# EDGAR Filing Document

**Accession Number:** 0001883085
**File Stem:** 0001883085-23-000025
**Filing Date:** 2023-2
**Character Count:** 18706
**Document Hash:** cc25cc11914ccaccd639776537809581
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001883085-23-000025.hdr.sgml**: 20230215

**ACCESSION NUMBER**: 0001883085-23-000025

**CONFORMED SUBMISSION TYPE**: 424B3

**PUBLIC DOCUMENT COUNT**: 1

**FILED AS OF DATE**: 20230215

**DATE AS OF CHANGE**: 20230215

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Pagaya Technologies Ltd.
- **CENTRAL INDEX KEY:** 0001883085
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** L3
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 424B3
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-266228
- **FILM NUMBER:** 23633598

**BUSINESS ADDRESS:**
- **STREET 1:** AZRIELI SARONA BLDG, 54TH FLOOR
- **STREET 2:** DERECH MENACHEM BEGIN 121
- **CITY:** TEL-AVIV
- **STATE:** L3
- **ZIP:** 000000
- **BUSINESS PHONE:** (646) 710-7714

**MAIL ADDRESS:**
- **STREET 1:** AZRIELI SARONA BLDG, 54TH FLOOR
- **STREET 2:** DERECH MENACHEM BEGIN 121
- **CITY:** TEL-AVIV
- **STATE:** L3
- **ZIP:** 000000

**Filed Pursuant to Rule 424(b)(3)**

**Registration No. 333-266228**

**PROSPECTUS SUPPLEMENT NO. 2**

**(to Prospectus dated December 6, 2022)**

**Pagaya Technologies Ltd.**

**Up to 46,100,020 Class A Ordinary Shares**

**Up to 676,627,977 Class A Ordinary Shares Offered by the Selling Securityholders**

This prospectus supplement is being filed to update and supplement the prospectus, dated December 6, 2022 (as supplemented to date, the "Prospectus"), which forms a part of our registration statement on Form F-1 (No. 333-266228), with the unaudited financial results for the quarter and fiscal year ended December 31, 2022 (the "unaudited financial results") announced by Pagaya Technologies Ltd. (the "Company" or "Pagaya") on February 15, 2023. Accordingly, we have attached unaudited financial results to this prospectus supplement. The unaudited financial results are subject to completion of final audit adjustments, and therefore could differ from the financial results in the Company's audited consolidated financial statements for the fiscal year ended December 31, 2022.

The Prospectus and this prospectus supplement relate to: (1) the issuance by us of up to 46,100,020 Class A Ordinary Shares, no par value (the "Class A Ordinary Shares"), including the Class A Ordinary Shares that may be issued upon exercise of the public warrants and the private placement warrants to purchase Class A Ordinary Shares at an exercise price of $11.50 per Class A Ordinary Share for the public warrants, $11.50 per Class A Ordinary Share for 5,166,667 private placement warrants, $0.000054 per Class A Ordinary Share for 4,316,570 private placement warrants, $0.000005 per Class A Ordinary Share for 26,941,517 private placement warrants and $1.60551 per Class A Ordinary Share for 91,933 private placement warrants and (2) the offer and sale, from time to time, by the selling securityholders identified in the Prospectus, or their permitted transferees, of up to 676,627,977 Class A Ordinary Shares (including Class A Ordinary Shares underlying the Warrants and Class B Ordinary Shares).

Capitalized terms used in this prospectus supplement and not otherwise defined herein have the meanings specified in the Prospectus.

This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any supplements and amendments thereto. We may further amend or supplement the Prospectus and this prospectus supplement from time to time by filing amendments or supplements as required. You should read the entire Prospectus, this prospectus supplement, and any supplements or amendments carefully before you invest in our securities. This prospectus supplement is qualified by reference to the Prospectus, including any amendments or supplements thereto, except to the extent that the information in this prospectus supplement updates or supersedes the information contained in the Prospectus.

Our Class A Ordinary Shares are listed on The Nasdaq Capital Market ("Nasdaq") under the symbol "PGY." On February 14, 2023, the closing price of our Class A Ordinary Shares on Nasdaq was $1.34 per share.

**Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described in the section titled "Risk Factors" beginning on page 23 of the Prospectus, and under similar headings in any amendments or supplements to the Prospectus.**

**None of the SEC, the Israeli Securities Authority or any state securities commission has approved or disapproved of these securities or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.**

**The date of this prospectus supplement is February 15, 2023.**

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**PAGAYA TECHNOLOGIES LTD.** 

**CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**

**(In thousands, except share and per share data)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended <br>December 31,** | **Year Ended <br>December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from fees | $178173 | $144262 | $685414 | $445866 |
| **Other Income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | 14631 | 10621 | 57758 | 28877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment income (loss) | 86 | (153) | 5756 | (155) |
| **Total Revenue and Other Income** | 192890 | 154730 | 748928 | 474588 |
| **Costs and Operating Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production costs (1) | 124709 | 78450 | 451084 | 232324 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development (2) | 23554 | 14867 | 150933 | 66211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing (2) | 13974 | 12063 | 104203 | 49627 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative (1)(2) | 57350 | 51536 | 294213 | 132235 |
| **Total Costs and Operating Expenses** | 219587 | 156916 | 1000433 | 480397 |
| **Operating Loss** | (26697) | (2186) | (251505) | (5809) |
| Other loss, net | (34715) | (4300) | (24869) | (55839) |
| **Loss Before Income Taxes** | (61412) | (6486) | (276374) | (61648) |
| Income tax expense (benefit) | (9204) | (3542) | 16400 | 7875 |
| **Loss Including Noncontrolling Interests** | (52208) | (2944) | (292774) | (69523) |
| Less: Net income (loss) attributable to noncontrolling interests | (18210) | 7512 | 9547 | 21628 |
| **Loss Attributable to Pagaya Technologies Ltd.** | $(33998) | $(10456) | $(302321) | $(91151) |
| **Per share data:** |  |  |  |  |
| Net loss attributable to Pagaya Technologies Ltd. | $(33998) | $(10456) | $(302321) | $(91151) |
| Less: Undistributed earnings allocated to participated securities |  | (6064) | (12205) | (19558) |
| Less: Deemed dividend distribution |  |  |  | (23612) |
| Net loss attributed to Pagaya Technologies Ltd. | $(33998) | $(16520) | $(314526) | $(134321) |
| **Net loss per share attributable to Pagaya Technologies Ltd.:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and Diluted (3) | $(0.05) | $(0.08) | $(0.69) | $(0.69) |
| **Non-GAAP adjusted net income (loss) (4)** | $(3683) | $380 | $(32664) | $37259 |
| **Non-GAAP adjusted net income (loss) per share:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic (3) | $(0.01) | $0.00 | $(0.07) | $0.19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted (3) | $(0.01) | $0.00 | $(0.07) | $0.14 |
| **Weighted average shares outstanding (Class A and Class B):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic (3) | 688165887 | 197751810 | 459044846 | 195312586 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted (3) | 697441165 | 448116776 | 699631838 | 262995525 |

---

(1) Certain amounts included for the three months ended December 31, 2021 in Production costs have been reclassified to be included in General and administrative expenses in order to conform to the presentation for the 2022 periods and year ended December 31, 2021. The effect of the reclassification on the Company's previously reported unaudited condensed consolidated interim financial statements for each of the three months ended September 30, 2021, June 30, 2021 and March 31, 2021 is a decrease in Production costs and a corresponding increase in General and administrative expenses of approximately $11.0 million, $8.9 million and $7.8 million for the three months ended September 30, 2021, June 30, 2021, and March 31, 2021, respectively. The reclassification has no other effect on the previously reported financial position, net loss, and cash flows for the 2021 periods.

(2) The following table sets forth share-based compensation for the periods indicated below:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended <br>December 31,** | **Year Ended <br>December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| Research and development | $4886 | $800 | $81337 | $27042 |
| Selling and marketing | 3843 | 1048 | 58377 | 18458 |
| General and administrative | 9953 | 2963 | 101975 | 22285 |
| Total | $18682 | $4811 | $241689 | $67785 |

---

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

(4) See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of this and adjusted EBITDA, another non-GAAP measure.

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**PAGAYA TECHNOLOGIES LTD.** 

**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)**

**(In thousands)**

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $309793 | $190778 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 22539 | 7000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term deposits |  | 5020 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fees receivable | 59219 | 32332 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in loans and securities | 1007 | 5142 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 27258 | 6263 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | 419816 | 246535 |
| Restricted cash | 4744 | 6797 |
| Fees receivable | 38774 | 19208 |
| Investments in loans and securities | 462969 | 277582 |
| Equity method and other investments | 25894 | 14841 |
| Right-of-use asset | 61077 |  |
| Property and equipment, net | 31663 | 7648 |
| Deferred tax assets, net |  | 5681 |
| Deferred offering costs |  | 11966 |
| Prepaid expenses and other assets | 142 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total non-current assets** | 625263 | 343723 |
| **Total Assets** | $1045079 | $590258 |
| **Liabilities, Redeemable convertible preferred shares, and Shareholders' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $1739 | $11580 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 49496 | 17093 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability - current | 8530 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Secured borrowing - current | 61829 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable - current | 6424 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 128018 | 28673 |
| Non-current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Warrant liability | 1400 | 27469 |
| &nbsp;&nbsp;&nbsp;Revolving credit facility | 15000 |  |
| &nbsp;&nbsp;&nbsp;Secured borrowing - non-current | 77802 | 37905 |
| &nbsp;&nbsp;&nbsp;Operating lease liability - non-current | 49097 |  |
| &nbsp;&nbsp;&nbsp;Income taxes payable - non-current | 7771 | 11812 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities, net - non-current | 568 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total non-current liabilities** | 151638 | 77186 |
| **Total liabilities** | 279656 | 105859 |
| &nbsp;&nbsp;&nbsp;Redeemable convertible preferred shares |  | 307047 |
| Shareholders' equity (deficit): |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 968432 | 113170 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income loss | (713) |  |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (414199) | (111878) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Pagaya Technologies Ltd. shareholders' equity** | 553520 | 1292 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interests | 211903 | 176060 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total shareholders' equity** | 765423 | 177352 |
| &nbsp;&nbsp;**Total Liabilities, Redeemable Convertible Preferred Shares and Shareholders' Equity** | $1045079 | $590258 |

---

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**PAGAYA TECHNOLOGIES LTD.** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

**(In thousands)** 

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** |
| **Cash flows from operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss including noncontrolling interests | $(292774) | $(69523) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method income (loss) | (5756) | 155 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of equity method investments |  | 421 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 6294 | 815 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 241689 | 67785 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustment to warrant liability | (11088) | 53019 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of ordinary shares related to commitment shares | 1000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on investments in loans and securities | 15007 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on loans held-for-investment | 10651 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other than temporary impairment of investments in loans and securities | 33704 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment of goodwill and other intangible assets | 3209 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees and other receivables | (46453) | (27555) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets, net | 5681 | (3378) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liabilities, net | 568 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (23227) | (4738) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use asset | 7742 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (9841) | 10999 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 32403 | 13407 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability | (11192) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 2383 | 8404 |
| **Net cash (used in) provided by operating activities** | (40000) | 49811 |
| **Cash flows from investing activities** |  |  |
| Proceeds from the sale/maturity/prepayment of: |  |  |
| &nbsp;&nbsp;&nbsp;Investments in loans and securities | 112897 | 28904 |
| &nbsp;&nbsp;&nbsp;Short-term deposits | 5020 | 53412 |
| &nbsp;&nbsp;&nbsp;Equity method and other investments | 453 | 8925 |
| Payments for the purchase of: |  |  |
| &nbsp;&nbsp;&nbsp;Investments in loans and securities | (355633) | (202366) |
| &nbsp;&nbsp;&nbsp;Property and equipment | (22406) | (6624) |
| &nbsp;&nbsp;&nbsp;Equity method and other investments | (5750) | (22991) |
| **Net cash used in investing activities** | (265419) | (140740) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of ordinary shares in connection with the Business Combination and PIPE Investment, net of issuance costs | 291872 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of redeemable convertible preferred shares, net |  | 172645 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of ordinary share warrants, net |  | 20807 |
| &nbsp;&nbsp;&nbsp;Proceeds from secured borrowing | 139413 | 37905 |
| &nbsp;&nbsp;&nbsp;Proceeds received from noncontrolling interests | 105469 | 151035 |
| &nbsp;&nbsp;&nbsp;Proceeds from revolving credit facility | 42100 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of stock options | 1617 | 346 |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of redeemable convertible preferred shares warrants |  | 400 |
| &nbsp;&nbsp;&nbsp;Distribution made to noncontrolling interests | (77764) | (81548) |
| &nbsp;&nbsp;&nbsp;Distribution made to revolving credit facility | (27100) |  |
| &nbsp;&nbsp;&nbsp;Distribution made to secured borrowing | (37687) |  |
| &nbsp;&nbsp;&nbsp;Payment for deferred offering costs |  | (11966) |
| **Net cash provided by financing activities** | 437920 | 289624 |
| Net increase in cash, cash equivalents and restricted cash | 132501 | 198695 |
| Cash, cash equivalents and restricted cash, beginning of period | 204575 | 5880 |
| **Cash, cash equivalents and restricted cash, end of period** | $337076 | $204575 |

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**PAGAYA TECHNOLOGIES LTD.** 

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)**

**(In thousands)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended <br>December 31,** | **Year Ended <br>December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| **Net Loss Attributable to Pagaya Technologies Ltd.** | $(33998) | $(10456) | $(302321) | $(91151) |
| Adjusted to exclude the following: |  |  |  |  |
| Share-based compensation | 18682 | 4811 | 241689 | 67785 |
| Fair value adjustment to warrant liability | (1680) | 1542 | (11088) | 53019 |
| Other than temporary impairment loss on certain investments | 8836 |  | 8836 |  |
| Impairment of goodwill and other intangible assets | 3209 |  | 3209 |  |
| Non-recurring expenses | 1268 | 4483 | 27011 | 7606 |
| **Adjusted Net Income (Loss)** | (3683) | 380 | (32664) | 37259 |
| Adjusted to exclude the following: |  |  |  |  |
| Interest expenses | 1716 |  | 5136 |  |
| Provision for income tax | (9204) | (3542) | 16400 | 7875 |
| Depreciation and amortization | 2217 | 326 | 6294 | 815 |
| **Adjusted EBITDA** | $(8954) | $(2836) | $(4834) | $45949 |

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