8bff1c0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-044822.hdr.sgml**: 20230222

**ACCESSION NUMBER**: 0001193125-23-044822

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 29

**CONFORMED PERIOD OF REPORT**: 20230222

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230222

**DATE AS OF CHANGE**: 20230222

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Offerpad Solutions Inc.
- **CENTRAL INDEX KEY:** 0001825024
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39641
- **FILM NUMBER:** 23653206

**BUSINESS ADDRESS:**
- **STREET 1:** 4520 DEXTER STREET, N.W.
- **CITY:** WASHINGTON
- **STATE:** DC
- **ZIP:** 20007
- **BUSINESS PHONE:** (202) 918-7070

**MAIL ADDRESS:**
- **STREET 1:** 4520 DEXTER STREET, N.W.
- **CITY:** WASHINGTON
- **STATE:** DC
- **ZIP:** 20007

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Supernova Partners Acquisition Company, Inc.
- **DATE OF NAME CHANGE:** 20200916

?xml version="1.0" encoding="utf-8" ? Form 8-K

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### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### WASHINGTON, D.C. 20549

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### FORM 8-K

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#### CURRENT REPORT

#### Pursuant to Section 13 or 15(d)

#### of the Securities Exchange Act of 1934

#### Date of Report (Date of earliest event reported): February 22, 2023

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## Offerpad Solutions Inc.

#### (Exact name of Registrant as Specified in Its Charter)

------

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-39641** | **85-2800538** |
| **(State or Other Jurisdiction**<br> **of Incorporation)** | **(Commission**<br> **File Number)** | **(IRS Employer**<br> **Identification No.)** |

---

---

| | |
|:---|:---|
| **2150 E. Germann Road**<br> **Suite 1** |  |
| **Chandler, Arizona** | **85286** |
| **(Address of Principal Executive Offices)** | **(Zip Code)** |

---

#### Registrant's Telephone Number, Including Area Code: (844) 388-4539

#### N/A

#### (Former Name or Former Address, if Changed Since Last Report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

#### Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange**<br> **on which registered** |
| Class A common stock, $0.0001 par value per share | OPAD | The New York Stock Exchange |
| Warrants to purchase Class A common stock, at an exercise price of $11.50 per share | OPADWS | The New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

---

| | |
|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition.**  |

---

On February 22, 2023, Offerpad Solutions Inc. issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2022 and a Shareholder Letter. A copy of the press release and the Shareholder Letter are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.

The information in this Item 2.02, including the information contained in Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K, is furnished herewith and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.**  |

---

(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Exhibit Description** |
| 99.1 | [Press Release of Offerpad Solutions Inc. dated February 22, 2023](d470852dex991.htm) |
| 99.2 | [Offerpad Solutions Inc. Shareholder Letter dated February 22, 2023](d470852dex992.htm) |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |

---

------

#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  |  | Offerpad Solutions Inc. |
| Date: February 22, 2023 | By: | /s/ Michael Burnett |
|  |  | Michael Burnett<br> Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**![LOGO](g470852g0221232653324.jpg)

**Offerpad Reports Fourth Quarter and Full-Year 2022 Results** 

***Reduced legacy inventory and strengthened balance sheet with new equity capital***

CHANDLER, Ariz. – February 22, 2023 – (BUSINESS WIRE) – Offerpad Solutions Inc. ("Offerpad") (NYSE: OPAD), a leading tech-enabled platform for residential real estate, today released financial results for the three months ended and year ended December 31, 2022.

Fourth Quarter 2022 Financial Results – compared with the prior-year fourth quarter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenue was $677.2 million compared to $867.5 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gross Profit was ($44.9) million\* compared to $70.3 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net Income was ($121.1) million\* compared to $12.8 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA was ($103.7) million\* compared to $7.7 million

\* Reported amounts include an inventory impairment charge of $44.1 million 

"I'm pleased to share we've made significant progress on two key challenges, selling inventory acquired prior to the sharp market dislocation and securing additional capital to strengthen our balance sheet," said Brian Bair, Chairman and CEO. "We are nearing the end of our legacy inventory disposition process, and early results from homes acquired after September 1, 2022 are showing positive returns."

"In addition, the investment of $90 million of new equity capital from both new and existing shareholders at the end of January further demonstrates continued confidence in our strategy," said Bair.

**Q4 2022 Financial Results** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Q4 2022** | **Q4 2021** | **Percentage Change** |
|  **Homes acquired** | 539 | 3049 | (82%) |
|  **Homes sold** | 1865 | 2423 | (23%) |
|  **Revenue** | $677.2M | $867.5M | (22%) |
|  **Gross profit<sup>1</sup>** | 44.9M) | $70.3M | n.a. |
|  **Net income (loss)<sup>1, 2</sup>** | 121.1M) | $12.8M | n.a |
|  **Adjusted net loss<sup>1</sup>** | 124.5M) | 2.8M) | (4280%) |
|  **Adjusted EBITDA<sup>1</sup>** | 103.7M) | $7.7M | n.a. |
|  **Gross profit (loss) per home sold** | 24100) | $29000 | n.a. |
|  **Contribution profit (loss) after interest per home sold** | 32800) | $18400 | n.a. |

---

<sup>1</sup> Includes $44.1 million charge in Q4 2022 for inventory impairments. 

<sup>2</sup> Includes $3.4 million non-cash credit in Q4 2022 and a $15.6 million non-cash credit in Q4 2021 to mark to market the Warrant Liability. 

------

Operational highlights for full-year 2022 include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sold over 10,000 homes in a year for the first time in Offerpad history;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Earned a 93 percent customer satisfaction rating<sup>1</sup>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased total listing, buyer and mortgage transactions by 90% year-over-year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash offer requests from the Agent Partnership Program increased 80% year-over-year.

**Full-Year 2022 Financial Results** 

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | **2021** | **Percentage Change** |
|  **Homes acquired** | 9034 | 9023 | 0% |
|  **Homes sold** | 10635 | 6373 | 67% |
|  **Revenue** | $4.0B | $2.1B | 91% |
|  **Gross profit<sup>1</sup>** | $182.4M | $207.8M | (12%) |
|  **Net income (loss)<sup>1, 2</sup>** | 148.6M) | $6.5M | n.a. |
|  **Adjusted net income (loss)<sup>1</sup>** | 172.1M) | $4.0M | n.a. |
|  **Adjusted EBITDA<sup>1</sup>** | 103.8M) | $29.9M | n.a. |
|  **Gross profit per home sold** | $17200 | $32600 | (47%) |
|  **Contribution profit after interest per home sold** | $9300 | $22900 | (59%) |
|  **Cash and cash equivalents** | $97.2M | $169.8M | (43%) |

---

<sup>1</sup> Includes $93.8 million charge in 2022 for inventory impairments. 

<sup>2</sup> Includes $23.5 million non-cash credit in 2022 and a $2.5 million non-cash credit in 2021 to mark to market the Warrant Liability. 

Additional information regarding Offerpad's fourth quarter and full-year 2022 financial results and management commentary can be found by accessing the Company's Quarterly Letter to Shareholders on the Offerpad investor relations website at <u>investor.offperpad.com</u>.

**First Quarter 2023 Outlook** 

"Our strategy this year builds upon our long-standing mission to provide a comprehensive solution center, while incorporating new approaches that further capitalize on our existing foundation and expertise. Specifically, we plan to retain and build our foundational cash offer and listing service, responsibly grow our business with an increased focus on existing market penetration and expand our capital light business-to-business partnerships and services," noted Bair.

Offerpad is providing its first quarter outlook for 2023 as follows:

---

| | |
|:---|:---|
|  | **Q1 2023 Outlook** |
|  **Homes Sold** | 1300 – 1450 |
|  **Revenue** | $480M – $540M |
|  **Adjusted EBITDA<sup>4</sup>** | ($35)M – ($55)M |

---

<sup>4</sup> See Non-GAAP financial measures below for an explanation of why a reconciliation of this guidance cannot be provided.

"We expect our first quarter 2023 results to reflect sequential bottom line improvement driven by improving returns and cost reductions," said Mike Burnett, CFO of Offerpad. "Consistent with our purposeful decrease in homes acquired during the latter half of 2022, we expect a sequential decline in revenue as we continue to optimize our portfolio."

------

<sup>1</sup> Based on survey of approximately 3,400 customers who sold their home to Offerpad in 2022.

------

**Conference Call and Webcast Details** 

Offerpad Chairman and CEO Brian Bair and CFO Mike Burnett will host a conference call and accompanying webcast on February 22, 2023, at 5 p.m. ET. The webcast can be accessed on Offerpad's Investor Relations website at <u>https://events.q4inc.com/attendee/542581541</u>. Participants can register at <u>https://www.netroadshow.com/events/login?show=6e55212d&confId=45658</u> to receive a personalized dial in number and PIN. Access to a replay of the webcast will be available from the same website address shortly after the live webcast concludes.

**About Offerpad** 

Offerpad's mission is to deliver the best home buying and selling experience so you can spend less time 'real estat-ing' and more time living. From cash offers and flexible listing options to mortgages and buyer services, Offerpad has been helping homeowners since 2015. We pair our local expertise in residential real estate with proprietary technology to put you in control of the process and help find the right solution that fits your needs. Visit <u>Offerpad.com</u> for more information.

#OPAD_IR

**Contacts** 

Investors

Stefanie Layton

<u>Investors@offerpad.com</u> 

Media

<u>Press@Offerpad.com</u> 

------

**Forward-Looking Statements** 

Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad's future financial or operating performance. For example, statements regarding Offerpad's financial outlook for the first quarter 2023, expectations regarding profitability and anticipated growth in the industry in which Offerpad operates are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "pro forma," "may," "should," "could," "might," "plan," "possible," "project," "strive," "budget," "forecast," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," "potential" or "continue," or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, Offerpad's ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpad's ability to grow market share in its existing markets or any new markets it may enter; the impact of the COVID-19 pandemic; Offerpad's ability to manage its growth effectively; Offerpad's ability to accurately value and manage inventory, and to maintain an adequate and desirable supply of inventory; Offerpad's ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpad's ability to maintain and enhance its products and brand, and to attract customers; Offerpad's ability to achieve and maintain profitability in the future; the success of strategic relationships with third parties; and Offerpad's failure to meet the New York Stock Exchange's continued listing standards. These and other important factors discussed under the caption "Risk Factors" in Offerpad's Annual Report on Form 10-K for the year ended December 31, 2022 to be filed with the Securities and Exchange Commission on or about February 28, 2023, and Offerpad's other reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Offerpad and its management, are inherently uncertain. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Offerpad undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

------

**OFFERPAD SOLUTIONS INC.** 

**Condensed Consolidated Statements of Operations** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br>**December 31,** | **Three Months Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
| *(in thousands, except per share data)* | **2022** | **2021** | **2022** | **2021** |
|  **Revenue** | $677214 | $867540 | $3952314 | $2070446 |
|  Cost of revenue | 722074 | 797248 | 3769892 | 1862631 |
|  **Gross (loss) profit** | (44860) | 70292 | 182422 | 207815 |
|  Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales, marketing and operating | 48761 | 51474 | 238931 | 146872 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 13300 | 12286 | 58718 | 30317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technology and development | 2978 | 3197 | 12090 | 10860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 65039 | 66957 | 309739 | 188049 |
| **(Loss) income from operations** | (109899) | 3335 | (127317) | 19766 |
|  Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of warrant liabilities | 3360 | 15649 | 23522 | 2464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | (15135) | (6178) | (45991) | (15848) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income, net | 861 |  | 1532 | 248 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other (expense) income | (10914) | 9471 | (20937) | (13136) |
| **(Loss) income before income taxes** | (120813) | 12806 | (148254) | 6630 |
|  Income tax expense | (324) |  | (359) | (170) |
|  **Net (loss) income** | $(121137) | $12806 | $(148613) | $6460 |
|  Net (loss) income per share, basic | $(0.49) | $0.05 | $(0.61) | $0.05 |
|  Net (loss) income per share, diluted | $(0.49) | $0.05 | $(0.61) | $0.05 |
|  Weighted average common shares outstanding, basic | 247379 | 238395 | 245148 | 118571 |
|  Weighted average common shares outstanding, diluted | 247379 | 261897 | 245148 | 143220 |

---

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**OFFERPAD SOLUTIONS INC.** 

**Condensed Consolidated Balance Sheets** 

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
| *(in thousands, except par value per share)* | **2022** | **2021** |
|  **ASSETS** |  |  |
|  Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $97241 | $169817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 43058 | 24616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 2350 | 6165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | 664697 | 1132571 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 6833 | 9808 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 814179 | 1342977 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment, net | 5194 | 5146 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other non-current assets | 5696 | 4959 |
|  **TOTAL ASSETS** | $825069 | $1353082 |
|  **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
|  Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $4647 | $6399 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued and other current liabilities | 28252 | 35027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Secured credit facilities and other debt, net | 605889 | 861762 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Secured credit facilities and other debt - related party | 60176 | 164434 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 698964 | 1067622 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Warrant liabilities | 539 | 24061 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities | 3689 | 3830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | 703192 | 1095513 |
|  Commitments and contingencies |  |  |
|  Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 232,379 and 224,154 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 23 | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class B common stock, $0.0001 par value; 20,000 shares authorized; 14,816 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 2 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid in capital | 402521 | 389601 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | (280669) | (132056) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total stockholders' equity** | 121877 | 257569 |
|  **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $825069 | $1353082 |

---

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**OFFERPAD SOLUTIONS INC.** 

**Condensed Consolidated Statements of Cash Flows** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
| *($ in thousands)* | **2022** | **2021** |
|  **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net (loss) income | $(148613) | $6460 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 1022 | 523 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of property and equipment |  | (246) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of debt financing costs | 2948 | 916 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of inventory | 93810 | 2843 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 8307 | 3079 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of warrant liabilities | (23522) | (2464) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 3815 | (3845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | 374064 | (949591) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other assets | (275) | (5288) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | (1752) | 4130 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued and other liabilities | (4402) | 21563 |
|  **Net cash provided by (used in) operating activities** | 305402 | (921920) |
|  **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of property and equipment | (1070) | (13687) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sales of property and equipment |  | 2032 |
|  **Net cash used in investing activities** | (1070) | (11655) |
|  **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowings from credit facilities and other debt | 3178033 | 2764071 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayments of credit facilities and other debt | (3540466) | (1912837) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment of debt financing costs | (646) | (7632) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from exercise of stock options | 4898 | 902 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for taxes related to stock-based awards | (285) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from Business Combination |  | 284011 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Issuance cost of common stock |  | (51249) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Class C preferred stock, net |  |  |
|  **Net cash (used in) provided by financing activities** | (358466) | 1077266 |
|  **Net change in cash, cash equivalents and restricted cash** | (54134) | 143691 |
|  **Cash, cash equivalents and restricted cash, beginning of period** | 194433 | 50742 |
|  **Cash, cash equivalents and restricted cash, end of period** | $140299 | $194433 |
|  **Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $97241 | $169817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 43058 | 24616 |
|  **Total cash, cash equivalents and restricted cash** | $140299 | $194433 |
|  **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash payments for interest | $59732 | $21875 |
|  **Supplemental disclosure of non-cash investing and financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer of property and equipment, net to inventory | $— | $14464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of warrant liabilities | $— | $26525 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion of preferred stock to common stock | $— | $184123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion of treasury stock | $— | $10650 |

---

------

**Non-GAAP Financial Measures** 

In addition to Offerpad's results of operations above, Offerpad reports 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 Offerpad's operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income.

Offerpad may calculate or present its non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures Offerpad reports may not be comparable with those of companies in Offerpad's industry or in other industries. Offerpad has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted net income (loss) within this press release because Offerpad is unable to calculate certain reconciling items without making unreasonable efforts. These items, which include, but are not limited to, stock-based compensation with respect to future grants and forfeitures, could materially affect the computation of forward-looking net income (loss), are inherently uncertain and depend on various factors, some of which are outside of Offerpad's control.

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

To provide investors with additional information regarding Offerpad's margins, Offerpad has included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. Offerpad believes 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 Offerpad's markets. Each of these measures is intended to present the economics related to homes sold during a given period. Offerpad does 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 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. Offerpad believes these measures facilitate meaningful period over period comparisons and illustrate Offerpad's 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 Offerpad's 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 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 Offerpad's results as reported under GAAP. Offerpad includes a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.

*Adjusted Gross Profit / Margin* 

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

Offerpad views 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* 

Offerpad calculates 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 which is primarily comprised of interest income earned on our cash and cash equivalents and income earned from the sale of certain fixed assets. The composition of Offerpad's holding costs is described in the footnotes to the reconciliation table below. Offerpad defines Contribution Margin as Contribution Profit as a percentage of revenue.

Offerpad views 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* 

Offerpad defines 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 Offerpad's senior and mezzanine secured credit facilities incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Offerpad's senior and mezzanine secured credit facilities are secured by their homes in 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. Offerpad defines Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.

------

Offerpad views 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 Offerpad's Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest to Offerpad's gross profit, which is the most directly comparable GAAP measure, for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br>**December 31,** | **Three Months Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
| **(in thousands, except percentages and homes sold, unaudited)** | **2022** | **2021** | **2022** | **2021** |
|  **Gross profit (GAAP)** | $**(44860** | $**70292** | $**182422** | $**207815** |
|  *Gross margin* | *-6.6* | *8.1* | *4.6* | *10.0* |
|  *Homes sold* | *1865* | *2423* | *10635* | *6373* |
|  **Gross profit per home sold** | $***(24.1*** | $***29.0*** | $***17.2*** | $***32.6*** |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory impairment - current period<sub> (1) </sub> | 44075 | 985 | 58413 | 1205 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory impairment - prior period<sub> (2) </sub> | (25469) | (511) | (1205) | (160) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense capitalized<sub> (3) </sub> | 3081 | 3511 | 12660 | 6294 |
|  **Adjusted gross profit** | $**(23173** | $**74277** | $**252290** | $**215154** |
|  *Adjusted gross margin* | *-3.4* | *8.6* | *6.4* | *10.4* |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Direct selling costs<sub> (4) </sub> | (20584) | (19894) | (97381) | (48066) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Holding costs on sales - current period<sub> (5)(6) </sub> | (1251) | (1339) | (8342) | (4262) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Holding costs on sales - prior period<sub> (5)(7) </sub> | (1209) | (558) | (918) | (214) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income<sub> (8) </sub> | 861 |  | 1532 | 248 |
|  **Contribution profit** | $**(45356** | $**52486** | $**147181** | $**162860** |
|  *Contribution margin* | *-6.7* | *6.0* | *3.7* | *7.9* |
|  *Homes sold* | *1865* | *2423* | *10635* | *6373* |
|  **Contribution profit per home sold** | $**(24.3** | $**21.7** | $**13.8** | $**25.6** |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense capitalized<sub> (3) </sub> | (3081) | (3511) | (12660) | (6294) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense on homes sold - current period<sub> (9) </sub> | (5858) | (2575) | (32022) | (10228) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense on homes sold - prior period<sub> (10) </sub> | (6943) | (1749) | (3737) | (468) |
|  **Contribution profit after interest** | $**(61238** | $**44651** | $**98762** | $**145870** |
|  *Contribution margin after interest* | *-9.0* | *5.1* | *2.5* | *7.0* |
|  *Homes sold* | *1865* | *2423* | *10635* | *6373* |
|  **Contribution profit after interest per home sold** | $**(32.8** | $**18.4** | $**9.3** | $**22.9** |

---

(1) Inventory impairment – current period is the inventory valuation adjustments recorded during the period
presented associated with homes that remain in inventory at period end.

(2) Inventory impairment – prior period is the 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 principally represents interest income earned on our cash and cash equivalents and income earned
from the sale of certain fixed assets.

------

(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* 

Offerpad also presents Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which the management team uses to assess Offerpad's underlying financial performance. Offerpad believes these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.

Offerpad calculates Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. Offerpad defines Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.

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

Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to Offerpad's 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 Offerpad's industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad's results as reported under GAAP.

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br>**December 31,** | **Three Months Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
| **(in thousands, except percentages, unaudited)** | **2022** | **2021** | **2022** | **2021** |
|  **Net income (loss) (GAAP)** | $**(121137)** | $**12806** | $**(148613)** | $**6460** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of warrant liability | (3360) | (15649) | (23522) | (2464) |
|  **Adjusted net (loss) income** | $**(124497)** | $**(2843)** | $**(172135)** | $**3996** |
|  *Adjusted net (loss) income margin* | *(18.4 %)* | *(0.3 %)* | *(4.4 %)* | *0.2 %* |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | 15135 | 6178 | 45991 | 15848 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of capitalized interest<sub> (1) </sub> | 3081 | 3511 | 12660 | 6294 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense | 324 |  | 359 | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 258 | 90 | 1022 | 523 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of share based compensation | 2014 | 763 | 8307 | 3079 |
|  **Adjusted EBITDA** | **(103685)** | **7699** | **(103796)** | **29910** |
|  *Adjusted EBITDA margin* | *(15.3 %)* | *0.9 %* | *(2.6 %)* | *1.4 %* |

---

(1) Amortization of capitalized interest represents all interest related costs, including senior and mezzanine
secured 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.

## Exhibit 99.2

**Exhibit 99.2**![LOGO](g470852g12m86.jpg)

Offerpad Offerpad SOLD LETTER TO SHAREHOLDERS Q4 \| 2022

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![LOGO](g470852g21m87.jpg)

2022 RESULTS REVENUE $4.0B GROSS PROFIT $182.4M (4.6%) HOMES SOLD 10,635 HOMES ACQUIRED 9,034 MOVE FREELY America Revenue increased 91% year over year Completed nearly 10,000 renovations projects Total listing, buyer and mortgage transactions increased by 90% year over year 2 \| Q4 2022

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![LOGO](g470852g21m88.jpg)

Offerpad OUR MISSION PROVIDE YOUR BEST WAY TO BUY AND SELL A HOME. PERIOD04 Welcome to Offerpad 05 Letter to Shareholders 06 Investment Highlights 07 Customer Feedback 08 Business Highlights 09 Financial Results Summary 11 First Quarter 2023 Outlook 12 Appendix 3 \| Q4 2022

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![LOGO](g470852g21m89.jpg)

WELCOME TO OFFERPAD HOW ARE WE DIFFERENT? 1 Providing Solutions for All Things Home We are offering services to meet homeowners' needs beyond just buying and selling. 2 Offering Customizable Options With multiple service offerings to choose from, homeowners can create customizable solutions to best meet their needs. 3 Building Sustainable Growth Our focus is on growing in a responsible and disciplined manner that balances our goal of increasing market share with achieving long-term sustainable profitability. 4 Utilizing Industry Expertise Our in-house real estate experts provide deep, local real estate expertise to ensure we are accounting for the unique market conditions in each location to optimize performance. 5 Adding Value Through Renovations Our renovations team can navigate both less traditional and larger renovation projects, expanding our customer base and adding value to each home. 6 Applying Flexibility We use real time market data and sentiment to anticipate and integrate changes in market conditions into our model. Our agility and flexibility mitigate external risk factors. Offerpad SOLD 4 \| Q4 2022

------

![LOGO](g470852g21m90.jpg)

DEAR SHAREHOLDERS, 2022 was truly a tale of two halves with the striking difference in market conditions from the first to second half of the year. The sharp market dislocation in the real estate market towards the end of 2022 presented two main challenges. The first was selling inventory acquired prior to the market shift. The second, was securing additional capital to strengthen our balance sheet. With less than 225 homes purchased prior to September 1, 2022 remaining in our inventory, and the closing of a $90 million private placement, our two main challenges from 2022 are largely behind us. We are now ready to reengage as the broader market begins to stabilize. Our strategy this year builds upon our long-standing mission to provide a comprehensive platform for residential real estate, while incorporating new approaches that further capitalize on our existing foundation and expertise. Specifically, we plan to retain and build our foundational cash offer and listing service, responsibly grow our footprint with an increased focus on market penetration and expand our business-to-business partnerships and services. I'm particularly excited about our renovations as a service business model and our expanded relationship with other home buyers. I believe both these programs provide opportunities for new asset-light revenue streams that can increase our ability to reach more customers and enhance our profitability. The combination of building upon our foundational services – cash offers and our listing service – and introducing new asset-light services moves us closer to the true vision of a wholistic, simplified solution designed to meet the unique needs of each customer. I expect 2023 will be an exciting year as we dive into the next evolution of our business. I see numerous opportunities coming and I believe we have the skill set and the structural foundation needed to capitalize on those opportunities. Brian Bair \| Chairman and CEO 5 \| Q4 2022

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![LOGO](g470852g21m91.jpg)

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![LOGO](g470852g21m92.jpg)

9 OUT OF 10 WOULD RECOMMEND TO A FRIEND\* +70 NET PROMOTER SCORE\* "Quick and painless" Nicole in Houston "Professional...Punctual...Courteous" Darlene in Eustis, FL 93% CUSTOMER SATISFACTION\* "Wonderful to work with every step of the way" Wendy in Tampa \* Based on survey of approximately 3,400 customers who sold their home to Offerpad in 2022. 7 \| Q4 2022

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![LOGO](g470852g21m93.jpg)

BUSINESS HIGHLIGHTS Expanding Business-to Business Services Creating New Revenue Source In December 2022, Offerpad expanded its renovation services. Now, other homeowners and businesses can utilize Offerpad's renovation department to update their portfolio of homes for rent or to sell. Over 200 projects under the renovation as a service business model completed to date This asset-light service leverages Offerpad's existing infrastructure and strengths to diversity its revenue streams. #1 Building New Partnerships to Serve More Customers Offerpad SOLD Offerpad's new Direct Plus program allows other buying partners to purchase homes directly from the homeowner, seamlessly matching cash buyers with sellers. This program is expected to allow Offerpad to submit a wider range of offers and help more homeowners sell, even if the home is outside its existing markets. 8 \| Q4 2022

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![LOGO](g470852g21m94.jpg)

Q4 2022 FINANCIAL RESULTS SUMMARY Compared with Q4 2021 Revenue decreased 22% to $677.2M Acquired 539 homes, a decrease of 82% Sold 1,865 homes, a decrease of 23% Gross profit (loss) decreased from $70.3M to ($44.9M)1 Net income (loss) decreased from $12.8M to ($121.1M)1 Net loss includes a $3.4M non-cash credit in Q4 2022 and a $15.6 million non-cash credit in Q4 2021 to mark to market the Warrant Liability Adjusted EBITDA decreased from $7.7M to ($103.7)M1 Gross profit (loss) per home sold decreased from $29,000 to ($24,100) Contribution profit (loss) after interest per home sold decreased from $18,400 to ($32,800) 1 Includes $44.1 million charge in Q4 2022 for inventory impairments Live, Laugh, Offerpad 9 \| Q4 2022

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![LOGO](g470852g21m95.jpg)

Offerpad TOTAL REVENUE ($M) $868 Q4'21 $1,374 Q1'22 $1,080 Q2'22 $822 Q3'22 $677 Q4'22 RETURNS PER HOME SOLD Gross Profit per Home Sold Contribution Profit After Interest Per Home Sold $50K $40K $30K $20K $10K $0K -$10K -$20K -$30K -$40K Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 NET INCOME (LOSS), ADJ. NET INCOME (LOSS) & ADJ. EBITDA ($M) $12.8 $7.7 ($2.8) $50.4 $41.0 $35.3 $13.7 $11.6 ($1.0) ($64.3) ($80.0) ($82.0) ($103.7) ($121.1) ($124.5) Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 See page 19 for a reconciliation to the most directly comparable GAAP measure and additional information. Net Income (Loss) Adj. Net Income (Loss) Adj. EBITDA 10 \| Q4 2022

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![LOGO](g470852g21m96.jpg)

FIRST QUARTER 2023 OUTLOOK HOMES SOLD 1,300 – 1,450 REVENUE $480M – $540M ADJUSTED EBITDA1 ($35)M – ($55)M 1 See Non-GAAP financial measures on page 16 for an explanation of why a reconciliation of this guidance cannot be provided. 11 \| Q4 2022

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![LOGO](g470852g21m97.jpg)

APPENDIX Forward-Looking Statements Certain statements in this shareholder letter may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad's future financial or operating performance. For example, statements regarding Offerpad's financial outlook for the first quarter 2023, expectations regarding growth and profitability and anticipated market conditions in the industry in which Offerpad operates are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "might," "plan," "possible," "project," "strive," "budget," "forecast," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," "potential" or "continue," or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, Offerpad's ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpad's ability to grow market share in its existing markets or any new markets it may enter; the impact of the COVID-19 pandemic; Offerpad's ability to manage its growth effectively; Offerpad's ability to accurately value and manage inventory, and to maintain an adequate and desirable supply of inventory; Offerpad's ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpad's ability to maintain and enhance its products and brand, and to attract customers; Offerpad's ability to achieve and maintain profitability in the future; the success of strategic relationships with third parties; and Offerpad's failure to meet the New York Stock Exchange's continued listing standards. These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022 to be filed with the Securities and Exchange Commission on or about February 28, 2023, and our other reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this shareholder letter. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Offerpad and its management, are inherently uncertain. Nothing in this shareholder letter should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Offerpad undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 12 \| Q4 2022

------

**OFFERPAD SOLUTIONS INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br>**December 31,** | **Three Months Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
| *(in thousands, except per share data)* | **2022** | **2021** | **2022** | **2021** |
|  **Revenue** | $677214 | $867540 | $3952314 | $2070446 |
|  Cost of revenue | 722074 | 797248 | 3769892 | 1862631 |
|  **Gross (loss) profit** | (44860) | 70292 | 182422 | 207815 |
|  Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales, marketing and operating | 48761 | 51474 | 238931 | 146872 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 13300 | 12286 | 58718 | 30317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technology and development | 2978 | 3197 | 12090 | 10860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 65039 | 66957 | 309739 | 188049 |
| **(Loss) income from operations** | (109899) | 3335 | (127317) | 19766 |
|  Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of warrant liabilities | 3360 | 15649 | 23522 | 2464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | (15135) | (6178) | (45991) | (15848) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income, net | 861 |  | 1532 | 248 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other (expense) income | (10914) | 9471 | (20937) | (13136) |
| **(Loss) income before income taxes** | (120813) | 12806 | (148254) | 6630 |
|  Income tax expense | (324) |  | (359) | (170) |
|  **Net (loss) income** | $(121137) | $12806 | $(148613) | $6460 |
|  Net (loss) income per share, basic | $(0.49) | $0.05 | $(0.61) | $0.05 |
|  Net (loss) income per share, diluted | $(0.49) | $0.05 | $(0.61) | $0.05 |
|  Weighted average common shares outstanding, basic | 247379 | 238395 | 245148 | 118571 |
|  Weighted average common shares outstanding, diluted | 247379 | 261897 | 245148 | 143220 |

---

13 \| Q4 2022

------

**OFFERPAD SOLUTIONS INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
| *(in thousands, except par value per share)* | **2022** | **2021** |
|  **ASSETS** |  |  |
|  Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $97241 | $169817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 43058 | 24616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 2350 | 6165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | 664697 | 1132571 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 6833 | 9808 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 814179 | 1342977 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment, net | 5194 | 5146 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other non-current assets | 5696 | 4959 |
|  **TOTAL ASSETS** | $825069 | $1353082 |
|  **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
|  Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $4647 | $6399 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued and other current liabilities | 28252 | 35027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Secured credit facilities and other debt, net | 605889 | 861762 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Secured credit facilities and other debt - related party | 60176 | 164434 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 698964 | 1067622 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Warrant liabilities | 539 | 24061 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities | 3689 | 3830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | 703192 | 1095513 |
|  Commitments and contingencies |  |  |
|  Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 232,379 and 224,154 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 23 | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class B common stock, $0.0001 par value; 20,000 shares authorized; 14,816 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 2 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid in capital | 402521 | 389601 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | (280669) | (132056) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total stockholders' equity** | 121877 | 257569 |
|  **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $825069 | $1353082 |

---

14 \| Q4 2022

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**OFFERPAD SOLUTIONS INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
| *($ in thousands)* | **2022** | **2021** |
|  **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net (loss) income | $(148613) | $6460 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 1022 | 523 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of property and equipment |  | (246) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of debt financing costs | 2948 | 916 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of inventory | 93810 | 2843 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 8307 | 3079 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of warrant liabilities | (23522) | (2464) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 3815 | (3845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | 374064 | (949591) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other assets | (275) | (5288) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | (1752) | 4130 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued and other liabilities | (4402) | 21563 |
|  **Net cash provided by (used in) operating activities** | 305402 | (921920) |
|  **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of property and equipment | (1070) | (13687) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sales of property and equipment |  | 2032 |
|  **Net cash used in investing activities** | (1070) | (11655) |
|  **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowings from credit facilities and other debt | 3178033 | 2764071 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayments of credit facilities and other debt | (3540466) | (1912837) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment of debt financing costs | (646) | (7632) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from exercise of stock options | 4898 | 902 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for taxes related to stock-based awards | (285) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from Business Combination |  | 284011 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Issuance cost of common stock |  | (51249) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Class C preferred stock, net |  |  |
|  **Net cash (used in) provided by financing activities** | (358466) | 1077266 |
|  **Net change in cash, cash equivalents and restricted cash** | (54134) | 143691 |
|  **Cash, cash equivalents and restricted cash, beginning of period** | 194433 | 50742 |
|  **Cash, cash equivalents and restricted cash, end of period** | $140299 | $194433 |
|  **Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $97241 | $169817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 43058 | 24616 |
|  **Total cash, cash equivalents and restricted cash** | $140299 | $194433 |
|  **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash payments for interest | $59732 | $21875 |
|  **Supplemental disclosure of non-cash investing and financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer of property and equipment, net to inventory | $— | $14464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of warrant liabilities | $— | $26525 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion of preferred stock to common stock | $— | $184123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion of treasury stock | $— | $10650 |

---

15 \| Q4 2022

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**Non-GAAP Financial Measures** 

In addition to our results of operations above, 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. We have not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted net income (loss) within this shareholder letter because we are unable to calculate certain reconciling items without making unreasonable efforts. These items, which include, but are not limited to, stock-based compensation with respect to future grants and forfeitures, could materially affect the computation of forward-looking net income (loss), are inherently uncertain and depend on various factors, some of which are outside of our control.

**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 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 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.

16 \| Q4 2022

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**Adjusted Gross Profit / Margin** 

We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net inventory impairment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net inventory impairment is calculated by adding back the inventory impairment charges recorded during the period on homes that remain in inventory at period end and subtracting the inventory impairment 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 which is primarily comprised of interest income earned on our cash and cash equivalents and income earned from the sale of certain fixed assets. 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 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 are secured by our homes in 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. 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.

17 \| Q4 2022

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
| **(in thousands, except percentages and homes sold, unaudited)** | **2022** | **2021** | **2022** | **2021** |
|  **Gross profit (GAAP)** | $**(44860** | $**70292** | $**182422** | $**207815** |
|  *Gross margin* | *-6.6* | *8.1* | *4.6* | *10.0* |
|  *Homes sold* | *1865* | *2423* | *10635* | *6373* |
|  **Gross profit per home sold** | $***(24.1*** | $***29.0*** | $***17.2*** | $***32.6*** |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory impairment - current period <sub>(1)</sub> | 44075 | 985 | 58413 | 1205 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory impairment - prior period <sub>(2)</sub> | (25469) | (511) | (1205) | (160) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense capitalized <sub>(3)</sub> | 3081 | 3511 | 12660 | 6294 |
|  **Adjusted gross profit** | $**(23173** | $**74277** | $**252290** | $**215154** |
|  *Adjusted gross margin* | *-3.4* | *8.6* | *6.4* | *10.4* |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Direct selling costs <sub>(4)</sub> | (20584) | (19894) | (97381) | (48066) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Holding costs on sales - current period <sub>(5)(6)</sub> | (1251) | (1339) | (8342) | (4262) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Holding costs on sales - prior period <sub>(5)(7)</sub> | (1209) | (558) | (918) | (214) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income <sub>(8)</sub> | 861 |  | 1532 | 248 |
|  **Contribution profit** | $**(45356** | $**52486** | $**147181** | $**162860** |
|  *Contribution margin* | *-6.7* | *6.0* | *3.7* | *7.9* |
|  *Homes sold* | *1865* | *2423* | *10635* | *6373* |
|  **Contribution profit per home sold** | $**(24.3** | $**21.7** | $**13.8** | $**25.6** |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense capitalized <sub>(3)</sub> | (3081) | (3511) | (12660) | (6294) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense on homes sold - current period <sub>(9)</sub> | (5858) | (2575) | (32022) | (10228) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense on homes sold - prior period <sub>(10)</sub> | (6943) | (1749) | (3737) | (468) |
|  **Contribution profit after interest** | $**(61238** | $**44651** | $**98762** | $**145870** |
|  *Contribution margin after interest* | *-9.0* | *5.1* | *2.5* | *7.0* |
|  *Homes sold* | *1865* | *2423* | *10635* | *6373* |
|  **Contribution profit after interest per home sold** | $**(32.8** | $**18.4** | $**9.3** | $**22.9** |

---

(1) Inventory impairment – current period is the inventory valuation adjustments recorded during the period
presented associated with homes that remain in inventory at period end.

(2) Inventory impairment – prior period is the 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 principally represents interest income earned on our cash and cash equivalents and income earned
from the sale of certain fixed assets.

(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.

18 \| Q4 2022

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**Adjusted Net (Loss) Income 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:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br>**December 31,** | **Three Months Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
| **(in thousands, except percentages, unaudited)** | **2022** | **2021** | **2022** | **2021** |
|  **Net income (loss) (GAAP)** | $**(121137)** | $**12806** | $**(148613)** | $**6460** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of warrant liability | (3360) | (15649) | (23522) | (2464) |
|  **Adjusted net (loss) income** | $**(124497)** | $**(2843)** | $**(172135)** | $**3996** |
|  *Adjusted net (loss) income margin* | *(18.4 %)* | *(0.3 %)* | *(4.4 %)* | *0.2 %* |
|  *Adjustments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | 15135 | 6178 | 45991 | 15848 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of capitalized interest <sub>(1)</sub> | 3081 | 3511 | 12660 | 6294 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense | 324 |  | 359 | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 258 | 90 | 1022 | 523 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of share based compensation | 2014 | 763 | 8307 | 30 79 |
|  **Adjusted EBITDA** | **(103685)** | **7699** | **(103796)** | **29910** |
|  *Adjusted EBITDA margin* | *(15.3 %)* | *0.9 %* | *(2.6 %)* | *1.4 %* |

---

(1) Amortization of capitalized interest represents all interest related costs, including senior and mezzanine
secured 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.

19 \| Q4 2022

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