prosper-20251231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______


333-179941-01 333-204880 333-225797-01 333-257739	PROSPER MARKETPLACE, INC. a Delaware corporation 221 Main Street, 3rd Floor San Francisco, CA 94105 Telephone: (415) 593-5426	73-1733867
333-179941 333-204880-01 333-225797 333-257739-01	PROSPER FUNDING LLC a Delaware limited liability company 221 Main Street, 3rd Floor San Francisco, CA 94105 Telephone: (415) 593-5426	45-4526070
Commission File Number	Exact Name of Registrant as Specified in its Charter State or Other Jurisdiction of Incorporation or Organization Address of Principal Executive Offices, Zip Code Registrant's Telephone Number (Including Area Code)	I.R.S. Employer Identification Number

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

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Prosper Marketplace, Inc.

None

Prosper Funding LLC

None

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

Prosper Marketplace, Inc.

None

Prosper Funding LLC

None

Indicate by check mark if each registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


Prosper Marketplace, Inc.			Yes ¨ No ý
Prosper Funding LLC			Yes ¨ No ý

Indicate by check mark if each registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.


Prosper Marketplace, Inc.			Yes ¨ No ý
Prosper Funding LLC			Yes ¨ No ý

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Prosper Marketplace, Inc.			Yes ý No ¨
Prosper Funding LLC			Yes ý No ¨

Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Prosper Marketplace, Inc.			Yes ý No ¨
Prosper Funding LLC			Yes ý No ¨

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large

Accelerated

Filer

Accelerated

Filer

Non-accelerated Filer

Smaller

Reporting

Company

Emerging Growth Company

Prosper Marketplace, Inc.

☐

Prosper Funding LLC

☐

If an emerging growth company, indicate by check mark if each 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.


Prosper Marketplace, Inc.			¨
Prosper Funding LLC			¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.


Prosper Marketplace, Inc.			¨
Prosper Funding LLC			¨

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant

included in the filing reflect the correction of an error to previously issued financial statements.


Prosper Marketplace, Inc.			¨
Prosper Funding LLC			¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based

compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).


Prosper Marketplace, Inc.			¨
Prosper Funding LLC			¨

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act).


Prosper Marketplace, Inc.			Yes ☐ No ý
Prosper Funding LLC			Yes ☐ No ý

Prosper Funding LLC meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Annual Report on Form 10-K with the reduced disclosure format specified in General Instruction I(2) of Form 10-K.

Aggregate Market Value of Voting and Non-Voting Common Equity Held by Non-Affiliates of the Registrant at

Number of Shares of Common Stock of the Registrant Outstanding at

June 30, 2025

March 24, 2026

Prosper Marketplace, Inc.

(a)

78,299,355

($0.01 par value)

Prosper Funding LLC

(a)(b)

None

(a) Not applicable

(b) All voting and non-voting common equity is owned by Prosper Marketplace, Inc.

THIS COMBINED FORM 10-K IS SEPARATELY FILED BY PROSPER MARKETPLACE, INC. AND PROSPER FUNDING LLC. INFORMATION CONTAINED HEREIN RELATING TO ANY INDIVIDUAL REGISTRANT IS FILED BY SUCH REGISTRANT ON ITS OWN BEHALF. EACH REGISTRANT MAKES NO REPRESENTATION AS TO INFORMATION RELATING TO THE OTHER REGISTRANT.

TABLE OF CONTENTS

ITEM

Page

PART I

ITEM 1

Business

ITEM 1A

Risk Factors

ITEM 1B

Unresolved Staff Comments

ITEM 1C

Cybersecurity

ITEM 2

Properties

ITEM 3

Legal Proceedings

ITEM 4

Mine Safety Disclosures

PART II

ITEM 5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

ITEM 6

[Reserved]

ITEM 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7A

Quantitative and Qualitative Disclosures About Market Risk

ITEM 8

Financial Statements and Supplementary Data

ITEM 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

ITEM 9A

Controls and Procedures

ITEM 9B

Other Information

ITEM 9C

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III

ITEM 10

Directors, Executive Officers and Corporate Governance

ITEM 11

Executive Compensation

ITEM 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

ITEM 13

Certain Relationships and Related Transactions, and Director Independence

ITEM 14

Principal Accounting Fees and Services

PART IV

ITEM 15

Exhibits, Financial Statement Schedules

SIGNATURES

EXHIBIT INDEX

XBRL Content

Except as the context requires otherwise, as used herein, “Registrants” refers to Prosper Marketplace, Inc. (“PMI”), a Delaware corporation, and its wholly owned subsidiary, Prosper Funding LLC (“PFL”), a Delaware limited liability company; “we,” “us,” “our,” “Prosper,” and the “Company” refers to (i) PMI, (ii) its wholly owned subsidiaries, PFL, BillGuard, Inc. (“BillGuard”), a Delaware corporation and Prosper Healthcare Lending LLC (“PHL”), a Delaware limited liability company, and (iii) its variable interest entities, Prosper Warehouse I Trust (“PWIT,” terminated March 28, 2024), a Delaware statutory trust; Prosper Warehouse II Trust (“PWIIT,” terminated September 25, 2023), a Delaware statutory trust; Prosper Marketplace Issuance Trust, Series 2023-1 (“PMIT 2023-1”), a Delaware statutory trust; Prosper Marketplace Issuance Trust, Series 2024-1 (“PMIT 2024-1”), a Delaware statutory trust; Prosper Credit Card Issuer LLC (“PMCC 2024-1”), a Delaware limited liability company and Prosper Grantor Trust (“PGT”), a Delaware statutory trust, on a consolidated basis; and “Prosper Funding” refers to PFL and its wholly owned subsidiary, Prosper Depositor LLC, a Delaware limited liability company, on a consolidated basis. In addition, the unsecured personal loans originated through our marketplace are referred to as “Borrower Loans,” and the borrower payment dependent notes issued through our marketplace, whether issued by PMI or PFL, are referred to as “Notes.” Investors currently invest in Borrower Loans through two channels: (i) the “Note Channel,” which allows investors to purchase Notes from PFL, the payments of which are dependent on the payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows accredited and institutional investors to purchase Borrower Loans in their entirety directly from PFL. The Notes available to Note Channel investors are distinguishable from notes held by certain third party investors pursuant to Prosper’s securitization transactions, which are referred to herein as “Notes Issued by Securitization Trust.” Finally, although historically the Company has referred to investors as “lender members,” PFL calls them “investors” herein to avoid confusion since WebBank is the lender for Borrower Loans originated through our marketplace.

Forward-Looking Statements

This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “may,” “believe,” “expect,” “project,” “estimate,” “intend,” “anticipate,” “plan,” “continue” or similar expressions. These statements may appear throughout this Annual Report on Form 10-K, including the sections titled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, PFL or PMI expresses an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of their respective managements, expressed in good faith, and is believed to have a reasonable basis. Nevertheless, there can be no assurance that the expectation or belief will result or be achieved or accomplished.

The following include some, but not all, of the factors that could cause actual results or events to differ materially from those anticipated:

•the performance of the Notes, which, in addition to being speculative investments, are special, limited obligations that are not guaranteed or insured;

•PFL’s ability to make payments on the Notes, including in the event that borrowers fail to make payments on the corresponding Borrower Loans;

•our ability to attract potential borrowers and investors to our personal loan marketplace and borrowers to our unsecured credit card (“Credit Card”) product;

•the reliability of the information about borrowers that is supplied by borrowers, including actions by some borrowers to defraud investors;

•our ability to service the Borrower Loans, and our ability or the ability of a third party debt collector to pursue collection against any borrower, including in the event of fraud or identity theft;

•credit risks posed by the credit worthiness of borrowers of our Personal Loan and Credit Card products and the effectiveness of our credit rating systems;

•potential efforts by state regulators or litigants to impose liability that could affect PFL’s (or any subsequent assignee’s) ability to continue to charge to borrowers the interest rates that they agreed to pay at origination of their loans;

•the impact of future economic conditions on the performance and the loss rates for the Borrower Loans and the Credit Card product;

•our ability to manage loss rates associated with our Credit Card product;

•our compliance with applicable local, state and federal law, including the Investment Advisers Act of 1940, the Investment Company Act of 1940 and other laws;

•our compliance with applicable regulations and regulatory developments or court decisions affecting our business;

•potential efforts by state regulators or litigants to characterize PFL or PMI, rather than WebBank, as the lender of the loans originated through our marketplace;

•the application of federal and state bankruptcy and insolvency laws to borrowers and to PFL and PMI;

•the impact of borrower delinquencies, defaults and prepayments on the returns on the Notes;

•the impact of rising interest rates and inflation on our business, results of operations, financial condition and future prospects;

•the lack of a public trading market for the Notes and the current lack of any trading platform on which investors can resell the Notes;

•the federal income tax treatment of an investment in the Notes and the PMI Management Rights;

•our ability to prevent security breaches, disruptions in service, and comparable events that could compromise the personal and confidential information held on our data systems, reduce the attractiveness of the platform or adversely impact our ability to service Borrower Loans;

•the potential adverse legal, reputational, and financial effects on the Company resulting from the cybersecurity incident that we reported in September 2025; and

•the other risks discussed under the “Risk Factors” section of this Annual Report on Form 10-K.

There may be other factors that may cause actual results to differ materially from the forward-looking statements in this Annual Report on Form 10-K. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does occur, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” section of this Annual Report on Form 10-K for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

All forward-looking statements speak only as of the date hereof and are expressly qualified in their entirety by the cautionary statements included in this Annual Report on Form 10-K. We undertake no obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.

PART I

ITEM 1. BUSINESS

Overview

Our vision is to transform lives by providing affordable financial solutions through the simplest and most trusted platform. We currently offer access to consumer lending products which support our vision: (i) unsecured personal loans through a personal loan marketplace which connects eligible consumer borrowers with individual and institutional investors, and (ii) a Credit Card product available to eligible borrowers.

Personal Loan

We are a pioneer of peer-to-peer lending in the U.S. and first launched our personal loan lending product in 2006. Our personal loan marketplace facilitated $2.7 billion in Borrower Loan originations during 2025 and $30.5 billion in Borrower Loan originations since launch.

We believe our personal loan business model has key advantages relative to traditional banks, including (i) an innovative marketplace model that efficiently connects qualified supply and demand of capital, (ii) online operations that substantially reduce the need for physical infrastructure and improve convenience, and (iii) use of advanced technology and artificial intelligence to deliver simple, fast, personalized, and transparent solutions that can improve consumers’ financial health as they move across the credit spectrum. We do not operate physical branches or incur expenses related to infrastructure like traditional banks or consumer finance institutions. As part of operating our marketplace, we verify the identity of borrowers and assess borrowers’ credit risk profile using a combination of public and proprietary data. Our proprietary technology automates several loan origination and servicing functions, including the borrower application process, data gathering, underwriting, credit scoring, loan funding, investing and servicing, regulatory compliance and fraud detection.

To consumer borrowers, we believe that we offer generally better pricing, on average, than the pricing those loan borrowers would pay on outstanding credit card balances or unsecured installment loans from a traditional lender. To individual and institutional investors, we offer an asset class (personal loans) that we believe has attractive risk adjusted returns, transparency, and lower duration risk.

Our personal loan marketplace offers fixed rate, fully amortizing, unsecured personal loans ranging from $2,000 to $50,000 with no prepayment penalty. Loan terms of 24, 36, 48 and 60 months are available, depending in large part upon the Prosper Rating assigned to the borrower at issuance and loan amount being sought. All Borrower Loans are originated and funded by WebBank, an FDIC-insured, state chartered industrial bank organized under the laws of Utah. After origination, WebBank sells the Borrower Loans to PFL, which either holds them or sells them to accredited institutional investors.

Investors invest in Borrower Loans through two channels – (i) the “Note Channel,” which allows investors to purchase Notes from PFL, the payments of which are dependent on PFL’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows accredited institutional investors to purchase a Borrower Loan in its entirety directly from PFL. PFL continues to own the Borrower Loans originated through the Note Channel. We service all of the Borrower Loans made through our marketplace.

Credit Card

In December 2021, we launched our Prosper Credit Card product in partnership with Coastal Community Bank (“Coastal”), through which eligible consumers are extended unsecured credit through Prosper-branded Credit Cards. In accordance with our program agreement with Coastal, the receivables associated with these Credit Cards are originated and maintained on the balance sheet of Coastal, until we exercise our right to purchase eligible receivables. Customer accounts are randomly designated as either Prosper Allocations or Coastal Allocations in accordance with the requirements of the program agreement. Each party receives 100% of the interest income and is responsible for the credit losses on its allocated customer accounts. Credit Card receivables that remain on Coastal’s balance sheet are not available for investment purposes.

On November 1 2024, we closed our first Credit Card securitization transaction, PMCC 2024-1, in which we purchased Credit Card receivables with an unpaid principal balance of $94.7 million from the Prosper Allocations, and contributed them to the securitization. PMCC 2024-1 then issued senior notes in four classes to third-party investors with a stated aggregate value of $82.9 million. This transaction is described more fully in Note 5 of the accompanying consolidated financial statements.

Segment Reporting

We have two reportable segments: Personal Loan and Credit Card.

Company Background and History

PMI was incorporated in the state of Delaware on March 22, 2005. PFL was formed as a limited liability company in the state of Delaware on February 17, 2012, and is a wholly-owned subsidiary of PMI.

PMI developed our personal loan marketplace and, until February 1, 2013, owned the proprietary technology that makes operation of our personal loan marketplace possible. On February 1, 2013, PMI transferred the personal loan marketplace to PFL. PFL has been organized and is operated in a manner that is intended (i) to minimize the likelihood that it will become subject to a voluntary or involuntary bankruptcy or similar proceeding, and (ii) to minimize the likelihood that, in the event of PMI’s bankruptcy, PFL would be substantively consolidated with PMI and thus have its assets subjected to claims of PMI’s creditors. We believe we have achieved this by imposing through PFL’s organizational documents and covenants in the Amended and Restated Indenture (as defined below in Item 13, “Certain Relationships and Related Transactions, and Director Independence”) certain restrictions on PFL’s activities and certain formalities designed to reinforce PFL’s status as a distinct entity from PMI. In addition, under the Administration Agreement, dated February 1, 2013, between PMI and PFL (as amended to date, the “Administration Agreement”), PMI has agreed, in its dealings with PFL and with third parties, to observe certain “separateness covenants” related to its corporate formalities. PMI has also adopted resolutions limiting its own activities and interactions with PFL in order to further reduce the likelihood that PFL would be substantively consolidated with PMI in the event of PMI’s bankruptcy.

PFL has retained PMI, pursuant to the Administration Agreement, to provide certain administrative services relating to our personal loan marketplace. Specifically, the Administration Agreement contains a license granted by PFL to PMI that entitles PMI to use the marketplace for and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement relating to corporate administration, loan platform services, loan and Note servicing, and marketing, and (ii) PMI’s performance of its duties and obligations to WebBank in relation to loan origination and funding. The license is terminable in whole or in part upon the failure by PMI to pay PFL the licensing fee, or upon PMI’s termination as the provider of some or all of the aforementioned services. See Item 13, “Certain Relationships and Related Transactions, and Director Independence—Prosper Marketplace, Inc.—Agreements with PFL” for more information.

How our Personal Loan Marketplace Works

Our Personal Loan marketplace is an online marketplace that matches individuals who wish to obtain unsecured Borrower Loans with individuals and institutions who are willing to commit funds to those loans. A borrower who wishes to obtain a loan through our marketplace must apply and, if accepted, post a loan listing to our marketplace. Each time we post a group of listings on our Personal Loan marketplace, we determine the relative proportions of such listings that will be allocated to the Note Channel and the Whole Loan Channel, respectively, based on our estimate of the relative overall demand in each channel. We then use a random allocation methodology to allocate individual listings between the two channels based on those proportions. If a listing receives enough investor commitments, WebBank will originate the Borrower Loan requested and then sell it to PFL.

Borrowers

Any natural person at least 18 years of age who is a U.S. resident in a state where loans through our marketplace are available with a U.S. bank account and a social security number may apply to become a borrower by registering at www.prosper.com. After passing the anti-fraud, anti-terrorism and identity verification processes, borrowers can request unsecured Borrower Loans at interest rates set by us.

When a borrower requests a loan, we first evaluate whether the borrower meets the underwriting criteria required by WebBank. WebBank originates loans to borrowers and then sells and assigns the promissory notes evidencing those loans to PFL. The underwriting criteria apply for all Borrower Loans originated through our marketplace and may not be changed without WebBank’s consent. For the Note Channel, all borrowers who request a loan are subject to the following minimum eligibility criteria: (1) have at least a 600 FICO 08 score, (2) have nine or fewer credit bureau inquiries (after excluding duplicate inquiries) within the last 6 months, (3) have an annual income greater than $0, (4) have a debt-to-income ratio of no more than 50%, (5) have at least two open trades reported on their credit report, and (6) have not filed for bankruptcy within the last 12 months.

We also allow two borrowers to apply together as joint applicants for a co-borrower loan. We currently offer Borrower Loans with 2-, 3-, 4-, and 5-year terms to co-borrowers. Each borrower applicant is held jointly and severally liable for the obligations under the loan. In the case of co-borrower loans, both of the borrowers must satisfy the following minimum eligibility criteria: (1) have at least a 600 FICO 08 score, (2) have nine or fewer credit bureau inquiries (after excluding

duplicate inquiries) within the last 6 months, (3) have an annual income greater than $0, (4) have a debt-to-income ratio of no more than 50% (the debt-to-income ratio for joint loans is calculated using the combined debt-to-income ratio of the primary and secondary borrowers without duplication of combined debt), (5) have at least one open trade reported on their credit report, and (6) have not filed for bankruptcy within the last 12 months.

In addition, a borrower may have up to two loans through Prosper outstanding at one time, provided that (1) the first loan is current, (2) the aggregate outstanding principal balance of both loans does not exceed the then-current maximum allowable loan amount for loans (currently $50,000), (3) the borrower has held their first Borrower Loan for at least 6 months, and (4) the borrower complies with the prior-borrower constraints below. For co-borrower loans, the foregoing additional requirements will apply if either the primary or secondary borrower has a currently outstanding loan.

If a borrower has previously obtained a Borrower Loan through our marketplace, then in addition to the foregoing requirements (as applicable), the borrower must also (1) have no prior charge-offs on Borrower Loans originated through our marketplace, and (2) have never been more than 15 days delinquent on any Borrower Loan obtained through our marketplace within 12 months of their application.

Underwriting requirements for Borrower Loans, including eligibility requirements for subsequent loans, are subject to change over time. From time to time, we have, with WebBank’s consent, tested new products that include features which are outside the standard eligibility criteria discussed above. These products are available exclusively through our Whole Loan Channel.

Investors

Investors are individuals and institutions that have the opportunity to buy Notes or Borrower Loans after registering on our Personal Loan marketplace. However, investors do not have the ability to invest in the Credit Card product on our personal loan marketplace. An individual investor must be a natural person at least 18 years of age and a U.S. resident, must provide their social security number, and may be required to provide their state driver’s license or state identification card number. An institutional investor must provide its taxpayer identification number and entity formation documentation. All potential investors are subject to anti-fraud, anti-terrorism and identity verification processes and a potential investor cannot invest in Notes or Borrower Loans without passing those processes.

At the time an individual investor registers to participate in the Note Channel, such investor must satisfy any minimum financial suitability standards established for the Note Channel by the state in which the investor resides, if applicable. Investors who participate in the Note Channel must enter into an investor registration agreement, which governs all sales of Notes to such investors.

Only investors who are approved by us are eligible to participate in the Whole Loan Channel. At a minimum, to participate in the Whole Loan Channel, an investor must meet the definition of an “accredited investor” set forth in Regulation D under the Securities Act. Investors who participate in the Whole Loan Channel must enter into loan purchase and loan servicing agreements with us.

Individual investors can also create a Prosper IRA account to invest in our marketplace using tax-deferred funds from an individual retirement account (“IRA”). Prosper IRA accounts are not maintained on our personal loan marketplace. Rather, Prosper IRA accounts are managed by third-party custodians who direct Prosper to make deposits and withdrawals to the individual’s Prosper IRA account on behalf of the investor and/or their beneficiaries and who ensure IRA accounts remain compliant with applicable U.S. Internal Revenue Service (“IRS”) regulations. Investors have the ability to select their third-party custodian or utilize a Prosper preferred third-party custodian partner for account management purposes.

Relationship with WebBank

WebBank is an FDIC-insured, Utah-chartered industrial bank that originates all Borrower Loans made through our personal loan marketplace. WebBank and PMI are parties to an agreement under which PMI manages the operations of our marketplace that relate to the submission of loan applications by borrowers and the making of related Borrower Loans by WebBank in exchange for a fee. WebBank makes each Borrower Loan with its own funds. A joint WebBank-Prosper Credit Policy, which can be changed only with WebBank’s approval, constitutes the policy we must follow in reviewing, approving and administering Borrower Loans made by WebBank through the marketplace. WebBank, PMI and PFL are parties to a Loan Sale Agreement, under which WebBank sells and assigns the promissory notes evidencing the Borrower Loans to PFL. As consideration for WebBank's agreement to sell and assign the promissory notes, PFL pays WebBank the purchase price of the promissory notes, as well as a monthly fee, which is partially tied to the terms and performance of the loans. PMI receives payments from WebBank as compensation for the activities it undertakes on WebBank's behalf.

Risk Management

Each loan listing is assigned a letter grade that indicates the expected level of risk associated with the listing, which we refer to as a Prosper Rating. Each Prosper Rating corresponds to an estimated average annualized loss rate range. The Prosper Rating associated with a loan listing reflects the loss expectations for that listing as of the time the rating is given. This means that otherwise similar borrowers may have different Prosper Ratings at different points in time as the Prosper Rating is updated to incorporate more recent information.

The estimated average annualized loss rate for each loan listing is based primarily on the historical performance of Borrower Loans with similar characteristics and is primarily determined by the following scores: (i) one or more custom Prosper scores (“Prosper Score”), as may be supplemented by additional proprietary scoring models, and (ii) a credit score obtained from a credit reporting agency. A Prosper Score is also updated periodically to include new information that is predictive of borrower risk as such information becomes available or as the evidence supporting a particular variable becomes strong enough to merit its inclusion in a Prosper Score.

To create a Prosper Score, we have developed and refined custom, artificial intelligence driven risk models using our historical data as well as a data archive from a consumer credit bureau. We built the Prosper Score models on our borrower population, and included information provided directly by the borrowers as well as information from their credit reports and other data sources, so that the models would incorporate behavior that is unique to that population. In addition to a Prosper Score, another major element used to determine the Prosper Rating for a loan listing is a credit score from a consumer reporting agency. We currently use either or both of TransUnion’s FICO08 score and VantageScore. We obtain a borrower’s credit score at the time the loan listing is created, unless we already have a credit score on file that is not more than thirty days old.

Sale of Notes and Borrower Loans

If an investor successfully bids on a loan listing, the principal amount of the loan will be set aside in the investor’s account and may not be used for other bids. In the event a listing does not result in a loan being originated, the funds are again made available for bidding by the investor.

For loan listings allocated to the Note Channel, a bid on a listing is an investor’s commitment to purchase a Note from PFL. PFL generally issues and sells a series of Notes for each Borrower Loan that is originated through the Note Channel. The Notes are sold to the investors who successfully bid on the corresponding loan listing in the principal amounts of their respective bids. Payment on each series of Notes depends on PFL receiving payments from the corresponding Borrower Loans. PFL uses the proceeds of each series of Notes to purchase the corresponding Borrower Loan from WebBank on the second business day after WebBank has originated the Borrower Loan. Each Note comes attached with an inseparable PMI Management Right issued by PMI. Each PMI Management Right constitutes an "investment contract," a concept under federal securities law that refers to an arrangement where investors invest money in a common enterprise with the expectation of profits, primarily from the efforts of others.

Generally, for listings allocated to the Whole Loan Channel, a bid on a listing is an investor’s commitment to purchase the Borrower Loan from PFL after origination by WebBank and sale to PFL. On the second business day after WebBank has originated the Borrower Loan, PFL purchases the Borrower Loan from WebBank and re-sells the Borrower Loan that same day to the corresponding investor. In some cases, certain investors in the Whole Loan Channel purchase Borrower Loans that WebBank retains beyond the second business day. PFL records the investor as the owner of the Borrower Loan.

Loan Servicing and Collection

We are responsible for servicing the Borrower Loans made through our personal loan marketplace. We will pay each Note holder principal and interest on the Note in an amount equal to each such Note’s pro-rata portion of the principal and interest payments, if any, which we receive on the corresponding Borrower Loan, net of our servicing fee. We will also pay Note holders their pro-rata portion of any other amounts we receive on the corresponding Borrower Loans, including late fees and prepayments, subject to our servicing fee; provided, that we will not pay Note holders any non-sufficient funds fees we receive for failed borrower payments. In addition, the funds available for payment on the Notes will be reduced by the amount of any attorneys’ fees or collection fees we, a third-party servicer, or a collection agency imposes in connection with collection efforts related to the corresponding Borrower Loan. We will have no further obligation to make payments on any Note after its final maturity date.

We will pay each investor who has purchased a Borrower Loan through the Whole Loan Channel principal and interest on the Borrower Loan purchased in an amount equal to the principal and interest payments, if any, that we receive, net of our servicing fee. We will also pay these investors any other amounts we receive on the Borrower Loans, including late fees and prepayments, subject to our servicing fee, provided that we will not pay these investors any non-sufficient funds fees we receive for failed borrower payments or any payment processing fees we may collect. In addition, the funds available for payment on

the Borrower Loans will be reduced by the amount of any attorneys' fees or collection fees we, a third-party servicer or a collection agency imposes in connection with collection efforts related to the Borrower Loan.

If a Borrower Loan becomes past due, we may collect on it directly or refer it to a third-party collection agency. Our in-house collections department and third-party collection agencies are compensated by keeping a portion of the payments they collect based on a predetermined schedule.

Customers

Personal Loan: A relatively small number of investors provide the funding commitments for a large percentage of all listings that result in Borrower Loans originated through our Personal Loan marketplace. Of all Borrower Loans originated in the year ended December 31, 2025, the largest party purchased a total of 21.0% of those loans. For a description of the investors and borrowers on our personal loan marketplace, please see the “How our Personal Loan Marketplace Works—Investors” and “How our Personal Loan Marketplace Works—Borrowers” sections above.

Credit Card: Our Credit Card cardholders are generally near-prime borrowers with credit scores that typically range from 600 to 660 and initial credit lines that range from $500 to $3,000.

Industry Background and Trends

According to the Board of Governors of the Federal Reserve System, as of December 2025, the balance of outstanding consumer credit (excluding loans secured by real estate) in the United States totaled $5.1 trillion. This amount included $1.3 trillion of revolving consumer credit, primarily credit card, and $3.8 trillion of non-revolving loans. A portion of the revolving balances are also refinanced by consumers at lower interest rates and fixed terms through personal loans.

The market for consumer lending is competitive and rapidly evolving, and there is an opportunity for our business model to transform the traditional lending process. We believe our marketplace offers a superior solution for both borrowers and investors.

For borrowers, we believe our Personal Loan marketplace and Credit Card product offers the following principal competitive factors: better terms versus other alternatives; a simple, easy and intuitive customer experience; a fast and efficient process; and trust and transparency.

For investors, we believe our marketplace offers the following principal competitive factors: attractive risk-adjusted returns; low duration risk; diversification from other asset classes; a simple, easy and intuitive customer experience; and trust and transparency.

Competition

We compete for borrowers and investors against other financial products and companies. For borrowers, our competition includes banking institutions, credit unions, credit card issuers, and other online consumer lending companies, including publicly traded companies such as LendingClub Corporation, Social Finance Inc., and Upstart Holdings, Inc. For investors in our Personal Loan product, our competition includes other consumer lending platforms, alternative asset funds, and asset classes such as equities, bonds and commodities. We may also face potential competition from new market entrants, or business expansion from established companies. These companies may have significantly greater financial, technical, marketing and other resources and may be able to devote greater resources to the development, promotion, sale and support of their offerings.

Our Competitive Strengths

We believe the following strengths differentiate us from our competitors and provide us with sustainable competitive advantages:

•Leading Online Personal Loan Marketplace. Since inception, our personal loan marketplace has facilitated $30.5 billion in loan originations, of which $2.7 billion was for the year-ended December 31, 2025. As our business grows, our brand, reputation and scale strengthens. This allows us to attract top talent, speed up product innovation, launch additional consumer finance products, attract marketplace participants and drive down our cost structure, all of which further benefit borrowers and investors. For the year ended December 31, 2025, 45.1% of our Borrower Loan originations were from borrowers who previously borrowed on our personal loan marketplace, evidence of our strong brand.

•Robust Network Effect. The attractiveness of our personal loan marketplace increases as the number of participants on our marketplace increases, yielding a classic network effect. Our personal loan marketplace offers consumer borrowers access to affordable credit, and allows individual and institutional investors to invest in an asset class with attractive

risk-adjusted returns. The diversity of investors brings scale and breadth of funding to our marketplace and makes credit more affordable. As both sides of the equation grow, the advantages (reduced risk, lower cost) scale accordingly, attracting even more borrowers and investors. The increased participant pool reduces costs and generates more borrower performance data which we use to improve the effectiveness of our credit decisioning and scoring models. This enhances our aggregate loan performance and builds increased trust in our marketplace, which in turn attracts more borrowers and investors. We believe the strength of our brand in the personal loan marketplace will also attract customers to seek out or recommend the Credit Card product.

•Technology Platform. Our technology platform automates key aspects of our operations, including the borrower application process, data gathering, underwriting, credit scoring, loan funding, investing and servicing, regulatory compliance and fraud detection. This provides a significant time and cost advantage over traditional consumer lending business models and, we believe, enables us to provide a superior user experience to our customers. Using our accumulated performance data, we continually invest in incremental improvements in our algorithms thus extending our technological advantage.

•Proprietary Risk Management Capabilities. We have developed artificial intelligence driven proprietary risk models based on personal loan and credit card performance data, which we believe allows us to accurately assess the credit risk profile of borrowers and which we believe also allows investors to earn attractive risk-adjusted returns. We leverage the results from our growing data stream to continually refine these artificial intelligence driven risk models and more accurately predict credit performance.

•Unique Corporate Structure. Our corporate structure was designed to offer our investors extra protection. The organization and operation of PFL and PMI as separate and distinct entities should serve to protect our Note investors in the event of a bankruptcy filing by or against PMI. This organizational structure, along with the federal and state registration process, is expensive and time consuming to undertake, and is not easily duplicated by competitors.

•Efficient and Attractive Financial Model. We have multiple revenue streams and an efficient cost model. For personal loans, we generate revenue from transaction fees from our marketplace’s role in matching borrowers with investors to enable loan originations, servicing fees related to Borrower Loans for which we retain the servicing rights, net interest income from Borrower Loans, credit referral fees and other ancillary revenue sources. We also earn revenue from net interest income and a variety of fees provided under the Credit Card program, including interchange fees, annual fees and late fees, net of a program fee and a portion of the interchange fees that must be remitted to Coastal. Additionally, our technology platform significantly reduces the need for physical infrastructure and therefore allows our business to grow with a lower cost operating model, providing us with significant operating leverage.

Sources of Revenues

We earn revenue in a variety of ways from our Personal Loan and Credit Card products. We have three primary sources of Personal Loan revenues: transaction fees, servicing fees and net interest income. We earn transaction fees from WebBank by facilitating the origination of Borrower Loans through the Personal Loan marketplace, servicing fees from investors for processing principal and interest payments made by borrowers and passing such payments on to investors and net interest income from Borrower Loans. Our revenues are reduced by any incentives provided to investors. We also earn net interest income and various fees generated by our Credit Card program, including net interchange fees, annual fees and late fees, net of program fees and a portion of the interchange fees that must be remitted to Coastal. Changes in the fair values of our consolidated financial instruments are also included in our revenue.

Sales and Marketing

Our sales and marketing efforts are designed to attract individuals and institutions to our products, encourage their enrollment and participation as users, and facilitate and enhance their understanding and utilization of each product. We employ a wide range of marketing channels to reach potential customers and build our brand and value proposition. These channels include referrals, online marketing, direct mail, partner and affiliate introductions, and email. We are constantly seeking new methods to reach more potential members, while testing and optimizing the end-to-end customer experience.

Origination and Servicing

We have efficient and scalable systems for credit risk assessment, loan underwriting, and servicing of the Borrower Loans and Credit Card product. Our risk models take borrowers’ supplied information and combine that information with public and proprietary data to make real time decisions. Our verification agents use several tools to efficiently verify borrower information. Our personal loan servicing platform calculates a loan’s amortization and processes payments received from borrowers and passes such payments on to investors. In addition, we have a back-up servicing agreements for personal loans and the Credit Card portfolio with Vervent, Inc. (“Vervent”), a loan servicing company that is willing and able to assume

servicing responsibilities in the event that we are no longer able to service the Borrower Loans and Notes and Credit Cards. Vervent is a financial services company that has entered into numerous successor loan servicing agreements.

Technology

We have made, and continue to make, substantial investment in our customer acquisition capability, customer experience, and credit underwriting, loan servicing and payment systems. Our personal loan marketplace utilizes proprietary software to process electronic cash movements, record book entries and calculate cash balances in users’ funding accounts. Electronic deposits and payments are mostly done via Automated Clearing House (“ACH”) transactions. The technology platform allows us to economically acquire and service Borrower Loans and Notes and allows WebBank to efficiently originate and fund Borrower Loans.

The platform for our personal loan marketplace is hosted in Google Cloud. We continuously monitor the performance and availability of our marketplace. The infrastructure leverages Google Cloud’s native products, such as Cloud Run instances and segregated Virtual Private Clouds.

Key aspects of our technology include:

•Scalability. Our personal loan marketplace is designed and built as a real-time, highly scalable, multi-tier, redundant system. It incorporates technologies designed to prevent any single point of failure within our loan platform from taking the entire system offline. This is achieved by utilizing load-balancing technologies at the front end and business layer tiers and clustering technologies in the back-end tiers to allow scaling both horizontally and vertically depending on marketplace utilization. Google Cloud autoscaling is also utilized to dynamically scale platform availability in real-time.

•Data Integrity and Security. We are committed to protecting our users' information and we take the integrity and security of the data provided by them very seriously. To that end, we have established data protection policies which are implemented and enforced using the latest technologies. All sensitive information is transmitted on secure channels using SSL technology, with SSL certificates issued by Symantec or DigiCert. We employ principles of least privilege and layered security to protect stored sensitive information. Sensitive information at rest is encrypted using industry standard encryption technologies with appropriate controls to access the data. We protect the network perimeter using the latest technologies including but not limited to firewall and anti-virus threat management techniques. We use strong multi-factor authentication to protect and monitor remote access. We utilize multiple Google Cloud regions and zones to provide backups and fault-tolerance, adding resilience to recovery operations in the event of a disaster. Logging and monitoring of the systems and security controls are designed to ensure that the controls are functional and that alerts are triggered on security violations.

•Fraud Detection. We employ a combination of proprietary technologies and commercially available licensed technologies and solutions to prevent and detect fraud. These include knowledge-based authentication, behavioral analytics and digital fingerprinting to prevent identity fraud. We use services from third-party vendors for user identification, credit checks and for checking customer names against the list of Specially Designated Nationals and other lists maintained by the Office of Foreign Assets Control (“OFAC”). In addition, we use specialized third-party software to augment the identity fraud detection systems. We also have a dedicated team which conducts additional investigations of cases flagged for high fraud risk. Finally, we enable users to report suspicious activity, which we may then evaluate further.

•Targeted Risk Assessment. Our risk models, which utilize artificial intelligence via machine learning, include flags and characteristics which are unique to our platform. We believe these models result in a risk assessment that is more targeted and accurate than traditional models, leading to higher approval rates and greater automation across identity and income verification. We are continuing to enhance the technology embedded within our models to facilitate and improve access to credit and the application experience for borrowers. We have been building and enhancing these machine learning models since 2015.

Intellectual Property

We rely on a combination of copyright, patent, trade secret, trademark, and other rights, as well as confidentiality procedures and contractual provisions, to protect our proprietary technology, processes and other intellectual property. We enter into confidentiality and other written agreements with our employees, consultants and service providers, and through these and other written agreements, attempt to control access to and distribution of the software, documentation and other proprietary technology and information. We also utilize a robust multi-layered monitoring program, including third party domain monitoring services, web search engine alerts and our outside counsel, which we leverage to actively enforce our intellectual property rights. Despite these efforts to protect our proprietary rights, third parties may, in an authorized or unauthorized manner, attempt to use, copy or otherwise obtain and market or distribute our intellectual property rights or technology or

otherwise develop a product with the same functionality. Policing all unauthorized use of intellectual property rights is nearly impossible. Therefore, we cannot be certain that the steps we have taken or will take in the future will prevent misappropriations of our technology or intellectual property rights.

We have registered several trademarks in the United States, including “Prosper,” “Powered by Prosper” and numerous stylized marks, including the Prosper and Prosper Healthcare Lending logos.

We have invested in a research and development program and, as of December 31, 2025, we had eight issued patents by the United States Patent and Trademark Office. We have filed, and may file additional patent applications or pursue additional patent protection in the future to the extent we believe it will be beneficial.

Human Capital Resources

Employee Profile

At Prosper, our mission is to advance financial well-being and our employees are critical to achieving this mission. We are committed to hiring and developing employees who embody our core values: accountability, collaboration, excellence, curiosity, diversity, simplicity, and integrity. As of December 31, 2025, we had 385 full-time employees, all of whom were based in the United States. Our employees are classified as either “local” to either our San Francisco, California and Phoenix, Arizona offices or “remote national” if they work remotely. As of December 31, 2025, we had 139 local employees based in our San Francisco, California office, 110 local employees based in our Phoenix, Arizona office, and 136 remote national employees. None of our employees are represented by labor unions. We have not experienced any work stoppages, and we believe that our relations with our employees are good.

Employee Health & Wellness

Our employees currently have access to several programs and benefits related to employee wellness including: a 401(k) match program, traditional life and health (medical, dental, vision) insurance, flexible paid time off, a health and wellness stipend, free membership to physical, mental and emotional health resources, and parental leave programs, among others. We believe our human resources policies, learning and development, talent acquisition, and community engagement and support activities enable us to attract and retain key personnel.

Employee Recognition and Talent Development

We understand that to attract and retain great people, we must listen to and engage them regularly. We conduct an anonymous, company-wide employee engagement survey to gauge our progress and identify the areas where we excel and areas for improvement in the employee experience. Following the survey, we identify areas where we would like to focus on supporting engagement within the company and create action plans to support those initiatives. We have implemented two award programs to recognize and honor our employees who exemplify our values and demonstrate outstanding leadership.

Because we operate in a highly regulated industry, we require ongoing regulatory and compliance training for our employees. Additionally, we provide a series of leadership training for all people managers. We also offer employees free access to on-demand training on an array of subjects from technical to business management to build their skills and advance their careers as well as opportunities for employees to pursue their passion projects and leadership development in alignment with our values.

Government Regulation

Overview

The lending and securities industries are highly regulated. Each of the financial products offered by us are subject to extensive and complex rules and regulations. We also are subject to licensing and examination by various federal, state and local government authorities. These authorities impose obligations and restrictions on our activities, including WebBank’s activities and the Borrower Loans acquired and Notes issued through our marketplace, and Coastal’s activities and the Credit Card product. In particular, these rules may limit the fees that may be assessed, require extensive disclosure to, and consents from, borrowers, prohibit discrimination, and impose multiple qualification and licensing obligations on our activities. Failure to comply with these requirements may result in, among other things, revocation of required licenses or registrations, loss of approved status, voiding of loan contracts, indemnification liabilities to contract counterparties, class action lawsuits, administrative enforcement actions, and civil and criminal liabilities. While compliance with such requirements is at times complicated by our novel business model, we believe we are in substantial compliance with these rules and regulations. These rules and regulations are subject to continuous change, however, and a material change could have an adverse effect on our compliance efforts and ability to operate.

From time to time, various types of federal and state legislation are proposed and new regulations are introduced that could result in additional regulation of, and restrictions on, the business of consumer lending. We cannot predict whether any such legislation or regulations will be adopted or how this would affect our business or our important relationships with third parties. In addition, the interpretation of existing legislation may change or may prove different than anticipated when applied to our novel business model. Compliance with such requirements could involve additional costs, which could have a material adverse effect on our business. As a consequence of the extensive regulation of consumer lending in the United States, our business is particularly susceptible to being affected by federal and state legislation and regulations that may increase the cost of doing business.

Personal Loan State and Federal Laws and Regulations

State Licensing Requirements. In most states we believe that WebBank, as originator of all Borrower Loans originated through our marketplace, satisfies any relevant licensing requirements with respect to the origination of such Borrower Loans. In addition, as needed, we seek licenses and/or authorizations of various types so that we may conduct activities such as servicing and marketing in all states and the District of Columbia, with the exceptions of Iowa, North Dakota, and West Virginia. We are subject to supervision and examination by the state regulatory authorities that administer these state lending laws. The licensing statutes vary from state to state and prescribe or impose different requirements, including: restrictions on loan origination and servicing practices, limits on finance charges and the type, amount and manner of charging fees; disclosure requirements; requirements that licensees submit to periodic examination; surety bond and minimum specified net worth requirements; periodic financial reporting requirements; notification requirements for changes in principal officers, stock ownership or corporate control; restrictions on advertising; and requirements that loan forms be submitted for review.

State Usury Laws. Section 521 of the Depository Institution Deregulation and Monetary Control Act of 1980 (12 U.S.C. § 1831d) (“DIDA”) and Section 85 of the National Bank Act (“NBA”) (12 U.S.C. § 85), federal case law interpreting the NBA such as Tiffany v. National Bank of Missouri and Marquette National Bank of Minneapolis v. First Omaha Service Corporation, and FDIC advisory opinion 92-47 permit FDIC-insured depository institutions, such as WebBank, to “export” the interest rate permitted under the laws of the state where the loan is made. WebBank is located in Utah, and Title 70C of the Utah Code does not limit the amount of fees or interest that may be charged by WebBank on loans of the type offered through our marketplace. Iowa and Puerto Rico have opted out of the exportation regime under Section 525 of DIDA and we do not operate in either jurisdiction. In June 2023, Colorado enacted a DIDA opt-out law which went into effect on July 1, 2024. On June 18, 2024, a federal court granted a preliminary injunction to halt enforcement of the Colorado DIDA law with respect to loans made by state-charted banks located out of Colorado to the extent those banks are members of one of the trade associations which brought the suit. Colorado appealed the decision to the U.S. Court of Appeals for the Tenth Circuit. On November 10, 2025, the U.S. Court of Appeals for the Tenth Circuit reversed the district court’s decision, holding that a loan is “made” for purposes of the opt-out provision in Section 525 of DIDA in both the state where the bank is located and the borrower’s state. On December 9, 2025, the plaintiff trade associations filed a Petition for Rehearing En Banc (the “En Banc Petition”). The En Banc Petition was supported by four briefs filed by amicus curiae, including one on behalf of the American Bankers Association, the Bank Policy Institute, and 52 State Bankers’ Associations; one on behalf of the FDIC, one of behalf of the OCC, and one of behalf of Utah and 19 other states. While there can be no assurances as to the outcome of this litigation with Colorado, we believe that judicial interpretations support the view that DIDA opt outs only apply to loans “made” in the opted-out states.

In May 2015, the U.S. Court of Appeals for the Second Circuit issued a decision in Madden v. Midland Funding, LLC that interpreted the scope of federal preemption under the NBA and held that a nonbank assignee of a loan originated by a

national bank was not entitled to the benefits of federal preemption of claims of usury. On November 10, 2015, the defendant in the Madden case filed a petition for a writ of certiorari with the United States Supreme Court for further review of the Second Circuit’s decision. On June 27, 2016, the United States Supreme Court denied the petition and refused to review the case, leaving the decision of the Second Circuit intact and binding on federal courts in Connecticut, New York and Vermont. The Madden decision has created some uncertainty as to whether non-bank entities purchasing loans originated by a bank may rely on federal preemption of state usury laws, and may create an increased risk of litigation by plaintiffs challenging our ability to collect interest in accordance with the terms of Borrower Loans. While the decision specifically addressed preemption under the NBA, it could support future challenges to federal preemption for other institutions, including an FDIC-insured, state chartered industrial bank like WebBank. However, although there can be no assurances as to the outcome of any potential litigation, or the possible impact of the litigation on our marketplace, we believe the Madden case addressed facts that are not presented by our marketplace lending platform and thus would not apply to Borrower Loans.

In June 2020, the FDIC issued a final regulation entitled “Federal Interest Rate Authority” that, among other things, addressed the uncertainty resulting from the Madden decision, including uncertainty affecting marketplace lenders that partner with banks. Under the FDIC’s rule, which applies to FDIC-insured state-chartered industrial banks such as WebBank, interest on a loan originated by WebBank that was permissible under DIDA at origination is not affected by WebBank’s subsequent sale of the loan to PFL. Seven states and the District of Columbia sued the FDIC, however, seeking to have the regulation set aside on Administrative Procedure Act grounds. Three states brought a similar challenge in the same court to a similar regulation issued by the OCC under the NBA. Both suits were decided on February 8, 2022, with the United States District Court for the Northern District of California ruling that the FDIC and OCC had not exceeded their statutory authority when promulgating their respective rules. The court deferred to each federal agency's interpretation, and thus concluded that each agency’s rule was not unreasonable or arbitrary or capricious. The states had until April 11, 2022 to appeal the rulings to the U.S. Court of Appeals for the Ninth Circuit and did not do so.

On August 18, 2020, WebBank, the originator and lender of the loans offered through the personal loan marketplace, was among the parties that reached a settlement with the Administrator of the Colorado Uniform Consumer Credit Code which provides a safe harbor for the platforms operated by Marlette Funding, LLC and Avant, Inc., such that if the programs meet certain criteria related to oversight, disclosure, funding, licensing, consumer terms, and structure, the programs will be deemed to be in compliance with Colorado’s usury limits. On November 9, 2020, we amended our agreements with WebBank to meet the requirements of the safe harbor for extending credit to borrowers in Colorado.

We had separately been in discussions with the Colorado Administrator during the Marlette and Avant litigation regarding certain terms of Borrower Loans offered through the personal loan marketplace to Colorado residents. Effective as of July 30, 2019, we and the Administrator entered into a stipulation (the “Stipulation”) to allow loans to continue to be offered through the personal loan marketplace to Colorado residents, subject to certain financing charge and late fee restrictions during the period that the Stipulation is in effect with respect to acquired loans, but excluding loans retained by WebBank or sold to a state-chartered, FDIC-insured bank or a federally-chartered bank. Effective as of February 6, 2024, we entered into a Stipulation and Final Agency Order (“FAO”) pursuant to which Prosper agreed to continue during the term of the FAO to be subject to such financing charge and late fee restrictions set forth in the Stipulation. The FAO expired on July 1, 2024 pursuant to its terms.

If a Borrower Loan made through our marketplace was deemed to be subject to the usury laws of a state that has opted-out of the exportation regime or becomes bound by the Second Circuit’s or a similar judicial decision (including a judicial decision setting aside the FDIC’s regulation governing permissible interest on loans sold by banks to non-banks), we could become subject to fines, penalties, and possible forfeiture of amounts charged to borrowers, and we may decide not to originate Borrower Loans through our marketplace in that applicable jurisdiction, which may adversely impact our growth. For more information, see Item 1A, “Risk Factors—If our marketplace were found to violate a state’s usury laws, we may have to alter our business model and our business could be harmed.”

State Securities Laws. We are subject to the securities laws of each state in which the registration or qualification to offer and sell the Notes and PMI Management Rights has been approved. Certain of these state laws require us to renew the registration or qualification of Notes and PMI Management Rights on an annual basis.

The Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) created many new restrictions and an expanded framework of regulatory oversight for the financial services industry. Among other things, the Dodd-Frank Act centralized responsibility for consumer financial protections by creating the Consumer Financial Protection Bureau (the “CFPB”), which has broad authority to write regulations under federal consumer financial protection laws, such as the Truth-in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act, and to enforce those laws against and examine financial institutions, such as our issuing banks, for compliance. The CFPB is authorized to prevent “unfair, deceptive or abusive acts or practices” through its regulatory, supervisory and enforcement authority. We are subject to the CFPB’s

jurisdiction, including its enforcement authority and may become subject to their supervisory authority, as a servicer and acquirer of consumer credit. The CFPB may request reports concerning our organization, business conduct, markets and activities, and also conduct on-site examinations of our business on a periodic basis. In February 2025, the CFPB issued orders to suspend operations and cease activity including, among other things, supervision and examination activity and litigation proceedings. These orders have been challenged in a federal lawsuit currently pending before the United States Court of Appeals for the District of Columbia. While there can be no assurances as to the possible impact of the CFPB orders or the various lawsuits challenging those orders, we believe that we are in substantial compliance with the rules and regulations issued by the CFPB prior to the issuance of the orders.

Truth-in-Lending Act. The federal Truth-in-Lending Act (“TILA”), and Regulation Z, which implements TILA, require creditors to provide consumers with uniform, understandable information concerning certain terms and conditions of their loan and credit transactions. These rules apply to WebBank as the creditor for Borrower Loans facilitated through our marketplace, but because the transactions are carried out on our hosted website, we facilitate compliance at WebBank’s direction. For closed-end credit transactions of the type provided through our marketplace, these disclosures include providing the annual percentage rate, the finance charge, the amount financed, the number of payments and the amount of the monthly payment. The creditor must provide the disclosures before the Borrower Loan is closed. TILA also regulates the advertising of credit and gives borrowers, among other things, certain rights regarding updated disclosures and the treatment of credit balances. Our marketplace provides borrowers with a TILA disclosure prior to the time a Borrower Loan is originated. We also seek to comply with TILA’s disclosure requirements related to credit advertising.

Equal Credit Opportunity Act. The federal Equal Credit Opportunity Act (“ECOA”) prohibits creditors from discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act or any applicable state law. Regulation B, which implements ECOA, restricts creditors from requesting certain types of information from applicants and from making statements that would discourage on a prohibited basis a reasonable person from making or pursuing an application. These requirements apply both to lenders such as WebBank and other parties like us that regularly implement and communicate credit decisions. Investors may also be subject to the ECOA in their capacity as purchasers of Notes, if they are deemed to regularly participate in credit decisions. In the underwriting of Borrower Loans on our marketplace, both WebBank and we seek to comply with ECOA’s provisions prohibiting discouragement and discrimination. ECOA also requires creditors to provide consumers with timely notices of adverse action taken on credit applications. WebBank and we provide prospective borrowers who apply for a Borrower Loan through our marketplace but are denied credit with an adverse action notice which is in compliance with applicable requirements (see also below regarding “Fair Credit Reporting Act”).

Fair Credit Reporting Act. The federal Fair Credit Reporting Act (“FCRA”) and its implementing regulations, including Regulation V, promote the accuracy, fairness and privacy of information in the files of consumer reporting agencies. FCRA requires a permissible purpose to obtain a consumer credit report, and requires persons to report loan payment information to credit bureaus accurately. FCRA also imposes disclosure requirements on creditors who take adverse action on credit applications based on information contained in a credit report. WebBank and we have a permissible purpose for obtaining credit reports on potential borrowers and WebBank and we also obtain explicit consent from borrowers to obtain such reports. As the servicer for the Borrower Loans, we have systems in place to report Borrower Loan payment and delinquency information to appropriate reporting agencies. We provide an adverse action notice to a rejected borrower on WebBank’s behalf at the time the borrower is rejected that includes all the required disclosures. We have also implemented an identity theft prevention program as required by law.

Fair Debt Collection Practices Act. The federal Fair Debt Collection Practices Act (“FDCPA”) and its implementing regulation, Regulation F, provide guidelines and limitations on the conduct of third-party debt collectors in connection with the collection of consumer debts. The FDCPA limits certain communications with third parties, imposes notice and debt validation requirements, and prohibits threatening, harassing or abusive conduct in the course of debt collection. We are not a “debt collector” under the FDCPA, through an exception to the definition of a debt collector as a person who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another. The CFPB retained the statute’s “debt collector” definition, and associated exceptions, in its November 2020 final rules implementing the FDCPA. As the servicer for Borrower Loans originated by WebBank and owned by investors, we are not a debt collector based on our facilitation of loans in the origination process and/or its servicing of the Borrower Loans after the time of origination and prior to any default. While the FDCPA applies to third-party debt collectors, debt collection laws of certain states impose similar requirements on creditors who collect their own debts. Our agreement with our investors prohibits investors from attempting to collect directly on the Borrower Loan. We use our internal collection team and professional external debt collection agents to collect delinquent accounts in compliance with applicable law.

Servicemembers Civil Relief Act. The federal Servicemembers Civil Relief Act (“SCRA”) allows military members to suspend or postpone certain civil obligations so that the military member can devote their full attention to military duties. The

SCRA, as well as certain state laws with similar protections for military members, require us to adjust the interest rate of borrowers who qualify for and request relief. If a borrower with an outstanding Borrower Loan qualifies for protection under the SCRA or similar state laws, we will reduce the interest rate on the Borrower Loan to 6% for the duration of the borrower’s active duty. During this period, the investors who have invested in such Borrower Loan will not receive the difference between 6% and the Borrower Loan’s original interest rate. For a borrower to obtain an interest rate reduction on a Borrower Loan due to military service, we require the borrower to provide written documentation of active duty. We do not take military service into account in assigning Prosper Ratings to borrower loan requests and we do not disclose the military status of borrowers to investors.

Military Lending Act. The federal Military Lending Act (“MLA”) provides specific protections for active duty service members and their dependents (or covered borrowers) in consumer credit transactions. Although originally enacted in 2006, the MLA applies to persons engaged in the business of extending consumer credit subject to the disclosure requirements of the TILA and Regulation Z with respect to loans made on or after October 3, 2016. The MLA prohibits creditors from imposing a Military Annual Percentage Rate (“MAPR”) greater than 36% in any consumer credit transaction involving a covered borrower. It also requires certain oral and written disclosures to be provided to covered borrowers. Additionally, the MLA prohibits creditors from requiring covered borrowers to waive rights to legal recourse, submit to arbitration, or pay a prepayment penalty or fee. Both we and WebBank have ensured that the loan program complies with the MLA requirements for covered borrowers, including but not limited to the restriction on MAPR, the delivery of required disclosures and the prohibition of mandatory arbitration and waiver of legal recourse.

Other Lending Regulations. We are subject to and seek to comply with other state and federal laws and regulations applicable to consumer lending, including additional requirements relating to loan disclosure, credit discrimination, credit reporting, debt collection and unfair, deceptive or abusive business practices. These laws and regulations may be enforced by state consumer credit regulatory agencies, state attorneys general, the CFPB, and private litigants, among others. Given our novel business model and the subjective nature of some of these laws and regulations, particularly laws regulating unfair, deceptive or abusive business practices, we may become subject to regulatory scrutiny or legal challenge with respect to our compliance with these requirements.

Electronic Funds Transfer Act. The federal Electronic Fund Transfer Act (“EFTA”) and Regulation E, which implements the EFTA, provide guidelines and restrictions on the electronic transfer of funds from consumers’ bank accounts. In addition, transfers performed by ACH electronic transfers are subject to detailed timing and notification rules and guidelines administered by the National Automated Clearinghouse Association (“NACHA”). Most transfers of funds in connection with the origination and repayment of the Borrower Loans are performed by ACH. We obtain necessary electronic authorization from borrowers and investors for such transfers in compliance with such rules. Transfers of funds through our marketplace are currently executed by Wells Fargo and conform to the EFTA, its regulations and NACHA guidelines.

Electronic Signatures in Global and National Commerce Act/Uniform Electronic Transactions Act. The federal Electronic Signatures in Global and National Commerce Act (“ESIGN”) and similar state laws, particularly the Uniform Electronic Transactions Act (“UETA”), authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures. ESIGN and UETA require businesses that want to use electronic records or signatures in consumer transactions to obtain the consumer’s consent to receive information electronically. When a borrower or individual investor registers with our marketplace, we obtain their consent to transact business electronically and maintain electronic records in compliance with ESIGN and UETA requirements.

Privacy and Data Security Laws. The federal Gramm-Leach-Bliley Act (“GLBA”) places requirements on the collection and limits the disclosure of nonpublic personal information about a consumer to nonaffiliated third parties and requires financial institutions to disclose certain privacy policies and practices with respect to information sharing with affiliated and nonaffiliated entities as well as to safeguard personal customer information. Many states have passed or are in the process of passing consumer privacy and data protection laws. Most of these state privacy laws exempt entities subject to GLBA. However, there are a few state privacy laws that exempt data subject to GLBA (“Non-exempt Personal Information”), and thus any consumer data not subject to GLBA are subject to these state privacy laws. As of December 31, 2025, the California Consumer Privacy Act (“CCPA”), Oregon Consumer Privacy Act (“OCPA”), Minnesota Consumer Data Privacy Act (“MNCDPA”) and Montana Consumer Data Privacy Act (“MTCDPA”) apply to consumer data not subject to the GLBA. The CCPA, OCPA, MNCDPA and MTCDPA provide consumers in these states with rights to know about the use, to request deletion and correction, and to opt out of the sale of their Non-exempt Personal Information by businesses that are a certain size, have processed a certain number of residents’ personal information or that generate a portion of their revenue by selling personal information. In turn, these state privacy laws require subject businesses to notify consumers of their data collection practices and to implement procedures for timely responding to consumer requests submitted in exercise of their rights available under the statute. We maintain a detailed privacy notice that is accessible from our website and is designed to comply with applicable privacy laws.

In addition, state and federal privacy and data security laws require safeguards to protect the privacy and security of consumers’ personally identifiable information, require notification to affected customers in the event of a breach, and restrict certain sharing of nonpublic personal information about a consumer with affiliated entities. We maintain security measures designed to protect participants’ personal information, and we do not sell, rent or share such information with nonaffiliated third parties for marketing purposes unless previously agreed to by the participant or otherwise permitted by applicable law. In addition, we take a number of measures to safeguard the personal information of our borrowers and investors and to protect it against unauthorized access.

Bank Secrecy Act. In cooperation with WebBank, we have implemented an anti-money laundering policy and various anti-money laundering procedures to comply with applicable federal law. With respect to new borrowers and investors, we apply the customer identification and verification program rules and screen names against the list of Specially Designated Nationals maintained by the U.S. Department of the Treasury Office of Foreign Asset Control’s (“OFAC”) pursuant to the USA PATRIOT Act amendments to the Bank Secrecy Act (“BSA”) and its implementing regulation.

Credit Card State and Federal Laws and Regulations

The Credit Card product operates under a similar bank partnership model as our personal loan marketplace, whereby through the application of Section 521 of DIDA, Section 85 of the NBA, and federal case law, Coastal may “export” the interest rate permitted under the laws of the State of Washington, where Coastal is located, regardless of the usury limitations imposed by the state law of the cardholder’s state of residence unless the state has chosen to opt out of the exportation regime. Federal and state privacy and data security laws, such as the GLBA, CCPA, OCPA, MNCDPA, and the MTCDPA also apply to the Credit Card product.

The Credit Card product is subject to the same federal laws and regulations applicable to our personal loan marketplace and as summarized above, including the Dodd-Frank Act, TILA, ECOA, FCRA, FDCPA, SCRA, MLA, EFTA, ESIGN, UETA, GLBA, BSA and OFAC. TILA and Regulation Z contain specific disclosure requirements for credit cards and advertising rules for credit cards. Please refer to the “Government Regulations—Personal Loan State and Federal Laws and Regulations” section above for a summary of these federal laws and regulations. Certain amendments to TILA also govern the Credit Card product, including the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”), which amended TILA to prescribe, among other things, additional procedures, disclosures, fee limits, and other protections for consumers applying for or holding credit cards, and the Fair Credit Billing Act (“FCBA”), which governs creditor obligations with respect to billing complaints and errors. For the Credit Card product, we take a similar approach to compliance for our personal loan marketplace, with adjustments for application of the rules to open-end, unsecured credit cards as opposed to closed-end unsecured personal loans. We work with Coastal to facilitate compliance.

Foreign Laws and Regulations

We do not permit non-U.S. based individuals to register as borrowers on our marketplace and the marketplace does not operate outside the United States. Therefore, we do not believe that our marketplace is subject to foreign laws or regulations.

Summary of Risk Factors

We are subject to various risks, the most significant of which are summarized below. For more information about these and other risks that may affect us, you should carefully read the factors described in the “Risk Factors” section below.

Risks related to PFL, PMI, our credit card product, and our operation of the personal loan marketplace

•We have incurred operating losses in prior years and may continue to incur net losses in the future.

•The Term Loan, and any additional indebtedness we incur in the future, could adversely affect our business and financial results.

•Human error in the operation of our platform has resulted in the allocation of Borrower Loans to our Note Channel which did not conform to the eligibility criteria applicable to Borrower Loans at the time of allocation. If we are unable to prevent the reoccurrence of similar errors, our business and investors could be adversely impacted.

•We have experienced errors on our platform that have resulted in incorrect reporting of performance returns to Note investors. If we are unable to prevent the reoccurrence of similar errors, investors could be adversely impacted.

•Arrangements for back-up servicing are limited. If PMI fails to maintain operations or the Administration Agreement is rejected or terminated (in bankruptcy or otherwise), investors may experience a delay and increased cost in respect of their expected principal and interest payments on Notes, and PFL may be unable to collect and process repayments from borrowers.

•PMI, in its capacity as servicer, has the authority to waive or modify the terms of a Borrower Loan without the consent of the Note holders.

•PFL relies on a third-party commercial bank to process transactions. If PFL is unable to continue utilizing these services, its business and ability to service the Notes may be adversely affected.

•Any significant disruption in service in our marketplace or in PMI’s computer systems could adversely affect PMI’s ability to perform its obligations under the Administration Agreement. We have experienced, and may experience in the future, unauthorized access to our systems. If the security of PFL’s investors’ and borrowers’ confidential information stored in our systems is compromised, users’ secure information may be stolen, account funds and security could be impacted, our reputations may be harmed; and we may be exposed to liability.

•A rising rate of inflation or an increase in interest rates could materially and adversely impact our personal loan marketplace, our Credit Card program, and our investments in Borrower Loans.

Risks related to compliance and regulation

•Our marketplace represents a novel approach to borrowing and investing that may fail to comply with federal and state securities laws, borrower protection laws and the state counterparts to such consumer protection laws. Borrowers may dispute the enforceability of their obligations under borrower or consumer protection laws after collection actions have commenced, or otherwise seek damages under these laws. Investors may attempt to rescind their Note purchases under securities laws. Regulatory agencies and their state counterparts may investigate our compliance with these regulatory obligations, and may take enforcement action with respect to alleged law violations. There continues to be uncertainty as to how the actions of the Consumer Financial Protection Bureau, state regulators, or any new agency could impact our business or that of our issuing bank. If our marketplace were found to violate a state’s usury laws, we may have to alter our business model and our business could be harmed. If one or both of PMI and PFL is required to register under the Investment Company Act or the Investment Advisers Act, our ability to conduct business could be materially adversely affected. Several lawsuits have sought to recharacterize certain loan marketers and other originators as lenders. If litigation or a regulatory enforcement action on similar theories were successful against one or both of PMI and PFL, Borrower Loans originated through our marketplace could be subject to state usury laws, consumer protection laws and licensing requirements.

•We rely on agreements with WebBank, pursuant to which WebBank originates loans to qualified borrowers on a uniform basis throughout the United States and sells and assigns those loans to PFL. If our relationship with WebBank were to end, we may need to rely on individual state lending licenses to originate Borrower Loans.

•PMI's administration of Quick Invest under its previous offering and PFL’s administration of Quick Invest, Recurring Order, and Auto Invest under its current offering, could create additional liability for PFL and such liability could be material.

Risks related to borrower loans and investing in notes on the retail channel

•Payments on the Notes depend entirely on payments PFL receives on corresponding Borrower Loans. If a borrower fails to make any payments on the corresponding Borrower Loan related to a Note, payments on such Note will be correspondingly reduced. If payments on the Borrower Loan corresponding to an investor’s Note become overdue, such investor may not receive the full principal and interest payments that were expected on the Note.

•Borrowers may not view or treat their obligations to PFL as having the same significance as loans from traditional lending sources.

•The credit information of an applicant may be inaccurate or may not accurately reflect the applicant’s creditworthiness, which may cause an investor to lose all or part of the price paid for a Note. The fact that we have the exclusive right and ability to investigate claims of identity theft in the origination of Borrower Loans creates a significant conflict of interest between us and our investors.

•The Borrower Loans are not secured by any collateral or guaranteed or insured by any third party, and investors must rely on us or a third-party collection agency to pursue collection against any borrower.

•The Prosper Rating may not accurately set forth the risks of investing in the Notes, no assurances can be provided that actual loss rates for the Notes will come within the estimated average annualized loss rates indicated by the Prosper Rating, and investors have limited rights to cause Prosper to repurchase the Notes.

•We may not set appropriate interest rates for Borrower Loans.

•Investors who use the Recurring Order (formerly known as Recurring Investment) or Auto Invest tools may face additional risk of funding Borrower Loans that have been erroneously selected by the tool.

•The Borrower Loans do not restrict borrowers from incurring additional unsecured or secured debt, nor do they impose any financial restrictions on borrowers during the term of the Borrower Loan, which may reduce the likelihood that an investor will receive the full principal and interest payments that such investor expects to receive on a Note.

•In general, the Borrower Loans do not contain any cross-default or similar provisions. If a borrower defaults on any of their other debt obligations, our ability to collect on the Borrower Loan on which an investor’s Note is dependent for payment may be substantially impaired.

•The Notes are risky and speculative investments suitable only for investors of adequate financial means.

•The Notes are special, limited obligations of PFL only and are not directly secured by any collateral or guaranteed or insured by PMI or any third party.

•PFL is not obligated to indemnify Note holders or repurchase Notes except in limited circumstances.

•Our marketplace allows a borrower to prepay a Borrower Loan at any time without penalty. Borrower Loan prepayments will extinguish or limit an investor’s ability to receive additional interest payments on a Note.

•The Notes will not be listed on any securities exchange and can be held only by registered Prosper investors. Further, no trading platform for the transfer of Notes exists. Therefore, investors should be prepared to hold the Notes they purchase until maturity.

•Our participation in the funding of Borrower Loans could be viewed as creating a conflict of interest.

Recent Developments

Home Equity

In December 2025, we made the strategic decision to discontinue offering Home Equity products and allocate our resources to our Personal Loan and Credit Card products.

New Credit Agreement

In November 2025, we executed a Credit Agreement with a third-party financial institution which provides for a $75.0 million senior unsecured credit facility (“2025 Term Loan”) which will mature in November 2030. We used the proceeds of the 2025 Term Loan to fully repay the outstanding balance of approximately $68.4 million under our prior $75.0 million senior secured credit facility (the “2022 Term Loan”). Please refer to Note 11 of the accompanying consolidated financial statements for further details on the Credit Agreement and 2022 and 2025 Term Loans.

Available Information

The following filings are available for download free of charge at www.prosper.com as soon as reasonably practicable after such filings are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”): Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports. Our SEC filings are also available to the public on the SEC’s website, at www.sec.gov. The information contained on our website and our blog is not incorporated by reference into this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS

You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, when evaluating our business. Any of the following risks, either alone or taken together, could materially and adversely affect our business, financial condition, operating results and prospects. While we believe the risks and uncertainties described below include all material risks currently known by us, it is possible that these may not be the only ones we face.

RISKS RELATED TO PFL, PMI, OUR CREDIT CARD PRODUCT, AND OUR OPERATION OF THE PERSONAL LOAN MARKETPLACE

We have incurred operating losses in prior years and may continue to incur net losses in the future.

We have incurred operating losses in prior years, including 2025, and may continue to incur net losses in the future. We have financed our operations to date primarily with proceeds from the sale of equity securities. In addition, we borrowed $75.0 million under the 2025 Term Loan, the proceeds of which were used to fully repay the balance from the 2022 Term Loan. PMI is dependent upon raising additional capital or debt financing to fund its current operating plan if it cannot generate sufficient positive cash flow from operations. PMI’s failure to achieve positive cash flow from operations or obtain additional debt and equity financing could adversely affect PMI’s ability to perform its obligations under the Administration Agreement.

The Term Loan, and any additional indebtedness we incur in the future, could adversely affect our business and financial results.

In November 2025, PMI entered into the 2025 Term Loan which provides for $75.0 million in debt financing that matures in November 2030. PMI used the proceeds from the 2025 Term Loan to fully repay the outstanding balance of approximately $68.4 million under the 2022 Term Loan.

Our ability to repay the 2025 Term Loan when due, and to fund our business, operations and planned capital expenditures will depend on our ability to pay with available cash or generate cash in the future. Repayment of the 2025 Term Loan, and any additional indebtedness we may incur in the future, could require us to divert funds identified for other purposes to service the 2025 Term Loan. If we cannot generate sufficient cash flow from our operations to service the Term Loan, we may need to amend the 2025 Term Loan, refinance the 2025 Term Loan, dispose of assets, or issue additional equity to obtain the necessary funds. If required to do so, we may be unable to take any of these actions on a timely basis, on terms satisfactory to us or at all.

In addition, the 2025 Term Loan contains financial covenants, including a minimum tangible net worth covenant, minimum net liquidity covenant, and maximum leverage ratio, together with other customary affirmative and negative covenants and events of default. Maintaining compliance with these covenants may require us to amend the 2025 Term Loan, divert funds intended for other uses and limit our flexibility to take certain actions.

See Note 11 of the accompanying consolidated financial statements for more information about the Term Loan.

Human error in the operation of our platform has resulted in the allocation of Borrower Loans to our Note Channel which did not conform to the eligibility criteria applicable to Borrower Loans at the time of allocation. If we are unable to prevent the reoccurrence of similar errors, our business and investors could be adversely impacted.

In August 2022, we became aware of an error which resulted in the allocation of certain Borrower Loans intended for our Whole Loan Channel to our Note Channel. These Borrower Loans corresponded to Borrower Loan listings with attributes which, at the time of allocation, did not conform to the eligibility criteria applicable to Borrower Loans offered for investment in our Note Channel. The error did not affect any other parts of Note investors’ accounts or the platform, including the receipt and distribution of loan payments, the Note and loan level information provided to investors, or the enforceability of the Borrower Loans. Following discovery of the error, we repurchased the impacted Notes from investors for the full outstanding principal balance, allowing such investors to retain all interest, principal and other payments received on such Notes prior to their repurchase, and have implemented new measures designed to avoid similar issues in the future.

This error illustrates the risks of human error on our processes to allocate loan listings to the Note Channel. If similar errors were to occur in the future, it could result in repurchase or indemnification obligations, negative publicity and unfavorable media coverage, harm to our reputation, litigation, regulatory inquiries or proceedings, loss of or damage to our relationships with borrowers or investors, loss of income and/or liability for damages, any of which could adversely affect our business and financial results.

We have experienced errors on our platform that have resulted in incorrect reporting of performance returns to Note investors. If we are unable to prevent the reoccurrence of similar errors, investors could be adversely impacted.

In April 2017, we became aware of an error in the annualized net return and seasoned annualized net return numbers displayed to Note investors, which resulted from errors in the code forming part of our calculation framework. On average, the error resulted in Note investors being shown annualized net return information that was approximately 260 basis points higher than the actual performance of Notes in their accounts. The error did not affect any other part of Note investors’ accounts, nor did it affect any other aspects of the platform, including the receipt and distribution of loan payments, deposits, monthly statements or tax documentation, or the Note and loan level information provided to investors. Following an SEC investigation, we entered into a settlement with the SEC to resolve the matter on April 19, 2019. Under the settlement, the SEC alleged a negligence-based violation of Section 17(a)(2) of the Securities Act and ordered PFL to cease and desist from any future violations of that provision. PFL neither admitted nor denied any wrongdoing, and paid a civil monetary penalty of $3.0 million in full on April 24, 2019.

The error reveals a risk associated with the complex programs, algorithms and inputs that support our platform. We depend on these programs, algorithms and inputs to store, retrieve, process and manage data, as well as to provide marketplace features such as our credit assessments and underwriting, the Prosper Rating, historical returns, and individual Note, Note portfolio and platform-wide performance data. Errors or other design defects within these programs, algorithms and inputs may result in a negative experience for borrowers and investors, delay introductions of new features or enhancements, or impact the information displayed on our website. They could also result in negative publicity and unfavorable media coverage, harm to our reputation, litigation, regulatory inquiries or proceedings, loss of or damage to our relationships with borrowers or investors, or loss of revenue or liability for damages, any of which could adversely affect our business and financial results.

Arrangements for back-up servicing of the Borrower Loans are limited. If PMI fails to maintain operations or the Administration Agreement is rejected or terminated (in bankruptcy or otherwise), investors may experience a delay and increased cost in respect of their expected principal and interest payments on Notes, and PFL may be unable to collect and process repayments from borrowers.

If the Administration Agreement (or the loan servicing provisions thereof) are terminated for any reason (whether as a result of PMI’s bankruptcy, non-performance or otherwise), PFL would attempt to transfer the loan servicing obligations on the Borrower Loans and Notes to a third party pursuant to its contractual agreements with investors.

PFL has entered into a back-up servicing agreement with a loan servicing company that is willing and able to transition servicing responsibilities from PMI. There can be no assurance, however, that this back-up servicer will be able to adequately perform the servicing of the outstanding Borrower Loans and Notes. If this back-up servicer assumes the servicing of the Borrower Loans and Notes, the back-up servicer may impose additional servicing fees (up to the maximums we have negotiated), reducing the amounts available for payments on the Notes. Additionally, transferring these servicing obligations to the back-up servicer may result in delays in the processing of collections on Borrower Loans and information with respect to amounts owed on Borrower Loans. If the back-up servicer is not able to service the Borrower Loans and Notes effectively, investors’ ability to receive principal and interest payments on their Notes may be substantially impaired, even if their portfolio of Notes is well diversified and the corresponding Borrower Loans are paying on schedule.

In addition, it is unlikely that the back-up servicer would be able to perform functions other than servicing the outstanding Borrower Loans and Notes, such as facilitating the creation of new Borrower Loans through our marketplace, or managing PFL’s marketing efforts. PFL believes that it could find one or more other parties who could perform these and any other functions necessary to fully operate our marketplace in the absence of PMI. However, this process, and any related onboarding of such party or parties, will take time. Any such delay or impairment that does not affect existing Note holders, because PFL or its back-up servicer proves able to continue servicing outstanding Borrower Loans and Notes, could nonetheless delay PFL’s ability to facilitate the origination of new Borrower Loans and issue new Notes through our marketplace, which could adversely affect PFL’s finances and customer relationships.

A relatively small number of investors provide the funding for a large percentage of all Borrower Loans originated through our marketplace.

A relatively small number of investors provide the funding for a large percentage of all Borrower Loans originated through our marketplace. In the year ended December 31, 2025, the largest party purchased a total of 21.0% of the Borrower Loans originated through our marketplace. If these investors cease or significantly decrease their investment in Borrower Loans through our personal loan marketplace and PFL is unable to attract sufficient investor purchase commitments from new and existing investors, then our business and results of operations may be adversely affected.

Our business could be adversely affected by a weakening market for securities backed by consumer assets.

PFL is involved in the securitization market through: (i) its business of selling loans to investors who, in turn, sell asset backed securities based on new Borrower Loans to be originated through Prosper’s marketplace or accumulated loan portfolios and (ii) securitization of loans retained by affiliates of PFL. If the market for asset backed securities based on consumer assets weakens, investors may cease or significantly decrease their funding of Borrower Loans through our marketplace and if PFL has been unable to attract sufficient investor purchase commitments from new and existing investors, then our business and results of operations may be adversely affected.

Although PFL has been organized in a manner that is intended to minimize the likelihood that it will become subject to a bankruptcy proceeding, if this were to occur, the rights of holders of the Notes could be uncertain, and payments on the Notes may be limited, suspended or stopped. The recovery, if any, of a holder on a Note may therefore be substantially delayed and substantially less than the principal and interest due and to become due on the Note.

Although PFL has been organized and is operated in a manner that is intended to minimize the likelihood that it will become subject to a bankruptcy or similar proceeding, if this were to occur, the recovery, if any, of a holder of a Note may be substantially delayed in time (for example, due to the imposition of a stay on payments by the bankruptcy court) and may be substantially less in amount than the principal and interest due and to become due on the Note even if a Note holder’s portfolio of Notes is well diversified and the Borrower Loans are paying on schedule. Further, although PFL has granted the indenture trustee, for the benefit of the Note holders, a security interest in all of the Borrower Loans, in all payments and proceeds it receives on the corresponding Borrower Loans and in the bank account in which the Borrower Loan payments are deposited, the holders of the Notes would still be subject to risks associated with PFL’s insolvency, bankruptcy or a similar proceeding.

If PFL becomes subject to a bankruptcy or similar proceeding, borrowers may delay payments or cease making payments at all.

Borrowers may delay or suspend making payments to PFL because of the uncertainties associated with PFL becoming subject to a bankruptcy or similar proceeding, even if the borrowers have no legal right to do so, and such delay would reduce, at least for a time, the funds that might otherwise be available to pay the Notes corresponding to those Borrower Loans. In addition, the commencement of the bankruptcy or similar proceeding may, as a matter of law, prevent PFL from making regular payments on the Notes, even if the funds to make such payments are available. Because the Indenture trustee would be required to enforce its security interest in the Borrower Loans in a bankruptcy or similar proceeding, the Indenture trustee's ability to make payments under the Notes would be delayed, which may effectively reduce the value of any recovery that a holder of a Note may receive (and no such recovery can be assured) by the time any recovery is available.

If PFL becomes subject to a bankruptcy or similar proceeding, interest accruing on the Notes upon and following such bankruptcy or similar proceeding may not be paid.

In a bankruptcy or similar proceeding of PFL, interest accruing on the Notes during the proceeding may not be part of the allowed claim of a holder of a Note. If the Note holder receives a recovery on the Note (and no such recovery can be assured), any such recovery may be based on, and limited to, the Note holder’s claim for principal and for interest accrued up to the date of the bankruptcy or similar proceeding, but not thereafter. Because a bankruptcy or similar proceeding may take months or years to complete, a claim based on principal and on interest only up to the start of the bankruptcy or similar proceeding may be substantially less than a claim based on principal and on interest through the end of the bankruptcy or similar proceeding.

If PFL becomes subject to a bankruptcy or similar proceeding, a Note holder may not have any priority right to payment from the corresponding Borrower Loan, may not have any right to payment from funds in the applicable servicing account, and may not have any ability to access funds in the applicable funding accounts (the “FBO Funding accounts”).

In a bankruptcy or similar proceeding, if PFL has failed to perfect the security interest in Borrower Loans, investors may be required to share the proceeds of the Borrower Loans upon which their Notes are dependent for payment with PFL’s other creditors, including holders of other Notes or Borrower Loans. To the extent that proceeds of the Borrower Loans would be shared with PFL’s other creditors, any secured or priority rights of such other creditors may cause the proceeds to be distributed to such other creditors before any distribution is made to investors on the corresponding Notes.

If a payment is made on a Borrower Loan corresponding to a Note before PFL’s bankruptcy or similar proceeding is commenced, and those funds are held in the servicing account PFL maintains with Wells Fargo to collect borrower payments and have not been used by PFL to make payments on the Note as of the date the bankruptcy or similar proceeding is commenced, there can be no assurance that PFL will or will be able to use such funds to make payments on such Note. Other creditors of PFL (including holders of other Notes or Borrower Loans) may be deemed to have rights to such funds or interests in the applicable servicing account and monies credited thereto that are equal to or greater than the rights of the holder of such Note.

Although PFL believes that amounts funded by both Whole Loan Channel and Note Channel investors into the applicable FBO Funding accounts should not be subject to claims of its creditors other than the investors for whose benefit the funds are held, the legal title to the FBO Funding accounts, and the attendant right to administer the FBO Funding accounts, would be property of PFL’s bankruptcy estate. As a result, if PFL were to file for bankruptcy protection, the legal right to administer the funds in the FBO Funding accounts would vest with the bankruptcy trustee or debtor in possession. In that case, while neither PFL nor its creditors should be able to reach those funds, the indenture trustee or the investors may have to seek a bankruptcy court order lifting the automatic stay and permitting them to withdraw their funds. Investors may suffer delays in accessing their funds in the FBO Funding accounts as a result. Moreover, United States bankruptcy courts have broad powers at

law and in equity and, if PFL has failed to properly segregate or handle investors’ funds, a bankruptcy court could determine that some or all of such funds were beneficially owned by PFL and should therefore be made available to PFL’s creditors generally.

In a bankruptcy or similar proceeding of PFL, a holder of a Note may be delayed or prevented from enforcing PFL’s repurchase obligations with respect to such Note.

In a bankruptcy or similar proceeding of PFL, any right of a Note holder to require PFL to repurchase the Note or indemnify such Note holder under the circumstances set forth in the Investor Registration Agreement or the Note might not be enforceable, and such holder’s claim for such repurchase may be treated less favorably than a general unsecured obligation of PFL.

Although PFL has been organized in a manner that is intended to prevent it from being substantively consolidated with PMI in the event of PMI’s bankruptcy, if PFL were substantively consolidated in this manner, the rights of the holders of the Notes could be uncertain, and payments on the Notes may be limited, suspended or stopped. The recovery, if any, of a holder on a Note may therefore be substantially delayed and substantially less than the principal and interest due and to become due on the Note.

Although PFL has been organized and is operated in a manner that is intended to prevent it from being substantively consolidated with PMI in the event of PMI’s bankruptcy, if PMI became subject to a bankruptcy or similar proceeding and PFL were substantively consolidated with PMI, the risks described in the immediately preceding risk factors regarding (i) payment delays, (ii) uncollectability of interest accrued during the bankruptcy proceeding, (iii) being subordinated to the interests of PFL’s other creditors, and (iv) the indenture trustee’s inability to access funds in the deposit account or the FBO Funding accounts, would all be present and, in addition, the same considerations would apply in relation to the claims of creditors of PMI, including that such creditors of PMI may be determined to have perfected security interests or unsecured claims that take precedence over or are at least equal in priority to those of creditors of PFL (including holders of Notes).

In addition, in the event of a bankruptcy or similar proceeding of PMI, (i) the implementation of back-up servicing arrangements may be delayed or prevented, and (ii) PMI’s ability to transfer its servicing obligations to a back-up servicer or its other corporate and marketplace administration services and marketing services to third parties may be limited and subject to the approval of the bankruptcy court or other presiding authority. The bankruptcy process may delay or prevent the implementation of back-up servicing, which may impair the collection on Borrower Loans to the detriment of Note holders.

PMI owns and did not transfer to PFL ownership of the computer hardware that it uses to host and maintain the website or agreements with third parties relating to the hosting and maintenance of the website. Although PMI’s retention of such hardware and agreements should not bear on a bankruptcy court’s analysis of the legal separateness of PMI and PFL (or their respective assets and liabilities), the cessation of or substantial reduction of the day-to-day operations of PMI (because of or during its bankruptcy or otherwise) would materially impair and delay the ability of PFL or a back-up service provider to retrieve data and information in the possession of PMI and to operate our marketplace or elements thereof relevant to Borrower Loan and Note servicing.

PMI, in its capacity as servicer, has the authority to waive or modify the terms of a Borrower Loan without the consent of the Note holders.

Pursuant to the Administration Agreement, PMI is obligated to use commercially reasonable efforts to service and collect on the Borrower Loans in accordance with industry standards. Subject to that obligation, the Administration Agreement grants PMI the authority to waive or modify any non-material term of a Borrower Loan, consent to the postponement of strict compliance with any such term, or in any manner grant a non-material indulgence to any borrower. In addition, if a Borrower Loan is in default, or PMI determines a default is reasonably foreseeable or that such action is consistent with its servicing obligation, the Administration Agreement grants PMI the authority to waive or modify a material term of a Borrower Loan, to accept payment of an amount less than the principal balance in final satisfaction of a Borrower Loan and to grant any indulgence to a borrower, provided that PMI has reasonably and prudently determined that such action will not be materially adverse to the interests of the relevant Note holders. If PMI approves a modification to the terms of any Borrower Loan it must promptly notify the corresponding Note holders in each Note holder's account.

There can be no assurance that PMI, in its capacity as servicer, will be able to collect the principal amount or interest rate agreed to and/or sell charged off Borrower Loans in the future as a result of business, regulatory or other considerations.

The Credit Card product is complex and requires us to allocate significant resources to support the product.

Our investment in the growth and expansion of the Credit Card product requires us to allocate significant resources and develop detailed knowledge around supporting the product, including in marketing, servicing and collections. Our Credit Card product also faces intense competition from other new market entrants or business expansion from established companies which may have more experience and resources operating a comparable product. There is no guarantee that we will generate

sufficient revenue to recoup the continued investment of resources into the operation of the Credit Card product or that we will develop the required expertise to support the product, and the operation of the Credit Card product may also divert management’s time and effort from other initiatives.

We are responsible for verified fraud losses and most straight chargeoffs across the Credit Card portfolio and for credit losses on Credit Card accounts allocated to us. As a result, any failure to accurately capture credit and market risks could have a negative impact on our business, operating results and financial condition.

The performance of the Credit Card product is significantly dependent on the ability of the application process and credit risk models we use for the Credit Card product to prevent fraud, evaluate an applicant’s credit profile, and determine the likelihood of default. There is no assurance that our Credit Card application process and credit risk models can accurately verify Credit Card applicants and predict repayment and loss profiles. Pursuant to our program agreement with Coastal, we are responsible for verified fraud losses and most straight charge-offs across the entire Credit Card portfolio and for credit losses for substantially all of the Credit Card accounts. If our application process and risk models do not accurately prevent fraud or reflect credit risk on the Credit Card product, greater than expected losses may result and our business, operating results and financial condition could be materially and adversely affected. For more information about credit losses for the Credit Card portfolio during the year ended December 31, 2025, please see Note 5, Credit Card, of the consolidated financial statements.

Our Credit Card product is also currently focused on higher risk borrowers, who may have higher exposure to economic downturns and general economic conditions beyond our control and beyond the control of these borrowers. The risk of exposure faced by these borrowers may be even higher if there is a change in market conditions, such as a rising rate of inflation or an increase in interest rates. See “A rising rate of inflation or an increase in interest rates could materially and adversely impact our personal loan marketplace, our Credit Card program, and our investments in Borrower Loans” for more information about such market conditions.

The Credit Card Product is not available on our personal loan marketplace for investment purposes.

We rely on our program agreement with Coastal to offer our Credit Card product. If our relationship with Coastal were to end, the ability to continue to offer our Credit Card product would be affected, which could affect our financial and business results.

We offer our Credit Card product to eligible consumers through a program agreement with Coastal, our bank partner for the Credit Card product. If our relationship with Coastal were to end or if Coastal were to cease operations, our ability to continue to offer and to fund our Credit Card product through Coastal’s balance sheet would be affected. In such an event, one or both of PMI and PFL would need to either partner with a different bank or rely on individual state lending licenses (to the extent necessary) to continue to offer the Credit Card product. Because neither of PMI or PFL currently possess all required licenses to offer the Credit Card product in every state, we might be forced to limit the rates of interest charged on the Credit Card product in some states and might not be able to offer the Credit Card in certain states altogether. If we partner with a new bank, issuance and servicing of the Credit Card product could be disrupted and delayed as we transition to a different bank partner. We also may face increased costs and compliance burdens if the program agreement with Coastal is terminated.

In addition, Prosper’s allocation of Credit Card receivables are maintained on the balance sheet of Coastal and Coastal holds a cash reserve account funded by Prosper which applies to Prosper’s allocation of Credit Card charge-off losses and all fraud losses. The Credit Card program agreement contains provisions that provide for the transition to a new bank partner and wind down of the agreement, but if our relationship with Coastal were to end due to unforeseen circumstances or if Coastal were to cease operations, the Credit Card receivables and the cash reserve account could be affected.

PFL’s reliance on PMI or other third-party service providers, lack of employees, and capitalization levels could make it difficult to operate at a sustainable level.

PFL was formed in 2012 as a limited purpose vehicle. Under the Administration Agreement, PFL receives a license fee from PMI for granting PMI a non-exclusive, worldwide license to access and use our marketplace. In addition, PFL earns servicing fees in relation to the servicing of the Borrower Loans and Notes that it retains from collections on the Borrower Loans. PFL believes this fee income is sufficient to cover its reasonably anticipated obligations. While PFL believes that it is adequately capitalized to meet its foreseeable obligations, and that its fee income is sufficient to meet its ongoing operating costs, its financial resources are limited and could prove to be insufficient. In addition, PFL has no employees and relies on PMI, as servicer, or other third-party service providers, to perform most of its day-to-day operations. The lack of PFL’s own employees, and capitalization that is less than that of PMI could make it difficult for PFL to operate at a level that will be sustainable. Absent the services to be provided to PFL by PMI pursuant to the Administration Agreement, PFL's risk management process, ability to predict loss rates and the general operation of our marketplace would have a smaller margin for error than does PMI.

The market in which we participate is competitive and, if we do not compete effectively, our operating results could be harmed.

The consumer lending market is competitive and rapidly changing. With the introduction of new technologies, including the use of artificial intelligence, and the influx of new entrants, we expect competition to persist and intensify in the future, which could harm our ability to increase volume in our marketplace.

Our principal competitors include banking institutions, credit unions, credit card issuers, mortgage lenders, consumer finance companies, and online lending platforms. Competition could result in reduced volumes, reduced fees or the failure of our marketplace to achieve or maintain more widespread market acceptance, any of which could harm our business. In addition, in the future we may experience new competition including companies possessing large, existing customer bases, substantial financial resources and established distribution channels. If any of these companies or any major financial institution decides to enter our online lending sector, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed.

Many of our current or potential competitors have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their marketplaces and distribution channels. Our potential competitors may also have longer operating histories, more extensive customer bases, greater brand recognition and broader customer relationships than we have. These competitors may be better able to develop new products, to respond quickly to or adopt new technologies and to undertake more extensive marketing campaigns. Our industry is driven by constant innovation. If we are unable to compete with such companies and meet the need for innovation, the use of our marketplace could stagnate or substantially decline.

If we fail to promote and maintain our brand in a cost-effective manner, we may lose market share and our revenue may decrease.

To succeed, we must increase transaction volumes in our marketplace by attracting a large number of borrowers and investors in a cost-effective manner. If we are not able to attract qualified borrowers and sufficient investor purchase commitments, we will not be able to increase our transaction volumes. We believe that developing and maintaining awareness of our brand in a cost-effective manner is critical to achieving widespread acceptance of our marketplace and attracting new borrower and investors. Furthermore, we believe that the importance of brand recognition will increase as competition in our industry increases. Successful promotion of our brand will depend largely on the effectiveness of marketing efforts, the user experience on our marketplace and our ability to maintain and defend a differentiated brand identity. These brand promotion activities may not yield increased revenues. If we fail to successfully promote, defend, and maintain our brand, including through enforcement actions against infringement of our trademark assets, we may lose our existing users to competitors or be unable to attract new users, which would cause our revenue to decrease and may impair our ability to maintain our marketplace.

The proprietary technology that makes operation of our marketplace possible is not fully protected by patents. It may be difficult and costly for PFL to protect its intellectual property rights in relation thereto, or to continue to develop or obtain new technologies, which could adversely affect its ability to operate competitively.

On February 1, 2013, PMI transferred ownership of the marketplace, including the proprietary technology and all of the rights related to the operation of the marketplace, to PFL. PFL’s ability to maintain our marketplace depends, in part, upon this proprietary technology. We have taken steps to protect our proprietary interests in such technology, including through patent filings, and intend to continue to vigorously protect these interests. Despite our best efforts, however, we may not protect the proprietary technology effectively, which would allow competitors to duplicate our products and adversely affect our ability to compete. A third party may attempt to reverse engineer or otherwise obtain and use the proprietary technology without PFL’s consent. In addition, our marketplace may infringe upon claims of third-party patents and PFL or PMI may face intellectual property challenges from such other parties. PFL or PMI may not be successful in defending against any such challenges or in obtaining licenses to avoid or resolve any intellectual property disputes. Furthermore, the technology may become obsolete, and there is no guarantee that PFL will be able to successfully develop, obtain or use new technologies to adapt our marketplace to compete with other companies. If PFL cannot protect the proprietary technology embodied in and used by our marketplace from intellectual property challenges, or if our marketplace becomes obsolete, PFL’s ability to maintain our marketplace and perform its servicing obligations could be adversely affected and, in such event, its ability to continue to make payments on the Notes could be materially impaired.

PFL relies on a third-party commercial bank to process transactions. If PFL is unable to continue utilizing these services, its business and ability to service the Notes may be adversely affected.

Because PFL is not a bank, it cannot belong to or directly access the Automated Clearing House (ACH) payment network. As a result, it currently relies on an FDIC-insured depository institution to process its transactions. If PFL cannot continue to obtain such services from this institution or elsewhere, or if it cannot transition to another processor quickly, its

ability to process payments will suffer and investors’ ability to receive principal and interest payments on the Notes will be delayed or impaired.

We have experienced, and may experience in the future, unauthorized access to our systems. If the security of PFL’s investors’ and borrowers’ confidential information stored in our systems is compromised, users’ secure information may be stolen, account funds and security could be impacted, our reputations may be harmed, and we may be exposed to liability.

We and our third-party vendors may experience, and occasionally have experienced, cyber-attacks, system breaches and other similar incidents. For example, as previously disclosed in Prosper’s Form 8-K filed with the SEC on September 17, 2025, an unauthorized third party gained access to the Company’s systems that contain proprietary, confidential, and personal information (the “September Incident”). There is evidence that the unauthorized third party was able to obtain confidential, proprietary and personal information, including Social Security numbers. There is no evidence of unauthorized access to customer accounts and funds as a result of the September Incident, and the Company’s customer-facing operations continued uninterrupted. To-date, these incidents have not had a material effect on our business or operations. However, we continue to face various risks related to the September Incident, including litigation and potential fines, regulatory scrutiny and investigations, reputational harm, changes in customer behavior, and an increase in the cost to the Company of our insurance policy covering cybersecurity incidents.

Additionally, other attacks may occur in the future. Our marketplace stores PFL’s investors’ and borrowers’ bank information and other personally-identifiable sensitive data. Any accidental or intentional security breaches or other unauthorized access could impair our operations, or cause users’ information or funds to be stolen and used for improper or criminal purposes. Security breaches or unauthorized access to information could also expose us to liability, including for the loss of the information, time-consuming and expensive responsive actions, and litigation (including statutory penalties under certain legal regimes) and cause negative publicity or harm to our reputation. If security measures are compromised because of third-party action, employee or contractor error, malfeasance, faulty password management or otherwise, or if design flaws in the relevant software are exposed and exploited, and, as a result, a third party or disaffected employee obtains unauthorized access to any investors’ or borrowers’ data, PFL’s relationships with its users and third party partners and stakeholders could be severely damaged, and PFL (or PMI) could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and PMI’s service providers may be unable to anticipate these techniques or to effectuate adequate measures to prevent, detect, or investigate cyber attacks. In addition, many states and federal agencies have enacted laws or rules requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause our users to lose confidence in the effectiveness of PFL’s and PMI's data security measures. Any security breach, whether actual or perceived, would harm our reputations, and we could lose users. Although we maintain insurance coverage, it may be insufficient to protect us against all losses and costs stemming from security breaches, cyberattacks, and other types of unlawful activity, or any resulting disruptions or data theft and loss from such events.

Prosper uses industry standard technologies to maintain secure remote work protocols and protect sensitive data within its control, and we require employees to undergo background checks prior to being hired and complete security awareness training at regular intervals. However, we are necessarily limited in our ability to control or ensure the security of networks that employees use to work remotely.

Our marketplace may be vulnerable to malware, third-party software vulnerabilities and similar disruptions.

Our marketplace may be vulnerable to malware, third-party software vulnerabilities, and similar disruptions. If a hacker were able to infiltrate and deploy malware on our network, users would be subject to the increased risk of fraud or borrower identity theft and may experience losses, delays in the recoupment of amounts owed, or fraudulently induced purchases of Notes. While we have taken steps to prevent such activity from affecting our marketplace, if we are unable to prevent such activity, the value of investors’ investment in the Notes could be adversely affected.

Any significant disruption in service in our marketplace or in PMI’s computer systems could adversely affect PMI’s ability to perform its obligations under the Administration Agreement.

PMI's ability to perform its obligations under the Administration Agreement could be materially and adversely affected by events outside of its control. The satisfactory performance, reliability and availability of PMI's technology and its underlying network infrastructure are important to our respective operations, level of customer service, reputation and ability to attract new users and retain existing users. PMI's loan platform and internal systems are hosted in Google Cloud Platform (“GCP”). GCP does not guarantee that access to our marketplace or to PMI's own systems will be uninterrupted, error-free or secure. The operation of our marketplace and PMI's operation of its own systems depends on GCP's ability to protect their

infrastructure against damage or interruption from natural disasters, power or telecommunications failures, service outages, hardware/software failures, network disruptions, cyber-attacks, and similar events. If our cloud service agreement with Google were terminated, or if there were significant service disruptions within the GCP environment, PMI could experience interruptions in providing its services under the Administration Agreement, PFL could experience interruptions in the operations of our marketplace, and both could experience delays and additional expense in arranging alternative cloud infrastructure. Any interruptions or delays in PMI’s performance of its services or in the functioning of and accessibility of our marketplace, whether as a result of GCP service issues, PMI's configuration errors, natural disasters or security breaches, whether accidental or willful, could harm PFL’s relationships with users and its reputation. Additionally, in the event of damage or interruption, PMI's insurance policies may not be sufficient for PMI to adequately compensate PFL for any losses that it may incur. PMI's disaster recovery plan has also not been tested under actual disaster conditions. These factors could prevent PMI from processing or posting payments on the Borrower Loans or the Notes, damage PFL's brand and reputation, divert the attention of PMI's employees, reduce PFL's revenue, subject PMI or PFL to liability and cause users to abandon our marketplace, any of which could adversely affect our respective businesses, financial condition and results of operations.

The development and use of artificial intelligence technology presents risks and challenges that may adversely impact our business.

We or our third-party vendors may develop or incorporate AI technology in certain business processes, services, or products. The development and use of AI presents a number of risks and challenges. AI tools, particularly generative AI tools, may produce outputs or take action that is incorrect and results in the release of private, confidential, or proprietary information, that infringes on the intellectual property rights of others, or that is otherwise harmful. The limited transparency of outputs generated by AI technology increases the challenges associated with assessing the proper operation of AI tools, understanding and monitoring the capabilities of AI technology, reducing erroneous outputs, and complying with applicable regulations. We may also rely on AI technology developed by third parties in areas such as software code, customer support, or in the generation of content, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility.

The legal and regulatory environment relating to AI is uncertain and rapidly evolving and includes regulatory schemes targeted specifically at AI and machine learning, as well as provisions in intellectual property, privacy, consumer protection, employment, and other laws applicable to the use of AI. There is a significant amount of new and proposed legislation at the state and federal levels addressing the use and development of AI, including an executive order which became effective December 11, 2025, and which may affect state legislation and authority over AI. The use of AI and machine learning in the development of our credit risk models may heighten the risk of legal and regulatory scrutiny and may require us to demonstrate compliance with applicable legislation, which may be difficult, costly, or impractical to demonstrate or explain given the complexity of our models. These laws and regulations could require changes in our use and implementation of AI and machine learning technology, including in our credit risk models, and increase our compliance costs and the risk of non-compliance. While we have policies governing the development of our credit risk models, the use of generative AI by our employees, and a process for approving vendors that use AI technology, there is no guarantee that such policies will protect us from potential liability relating to our adoption or use of AI technologies and vendors that use AI technology. Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures.

Competition for our employees is intense, and we may not be able to attract and retain the highly skilled employees we need to perform under the Administration Agreement.

Competition for highly skilled technical and financial personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we compete for experienced employees have greater resources than we do and may be able to offer more attractive terms of employment.

In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements and the quality of our services and our ability to serve borrower and investors could diminish, resulting in a material adverse effect on PMI's ability to perform its obligations under the Administration Agreement and, in such event, PFL’s ability to continue to make payments on the Notes could be materially impaired. See Item 1, “Business—Human Capital Resources” for more information about Prosper’s employees.

PMI may enter into, or become a party to, an acquisition that may be difficult to integrate, fail to achieve our strategic objectives, disrupt our business or divert management attention.

PMI may enter into, or become a party to, an acquisition of its or a third party’s businesses, technologies and products intended to complement its or a third party’s existing business, solutions, services and technologies. PMI cannot provide assurance that any such acquisition will provide it with the benefits or achieve the results anticipated in entering into the transaction. Acquisitions are typically accompanied by a number of risks, including: difficulties assimilating and retaining management and other personnel, culture and operations of the acquirer or acquired businesses; potential disruption of ongoing business and distraction of management; difficulties in maintaining acceptable standards, controls, procedures and policies, including integrating financial reporting and operating systems between businesses, particularly with respect to foreign and/or public subsidiaries; potential loss of existing or acquired strategic operating partners, users and customers following an acquisition; difficulties in integrating technologies and products into our or a third party’s solutions and services; and unexpected costs and expenses resulting from the acquisition, and potential unknown liabilities associated with a third party’s business.

PMI may enter into negotiations for acquisitions that are not ultimately consummated. Those negotiations could result in diversion of management time and significant out-of-pocket costs. If PMI fails to evaluate and enter acquisitions successfully, PMI may not be able to achieve its anticipated level of growth and its business and operating results could be adversely affected.

Events beyond our control may damage our ability to maintain adequate records, maintain our marketplace or perform the servicing obligations. If such events result in a system failure, investors’ ability to receive principal and interest payments on the Notes would be substantially harmed.

If a catastrophic event resulted in a marketplace outage and physical data loss and/or affected our electronic data storage and back-up storage systems, PFL’s ability (and PMI’s ability as servicer under the Administration Agreement) to perform its servicing obligations would be materially and adversely affected. Such events include, but are not limited to, fires, earthquakes, terrorist attacks, natural disasters, computer viruses and telecommunications failures. In the event of any marketplace outage or physical data loss described in this paragraph, PFL cannot guarantee that investors would be able to recoup their investment in the Notes.

Events beyond our control, such as an economic downturn, public health emergencies, international conflicts, natural disasters, or other catastrophic events, may damage our ability to continue operations without disruptions, including our ability to attract new borrowers and investors, retain existing investors, as well as the ability of existing borrowers to repay their loans. If such events continued for an extended period of time and PFL is unable to attract sufficient investor purchase commitments from new and existing investors, our business and results of operations may be materially adversely affected.

Our business is subject to the risk that external events, such as economic downturns, public health emergencies, natural disasters, or other catastrophic events, could disrupt our day-to-day operations and impair the activities of borrowers and investors on our marketplace. Unforeseen events, or the prospect of such events, including acts of war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as fires, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our vendors or result in political or economic instability. These events could reduce demand for our products or make it difficult or impossible to receive services from our vendors. Any such disruption could also damage our reputation, which could further lower investor or borrower demand for our products. We could also be subject to claims or litigation with respect to losses caused by such disruptions. Our property and business interruption insurance may not cover a particular event at all or be sufficient to fully cover our losses.

Additionally, a potential recession or volatility in capital markets may cause existing investors to cease or significantly decrease their investment in Borrower Loans through our marketplace. For existing borrowers, any resulting work slowdowns or stoppages may directly result in the inability to make loan payments, and may impair investors’ ability to receive principal and interest payments on the corresponding Notes. If such events continued for an extended period of time and PFL is unable to attract sufficient investor purchase commitments from new and existing investors, our business and results of operations may be materially adversely affected.

A rising rate of inflation or an increase in interest rates could materially and adversely impact our personal loan marketplace, our Credit Card program, and our investments in Borrower Loans.

Although the rate of inflation and interest rates decreased during 2025, various economic factors resulted in a significant increase in inflation and interest rates in 2022 through 2023. If the rate of inflation or interest rates increase again, such increases could have a negative impact on our personal loan marketplace by decreasing the ability of borrowers to repay their current loan obligations on Borrower Loans, decreasing the ability of borrowers under our Credit Card program to repay the obligations on their Credit Card, and reducing Borrower Loan origination volume. Borrowers could also be more likely to incur additional unsecured or secured debt in an effort to mitigate the effects of inflation or the increase in interest rates, which may further reduce their likelihood of repaying Borrower Loans. A rising rate of inflation or an increase in interest rates could also reduce investor demand for Borrower Loans, as investors may seek alternative investment options. See “Quantitative and

Qualitative Disclosures about Market Risk” for more information regarding the potential impact of the various market risks on our business.

RISKS RELATED TO COMPLIANCE AND REGULATION

We must comply with regulatory regimes applicable to consumer credit transactions as well as with regulatory regimes applicable to securities transactions. Certain state laws generally regulate interest rates and other charges and require certain disclosures, and also require licensing for certain activities. In addition, other state laws, public policy and general principles of equity relating to the protection of consumers, unfair, deceptive, or abusive acts and practices, and debt collection practices may apply to the origination, servicing and collection of Borrower Loans in our marketplace and credit card receivables. We are also subject to other laws, such as:

•the federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to borrowers regarding the terms of their loans;

•the Credit Card Accountability Responsibility and Disclosure Act of 2009, which amended the federal Truth-in-Lending Act and requires additional procedures, disclosures, fee limits and other protections for consumers applying for or holding open end credit cards;

•the Fair Credit Billing Act, which amended the federal Truth-in-Lending Act and creates creditor obligations with respect to billing complaints and errors for credit card customers;

•the federal Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit discrimination in the extension of credit on the basis of age, race, color, sex, religion, marital status, national origin, receipt of public assistance or the exercise of any right under the Consumer Credit Protection Act;

•the federal Fair Credit Reporting Act and Regulation V, which regulate the use, reporting and disclosure of information related to each applicant’s credit history;

•state statutes similar to the federal Fair Debt Collection Practices Act and Regulation F, which regulate debt collection practices by “debt collectors” and prohibit debt collectors from engaging in certain practices in collecting, and attempting to collect, outstanding consumer loans;

•state counterparts to the above consumer protection laws;

•state and federal securities laws, which require that any non-exempt offers and sales of the Notes be registered;

•Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, and Section 1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair, deceptive or abusive acts or practices in connection with any consumer financial product or service;

•the federal Gramm-Leach-Bliley Act, which includes requirements on financial institutions’ collection of nonpublic personal information about a consumer and limitation on disclosure of that nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information and requires financial institutions to disclose certain privacy policies and practices with respect to information sharing with affiliated and nonaffiliated entities as well as to safeguard personal customer information, and other privacy laws and regulations;

•state consumer privacy and data protection laws, including the California Consumer Privacy Act and Oregon Consumer Privacy Act, Minnesota Consumer Data Privacy Act, and Montana Consumer Data Privacy Act, which provide consumers in these states with extensive rights to know about the use, to request deletion and correction, and to opt out of the sale of their Non-Exempt Personal Information by certain businesses, and which obligates such businesses to notify consumers of their data collection practices and to implement procedures for addressing consumer requests regarding their personal data;

•the Bankruptcy Code, which limits the extent to which creditors may seek to enforce debts against parties who have filed for bankruptcy protection;

•the federal Servicemembers Civil Relief Act, which allows military members to suspend or postpone certain civil obligations so that the military member can devote their full attention to military duties and grants certain protections to military members while serving on active duty;

•the federal Military Lending Act, which provides specific protections for active duty service members and their dependents (or covered borrowers) in consumer credit transactions;

•the federal Electronic Fund Transfer Act and Regulation E promulgated thereunder, which provide disclosure requirements, guidelines and restrictions on the electronic transfer of funds from consumers’ bank accounts;

•the federal Electronic Signatures in Global and National Commerce Act and similar state laws, particularly the Uniform Electronic Transactions Act, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures;

•the federal Bank Secrecy Act, which relates to compliance with anti-money laundering, customer due diligence and record-keeping policies and procedures.

We may not always be in compliance with these laws. Borrowers may make counterclaims regarding the enforceability of their obligations under borrower or consumer protection laws after collection actions have commenced, or otherwise seek damages under these laws. Investors may attempt to rescind their Note purchases under securities laws, and PFL or PMI’s failure to comply with such laws could also result in civil or criminal liability. Compliance with these requirements is also costly, time-consuming and limits operational flexibility. See Item 1, “Business—Government Regulation” for more information.

Recent U.S. Supreme Court rulings and changes in the U.S. legislative and executive branches may result in changes to regulatory policies that may impact our business and operations.

Several significant administrative law cases were decided by the U.S. Supreme Court in 2024, most notably Loper Bright Enterprises v. Raimondo. In Loper Bright, the U.S. Supreme Court held that the U.S. Administrative Procedure Act requires that courts exercise their independent judgment when deciding whether a federal agency has acted within its statutory authority and are not required to defer to an agency interpretation solely because a statute is ambiguous. These decisions may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies on which we rely. In addition, the recent changes in U.S. legislative and executive branches could lead to potentially significant changes to the existence, priorities, scope, practices and/or staffing levels of various regulatory agencies. For example, in February 2025, the Trump administration directed the CFPB to, among other things, suspend rule implementations and cease supervisory activities. This directive is the subject of litigation currently pending before the United States Court of Appeals for the District of Columbia and the CFPB has transferred its enforcement actions, appellate cases, and litigation to the United States Department of Justice. Uncertainty remains with regard to the scope, priorities and activities of the CFPB and other regulatory agencies.

Changes to the federal and state legal and regulatory regimes, such as through amendments to laws and regulations, legal challenges to new and existing agency regulations and interpretations, imposition of supervisory action, or shifts in governmental or regulatory policies, practices or priorities may have a material adverse impact on the products and services we can offer, our operations, the cost to conduct business, and our results of operations. We may also become subject to different and potentially conflicting requirements and expectations in the jurisdictions in which we operate or that may attempt to exercise jurisdiction over us, which may have an adverse effect on our business and results of operations.

There continues to be uncertainty as to how the actions of the Consumer Financial Protection Bureau, state regulators, or any new agency could impact our business or that of our issuing bank.

The Consumer Financial Protection Bureau (“CFPB”), which commenced operations in July 2011, has broad authority over the businesses in which we engage. This includes authority to write regulations under federal consumer financial protection laws, such as the Truth in Lending Act and the Equal Credit Opportunity Act, and to enforce those laws against and examine large financial institutions for compliance. The CFPB is authorized to prevent unfair, deceptive or abusive acts or practices through its regulatory, supervisory, and enforcement authority. To assist in its enforcement, the CFPB maintains an online complaint system that allows consumers to log complaints with respect to various consumer finance products, including the loan products we facilitate. This system could inform future CFPB decisions with respect to its regulatory, enforcement or examination focus.

We are subject to the CFPB's jurisdiction, including its enforcement authority. The CFPB may therefore request reports concerning our organization, business conduct, markets and activities. In addition, the CFPB may conduct on-site examinations of our business on a periodic basis if the CFPB were to determine, based on, for example, consumer complaints, judicial opinions, or administrative decisions, that we are engaging in activities that pose risks to consumers.

There continues to be uncertainty as to how the CFPB's strategies and priorities, including in both its examination and enforcement processes, will impact our businesses and our results of operations going forward. Actions by the CFPB could result in requirements to alter or cease offering affected loan products and services, making them less attractive and restricting our ability to offer them. In February 2025, the CFPB issued orders to suspend operations and cease activity including, among other things, supervision and examination activity and litigation proceedings. These orders have been challenged in a federal lawsuit currently pending before the United States Court of Appeals for the District of Columbia and the CFPB has transferred its enforcement actions, appellate cases, and litigation to the United States Department of Justice. Uncertainty remains as to the possible impact of the CFPB orders, the various lawsuits challenging those orders, and the new enforcement priorities of the CFPB.

Although we have committed resources to enhancing our compliance programs, actions by the CFPB, state regulators, or other regulators against us, our issuing banks or our competitors that discourage the use of the marketplace model or suggest to consumers the desirability of other loan products or services could result in reputational harm and a loss of borrowers or investors. Our compliance costs and litigation exposure could increase materially if the CFPB, state regulators, or other regulators enact new regulations, change regulations that were previously adopted, modify, through supervision, enforcement, past regulatory guidance, or interpret existing regulations in a manner different or stricter than have been previously interpreted.

Noncompliance with laws and regulations may impair our ability to facilitate the origination of or service Borrower Loans.

Generally, failure to comply with applicable laws and regulatory requirements may, among other things, limit our or a third party collection agency's ability to collect all or part of the principal amount of or interest on the Borrower Loans on which the Notes are dependent for payment. In addition, non-compliance could subject us to damages, revocation of required licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm PFL's business and ability to maintain our marketplace and may result in borrowers rescinding their Borrower Loans.

Where applicable, we seek to comply with state lending, servicing and similar statutes, and we continually evaluate our licensing needs. In U.S. jurisdictions with licensing or other requirements that we believe may be applicable to our marketplace, we have obtained necessary licenses or comply with the relevant requirements. Nevertheless, if we are found to not comply with applicable laws, or new laws are enacted that change the scope, applicability, or requirements of existing laws, or fail to meet financial or other state licensing requirements, we could lose one or more of our licenses or face other sanctions, which may have an adverse effect on our ability to continue to facilitate the origination of Borrower Loans through our marketplace, and on our ability to perform servicing obligations or make our marketplace available to borrowers in particular states, which may impair investors' ability to receive the payments of principal and interest on the Notes that they expect to receive.

If our marketplace were found to violate a state's usury laws, we may have to alter our business model and our business could be harmed.

If our marketplace were found to violate a state's usury laws, we may have to alter our business model and our business could be harmed. The interest rates that are charged to borrowers and that form the basis of payments to investors through our marketplace are based upon the ability under federal law of the issuing bank that originates the loan to export the interest rates of the state where it is located and on our ability to assist the bank in arranging such loans. WebBank, the bank that issues personal loans through our marketplace, exports the interest rates of Utah, which allows parties to generally agree by contract to any interest rate. As of December 31, 2025, the Borrower Loans carried interest rates that range from 6.00% to 33.00%, which equate to an effective interest rate for Note investors that range from 5.00% to 32.00%. Some states where borrowers are located, including Utah, have no statutory interest rate limitations on personal loans, while other jurisdictions have a maximum rate less than the current maximum rate offered by WebBank through our marketplace. If a borrower were to successfully bring claims against us for state usury or other state law violations, we could be subject to fines and penalties. Further, if the current structure under which WebBank makes personal loans through our marketplace were successfully challenged, we may have to substantially modify our business operations and may be required to maintain state-specific licenses and only provide a limited range of interest rates for Borrower Loans, all of which may substantially reduce our operating efficiency and attractiveness to investors and possibly result in a decline in our operating results. Recent litigation has successfully challenged lending arrangements in which banks or other exempt entities make loans and sell those loans to a third party charged with servicing the loans.

In addition, it is possible that state usury laws may impose liability that could affect an assignee's (i.e., PFL's and/or an investor who purchases Borrower Loans from PFL) ability to continue to charge to borrowers the interest rates that they agreed to pay at origination of their Borrower Loans.

As discussed in Part I, Item 1, “Business—Government Regulation—State Usury Laws” above, in Madden v. Midland Funding, LLC, in May 2015, the U.S. Court of Appeals for the Second Circuit issued a decision in Madden v. Midland Funding, LLC that interpreted the scope of federal preemption under the National Bank Act and held that a nonbank assignee of a loan originated by a national bank was not entitled to the benefits of federal preemption of claims of usury. The Madden decision has created some uncertainty as to whether non-bank entities purchasing loans originated by a bank may rely on federal preemption of state usury laws, and may create an increased risk of litigation by plaintiffs challenging our ability to collect interest in accordance with the terms of Borrower Loans. Although there can be no assurances as to the outcome of any potential litigation, or the possible impact of the litigation on our marketplace, we believe the Madden case addressed facts that are not presented by our marketplace lending platform and thus would not apply to Borrower Loans.

We rely on agreements with WebBank, pursuant to which WebBank originates personal loans on a uniform basis to qualified borrowers throughout the United States and sells and assigns those loans to PFL. If our relationships with

WebBank were to end, we may need to rely on individual state lending licenses or partner with a different bank to offer Borrower Loans.

Borrower Loan requests take the form of an application to WebBank submitted through our marketplace. WebBank currently makes all personal loans to borrowers through our marketplace, which allows our marketplace to be available to borrowers on a uniform basis throughout the United States. If our relationships with WebBank were to end or if WebBank were to cease operations, one or both of PMI and PFL may need to rely on individual state lending licenses or we would need to partner with a different bank to originate Borrower Loans. Because neither of us currently possesses all required licenses to lend in every state, we might be forced to limit the rates of interest charged on Borrower Loans in some states and we might not be able to originate personal loans in some states altogether. If we partner with a new bank, service on our marketplace could be disrupted and delayed as we transition to a different bank partner. We also may face increased costs and compliance burdens if the agreements with WebBank are terminated.

Several lawsuits have sought to recharacterize certain loan marketers and other originators as lenders. If litigation or a regulatory enforcement action on similar theories were successful against one or both of PMI and PFL, Borrower Loans originated through our marketplace could be subject to state usury laws, consumer protection laws and licensing requirements.

Several lawsuits in the lending industry primarily involving high-interest “payday loan” marketers have brought under scrutiny the association between those firms and out-of-state banks. These lawsuits assert the loan marketers use out-of-state lenders in order to evade the consumer protection laws imposed by the states where they do business. Such litigation has sought to re-characterize the loan marketer as the lender for purposes of state consumer protection law and usury restrictions. Similar civil actions have been brought in the context of gift cards and retail purchase finance. Although we believe that our activities are generally distinguishable from the activities involved in these cases, a court or regulatory authority could disagree.

Additional state consumer protection laws would be applicable to the Borrower Loans facilitated through our marketplace if one or both of us were re-characterized as a lender, and the Borrower Loans could be voidable or unenforceable. In addition, we could be subject to claims by borrowers, as well as enforcement actions by regulators. Even if we were not required to cease doing business with residents of certain states or to change our business practices to comply with applicable laws and regulations, we could be required to register or obtain licenses or regulatory approvals that could impose a substantial cost on us.

If one or both of PMI and PFL is required to register under the Investment Company Act, our ability to conduct business could be materially adversely affected.

The Investment Company Act of 1940 (the “Investment Company Act”) contains substantive legal requirements that regulate the manner in which “investment companies” are permitted to conduct their business activities. PFL and PMI believe each has conducted its business in a manner that does not result in being characterized as an investment company. If, however, PFL is deemed to be an investment company under the Investment Company Act, it may be required to institute burdensome compliance requirements and its activities may be restricted, which would materially adversely affect its business, financial condition and results of operations. Any determination that PMI is an investment company under the Investment Company Act similarly could impair its ability to perform its obligations under the Administration Agreement and thereby impair PFL’s ability to make payments on the Notes. If PFL or PMI were deemed to be an investment company, PFL or PMI may also attempt to seek exemptive relief from the SEC, which could impose significant costs and delays on their businesses.

If one or both of PMI and PFL is required to register under the Investment Advisers Act, our ability to conduct business could be materially adversely affected.

The Investment Advisers Act of 1940, or the “Investment Advisers Act,” contains substantive legal requirements that regulate the manner in which “investment advisers” are permitted to conduct their business activities. PFL believes that its business consists of providing a platform for marketplace lending for which investment adviser registration and regulation do not apply under applicable federal or state law, and does not believe that it is required to register as an investment adviser with either the SEC or any of the various states. The SEC or a state securities regulator could reach a different conclusion, however. Registration as an investment adviser could adversely affect PFL’s method of operation and revenues. For example, the Investment Advisers Act requires that an investment adviser act in a fiduciary capacity for its clients. Among other things, this fiduciary obligation requires that an investment adviser manage a client’s portfolio in the best interests of the client, have a reasonable basis for its recommendations, fully disclose to its client any material conflicts of interest that may affect its conduct and seek best execution for transactions undertaken on behalf of its client. It could be difficult for PFL to comply with this obligation without meaningful changes to its business operations, and there is no guarantee that it could do so successfully. If PFL were ever deemed to be in non-compliance with applicable investment adviser regulations, it could be subject to various penalties, including administrative or judicial proceedings that might result in censure, fine, civil penalties (including treble damages in the case of insider trading violations), the issuance of cease-and-desist orders or other adverse

consequences. Similarly, any determination by regulators that PMI must register as an investment adviser could materially adversely affect PMI and impair its ability to continue to administer our marketplace on PFL’s behalf.

PMI's administration of Quick Invest under its previous offering and PFL’s administration of Recurring Order and Auto Invest under its current offering, could create additional liability for PFL and such liability could be material.

Quick Invest was a loan search tool that allowed investors to identify Notes that met their investment criteria. An investor using Quick Invest was asked to indicate (i) the Prosper Rating or Ratings they wished to use as search criteria, (ii) the total amount they wished to invest, and (iii) the amount they wished to invest per Note. Quick Invest then compiled a basket of Notes for their consideration that met their search criteria.

Recurring Order (formerly known as Recurring Investment) is an automated loan search tool that allows investors to easily invest in Notes that meet their specific investment criteria by automatically bidding any available funds in their account on Notes that match their selected parameters, in accordance with their specified instructions. An investor using Recurring Order is asked to indicate (i) the Prosper Rating or Ratings and term of the Notes they wish to use as search criteria, and (ii) the amount they wish to invest per Note. If they wish, the investor can further customize their investment criteria by applying one or more of several dozen additional search criteria, such as loan amount, debt-to-income ratio and credit score. The investor can also set aside a specific amount of their funds as a cash reserve that will not be invested by the Recurring Order tool. After the investor has entered and saved the parameters of their search, Recurring Order automatically (i) runs searches on the designated criteria as new listings are posted on the marketplace, and (ii) places bids on any Notes identified by each such search. Currently, the Recurring Order tool is available only through our website, and is not available through our mobile app, Prosper Invest.

Auto Invest is an automated loan search tool that makes it easier for investors to build their desired portfolio of Notes by automatically investing any available funds in an investor’s account in Notes that match the investor’s specified investment criteria and allocation targets. An investor using Auto Invest is asked to select (i) a loan allocation target, or a target mix of loans based on Prosper Ratings, and (ii) the amount they wish to invest per Note. The investor has the option of selecting a target from Prosper’s series of preset loan allocations based on the recent historical loan inventory on the marketplace, any of which may be customized by changing the individual allocation targets for each Prosper Rating, or they can create a custom loan allocation target across Prosper Ratings based on their specific risk tolerance. If they wish, the investor can further customize their investment criteria by applying additional filters, such as loan term and employment status. The investor can also set aside a percentage of their portfolio as a cash reserve that will not be invested by Auto Invest. Investors may update their target allocations, cash reserve and other investment criteria, and pause and restart Auto Invest, at any time. Once the investor turns on Auto Invest, the tool may immediately begin placing orders for Notes in accordance with the investor’s current and target allocations and other criteria. The mix of Notes in any particular order may not match the investor’s individual loan allocation targets, but over time Auto Invest will place orders so that the aggregate holdings in the investor’s portfolio will approximate, to the extent possible, the allocation specified in their investment criteria.

Since the Notes purchased through Recurring Order, Auto Invest and Quick Invest are the same as Notes purchased manually, they present the same risks of non-payment as all Notes that may be purchased through our marketplace. For example, there is a risk that a Borrower Loan identified through Recurring Order, Auto Invest or Quick Invest may become delinquent or default, and that the estimated return or historical return (as applicable) for that loan individually, or the estimated return or historical return (as applicable) for the allocation target or the basket of Notes selected by Recurring Order, Auto Invest or Quick Invest as a whole, may not accurately reflect the actual return on such loan or Notes. If this were to occur, an investor who purchased a Note from PFL through Recurring Order, Auto Invest or Quick Invest could pursue a claim against PFL in connection with its representations regarding the performance of the Borrower Loans bid upon through Recurring Order, Auto Invest or Quick Invest, respectively. An investor could pursue such a claim under various anti-fraud theories under federal and state securities law.

We may face liability under state and federal securities law for statements in our prospectus and in other communications that could be deemed to be an offer to the extent that such statements are deemed to be false or misleading.

Loan listings and other borrower information available on PFL's website as well as in sales and listing reports are statements made in connection with the purchase and sale of securities that are subject to the antifraud provisions of the Exchange Act and the Securities Act. In general, these liability provisions provide a purchaser of the Notes with a right to bring a claim against one or both of us for damages arising from any untrue statement of material fact or failure to state a material fact necessary to make any statements made not misleading. Even though PFL and PMI have advised investors of what they believe to be the material risks associated with an investment in the Notes and PMI management rights, the SEC or a court could determine that they have not advised investors of all of the material facts regarding an investment in the Notes and PMI Management Rights, which could give investors the right to rescind their investment and obtain damages, and could subject PFL and PMI to civil fines or criminal penalties in addition to any such rescission rights or damages.

PMI and PFL’s activities in connection with the offer and sale of securities through our marketplace could result in potential violations of federal securities law and result in material liability to PFL and/or PMI.

PFL and PMI’s respective businesses are subject to federal and state securities laws that may limit the kinds of activities in which PFL and PMI may engage and the manner in which they engage in such activities. For example, changes to the manner in which PFL offers and sells Notes or other securities through our marketplace could be viewed by the SEC or a state securities regulator as involving the creation or sale of new, unregistered securities. In such circumstances, the failure to register such securities could subject PFL to liability and the amount of such liability could be meaningful. In addition, in 2008, PMI entered into a settlement with the SEC pursuant to which PMI agreed to cease and desist from committing or causing any violations or any future violations of Sections 5(a) and (c) of the Securities Act. Failure to comply with that order could result in material civil or criminal liability, which could materially adversely affect PMI’s business and PFL’s offering of Notes.

RISKS RELATED TO BORROWER LOANS AND INVESTING IN NOTES ON THE RETAIL CHANNEL

Payments on the Notes depend entirely on payments PFL receives on corresponding Borrower Loans. If a borrower fails to make any payments on the corresponding Borrower Loan related to a Note, payments on such Note will be correspondingly reduced.

PFL will only make payments pro-rata on a series of Notes after it receives a borrower’s payment on the corresponding Borrower Loan, net of servicing fees. PFL also will retain from the funds received from the relevant borrower and otherwise available for payment on the Notes any non-sufficient funds fees and the amounts of any attorneys’ fees or collection fees our in-house collections department, a third-party servicer or collection agency imposes in connection with collection efforts. Under the terms of the Notes, if PFL does not receive any or all payments on the corresponding Borrower Loan, payments on the Note will be correspondingly reduced in whole or in part. If the relevant borrower does not make a payment on a specific monthly loan payment date, no payment will be made on the Note on the corresponding succeeding Note payment date.

The Borrower Loans are not secured by any collateral or guaranteed or insured by any third party, and investors must rely on us or a third-party collection agency to pursue collection against any borrower.

Borrower Loans are unsecured obligations of borrowers. They are not secured by any collateral, and they are not guaranteed or insured by PFL, PMI or any third party, or backed by any governmental authority in any way. We and our third-party collection agencies will, therefore, be limited in our ability to collect on Borrower Loans. Moreover, Borrower Loans are obligations of borrowers to PFL as successor to WebBank, not obligations to the holders of Notes. Holders of the Notes will have no recourse to the borrowers and no ability to pursue borrowers to collect payments under Borrower Loans. Holders of the Notes may look only to PFL for payment of the Notes. Furthermore, if a borrower fails to make any payments on the Borrower Loan, the holders of the Notes corresponding to that Borrower Loan will not receive any payments on their Notes. The holders of such Notes will not be able to pursue collection against the borrower and will not be able to obtain the identity of the borrower in order to contact the borrower about the defaulted Borrower Loan.

The credit information of an applicant may be inaccurate or may not accurately reflect the applicant’s creditworthiness, which may cause an investor to lose all or part of the price paid for a Note.

We obtain applicant credit information from consumer reporting agencies, and assign Prosper Ratings to listings based in part on the applicant’s credit score. A credit score that forms a part of the Prosper Rating assigned to a listing may not reflect the applicant’s actual creditworthiness because the credit score may be based on outdated, incomplete or inaccurate consumer reporting data. Similarly, the credit data taken from the applicant’s credit report and displayed in listings may also be based on outdated, incomplete or inaccurate consumer reporting data. We do not verify the information obtained from the applicant’s credit report. Moreover, investors do not, and will not, have access to financial statements of applicants or to other detailed financial information about applicants.

The Prosper Rating may not accurately set forth the risks of investing in the Notes, no assurances can be provided that actual loss rates for the Notes will come within the estimated average annualized loss rates indicated by the Prosper Rating, and investors have limited rights to cause Prosper to repurchase the Notes.

The Prosper Rating assigned to a loan listing may not accurately reflect the risks of investing in the Notes, and is not a recommendation by us to purchase a Note. For example, the Prosper Rating for a listing could be inaccurate because the applicant’s credit report contained incorrect information. Similarly, although some of the information provided by applicants that is relevant to the Prosper Rating is verified by us before calculating the Prosper Rating, we do not verify all such information. For example, we do not verify the income or employment information on all applications. Further, the Prosper Rating does not reflect PFL’s credit risk as a debtor (such credit risk exists even though, as the debtor on the Notes, PFL’s only obligation is to pay to the Note holders their pro-rata shares of collections received on the related Borrower Loans net of applicable fees). In addition, no assurances can be provided that actual loss rates for the Notes will fall within the expected loss

rates indicated by the Prosper Rating. The interest rates on the Notes might not adequately compensate Note investors for these additional risks.

If we include in a listing a Prosper Rating that is different from the Prosper Rating calculated by us or calculate the Prosper Rating for a listing incorrectly, and such error materially and adversely affects a holder’s interest in the related Note, PFL will indemnify the holder or repurchase the Note. PFL will not, however, have any indemnity or repurchase obligation under the Amended and Restated Indenture, the Notes, the Investor Registration Agreement or any other agreement associated with the Note Channel as a result of any other inaccuracy with respect to a listing’s Prosper Score or Prosper Rating. PFL’s contractual repurchase obligations do not affect a Note holder’s rights under federal or state securities laws.

Investors who use the Recurring Order or Auto Invest tools may face additional risk of funding Borrower Loans that have been erroneously selected by the tool.

Since it was first implemented in July 2011 through December 31, 2025, the Recurring Order tool has experienced programming errors that affected 8,630 Notes and PMI Notes out of the 14,457,511 Notes and PMI Notes purchased. The Auto Invest tool was first implemented on June 2, 2016. Since such time through December 31, 2025, the Auto Invest tool has experienced programming errors that affected 2 Notes out of the 24,011,708 Notes purchased.

In the event of any errors in Recurring Order or Auto Invest that cause an investor to purchase a Note from PFL that such investor would not otherwise have purchased or that differs materially from the Note such investor would have purchased had there been no error, PFL will either repurchase the Note, indemnify the investor against losses suffered on that Note or cure such error. See “Risk Factors—Risks Related to PFL and PMI, Our Marketplace and Our Ability to Service the Notes” for more information.

Some borrowers may use our marketplace to defraud investors, which could adversely affect investors’ ability to recoup their investment.

We use identity and fraud checks with external databases to authenticate each borrower’s identity. There is a risk, however, that these checks could fail and fraud may occur. In addition, applicants may misrepresent their intentions regarding loan purpose or other information contained in listings, and we do not verify the majority of this information. While PFL will indemnify an investor or repurchase Notes in limited circumstances (including, e.g., a material payment default on the Borrower Loan resulting from verifiable identity theft), it is not obligated to indemnify an investor or repurchase a Note from an investor if the investment is not realized in whole or in part due to fraud (other than verifiable identity theft) in connection with a loan listing, or due to false or inaccurate statements or omissions of fact in a listing, whether in credit data, a borrower’s representations, similar indicators of borrower intent and ability to repay the Borrower Loan. If PFL repurchases a Note, the repurchase price will be equal to the Note's outstanding principal balance and will not include accrued interest. If PFL repurchases any Notes, PMI will concurrently repurchase the related PMI Management Rights for zero consideration.

The fact that we have the exclusive right and ability to investigate claims of identity theft in the origination of Borrower Loans creates a significant conflict of interest between us and our investors.

We have the exclusive right to investigate claims of identity theft and determine, in our sole discretion, whether verifiable identity theft has occurred. Such a determination of verifiable identity theft may trigger an obligation by PFL to either repurchase the related Notes or Borrower Loans or indemnify the applicable Note holders. The denial of a claim under PFL’s identity theft guarantee would save PFL from its indemnification or repurchase obligation. Because investors rely solely on us to investigate incidents that might require PFL to indemnify the applicable Note holders or repurchase the related Notes or Borrower Loans, a conflict of interest exists between us and such investors.

If payments on the Borrower Loan corresponding to an investor’s Note become overdue, such investor may not receive the full principal and interest payments that were expected on the Note, and such investor may not recover the original purchase price on the Note.

We may refer Borrower Loans that become past due to a third party collection agency for collection or we may collect on such Borrower Loans directly. If a borrower fails to make a required payment on a Borrower Loan, we will pursue reasonable collection efforts in respect of the Borrower Loan. Referral of a delinquent Borrower Loan to a collection agency within five business days after it becomes 30 days past due will be considered reasonable collection efforts. If payment amounts on a delinquent Borrower Loan are received from a borrower after the loan has been referred to our in-house collections department or an outside collection agency, we or that collection agency may retain a percentage of that payment as a fee before any principal or interest becomes payable to an investor. Collection fees may be up to 40% of recovered amounts, in addition to any legal fees and transaction fees associated with accepting payments incurred in the collection effort.

For some non-performing Borrower Loans, we may not be able to recover any of the unpaid loan balance and, as a result, an investor who has purchased a corresponding Note may receive little, if any, of the unpaid principal and interest payable under the Note. In all cases, investors must rely on our collection efforts or the applicable collection agency to which

such Borrower Loans are referred, and are not permitted to collect or attempt collection of payments on the Borrower Loans in any manner.

Loss rates on the Borrower Loans may increase as a result of economic conditions beyond our control and beyond the control of the borrower.

Borrower Loan loss rates may be significantly affected by economic downturns or general economic conditions beyond our control and beyond the control of individual borrowers. In particular, loss rates on Borrower Loans may increase due to factors such as prevailing interest rates, inflation, the rate of unemployment, the level of consumer confidence, residential real estate values, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets, natural disasters, pandemics, and other factors.

The Borrower Loans do not restrict borrowers from incurring additional unsecured or secured debt, nor do they impose any financial restrictions on borrowers during the term of the Borrower Loan, which may reduce the likelihood that an investor will receive the full principal and interest payments that such investor expects to receive on a Note.

If a borrower incurs additional debt after the date a loan listing is posted, the additional debt may impair the ability of that borrower to make payments on their Borrower Loan and, as such, reduce the likelihood that an investor will receive the principal and interest payments that such investor expects to receive on a corresponding Note. Moreover, the additional debt may adversely affect the borrower’s creditworthiness generally, and could result in the financial distress, insolvency, or bankruptcy of the borrower. To the extent that the borrower has or incurs other indebtedness and cannot pay all of their indebtedness, the borrower may choose to make payments to other creditors, rather than to PFL.

To the extent borrowers incur other indebtedness that is secured, such as a mortgage, a home equity line or an auto loan, the ability of the secured creditors to exercise remedies against the assets of the borrower may impair the borrower’s ability to repay the Borrower Loan on which an investor’s Note is dependent for payment. Borrowers may also choose to repay obligations under secured indebtedness or other unsecured indebtedness before repaying Borrower Loans because there is no collateral securing the Borrower Loans. An investor will not be notified if a borrower incurs additional debt after the date a loan listing is posted.

Borrowers may not view or treat their obligations to PFL as having the same significance as loans from traditional lending sources.

The investment return on the Notes depends on borrowers fulfilling their payment obligations in a timely and complete manner under the corresponding Borrower Loan. Borrowers may not view marketplace lending obligations originated through our marketplace as having the same significance as other credit obligations arising under more traditional circumstances. If a borrower neglects their payment obligations on a Borrower Loan upon which payment of an investor’s Note is dependent or chooses not to repay their Borrower Loan entirely, such investor may not be able to recover any portion of the investment in a Note.

Our marketplace may fail to comply with applicable laws, which could limit our ability to collect on Borrower Loans.

The Borrower Loans are subject to federal and state consumer protection, licensing, and privacy laws. Our marketplace may not always be, and may not always have been, in compliance with these laws. Failure to comply with the laws and regulatory requirements applicable to our marketplace may, among other things, limit our or a collection agency's ability to collect all or part of the principal of or interest on Borrower Loans.

We regularly review the requirements of these laws and take measures aimed at ensuring that the Borrower Loans originated through our marketplace meet the requirements of all applicable laws. However, determining compliance with all applicable laws is a complex matter and it is possible that our determination may be inaccurate or incorrect. Also, changes in law, either due to court decisions, regulatory interpretations or rulings, or new legislation, may adversely affect the collectability of a Borrower Loan.

In general, the Borrower Loans do not contain any cross-default or similar provisions. If a borrower defaults on any of their other debt obligations, our ability to collect on the Borrower Loan on which an investor’s Note is dependent for payment may be substantially impaired.

The Borrower Loans do not contain cross-default provisions. A cross-default provision makes a default under certain debt of a borrower an automatic default on other debt of that borrower. Because the Borrower Loans do not contain cross-default provisions, a Borrower Loan will not be placed automatically in default upon that borrower’s default on any of the borrower’s other debt obligations. If a borrower defaults on debt obligations owed to a third party and continues to satisfy the payment obligations under the Borrower Loan, the third party may seize the borrower’s assets or pursue other legal action against the borrower before the borrower defaults on the Borrower Loan, which may affect our ability to collect from the borrower when or if the Borrower Loan becomes delinquent.

Borrowers may seek the protection of debtor relief under federal bankruptcy or state insolvency laws, which may result in the nonpayment of an investor’s Notes.

Borrowers may seek protection under federal bankruptcy law or similar laws. If a borrower files for bankruptcy (or becomes the subject of an involuntary petition), a stay will go into effect that will automatically put any pending collection actions on the Borrower Loan on hold and prevent further collection action absent bankruptcy court approval. If we receive notice that a borrower has filed for protection under the federal bankruptcy laws, or has become the subject of an involuntary bankruptcy petition, we will put the borrower’s account into “bankruptcy status.” When this occurs, we terminate automatic monthly ACH debits on the Borrower Loan and we will not undertake collection activity without bankruptcy court approval. Whether any payment will ultimately be made or received on a Borrower Loan after a bankruptcy status is declared depends on the borrower’s particular financial situation. In most cases, however, unsecured creditors such as PFL receive nothing, or only a fraction of their outstanding debt and, as a result, an investor who has purchased a corresponding Note may receive none or very little of the unpaid principal and interest payable on the Note.

Federal law entitles borrowers who enter active military service to an interest rate cap and certain other rights that may inhibit the ability to collect on Borrower Loans and reduce the amount of interest paid on the corresponding Notes.

Federal law provides borrowers on active military service with rights that may delay or impair our ability to collect on a Borrower Loan corresponding to an investor’s Note. The Servicemembers Civil Relief Act (“SCRA”) and other similar state laws require that the interest rate on preexisting debts, such as Borrower Loans, be set at no more than 6% while the qualified service member or reservist is on active duty. A holder of a Note that is dependent on such a Borrower Loan for payment will not receive the difference between 6% and the original stated interest rate for the Borrower Loan during any such period. The SCRA also permits courts to stay proceedings and the execution of judgments against service members and reservists on active duty, which may delay recovery on any Borrower Loans in default, and, accordingly, payments on the corresponding Notes.

Beginning October 3, 2016, the Military Lending Act (“MLA”) prohibits requiring covered borrowers, which include active military servicemembers and their dependents, to waive the right to legal recourse or to submit to arbitration. This may delay recovery on any relevant Borrower Loans in default, and, accordingly, payments on the corresponding Notes.

If there are any amounts under such a Borrower Loan still due and owing to PFL after the final maturity of the corresponding Notes, PFL will have no further obligation to make payments on such Notes, even if it receives payments on the Borrower Loan after the final maturity of such Notes. We do not take military service into account in assigning a Prosper Rating to loan listings. In addition, as part of the borrower registration process, we do not request borrowers to confirm if they are qualified service members or reservists within the meaning of the SCRA or the MLA. See Item 1, “Business—Government Regulation” for more information.

As of December 31, 2025, 216 Borrower Loans, with a total outstanding balance of $1.8 million are subject to the SCRA.

The Federal Trade Commission's Holder in Due Course Rule may substantially impair an investor’s ability to recoup the full purchase price of a Note or to receive the interest payments that such investor expects to receive on the Note.

The Federal Trade Commission's Holder in Due Course Rule, which in certain circumstances permits borrowers to assert any claims and defenses that they would have had against a seller of goods or services obtained with the proceeds of a loan against an originator or subsequent purchaser of the loan, could allow certain borrowers to raise such defenses against PFL to the extent of the outstanding loan balance. If such defenses are successfully raised, PFL will be unable to collect on the loan and it is unlikely that any further payment will be made on the corresponding Notes.

The death of a borrower may substantially impair an investor’s ability to recoup the full purchase price of a Note or to receive the interest payments that such investor expects to receive on the Note.

If a borrower dies with an outstanding Borrower Loan, PFL is required, upon receiving notice of the death, to stop accepting automatic loan payments and to refund any payments that were automatically debited after the borrower's date of death. Though we may seek to work with the executor of the borrower’s estate to obtain repayment of the loan, the borrower’s estate may not contain sufficient assets to repay the loan, or its executor may prioritize repayment of other creditors. In addition, if a borrower dies near the end of the term of their Borrower Loan, the time required for the probate of the borrower’s estate will likely extend beyond the Notes’ final maturity date, after which date PFL will cease to have any obligation to make payments on the Notes.

The Notes are risky and speculative investments suitable only for investors of adequate financial means.

Investors should be aware that the Notes offered through our marketplace are risky and speculative investments. The Notes are special, limited obligations of PFL and depend entirely for payment on PFL’s receipt of payments under the corresponding Borrower Loans. Notes are suitable only for investors of adequate financial means. If an investor cannot afford to lose the entire amount of such investor’s investment in the Notes, the investor should not invest in the Notes.

The Notes are special, limited obligations of PFL only and are not directly secured by any collateral or guaranteed or insured by PMI or any third party.

The Notes will not represent an obligation of borrowers, PMI or any other party except PFL, and are special, limited obligations of PFL. The Notes are not guaranteed or insured by PMI, any governmental agency or instrumentality, or any third party. Although PFL has granted the indenture trustee, for the benefit of the Note holders, a security interest in the Borrower Loans corresponding to the Notes, the payments and proceeds that PFL receives on such Borrower Loans, the bank account in which such Borrower Loan payments are deposited, and the accounts in which investors’ funding amounts are deposited, the Note holders do not themselves have a direct security interest in the Borrower Loans or the right to payment thereunder. If an event of default under the Amended and Restated Indenture were to occur, the Note holders would be dependent on the indenture trustee’s ability to realize on the collateral and make payments on the Notes in the manner contemplated by the Amended and Restated Indenture. In addition, although PFL will take all actions that it believes are required under applicable law to perfect the security interest of the indenture trustee in the collateral, if its analysis of the required actions is incorrect or if it fails to take any required action in a timely manner, the indenture trustee’s security interest may not be effective and holders of the Notes could be required to share the collateral (and any proceeds thereof) with PFL’s other creditors, or, if a bankruptcy court were to order the substantive consolidation of PMI and PFL (as described below), PMI’s creditors.

PFL is not obligated to indemnify Note holders or repurchase Notes except in limited circumstances.

PFL is only obligated to repurchase Notes or indemnify holders of Notes in limited circumstances. These circumstances include if (i) a material payment default under the corresponding Borrower Loan occurs as a result of verifiable identify theft; (ii) we include a Prosper Rating in a listing that is different from the Prosper Rating we calculated, or we calculate the Prosper Rating incorrectly; or (iii) any errors in Quick Invest, Recurring Order, or Auto Invest cause an investor to purchase a Note from PFL that such investor would not otherwise have purchased or that differs materially from the Note, in which cases PFL also has the option to cure such error. PFL is not required to repurchase Notes or indemnify holders of Notes, however, if the Note holder’s investment is not realized in whole or in part due to fraud other than verified identity theft, or due to other false or inaccurate statements or omissions of fact in a listing, whether in credit data, borrower representations or similar indicia of borrower intent and ability to repay the loan. Further, PFL is under no obligation to repurchase a Note or indemnify any holder of Notes if a correctly determined Prosper Rating fails to accurately predict the actual losses on a Borrower Loan.

PFL might incur indemnification and repurchase obligations that exceed its projections, in which case it may not have sufficient liquidity to meet its indemnification and repurchase obligations.

PFL believes its liquidity will be sufficient to meet its reasonably anticipated indemnification and repurchase obligations. In determining its expected liquidity needs with respect to indemnification and repurchase obligations, PFL considers the history of such obligations incurred by it and PMI. Nonetheless, there can be no assurance that if PFL is obligated to repurchase a Note or indemnify a Note holder, that it will be able to meet its repurchase or indemnification obligations. If PFL is unable to meet its indemnification and repurchase obligations with respect to a Note, the investor in such Note may lose all of such investor’s investment in the Note. For more information about Prosper’s existing repurchase and indemnification obligations, please see “Repurchase Obligations” in Note 17 of the accompanying consolidated financial statements.

Our marketplace allows a borrower to prepay a Borrower Loan at any time without penalty. Borrower Loan prepayments will extinguish or limit an investor’s ability to receive additional interest payments on a Note.

Borrower Loan prepayment occurs when a borrower decides to pay some or all of the principal amount on a Borrower Loan earlier than originally scheduled. Borrowers may decide to prepay all or a portion of the remaining principal amount due under a Borrower Loan at any time without penalty. In the event of a prepayment of the entire remaining unpaid principal amount of a Borrower Loan, each of the holders of the Notes corresponding to the Borrower Loan will receive their share of such prepayment but further interest will not accrue on such Borrower Loan or on such Note after the date on which the payment is made. If the borrower prepays a portion of the remaining unpaid principal balance, the term of the Borrower Loan will not change, but interest will cease to accrue on the prepaid portion. If a borrower prepays a Borrower Loan in whole or in part, an investor will not receive all of the interest payments that such investor originally expected to receive on the Note corresponding to such Borrower Loan. In addition, such investor may not be able to find a similar rate of return on another investment at the time at which the Borrower Loan is prepaid. Prepayments are subject to PFL’s servicing fee, even if the prepayment occurs immediately after issuance of a Note.

Prevailing interest rates may change during the term of the Notes. If this occurs, investors may receive less value from the purchase of Notes in comparison to other ways they may invest their money. Additionally, borrowers may prepay their Borrower Loans due to changes in interest rates, and investors may not be able to redeploy the amounts received from prepayments in a way that offers the return expected from the Notes.

The Borrower Loans on which the Notes are dependent for payment bear fixed, not floating, rates of interest. If prevailing interest rates increase, the interest rates on Notes investors purchase might be less than the rate of return they could earn if they had invested the purchase price in a different investment.

We may not set appropriate interest rates for Borrower Loans.

We set interest rates for all Borrower Loans based on Prosper Ratings, as well as additional factors such as Borrower Loan terms, the economic environment and competitive conditions. If we set interest rates for Borrower Loans too low, investors may not be compensated appropriately for the level of risk that they are assuming in purchasing Notes, while setting the interest rate too high may increase the risk of non-payment. In either case, a failure by us to set rates appropriately may adversely impact the ability of investors to receive returns on their Notes that are commensurate with the risks they have assumed in acquiring such Notes.

The Notes will not be listed on any securities exchange and can be held only by registered Prosper investors. Further, no trading platform for the transfer of Notes exists and there can be no assurance a trading platform for the transfer of Notes will develop in the future. Therefore, investors should be prepared to hold the Notes they purchase until maturity.

The Notes and PMI Management Rights will not be listed on any securities exchange and all Notes and PMI Management Rights must be held by registered Prosper investors. Further, no trading platform for the transfer of Notes exists and there can be no assurance a trading platform for the transfer of Notes will develop in the future. While we may, in our sole discretion, permit the establishment of a platform on which a secondary market may be made with respect to the Notes, there can be no assurance a trading platform for the Notes and PMI Management Rights will develop in the future. Therefore, Note purchasers must be prepared to hold their Notes and PMI Management Rights to maturity.

The U.S. federal income tax consequences of an investment in the Notes are uncertain.

There are no statutory provisions, regulations, published rulings or judicial decisions that directly address the characterization of the Notes or instruments similar to the Notes for U.S. federal income tax purposes. However, although the matter is not free from doubt because payments on the Notes are dependent on payments on the corresponding Borrower Loan, PFL treats the Notes as debt instruments that have original issue discount (“OID”) for U.S. federal income tax purposes. Where required, PFL intends to file informational returns with the IRS in accordance with such treatment unless there is a change or clarification in the law, by regulation or otherwise, that would require a different characterization of the Notes. Investors should be aware, however, that the IRS is not bound by PFL’s characterization of the Notes and the IRS or a court may take a different position with respect to the Notes’ proper characterization. For example, the IRS could determine that, in substance, each investor owns a proportionate interest in the corresponding Borrower Loan for U.S. federal income tax purposes or, for example, the IRS could instead treat the Notes as a different financial instrument (including an equity interest or a derivative financial instrument). Any different characterization could significantly affect the amount, timing, and character of income, gain or loss recognized in respect of a Note. For example, if the Notes are treated as PFL’s equity, (i) PFL would be subject to U.S. federal income tax on income, including interest, accrued on the corresponding Borrower Loans but would not be entitled to deduct interest or OID on the Notes, and (ii) payments on the Notes would be treated by the Note holder for U.S. federal income tax purposes as dividends (that may be ineligible for reduced rates of U.S. federal income taxation or the dividends-received deduction) to the extent of PFL’s earnings and profits as computed for U.S. federal income tax purposes. A different characterization may significantly reduce the amount available to pay interest on the Notes. Investors are strongly advised to

consult their own tax advisor regarding the U.S. federal, state, local and non-U.S. tax consequences of the purchase, ownership, and disposition of the Notes (including any possible differing treatments of the Notes).

PFL’s ability to pay principal and interest on a Note may be affected by its ability to match the timing of its income and deductions for U.S. federal income tax purposes.

Investors should be aware that PFL’s ability to pay principal and interest on a Note may be affected by its ability, for U.S. federal income tax purposes, to match the timing of income it receives from a corresponding Borrower Loan that it holds and the timing of deductions that it may be entitled to in respect of payments made on the Notes that it issues. For example, if the Notes are treated as contingent payment debt instruments for U.S. federal income tax purposes but the corresponding Borrower Loans are not, there could be a potential mismatch in the timing of PFL’s income and deductions for U.S. federal income tax purposes, and PFL’s resulting tax liabilities could affect its ability to make payments on the Notes.

Our participation in the funding of Borrower Loans could be viewed as creating a conflict of interest.

As is the practice with other marketplace lending companies, from time to time, we may fund portions of qualified loan requests in our marketplace and hold any Notes purchased as a result of such funding for our own individual accounts. Even though we will participate in funding Borrower Loans listed in our marketplace under the same terms and conditions and through the use of the same information that is made available to other potential investors in our marketplace, such participation may be perceived as involving a conflict of interest. For example, our funding of a Borrower Loan may cause the loan to fund, and in some cases, fund faster, than it would fund in the absence of our participation, which could benefit us to the extent that it ensures that we generate the revenue associated with the loan.

During the year ended December 31, 2025, we purchased $0.4 million in Notes for investment.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy

Prosper recognizes the critical importance of protecting the company’s assets and customer data against new and existing risks using appropriate organizational measures, policies, procedures, and technical solutions while maintaining robust cybersecurity measures to safeguard our information systems and protect the security, confidentiality, integrity, and availability of our data.

Managing Material Risks & Integrated Overall Risk Management

Prosper has strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our information security (“InfoSec”) team works closely with our information technology team to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.

Third-Party Risk Management Engagement

Prosper engages with a range of external experts, including external auditors, cybersecurity assessors and penetration testers as part of our InfoSec and cybersecurity programs. Our collaboration with these third-parties includes services such as external audits, threat assessments and guidance on key security initiatives. These partnerships allow us to leverage specialized knowledge and insights, consistent with our aim for industry-best practices.

Oversee Third-Party Risk

Prosper maintains stringent processes to oversee and manage the risks associated with third-party service providers, including a team focused on vendor, enterprise, and procurement risk management. We conduct diligence and security assessments of material third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. This monitoring includes an initial review of their information security program, annual re-assessments, and ongoing monitoring for security incidents. This approach is designed to mitigate risks related to data breaches or other security incidents originating from our material vendors and partners.

Risks from Cybersecurity Threats

For a description of the cybersecurity risks which could materially affect Prosper’s business strategy, results of operations, or financial condition, please refer to the following: (i) “Risk Factors—We have experienced, and may experience in the future, unauthorized access to our systems. If the security of PFL’s investors’ and borrowers’ confidential information stored in our systems is compromised, users’ secure information may be stolen, account funds and security could be impacted, our reputations may be harmed; and we may be exposed to liability,”; (ii) “Risk Factors—Any significant disruption in service in our marketplace or in PMI’s computer systems could adversely affect PMI’s ability to perform its obligations under the Administration Agreement,”; and (iii) “Risk Factors—Our marketplace may be vulnerable to malware, third-party software vulnerabilities, and similar disruptions.”

We and certain third-party vendors occasionally have experienced cyber-attacks, breaches of our and their systems and other similar incidents. For example, as previously disclosed in Prosper’s Form 8-K filed with the SEC on September 17, 2025, an unauthorized third party gained access to the Company’s systems that contain proprietary, confidential, and personal information (the “September Incident”). There is evidence that the unauthorized third party was able to obtain confidential, proprietary and personal information, including Social Security numbers. There is no evidence of unauthorized access to customer accounts and funds as a result of the September Incident, and the Company’s customer-facing operations continued uninterrupted. To-date, these incidents have not had a material effect on our business or operations. However, we continue to face various risks related to the September Incident, including litigation and potential fines, regulatory scrutiny and investigations, reputational harm, changes in customer behavior, and an increase in the cost to the Company of our insurance policy covering cybersecurity incidents.

Governance

The Board of Directors is acutely aware of the critical nature of managing risks associated with cybersecurity threats. The Board has established oversight mechanisms to ensure effective governance in managing risks associated with cybersecurity threats.

Board of Directors Oversight of Risks

The Board is directly responsible for overseeing risks related to cybersecurity and is composed of board members with diverse expertise, including risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.

The Board is informed of cybersecurity risks by our Chief Executive Officer (“CEO”) and General Counsel (“GC”), who are kept updated on an ongoing basis of cybersecurity risks through our Chief Technology Officer (“CTO”) and Head of Information Security (the “InfoSec Director”). Our CTO also meets with the Board on a quarterly basis to update the members regarding any information security and cybersecurity risks and threats to our systems. Additionally, Board members meet with our InfoSec Director once a year for training focused exclusively on our cybersecurity and information security program and risks.

Risk Management Personnel

Primary responsibility for assessing, monitoring, and managing our cybersecurity risks rests with our InfoSec Director. Our InfoSec Director has experience building global Information Security programs and has advised organizations across several highly- regulated industries, including financial services, technology, healthcare, government, non-profit, and retail. Our InfoSec Director, with oversight from the CTO, manages Prosper’s information security risk management program and informs Prosper’s Enterprise Risk & Information Security Committee (“eRISC”), which consists of members of Prosper’s management team and includes our CEO, Chief Financial Officer (“CFO”), CTO, and GC, regarding the prevention, detection, mitigation, and remediation of cyber risks and incidents. The cybersecurity team has decades of experience in selecting, deploying, and operating cybersecurity technologies, initiatives, and processes. eRISC meets on at least a quarterly basis to discuss any cybersecurity incident reports, as applicable, ongoing cybersecurity initiatives and strategies, take any actions approved by the voting members of eRISC, and discuss escalation and reporting to the Board, as needed.

Process for Monitoring Cybersecurity Incidents

The InfoSec Director and eRISC, as applicable, are continually informed about the latest developments in cybersecurity including potential threats and innovative risk management techniques. The InfoSec Director is an active thought leader and speaker within the CISO community, regularly participating in cybersecurity conferences such as FS-ISAC, and CISO summits. This ongoing knowledge acquisition is crucial for the effective prevention, detection, mitigation, and remediation of cybersecurity incidents. The InfoSec Director implements and oversees processes for the regular monitoring of our information systems. This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the InfoSec Director is equipped with a well-defined incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.

Reporting to Board of Directors

As discussed above in “Cybersecurity Board of Directors Oversight of Risks,” our InfoSec Director regularly updates our eRISC committee regarding all aspects related to cybersecurity risks and incidents and also maintains direct communication with the CEO, CFO, CTO, and GC for escalation of such incidents directly to the Board. This ensures that the highest levels of management and the Board are kept informed of the cybersecurity posture and potential risks facing Prosper.

ITEM 2. PROPERTIES

Our corporate headquarters, including our principal administrative, marketing, technical support and engineering functions, is located in San Francisco, California, where we lease approximately 35,200 square feet of office space under a lease that will expire May 31, 2028. We have also entered into leases for approximately 44,500 square feet of office space located in Arizona and Utah. We believe that our facilities are adequate to meet our current needs and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.

ITEM 3. LEGAL PROCEEDINGS

As of March 20, 2026, multiple purported class-action lawsuits related to the September Incident have been filed against the Company. The federal lawsuits filed against Prosper have been consolidated into one proceeding, captioned In re: Prosper Funding, LLC Data Breach Litigation. Prosper is also subject to lawsuits filed in state courts and has received demands for mass and individual arbitrations. The Company may receive additional federal and state lawsuits and arbitration demands in the future. As these matters are still in their early stages, at this time, the Company is unable to predict the outcome of these matters and is unable to estimate the range of loss, if any, that could result from an unfavorable outcome. For more information on the September Incident, please see “Risk Factors—Risks Related to PFL and PMI, our Marketplace and our Ability to Service the Notes—We have experienced, and may experience in the future, unauthorized access to our systems. If the security of PFL’s investors’ and borrowers’ confidential information stored in our systems is compromised, users’ secure information may be stolen, account funds and security could be impacted, our reputations may be harmed, and we may be exposed to liability.”

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information; Holders of Record

There is no established public trading market for PMI's or PFL's common equity. As of December 31, 2025, there were approximately 498 holders of record of PMI’s common stock. As of December 31, 2025, PMI owns 100% of PFL's membership interests.

Dividend Policy

PMI has not paid cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12 in Part III of this Annual Report for information about securities authorized for issuance under our equity compensation plans.

Recent Sales of Unregistered Securities

For the year ended December 31, 2025, PMI issued 737,326 shares of common stock upon the exercise of stock options at a weighted-average exercise price per share of $0.06. For the year ended December 31, 2024, PMI issued 540,055 shares of common stock upon the exercise of stock options at a weighted-average exercise price per share of $0.03. These securities were sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder relative to sales by an issuer not involving a public offering.

On July 29, 2025, one warrant holder exercised warrants (the “Series F Warrants”) to purchase an aggregate of 51,614,124 shares of Series F Convertible Preferred Stock (the “Series F Shares”) at an exercise price of $0.01 per share for total cash proceeds of $0.5 million. The aggregate fair value of these warrants as of the date of the exercise was approximately $73.3 million, which was reclassified from Convertible Preferred Stock Warrant Liability to Convertible Preferred Stock on the date of exercise.

The Series F Warrants and Series F Shares were issued in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder relative to sales by an issuer not involving a public offering.

PFL – Information for this Item is not required for PFL because it meets the conditions set forth in General Instruction I(1) of Form 10-K; PFL is therefore filing this Form with the reduced disclosure format.

Issuer Purchases of Equity Securities

For the year ended December 31, 2025, we did not repurchase any common or preferred stock.

ITEM 6. [Reserved]

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition and results of operations, or MD&A, contains forward-looking statements that involve risks and uncertainties. Please see “Forward-Looking Statements” in this Annual Report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. This discussion should be read in conjunction with historical financial statements and related notes thereto and the other disclosures contained elsewhere in this Annual Report on Form 10-K. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those included in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. For discussions related to 2023 items and year-to-year comparisons between 2024 and 2023, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K for the year ended December 31, 2024.

PROSPER MARKETPLACE, INC.

Overview

Our vision is to transform lives by providing affordable financial solutions through the simplest and most trusted platform. We currently offer access to two primary lending products, each of which supports our vision: (i) unsecured Personal Loans through a personal loan marketplace which connects eligible consumer borrowers with individual and institutional investors, and (ii) a Credit Card product available to eligible borrowers. Historically, we have offered access to Home Equity lending products as well, but we made the strategic decision to discontinue offering Home Equity products in December 2025.

We believe our Personal Loan business model has key advantages relative to traditional banks, including (i) an innovative marketplace model that efficiently connects qualified supply and demand of capital, (ii) online operations that substantially reduce the need for physical infrastructure and improve convenience, and (iii) use of advanced technology and artificial intelligence to deliver simple, fast, personalized, and transparent solutions that can improve consumers’ financial health as they move across the credit spectrum. We do not operate physical branches or incur expenses related to infrastructure like traditional banks or consumer finance institutions. As part of operating our marketplace, we verify the identity of borrowers and assess borrowers’ credit risk profile using a combination of public and proprietary data. Our proprietary technology automates several loan origination and servicing functions, including the borrower application process, data gathering, underwriting, credit scoring, loan funding, investing and servicing, regulatory compliance and fraud detection.

For the year ended December 31, 2025, our Personal Loan marketplace facilitated $2.7 billion in Borrower Loan originations, of which $2.5 billion were funded through our Whole Loan Channel, representing 94% of the total Borrower Loans originated through our marketplace during this period. For the quarter ended December 31, 2025, our marketplace facilitated $696.3 million in Borrower Loan originations, of which $659.3 million were originated through our Whole Loan Channel, representing 95% of the total Borrower Loans originated through our marketplace during this period. From inception through December 31, 2025 our marketplace has facilitated $30.5 billion in Borrower Loan originations, of which $27.6 billion were funded through our Whole Loan Channel, representing 90% of the total Borrower Loans originated through our marketplace during this period.

We believe our Credit Card product provides consumers working to build their credit profile with affordable access to the credit they need, when they need it, as well as tools and resources to help them stay on track with their personal finances. As with the Personal Loan product, we manage the credit risk associated with our Credit Card borrowers through a combination of public and proprietary data. From the launch of the Credit Card product through December 31, 2025, approximately 532,000 Credit Card accounts have been booked through our platform, and borrowers have spent $1.3 billion on their Prosper Credit Cards.

As a company that operates a credit marketplace, and offers a Credit Card product, our customers may be highly susceptible to uncertainties and negative trends, real or perceived, in the markets driven by, among other factors, general economic conditions in the United States and abroad. These external economic conditions and resulting trends or uncertainties could adversely impact our customers’ ability or desire to participate in our Personal Loan marketplace, as borrowers or investors, or maintain compliance with the repayment terms on a Prosper Credit Card. Consequently, our business and results of operations could be negatively affected.

Key Operating and Financial Metrics (in thousands)

The following table displays our key operating and financial metrics for the years ended December 31, 2025, 2024 and 2023:


	Years Ended December 31,
	2025		2024		2023
Personal Loan Originations	$	2,662,264	$	2,243,346	$	2,164,079
Transaction Fees, Net	$	233,385	$	193,588	$	127,838
Personal Loan Serviced Portfolio (1)	$	4,100,938	$	3,805,480	$	3,831,896
Whole Loans Outstanding (1)	$	3,847,352	$	3,508,181	$	3,491,788
Prosper Credit Card Portfolio (1) (2)	$	420,466	$	394,416	$	286,284
Servicing Fees, Net	$	30,853	$	23,026	$	15,364
Total Net Revenues	$	212,549	$	173,355	$	137,700
Net Loss	$	(35,702)	$	(54,079)	$	(106,462)
Adjusted Net Revenue (3)	$	212,570	$	175,474	$	142,209
Adjusted EBITDA (3)	$	29,414	$	17,061	$	(30,628)
(1) Unpaid principal balance as of December 31
(2) Total of Prosper Allocations, Coastal Allocations and securitized PMCC 2024-1 Credit Card receivables
(3) Adjusted Net Revenue and Adjusted EBITDA are non-GAAP financial measures. For more information regarding these measures and the reconciliation to Total Net Revenue and Net (Loss) Income, respectively, the most comparable US GAAP measures, see “Non-GAAP Financial Measures.”

Personal Loan Originations

From inception of the Company through December 31, 2025, a total of 2,370,714 Borrower Loans, totaling $30.5 billion, were originated through our marketplace.

For the year ended December 31, 2025, 165,037 Borrower Loans totaling $2.7 billion were originated through our marketplace, as compared to 148,518 Borrower Loans totaling $2.2 billion originated in 2024, which represented a unit increase of 11% and a dollar increase of 19%. These origination increases were primarily due to increased third-party investor demand, updated underwriting models, lower interest rates and a new customer acquisition channel.

Personal Loan origination volume by Prosper Rating was as follows for the periods presented (in millions, except percentages):


	Year Ended December 31,
	2025				2024				2023
	Amount		%		Amount		%		Amount		%
AA	$	358.0	13	%	$	298.3	13	%	$	288.8	13	%
A	512.6		19	%	374.2		17	%	293.8		14	%
B	551.0		21	%	479.7		22	%	563.0		26	%
C	258.7		10	%	223.3		10	%	304.1		14	%
D	262.1		10	%	212.3		9	%	227.6		11	%
E	335.4		13	%	318.6		14	%	268.7		12	%
HR	—		—	%	13.1		1	%	21.7		1	%
Other (1)	384.5		14	%	323.8		14	%	196.4		9	%
Total	$	2,662.3	100	%	$	2,243.3	100	%	$	2,164.1	100	%
(1) Represents personal loans funded through the Prosper platform via the Whole Loan Channel but not assigned Prosper Ratings.

For the year ended December 31, 2025, compared to 2024, Personal Loan originations on the Prosper platform reflect increased originations across most loan ratings. Beginning in the third quarter of 2024, the Prosper platform ceased originations for loans rated HR given limited investor demand for this rating. Loans not assigned Prosper ratings are sold only to institutional investors based on specific underwriting criteria and custom risk models developed by those investors.

Personal Loan Serviced Portfolio and Whole Loans Outstanding

Our Personal Loan serviced portfolio consists of all Borrower Loans that we service both through the Note and Whole Loan Channels. Borrower Loans funded through the Whole Loan Channels include loans that we hold in consolidated trusts, as well as those sold to third parties. Our Personal Loan serviced portfolio increased $295.5 million, or 8%, from December 31, 2024 to December 31, 2025. This increase is primarily due to increased originations for the year ended December 31, 2025, as compared to 2024.

The outstanding balance of Borrower Loans sold through our Whole Loan Channel serves as a primary driver of our Servicing Assets. Whole loans outstanding increased $339.2 million, or 10%, from December 31, 2024 to December 31, 2025 due primarily to the year-over-year increase in originations discussed above.

Prosper Credit Card Portfolio

Our Credit Card portfolio consists of the outstanding principal of all Prosper-branded Credit Cards originated through our partnership with Coastal Community Bank (“Coastal”). From December 31, 2024 to December 31, 2025, the principal balance of the Credit Card portfolio increased $26.1 million, or 7%, due to increases in the number of active Credit Cards and cardholder spend during this time.

Net (Loss) Income

See the section titled “Results of Operations” below, for the discussion on significant changes in Net (Loss) Income year-over-year.

Results of Operations

Overview

The following table summarizes our net loss for the years ended December 31, 2025, 2024 and 2023 (in thousands, except percentage):


	Years Ended December 31,
	2025		2024		Change		% Change		2024		2023		Change		% Change
Total Net Revenues	$	212,549	$	173,355	$	39,194	23	%	$	173,355	$	137,700	$	35,655	26	%
Total Expenses	248,083		227,318		20,765		9	%	227,318		244,084		(16,766)		(7)	%
Net Loss Before Income Taxes	(35,534)		(53,963)		18,429		34	%	(53,963)		(106,384)		52,421		49	%
Income Tax Expense	(168)		(116)		(52)		45	%	(116)		(78)		(38)		49	%
Net Loss	$	(35,702)	$	(54,079)	$	18,377	34	%	$	(54,079)	$	(106,462)	$	52,383	49	%

Total Net Revenues for the year ended December 31, 2025, increased $39.2 million, or 23%, as compared to the year ended December 31, 2024. The increase was largely attributable to a $39.8 million increase in Transaction Fees, Net, primarily as a result of higher personal loan origination volume during this time, as discussed above, as well as a revised WebBank transaction fee starting in June 2024. There was also a $7.8 million increase in Servicing Fees, Net due primarily to increased Personal Loan and Credit Card collections income, as well as Personal Loan servicing income, generally consistent with the increase in whole loans outstanding during this time. We also lowered our Personal Loan market servicing rate in September 2025, increasing the servicing asset and Servicing Fees, Net. In addition, Total Interest Income (Expense) increased $6.1 million, due largely to a full year of net interest income generated from the PMCC 2024-1 Credit Card securitization that closed in November 2024, and Other Revenues increased $1.5 million, primarily due to increased credit referral fees. These increases were partially offset by a $9.9 million increase in Loss on Sale of Borrower Loans, primarily as a result of additional incentives provided to whole loan investors year-over-year. Finally, there was a $6.2 million decrease in Total Net Revenues from Change in Fair Value of Financial Instruments, primarily as a result of lower fair value adjustments and increased charge-offs from the Receivable from Credit Card Partner, partially offset by increased fair value gains on the Credit Card Derivative and lower charge-offs on loans held in consolidated securitization and warehouse trusts.

Total expenses for the year ended December 31, 2025, increased $20.8 million, or 9%, as compared to the year ended December 31, 2024, which is primarily due to a combined $25.3 million increase in Origination and Servicing, Sales and Marketing and General and Administrative expenses, as costs increased primarily in response to higher Personal Loan originations and growth in the Credit Card portfolio. This increase was partially offset by the decrease attributable to the Change in Fair Value of Convertible Preferred Stock Warrants, which is in turn driven by changes in the fair value of the underlying Convertible Preferred Stock. Specifically, the loss for the year ended December 31, 2025 totals $42.1 million, which

compares to a loss of $46.2 million for 2024, a change of approximately $4.1 million. Accordingly, the net loss for the year ended December 31, 2025 decreased $18.4 million when compared to the net loss for the year ended December 31, 2024.

Revenues

The following table summarizes our revenues for the years ended December 31, 2025, 2024 and 2023 (in thousands, except percentages):


	Years Ended December 31,
	2025		2024		Change		% Change		2024		2023		Change		% Change
Operating Revenues:
Transaction Fees, Net	$	233,385	$	193,588	$	39,797	21	%	$	193,588	$	127,838	$	65,750	51	%
Servicing Fees, Net	30,853		23,026		7,827		34	%	23,026		15,364		7,662		50	%
Loss on Sale of Borrower Loans	(55,212)		(45,316)		(9,896)		(22)	%	(45,316)		(12,380)		(32,936)		n/m
Other Revenues	9,315		7,773		1,542		20	%	7,773		6,108		1,665		27	%
Total Operating Revenues	218,341		179,071		39,270		22	%	179,071		136,930		42,141		31	%

Interest Income (Expense):
Interest Income on Financial Instruments	81,904		89,849		(7,945)		(9)	%	89,849		115,663		(25,814)		(22)	%
Interest Expense on Financial Instruments	(59,770)		(73,826)		14,056		(19)	%	(73,826)		(91,983)		18,157		(20)	%
Total Interest Income, Net	22,134		16,023		6,111		38	%	16,023		23,680		(7,657)		(32)	%
Change in Fair Value of Financial Instruments	(27,926)		(21,739)		(6,187)		(28)	%	(21,739)		(22,910)		1,171		5	%
Total Net Revenues	$	212,549	$	173,355	$	39,194	23	%	$	173,355	$	137,700	$	35,655	26	%

n/m: not meaningful

Transaction Fees, Net

We earn a transaction fee upon the successful origination of all Borrower Loans facilitated through our marketplace. Specifically, we receive payments from WebBank as compensation for the activities we perform on behalf of WebBank. Our fee is determined by the term and credit grade of the Borrower Loans that we facilitate on our marketplace and WebBank originates. We record the transaction fee revenue net of any fees paid by us to WebBank. We also earn various program fees from our Credit Card product, such as interchange fees, annual fees and late fees, all of which are recorded within Transaction Fees, Net.

Transaction Fees increased by $39.8 million, or 21%, for the year ended December 31, 2025, as compared to 2024, primarily due to the increased Personal Loan originations discussed above. In addition, the increase is due to the revisions to the WebBank transaction fee schedule starting in June 2024. Under the revised WebBank transaction fee schedule, transaction fees now range from 1.0% to 9.99%, depending on the term and credit grade of the Borrower Loan, as compared to 1.0% to 7.99% under the previous schedule. Transaction fees above 5.0% are refundable on a pro-rated basis upon the full prepayment of the related Borrower Loan prior to maturity under Utah law, where WebBank is domiciled, and thus the impact of these increased transaction fees is reduced by expected refunds.

We recognized approximately $25.1 million in program fees under our Credit Card product for the year ended December 31, 2025, which represented a $1.0 million increase from 2024.

Servicing Fees, Net

Investors who purchase Borrower Loans through the Whole Loan Channel typically pay us a servicing fee which is generally set at 1.0% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment, plus an additional 0.075% per annum to cover the Loan Trailing Fee. The Servicing Fee compensates us for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, payments to investors and maintaining investors’ account portfolios. We record Servicing Fees from investors as a component of operating revenues when received. We also include any collection fees received, net of collection agency expenses, in Servicing Fees, Net.

In addition, we are contractually obligated to service the entire portfolio under our Credit Card product. Our banking partner, Coastal, pays us a servicing fee of 1.0% per annum of the daily outstanding principal balance of all cards designated as Coastal allocations within the non-securitized portion of the portfolio. These allocations represented approximately 10% of the portfolio through March 31, 2024, but were reduced to 5% starting April 1, 2024 as a result of an amendment to the Program Agreement executed in March 2024. To the extent these contractual fees are less than the market servicing rate that would be required by a market participant to service the portfolio, a servicing obligation is recorded. Changes to the net Credit Card servicing obligation are included in Servicing Fees, Net. We do not recognize a servicing asset or obligation related to any Credit Card receivables that are effectively consolidated on our balance sheet through the PMCC 2024-1 securitization transaction discussed in Note 5 of the accompanying consolidated financial statements.

For the year ended December 31, 2025, Servicing Fees, Net increased $7.8 million, or 34%, as compared to 2024, primarily as a result of a $6.1 million increase in net collections, debt sale and loan trailing fees, due largely to enhanced Personal Loan and Credit Card collections and recovery efforts. Additionally, there was a $2.0 million increase in Personal Loan servicing revenue from servicing fees collected, net of amortization of the Servicing Asset, reflective of both (i) the growth in the underlying servicing book discussed above, as well as (ii) the reduction in the estimated market servicing rate used to value the Servicing Asset from 63.3 basis points to 59.3 basis points in September 2025. Changes in the fair value of the net Credit Card servicing obligation contributed a $1.1 million decrease in Servicing Fees, due to growth in the portfolio year-over-year. We also generated an additional $0.8 million in miscellaneous Credit Card fees as compared to the prior year.

Loss on Sale of Borrower Loans

We recognize a Gain or Loss on Sale of Borrower Loans for the net proceeds received on a sale through the Whole Loan Channel, less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, incentives and repurchase obligations provided or received at the time of sale. Since 2022, due to market volatility and incentives offered by competitors, we started providing additional incentives to our investors. For the year ended December 31, 2025, these incentives increased $13.0 million from the prior year. Excluding the impact of these incentives, the remaining change in Loss on Sale of Borrower Loans was an increased gain of $3.1 million for the year ended December 31, 2025, as compared to 2024, primarily due to the recognition of additional Servicing Assets upon the sale of whole loans, as well as a decrease in the market servicing rate used to value the Servicing Assets from 63.3 bps to 59.3 basis points in September 2025.

Other Revenues

Other Revenues consists primarily of credit referral fees earned from partner companies for the referral of customers on our platform, as well as incentive fees from our Credit Card network partner, based primarily on the volume of transactions generated on our Credit Cards, net of any fees paid to that network partner. Credit referral fees accounted for the majority of the $1.5 million increase in Other Revenues for the year ended December 31, 2025 as compared to 2024.

Interest Income on Financial Instruments and Interest Expense on Financial Instruments

We recognize Interest Income on Borrower Loans, Loans Held for Sale and Receivable from Credit Card Partner (consisting of the underlying securitized Credit Card receivables) using the accrual method based on the stated interest rate to the extent we believe it to be collectible. We record interest expense on the corresponding fractional Notes, at Fair Value, Notes Issued by Securitization Trusts and Warehouse Lines based on the contractual interest rates. The interest rate on fractional Notes, at Fair Value is generally 1% lower than the interest rate on the corresponding Borrower Loans to compensate us for servicing the underlying Borrower Loans.

The increase of $6.1 million, or 38%, in Total Interest Income (Expense) for the year ended December 31, 2025 as compared to 2024, was primarily due to a $13.2 million increase in Total Interest Income (Expenses), Net generated from the underlying credit card receivables included within Receivable from Credit Card Partner, less interest expense and setup cost amortization incurred on the related Notes Issued by Securitization Trust, following the PMCC 2024-1 securitization in November 2024. This increase was partially offset by a combined $6.3 million decrease in Total Interest Income (Expense), Net generated from (i) Loans Held for Sale, net of interest expense and setup cost amortization on the Warehouse Lines, and (ii) securitized Borrower Loans, net of interest expense and setup cost amortization incurred on the Notes Issued by Securitization Trust during this period. This decrease is reflective of the reduced average outstanding balance of loans held in these consolidated trusts year-over-year, as well as the related decrease in the associated financing liabilities due to principal repayments. In addition, Total Interest Income (Expense), Net from securitization and warehouse bank accounts, servicing revenue related to fractional Notes, and Borrower Loans we hold for investment decreased a combined $0.8 million from the prior year.

Change in Fair Value of Financial Instruments

We record Borrower Loans, Loans Held for Sale, Notes, the Credit Card Derivative and Receivable from Credit Card Partner at fair value on our balance sheets. Changes in the fair values of these financial instruments are presented within Change in Fair Value of Financial Instruments on our statements of operations.

Personal Loan

Changes in the fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in the fair value of the Notes due to their borrower payment-dependent structure. Our obligation to pay principal and interest on Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of the servicing fee, which is generally 1.0% of the outstanding balance.

We used Warehouse Lines to finance the purchase of Loans Held for Sale for the purpose of earning net interest income and contributing to securitization transactions. Loans Held for Sale consisted primarily of loans held in warehouse trusts. Changes in the fair value of Loans Held for Sale were not offset by changes in the fair value of Warehouse Lines because Warehouse Lines were carried at amortized cost. As discussed below and in Note 11, Debt, of the accompanying condensed consolidated financial statements, we terminated our two existing Warehouse Lines in September 2023 and March 2024, respectively, and securitized the related Loans Held for Sale. Because of the securitizations, these loans are now classified as Borrower Loans on our consolidated balance sheets.

In September 2023 and March 2024, we sponsored and consolidated two Personal Loan securitization transactions, PMIT 2023-1 and PMIT 2024-1, respectively, with loans that were previously funded through our PWIIT and PWIT Warehouse Lines, respectively. Refer to Note 7, Securitizations, of the accompanying consolidated financial statements for additional information on these securitization transactions. We expect that changes in the fair value of Borrower Loans held by PMIT 2023-1 and PMIT 2024-1 will be negative due to delinquencies and charge-offs, but they could ultimately be negative or positive due to changes in fair value assumptions, such as expected credit performance, prepayment rates and implied market discount rates. Additionally, the impact from fair value adjustments on these securitized Borrower Loans may lessen as they season and the outstanding principal balances decrease. Notes issued by PMIT 2023-1 and PMIT 2024-1 are carried at amortized cost on the accompanying consolidated balance sheets and thus do not impact the Change in Fair Value of Financial Instruments.

We earn interest income on personal loans held in securitization trusts during the period we own or consolidate the loans, which partially offsets changes in the fair value of these loans. The following table illustrates the weighted-average composition of the loans held in consolidated securitization trusts by Prosper Rating for the periods presented, which is an indicator of their credit quality:


	Year Ended December 31,
	2025		2024
Borrower Loans - Securitization(1):
AA	23	%	26	%
A	30	%	28	%
B	24	%	23	%
C	11	%	12	%
D	6	%	5	%
E	5	%	5	%
HR	1	%	1	%
Total	100	%	100	%

(1) The percentages are calculated using the weighted-average of month-end principal balances of Borrower Loans by Prosper Rating.

Fair values of Borrower Loans and Notes are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The key assumptions used include default and prepayment rates derived primarily from historical performance, and discount rates based on estimates of the rates of return that market investors would require when investing in other financial instruments with similar characteristics.

Credit Card

The Credit Card Derivative is recorded at fair value and is primarily reflective of discounted future cash flows from certain features of our Credit Card program that were determined to meet the definition of freestanding derivatives, including interest income, program fees paid to our banking partner Coastal, credit losses and fraud losses. These cash flows are estimated based upon a set of valuation assumptions, including default and prepayment rates derived primarily from comparable companies and our own historical performance, and discount rates based on estimates of the rates of return that investors would require when investing in other financial instruments with similar characteristics. We also record the net impact of realized gains and losses under the Credit Card Derivative in Change in Fair Value of Financial Instruments.

In November 2024, we sponsored and consolidated a Credit Card securitization transaction, PMCC 2024-1, with existing Credit Card receivables that were previously accounted for through our Credit Card Derivative. See Notes 5 and 7 of the accompanying consolidated financial statements for further details on both the Credit Card Derivative and PMCC 2024-1. We fully consolidate PMCC 2024-1 as a VIE, as it has insufficient equity at risk and we determined that we were its primary beneficiary. Based on an analysis of the facts and circumstances surrounding the transaction, it was determined that the transfer of the Credit Card receivables from Coastal to PMCC 2024-1 did not meet the sales or participating interest criteria under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, and thus could not be recognized on our consolidated balance sheets. As a result, we record a secured Receivable from Credit Card Partner, which we have elected to present at fair value on our consolidated balance sheets. Receivable from Credit Card Partner is secured by and effectively mirrors the value of the underlying Credit Card receivables.

As the sole sponsor of PMCC 2024-1, we are entitled to any residual cash flows it generates, and estimate the fair value of that residual interest using a discounted cash flow analysis based upon valuation assumptions generally similar to those used to value the Credit Card Derivative, adjusted to reflect the specific characteristics of the securitized Credit Card receivables underlying the Receivable from Credit Card Partner. That residual interest fair value is then added to the securitization advance rate applied to the outstanding balance of the Credit Card receivables to calculate the estimated fair value of Receivable from Credit Card Partner. Consistent with securitized Borrower Loans, Notes issued by PMCC 2024-1 are carried at amortized cost on the accompanying consolidated balance sheets, and thus do not impact the Change in Fair Value of Financial Instruments.

For both the Credit Card Derivative and Receivable from Credit Card Partner, changes in the fair value should generally fluctuate in line with changes in the underlying portfolio and charge-off levels, but could also be impacted by changes in fair value assumptions, such as expected credit performance, prepayment rates and implied market discount rates.

Fluctuation Analysis

For the years ended December 31, 2025 and 2024, the Change in Fair Value of Financial Instruments, Net were losses of $27.9 million and $21.7 million, respectively.

The increase in the loss for this period of $6.2 million is largely driven by the Receivable from Credit Card Partner, for which we recognized a $3.3 million loss from changes in fair value related to future cash flows and $14.0 million in net charge-offs for the year ended December 31, 2025. This compares to the prior year, when we recognized a $10.3 million gain from changes in fair value related to future cash flows and $0.9 million in net charge-offs, following the closing of the PMCC 2024-1 securitization on November 1, 2024. The fair value change in 2024 is inclusive of a $7.5 million initial gain recorded at the time the securitization closed. Because of the minimum contractual ratio of Credit Card receivables to outstanding Notes issued by PMCC 2024-1, the underlying securitized Credit Card portfolio has remained generally flat year-over-year, reducing the impact of fair value changes related to future cash flows.

The increased net losses from the Receivable from Credit Card Partner were partially offset by decreased net losses from the Credit Card Derivative, due primarily to growth in the underlying non-securitized Credit Card portfolio from the prior year. For the year ended December 31, 2025, fair value changes related to future cash flows resulted in a gain of $9.6 million, and the net impact of realized transactions resulted in a loss of $10.3 million. This compares to the prior year, when fair value changes resulted in a gain of $1.9 million, and the net impact of realized transactions resulted in a loss of $9.1 million. The fair value loss in 2024 is also reflective of the impact of the closing of the PMCC 2024-1 securitization on November 1, 2024. Specifically, we recognized an $11.4 million reduction to the Credit Card Derivative on that closing date, when approximately 25% of the outstanding Credit Card receivables were transferred to the securitization.

There was also a decrease in net losses from securitized Borrower Loans and Loans Held for Sale year-over-year, due primarily to the overall decrease in the average balance of loans held in consolidated securitization and warehouse trusts during this time, as these loans continue to season. For securitized Borrower Loans, the loss from changes in fair value for the year ended December 31, 2025 was $9.2 million, due to a $7.3 million gain from fair value adjustments, offset by $16.5 million in net charge-offs. This compares to securitized Borrower Loans and Loans Held for Sale in 2024, when there was a combined loss from changes in fair value of $22.0 million, due primarily to a $7.5 million gain from fair value adjustments, offset by $29.6 million in net charge-offs.

The net impact to the Change in Fair Value of Financial Instruments for fractional Borrower Loans and Notes (as well as the population of whole loans that are owned directly by our wholly-owned subsidiary PFL) was a $0.7 million loss for the year ended December 31, 2025, due to the borrower payment-dependent structure described above, offset by certain timing factors related to the receipt of borrower payments and the application of those payments against the corresponding Notes. For 2024, the net impact from these fractional Borrower Loans and Notes (as well as the population of whole loans that are owned directly by PFL) was a $1.9 million loss.

The following table details the change in fair value of our financial instruments for the years ended December 31, 2025, 2024 and 2023, respectively (in thousands):


	Years Ended December 31,
	2025		2024		2023
Assets:
Borrower Loans	$	(28,702)	$	(49,271)	$	(48,387)
Loans Held for Sale	—		(2,263)		(39,269)
Credit Card Derivative (includes gains and losses from settled transactions)	(701)		(7,247)		25,506
Receivable from Credit Card Partner	(17,318)		9,462		—
SOFR rate swaption (included in Prepaid and Other Assets)	—		37		(1,163)

Liabilities:
Notes	18,795		27,543		40,403
Total	$	(27,926)	$	(21,739)	$	(22,910)

Expenses

The following table summarizes our expenses for the years ended December 31, 2025, 2024 and 2023 (dollar amounts in thousands):


	Years Ended December 31,
	2025		2024		$ Change		% Change		2024		2023		$ Change		% Change
Expenses:
Origination and Servicing	$	48,490	$	47,628	$	862	2	%	$	47,628	$	46,669	$	959	2	%
Sales and Marketing	60,513		50,638		9,875		20	%	50,638		53,585		(2,947)		(5)	%
General and Administrative - Research and Development	21,528		14,076		7,452		53	%	14,076		19,069		(4,993)		(26)	%
General and Administrative - Other	66,548		59,396		7,152		12	%	59,396		66,464		(7,068)		(11)	%
Change in Fair Value of Convertible Preferred Stock Warrants	42,103		46,208		(4,105)		(9)	%	46,208		48,695		(2,487)		(5)	%
Impairment of Right-of-Use Lease Assets	—		—		—		n/a		—		196		(196)		(100)	%
Interest Expense on Term Loans	12,331		13,124		(793)		(6)	%	13,124		12,265		859		703	%
Other Income, Net	(3,430)		(3,752)		322		(9)	%	(3,752)		(2,859)		(893)		31	%
Total Expenses	$	248,083	$	227,318	$	20,765	9	%	$	227,318	$	244,084	$	(16,766)	(7)	%

n/a: not applicable

The following table reflects full-time employees as of December 31, 2025, 2024 and 2023 by functional area:


	December 31,
	2025	2024	2023
Origination and Servicing	88	97	100
Sales and Marketing	26	32	28
General and Administrative - Research and Development	104	102	97
General and Administrative - Other	167	185	179
Total Headcount	385	416	404

Origination and Servicing

Origination and Servicing costs consist primarily of salaries, benefits and stock-based compensation expense related to our capital markets, collections, customer support and payment processing employees and vendor costs associated with facilitating and servicing personal loans and our Credit Card product. The increase for the year ended December 31, 2025, of $0.9 million, or 2%, as compared to 2024 is primarily due to a $2.1 million increase in depreciation due to the increase in the balance of internal-use software during this time. Additionally, there was a $1.6 million increase in compensation costs during this time, driven largely by the elimination of the 2023 corporate bonus accrual in the second quarter of 2024, which reduced expenses recognized in 2024. These increases were partially offset by a $2.7 million decrease in servicing and origination costs, particularly those related to our Credit Card product, as we continued to drive efficiencies and reduced our spend on vendors.

Sales and Marketing

Sales and Marketing costs consist primarily of affiliate marketing, search engine marketing, online and offline campaigns, email marketing, public relations and direct mail marketing, as well as compensation expenses such as wages, benefits and stock-based compensation for the employees who support these activities. For the year ended December 31, 2025, the increase of $9.9 million, or 20%, from the prior year is due to an overall increase in marketing and advertising costs associated with our Personal Loan and Credit Card products, including marketing partnership costs of $7.7 million and direct mail marketing costs of $4.1 million. This is generally in line with the increase in Personal Loan originations and growth in our Credit Card portfolio during this time. This increase was partially offset by a $1.9 million decrease in compensation expense, primarily due to the decrease in headcount from the prior year.

General and Administrative – Research and Development

General and Administrative – Research and Development costs consist primarily of salaries, benefits and stock-based compensation expense related to our engineering and product development employees, as well as related vendor costs. For the year ended December 31, 2025, the increase of $7.5 million, or 53%, as compared to 2024, is primarily due to a $6.1 million increase in compensation costs, driven by increased average headcount and the elimination of the 2023 corporate bonus accrual in the second quarter of 2024, which reduced expenses recognized in 2024. Additionally, there was a $0.7 million increase in General and Administrative – Research and Development costs related to lower capitalized internal-use software and web development costs (which reduce the expense). Specifically, these capitalized costs were $13.8 million and $14.5 million for the years ended December 31, 2025 and 2024, respectively. Finally, there was a $0.4 million increase in cloud storage costs to support the growth in our operations.

General and Administrative – Other

General and Administrative – Other expenses consist primarily of salaries, benefits and stock-based compensation expense related to our accounting, finance, risk, legal, compliance, human resources and facilities employees; professional fees related to legal and accounting services; and facilities expenses. The increase in General and Administrative – Other for the year ended December 31, 2025 of $7.2 million, or 12%, as compared to 2024 is due primarily to a $7.5 million increase in compensation expense, driven largely by the elimination of the 2023 corporate bonus accrual in the second quarter of 2024, which reduced expenses recognized in 2024. In addition, there was an increase of $1.1 million in software and subscription costs, and a $0.7 million increase in professional services, both of which were generally related to the growth in our operations. These increases were partially offset by a $0.5 million loss on disposal of equipment recorded in April 2024, related to the exit from our former data center lease in Las Vegas, NV. As this equipment was used primarily for general operations, it was considered general and administrative in nature. There were no such significant exit activities in 2025, and no material loss on disposal of equipment was recorded. In part due to these prior year exit activities, there was also a $0.8 million decrease in depreciation and amortization, a $0.2 million decrease in data center costs, net of the associated increase in cloud computing costs, and a $0.2 million decrease in internet connectivity charges, for the year ended December 31, 2025, as compared to 2024. Finally, insurance costs decreased $0.2 million from the prior year.

Change in Fair Value of Convertible Preferred Stock Warrants

Change in Fair Value of Convertible Preferred Stock Warrants were losses of $42.1 million and $46.2 million for the years ended December 31, 2025 and 2024, respectively, due to increases in the fair value of the underlying Convertible Preferred Stock for those periods.

As disclosed in Note 13, Convertible Preferred Stock, Convertible Preferred Stock Warrant Liability and Common Stock, of the accompanying consolidated financial statements, on July 29, 2025, one warrant holder exercised 51,614,124 shares of Series F warrants for total proceeds of $0.5 million. At that time, the estimated fair value of these warrants of $73.3 million was reclassified from Convertible Preferred Stock Warrant Liability to Convertible Preferred Stock on our consolidated balance sheet.

Interest Expense on Term Loans

We entered into a $75.0 million Term Loan with a third party lender in November 2022. In November 2025, we entered into a new $75.0 million Term Loan with a different third-party lender, and simultaneously repaid the outstanding principal and interest balance of approximately $68.4 million on the old Term Loan. Refer to Note 11, Debt, of the accompanying consolidated financial statements for further information on our Term Loans. We incurred interest costs of $12.3 million between the two Term Loans for the year ended December 31, 2025, as compared to $13.1 million on the old Term Loan for the year ended December 31, 2024. This decrease is primarily reflective of the decrease in the unpaid principal on the old Term Loan following contractual quarterly repayments totaling $10.0 million from December 2024 to September 2025. Because the interest rate associated with the new Term Loan is four percentage points lower than the old Term Loan, we also incurred lower interest expense for the period that the new Term Loan was in place during 2025. We expect to continue to incur lower interest expense in the future because of this change. Finally, interest expense for the year ended December 31, 2025, is inclusive of $0.9 million in accelerated amortization of the original issue discount and debt issuance costs associated with the termination of the old Term Loan in November 2025.

Other Income, Net

Other Income, Net was $3.4 million for the year ended December 31, 2025 and primarily consists of interest income on cash and cash equivalents, sublease income and other miscellaneous items. The decrease of $0.3 million in Other Income, Net for the year ended December 31, 2025, as compared to 2024 was primarily attributable to decreases in interest income driven by lower average interest rates.

Non-GAAP Financial Measure

Adjusted Net Revenue

Adjusted Net Revenue is a non-GAAP financial measure that we define as our Total Net Revenue adjusted to exclude the impact of interest rates on the fair value of loans held in consolidated trusts and certain infrequent or unusual transactions, such as the accelerated amortization of PWIT and PWIIT debt issuance costs. As a result of the termination of the PWIT Warehouse Line in March 2024 and the PWIIT Warehouse Line in September 2023 (see Note 11, Debt), we accelerated the remaining amortization of the related deferred debt issuance costs into Interest Expense on Financial Instruments. We excluded the impact of this accelerated amortization because it is non-cash and because of the infrequent nature of the transaction. Management does not believe that it is reflective of our ongoing operating results. We believe it is useful to investors to exclude the impact of interest rates on the fair value of loans held in consolidated trusts to gain insight into the performance of our consolidated loans, independent of market factors that are beyond management’s control.

Adjusted Net Revenue has limitations as a financial measure, should be considered as supplemental in nature and is not meant as a substitute for Total Net Revenue, which has been prepared in accordance with U.S. GAAP. These limitations include the following:

•Adjusted Net Revenue excludes the impact of interest rates, which may influence the price that a buyer would be willing to pay for our personal loans in a hypothetical arm’s length transaction; and

•Other companies, including companies in our industry, may calculate Adjusted Net Revenue differently or not at all, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted Net Revenue alongside other financial performance measures, including Total Net Revenue and our financial results presented in accordance with U.S. GAAP. The following table presents a reconciliation of Total Net Revenue to Adjusted Net Revenue for each of the periods indicated (in thousands):


	Years Ended December 31,
	2025		2024		2023
Total Net Revenue	$	212,549	$	173,355	$	137,700
Impact of Interest Rates on Fair Value of Loans Held in Consolidated Trusts (1)	21		1,386		2,629
Accelerated Amortization of PWIT Debt Issuance Costs (2)	—		733		—
Accelerated Amortization of PWIIT Debt Issuance Costs (2)	—		—		1,880
Adjusted Net Revenue	$	212,570	$	175,474	$	142,209
(1) Component of Change in Fair Value of Financial Instruments on the consolidated statements of operations
(2) Component of Interest Expense on Financial Instruments on the consolidated statements of operations

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we define as Net Income (Loss) adjusted for interest income on Cash and Cash Equivalents, Interest Expense on Term Loan, Income Tax Benefit or Expense, depreciation and amortization, impairment of long-lived assets and Goodwill, stock-based compensation expense, Change in Fair Value of Convertible Preferred Stock Warrants, impact of interest rates on the fair value of loans held in consolidated trusts, and certain infrequent or unusual transactions. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

We consider Adjusted EBITDA to be a helpful indicator of the operational strength and performance of our business and a good measure of our historical operating trends. Management uses Adjusted EBITDA, among other things, to understand and compare operating results across accounting periods, to evaluate our operations and financial performance and for internal planning and forecasting purposes. Inclusion of Adjusted EBITDA is intended to provide investors with insight into the manner in which management views the performance of the Company, enhance investors’ evaluation of our operating results, and to facilitate meaningful comparisons of our results between periods. This non-GAAP financial measure should not be considered an alternative to, or more meaningful than, the GAAP financial information provided herein.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•Adjusted EBITDA does not consider the potentially dilutive impact of equity-based charges;

•Adjusted EBITDA does not reflect interest and tax payments that may represent a reduction in cash available to us; and

•Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

The major non-GAAP adjustments, and our basis for excluding them, are outlined below:

•Changes in the fair value of Convertible Preferred Stock Warrants: We exclude these fair value changes primarily because they are non-cash items and the fair value varies based on the fair value of the underlying preferred stock, varying valuation methodologies and subjective assumptions. Their inclusion makes the comparison of our current financial results to previous and future periods difficult to evaluate.

•Stock-based compensation expense: This consists of expenses for equity awards under our equity incentive plans. Although stock-based compensation is an important aspect of the compensation paid to our employees, the grant date fair value varies based on the stock price at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of our current financial results to previous and future periods difficult to evaluate; therefore, we believe it is useful to exclude stock-based compensation. We also excluded these expenses because they are non-cash.

•Amortization or impairment of acquired Intangible Assets and impairment of Goodwill: We incur amortization or impairment of acquired Intangible Assets and Goodwill in connection with acquisitions and therefore exclude these amounts from our non-GAAP measures. We exclude these items because management does not believe they are reflective of our ongoing operating results.

•Impairment of operating lease right-of-use assets - We have recognized impairment on our operating lease right-of-use assets related to vacant sublease space and the expected timing of finding new subtenants. We exclude these charges because they are non-cash and because management does not believe they are reflective of our ongoing operating results.

•Impairment of long-lived assets: We incur losses on the impairment of long-lived assets that are disposed of primarily in connection with the exit of facilities. We exclude these items because management does not believe they are reflective of our ongoing operating results.

•Impact of interest rates on the fair value of loans held in consolidated trusts: See discussion on Adjusted Net Revenue, above.

•Accelerated amortization of PWIT and PWIIT debt issuance costs: See discussion on Adjusted Net Revenue, above.

•Interest Expense on Term Loans: We incur interest expense on our Term Loan, which is more fully described in Note 11, Debt, of the accompanying consolidated financial statements. This includes any amortization of original issue discount and deferred issuance costs associated with the Term Loan. Proceeds from the Term Loan are used to fund the operations of the business at our discretion, within certain limitations. This may include, but is not limited to, making investments in our Credit Card product or meeting operational obligations. We exclude the Term Loan interest expense as it is based on the overall financing structure of PMI. This differs from Interest Expense on Financial Instruments (part of Total Net Revenues), as the proceeds from those instruments are used exclusively for the purposes of purchasing loans on our marketplace and Credit Card receivables through the underlying warehouse and securitization transactions.

The following table presents a reconciliation of Net (Loss) Income to Adjusted EBITDA for each of the periods indicated (in thousands):


	Years Ended December 31,
	2025		2024		2023
Net Loss	$	(35,702)	$	(54,079)	$	(106,462)
Depreciation expense:
Origination and Servicing	11,292		9,200		8,774
General and Administrative – Other	836		1,531		2,108
Amortization of Intangible Assets	—		85		107
Stock-Based Compensation	1,307		1,616		1,575
Change in Fair Value of Convertible Preferred Stock Warrants	42,103		46,208		48,695
Impact of Interest Rates on Fair Value of Loans Held in Consolidated Trusts	21		1,386		2,629
Impairment of Long-Lived Assets	—		463		—
Impairment of Right-of-Use Lease Assets	—		—		196
Interest Income on Cash and Cash Equivalents	(2,942)		(3,322)		(2,473)
Interest Expense on Term Loans	12,331		13,124		12,265
Accelerated Amortization of PWIT Debt Issuance Costs	—		733		—
Accelerated Amortization of PWIIT Debt Issuance Costs	—		—		1,880
Income Tax Expense	168		78		295
Adjusted EBITDA	$	29,414	$	17,061	$	(30,628)

The increase in Adjusted EBITDA for the year ended December 31, 2025, as compared to 2024, of $12.4 million is primarily reflective of increased Transaction Fees, Net, driven by the increase in Personal Loan originations during this time and the revised WebBank transaction fee schedule starting in June 2024, higher Servicing Fees, Net, due to growth in the Personal Loan serviced portfolio, increased collections fees and higher Total Interest Income, Net, generated by the Credit Card product from the PMCC 2024-1 securitization that closed in November 2024. These were partially offset by increased incentives provided to whole loan investors, and increased fair value losses, primarily related to the Credit Card product. Additionally, expenses for the period increased in response to the higher Personal Loan originations, growth in the Credit Card portfolio and the elimination of the 2023 bonus accrual in the second quarter of 2024, which reduced expenses recognized in 2024.

Expenses on the consolidated statements of operations include the following amounts of stock-based compensation expense for the periods presented (in thousands):


	Years Ended December 31,
	2025		2024		2023
Origination and Servicing	$	109	$	86	$	83
Sales and Marketing	68		446		304
General and Administrative	1,130		1,084		1,188
Total Stock-Based Compensation Expense	$	1,307	$	1,616	$	1,575

Segment Net Revenues, Adjusted Net Revenue and Adjusted EBITDA

Refer to Note 21, Segments, of the accompanying consolidated financial statements for information on our segment reporting, including reconciliations of segment net revenues to segment Adjusted Net Revenue, and segment Adjusted EBITDA to Net Income (Loss) Before Income Taxes, as well as details on segment operating expenses.

Effective in the fourth quarter of 2025, we updated our operating and reportable segments to align with recent strategic business and management reporting changes. This realignment is reflected in the periodic financial reports provided to our Chief Executive Officer, who serves as the chief operating decision maker, for the purposes of evaluating performance, making operating decisions and allocating resources. As a result of these changes, our former Home Equity segment was eliminated and the related products and services are now combined with the Personal Loan segment, which includes both Personal Loan products and services, as well as general corporate expenses. We now have two reportable and operating segments: Personal Loan and Credit Card. Periods prior to the fourth quarter of 2025 have been recast to conform to the current reportable segment presentation.

The following table summarizes our segment net revenues, segment Adjusted Net Revenue and segment Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023 (in thousands, except percentages).


	Years Ended December 31,
	2025		2024		Change		% Change		2024		2023		Change		% Change
Segment Net Revenues
Personal Loan	$	192,197	$	146,016	$	46,181	32	%	$	146,016	$	102,796	$	43,220	42	%
Credit Card	20,352		27,339		(6,987)		(26)	%	27,339		34,904		(7,565)		(22)	%
Total Net Revenues	$	212,549	$	173,355	$	39,194	23	%	$	173,355	$	137,700	$	35,655	26	%

Segment Adjusted Net Revenues
Personal Loan	$	192,218	$	148,135	$	44,083	30	%	$	148,135	$	107,305	$	40,830	38	%
Credit Card	20,352		27,339		(6,987)		(26)	%	27,339		34,904		(7,565)		(22)	%
Total Adjusted Net Revenues	$	212,570	$	175,474	$	37,096	21	%	$	175,474	$	142,209	$	33,265	23	%

Segment Adjusted EBITDA
Personal Loan	$	40,753	$	20,209	$	20,544	102	%	$	20,209	$	(34,510)	$	54,719	n/m
Credit Card	(11,339)		(3,148)		(8,191)		n/m		(3,148)		3,882		(7,030)		n/m
Total Adjusted EBITDA	$	29,414	$	17,061	$	12,353	72	%	$	17,061	$	(30,628)	$	47,689	n/m

n/m: not meaningful

Segment Adjusted EBITDA is our primary segment profitability metric, and is calculated as segment revenues less operating expenses that are directly attributable to the segments’ products. Segment Adjusted Net Revenue is calculated as segment revenue less the impact of changes in interest rates on the fair value of loans held in consolidated trusts and certain unusual or infrequent transactions. For the periods presented above, these adjustments only impact the Personal Loan segment.

Personal Loan

Personal Loan segment net revenues increased $46.2 million, or 32%, for the year ended December 31, 2025, as compared to 2024, primarily as a result of (a) a $38.8 million increase in Transaction Fees, Net, due to the impact from higher Personal Loan originations during this time, as well as the revised WebBank transaction fee schedule starting in June 2024; (b) a $14.0 million increase in net revenues from Change in Fair Value of Financial Instruments related to Borrower Loans, Loans Held for Sale and Notes, as described above, (c) a $9.0 million increase in Servicing Fees, Net, due primarily to the year-over-year increase in net collections fees, as well as Personal Loan servicing revenues (including the impact of reducing the estimated market servicing rate applied to the Servicing Asset starting in September 2025), as discussed above; and (d) a $1.4 million increase in Other Revenues, due primarily to additional credit referral fees generated from our partners. These increases were partially offset by (e) a $9.9 million decrease in net revenues from Loss on Sale of Borrower Loans, due primarily to an increase in incentives provided to whole loan investors, partially offset by gains from increased Personal Loan sales during this time; and (f) an $7.1 million decrease in Total Interest Income (Expense) Net, due primarily to the decrease in the average outstanding principal balance of Borrower Loans held in consolidated securitization and warehouse trusts.

Segment Adjusted Net Revenue associated with the Personal Loan segment increased $44.1 million, or 30%, for the year ended December 31, 2025, as compared to 2024. This is reflective of the same factors that drove the increase in net revenues discussed above, excluding the impact of (a) interest rates on the fair value of loans held in consolidated trusts, and (b) accelerated recognition of debt issuance costs upon the termination of the PWIT Warehouse Line in March 2024 (impacted 2024 only).

Adjusted EBITDA associated with the Personal Loan segment increased $20.5 million for the year ended December 31, 2025, as compared to 2024. This is primarily reflective of the same factors that drove the increases in net revenues and Adjusted Net Revenue discussed above, partially offset by an increase of $23.5 million in segment operating expenses. This increase in segment operating expenses was largely driven by personnel costs, primarily as a result of the reversal of the 2023 bonus accrual in the second quarter of 2024, which reduced expenses recognized in 2024. It was also reflective of increased marketing, software and cloud computing costs, in response to the increase in Personal Loan originations during this time.

Credit Card

For the year ended December 31, 2025, Credit Card segment net revenues and segment Adjusted Net Revenues decreased $7.0 million, or 26%, as compared to 2024, primarily as a result of an $20.2 million decrease in net revenues from Change in Fair Value of Financial Instruments, related to the Receivable from Credit Card Partner, partially offset by the Credit Card Derivative, as discussed above. Generally, this decrease in net revenues from fair value losses is reflective of increased charge-offs within the securitized Credit Card portfolio, which was established in November 2024. The impact from Change in Fair Value of Financial Instruments, was partially offset by a $13.2 million increase in Total Interest Income (Expense), Net, from the securitized Credit Card receivables underlying the Receivable from Credit Card Partner, less the interest expense on the related Notes Issued by Securitization Trust.

Adjusted EBITDA associated with Credit Card decreased $8.2 million in 2025, as compared to 2024, which is primarily reflective of the decrease in net revenues and Adjusted Net Revenue discussed above, as well as increased segment operating expenses of approximately $1.2 million. This increase in segment operating expenses was largely driven by personnel costs, primarily as a result of the reversal of the 2023 bonus accrual in the second quarter of 2024, which reduced expenses recognized in 2024, as well as reduced capitalized internal-use software and web development costs. It was also reflective of increased marketing costs, in response to the increase in the underlying Credit Card portfolio during this time. These increases were partially offset by decreased third-party Credit Card servicing costs, as we continued to drive efficiencies and reduced our spend on vendors.

LIQUIDITY AND CAPITAL RESOURCES

We have incurred operating losses in prior years and may continue to incur net losses in the future. For the years ended December 31, 2025 and 2024, we incurred net losses of $35.7 million and $54.1 million, respectively. Additionally, from our inception through December 31, 2025, we have an accumulated deficit of $679.9 million.

We believe our liquidity needs for the next twelve months, and for the foreseeable future beyond that period, can be met through transaction fees, servicing fees, net interest income, other revenue, proceeds from sales of loans and securitizations, realized gains from the Credit Card portfolio and Cash and Cash Equivalents. Management monitors our financial results and operations. If the anticipated financial results are not achieved or we fail to maintain compliance with the debt covenants under our Term Loan, our sources of liquidity may not be sufficient to meet our operating and liquidity requirements without obtaining additional liquidity, which may not be available on favorable terms or at all. For further details related to our Term Loan, see Note 11, Debt, of the accompanying consolidated financial statements.

The following table summarizes our cash flow activities for the periods presented (in thousands):


	Year Ended December 31,
	2025		2024		2023
Net Loss	$	(35,702)	$	(54,079)	$	(106,462)

Net cash provided by operating activities	$	134,341	$	219,951	$	47,845
Net cash used in investing activities	(7,420)		(99,040)		(56,951)
Net cash used in financing activities	(130,890)		(131,092)		(32,235)
Net decrease in Cash, Cash Equivalents and Restricted Cash	(3,969)		(10,181)		(41,341)
Cash, Cash Equivalents and Restricted Cash at the beginning of the period	145,087		155,268		196,609
Cash, Cash Equivalents and Restricted Cash at the end of the period	$	141,118	$	145,087	$	155,268

Cash, Cash Equivalents and Restricted Cash decreased by $4.0 million for the year ended December 31, 2025, based on the following components:

Operating Activities: $134.3 million in cash was provided by operating activities, due to (a) $101.5 million in net proceeds from Loans Held for Sale, including securitized Borrower Loans that were previously classified as Loans Held for Sale and (b) $51.3 million in net income, net of non-cash items, partially offset by (c) $18.5 million in cash used for working capital, primarily due to the timing of payments to investors and third-party vendors.

Investing Activities: $7.4 million in cash was used in investing activities due to (a) $164.6 million in purchases of Borrower Loans, (b) $75.2 million in purchases of Credit Card receivables from our Credit Card Partner that were sold to the PMCC 2024-1 securitization and (c) $14.8 million in purchases of property and equipment, primarily consisting of internal-use software, partially offset by (d) $184.9 million from sales and principal payments of Borrower Loans, and (e) $62.3 million from principal payments on Credit Card Receivable from Credit Card Partner.

Financing Activities: $130.9 million in cash was used in financing activities, due primarily to (a) $110.8 million in payments on Notes Issued by Securitization Trusts and (b) $19.9 million in payments, net of proceeds, on Notes, at Fair Value, partially offset by (c) $0.5 million in proceeds from the exercise of Series F Convertible Preferred Stock Warrants, as discussed above. Cash flows from financing activities are also inclusive of the impact of refinancing our old Term Loan with a new lender in November 2025, which is more fully described in Note 11, Debt, of the accompanying consolidated financial statements. Specifically, principal repayments on the old Term Loan totaled $75.5 million, which were partially offset by $75.0 million in proceeds from the new Term Loan.

Cash, Cash Equivalents and Restricted Cash decreased by $10.2 million for the year ended December 31, 2024, based on the following components:

Operating Activities: $220.0 million in cash was provided by operating activities, driven by (a) $180.9 million in net proceeds from Loans Held for Sale, (b) $33.2 million in net income, net of non-cash items, and (c) $5.9 million in cash provided by working capital, primarily due to the timing of payments to investors and third-party vendors.

Investing Activities: $99.0 million in cash was used in investing activities due to (a) $186.1 million in purchases of Borrower Loans, (b) $106.2 million in transfers of Credit Card Receivables from Credit Card Partner, and (c) $15.3 million in purchases of property and equipment, primarily consisting of internal-use software, partially offset by (d) $196.6 million from sales and principal payments of Borrower Loans, and (e) $11.9 million from principal payments on Credit Card Receivable from Credit Card Partner.

Financing Activities: $131.1 million in cash was used in financing activities, due primarily to (a) $129.4 million paid for the extinguishment of principal and interest on the PWIT Warehouse Line in March 2024, (b) $28.6 million in principal payments on Warehouse Lines, (c) $11.0 million in payments on Notes, at Fair Value, net of proceeds, (d) $4.3 million in debt issuance costs related to the PMIT 2024-1 and PMCC 2024-1 securitizations executed in March 2024 and November 2024, respectively, and (e) $2.5 million in principal repayments on the Term Loan, partially offset by (f) $44.7 million in proceeds, net of payments, from the issuance of PMIT 2024-1 and PMCC 2024-1 securitization notes.

Income Taxes

We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized by applying the statutory tax rates in effect in the years in which the differences between the financial reporting and tax filing bases of existing assets and liabilities are expected to reverse. We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance against our deferred tax assets.

Based on the weight of available evidence, which includes our historical operating performance and the reported cumulative net losses in prior years, we have provided a full valuation allowance against our net deferred tax assets.

We report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. We are required to make subjective assumptions and judgments regarding our income tax exposures. Interpretations and guidance surrounding income tax laws and regulations change over time. As such, changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, extending key provisions of the 2017 Tax Cuts and Jobs Act including, but not limited to, federal bonus depreciation and deductions for domestic research and development expenditures. The enactment of OBBBA did not have a material impact on our financial statements for the year ended December 31, 2025.

Off-Balance Sheet Arrangements

As a result of retaining servicing rights on the sale of Borrower Loans, we are an interest holder in certain special purpose entities that purchase these Borrower Loans. None of these special purpose entities are consolidated as we are not the primary beneficiary. Other than these special purpose entities, as of December 31, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other purposes.

Contractual Obligations

As of December 31, 2025, the following table summarizes our contractual obligations and the effect such obligations are expected to have on our liquidity and cash flow in future periods (in thousands):


	Payments Due by Period
	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years
Term Loan principal	$	75,000	$	—	$	—	$	75,000	$	—
Operating lease obligations	10,840		4,648		6,192		—		—
WebBank purchase obligations	32,078		32,078		—		—		—
WebBank minimum origination fees	1,300		1,200		100		—		—
Total contractual obligations	$	119,218	$	37,926	$	6,292	$	75,000	$	—

Term Loan

As discussed in Note 11, Debt, of the accompanying consolidated financial statements, we repaid the outstanding balance of principal and interest on our Term Loan from 2022 in November 2025, using proceeds from a new $75.0 million Term Loan with a different third-party lender. Under the terms of the new Term Loan, the full principal balance and any unpaid interest are payable upon maturity in November 2030. Interest is payable in cash at the end of each quarter.

WebBank Purchase Obligations

Under our loan account program with WebBank, a Utah-charted industrial bank that serves as our primary issuing bank, WebBank retains ownership of loans facilitated through our marketplace for two business days after origination. As part of this arrangement, we have committed to purchase the loans at the conclusion of the two business days.

WebBank Minimum Origination Fees

We are required to pay WebBank a minimum fee to the extent monthly loan originations due to not meeting certain contractual thresholds. This obligation is more fully discussed in Note 17, Commitments and Contingencies, of the accompanying consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

The accounting policies discussed below reflect our most significant judgments, assumptions and estimates which we believe are critical in understanding and evaluating our reported financial results, including fair value measurements of (i) Borrower Loans and Notes; (ii) Loan Servicing Asset; (iii) Credit Card Derivative and Credit Card Servicing Obligation; (iv) Receivable from Credit Card Partner (as well as the related accounting treatment); and (v) Convertible Preferred Stock

Warrants, as well as the estimate of our transaction fee refund liability. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. For a full description of all accounting policies adopted by us, please see Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements.

Valuation of Borrower Loans and Notes

We have elected the fair value option for Borrower Loans and Notes. We primarily use a discounted cash flow model to estimate the fair value of these financial instruments. The key assumptions used in the valuation include default rates and prepayment rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. All these assumptions require significant management judgment. For further information on fair value measurement of Borrower Loans and Notes, refer to Note 8, Fair Value of Assets and Liabilities, of the accompanying notes to our consolidated financial statements.

Valuation of Loan Servicing Asset

We have elected to adopt the fair value method to measure the loan Servicing Asset for all classes of Servicing Assets subsequent to initial recognition. We use a discounted cash flow model to estimate the fair value of the loan Servicing Assets, which incorporates observable inputs such as the contractual servicing fee revenue that we earn on the Borrower Loans and the current principal balances of the loans, as well as significant unobservable inputs such as the estimated market servicing rate to service such loans, the prepayment rates, the default rates and the discount rate. For further information on fair value measurement of the loan Servicing Assets, refer to Note 6, Servicing Assets, and Note 8, Fair Value of Assets and Liabilities, of the accompanying notes to our consolidated financial statements.

Effective September 2025, as a result of an updated assessment of market rates, we lowered the estimated base market servicing rate used to value the Servicing Asset associated with our Personal Loans from 63.3 basis points to 59.3 basis points. This change resulted in a $1.5 million increase to Servicing Assets, Net as of September 30, 2025.

Valuation of Credit Card Derivative and Credit Card Servicing Obligation

We evaluated the terms of the Credit Card program agreement and determined that it contained features that met the definition of derivatives under U.S. GAAP. These features are freestanding financial instruments and have been valued separately as derivatives. A right of offset exists between the derivatives, and they are presented net on the accompanying consolidated balance sheets. We use a discounted cash flow model to estimate the fair value of the various components of the Credit Card Derivative. The key assumptions used in the valuation include average portfolio interest rates, as well as default and prepayment rates derived primarily from relevant market data and historical performance, adjusted as necessary based on the perceived credit risk of the underlying cardholders. In addition, a single discount rate (see Changes in Estimates in 2024 discussion, below) based on the estimate of the rate of return that investors would require when investing in similar credit card portfolios, is applied to the individual freestanding derivatives. For further information on fair value measurement of the Credit Card Derivative, refer to Note 5, Credit Card, and Note 8, Fair Value of Assets and Liabilities, of the accompanying notes to our consolidated financial statements.

We are also responsible for servicing our entire Credit Card portfolio and recognize a servicing obligation liability for the portion of Credit Card receivables that we do not effectively consolidate through the Receivable from Credit Card Partner (see below). This Credit Card servicing obligation is measured and recorded to the extent servicing fees we expect to earn do not exceed the estimated market servicing rate a market participant would require to service the portfolio. We use a discounted cash flow model to estimate the fair value of the Credit Card servicing obligation which incorporates observable inputs such as the contractual servicing fee revenue that we earn on the Credit Card portfolio and the current outstanding principal balances of the related Credit Card receivables, as well as significant unobservable inputs such as the estimated market servicing rate to service the portfolio, the prepayment rates, the default rates and the discount rate. For further information on fair value measurement of the Credit Card servicing obligation, refer to Note 5, Credit Card, and Note 8, Fair Value of Assets and Liabilities, of the accompanying notes to our consolidated financial statements.

Changes in Estimates in 2024

Effective March 31, 2024, we applied a single discount rate to all of the projected cash flows that comprise the Credit Card Derivative and Credit Card servicing obligation, in order to better align with how we believe a market participant would estimate the fair value of those cash flows. This single discount rate reflects the expected market rate of return from an investment in residual cash flows derived from a credit card portfolio. Previously, separate discount rates were applied to different cash flows reflecting assumptions around counterparty credit risk.

Additionally, effective December 31, 2024, to calculate the relevant portfolio interest rate for the Credit Card Derivative valuation, we implemented a forward projection for the attrition of cardholders enrolled in hardship and settlement

programs. These programs were launched in the second quarter of 2024 and we believe they should be segregated from the base population of cardholders for the purposes of analyzing the fair value of the Credit Card Derivative cash flows.

Valuation of Receivable from Credit Card Partner

On November 1, 2024, we completed a securitization of Credit Card receivables from our Credit Card portfolio, which is maintained on the balance sheet of our banking partner, Coastal. On that date, Credit Card receivables with an outstanding principal balance of $94.7 million were purchased and contributed to the securitization entity, PMCC 2024-1, which we fully consolidate as a VIE. Based on an analysis of the facts and circumstances of the transaction, including the revolving nature of the underlying financial instruments, it was determined that the transfer of these Credit Card receivables did not meet the criteria for sales or participating interest accounting under ASC 860, Transfers and Servicing. As a result, we have recorded a secured Receivable from Credit Card Partner that effectively consists of the unpaid principal balance of the securitized Credit Card receivables.

We have elected to account for the Receivable from Credit Card Partner at fair value, and use a discounted cash flow model to estimate the fair value of the residual interest, given that we are the sole sponsor of the securitization and entitled to all residual cash flows it generates. We use certain assumptions similar to those used to value the Credit Card Derivative, including the discount rate that reflects the expected market rate of return from an investment in residual cash flows derived from a credit card portfolio, and the prepayment rate. Additional assumptions are adjusted to reflect the specific characteristics of the securitized Credit Card receivables, including the average portfolio interest rate and the default rate. This residual interest fair value is then added to the applicable securitization advance rate applied to the outstanding balance of Credit Card receivables to calculate the estimated fair value of Receivable from Credit Card Partner.

Valuation of Convertible Preferred Stock Warrants

Convertible Preferred Stock Warrants primarily consist of warrants to purchase Series E-1 and Series F Convertible Preferred Stock. Series F Warrants were issued to an investor Consortium and vested when the Consortium purchased whole loans under the Consortium Purchase Agreement, which ended in May 2019. The Series E-1 warrants expire in December 2026, and the Series F warrants expire in February 2027.

We estimate the fair value of the Series E-1 and Series F Warrants using valuation methods appropriate at each balance sheet or exercise date. Generally, this includes determining the equity value of the Company using methods that may include a discounted cash flow model, comparable public company analysis, and comparable acquisition analysis, which require significant management judgment. Additionally, we review and consider any recent transactions involving the Company's equity in determining whether such transactions should be considered in the valuation. Once the equity value has been estimated, an option pricing model is used to allocate the value to the various classes of our equity. The concluded per share value for the Series E-1 and Series F Convertible Preferred Stock Warrant is then determined using a Black-Scholes option pricing model that requires us to make key assumptions such as volatility and expected warrant term. For further information on fair value measurement of the Convertible Preferred Stock Warrants, refer to Note 8, Fair Value of Assets and Liabilities, and Note 13, Convertible Preferred Stock, Convertible Preferred Stock Warrant Liability and Common Stock, of the accompanying notes to our consolidated financial statements.

PROSPER FUNDING LLC

Overview

Prosper Funding LLC (“PFL”) was formed in the state of Delaware in February 2012 as a limited liability company with PMI as its sole equity member. PFL was formed by PMI to hold Borrower Loans originated through the Note Channel and issue related Notes. Although PFL is consolidated with PMI for accounting and tax purposes, PFL has been organized and is operated in a manner that is intended to minimize the likelihood that it would be substantively consolidated with PMI in a bankruptcy proceeding. PFL’s intention is to minimize the likelihood that its assets would be subject to claims by PMI’s creditors if PMI were to file for bankruptcy, as well as to minimize the likelihood that PFL will become subject to bankruptcy proceedings directly. PFL seeks to achieve this by placing certain restrictions on its activities and by implementing certain formal procedures designed to expressly reinforce its status as a distinct corporate entity from PMI.

As a credit marketplace, we believe our customers are more highly susceptible to uncertainties and negative trends, real or perceived, in the markets driven by, among other factors, general economic conditions in the United States and abroad. These external economic conditions and resulting trends or uncertainties could adversely impact our customers’ ability or desire to participate in our marketplace as borrowers or investors, and consequently could negatively affect our business and results of operations.

On November 14, 2025, PFL and PMI executed Amendment 7 to the Administration Agreement, which dictates the performance of platform services by the two entities and the related compensation for those services. The primary changes

resulting from Amendment 7 were (a) PMI will now reimburse PFL for any whole loan investor performance-based payments and transaction fee refunds issued each month, and (b) PFL will now compensate PMI 59.3% of servicing fees collected each month, down from 62.5%. This change in the servicing fee percentage aligns the compensation with the market servicing rate used to value PFL’s Servicing Asset.

Results of Operations

Overview

The following table summarizes PFL’s net (loss) income for the years ended December 31, 2025, 2024 and 2023 (in thousands):


	Year Ended December 31,
	2025		2024		Change		% Change		2024		2023		Change		% Change
Total Net Revenues	$	75,650	$	61,915	$	13,735	22	%	$	61,915	$	63,224	$	(1,309)	(2)	%
Total Expenses	89,728		72,859		16,869		23	%	72,859		65,290		7,569		12	%
Net Loss	$	(14,078)	$	(10,944)	$	(3,134)	29	%	$	(10,944)	$	(2,066)	$	(8,878)	n/m

n/m: not meaningful

Total revenues for the year ended December 31, 2025 increased $13.7 million, or 22%, from 2024, primarily due to a $7.6 million increase in Servicing Fees, Net, generally related to increased net collections and loan servicing fees, due to the growth in the underlying servicing book and the impact of lowering our estimated market servicing rate in September 2025. There were also additional gains on the sale of borrower loans due to the increase in Personal Loan originations for the year, and a corresponding increase in Administration Fee Revenue – Related Party, as a result of an increase in loan listings on the platform. There was also an increase to Administration Fee Revenue – Related Party related to the compensation changes in Amendment 7 to the Administration Agreement discussed above, particularly from billing PMI for transaction fee refunds issued starting in November 2025. Additionally, Changes in Fair Value of Financial Instruments contributed to an increase in net revenues, primarily due to changes in the timing of borrower payments received close to quarter-end, and the application of those payments against the related Notes. These increases were partially offset by an increase in the investor performance-based payment liability due to the growth in the portfolio. Under the terms of the Administration Agreement between PFL and PMI, incentives provided to whole loan investors, which are recorded in Loss on Sale of Borrower Loans, are billed back to PMI through the Administration Fee Revenue – Related Party. As a result, fluctuations in these incentives do not have a direct impact on net revenues.

Total expenses for the year ended December 31, 2025 increased $16.9 million, or 23%, from 2024, largely due to a $15.5 million increase in Administration Fee Expense – Related Party resulting primarily from an increase in estimated transaction fee refunds following revisions to our pricing schedule with WebBank in June 2024. This liability also increased due to the higher Personal Loan originations from the prior year. As discussed above, under Amendment 7 to the Administration Agreement, transaction fee refunds issued to borrowers are now billed back to PMI through Administration Fee Revenue – Related Party, starting in November 2025. Administration Fee Expense – Related Party also increased due to an increase in the number of loans funded on the platform during this time.

Revenues

The following table summarizes PFL’s revenue for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):


	Year Ended December 31,
	2025		2024		Change		% Change		2024		2023		Change		% Change
Revenues:
Operating Revenues:
Administration Fee Revenue – Related Party	$	93,941	$	78,376	$	15,565	20	%	$	78,376	$	44,211	$	34,165	77	%
Servicing Fees, Net	34,567		26,921		7,646		28	%	26,921		26,208		713		3	%
Loss on Sale of Borrower Loans	(55,212)		(45,316)		(9,896)		(22)	%	(45,316)		(11,285)		(34,031)		n/m
Other Revenues	407		890		(483)		(54)	%	890		356		534		150	%
Total Operating Revenues	73,703		60,871		12,832		21	%	60,871		59,490		1,381		2	%
Interest Income (Expense):
Interest Income on Borrower Loans	42,733		49,986		(7,253)		(15)	%	49,986		52,188		(2,202)		(4)	%
Interest Expense on Notes	(40,045)		(47,033)		6,988		(15)		(47,033)		(48,572)		1,539		(3)	%
Total Interest Income (Expense), Net	2,688		2,953		(265)		(9)	%	2,953		3,616		(663)		(18)	%
Change in Fair Value of Financial Instruments, Net	(741)		(1,909)		1,168		61	%	(1,909)		118		(2,027)		n/m
Total Net Revenues	$	75,650	$	61,915	$	13,735	22	%	$	61,915	$	63,224	$	(1,309)	(2)	%

n/m: not meaningful

Administration Fee Revenue – Related Party

We primarily generate revenues through license fees we earn under our Administration Agreement with PMI. The Administration Agreement contains a license we grant to PMI that entitles PMI to use the marketplace for, and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement, and (ii) PMI’s performance of its duties and obligations to WebBank under the Loan Account Program Agreement. The Administration Agreement requires PMI to pay us a monthly license fee that is partially based on the number of personal loan listings posted on the marketplace in that month, as well as a fee based on incentives provided to investors to incentivize the purchase of Borrower Loans from PFL. As discussed above, as a result of Amendment 7 to the Administration Agreement starting in November 2025, we are also reimbursed by PMI for whole loan investor performance-based payments and transaction fee refunds issued each month. The increase in Administrative Fee Revenue – Related Party of $15.6 million for the year ended December 31, 2025 as compared to 2024 was primarily due to increased reimbursements received from PMI for incentives provided to whole loan investors, which resulted in an increase of $11.0 million in Administration Fee Revenue – Related Party during this time. There was also a $2.5 million increase related to reimbursed transaction fee refunds, and a $2.0 million increase from higher Personal Loan listings posted on the marketplace year-over-year, consistent with the increase in Personal Loan originations during this time.

Servicing Fees, Net

Investors who purchase Borrower Loans through the Whole Loan Channel typically pay us a servicing fee which is currently set at 1.0% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment, plus an additional 0.075% per annum to cover the Loan Trailing Fee. The Servicing Fee compensates us for the costs incurred in servicing the Borrower Loans, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. We record Servicing Fees from investors as a component of operating revenues when received. We also include any collection fees received, net of collection agency expenses, and debt sale fees in Servicing Fees, Net.

The increase in Servicing Fees, Net of $7.6 million for the year ended December 31, 2025, as compared to 2024, is largely due to a combined $6.7 million increase in net collections and debt sale fees, as we continue to enhance our Borrower Loan collection and recovery efforts, which includes entering into more settlement agreements with borrowers. Servicing fees collected and amortization of the Servicing Asset contributed to a $1.0 million increase in Servicing Fees, Net, for the year ended December 31, 2025, as compared to 2024, which is generally in line with the increases in Personal Loan originations and the underlying servicing book during this time. It is also reflective of the impact of lowering the estimated market servicing rate used to value the Servicing Asset from 63.3 basis points to 59.3 basis points in September 2025. Personal Loan servicing fees may increase or decrease net revenues depending on various factors, including timing and the valuation of the underlying Servicing Asset, but are generally reflective of additional servicing fees collected, offset by the continued seasoning of the underlying servicing book.

Loss on Sale of Borrower Loans

Loss on Sale of Borrower Loans consists primarily of incentives provided to investors at the time Borrower Loans are sold through the Whole Loan Channel, net of any gains recognized on those sales, primarily due to the recognition of additional Servicing Assets. Since 2022, due to market volatility and incentives offered by competitors, we started providing additional incentives to our whole loan investors. We also record changes in any estimated investor performance-based payment liabilities in Loss on Sale of Borrower Loans. For the year ended December 31, 2025, the Loss on Sale of Borrower Loans increased $9.9 million from the loss recognized in 2024. This increased loss was primarily due to these incentives and changes in the performance-based payment liability, which accounted for $11.5 million and $1.5 million, respectively, of the total year-over-year increase. As discussed above, PFL is reimbursed for the incentives and, effective with Amendment 7 to the Administration Agreement in November 2025, any performance-based payments by PMI through the Administration Fee Revenue – Related Party account. These increases to the loss were partially offset by net gains from the volume of whole loans sold of approximately $3.0 million for the year ended December 31, 2025, as a result of higher Personal Loan originations during this time.

Other Revenues

Other Revenues have historically consisted primarily of miscellaneous fees, including incentive fees earned from partner companies through our incentive programs, or securitization fees earned from sponsoring or facilitating securitization transactions with loans from our marketplace. We also record changes to the reserve for the repurchase of Borrower Loans in Other Revenues, which accounted for the majority of the $0.5 million decrease for the year ended December 31, 2025, as compared to 2024.

Interest Income on Borrower Loans and Interest Expense on Notes

We recognize Interest Income on Borrower Loans using the accrual method based on the stated interest rate to the extent we believe it to be collectible. We record Interest Expense on the corresponding Notes based on the contractual interest rates. The interest rate on Notes is generally 1% lower than the interest rate on the corresponding Borrower Loans to compensate us for servicing the underlying Borrower Loans.

Overall, the $0.3 million decrease in Net Interest Income for the year ended December 31, 2025, as compared to 2024, is reflective of the decrease in the outstanding principal balance of Borrower Loans and Notes from the prior year.

Change in Fair Value of Financial Instruments, Net

Change in Fair Value of Financial Instruments, Net captures gains (losses) in fair value estimates using discounted cash flow methodologies that are based upon a set of valuation assumptions. The key assumptions used in valuations include default and prepayment rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in other financial instruments with similar characteristics. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of the corresponding Notes due

to the borrower payment-dependent structure, though differences will arise due to the actual and projected impact of cash flows related to charge-offs, debt sales and miscellaneous fees, as well as certain timing differences.

The following table summarizes the fair value adjustments for the years ended December 31, 2025, 2024 and 2023 respectively (in thousands):


	Year Ended December 31,
	2025		2024		2023
Borrower Loans	$	(19,536)	$	(29,452)	$	(40,285)
Notes	18,795		27,543		40,403
Total	$	(741)	$	(1,909)	$	118

The decrease in the net loss recognized from Change in Fair Value of Financial Instruments for the year ended December 31, 2025, as compared to 2024, was primarily due to changes in the timing of borrower payments received close to year-end, and the application of those payments against the related Notes. Other fair value changes are generally not material, which is consistent with the borrower payment-dependent structure described above.

Expenses

The following table summarizes PFL’s expenses for the years ended December 31, 2025, 2024 and 2023 (in thousands):


	Year Ended December 31,
	2025		2024		Change		% Change		2024		2023		Change		% Change
Expenses:
Administration Fee Expense – Related Party	$	81,325	$	65,869	$	15,456	23	%	$	65,869	$	57,683	$	8,186	14	%
Servicing and Other, Net	8,403		6,990		1,413		20	%	6,990		7,607		(617)		(8)	%
Total Expenses	$	89,728	$	72,859	$	16,869	23	%	$	72,859	$	65,290	$	7,569	12	%

Administration Fee Expense – Related Party

Pursuant to our Administration Agreement with PMI, PMI manages the marketplace on our behalf. Accordingly, each month we are required to pay PMI (a) a corporate administration fee of $500,000 per month, (b) a fee for each Borrower Loan originate d through the marketplace, (c) 59.3% of all Servicing Fees collected by us or on our behalf (was 62.5% prior to executing Amendment 7 to the Administration agreement in November 2025) and (d) all nonsufficient funds fees collected by us or on our behalf. In general, the Administrative Fee Expense – Related Party will not fluctuate directly in line with the Administrative Fee Revenue – Related Party due to both the flat corporate administrative fee, as well as the fact that we pay fees for three different services, but receive a fee that fluctuates based only on the number of personal loans listed on the platform and incentives or, effective with Amendment 7 to the Administration Agreement in November 2025, any performance-based payments provided to investors. We also include WebBank transaction costs, loan trailing fees and, effective with Amendment 7 to the Administration Agreement in November 2025, refund liabilities for transaction fees above 5%, based on our revised pricing schedule with WebBank starting in October 2023 and revised in June 2024, in Administration Fee Expense – Related Party.

The increase in Administration Fee Expense – Related Party of $15.5 million, or 23%, for the year ended December 31, 2025, as compared to 2024, is due primarily to a $11.9 million increase in changes in actual and estimated refunds for transactions fees above 5% of Borrower Loan principal, as the total of refundable transaction fees continues to increase since the revisions to the WebBank pricing schedule referenced above and growth in origination volume. As discussed above, actual transaction fee refunds issued are reimbursed by PMI through Administrative Fee Revenue – Related Party account following the execution of Amendment 7 to the Administration Agreement in November 2025. There was also a $2.3 million increase in administration fee expense due primarily to a year-over-year increase in loans funded on the platform, and a $1.2 million combined increase in WebBank transaction costs and net loan trailing fees due to the increase in Personal Loan originations discussed above.

Servicing and Other, Net

Servicing costs consist primarily of vendor and borrower costs, as well as depreciation of internal-use software associated with servicing Borrower Loans. Other items consist primarily of interest income earned on cash invested on our platform, as well as bank service charges and professional fees. The increase in Servicing and Other, Net of $1.4 million, or 20%, for the year ended December 31, 2025, as compared to 2024, was primarily due to a $1.2 million increase in depreciation as a result of the growth in internal-use software during this time.

LIQUIDITY AND CAPITAL RESOURCES

We anticipate that our available funds and cash flows from operations, including reimbursements from PMI under the Administration Agreement, will be sufficient to meet our operational cash needs for at least the next 12 months.

The following table summarizes our cash flow activities for the years ended December 31, 2025, 2024 and 2023 (in thousands):


	Years Ended December 31,
	2025		2024		2023
Net Loss	$	(14,078)	$	(10,944)	$	(2,066)

Net cash (used in) provided by operating activities	$	(6,210)	$	7,555	$	3,664
Net cash provided by (used in) investing activities	11,228		3,115		(47,324)
Net cash (used in) provided by financing activities	(19,861)		(10,969)		42,850
Net decrease in Cash, Cash Equivalents and Restricted Cash	(14,843)		(299)		(810)
Cash, Cash Equivalents and Restricted Cash at the beginning of the period	96,740		97,039		97,849
Cash, Cash Equivalents and Restricted Cash at the end of the period	$	81,897	$	96,740	$	97,039

Cash, Cash Equivalents and Restricted Cash decreased by $14.8 million for the year ended December 31, 2025, based on the following components:

Operating Activities: $6.2 million was used in operating activities, driven by net loss, net of non-cash adjustments, of $8.7 million, partially offset by cash provided in working capital of $2.4 million, primarily due to the timing of payments to PMI and whole loan investors.

Investing Activities: $11.2 million was provided by investing activities, due to $184.9 million of principal payments from Borrower Loans, partially offset by $164.6 million in purchases of Borrower Loans and $9.0 million in purchases of property and equipment, consisting primarily of internal-use software.

Financing Activities: $19.9 million was used in financing activities, due to $183.8 million in payments for Notes, at Fair Value, partially offset by $163.9 million in proceeds from the issuance of Notes, at Fair Value.

Cash, Cash Equivalents and Restricted Cash decreased by $0.3 million for the year ended December 31, 2024, based on the following components:

Operating Activities: $7.6 million was provided by operating activities, driven by cash provided in working capital of $10.3 million, primarily due to the timing of payments to PMI and investors, partially offset by net loss, net of non-cash adjustments of $2.8 million.

Investing Activities: $3.1 million was provided by investing activities, due to $196.6 million of principal payments under Borrower Loans, partially offset by $186.1 million in purchases of Borrower Loans and $7.4 million in purchases of property and equipment, consisting primarily of internal-use software.

Financing Activities: $11.0 million was used in financing activities, due to $195.2 million in payments for Notes, at Fair Value, partially offset by $184.2 million in proceeds from the issuance of Notes, at Fair Value.

Income Taxes

We incurred no income tax provision for the years ended December 31, 2025 and 2024. We are a US disregarded entity for income tax purposes and our income and loss is included in the return of our parent, PMI. Given PMI’s history of taxable losses, it is difficult to accurately forecast how PMI’s and our results will be affected by the realization and use of net operating loss carry forwards.

Off-Balance Sheet Arrangements

As a result of retaining servicing rights on the sale of Borrower Loans, we are a variable interest holder in certain special purposes entities that purchase these Borrower Loans. None of these special interest entities are consolidated as we are not the primary beneficiary. Otherwise, we have not engaged in any off-balance sheet financing activities for the year ended December 31, 2025.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

PROSPER MARKETPLACE, INC.

Market Risk

Market risk is the risk of loss to future earnings, values, or future cash flows that may result from changes in financial market prices and interest rates.

Through our securitization trusts (formed in September 2023 and March 2024) we hold Borrower Loans. Changes in U.S. interest rates affect the market value of these Borrower Loans on our balance sheet. Our future investment income may fall short of expectations, or we may suffer a loss in principal if we are forced to sell Borrower Loans that have declined in market value due to changes in interest rates, loss assumptions or overall market conditions. Interest rate increases may increase the risks of our investments in Borrower Loans through our securitization trusts, and additional fluctuations in interest rates may exacerbate such risks. Changes in the market value of Borrower Loans are recorded on the consolidated statement of operations. The fair value of Borrower Loans held in consolidated securitization trusts was $64.4 million and $176.2 million as of December 31, 2025 and 2024, respectively.

The fair values of Borrower Loans and Notes are determined using discounted cash flow methodologies based upon a set of valuation assumptions such as default rate, prepayment rate and discount rate. Default rate, prepayment rate and discount rate may change due to expected loan performance or changes in the expected returns of similar financial instruments available in the market. We are exposed to the risk of a decrease in the fair value of loans held in the consolidated securitization trusts. For Borrower Loans and Notes presented on our Balance Sheet on behalf of our Note Channel investors, the fair value adjustments for Borrower Loans are largely offset by the fair value adjustments of the Notes due to the borrower payment dependent design of the Notes and due to the total principal balances of the Borrower Loans being very close to the total principal balances of the Notes.

We had cash and cash equivalents of $46.8 million and $30.3 million as of December 31, 2025 and 2024, respectively. These amounts were held in various unrestricted deposits with highly rated financial institutions and short-term, highly liquid marketable securities which may include money market funds, U.S. Treasury securities, and U.S. agency securities. Cash and Cash Equivalents are held for working capital purposes. Due to their short-term nature, we believe that we do not have any material exposure to changes in the fair value of these liquid investments as a result of changes in interest rates. Decreases in short-term interest rates will moderately reduce interest income on these Cash and Cash Equivalents. Increases in short-term interest rates will moderately increase the interest income earned on the Cash and Cash Equivalents.

Interest Rate Sensitivity

As more fully described in Note 8, Fair Value of Assets and Liabilities, of our financial statements attached to this Annual Report on Form 10-K, the fair value of Borrower Loans is $309.7 million as of December 31, 2025, determined using a weighted-average discount rate of 8.53%. The fair value of Borrower Loans was $706.5 million as of December 31, 2024, determined using a weighted-average discount rate of 6.88%. A hypothetical 100 basis point increase in interest rates would result in a decrease of $2.7 million and $6.8 million in the fair value of PMI’s investment in Borrower Loans as of December 31, 2025 and 2024, respectively. A hypothetical 100 basis point decrease in interest rates would result in an increase of approximately $2.8 million and $6.9 million in the fair value of our investment in Borrower Loans as of December 31, 2025 and 2024, respectively. Any realized or unrealized gains or losses resulting from such interest rate change would be recorded in our statement of operations so long as we hold these Borrower Loans on our balance sheet.

PROSPER FUNDING LLC

Market Risk

Market risk is the risk of loss to future earnings, values, or future cash flows that may result from changes in financial market prices and interest rates.

Because balances, interest rates, and maturities of Borrower Loans are matched and offset by an equal balance of Notes with the exact same interest rates (net of our servicing fee) and initial maturities, we believe that we do not have any material exposure to changes in the net fair value of the combined Borrower Loan and Note portfolios as a result of changes in interest rates. We do not hold or issue financial instruments for trading purposes.

The fair values of Borrower Loans and the related Notes are determined using discounted cash flow methodologies based upon a set of valuation assumptions. The fair value adjustments for Borrower Loans are largely offset by the fair value adjustments of the Notes due to the borrower payment dependent design of the Notes and due to the total principal balances of the Borrower Loans being very close to the total principal balances of the Notes.

Prosper Funding had Cash and Cash Equivalents of $2.9 million and $2.8 million as of December 31, 2025 and 2024, respectively. These amounts were held in various unrestricted deposits with highly rated financial institutions and short term, highly liquid marketable securities which may include money market funds, U.S. treasury securities and U.S. agency securities. Cash and cash equivalents are held for working capital purposes. Due to their short-term nature, Prosper Funding believes that it does not have any material exposure to changes in the fair value of these liquid investments as a result of changes in interest rates. Decreases in short-term interest rates will moderately reduce interest income on these cash and cash equivalents, while increases in short-term interest rates will moderately increase the interest income earned on these cash and cash equivalent balances.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Prosper Marketplace, Inc.

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Prosper Funding LLC

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Members' Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

In connection with the preparation of this Annual Report on Form 10-K, each Registrant’s management, under the supervision and with the participation of such Registrant’s Principal Executive Officer (PEO) and Principal Financial Officer (PFO), evaluated the effectiveness of the design and operation of such Registrant’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2025. Based upon this evaluation, the PEO and the PFO of each Registrant have concluded that these disclosure controls and procedures are effective to provide reasonable assurance that material information relating to each Registrant and its subsidiaries that is required to be disclosed in reports filed with, or submitted to, the SEC under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified by the SEC rules and forms, and (ii) is accumulated and communicated to management, including its PEO and PFO, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), each Registrant’s management is required to assess the effectiveness of such Registrant’s internal control over financial reporting as of the end of each fiscal year and report, based on that assessment, whether such Registrant’s internal control over financial reporting is effective.

Management of each Registrant is responsible for establishing and maintaining adequate internal control over financial reporting. Each Registrant’s internal control over financial reporting is designed to provide reasonable assurance as to the reliability of such Registrant’s financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Registrants’ management has assessed the effectiveness of the Registrants’ internal control over financial reporting as of December 31, 2025. In making this assessment the Registrants used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control-Integrated Framework (2013).” These criteria are in the areas of control environment, risk assessment, control activities, information and communication, and monitoring. Each Registrant’s assessment included documenting and evaluating the effectiveness of its internal control over financial reporting. Based on this evaluation, the person serving as each Registrant’s PEO and PFO has concluded that such Registrant’s internal controls were effective as of December 31, 2025.

Changes in Internal Control over Financial Reporting

During the fourth quarter of 2025, there were no changes in the internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Attestation Report of Registered Public Accounting Firm

The Dodd-Frank Wall Street Reform and Consumer Protection Act exempts any company that is not a “large accelerated filer” or an “accelerated filer” (as defined by SEC rules) from the requirement that such company obtain an external audit of the effectiveness of its internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. As a result, the Registrants are exempt from the requirement that they include in their Annual Report on Form 10-K an attestation report on internal control over financial reporting by an independent registered public accounting firm; however, management’s annual report on internal control over financial reporting, pursuant to Section 404(a) of the Sarbanes-Oxley Act, is still required with respect to the Registrants.

ITEM 9B. OTHER INFORMATION

Not applicable.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Prosper Marketplace, Inc.

Executive Officers, Directors and Key Employees

The following table sets forth information about PMI’s executive officers and directors as of the date of this Annual Report on Form 10-K:

Name

Age

Position(s)

David Kimball

Chief Executive Officer and Chairman of the Board

Usama Ashraf

President and Chief Financial Officer

Edward R. Buell III

General Counsel, Secretary and Chief Compliance Officer

Pete Woodhouse

Chief Technology Officer

Allyson Bryant 1

Vice President of Product and Marketing (until March 31, 2026)

Richard Brown

Vice President of People and Places

Claire A. Huang

Director

Thomas R. Kearney

Director

Peter J. deSilva

Director

(1) On March 13, 2026, Ms. Bryant submitted her resignation from PMI, effective March 31, 2026.

David Kimball has served as Chief Executive Officer and a director of PMI since December 2016. From March 2016 to February 2017, Mr. Kimball served as PMI's Chief Financial Officer. In May 2019, Mr. Kimball was appointed Chairman of the Board. He also currently serves as Chief Executive Officer and a director of PFL. Prior to joining PMI, Mr. Kimball was Senior Financial Officer of United Services Automobile Association's (USAA) Chief Operating Office, with financial responsibility for the real estate unit, the bank, the P&C and life insurance companies, the investment management company, and the call centers/distribution functions. Before his position as Senior Financial Officer of USAA's Chief Operating Office, Mr. Kimball spent eight years in various finance roles at USAA, including Senior Vice President of Corporate Finance; Corporate Treasurer; Chief Financial Officer of USAA Federal Savings Bank; and Assistant Vice President of Capital Markets. Prior to his time at USAA, Mr. Kimball spent ten years at Ford Motor Company and Ford Motor Credit Company in both the U.S. and U.K., working on their securitization programs, debt issuance, and a variety of financial planning and analysis positions. Mr. Kimball holds an M.B.A. and a B.A. in English from Brigham Young University. PMI believes that Mr. Kimball's financial and business expertise give him the qualifications and skills to serve as a director.

Usama Ashraf has served as PMI’s President since March 2021 and as its Chief Financial Officer since February 2017. He is currently responsible for Prosper's credit card business and finance, capital markets, risk, collections, and business intelligence functions. He also currently serves as President, Chief Financial Officer, Treasurer and a director of PFL. Prior to joining PMI, from February 2016 to February 2017, Mr. Ashraf served as Deputy Chief Financial Officer and Treasurer at Annaly Capital Management, Inc. (“Annaly”). Prior to his time at Annaly, Mr. Ashraf worked at United Services Automobile Association (“USAA”), where he served as Corporate Treasurer from November 2014 to February 2016 and Assistant Corporate Treasurer from January 2014 to October 2014. Before joining USAA, Mr. Ashraf spent 13 years at CIT Group, where he held various positions in the Treasury and Corporate M&A departments, most recently serving as Deputy Treasurer with responsibility for the firm’s Treasury activities in the United States. He started his career in the investment banking division of Citigroup focused on M&A. Mr. Ashraf received a B.S. in Economics, with concentrations in Finance and Accounting, from The Wharton School of the University of Pennsylvania.

Edward “Ted” R. Buell III has served as PMI’s General Counsel and Secretary since March 2021, and its Chief Compliance Officer since June 2018. Mr. Buell also currently serves as PFL’s Secretary, a position he has held since March 2021. Prior to that, Mr. Buell served as PMI’s Deputy General Counsel from June 2018 to March 2021, its Assistant General Counsel and Deputy Chief Compliance Officer from January 2017 to June 2018 and its Senior Corporate Counsel from September 2015 to January 2017. Before joining PMI in September 2015, Mr. Buell served as an attorney at Severson & Werson P.C., advising and representing financial services clients in regulatory matters and litigation, from April 2010 to September 2015. Prior to that, Mr. Buell served as Assistant General Counsel at GreenPoint Mortgage Funding, Inc., a national mortgage bank that originated, sold and serviced mortgage loans, from September 2005 to April 2010. Mr. Buell holds a J.D. from the University of Miami School of Law and a B.A. degree in Criminology, Law and Society from the University of California, Irvine.

Pete Woodhouse has served as PMI’s Chief Technology Officer since July 2021. Before joining PMI, Mr. Woodhouse was the Chief Technology Officer and Head of Product at Sibly, an employee mental health coaching text-based platform. Prior to his time at Sibly, Mr. Woodhouse spent 7 years in a variety of technology roles at PayPal, including as the Chief Technology Officer at PayPal Credit and as the Senior Director at PayPal Global Solutions Engineering. In Mr. Woodhouse’s role as Chief Technology Officer at PayPal Credit, he was responsible for building and integrating multiple credit products into the PayPal platform structure. Prior to his time at PayPal, Mr. Woodhouse held various product development and technology roles at PRTM, a management consulting subsidiary of PwC, Agilent Technologies, an analytical instrumentation development and manufacturing company, and spent 10 years at Hewlett-Packard Company. Mr. Woodhouse also currently serves as an Engineering Leadership Mentor at Plato, a mentorship program that aims to build soft skills in engineering and product managers. Mr. Woodhouse holds an MBA from Santa Clara University and a Bachelor of Science in Electrical Engineering from the University of Plymouth (England).

Allyson Bryant has served as PMI’s Vice President of Product and Marketing since January 2025. Ms. Bryant has held several product management roles at PMI, including as PMI’s Vice President of Product since September 2020, Senior Director of Product Management from July 2018 through September 2020, and Director of Product Management from October 2017 through July 2018. Ms. Bryant also spent 6 years at PMI from September 2010 to January 2017 in product management roles, serving as PMI’s Director of Product Management from November 2014 to January 2017, Senior Product Manager from March 2012 to November 2014, and Product Manager from September 2010 to March 2012. Between her tenures at PMI, Ms. Bryant spent a year as the Vice President of Digital Product at Exchange Bank, a full-service community bank in Sonoma County, California. Ms. Bryant holds a Bachelor of Science in Biology from the University of California, Santa Barbara. On March 13, 2026, Ms. Bryant submitted her resignation as Vice President of Product and Marketing of PMI, effective March 31, 2026.

Richard “Jared” Brown has served as PMI’s Vice President of People and Places since June 2016. Prior to that, Mr. Brown served in the position of Sr. Director of HR for PMI from August 2015 until June 2016. Prior to his time at PMI, Mr. Brown spent 7 years at Peet’s Coffee & Tea in multiple roles in human resources and leadership development, including as a Senior Director of Human Resources and Development. Prior to his time at Peet’s Coffee & Tea, Mr. Brown also held human resources and development roles at Gap Inc. and American Express. Mr. Brown holds a Bachelor of Arts in English from the University of Utah.

Claire A. Huang has served as a director of PMI since December 2017. Ms. Huang is currently a member of the board of directors of SigFig, a robo-investing and customer engagement software provider, Zions Bancorporation N.A., a regional bank, and PODS, a leading storage and moving company. She is a member of the audit committee and compensation committee of Zions Bancorporation N.A. She also previously served as a director of Mirador Financial, Inc., a small business lending platform, from 2017 to 2018. Ms. Huang has extensive experience in marketing and brand management. She served as the first global Chief Marketing Officer of JP Morgan Chase from 2012 to 2014, where she worked with the marketing teams across all Chase retail and JP Morgan wholesale businesses to build brands and businesses with a customer focus. Before joining JP Morgan Chase, from 2008 to 2012, Ms. Huang held global head of marketing positions at Bank of America Merrill Lynch, where she was responsible for a number of high profile marketing initiatives, including the integration of Merrill Lynch and Bank of America and the launch of Merrill Edge, the company’s brokerage platform. Prior to her time at Bank of America Merrill Lynch, Ms. Huang held marketing leadership positions at Fidelity Investments, American Express Company, Wise Foods, and The Häagen-Dazs Company. Ms. Huang received a B.A. in Economics from De La Salle University in Manila, Philippines. PMI believes that Ms. Huang’s marketing and brand management expertise, as well as her experience at several leading financial institutions, give her the qualifications and skills to serve as a director.

Thomas R. Kearney was appointed as a director of PMI in May 2020. Mr. Kearney is currently a member of the Board of Directors and Finance Committee of the Plattsburgh College Foundation (“PCF”), a non-profit organization affiliated with the State University of New York at Plattsburgh. Additionally, he is PCF Finance Committee Chair and a member of the PCF Board Executive Committee. Mr. Kearney is also a member of the Board of Directors of the YMCA of Greater San Francisco, a non-profit organization (“YGSF”). Additionally, he is YGSF Finance Committee Chair and a member of the YGSF Board Executive Committee. Mr. Kearney is a CPA with extensive technical accounting and auditing experience. He previously worked at PricewaterhouseCoopers LLP for nearly 35 years and served as Assurance Partner for 20 years. In this role, Mr. Kearney helped financial services clients navigate a wide range of complex financial instruments, credit arrangements and operational processes and controls. Prior to PwC, Mr. Kearney conducted periodic reserve reporting for the Federal Reserve Bank of San Francisco and assisted with the implementation of Regulation D and Contemporaneous Reserve Reporting. Mr. Kearney holds a B.S. in Accounting from State University of New York at Plattsburgh. PMI believes that Mr. Kearney’s financial, business, and regulatory expertise gives him the qualification and skills to serve as a director. Mr. Kearney qualifies as an “audit committee financial expert” under SEC guidelines.

Peter J. deSilva was appointed as a director of PMI in April 2021. Mr. deSilva is also currently the Chief Executive Officer and serves as a director on the Board of Directors at IRALOGIX, Inc., an IRA financial technology company. Mr. deSilva also currently serves as a director at Infosel Financiero SA de CV, a financial technological platform and business news agency that operates in Mexico and Latin America, at Fidelity Security Life Insurance Company, an insurance services provider, and at Fidelity Security Assurance Company, a subsidiary of Fidelity Security Life Insurance Company. In addition, Mr. deSilva serves as a director on the Board of Directors and as a member of the Compensation Committee of Onepak, Inc., a logistics technology company focused on return shipment tracking. Mr. deSilva previously served as the President of TD Ameritrade’s retail business and as President of TD Ameritrade, Inc. the firms broker dealer from September 2017 to December 2020. In his role, Mr. deSilva directed all facets of the division’s business strategy and operations, and integration with Scottrade Financial Services, another leading online brokerage firm. Prior to joining TD Ameritrade, from February 2015 to August 2017, Mr. deSilva served as the President of the Retail and Institutional divisions of Scottrade Financial Services, where he was responsible for the corporate strategy and distribution, sales, digital transformation, investment management, and institutional custody functions. Before joining Scottrade Financial Services, from 2004 to 2015, Mr. deSilva served as the President and Chief Operating Officer of UMB Financial Corporation, a financial services provider. Mr. deSilva also served on UMB Financial Corporation’s Board of Directors from February 2004 to December 2015. Prior to his time at UMB Financial Corporation, Mr. deSilva worked at Fidelity Investments, a leading online brokerage firm, where he held several leadership positions, including Senior Vice President and General Manager of Fidelity Investments’ Retail division and Senior Vice President of Fidelity Brokerage Company. Mr. deSilva holds a B.S. in Business Administration and Management from the University of Massachusetts, Dartmouth. PMI believes that Mr. deSilva’s financial, business and regulatory expertise give him the qualifications and skills to serve as a director.

Election of Directors

PMI’s board of directors currently consists of eight seats, with one vacancy to be filled by a designee of the Series A Holders, one vacancy to be filled by a designee of the Series A-1 Holders, one vacancy to be filled by a designee of Francisco Partners III, L.P., and one vacancy to be filled by a designee of the Series F Holders. All of the current members of PMI's board of directors were elected as directors pursuant to the terms of a voting rights agreement entered into among certain of PMI’s stockholders. In selecting the composition of its board of directors, PMI seeks to ensure that its board of directors collectively has a balance of expertise in the following areas: internet-based business, consumer financial products, business operations, and experience directing public and start-up companies. Based on these criteria, PMI believes that its board of directors has been effective in identifying diverse directors. The board of directors’ composition provisions of PMI’s voting rights agreement are still in effect. For more information regarding the terms of the voting rights agreement, see Item 13, “Certain Relationships and Related Transactions, and Director Independence.” Holders of the Notes offered through our marketplace, and the accompanying PMI Management Rights, will have no ability to elect or influence PMI’s directors or approve significant corporate transactions, such as a merger or other sale of PMI or its assets.

Board Leadership

Because PMI’s common stock is not listed on a national exchange, PMI is not required to maintain a board of directors consisting of a majority of independent directors, or to maintain an audit, nominating or compensation committee. PMI does not have a lead independent director.

Code of Ethics

Our Board of Directors is committed to a high standard of corporate governance practices and, through its oversight role, believes that it has encouraged and promoted a requisite culture of ethical business conduct among PMI’s officers and employees. To memorialize its commitment to these standards, the Board of Directors of PMI adopted a “Code of Ethics and Business Conduct” that applies to all of PMI's employees, directors and officers, including the Chief Executive Officer, Chief Financial Officer and other executive officers. A copy of the Code of Ethics and Business Conduct is available on our website at www.prosper.com/plp/legal. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, certain provisions of the Code of Ethics and Business Conduct by posting such information on our website or in public filings.

Director Independence

Because PMI’s common stock is not listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association or to issuers of such securities, PMI is not required to maintain a board of directors consisting of a majority of independent directors or to maintain an audit committee, nominating committee or compensation committee consisting solely of independent directors. Nevertheless, PMI’s board of directors has determined the independence of each director based on the independence criteria set forth in the listing standards of the New York Stock Exchange (“NYSE”). In making its determinations, the Board considered the current and prior relationships that each non-employee director has with us and all other facts and circumstances the board of directors deemed relevant in determining their

independence, including any transactions between each director or any member of their family, and us, our senior management or our independent registered public accounting firm. Based upon information requested from and provided by each director concerning their background, employment and affiliations, including family relationships, the board of directors determined that Ms. Huang and each of Messrs. Kearney and deSilva do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the listing requirements and rules of the NYSE.

Board Committees

Nominating Committee

PMI is not a “listed issuer” as defined under Section 10A-3 of the Exchange Act. Therefore, PMI is not required to have a nominating committee comprised of independent directors. PMI currently does not have a standing nominating committee and accordingly, there are no charters for such committee. PMI believes that a nominating committee is not necessary for a company of its size with its type of business. PMI also believes that its directors collectively have the requisite background, experience, and knowledge to fulfill the limited duties and obligations that a nominating committee may have.

Compensation Committee

PMI’s board of directors approved the formation of a Compensation Committee in August 2011. The current members of the Compensation Committee are Claire A. Huang (Chairwoman) and Thomas R. Kearney. The Compensation Committee oversees PMI’s executive officer compensation arrangements, plans, policies and programs maintained by PMI and administers PMI’s equity-based compensation plan for employees generally (including issuance of stock options, RSUs and other equity-based awards granted other than pursuant to a plan). The Compensation Committee meets at such times as determined appropriate by the Chair of the Compensation Committee.

The Compensation Committee is exempt from independence listing standards because PMI's common stock is not listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association or to issuers of such securities. Nevertheless, the board of directors of PMI has determined that each of the current members of PMI’s Compensation Committee is independent under the applicable rules and regulations of the SEC and NYSE.

Audit Committee

PMI’s board of directors approved the formation of an Audit Committee in January 2010. The current members of the Audit Committee are Thomas R. Kearney (Chairman) and Peter J. deSilva. The Audit Committee oversees financial risk exposures, including monitoring the integrity of PMI’s consolidated financial statements, internal controls over financial reporting and the independence of PMI’s Independent Registered Public Accounting Firm. The Audit Committee receives internal control related assessments and reviews and discusses PMI’s annual and quarterly consolidated financial statements with management. In fulfilling its oversight responsibilities with respect to compliance matters, the Audit Committee meets at least quarterly with management, PMI’s Independent Registered Public Accounting firm and PMI’s internal legal counsel to discuss risks related to PMI’s financial reporting function.

The Audit Committee is exempt from independence listing standards because PMI's common stock is not listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association or to issuers of such securities. Nevertheless, the board of directors of PMI has determined that each of the current members of PMI's Audit Committee is independent under the listing requirements and rules of the NYSE, and also satisfies the independence requirements of Section 10(m)(3) of the Exchange Act. Additionally, PMI's board of directors has determined that each of the current members of the Audit Committee is an audit committee financial expert as defined under SEC regulations and the listing requirements and rules of the NYSE.

Limitations on Officers’ and Directors’ Liability and Indemnification Agreements

As permitted by Delaware law, PMI’s amended and restated certificate of incorporation and bylaws contain provisions that limit or eliminate the personal liability of its directors for breaches of duty to the corporation. PMI’s amended and restated certificate of incorporation and bylaws limit the liability of directors to the fullest extent permitted under Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breaches of their fiduciary duties as directors, except liability for:

•any breach of the director’s duty of loyalty to PMI or PMI’s stockholders;

•any act or omission not in good faith, believed to be contrary to the interests of PMI or its shareholders, involving reckless disregard for the director’s duty, for acts that involve an unexcused pattern of inattention that amounts to an abdication of duty, or that involves intentional misconduct or knowing or culpable violation of law;

•any unlawful payments related to dividends, unlawful stock repurchases, redemptions, loans, guarantees or other distributions; or

•any transaction from which the director derived an improper personal benefit.

These limitations do not affect the availability of equitable remedies, including injunctive relief or rescission. As permitted by Delaware law, PMI’s amended and restated certificate of incorporation and bylaws also provide that:

•PMI will indemnify its directors and officers to the fullest extent permitted by law;

•PMI may indemnify its other employees and other agents to the same extent that PMI indemnifies its officers and directors; and

•PMI will advance expenses to its directors and officers in connection with a legal proceeding, and may advance expenses to any employee or agent; provided, however, that such advancement of expenses shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person was not entitled to be indemnified.

The indemnification provisions contained in PMI’s amended and restated certificate of incorporation and bylaws are not exclusive.

In addition to the indemnification provided for in PMI’s amended and restated certificate of incorporation and bylaws, PMI has entered into indemnification agreements with each of its directors and officers. The indemnification agreements require PMI, among other things, to indemnify such persons for all expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement (if such settlement is approved in advance by PMI) (collectively, “Expenses”), actually and reasonably incurred by such person in connection with the investigation, defense or appeal of any proceeding to which such person may be made a party, a potential party, a non-party witness, or otherwise by reason of: (i) such person’s service as a director or officer of PMI; (ii) any action or inaction taken by such person or on such person’s part while acting as director, officer, employee or agent of PMI; or (iii) such person’s actions while serving at the request of PMI as a director, officer, employee, trustee, general partner, managing member, agent or fiduciary of PMI or any other entity, in each case, whether or not serving in any such capacity at the time any liability or expense is or was incurred. In addition, PMI is required to indemnify against any Expenses actually and reasonably incurred in connection with any action establishing or enforcing a right to indemnification or advancement of expenses under the indemnification agreement or under any directors’ and officers’ liability insurance policies maintained by PMI to the extent that such person is successful in such action. The indemnification agreements also provide that PMI agrees to indemnify such persons to the fullest extent permitted by law, even if such indemnification is not specifically authorized by the other provisions of the agreement or PMI’s amended and restated certificate of incorporation or bylaws. Moreover, the indemnification agreements provide that any future changes under Delaware law that expand the ability of a Delaware corporation to indemnify its officers and directors are automatically incorporated into the agreements.

Under the indemnification agreements, PMI is not obligated to provide indemnification on account of any proceeding unless such person acted in good faith and in a manner reasonably believed to be in the best interests of PMI, and with respect to criminal proceedings, such person had no reasonable cause to believe their conduct was unlawful. The termination of a proceeding by judgment, settlement, or conviction or upon a plea of nolo contendere or its equivalent does not, by itself, create the presumption that such person did not satisfy the above standards. In addition, under the indemnification agreements, PMI is not obligated to provide indemnification for: (i) any proceedings or claims initiated or brought voluntarily by such person and not by way of defense, unless such indemnification is authorized by PMI, other than a proceeding to establish such person’s right to indemnification; (ii) any expenses incurred by such person with respect to any proceeding instituted by such person to enforce and interpret the terms of their indemnification agreement, unless such person is successful in such action; (iii) which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid; (iv) an accounting or disgorgement of profits pursuant to Section 16(b) of the Exchange Act, as amended, or similar provisions of federal, state or local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements); and (v) any reimbursement of PMI by such person of any bonus or other incentive-based or equity-based compensation or of any profits realized by such person from the sale of securities of PMI, as required in each case under the Exchange Act, as amended (including any such reimbursements that arise from an accounting restatement of PMI pursuant to Section 304 of the Sarbanes-Oxley Act, or the payment to PMI of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements).

PMI also maintains an insurance policy that covers certain liabilities of its directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

PMI believes that these provisions and agreements are necessary to attract and retain qualified persons as directors and officers. To the extent these provisions permit PMI to indemnify its officers and directors for liabilities arising under the

Securities Act, however, PMI has been informed by the SEC that such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Insider Trading Policy

We are a Section 15(d) reporting company with publicly registered debt securities. Our company is privately held and there is no established public trading market for our equity. In addition, there is no secondary market for our debt securities. As a result, the Company has not adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our equity securities by directors, officers, employees and the Company itself. Our Board and management will continue to evaluate the need for an insider trading policy, and we may adopt a formal policy in the future if appropriate.

ITEM 11. EXECUTIVE COMPENSATION

Prosper Marketplace, Inc. - Compensation Discussion and Analysis

Overview

This section describes PMI's executive compensation objectives, compensation-setting process, executive compensation components and significant 2025 compensation decisions for PMI's named executive officers (“NEOs”). The compensation provided to PMI's NEOs for 2025 is set forth in detail in the Summary Compensation Table and other tables and the accompanying footnotes and narrative that follow this section.

PMI's named executive officers for 2025 are as follows:

•David Kimball, our Chief Executive Officer;

•Usama Ashraf, our President and Chief Financial Officer;

•Pete Woodhouse, our Chief Technology Officer;

•Edward R. Buell III, our General Counsel, Secretary and Chief Compliance Officer; and

•Allyson Bryant, our Vice President of Product and Marketing.

Executive Compensation Objectives

The objectives of PMI's executive compensation are to:

•attract, retain and motivate senior leaders who are capable of advancing PMI's mission and strategy and ultimately, creating and maintaining its long-term equity value;

•align the interests of PMI's executive officers with its stockholders’ long-term interests; and

•reward executive officers for their contributions to PMI's overall performance as well as for their individual performance.

Compensation-Setting Process

Role of Our Compensation Committee. The Compensation Committee has primary responsibility for overseeing all aspects of our executive compensation program, including evaluating and approving executive salaries, annual bonus awards and the size and structure of equity awards for PMI's executive officers, including the NEOs.

Role of Management. In setting 2025 compensation, PMI's Chief Executive Officer worked closely with the Compensation Committee in making recommendations and attending Committee meetings. Because of his daily involvement with PMI's executive team, the Chief Executive Officer was involved in the determination of compensation for all of PMI's executive officers other than himself. The Compensation Committee also delegated to the Chief Executive Officer the authority to make compensation decisions for senior management and executive officers (other than the Chief Executive Officer, Chief Financial Officer and President), subject to certain compensation limits set by the Compensation Committee.

Executive Compensation Components

PMI's executive compensation package includes: (1) base salary; (2) cash bonuses; and (3) long term incentives, generally in the form of cash and equity-based compensation, such as stock options and restricted stock units. PMI believes that this compensation mix supports its objective of attracting, motivating and retaining a talented and entrepreneurial executive team who will provide leadership for PMI’s success in dynamic and competitive markets. PMI's compensation program is balanced among all three components in order to attract top talent and maximize retention, while ensuring that an appropriate portion of the executives’ compensation is tied to the Company's and its stockholders’ long-term interests.

Base Salary

Base salary is a fixed amount and is not tied to any metric relating to the performance of PMI's business as a whole. The base salary of each executive officer is initially established in the executive officer's offer letter and reviewed annually by the Compensation Committee. In determining base salaries for 2025, PMI's Compensation Committee, together with the Chief Executive Officer, considered the individual executive officer's scope of responsibilities, contributions, prior salary level and position (in case of a promotion), and financial and market conditions.

The following table summarizes information regarding the base salaries for PMI's named executive officers for 2025:


	2025 Base Salaries
David Kimball 1	$	641,700
Usama Ashraf 2	$	523,193
Pete Woodhouse 3	$	444,015
Edward R. Buell III 4	$	391,230
Allyson Bryant	$	338,445

1.In March 2025, PMI’s Compensation Committee reviewed executive base salaries and decided to increase Mr. Kimball’s annual base salary from $620,000 to $641,700.

2.In March 2025, PMI’s Compensation Committee reviewed executive base salaries and decided to increase Mr. Ashraf’s annual base salary from $505,500 to $523,193.

3.In March 2025, Mr. Woodhouse’s base salary was increased from $429,000 to $444,015.

4.In March 2025, Mr. Buell’s base salary was increased from $378,000 to $391,230.

Cash Bonuses

PMI uses cash bonuses primarily to motivate and retain senior management leaders that are critical to advancing the Company's short-term and long-term strategic goals. We base annual NEO bonuses on both the achievement of certain Board-approved performance objectives as well as other factors.

In January 2026, the Compensation Committee reviewed the Company’s performance and progress towards the established 2025 objectives, and approved a bonus award of up to 100% of the annual target bonus amount for each NEO.

The amounts and terms of the bonuses approved for each of our NEOs for 2025 are disclosed below, in the sections titled “Summary Compensation Table” and “Narrative Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table.”

Long-Term Incentives

Equity Compensation. PMI has used stock options and restricted stock units (“RSUs”) as the principal components of its executive long-term incentive equity compensation. Consistent with its compensation objectives, PMI believes this approach aligns the interests of its grantees with the long-term interests of PMI’s stockholders. PMI believes that stock options and RSUs also serve as effective retention tools due to vesting requirements that are based on continued service with the company. In granting equity awards, PMI has customarily considered, among other things, the executive officers' cash compensation, the need to retain and motivate executive officers and to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value, PMI's financial results, and each executive officer's individual contributions and responsibilities. The amounts and terms of the awards granted to each such NEO in 2025 are disclosed in the 2025 Grants of Plan-Based Awards table and accompanying footnotes to the table of Outstanding Equity Awards at 2025 Fiscal Year End.

Long-Term Cash Incentive Compensation. PMI’s Long-Term Cash Incentive Plan (“LTCIP”) is designed to reward our executives, including our named executive officers, for the achievement of strategic and operational objectives and the creation of long-term value. Under the LTCIP, eligible executive officers and vice presidents receive long-term cash incentive awards based on their performance during pre-established rolling two-year periods, the most recent of which ran from January 1, 2024 to December 31, 2025 (the “2024-2025 Performance Period”). Pursuant to the LTCIP, payments will be made by

March 15, following the end of a performance period, unless otherwise determined by the Compensation Committee. The incentive targets range from 75% to 150% of the participant’s base salary, unless otherwise determined by the Compensation Committee. PMI’s executive officers and vice presidents are eligible to participate in the LTCIP if, as of March 15th of a calendar year following the end of a performance period, they have been employed with PMI for at least three years, are currently full or part time employees of PMI, and are in good standing. PMI believes that the LTCIP will complement its annual equity awards by focusing its senior executives on specific long-term financial performance goals, while providing an opportunity for more immediate liquidity. In January 2026, the Compensation Committee considered the Company’s performance and progress towards its established objectives during the 2024-2025 Performance Period, and approved a payout of up to 80% of the LTCIP incentive target amount for each NEO. The amounts of the LTCIP awards earned by eligible NEOs in connection with the 2024-2025 Performance Period are set forth in the “Summary Compensation Table” below.

Employment Agreements

PMI has entered into employment arrangements with each of its NEOs, which are comprised of an offer letter and an At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement. Each of these arrangements was approved or authorized on PMI’s behalf by the Compensation Committee or, in certain instances, its Board of Directors.

Each of the offer letters provides for “at-will” employment and sets forth the initial compensation arrangements for the NEO, generally including an initial base salary, an annual cash bonus opportunity, and an equity award. Certain of the offer letters provide for payments or an acceleration of the executive’s equity award grant upon termination of their employment in specified situations, including following a change in control. These arrangements (including potential payments and terms) are discussed in more detail in the “Narrative Discussion of the Summary Compensation Table” and “Grants of Plan-Based Awards Table” and the “Potential Payments Upon Termination or a Change In Control of PMI” sections and related tables below.

Other Compensation Information

Benefits Programs

PMI’s employee benefit programs, including its 401(k) plan, health and welfare programs, and incentive programs, including the 2015 Equity Incentive Plan, the 2025 Equity Incentive Plan, and the Long-Term Cash Incentive Plan, are designed to provide a competitive level of benefits to PMI’s employees generally, including its named executive officers and their families.

PMI’s 401(k) plan covers all employees meeting certain eligibility requirements. The 401(k) plan is designed to provide tax-deferred retirement benefits in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Eligible employees are allowed to contribute a percentage of their eligible compensation to the 401(k) plan, up to the annual maximum as determined by the Internal Revenue Service, and PMI may make discretionary matching contributions of a portion of the employees’ eligible wage deferrals, subject to certain limitations and conditions. On January 1, 2024, PMI temporarily suspended its discretionary matching contributions. As a result, during the year ended December 31, 2025, PMI did not contribute any funds to the 401(k) plan. Beginning on January 1, 2026, PMI reinstated its discretionary matching contributions.

All full-time employees, including PMI’s named executive officers, may participate in its health and welfare benefit programs, including a health and wellness stipend, medical, dental and vision care coverage, disability insurance and life insurance.

Perquisites and Other Personal Benefits

Currently, PMI does not view perquisites or other personal benefits as a significant component of its compensation. Accordingly, PMI does not generally provide perquisites, such as company cars and paid parking spaces, to its executive officers. PMI does reimburse its executive officers for certain relocation expenses, subject to the terms and conditions prescribed by the Compensation Committee.

In the future, PMI may provide additional perquisites or other personal benefits in limited circumstances, such as where PMI believes it is appropriate to assist an individual executive in the performance of their duties and for recruitment, motivation or retention purposes.

Post-Employment Compensation

The Compensation Committee recognizes that a possible, threatened, or pending change of control transaction could result in the departure or distraction of PMI’s senior executives. To establish a meaningful financial incentive for PMI’s senior executive officers to work diligently through and beyond a proposed transaction that may involve a change in control of the company, certain of the stock options and restricted stock units granted to PMI’s NEOs will fully vest upon a change in control of PMI, while others will fully vest in the event that, within 12 months after a change in control of PMI, such officer is subject to a termination of employment without cause or resigns for good reason (each as defined in the applicable option agreement).

In addition, PMI entered into severance and change in control agreements with each of Messrs. Kimball and Ashraf in November 2020 and with Mr. Woodhouse in February 2022, the terms and conditions of which restate and replace any severance arrangements set forth in their respective offer letters. Under the severance and change in control agreements signed by each of Messrs. Kimball, Ashraf, and Woodhouse, each would be entitled to the following in the event that such officer’s employment is terminated by PMI without “cause” or by the applicable officer for “good reason” (each as defined in the severance agreement) and the officer meets certain tenure requirements as of the date of such termination: (i) a lump sum severance payment equal to one year base salary; (ii) any unpaid annual bonus and long-term cash incentive award for the year(s) preceding the year of termination; (iii) continued coverage for the participants and eligible dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for 12 months, unless such coverage is earlier terminated in accordance with the terms of the severance and change in control agreement; (iv) a pro-rated annual bonus payment for the year of termination; and (v) with respect to any long-term performance period under the LTCIP that commenced more than one year prior to the executive’s termination date, a pro-rated long-term cash incentive payment for the performance period in which the termination occurs. In the event that Messrs. Kimball, Ashraf, or Woodhouse is terminated by PMI or its successor without cause or by the applicable officer for good reason and such termination occurs within 24 months following a change in control of PMI, then, subject to certain tenure requirements, such officer would be entitled to receive the severance set forth in items (i) through (iii) above, as well as such officer’s (x) target annual bonus for the year of termination; and (y) their target long-term cash incentive payment for the year of termination. Receipt of these severance benefits is conditioned on the officer’s signing a release of claims in favor of PMI.

PMI also entered into a change in control severance agreement with Mr. Buell and Ms. Bryant in May 2025. Under the severance agreements signed by Mr. Buell and Ms. Bryant, each would be entitled to the following in the event that the officer’s employment is terminated by PMI or its successor without cause or by the applicable officer for good reason and such termination occurs within 24 months following a change in control of PMI: (i) a lump sum severance payment equal to one year base salary; (ii) any unpaid annual bonus and long-term cash incentive award for the year(s) preceding the year of termination; (iii) continued coverage for the participants and eligible dependents pursuant to COBRA for 12 months, unless such coverage is earlier terminated in accordance with the terms of the change in control severance agreement; (iv) the applicable officer’s target annual bonus for the year of termination; and (v) the applicable officer’s target long-term cash incentive payment for the year of termination. Receipt of these severance benefits is conditioned on the officer’s signing a release of claims in favor of PMI or its successor, as applicable, and subject to certain tenure requirements as set forth in the change in control severance agreement.

For additional information regarding these arrangements, see “Potential Payments Upon Termination or a Change in Control of PMI” below.

Compensation Risk Assessment

PMI's management evaluates and mitigates any risk that may exist relating to its compensation plans, practices and policies for all employees, including PMI's NEOs. PMI's management has concluded that PMI's compensation policies and practices do not create or promote inappropriate or excessive risk taking.

Summary Compensation Table

The following table provides information regarding the compensation earned during the years ended December 31, 2025, 2024 and 2023 by each of PMI’s named executive officers (in thousands):


	Year	Salary ($)		Bonus ($)		Option Awards ($) 1		Non-Equity Incentive Plan Compensation ($) 2		All Other Compensation ($) 3		Totals ($)
Name and Principal Position
David Kimball	2025	$	638	$	638	$	—	$	740	$	—	$	2,016
Chief Executive Officer	2024	617		370		—		447		—		1,434
	2023	596		—		—		—		17		613
Usama Ashraf	2025	520		520		—		603		—		1,644
President and	2024	503		302		—		364		—		1,168
Chief Financial Officer	2023	485		—		—		—		17		501
Pete Woodhouse	2025	442		331		—		512		—		1,285
Chief Technology Officer	2024	427		192		—		307		—		926
	2023	410		—		—		—		17		427
Edward R. Buell III	2025	389		253		—		301		—		943
General Counsel, Secretary and	2024	376		147		—		181		—		704
Chief Compliance Officer	2023	363		—		—		—		17		380
Allyson Bryant	2025	337		219		41		260		—		857
Vice President of
Product and Marketing

1.The amounts reported represent the grant date fair value of the restricted stock units and stock options granted to the named executive officers as calculated in accordance with the Financial Accounting Board’s Topic ASC 718, Compensation–Stock Compensation (“ASC 718”) using a Black-Scholes model to purchase shares of PMI’s common stock. The key assumptions used in PMI’s ASC 718 calculation are discussed in Note 2 of PMI’s consolidated financial statements, which are incorporated by reference into this Annual Report.

2.The amount reported reflects non-equity incentive compensation payable under the Long Term Cash Incentive Plan.

3.“All Other Compensation” consists of compensation received from employer matching contributions to PMI’s 401(k) plan. On January 1, 2024, PMI temporarily suspended its discretionary matching contributions. As a result, during the year ended December 31, 2025, PMI did not contribute any funds to the 401(k) plan. Beginning on January 1, 2026, PMI reinstated its discretionary matching contributions.

2025 Grants of Plan-Based Awards 1,2

The following table sets forth certain information regarding grants of plan-based awards to the listed PMI named executive officers during 2025 (dollar amounts in thousands, except per share information):


	Grant Date	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards ($) 3
Allyson Bryant	3/22/2025	111,700	$	0.59	$	41

1.The following columns are intentionally omitted from this table: Estimated Future Payouts under Non-Equity Incentive Plan Awards, and Estimated Future Payouts under Equity Incentive Plan Awards.

2.The equity awards granted to NEOs in 2025 were granted under, and governed by the terms of, PMI's 2015 Equity Incentive Plan and the applicable award agreements. See the footnotes to the Outstanding Equity Awards at 2025 Fiscal Year-End table below for a description of the vesting schedule of the equity awards granted in 2025 and reported in the table above.

3.The amounts reported represent the grant date fair value of the stock options granted to the named executive officers as calculated in accordance with the Financial Accounting Board’s Topic ASC 718, Compensation–Stock Compensation (“ASC 718”) using a Black-Scholes model to purchase shares of PMI’s common stock. The key assumptions used in PMI’s ASC 718 calculation are discussed in Note 2 of PMI’s consolidated financial statements, which are incorporated by reference into this Annual Report.

CEO Pay Ratio

In accordance with Item 402(u) of Regulation S-K, PMI is providing the following information for the year ended December 31, 2025:

•The median of total compensation of all employees, excluding our CEO: $165,103;

•The annual total compensation of our CEO: $2,016,167; and

•The ratio of CEO total compensation to median employee total compensation: 12.22 to 1.

Our CEO pay ratio information is a reasonable good faith estimate calculated in a manner consistent with the SEC pay ratio rules and methods for disclosure. In order to determine the median employee from a compensation perspective, PMI examined cash compensation (salary, wages and cash bonuses) paid for the 2025 calendar year for all employees, excluding our CEO, employed as of December 31, 2025 (the “Determination Date”). On the Determination Date, Prosper’s employee population consisted of 385 individuals, all of whom were located in the United States. This population consisted of our full-time, part-time, and temporary employees. We did not include any contractors or workers employed through a third-party provider in our employee population.

To identify the “median employee,” we utilized the amount of annualized earnings, wages and cash bonus our employees received, as reflected in our payroll records through the Determination Date and annualized such amounts for any individual hired during 2025. Once we identified our median employee, we combined all of the elements of such employee’s compensation for 2025 to determine the median employee total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K and compared such total compensation to the total compensation of PMI’s CEO, as reported in the Summary Compensation Table.

Narrative Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table

Offer Letters and Arrangements

David Kimball. In November 2016, PMI entered into an offer letter with Mr. Kimball in connection with his appointment as its Chief Executive Officer. In addition to his initial base salary, Mr. Kimball's offer letter provided for (i) eligibility to receive an annual performance bonus in a target amount of 100% of his base salary, payable on a quarterly basis; (ii) reimbursement of certain relocation expenses; and (iii) eligibility to participate in the benefit programs generally available to employees of PMI. PMI also committed to grant Mr. Kimball an equity award of options exercisable into shares of PMI common stock representing up to 5% of PMI’s capitalization on a fully diluted basis, subject to the terms and conditions of the offer letter.

Mr. Kimball's November 2016 offer letter replaced the offer letter PMI entered into with Mr. Kimball in March 2016 in connection with his appointment as its Chief Financial Officer. In addition to the severance, reimbursement and benefits arrangements included in the November 2016 offer letter, Mr. Kimball's March 2016 offer letter included his initial base salary and equity grant as CFO and provided for a one-time sign-on bonus of $125,000, subject to certain repayment requirements in the event of Mr. Kimball’s termination from PMI within 12 months of his employment.

In November 2020, PMI and Mr. Kimball executed a severance and change in control agreement that replaced any prior agreements regarding severance set forth in Mr. Kimball’s offer letter. The terms of Mr. Kimball’s severance and change in control agreement are described under “Post-Employment Compensation” above.

Usama Ashraf. In February 2017, PMI entered into an offer letter with Mr. Ashraf in connection with his appointment as its Chief Financial Officer. In addition to his initial base salary and equity grant, Mr. Ashraf's offer letter provided for (i) a one-time sign-on bonus of $20,000, subject to certain repayment requirements in the event of Mr. Ashraf's termination from PMI within 12 months of his employment; (ii) eligibility to receive an annual performance bonus in a target amount of 50% of his base salary; (iii) reimbursement of certain relocation expenses; (iv) reimbursement of certain short-term housing expenses and (v) eligibility to participate in the benefit programs generally available to employees of PMI.

In addition to the terms of Mr. Ashraf's offer letter, in January 2018, the Compensation Committee approved a one-time retention bonus payment in an amount equal to 25% of his base salary. In August 2018, in connection with Mr. Ashraf's expanded scope of responsibilities in the role of Chief Financial Officer, the Compensation Committee increased his annual

performance bonus target from 50% to 60% of his base salary. In March 2019, the Compensation Committee increased Mr. Ashraf's annual performance bonus target to 75% of his annual base salary. In March 2020, the Compensation Committee confirmed Mr. Ashraf's annual performance bonus target for 2020 would remain at 75% of his annual base salary. On February 24, 2021, Mr. Ashraf was appointed as President of PMI effective March 1, 2021. In connection with his appointment, Mr. Ashraf: (i) will be eligible to receive an annual performance bonus in a target amount of 85% of his base salary; and (ii) was granted an option to purchase 2,000,000 shares of PMI's common stock at an exercise price equal to the fair market value of the common stock on the grant date. The option will vest over a four year period, subject to and in accordance with the terms of the stock option agreement. Effective January 1, 2024, the Compensation Committee increased Mr. Ashraf’s annual performance bonus to a target amount of 100% of his base salary.

In November 2020, PMI and Mr. Ashraf executed a severance and change in control agreement that replaced any prior agreements regarding severance set forth in Mr. Ashraf’s offer letter. The terms of Mr. Ashraf’s severance and change in control agreement are described under “Post-Employment Compensation” above.

Pete Woodhouse. In May 2021, PMI entered into an offer letter with Mr. Woodhouse in connection with his appointment as its Chief Technology Officer. In addition to his initial base salary and equity grant, Mr. Woodhouse’s offer letter provided for (i) eligibility to receive an annual performance bonus in a target amount of 75% of his base salary; (ii) eligibility to participate in PMI’s Long Term Cash Incentive Plan, subject to the tenure and other requirements set forth therein; and (iii) eligibility to participate in the benefit programs generally available to employees of PMI. In February 2022, PMI and Mr. Woodhouse executed a severance and change in control agreement that replaces any prior agreements regarding severance set forth in Mr. Woodhouse’s offer letter. The terms of Mr. Woodhouse’s severance and change in control agreement are described under “Post-Employment Compensation” above.

Edward R. Buell III. In September 2015, PMI entered into an offer letter with Mr. Buell in connection with his appointment as Compliance Counsel. In addition to his initial base salary and equity grant, Mr. Buell’s offer letter provided for (i) eligibility to receive an annual performance bonus in a target amount of 20% of his base salary; and (ii) eligibility to participate in the benefit programs generally available to employees of PMI. In June 2018, Mr. Buell was promoted to Chief Compliance Officer and Deputy General Counsel. In connection with this promotion, Mr. Buell’s annual performance bonus target was increased to 30% of his annual base salary and Mr. Buell was granted an option to purchase 149,700 shares of PMI's common stock at an exercise price equal to the fair market value of the common stock on the grant date. In March 2021, Mr. Buell was appointed as General Counsel and Secretary of PMI. In connection with this appointment, Mr. Buell: (i) is eligible to receive an annual performance bonus in a target amount of 65% of his base salary; and (ii) was granted options to purchase 756,638 shares of PMI's common stock at an exercise price equal to the fair market value of the common stock on the grant date.

In May 2025, PMI and Mr. Buell executed a change in control severance agreement. The terms of Mr. Buell’s change in control severance agreement are described under “Post-Employment Compensation” above.

Allyson Bryant. In August 2017, PMI entered into an offer letter with Ms. Bryant in connection with her appointment as its Director of Product Management. In addition to her initial base salary and equity grant, Ms. Bryant’s offer letter provided for (i) eligibility to receive an annual performance bonus in a target amount of 20% of her base salary beginning on January 1, 2018; and (ii) eligibility to participate in the benefit programs generally available to employees of PMI. In connection with subsequent promotions since her appointment as Director of Product Management in 2017, Ms. Bryant is currently eligible to receive an annual performance bonus in a target amount of 65% of her base salary.

In May 2025, PMI and Ms. Bryant executed a change in control severance agreement. The terms of Ms. Bryant’s change in control severance agreement are described under “Post-Employment Compensation” above.

Equity Incentive Plans

PMI grants equity awards primarily through its 2025 Equity Incentive Plan, which was approved by PMI's Board of Directors on April 7, 2025 (the “2025 Plan”). PMI also previously granted equity awards through its (i) Amended and Restated 2005 Stock Option Plan (as amended, the “2005 Plan”), and (ii) 2015 Stock Option Plan (as amended, the “2015 Plan” and collectively with the 2005 Plan and the 2025 Plan, the “Equity Plans”). The 2005 Plan was terminated, replaced and superseded by the 2015 Plan, and the 2015 Plan was terminated, replaced and superseded by the 2025 Plan.

Any awards granted under the 2015 Plan prior to its expiration remain in effect pursuant to their terms. Unless sooner terminated by PMI’s Board of Directors, the 2025 Plan will expire ten years from the date of its adoption, unless sooner terminated under the terms of the 2025 Plan. All stock options granted to NEOs are incentive stock options, to the extent permissible under the Internal Revenue Code, as amended. All equity awards to PMI’s employees and directors were granted at no less than the fair market value of its common stock on the date of each award. In the absence of a public trading market for PMI common stock, PMI’s Board of Directors, acting on its own or through the Compensation Committee, has determined the fair market value of its common stock in good faith based upon consideration of a number of relevant factors including the

status of its development efforts, financial status and market conditions. See Item 15, “Notes to Consolidated Financial Statements.”

The 2015 Plan and 2025 Plan provide for grants in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and unrestricted stock. Under the 2015 Plan and the 2025 Plan, incentive stock options may be granted solely to PMI’s employees, including officers. Awards other than incentive stock options may be granted to its directors, consultants or employees, including officers. The 2025 Plan is administered by PMI’s Board of Directors, which in turn has delegated authority to administer the plans to the Compensation Committee.

Shares of PMI’s common stock subject to options that have expired or otherwise terminate under the 2015 Plan without having been exercised in full will become available for grant under the 2025 Plan. Shares of PMI’s common stock issued under the 2025 Plan may include previously unissued shares or reacquired shares bought on the market or otherwise.

As of December 31, 2025, an aggregate of 90,807,132 options to purchase our common stock were outstanding or authorized for issuance under the Equity Plans. Of these outstanding and authorized options, a total of 76,886,581 options and 2,559,633 restricted stock units were outstanding under the Equity Plans and 11,360,918 equity awards were available for grant under the 2025 Plan. No equity awards are available for grant under the 2015 Plan. During the year ended December 31, 2025, an aggregate of 11,286,667 options and 500 RSUs granted under the Equity Plans either expired or were forfeited. As of December 31, 2025, 67,651,143 options under the Equity Plans were vested and outstanding and 55,936,490 were exercised.

The NEOs identified herein have been granted equity awards upon employment with PMI, for merit increases, and for retention purposes.

Policies and Practices Related to the Grant of Certain Equity Awards

We do not have any formal policies or practices regarding the timing of awards of options in relation to the disclosure of material nonpublic information. Our option awards are typically granted based on a pre-established schedule, with the majority of awards to executive officers and non-executive employees occurring during the first quarter of the year or at the time of hiring or promotion.

Pursuant to Item 402(x) of Regulation S-K under the Exchange Act, we are providing the following information regarding awards granted to NEOs on the following dates:

•Consistent with our historical timing on annual equity awards, we granted share options to the following NEO on March 22, 2025, which was within four business days before the filing of our Annual Report on Form 10-K for the year ended December 31, 2024.


	Grant Date	Number of Securities Underlying the Award	Exercise Price of the Award ($/Sh)		Grant Date Fair Value of the Award (in thousands)		Percentage Change in Market Price1
Allyson Bryant	3/22/2025	111,700	$	0.59	$	41	—

1 As PMI’s securities are not publicly traded, there is no market price available for the period between March 25, 2025, the trading day ending immediately prior to the disclosure of the material nonpublic information, and March 27, 2025, the trading day beginning immediately following the disclosure of material nonpublic information.

Outstanding Equity Awards at 2025 Fiscal Year End

The following table sets forth certain information regarding outstanding equity awards granted to PMI’s named executive officers (“NEOs”) that remained outstanding as of December 31, 2025:


	Grant Date		Vesting Commencement Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#) 1
David Kimball	5/3/2016	2	3/18/2016	1,410,925	—	0.02	5/3/2026
	5/3/2016	3	3/18/2016					705,465
	6/17/2016	4	4/28/2016	2,115,703	—	0.02	6/17/2026
	3/17/2017	5	12/1/2016	21,156,579	—	0.02	3/17/2027
	3/20/2018	2	3/1/2018	2,535,292	—	0.02	3/20/2028
Usama Ashraf	3/17/2017	9	2/27/2017	3,397,242	—	0.02	3/17/2027
	11/7/2017	9	2/27/2017	402,758	—	0.02	11/7/2027
	3/20/2018	6	3/1/2018					1,784,793
	8/8/2018	9	7/1/2018	837,719	—	0.02	8/8/2028
	11/5/2019	9	11/5/2019	500,000	—	0.02	11/5/2029
	3/10/2021	9	3/1/2021	2,000,000	—	0.06	3/10/2031
	3/25/2022	9	12/16/2021	500,000	—	0.71	3/25/2032
	3/25/2022	9	2/3/2022	479,166	20,834	0.71	3/25/2032
Pete Woodhouse	8/10/2021	9	7/1/2021	5,584,793	—	0.24	8/10/2031
Edward R. Buell	6/17/2016	8	4/28/2016	30,325	—	0.02	6/17/2026
	3/17/2017	7	1/1/2017	37,800	—	0.02	3/17/2027
	3/17/2017	8	1/1/2017	30,250	—	0.02	3/17/2027
	3/20/2018	7	3/1/2018	114,875	—	0.02	3/20/2028
	3/20/2018	7	3/1/2018	125,000	—	0.02	3/20/2028
	8/8/2018	7	6/1/2018	149,700	—	0.02	8/8/2028
	5/7/2019	7	3/1/2019	55,850	—	0.02	5/7/2029
	11/5/2019	7	11/5/2019	300,000	—	0.02	11/5/2029
	3/10/2021	9	3/15/2021	756,638	—	0.06	3/10/2031
Allyson Bryant	11/7/2017	7	10/9/2017	148,535	—	0.02	11/7/2027
	8/8/2018	7	7/16/2018	149,700	—	0.02	8/8/2028
	11/5/2019	7	11/5/2019	500,000	—	0.02	11/5/2029
	3/10/2021	7	9/1/2020	149,700	—	0.06	3/10/2031
	3/25/2022	7	3/1/2022	104,718	6,982	0.71	3/25/2032
	3/21/2023	7	3/1/2023	76,793	34,907	0.35	3/21/2033
	3/22/2024	7	3/1/2024	48,868	62,832	0.40	3/22/2034
	3/22/2025	7	3/1/2025	—	111,700	0.59	3/22/2035

1.RSUs in each case that remained unvested as of December 31, 2025.

2.This option vests over four years, with 1/4 vesting on the first anniversary of the applicable vesting commencement date set forth in the table above (the “Vesting Commencement Date”) and 1/48 vesting each month thereafter for the following three years, provided that, any unvested options will vest in full immediately prior to the effective time of a change in control of PMI, a sale of all or substantially all of PMI's assets, or a liquidation, dissolution or winding up of PMI (each, a “Corporate Transaction”).

3.These RSUs initially vest, if at all, when PMI files for an initial public offering and the lock-up period expires or there is a Corporate Transaction (which, as defined in the RSU grant notice, does not include a liquidation, dissolution or

winding up of PMI), whichever occurs first (each, a “Triggering Event”). The RSUs will immediately and fully vest in connection with the occurrence of such Triggering Event.

4.This option vests over three years, with 1/36 vesting on the one month anniversary of the applicable Vesting Commencement Date and 1/36 vesting each month thereafter, provided that, any unvested options will vest in full immediately prior to the effective time of a Corporate Transaction.

5.This option vests over three years, with 1/2 vesting on the first anniversary of the applicable Vesting Commencement Date and 1/48 vesting each month thereafter, provided that, any unvested options will vest in full immediately prior to the effective time of the Corporate Transaction.

6.These RSUs initially vest, if at all, upon the occurrence of a Triggering Event. The number of RSUs that vest upon a Triggering Event will be equal to the number of RSUs that would have vested had the RSUs been subject to the four-year Time-Based Vesting Schedule (1/4 vesting on first-year anniversary of applicable Vesting Commencement Date and 1/48 vesting monthly thereafter). If the NEO provides continuous service through the Triggering Event, the remaining RSUs will vest pursuant to the Time-Based Vesting Schedule until the RSUs are fully vested.

7.This option vests over four years, with 1/4 vesting on the first anniversary of the applicable Vesting Commencement Date and 1/48 vesting each month thereafter.

8.This option vests over three years, with 1/36 vesting on the one month anniversary of the applicable Vesting Commencement Date and 1/36 vesting each month thereafter.

9.This option vests over four years, with 1/4 vesting on the first anniversary of the applicable Vesting Commencement Date and 1/48 vesting each month thereafter for the following three years, except that, in the event the NEO is terminated without cause, or if Optionee resigns for Good Reason, in each case within 12 months of a Corporate Transaction, any unvested options will vest in full immediately.

The following table sets forth information regarding equity awards held by PMI's named executive officers that were exercised, vested or settled during 2025 (dollar amounts in thousands):

Option Awards

Stock Awards

Number of

Acquired on

Exercise

(#)

Value

Realized

on Exercise

($)

Number of

Acquired

on Vesting

(#)

Value

Realized on

Vesting/Settlement

($)

David Kimball

—

Usama Ashraf

—

Pete Woodhouse

—

Edward R. Buell III

—

Allyson Bryant

—

Potential Payments Upon Termination or a Change In Control of PMI

The following table provides the estimated value of the payments that PMI would provide to its named executive officers in connection with a change in control of PMI and/or a termination of employment, including any options, RSUs and Stock Awards accelerated as a result of the change in control and/or termination. In determining amounts payable, we have

assumed in all cases that the change in control or termination of employment, as applicable, occurred on December 31, 2025. With respect to a termination of employment, we have assumed in all cases that the termination was without cause.


Name	Cash Severance ($)	Number of Unvested Options (#)	Estimated Value of Unvested Options at December 31, 2025 ($)	Number of Unvested RSUs and Stock Awards (#)	Estimated Value of Unvested RSUs and Stock Awards at December 31, 2025 ($)	Healthcare Benefits ($)	Total Estimated Value ($)
	(dollar amounts in thousands)

David Kimball
Involuntary Termination or Resignation for Good Reason	1,727	—	—	—	—	28	1,755
Change in Control	—	—	—	705,465	543	—	543
Involuntary Termination or Resignation for Good Reason following Change in Control	2,684	—	—	—	—	28	2,712
Usama Ashraf
Involuntary Termination or Resignation for Good Reason	1,407	—	—	—	—	28	1,435
Change in Control	—	—	—	1,784,793	1,374	—	1,374
Involuntary Termination or Resignation for Good Reason following Change in Control	2,187	20,834	1	—	—	28	2,216
Pete Woodhouse
Involuntary Termination or Resignation for Good Reason	1,083	—	—	—	—	9	1,092
Change in Control	—	—	—	—	—	—	—
Involuntary Termination or Resignation for Good Reason following Change in Control	1,745	—	—	—	—	9	1,754
Edward R. Buell III
Involuntary Termination or Resignation for Good Reason	—	—	—	—	—	—	—
Change in Control	—	—	—	—	—	—	—
Involuntary Termination or Resignation for Good Reason following Change in Control	1,215	—	—	—	—	28	1,243
Allyson Bryant
Involuntary Termination or Resignation for Good Reason	—	—	—	—	—	—	—
Change in Control	—	—	—	—	—	—	—
Involuntary Termination or Resignation for Good Reason following Change in Control	1,050	—	—	—	—	28	1,078

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2025, Claire A. Huang and Thomas R. Kearney served as members of the Compensation Committee. None of these directors is or has been an officer or employee of PMI at any time or had any relationship with PMI requiring disclosure by PMI under Item 404 of Regulation S-K. During the fiscal year ended December 31, 2025, none of PMI's executive officers served as a member of the Board of Directors or Compensation Committee (or other board committee serving an equivalent function) of any unrelated entity that had one or more of its executive officers serving on PMI’s Board of Directors or Compensation Committee (or other board committee serving an equivalent function).

Director Compensation

The following table shows compensation for the year ended December 31, 2025 to PMI’s directors who were not also named executive officers at the time they received compensation as directors (in thousands):


	Fees earned or paid in cash ($)		Equity awards ($)	Total ($)
Claire A. Huang	$	85	—	$	85
Thomas R. Kearney	$	85	—	$	85
Peter J. deSilva	$	85	—	$	85

From time to time, PMI reimburses certain of its non-employee directors for travel and other expenses incurred in connection with attending board of directors meetings.

Compensation Committee Report

The Compensation Committee of PMI has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and based on such review and discussions, the Compensation Committee recommended to PMI's Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

COMPENSATION COMMITTEE

Claire A. Huang, Chairwoman

Thomas R. Kearney

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Prosper Marketplace, Inc.

The following table sets forth information regarding the beneficial ownership of PMI’s Common Stock as of March 1, 2026, by:

•each of PMI’s directors;

•each of PMI’s named executive officers;

•each person, or group of affiliated persons, who is known by PMI to beneficially own more than 5% of PMI’s Common Stock; and

•all of PMI’s directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. Except as otherwise indicated in the footnotes to the table below, all of the shares reflected in the table are shares of Common Stock and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.

Percentage ownership calculations are based on 330,539,135 shares of Common Stock outstanding as of March 1, 2026, assuming the conversion of all of PMI’s convertible preferred stock, but excluding any outstanding stock options or warrants. Each share of PMI preferred stock is convertible at any time at the discretion of the holder. Shares of PMI’s Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock convert into shares of PMI Common Stock at a ratio of 1 to 1. Shares of PMI’s Series A-1 Preferred Stock convert into shares of PMI Common Stock at a ratio of 1,000,000 to 1. Shares of PMI’s Series G Preferred Stock convert into shares of PMI common stock at a ratio of 1 to 1.36.

In computing the number of shares of Common Stock beneficially owned by a person or entity and the percentage ownership of that person or entity, PMI deemed outstanding all shares of Common Stock subject to options and warrants held by that person or entity that are currently exercisable or vesting within 60 days of March 1, 2026. PMI did not deem these shares outstanding for the purpose of computing the percentage ownership of any other person. Beneficial ownership representing less than 1.0% is denoted with an asterisk (*). Except as otherwise indicated in the footnotes to the table below,

addresses of named beneficial owners and officers are in care of Prosper Marketplace, Inc., 221 Main Street, 3rd Floor, San Francisco, CA 94105.


	Number of Shares Owned1	Number of Shares Underlying Options, and Warrants Exercisable Currently or Within 60 Days2	Total Number of Shares Beneficially Owned3	Beneficial Ownership Percentage
Directors and Executive Officers
Thomas R. Kearney	20,000	980,000	1,000,000	*
Claire A. Huang	—	1,000,000	1,000,000	*
Peter J. deSilva	—	1,000,000	1,000,000	*
David Kimball	—	27,218,499	27,218,499	7.61	%
Usama Ashraf	—	8,137,719	8,137,719	2.40	%
Pete Woodhouse	—	5,584,793	5,584,793	1.66	%
Edward R. Buell III	—	1,600,438	1,600,438	*
Allyson Bryant	122,140	1,234,166	1,356,306	*
All directors and executive officers as a group4	142,140	46,755,615	46,897,755	13.47	%

5% Shareholders
Francisco Partners5	17,413,325	35,544,141	52,957,466	14.47	%
Newport Trust Company6	51,247,915	—	51,247,915	15.50	%
LPG Capital GP Limited7	50,776,886	—	50,776,886	15.36	%
Soros Fund Management LLC8	52,338,026	—	52,338,026	15.83	%
Accel Partners9	24,320,667	—	24,320,667	7.36	%
IDG Capital Partners10	24,320,667	—	24,320,667	7.36	%
JPF LLC11	—	41,833,904	41,833,904	11.23	%
Rithm Capital Corp.12	1	41,833,904	41,833,905	11.23	%
Third Point Ventures LLC13	—	41,833,904	41,833,904	11.23	%
* Less than 1%

1.Includes shares of Common Stock (including Common Stock issuable upon the conversion of preferred stock) owned directly or indirectly, but does not include shares subject to options and warrants.

2.Includes shares subject to options or warrants owned directly or indirectly that are currently exercisable or will become exercisable within 60 days of March 1, 2026.

3.The amounts and percentages of Common Stock beneficially owned are reported on the basis of regulations of the Securities and Exchange Commission governing the determination of beneficial ownership of securities. Under the rules of the Commission, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities for which that person has a right to acquire beneficial ownership within 60 days.

4.Consists of 46,755,615 shares of Common Stock issuable upon the exercise of stock options.

5.Represents 17,413,325 shares of Common Stock issuable upon the conversion of preferred stock held by Francisco Partners through certain of its affiliates and 35,544,141 shares of Common Stock issuable upon the exercise and conversion of the preferred stock warrant held by Francisco Partners through certain of its affiliates. Francisco Partners is deemed to have voting and investment power over these shares. The address for Francisco Partners is One Letterman Drive, Building C – Suite 410, San Francisco, CA 94129

6.Represents 51,247,915 shares of Common Stock issuable upon the conversion of preferred stock held by Prosper Grantor Trust. Prosper Grantor Trust is a wholly-owned subsidiary of Prosper Marketplace, Inc. and as such, Prosper Marketplace Inc. holds sole voting power over such shares. Newport Trust Company, as trustee for Prosper Grantor Trust, is deemed to be an indirect beneficial owner of such shares. The address for Newport Trust Company is 570 Lexington Ave., Suite 1502, New York, NY 10022.

7.Represents 50,776,886 shares of Common Stock issuable upon the conversion of preferred stock held by LPG Capital through certain of its affiliates. LPG Capital is deemed to have voting and investment power over the shares. The address for LPG Capital is 199-203 Hennessy Road, Flat 1002, Hong Kong, China.

8.Consists of (i) 51,614,126 shares of Common Stock held by QPL Holdings (PF) LP, a Delaware limited partnership (the “QPL Shares”); and (ii) 723,900 shares of Common Stock held by Quantum Strategic Partners Ltd., a Cayman Islands exempted company (the “Quantum Strategic Shares”).

Soros Fund Management LLC (“SFM LLC”) serves as principal investment manager for QPL Holdings (PF) LP and Quantum Strategic Partners Ltd. As such, SFM LLC has been granted investment discretion over the QPL Shares and the Quantum Strategic Shares. George Soros serves as Chairman of SFM LLC and has sole discretion to replace FPR Manager LLC, the Manager of SFM LLC. The business address of SFM LLC is 250 West 55th Street, 29th Floor, New York, NY 10019.

9.Represents 5,703,470 shares of Common Stock and 7,245,859 shares of Common Stock issuable upon the conversion of preferred stock held by Accel Partners through certain of its affiliates (collectively, the “Accel Shares”); 3,498,765 shares of Common Stock and 4,722,733 shares of Common Stock issuable upon the conversion of preferred stock held by IDG Capital Partners through certain of its affiliates (the “IDG Shares”); and 877,185 shares of Common Stock and 2,272,655 shares of Common Stock issuable upon the conversion of preferred stock held by Breyer Capital, LLC and James W. Breyer 2005 Trust dated 2/25/2005 (collectively, the “Breyer Shares”). Accel Partners is deemed to have voting and investment power over the Accel Shares. Accel Partners is an affiliate of IDG Capital Partners and may also therefore be deemed to share voting and investment power over the IDG Shares. Mr. Breyer is a partner of Accel Partners and therefore Accel Partners may also be deemed to share voting and investment power over the Breyer Shares. Accel Partners disclaims beneficial ownership of the IDG Shares and Breyer Shares except to the extent of its pecuniary interest therein. The address of Accel Partners is 500 University Avenue, Palo Alto, California 94301.

10.Represents 3,498,765 shares of Common Stock and 4,722,733 shares of Common Stock issuable upon the conversion of preferred stock held by IDG Capital Partners through certain of its affiliates (“IDG Shares”); 5,703,470 shares of common stock and 7,245,859 shares of common stock issuable upon the conversion of preferred held by Accel Partners through certain of its affiliates (collectively, the “Accel Shares”); and 877,185 shares of Common Stock and 2,272,655 shares of Common Stock issuable upon the conversion of preferred stock held by Breyer Capital, LLC and James W. Breyer 2005 Trust dated 2/25/2005 (collectively, the “Breyer Shares”). IDG Capital Partners is deemed to have voting and investment power over the IDG Shares. IDG Capital Partners is an affiliate of Accel Partners and may also therefore be deemed to share voting and investment power over the Accel Shares. Mr. Breyer is a partner of Accel Partners, which is an affiliate of IDG Capital Partners, and therefore IDG Capital Partners may also be deemed to share voting and investment power over the Breyer Shares. IDG Capital Partners disclaims beneficial ownership of the Accel Shares and Breyer Shares except to the extent of its pecuniary interest therein. The address for IDG Capital Partners is 99 Queen’s Road Central, Room 5505, 55th Floor, The Center, Hong Kong, China.

11.Represents 41,833,904 shares of common stock issuable upon the exercise and conversion of the preferred stock warrant held by JPF LLC. JPF LLC has shared voting power and shared investment power with its parent, Jefferies Funding LLC, Jefferies Funding LLC’s parent, Jefferies Group LLC, and Jefferies Group LLC’s parent, Jefferies Financial Group Inc. The address for JPF LLC is 520 Madison Avenue, New York, NY 10022.

12.Consists of (i) 1 share of Common Stock issuable upon the conversion of preferred stock, held directly by Rithm Capital Corp. (formerly known as New Residential Investment Corp.); and (ii) 41,833,904 shares of common stock issuable upon the exercise and conversion of the preferred stock warrant held by NRZ PRO Warrant LLC (the “NRZ Shares”). NRZ Pro Warrant LLC is an indirect, wholly-owned subsidiary of Rithm Capital Corp. Rithm Capital Corp. is deemed to have voting and investment power over the NRZ Shares. The address for Rithm Capital Corp. is 799 Broadway, 8th Floor, New York, NY 10003.

13.Represents 41,833,904 shares of common stock issuable upon the exercise and conversion of the preferred stock warrant held by Third Point Ventures LLC. Third Point LLC, as investment manager of Third Point Ventures LLC, has voting power over such shares. The address for Third Point LLC is 55 Hudson Yards, New York, NY 10001.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information, as of December 31, 2025, with respect to shares of PMI Common Stock that may be issued under PMI’s existing equity compensation plans.


	Number of shares of common stock to be issued upon exercise of outstanding options, warrants, RSUs and rights1	Weighted average exercise price of outstanding options, warrants and rights			Number of shares of common stock remaining available for future issuance under equity compensation plans
Equity compensation plans approved by stockholders:
Prosper Marketplace, Inc. 2015 Equity Incentive Plan, as amended	78,028,464	$		0.16	—
Prosper Marketplace, Inc. 2025 Equity Incentive Plan	1,417,750	0.75			11,360,918

Equity compensation plans not approved by stockholders:
Outstanding common stock warrants	705,349	0.22			—
Total potential shares	80,151,563	$	0.17		11,360,918

1.Includes option and RSU issuances to employees, directors and certain consultants, advisors or vendors; however, it does not include warrants granted to outside individuals, consultants, advisors and vendors.

Prosper Funding LLC

PMI is the sole member of, and holds a 100% equity interest in, PFL. PFL does not have any equity compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Prosper Marketplace, Inc.

Agreements with PFL

On January 22, 2013, PMI entered into an Administration Agreement with PFL (as amended to date, the “PMI Administration Agreement”), pursuant to which PMI agreed to provide certain administrative services relating to the marketplace. Under the PMI Administration Agreement, PFL is required to pay PMI (a) Corporate Administration Fees of $500,000 per month, (b) a fee for each Borrower Loan originated through the marketplace, (c) 59.3% of all Servicing Fees collected by or on behalf of Prosper Funding, and (d) all nonsufficient funds fees collected by or on behalf of Prosper Funding. Following the execution of Amendment 7 to the PMI Administration Agreement in November 2025, PMI also reimburses PFL for all whole loan investor performance-based payments and transaction fee refunds issued by PFL each month.

Also on January 22, 2013, PFL and PMI entered into an Asset Transfer Agreement (the “Asset Transfer Agreement”) pursuant to which PMI, effective February 1, 2013 (i) transferred the marketplace and substantially all of PMI’s assets and rights related to the operation of the marketplace to PFL, and (ii) made a capital contribution to PFL in excess of $3 million. Under the Asset Transfer Agreement, PMI also transferred substantially all of its remaining assets to PFL, including (i) all outstanding Notes issued by PMI under the Indenture dated June 15, 2009 between PMI and Wells Fargo Bank, as trustee (the “Indenture”), (ii) all Borrower Loans corresponding to such Notes, (iii) all registration agreements related to such Notes and Borrower Loans, and (iv) all documents and information related to the foregoing. Certain hardware and agreements relevant to the development, maintenance and use of the marketplace, including in relation to the origination, funding and servicing of Borrower Loans, and the issuance, funding and payment of the Notes, were not transferred or assigned to PFL by PMI. In addition, PMI did not transfer to PFL (i) agreements with PMI’s directors, officers or employees and PMI’s financial, legal or other advisors or consultants, (ii) certain agreements with vendors to provide PMI with goods or services in the ordinary course of business (including software licensed pursuant to any “shrink wrap” or “click wrap” license), and (iii) certain cash and short-term investments.

In the Asset Transfer Agreement, PMI agreed, among other things, to:

i.fund any repurchase obligation with respect to the transferred Notes, and indemnify PFL for any other losses that arise out of any registration agreement related to the transferred Notes or Borrower Loans, including as a result of a breach by PMI of any of its representations or warranties made therein;

ii.fund any arbitration filing or administrative fees or arbitrator fees payable under any registration agreement related to the transferred Notes or Borrower Loans; and

iii.fund any indemnification obligations that arise under any registration agreement entered into by PMI prior to the date of the asset transfer.

On August 17, 2021, PMI and PFL entered into an Asset Transfer and License Agreement (the “IP Asset Transfer and License Agreement”). The IP Asset Transfer and License Agreement, among other things, (i) transfers, assigns, and conveys certain intellectual property assets related to PMI’s white label service and PMI’s Credit Card product from PMI to PFL, and (ii) grants certain licenses and sublicenses related to the transferred intellectual property assets from PFL to PMI. PMI also agreed to make certain intellectual property filings to provide third parties with notice of the conveyance and to assist PFL with any additional intellectual property filings as may be required. PMI received a one-time fee of $10 from PFL in connection with the foregoing.

The foregoing description of the IP Asset Transfer and License Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the IP Asset Transfer and License Agreement, which is filed as an exhibit hereto and is incorporated herein by reference.

Holders of the transferred Notes are third party beneficiaries under the Asset Transfer Agreement and the Administration Agreement.

Under Section 4.1 of the Indenture, PMI could transfer substantially all of its assets to any person without the consent of the holders of the existing Notes, provided that the transferee expressly assumed all of PMI’s obligations under the Indenture and the existing Notes. In that case, the transferee would succeed to and be substituted for PMI, and PMI would be discharged from all of its obligations and covenants, under the Indenture and the existing Notes. Accordingly, on January 22, 2013, PMI, PFL and Wells Fargo Bank, as trustee entered an Amended and Restated Indenture (the “Amended and Restated Indenture”), effective February 1, 2013, which (i) effected such assumption, substitution and discharge (the “Note Assumption”), and (ii) amended and restated the Indenture to reflect the Note Assumption and to make certain other amendments to the Indenture as permitted therein. Following the Note Assumption, PFL became the obligor with respect to the transferred Notes and the Amended and Restated Indenture, and PMI no longer has any obligations with respect thereto.

Agreements with Significant Shareholders

On February 27, 2017, PFL entered into a Loan Purchase Agreement (the “Purchase Agreement”) with PF LoanCo Funding LLC, a Cayman limited liability company (the “Beneficiary”), and Wilmington Savings Fund Society, FSB, not in its individual capacity but solely in its capacity as trustee of PF LoanCo Trust, a New York common law trust (the “Trust”). The Purchase Agreement set forth the terms and conditions pursuant to which PFL would sell eligible personal loans in an aggregate amount of up to $5.0 billion to the Purchaser for the benefit of the Beneficiary. An aggregate of $3.3 billion of loans were purchased under the Purchase Agreement, which does not include $0.3 billion of Whole Loan purchases by members of the Consortium prior to the signing of the Purchase Agreement. The Consortium Purchase Agreement ended in May 2019.

In connection with the Purchase Agreement, on February 27, 2017, PMI entered into a Warrant Agreement with PF WarrantCo Holdings, LP (“PF WarrantCo”), a Delaware limited partnership and an entity related to the Beneficiary, and, for certain limited purposes, New Residential Investment Corp. (the “Series F Warrant Agreement”). Pursuant to the Series F Warrant Agreement, PMI issued to PF WarrantCo three warrant certificates to purchase up to in aggregate 177,720,706 shares of PMI’s Series F Preferred Stock at an exercise price of $0.01 per share (the “Warrant Shares”).

During the term of the Consortium Purchase Agreement, PF WarrantCo was a beneficial owner of more than 5% of PMI’s Common Stock as a result of the Warrant Shares vesting. The Beneficiary is an affiliate under common control with PF WarrantCo.

Certain Relationships Among Directors and Officers

None.

Participation in Marketplace and Credit Card Cardholders

Certain of PMI’s executive officers, directors and certain affiliates, have opened investor accounts on the marketplace and have made deposits to and withdrawals from their accounts, and invested in portions of borrowers’ loan requests from time to time in the past via purchases of Notes, and may do so in the future. The Notes and Borrower Loans were obtained on terms and conditions that were not more favorable than those obtained by other investors.

Certain of PMI’s executive officers, directors and certain affiliates are Credit Card cardholders. The Credit Card was obtained on terms and conditions that were not more favorable than those obtained by other Credit Card cardholders.

Financing Arrangements with Significant Shareholders, Directors and Officers

For further information regarding stock ownership for executive officers, directors and security holders owning greater than 5% ownership of all PMI classes of voting securities please see Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Prosper Marketplace, Inc.”

Under the terms of the amended and restated voting agreement, dated April 7, 2015, certain investors in PMI’s Convertible Preferred Stock, have each agreed, subject to maintaining certain ownership levels, to exercise their voting rights so as to elect one designee of Francisco Partners III, L.P., one designee of SC Prosper Holdings LLC, one designee of QPL Holdings (PF) LP, one designee of the Series A-1 Convertible Preferred Stock holders, PMI’s Chief Executive Officer (“CEO”), one common director designated by the CEO, and two independent directors.

Under the terms of the amended and restated investor rights agreement, dated February 27, 2017, the holders of a majority of the registrable securities of PMI have the right to demand that PMI file a registration statement under the Securities Act, so long as the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $20 million. These registration rights are subject to specified conditions and limitations. In addition, PMI is promptly required to give written notice to all holders of registrable securities prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of PMI. The amended and restated investor rights agreement also provides that if PMI registers any of its shares for public sale, stockholders with registration rights will have the right to include their shares in the registration statement, subject to specified conditions and limitations. Further, in the amended and restated investor rights agreement, if PMI receives from any holders of registrable securities a written request that PMI effect a registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement, PMI is required to use reasonable best efforts to file a Form S-3 registration statement and to effect such registration as would permit or facilitate the sale and distribution of all or such portion of such holder’s registrable securities as are specified in the request, so long as the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $2.5 million.

Indemnification Agreements

PMI’s amended and restated certificate of incorporation provides that it will indemnify its directors and officers to the fullest extent permitted by Delaware law. In addition, PMI has entered into separate indemnification agreements with each of its directors and executive officers. For more information regarding these agreements, see Item 10, “Directors, Executive Officers and Corporate Governance—Prosper Marketplace, Inc.—Limitations on Officers’ and Directors’ Liability and Indemnification Agreements” for more information.

Policies and Processes for Transactions Involving Related Parties

PMI’s board of directors has not adopted a formal policy or procedure that must be followed prior to any transaction, arrangement or relationship with a related person, as defined by SEC regulations.

PMI has adopted a corporate Code of Ethics and Corporate Governance (the “Code”) that is enforced throughout all levels of management and deals with conflicts of interest, among other things. The Code requires PMI’s directors, officers and employees to avoid any conduct or activities that conflict, or appear to conflict, with our interests, or that may make it difficult for the individual to perform their duties objectively. The Code also requires directors and executive officers to disclose any actual or potential conflict of interest to PMI’s Chief Compliance Officer, who will report such conflicts to PMI’s Audit Committee for review.

PMI’s directors and executive officers are required each year to respond to a questionnaire regarding their independence. The questionnaire also requires each director and executive officer to identify if they or an immediate family member have been indebted to, or have been a participant in any material transactions with, PMI or any of its subsidiaries. Additionally, PMI’s directors and executive officers are required to disclose on a quarterly basis whether they or an immediate family member had made any direct or indirect investments on our personal loan platform.

The standards applied pursuant to the above-described procedures are to provide comfort that potential conflicts of interest or related party transactions are identified and receive appropriate oversight and review.

Director Independence

For information regarding director independence, see Item 10, “Directors, Executive Officers, and Corporate Governance—Prosper Marketplace, Inc.—Director Independence.”

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Prosper Marketplace, Inc. and Prosper Funding LLC

Deloitte & Touche LLP (“Deloitte”) served as PMI and PFL’s independent registered public accounting firm for the fiscal year ended December 31, 2025 and is serving in such capacity for the current fiscal year. Deloitte was engaged in October 2014.

The aggregate fees billed by Deloitte for professional services to PMI and PFL were $2.0 million and $2.2 million in December 31, 2025 and 2024, respectively.

Audit Fees

The aggregate fees billed by Deloitte for professional services rendered for PMI and PFL for the audit of annual financial statements, the review of the quarterly financial statements, and services that are normally provided in connection with statutory and regulatory filings or engagements were $2.0 million and $2.2 million in 2025 and 2024, respectively.

Audit Related Fees

There were no fees billed by Deloitte for professional assurance and related services reasonably related to the performance of the audit or review of the financial statements of PMI and PFL for the fiscal years 2025 and 2024 that are not already disclosed under “Audit Fees.”

Tax Fees

There were no fees billed by Deloitte for professional services rendered for tax compliance, tax advice, and tax planning for the fiscal years 2025 and 2024.

All Other Fees

Deloitte billed $2 thousand and $2 thousand, in 2025 and 2024, respectively, related to fees not included in “Audit,” “Audit Related Fees” or “Tax Fees.”

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Reports of Independent Registered Public Accounting Firms (PCAOB ID No. 34)

(a1) Report of Independent Registered Public Accounting Firm for PMI

(a2) Report of Independent Registered Public Accounting Firm for Prosper Funding LLC

(b) Documents List


Financial Statements
Prosper Marketplace, Inc.
Consolidated Balance Sheets as of December 31, 2025 and 2024			3
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023			5
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the years ended December 31, 2025, 2024 and 2023			6
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023			7
Notes to Consolidated Financial Statements			8

Prosper Funding LLC
Consolidated Balance Sheets as of December 31, 2025 and 2024			56
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023			57
Consolidated Statements of Member’s Equity for the years ended December 31, 2025, 2024 and 2023			58
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023			59
Notes to Consolidated Financial Statements			60

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Prosper Marketplace, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Prosper Marketplace, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, convertible preferred stock and stockholders' deficit, cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Financial Instruments – Refer to Note 2 Summary of Significant Accounting Policies and Note 7, Fair Value of Assets and Liabilities, and as follows:

•Borrower loans, at fair value – Refer to Note 4 Borrower Loans and Notes, at Fair Value

•Servicing Assets – Refer to Note 6 Servicing Assets

•Credit Card Derivative, Receivable from Credit Card Partner and Credit Card Servicing Obligation Liability – Refer to Note 5. Credit Card

Critical Audit Matter Description

The Company measures the following financial instruments at fair value including borrower loans, servicing assets, credit card derivative, receivable from credit card partner and credit card servicing obligation. As of December 31, 2025, borrower loans were $309.7 million, servicing assets were $17.4 million, credit card derivative was $48.3 million, receivable from credit card partner was $99.9 million and the credit card servicing obligation liability was recorded within other liabilities. The Company estimates the fair values of these financial instruments using discounted cash flow valuation methodologies incorporating significant unobservable inputs and valuation assumptions that are reflective of management’s own estimates of assumptions that market participants would use in pricing the instruments and require significant management judgment. Significant unobservable inputs used in the valuation methodology of the servicing assets and credit card servicing obligation include the

F-1

market servicing rate. For all of these financial instruments, significant unobservable inputs used in the valuation include discount rates, default rates and prepayment rates.

Auditing the methodology and significant unobservable inputs used by management to estimate the fair values of these financial instruments required a high degree of auditor judgment and subjectivity and an increased extent of effort, including the need to involve fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of these financial instruments and unobservable inputs used by management to estimate the fair value included the following key procedures:

•We gained an understanding of the significance of inputs and assumptions using sensitivity analysis, identifying relevant inputs and assumptions for further testing.

•With the assistance of our fair value specialists, we developed independent estimates of fair value and compared our estimates to the Company’s estimates.

•We tested the source information derived from the Company’s data used in the valuation models.

•We evaluated the reasonableness of the market servicing rate assumption used in developing the fair value estimate of the servicing assets and credit card servicing obligation liability.

Valuation of Convertible Preferred Stock Warrant Liability – Refer to Note 2 Summary of Significant Accounting policies and Note 13 Convertible Preferred Stock, Convertible Preferred Stock Warrant Liability and Common Stock

Critical Audit Matter Description

Convertible preferred stock warrants are recorded at fair value and subject to remeasurement to fair value at each balance sheet date. As of December 31, 2025, convertible preferred stock warrant liability was $230.1 million. To estimate the fair value of the convertible preferred stock warrants, the Company determines the equity value using methods that may, include a discounted cash flow model, comparable public company analysis, and comparable acquisition analysis, which require significant management judgment. Additionally, management reviews and considers any recent transactions involving the Company's equity in determining whether such transactions should be considered in the valuation. Once the equity value has been estimated, an option pricing model is used to allocate the value to the various classes of equity, including preferred stock. The concluded per share value for the convertible preferred stock warrants is then determined using a Black-Scholes option pricing model.

Auditing the valuation methods used by management to estimate the fair value of the convertible preferred stock warrant liability required a high degree of auditor judgment and subjectivity and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of the convertible preferred stock warrant liability included the following key procedures, among others:

•We obtained an understanding of management’s process for developing the valuation model and assumptions applied, as well as the use of a third-party valuation expert.

•With the assistance of our fair value specialists, we evaluated the convertible preferred stock warrant valuation methodology, assumptions, and fair value results.

•We evaluated whether management’s assumptions were reasonable including comparing management’s historical forecasts of future cash flows to actual results.

/s/ DELOITTE & TOUCHE LLP

San Francisco, CA

March 26, 2026

We have served as the Company's auditor since 2014.

F-2

Prosper Marketplace, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	December 31,
	2025		2024
Assets:
Cash and Cash Equivalents	$	46,755	$	30,334
Restricted Cash (1)	94,363		114,753
Accounts Receivable (1)	11,947		7,545

Borrower Loans, at Fair Value (1)	309,737		461,785
Receivable from Credit Card Partner, at Fair Value (1)	99,865		104,153
Property and Equipment, Net	45,097		44,273
Prepaid and Other Assets (1)	30,263		25,362
Credit Card Derivative	48,290		38,739
Servicing Assets	17,402		13,718
Goodwill	36,368		36,368
Total Assets	$	740,087	$	877,030
Liabilities, Convertible Preferred Stock and Stockholders' Deficit:
Accounts Payable and Accrued Liabilities	$	73,692	$	58,558
Payable to Investors	77,604		91,945
Notes, at Fair Value	243,900		283,030
Notes Issued by Securitization Trusts (1)	149,902		258,960
Term Loan	74,759		73,857
Other Liabilities (1)	34,778		33,749
Convertible Preferred Stock Warrant Liability	230,060		261,249
Total Liabilities	$	884,695	$	1,061,348
Commitments and Contingencies (see Note 17)
Convertible Preferred Stock – $0.01 par value; 444,760,848 shares authorized as of December 31, 2025 and December 31, 2024; 261,227,694 shares issued and outstanding as of December 31, 2025 and 209,613,570 shares issued and outstanding as of December 31, 2024. Aggregate liquidation preference of $414,019 as of December 31, 2025 and $370,456 as of December 31, 2024.	$	396,556	$	322,748
Less: Convertible Preferred Stock Held by Consolidated VIE (Note 13), 51,247,915 shares issued and outstanding as of December 31, 2025 and December 31, 2024.	(2,381)		(2,381)
Stockholders' Deficit:
Common Stock – $0.01 par value; 625,000,000 shares authorized; 79,138,710 shares issued and 78,202,775 shares outstanding as of December 31, 2025; 78,401,384 shares issued and 77,465,449 shares outstanding as of December 31, 2024.	307		300
Additional Paid-In Capital	164,240		162,643
Less: Treasury Stock	(23,417)		(23,417)
Accumulated Deficit	(679,913)		(644,211)
Total Stockholders' Deficit	$	(538,783)	$	(504,685)
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit	$	740,087	$	877,030
(1) Includes amounts in consolidated variable interest entities presented separately in the table below.

The accompanying notes are an integral part of these consolidated financial statements.

F-3

The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. Refer to Note 7, Securitizations, and Note 11, Debt, to the notes to the consolidated financial statements for additional information.


	December 31,
	2025		2024
Assets of consolidated VIEs, included in total assets above:
Restricted Cash	$	11,892	$	17,961
Accounts Receivable	1,376		1,019

Borrower Loans, at Fair Value	64,400		176,208
Receivable from Credit Card Partner, at Fair Value	99,865		104,153

Total assets of consolidated VIEs	$	177,533	$	299,341
Liabilities of consolidated VIEs, included in total liabilities above:
Notes Issued by Securitization Trusts	$	149,902	$	258,960

Other Liabilities	2,163		1,570
Total liabilities of consolidated VIEs	$	152,065	$	260,530

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Prosper Marketplace, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)


	Years Ended December 31,
	2025		2024		2023
Revenues:
Operating Revenues:
Transaction Fees, Net	$	233,385	$	193,588	$	127,838
Servicing Fees, Net	30,853		23,026		15,364
Loss on Sale of Borrower Loans	(55,212)		(45,316)		(12,380)
Other Revenues	9,315		7,773		6,108
Total Operating Revenues	218,341		179,071		136,930
Interest Income (Expense):
Interest Income on Financial Instruments	81,904		89,849		115,663
Interest Expense on Financial Instruments	(59,770)		(73,826)		(91,983)
Total Interest Income, Net	22,134		16,023		23,680
Change in Fair Value of Financial Instruments	(27,926)		(21,739)		(22,910)
Total Net Revenue	212,549		173,355		137,700
Expenses:
Origination and Servicing	48,490		47,628		46,669
Sales and Marketing	60,513		50,638		53,585
General and Administrative	88,076		73,472		85,533
Change in Fair Value of Convertible Preferred Stock Warrants	42,103		46,208		48,695
Impairment of Right-of-Use Lease Assets	—		—		196
Interest Expense on Term Loans	12,331		13,124		12,265
Other Income, Net	(3,430)		(3,752)		(2,859)
Total Expenses	248,083		227,318		244,084
Net Loss Before Income Taxes	(35,534)		(53,963)		(106,384)
Income Tax Expense	(168)		(116)		(78)
Net Loss	$	(35,702)	$	(54,079)	$	(106,462)


Net Loss Per Share – Basic and Diluted	$	(0.46)	$	(0.70)	$	(1.40)

Weighted-Average Shares – Basic and Diluted	77,860,750		77,226,337		76,092,569

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Prosper Marketplace, Inc.

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

(in thousands, except share amounts)


	Convertible Preferred Stock			Convertible Preferred Stock Held by Consolidated VIE			Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2022	209,613,570	$	322,748	(51,247,915)	(2,381)		79,465,150	$	267	(5,177,235)	$	(23,417)	$	158,814	$	(483,670)	$	(348,006)
Exercise of vested stock options	—	—		—	—		2,637,479	26		—	—		91		—		117
Stock-based compensation expense	—	—		—	—		—	—		—	—		1,804		—		1,804
Net Loss	—	—		—	—		—	—		—	—		—		(106,462)		(106,462)
Balance at December 31, 2023	209,613,570	322,748		(51,247,915)	(2,381)		82,102,629	293		(5,177,235)	(23,417)		160,709		(590,132)		(452,547)
Exercise of vested stock options	—	—		—	—		540,055	7		—	—		11		—		18
Stock-based compensation expense	—	—		—	—		—	—		—	—		1,923		—		1,923
Net Loss	—	—		—	—		—	—		—	—		—		(54,079)		(54,079)
Balance at December 31, 2024	209,613,570	$	322,748	(51,247,915)	$	(2,381)	82,642,684	$	300	(5,177,235)	$	(23,417)	$	162,643	$	(644,211)	$	(504,685)
Exercise of vested stock options	—	—		—	—		737,326	7		—	—		40		—		47
Exercise of Series F convertible preferred stock warrant (Note 13)	51,614,124	73,808		—	—		—	—		—	—		—		—		—
Stock-based compensation expense	—	—		—	—		—	—		—	—		1,557		—		1,557
Net Loss	—	—		—	—		—	—		—	—		—		(35,702)		(35,702)
Balance at December 31, 2025	261,227,694	$	396,556	(51,247,915)	$	(2,381)	83,380,010	$	307	(5,177,235)	$	(23,417)	$	164,240	$	(679,913)	$	(538,783)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Prosper Marketplace, Inc.

Consolidated Statements of Cash Flows

(in thousands)


	Years Ended December 31,
	2025		2024		2023
Cash Flows from Operating Activities:
Net Loss	$	(35,702)	$	(54,079)	$	(106,462)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
Change in Fair Value of Financial Instruments	27,926		21,739		22,910
Depreciation and Amortization	12,128		10,816		10,989
Amortization of Operating Lease Right-of-Use Asset	2,147		2,285		2,408
Impairment of Operating Lease Right-of-Use Asset	—		—		196
Recognition of Servicing Asset on Sale of Borrower Loans	(13,608)		(10,997)		(9,239)
Change in Fair Value of Servicing Assets and Liability	10,253		8,743		15,564
Stock-Based Compensation Expense	1,307		1,616		1,575
Change in Fair Value of Convertible Preferred Stock Warrants	42,103		46,208		48,695
Amortization of debt discount and debt issuance costs	3,786		4,283		3,971
Accrual of Payment-in-Kind Interest on 2022 Term Loan	—		1,292		1,527
Other, Net	950		1,289		370
Changes in Operating Assets and Liabilities:
Purchase of Loans Held for Sale at Fair Value	(2,487,702)		(2,054,646)		(1,921,129)
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value	2,589,232		2,235,519		1,989,170
Accounts Receivable	(4,402)		3		(4,061)
Prepaid and Other Assets	(4,926)		(3,868)		(15,267)
Credit Card Derivative	(10,252)		(9,139)		(561)
Accounts Payable and Accrued Liabilities	15,095		16,595		3,382
Payable to Investors	(14,342)		5,214		1,420
Other Liabilities	697		(868)		1,537
Interest payable	(349)		(2,054)		850
Net Cash Provided by Operating Activities	134,341		219,951		47,845
Cash Flows from Investing Activities:
Purchases of Borrower Loans Held at Fair Value	(164,625)		(186,073)		(232,306)
Proceeds from Sales and Principal Payments of Borrower Loans Held at Fair Value	184,864		196,567		191,077
Purchases of Credit Card Receivables from Credit Card Partner	(75,181)		(106,161)		—
Principal Payments on Credit Card Receivable from Credit Card Partner	62,311		11,885		—
Purchases of Property and Equipment	(14,789)		(15,258)		(15,722)
Net Cash Used in Investing Activities	(7,420)		(99,040)		(56,951)
Cash Flows from Financing Activities:
Proceeds from Issuance of Notes Held at Fair Value	163,892		184,200		231,520
Payments of Notes Held at Fair Value	(183,753)		(195,169)		(188,670)
Principal Payments on Notes Issued by Securitization Trust	(110,834)		(174,326)		(34,701)
Proceeds from 2025 Term Loan (Note 11)	75,000		—		—
Principal payments on 2022 Term Loan (Note 11)	(75,512)		(2,500)		—
Payment for Debt Issuance Costs	(246)		(4,327)		(3,937)
Proceeds from Issuance of Securitized Notes (Note 7)	—		219,054		250,657
Proceeds from Warehouse Lines	—		—		48,478
Principal payments on Warehouse Lines	—		(28,601)		(111,732)
Extinguishment of Warehouse Line (Note 11)	—		(129,441)		(223,968)
Proceeds from Exercise of Stock Options	47		18		118
Proceeds from exercise of convertible preferred stock warrants	516		—		—
Net Cash Used in Financing Activities	(130,890)		(131,092)		(32,235)
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(3,969)		(10,181)		(41,341)
Cash, Cash Equivalents and Restricted Cash at Beginning of the Year	145,087		155,268		196,609
Cash, Cash Equivalents and Restricted Cash at End of the Year	$	141,118	$	145,087	$	155,268

Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest	$	73,841	$	84,461	$	97,431
Cash Paid for Income Taxes (Note 15)	509		—		—
Cash paid for operating leases included in the measurement of lease liabilities	4,416		3,923		3,051
Non-Cash Investing Activity - Accrual for Property and Equipment, Net	2,587		2,525		1,468
Non-Cash Financing Activity - Accrual for Debt Issuance Costs	—		—		550

Reconciliation to Amounts on Consolidated Balance Sheets
Cash and Cash Equivalents	$	46,755	$	30,334	$	34,970
Restricted Cash	94,363		114,753		120,298
Total Cash, Cash Equivalents and Restricted Cash	$	141,118	$	145,087	$	155,268

The accompanying notes are an integral part of these consolidated financial statements.

F-7

PROSPER MARKETPLACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND BUSINESS

Prosper Marketplace, Inc. (“PMI” or the “Company”) was incorporated in the state of Delaware on March 22, 2005. Except as the context requires otherwise, as used in these notes to consolidated financial statements of PMI, “Prosper,” “we,” “us,” and “our” refer to PMI and its wholly-owned subsidiaries, on a consolidated basis.

PMI developed a peer-to-peer online credit marketplace (the “marketplace”), and in February 2013 transferred ownership of the marketplace to Prosper Funding LLC (“PFL”), its wholly-owned subsidiary. All of the borrower payment dependent notes (“Notes”) issued and sold through the marketplace today are issued and sold by PFL. PFL also operates the marketplace and facilitates the origination of unsecured, personal loans by WebBank (“Borrower Loans”), an FDIC-insured, Utah-chartered industrial bank, through the marketplace. Pursuant to a Loan Account Program Agreement between PMI and WebBank, PMI manages the operation of the marketplace as an agent of WebBank in connection with the submission of loan applications by potential borrowers. PMI also manages the origination of related loans by WebBank and the funding of such Borrower Loans by WebBank. On February 1, 2013, PFL entered into an Administration Agreement with PMI in its capacity as licensee, corporate administrator, loan marketplace administrator and loan and Note servicer, pursuant to which PMI provides certain back office support, loan platform administration and loan servicing to PFL.

A borrower who wishes to obtain a Borrower Loan through the marketplace must post a loan listing on the marketplace. Listings are allocated to one of two investor funding channels: (i) the “Note Channel,” which allows investors to commit to purchase Notes from PFL, the payments of which are dependent on PFL’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows investors to commit to purchase 100% of a Borrower Loan directly from Prosper. As of December 31, 2025, the marketplace is open to investors in 31 states and the District of Columbia. Additionally, as of December 31, 2025, the marketplace is open to borrowers in 47 states and the District of Columbia. Currently our marketplace does not operate internationally.

In December 2021, the Company launched its Prosper Credit Card product in partnership with Coastal Community Bank (“Coastal”), through which eligible consumers are extended unsecured credit through Prosper-branded Credit Cards. In accordance with the Company’s program agreement with Coastal (“Credit Card Program Agreement”), the receivables associated with these Credit Cards are maintained on the balance sheet of Coastal up to a maximum committed amount. New customer accounts are then randomly designated as either Prosper Allocations or Coastal Allocations based on an approximate 95% to 5% split, respectively. These percentages may be subject to change based on the terms of the Credit Card Program Agreement, and accounts designated as Prosper Allocations may subsequently be sold or contributed to securitization transactions or other financing arrangements, thereby reducing the effective percentage of Prosper Allocations. Prosper and Coastal receive 100% of the interest income and are responsible for the credit losses on their allocated customer accounts. The Company pays Coastal a program fee based on the outstanding principal of Prosper Allocations, receives all non-interest fees and charges and is responsible for verified fraud losses across the entire portfolio and a portion of straight charge-off losses. Credit Card receivables are not available on the Company’s Personal Loan marketplace for investment purposes.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements include the accounts of PMI and its wholly owned subsidiaries including PFL, Prosper Healthcare Lending LLC (“PHL”), BillGuard, Inc. (“BillGuard”), and its consolidated VIEs including Prosper Warehouse I Trust (“PWIT,” terminated March 28, 2024), Prosper Warehouse II Trust (“PWIIT,” terminated September 25, 2023), Prosper Marketplace Issuance Trust, Series 2023-1 (“PMIT 2023-1”), Prosper Marketplace Issuance Trust, Series 2024-1 (“PMIT 2024-1”), Prosper Credit Card 2024-1 Issuer LLC (“PMCC 2024-1”) and Prosper Grantor Trust (“PGT”). All intercompany balances and transactions between PMI and its subsidiaries have been eliminated in consolidation. PMI and PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

PMI did not have any items of other comprehensive income (loss) during any of the periods presented in the consolidated financial statements as of and for the years ended December 31, 2025, 2024 and 2023.

Notes Issued by Securitization Trusts are notes held by certain third-party investors pursuant to Prosper’s securitization transactions, and are distinguishable from the borrower payment dependent Notes available to investors through the Company’s Note Channel.

F-8

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures, including contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include but are not limited to the following: (i) the valuation of Borrower Loans and associated Notes, Receivable from Credit Card Partner, Credit Card Derivative, servicing rights and obligations and the loan trailing fee liability; and (ii) the accounting for the valuation allowance on deferred tax assets, stock-based compensation expense, Goodwill, Convertible Preferred Stock Warrant Liability, Transaction Fee refund liability, repurchase obligations and contingent liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ materially from these estimates and assumptions.

Consolidation of Variable Interest Entities

The determination of whether to consolidate a VIE in which we have a variable interest requires a significant amount of analysis and judgment regarding whether we are the primary beneficiary of a VIE due to our holding a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support and (ii) whether a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity.

Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate or deconsolidate such VIE in the consolidated financial statements.

Transfers of Financial Assets

Prosper sells Borrower Loans through its Whole Loan Channel, as discussed above. In accordance with Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, the Company accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from Prosper, the transferee has the right to pledge or exchange the assets without any significant constraints, and Prosper has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, Prosper considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. Prosper measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale include the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations.

In November 2024, Prosper completed the PMCC 2024-1 Credit Card securitization transaction, which is more fully described in Note 7, Securitizations. Based on an analysis of the terms of that transaction, it was determined that the transfers of the underlying Credit Card receivables from Coastal to PMCC 2024-1 do not meet sale accounting requirements under ASC 860. In particular, as cardholders make additional draws on the Credit Cards associated with PMCC 2024-1, they lose their identity and become part of a larger outstanding balance. Further, the interests in the Credit Card receivables do not meet the definition of a participating interest given their lack of stated maturity dates, among other requirements. As a result, the Company derecognizes cash paid to Coastal for the transfer of the underlying Credit Card receivables, and has recorded an offsetting Receivable from Credit Card Partner on its consolidated balance sheets. Receivable from Credit Card Partner is secured by and effectively mirrors the value of the underlying Credit Card receivables.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments measured at fair value consist principally of Borrower Loans and Notes (Notes 4 and 7), Servicing Assets (Note 6), Receivable from Credit Card Partner (Notes 5 and 7), Credit Card Derivative and servicing obligation (Note 5) and Loan Trailing Fee Liabilities (Note 10). The Company believes that applying the fair value option to these financial instruments achieves consistent accounting for certain assets and liabilities and more accurately reflects their in-period economic performance as compared to alternate methodologies. In addition, the Convertible Preferred Stock Warrant Liability (Note 13) is recorded at fair value, as required by U.S. GAAP.

F-9

The estimated fair values of other financial instruments, including Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short-term nature. The estimated fair values of the Term Loan (Note 11) and Notes Issued by Securitization Trusts (Note 7) do not approximate their carrying values due primarily to differences in the stated and market rates associated with these instruments.

The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly.

Level 3 — Unobservable inputs.

When developing fair value measurements, Prosper maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments Prosper must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability.

As observable market prices are not available for the Borrower Loans, Notes, Servicing Assets, Receivable from Credit Card Partner and Credit Card Derivative, or for similar assets and liabilities, Prosper believes they should be considered level 3 financial instruments. Prosper primarily uses a discounted cash flow model to estimate their fair values, and key assumptions used in valuation include default rates and prepayment rates derived from market data and historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics.

The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is 1.0% of the outstanding balance. The fair value election for Borrower Loans and Notes allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. The effective interest rate associated with a group of Notes is less than the interest rate earned on the corresponding Borrower Loan due to the 1.0% servicing fee.

Refer to Note 8, Fair Value of Assets and Liabilities, for additional fair value disclosures.

Cash and Cash Equivalents

Cash includes various unrestricted deposits with investment-grade rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value.

At times, our cash balances may exceed federally insured amounts and potentially subject the Company to a concentration of credit risk. The Company believes that no significant concentration of credit risk exists with respect to these balances based on its assessment of the creditworthiness of these financial institutions.

Restricted Cash

Restricted cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for loan funding and servicing activities, and cash that investors or Prosper have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor.

F-10

Borrower Loans, Loans Held for Sale and Notes

Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank, then issues Notes and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s consolidated balance sheets as assets and liabilities, respectively. Borrower Loans funded through the Whole Loan Channel are sold to unrelated third-party buyers and the outstanding balances of these loans are not presented on the Company’s consolidated balance sheets.

Until March 2024, Prosper used Warehouse Lines to purchase personal loans that could be subsequently contributed to securitization transactions or sold to investors. These personal loans were included in Loans Held for Sale, at Fair Value on the consolidated balance sheets. In September 2023 and March 2024, in connection with the securitization transactions discussed below, the Loans Held for Sale in these Warehouse Lines were fully contributed to the securitization entities or purchased by Prosper, and the outstanding balances of the Warehouse Lines were fully paid down. See Note 11, Debt, for more details on the termination of the Warehouse Lines.

In September 2023 and March 2024, Prosper closed two separate securitization transactions, PMIT 2023-1 and PMIT 2024-1, respectively, with personal loans previously funded through its PWIIT Warehouse Line and PWIT Warehouse Line, respectively. These newly formed securitization entities issued notes acquired by third parties and residual certificates acquired by PMI (the wholly owned parent of PFL, the sole sponsor of the securitizations). PMIT 2023-1 and PMIT 2024-1 are deemed consolidated VIEs, and as a result the Borrower Loans they hold are presented in Borrower Loans, at Fair Value, and the notes sold to third-party investors are included in Notes Issued by Securitization Trusts on the accompanying consolidated balance sheets. See Note 7, Securitizations, for additional disclosures related to these securitizations.

Prosper has elected the fair value option for Borrower Loans and Notes. Changes in the fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in the fair value of Borrower Loans are recorded through Proper's earnings and Prosper collects interest on Borrower Loans. Changes in the fair values of Borrower Loans and Notes are included in Change in Fair Value of Financial Instruments on the accompanying consolidated statements of operations. See Note 4, Borrower Loans and Notes, at Fair Value, for further details on the methodologies utilized to value these financial instruments.

Credit Card

Credit Card Derivative

The Company evaluated the terms of the Credit Card Program Agreement with Coastal and determined that it contained features that met the definition of derivatives under ASC 815, Derivatives and Hedging. These features are freestanding financial instruments (as defined under ASC 480, Distinguishing Liabilities from Equity), and have been valued separately as derivatives. A right of offset exists between the derivatives, and they are presented net, at fair value, on the accompanying consolidated balance sheets. Prosper uses a discounted cash flow model to estimate the fair value of the Credit Card Derivative. The key assumptions used in the valuation include average portfolio interest rates, as well as default and prepayment rates derived primarily from relevant market data and historical performance, adjusted as necessary based on the perceived credit risk of the underlying cardholders. In addition, a single discount rate based on the estimate of the rate of return that investors would require when investing in similar credit card portfolios, is applied to the individual freestanding derivatives. Changes in the fair value of the Credit Card Derivative, as well as settled transactions from the Credit Card portfolio, are recorded in Change in Fair Value of Financial Instruments on the accompanying consolidated statements of operations.

In March 2024, the Company executed an amendment to the Credit Card Program Agreement that revised the allocation of new customer accounts designated as Prosper Allocations and Coastal Allocations from 90% and 10%, respectively, to 95% and 5%, respectively. Additionally, the maximum outstanding Credit Card principal balance for Prosper Allocations was increased from $300 million to $350 million. These changes went into effect on April 1, 2024. In September 2024, the Company executed a second amendment to the Credit Card Program Agreement that temporarily increased the maximum outstanding Credit Card principal balance for Prosper Allocations from $350 million to $375 million through November 1, 2024. In December 2025, the Company executed a third amendment to the Credit Card Program Agreement that primarily (a) increases the maximum outstanding Credit Card principal balance for Prosper Allocations to $375 million, (b) reduces the program fee percentage that the Company pays to Coastal by 0.75% and (c) provides Coastal with the discretion to adjust the Coastal Allocation percentage anywhere between 0% and 5% with advance notice. The Credit Card Program Agreement term is scheduled to end on December 31, 2027, but will automatically renew for one-year periods thereafter, unless terminated by either party in accordance with the agreement.

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Refer to Note 5, Credit Card, for additional details on revenues and expenses related to the Credit Card product, and to Note 8, Fair Value of Assets and Liabilities, for additional details related to the valuation methodology for the Credit Card Derivative.

Receivable from Credit Card Partner

In November 2024, Prosper closed a securitization transaction, PMCC 2024-1, with performing Credit Card receivables previously included within the Prosper Allocations on Coastal’s balance sheet. This securitization entity issued notes acquired by third parties, and a residual certificate to PMI, the sole sponsor of the securitization. PMCC 2024-1 is structured as a limited liability company in which PMI is the sole member, but was determined to be a VIE due to its lack of equity at risk. As PMI is considered the primary beneficiary of the VIE, it fully consolidates PMCC 2024-1 and all transactions between the two entities are eliminated. As discussed above, because the transfers of the underlying Credit Card receivables do not meet the requirements for sale accounting treatment under ASC 860, Transfers and Servicing, the Company has recorded a Receivable from Credit Card Partner on the consolidated balance sheets. Notes sold to third-party investors are included in Notes Issued by Securitization Trusts on the accompanying consolidated balance sheets.

The Company elected to carry the Receivable from Credit Card Partner at fair value, effectively consisting of the fair value of the underlying Credit Card receivables, in order to align with the measurement and presentation of the Borrower Loans and Credit Card Derivative. Prosper uses a discounted cash flow model to estimate the fair value of the securitization residual interest, given that the Company is the sole sponsor of the securitization and is entitled to all residual cash flows it generates. This involves utilizing certain assumptions similar to those used to value the Credit Card Derivative, including the discount and prepayment rates. Additional assumptions are adjusted to reflect the specific characteristics of the securitized Credit Card receivables, including the average portfolio interest rate and the default rate. The residual interest fair value is then added to the applicable securitization advance rate applied to the outstanding balance of the Credit Card receivables to calculate the estimated fair value of Receivable from Credit Card Partner. Changes in the fair value of the Receivable from Credit Card Partner are recorded in Changes in Fair Value of Financial Instruments on the consolidated statements of operations. See Note 5, Credit Card, and Note 7, Securitizations, for additional disclosures related to this securitization.

Charge-offs

Prosper places Borrower Loans on non-accrual status when they are 120 days past due. When a Borrower Loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper generally charges-off Borrower Loans when they are 120 days past due or reach the end of a settlement program. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods.

For Credit Cards, Prosper generally charges off the related receivable in the period the account becomes 180 days past due or reaches the end of a settlement program. Credit Card receivables in probate are generally charged off within a period not to exceed the end of the month in which the death notification is received, and Credit Card receivables in bankruptcy are generally charged off within a period not to exceed 60 days following receipt of the bankruptcy notification.

Servicing Assets and Obligation

Prosper records Servicing Assets at their estimated fair values for servicing rights retained when Prosper sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets is recognized in Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain (Loss) on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market servicing rate is recorded in Servicing Assets on the consolidated balance sheets. Prosper uses a discounted cash flow model to estimate the fair value of the loan Servicing Assets which considers the contractual servicing fee revenue that Prosper earns on the Borrower Loans, the estimated market servicing rates to service such loans, the prepayment rates, the default rates and the current principal balances of the Borrower Loans.

Prosper is also responsible for servicing the entire Credit Card portfolio and recognizes a servicing obligation liability for the Credit Card receivables that are not included in the Receivable from Credit Card Partner. This Credit Card servicing obligation is measured and recorded to the extent servicing fees the Company expects to earn do not exceed the estimated market servicing rate a market participant would require to service the portfolio, and is recorded within Other Liabilities on the consolidated balance sheets. Prosper uses a discounted cash flow model to estimate the fair value of the Credit Card servicing obligation which incorporates observable inputs such as the contractual servicing fee revenue that the Company earns on the Credit Card portfolio and the current outstanding principal balances of the related Credit Card receivables, as well as significant unobservable inputs such as the estimated market servicing rate to service the portfolio, the prepayment rates, the default rates and the discount rate.

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Changes in the fair value of the Servicing Assets and Credit Card servicing obligation are recorded in Servicing Fees, Net on the accompany statements of operations.

Property and Equipment

Property and Equipment consists of computer equipment, office furniture and equipment, leasehold improvements, software purchased or developed for internal use and web site development costs. Property and Equipment is stated at cost, less accumulated depreciation and amortization, and is computed using the straight-line method based upon estimated useful lives of the assets. Estimated useful lives of the assets are as follows:


Furniture and fixtures			7 years
Office equipment			5 years
Computers and equipment			3 years
Leasehold improvements	5	-	8 years
Software and website development costs	1	-	5 years

The costs to develop software for the website and other internal uses are capitalized when management has authorized and committed project funding, when preliminary development efforts are successfully completed, and when it is probable that the project will be completed, and the software will be used as intended. Capitalized software and website development costs primarily include software licenses acquired, fees paid to outside consultants and salaries and payroll-related costs for employees directly involved in the development efforts.

Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered probable to result in additional functionality are capitalized. Capitalized costs are included in Property and Equipment and amortized to expense using the straight-line method over their expected lives. Software and website development assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The recoverability of software and website development assets to be held and used is measured by a comparison of the carrying amount of the asset group to the future net undiscounted cash flows expected to be generated by the asset group. If such software and website development assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software and website development asset group.

Leases

Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not record ROU assets and lease liabilities.

If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment.

Goodwill

Goodwill associated with business combinations is computed by recognizing the portion of the purchase price that is not tied to individually identifiable and separately recognizable assets. Goodwill is assigned to the Company’s reporting units at the acquisition date according to the expected economic benefits that the acquired business will provide to the reporting unit. A reporting unit is a business operating segment or a component of a business operating segment. The Company identifies its reporting units based on how the operating segments and reporting units are managed. Accordingly, the Company allocated the

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entire balance of goodwill to the Personal Loan reportable and operating segment. Refer to Note 21 for further information on the Company’s reportable and operating segments.

Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Annual impairment testing occurs on October 1. Impairment exists whenever the carrying value of Goodwill exceeds its implied fair value. Adverse changes in impairment indicators such as loss of key personnel, increased regulatory oversight or unplanned changes in operations could result in impairment.

Payable to Investors

Payable to Investors primarily represents the obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers.

Term Loans

Prosper entered into a Credit Agreement, which provided for a Term Loan, with a third-party financial institution in November 2022. That Credit Agreement was terminated and the related Term Loan fully repaid in November 2025, when the Company entered into a new Credit Agreement and underlying Term Loan with a separate third-party financial institution. These agreements are fully described in Note 11, Debt. These Term Loans are carried at amortized cost, net of discounts, issuance costs and modification costs, which are subsequently amortized to Interest Expense on Term Loan over the life of the underlying agreements. Interest Expense on Term Loan is presented as a component of Expenses on the accompanying consolidated statements of operations.

Convertible Preferred Stock Warrant Liability

Prosper has entered into varying arrangements with investors to issue preferred stock warrants in exchange for their participation as a purchaser of Borrower Loans. In all cases, these warrants are free standing financial instruments due to their status as legally detached and separately exercisable warrants without conditions requiring Prosper to repurchase those warrants or the underlying preferred shares. These freestanding warrants are accounted for in accordance with ASC 480, Distinguishing Liabilities from Equity. Under ASC 480, vested freestanding warrants to purchase the Company’s convertible redeemable preferred stock are classified as a liability on the Consolidated Balance Sheets and carried at fair value because the warrants may conditionally obligate the Company to transfer assets at some point in the future. The Company records the warrants at fair value on issuance. The warrants are subject to remeasurement to fair value at each balance sheet date, and any change in their fair value is recognized as Change in Fair Value of Convertible Preferred Stock Warrants in the Consolidated Statements of Operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event or the conversion of convertible redeemable preferred stock into Common Stock.

Loan Trailing Fee Liability

On July 1, 2016, Prosper signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to Prosper. These agreements became effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by Prosper, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, Prosper is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to Prosper is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of Transaction Fees, Net. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the Consolidated Statements of Operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates.

Revenue Recognition

Revenue primarily results from Transaction Fees, Servicing Fees and Net Interest Income earned, partially offset by Loss on Sale of Borrower Loans. Fees include Transaction Fees for services performed on behalf of WebBank to originate a loan, as well as program fees generated from the Company’s Credit Card product. PMI also has other smaller sources of revenue reported as Other Revenues, including referral and incentive fees. Changes in Fair Value of Financial Instruments are included as a component of Total Net Revenue, and include changes in the fair value of Borrower Loans and Notes, Credit Card Derivative (including realized transactions) and Receivable from Credit Card Partner.

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Transaction Fees

Prosper has a customer contract with WebBank to facilitate the origination of all Borrower Loans through Prosper’s marketplace. In exchange for these services, Prosper earns a transaction fee from WebBank that is recognized when performance is complete and upon the successful origination of a Borrower Loan. The transaction fee Prosper earns is determined by the term and credit grade of the Borrower Loan that is facilitated on Prosper’s marketplace, and ranges from 1.00% to 9.99% of the original principal amount of each Borrower Loan that WebBank originates. Prosper records the transaction fee net of any fees paid to WebBank because Prosper does not receive an identifiable benefit from WebBank other than the borrower loan that has been recognized at fair value. Additionally, the Company assumes WebBank’s obligation under Utah law to refund the pro-rated amount of the transaction fee in excess of 5% in the event of a borrower prepayment of the loan in full before maturity. Actual and expected refunds are recorded as a reduction of “Transaction Fees, Net” on the Company’s Consolidated Statements of Operations, and are included in “Accounts Payable and Accrued Liabilities” on the Company’s Consolidated Balance Sheets (Note 17).

The Company also generates various Credit Card program fees through its partnership with Coastal. These include interchange fees, annual fees and late fees, which compensate Prosper for its role in marketing and managing the Credit Card product. Interchange and late fees are recognized as they are generated each month, while annual fees received are deferred and recognized over the annual period to which they relate.

Transaction Fee Refunds

Prosper assumes WebBank’s obligation under Utah law to refund the pro-rated amount of any Transaction Fees collected in excess of 5% of Borrower Loan principal, in the event the underlying borrower prepays the loan in full before maturity. Liabilities under this obligation are estimated upon the origination of Borrower Loans and recorded within Accounts Payable and Accrued Liabilities on the accompanying consolidated balance sheets. The key assumptions used in the estimated refund liability include prepayment rates and default rates derived primarily from historical performance. Changes in the liability are recorded within Transaction Fees, Net on the accompanying consolidated Statements of Operations. Refer to Note 17, Commitments and Contingencies, for details on the amounts recorded under this obligation.

Servicing Fees

Investors who purchase Borrower Loans from Prosper typically pay Prosper a servicing fee which is generally set at 1.0% per annum of the outstanding principal balance of the borrower loan prior to applying the current payment, plus an additional 0.075% per annum to cover the Loan Trailing Fee. The servicing fee compensates Prosper for the costs incurred in servicing the borrower loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received.

Under the Credit Card program agreement, Prosper is responsible for servicing the entire underlying Credit Card portfolio. Coastal pays the Company a 1% per annum servicing fee on the daily outstanding balance of receivables designated as Coastal Allocations. To the extent these servicing fees do not exceed the market servicing rate a market participant would require to service the Credit Card portfolio (excluding the Receivable from Credit Card Partner), the Company records a servicing obligation liability and measures it at fair value throughout the servicing period. Changes in the fair value of the servicing obligation liability are recorded in Servicing Fees.

Loss on Sale of Borrower Loans

Prosper recognizes a Gain or Loss on Sale of Borrower Loans as the net proceeds received on a sale through the Whole Loan Channel, less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, incentives and repurchase obligations provided or received at the time of sale. Due to market volatility and incentives offered by competitors, incentives provided to Whole Loan Channel buyers have increased in recent years.

Interest Income on Financial Instruments and Interest Expense on Financial Instruments

Prosper recognizes interest income on Borrower Loans and Receivable from Credit Card Partner using the accrual method based on the contractual interest rate to the extent the Company believes it to be collectible. The Company also records interest expense on the corresponding Notes, at Fair Value and Notes Issued by Securitization Trusts based on the contractual interest rates.

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Other Revenues

Other Revenues consist primarily of credit referral fees. These fees are earned from partner companies for the referral of customers on the Company’s platform. The transaction price is a fixed amount per referral and is recognized by the Company upon a successful referral. Other revenues also include incentive fees related to the Company’s Credit Card program, net of any Credit Card network fees.

As of December 31, 2025, Prosper had no contract assets, contract liabilities or deferred contract costs. As of December 31, 2025, Prosper had no unsatisfied performance obligations related to Transaction Fees or Other Revenues.

Advertising Costs

Advertising costs are expensed when incurred and are included in “Sales and Marketing” expense in the accompanying Consolidated Statements of Operations. Prosper incurred advertising costs of $17.8 million, $13.7 million and $17.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Stock-Based Compensation

Management determines the fair value of the Company's stock options issued to employees on the date of grant using the Black-Scholes option pricing model, which is impacted by the fair value of Common Stock as well as by changes in assumptions that include, but are not limited to, the expected Common Stock price volatility over the term of the option awards, the expected term of the awards, risk-free interest rates and the expected dividend yield. PMI uses an expected dividend yield of zero as it does not anticipate paying any dividends in the foreseeable future.

PMI recognizes compensation expense for stock-based awards on a straight-line basis over the period during which an employee is required to provide services in exchange for the award (the vesting period of the award). Stock-based compensation expense is recognized only for those awards expected to vest. PMI estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from estimates.

Stock-based awards issued to non-employees are marked-to-market up until the point that the awards measurement period has been achieved. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the vesting period of the award.

Income Taxes

The asset and liability method is used to account for income taxes. Under this method, deferred income tax assets and liabilities are based on the differences between the financial statement carrying values and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Prosper’s policy is to include interest and penalties related to gross unrecognized tax benefits within its provision for income taxes. U.S. Federal, California and other state income tax returns are filed. Prosper is not currently undergoing any income tax examinations. Due to the cumulative net operating loss, generally all tax years remain open.

Prosper recognizes benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

Other Income, Net

Other Income, Net consists primarily of interest income from Cash and Cash Equivalents and sublease income.

Recent Accounting Pronouncements

Accounting Standards Issued, Recently Adopted by the Company

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances effective tax rate reconciliation disclosure requirements and provides clarity to the disclosures of income taxes paid, income before taxes and provision for income taxes. The Company adopted this ASU for the full year ended December 31, 2025, on a prospective basis. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. See Note 15, Income Taxes, for further detail.

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Accounting Standards Issued, to be Adopted by the Company in Future Periods

In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission’s Disclosure Update and Simplification Initiative.” The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the ASC in response to the SEC’s Release No. 33-10532, “Disclosure Update and Simplification Initiative,” and align the ASC’s requirements with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. The Company does not expect the adoption of this ASU to have a material impact on the Company’s Consolidated Financial Statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,” that requires more detailed disclosure about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expense and depreciation expense. The guidance is effective for annual periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

In May 2025, the FASB issued ASU No. 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.” This standard clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted, and the standard is to be applied prospectively to acquisitions after the adoption date. The Company is currently evaluating this ASU to determine its impact on the Company’s consolidated financial statements and related disclosures.

In April 2025, the FASB issued ASU No. 2025-05, “Financial Instruments—Credit Losses (Topic 326): Practical Expedient for Estimating Expected Credit Losses on Current Receivables,” which provides a practical expedient for measuring expected credit losses on current accounts receivable and contract assets. The expedient allows an entity to assume that current economic conditions will remain unchanged for the remaining life of the asset when developing forecasts. The standard is effective for fiscal years beginning after December 15, 2025. The Company expects to elect this practical expedient for its short-term fee receivables and does not expect the adoption to have a material impact on its consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which modernizes the capitalization criteria for internal-use software costs by removing references to project stages. The amendments are effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The amendments in this update should be applied on a prospective basis. The Company is currently evaluating this ASU to determine its impact on the consolidated financial statements, and expects to adopt it for the year ending December 31, 2028.

In December 2025, the FASB issued ASU No. 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” which clarifies the requirements for interim financial statements and notes. The amendments compile existing interim disclosure requirements into a comprehensive list within Topic 270 and introduce a disclosure principle requiring an entity to disclose events or changes occurring since the end of the most recent annual reporting period that have a material effect on the entity. For public business entities, the standard is effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. The Company is currently evaluating this ASU to determine its impact on the Company’s interim financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-12, “Codification Improvements,” which clarifies, corrects errors in, and makes minor improvements to a variety of Topics in the ASC. Key amendments include clarifications to the calculation of diluted earnings per share during loss periods, explicit permission for certain treasury stock retirement accounting methods, and refinements to disclosure requirements for lease receivables. The amendments are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those years. Early adoption is permitted on an issue-by-issue basis. The Company is currently evaluating this ASU, but does not expect the adoption to have a material impact on its consolidated financial statements or related disclosures.

Other recent accounting pronouncements issued by the FASB did not, or are not believed by management to, have a material impact on the Company’s present or future financial statements.

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NOTE 3. PROPERTY AND EQUIPMENT, NET

Property and Equipment, Net consists of the following at the dates presented (in thousands):


	December 31,
	2025		2024
Internal-use software and website development costs	$	87,842	$	66,101
Operating lease right-of-use assets	22,690		22,690
Computer equipment	4,805		6,335
Office equipment and furniture	3,067		2,975
Leasehold improvements	7,183		7,143
Assets not yet placed in service	5,172		16,271
Property and equipment	130,759		121,515
Less: Accumulated depreciation and amortization	(85,662)		(77,242)
Total Property and Equipment, Net	$	45,097	$	44,273

Depreciation and amortization expense for Property and Equipment, Net for the years ended December 31, 2025, 2024 and 2023 was $12.1 million, $10.7 million and $10.9 million, respectively. These charges are included in Origination and Servicing and General and Administrative expenses on the consolidated statements of operations. Prosper capitalized internal-use software and website development costs in the amount of $14.5 million, $15.9 million and $14.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, disclosures around the operating lease right-of-use assets are included in Note 16, Leases.

NOTE 4. BORROWER LOANS AND NOTES, AT FAIR VALUE

The fair values of the Borrower Loans and Notes issued through the Note Channel are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such Borrower Loans and Notes include default rates, prepayment rates and recoveries derived from historical performance and discount rates based on the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the payments, if any, received on the corresponding Borrower Loan, net of the servicing fee. As such, the fair value of the Notes is approximately equal to the fair value of the Borrower Loans originated through the Note Channel, adjusted for the servicing fee and the timing of borrower payments subsequently disbursed to the Note holders. The effective interest rate associated with any series of Notes will be less than the interest rate earned on the corresponding Borrower Loan due to the servicing fee.

As of December 31, 2025 and 2024, Borrower Loans and Notes were as follows (in thousands):


	Borrower Loans				Notes
	2025		2024			2025		2024
Aggregate principal balance outstanding	$	324,505	$	489,289		$	256,929	$	301,246
Fair value adjustments	(14,768)		(27,504)			(13,029)		(18,216)
Fair value	$	309,737	$	461,785		$	243,900	$	283,030

Borrower Loans

As of December 31, 2025, outstanding Borrower Loans had original terms to maturity of 24, 36, 48 or 60 months, had monthly payments with fixed interest rates ranging from 6.00% to 33.00% and had various original maturity dates through December 2030. At December 31, 2024, outstanding Borrower Loans had original terms to maturity of 24, 36, 48 or 60 months, had monthly payments with fixed interest rates ranging from 6.00% to 33.00% and had various original maturity dates through December 2029.

As of December 31, 2025, the Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.9 million and a fair value of $0.6 million. As of December 31, 2024, the Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $5.4 million and a fair value of $1.1 million. We place loans on non-accrual status when they are over 120 days past due. As of December 31, 2025 and 2024, Borrower Loans in non-accrual status had a fair value of $0.4 million and $0.6 million, respectively.

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NOTE 5. CREDIT CARD

Credit Card Derivative

Prosper recognizes unrealized and settled gains and losses on the Credit Card Derivative within Change in Fair Value of Financial Instruments on the accompanying consolidated statements of operations. These settled gains and losses primarily consist of interest income and debt sales on charged off balances, less Coastal program fees, credit losses and fraud losses. For the years ended December 31, 2025, 2024 and 2023 the Company recognized $9.6 million, $13.3 million and $26.1 million of unrealized gains, respectively, from estimated fair value changes on the Credit Card Derivative. Changes from settled transactions underlying the Credit Card Derivative were losses of $10.3 million, $9.1 million and $0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. For the year ended December 31, 2024, the Company also recognized an $11.4 million reduction to the fair value of the Credit Card Derivative related to the underlying Credit Card receivables contributed to the PMCC 2024-1 securitization on November 1, 2024.

Receivable from Credit Card Partner

Fair value gains and losses on the Receivable from Credit Card Partner, which effectively consists of the underlying Credit Card receivables securitized through PMCC 2024-1 (as discussed at Note 2, Summary of Significant Accounting Policies, and at Note 7, Securitizations) are also recognized within Change in Fair Value of Financial Instruments. These gains and losses include changes related to estimated future cash flows, as well as actual charge-offs and debt sale recoveries. For the year ended December 31, 2025, the Company recognized fair value losses of $17.3 million related to the Receivable from Credit Card Partner, which primarily consisted of net charge-offs. For the year ended December 31, 2024, the Company recognized a fair value gain of $7.5 million gain upon the closing of the PMCC 2024-1 securitization on November 1, 2024, and a $1.9 million fair value gain subsequent to that date.

As of December 31, 2025 and 2024, the outstanding principal balance of Credit Card receivables held by PMCC 2024-1 was $90.1 million and $91.2 million, respectively.

Program Fees

The Company records revenue from various fees generated from the Credit Card program and PMCC 2024-1, including interchange fees, annual fees and late fees, net of a portion of the interchange fees that must be remitted to Coastal. These fees are included in Transaction Fees, Net on the accompanying consolidated statements of operations. For the years ended December 31, 2025 and 2024 these fees totaled $25.1 million and $24.1 million, respectively.

Servicing Obligation and Fees

Under the program agreement, Prosper is responsible for servicing the entire underlying Credit Card portfolio. Coastal pays the Company a 1% per annum servicing fee on the daily outstanding principal balance of receivables designated as Coastal Allocations, which is approximately 5% of the portfolio. To the extent these servicing fees do not exceed the market servicing rate a market participant would require to service the entire Credit Card portfolio, the Company records a servicing obligation liability and measures it at fair value through the servicing period. The net balance of this servicing obligation liability is included in Other Liabilities on the accompanying consolidated balance sheets (see Note 10, Other Liabilities). Changes in the fair value of the Credit Card servicing obligation liability are recorded in Servicing Fees, Net on the accompanying consolidated statements of operations, and totaled a $0.3 million loss, a $0.8 million gain and a $6.0 million loss for the years ended December 31, 2025, 2024 and 2023, respectively. No servicing asset or obligation is recognized for the Credit Card receivables securitized within PMCC 2024-1, which is a consolidated entity.

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NOTE 6. SERVICING ASSETS

Prosper accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the accompanying Consolidated Statement of Operations. The initial asset or liability is recognized in Gain (Loss) on the Sale of Borrower Loans on the consolidated statements of operations when the Company sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets are measured at fair value throughout the servicing period. The Company recognized gains from the initial recognition of Servicing Assets on the sale of Borrower Loans in the amounts of $13.6 million, $11.0 million and $9.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. These amounts are recorded in Loss on Sale of Borrower Loans on the Consolidated Statements of Operations, and are offset primarily by incentives provided to loan buyers at the time of sale.

As of December 31, 2025, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $3.8 billion, original terms to maturity of 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 5.75% to 33.00%, and various original maturity dates through December 2030. As of December 31, 2024, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $3.3 billion, original terms to maturity of 24, 36, 48 or 60, monthly payments with fixed interest rates ranging from 5.46% to 33.00%, and various original maturity dates through December 2029.

Contractually-specified personal loan servicing fees and ancillary fees totaling $40.8 million, $32.0 million and $30.9 million are included on the consolidated statements of operations in Servicing Fees, Net for the years ended December 31, 2025, 2024 and 2023, respectively.

Fair Value Valuation Method

Prosper uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounts those cash flows at a rate of return that results in the fair value amount.

Significant unobservable inputs presented in the table within Note 8 below are those that Prosper considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table.

Market Servicing Rate

Prosper estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. With the assistance of a valuation specialist, Prosper estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from subservicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper sells and services and information from backup service providers.

In September 2025, as a result of an updated assessment of market rates, the Company lowered the estimated base market servicing rate used to value its Servicing Asset from 63.3 basis points to 59.3 basis points. This change resulted in a $1.5 million increase to Servicing Assets, Net at the date of the change in estimate, which is included in Total Net Revenues for the year ended December 31, 2025.

Discount Rate

The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. We use a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with Prosper’s servicing assets.

Default Rate

The default rate presented in Note 8 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to default

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per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period.

Prepayment Rate

The prepayment rate presented in Note 8 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which we expect to collect fees on the Borrower Loans, which is used to project future servicing revenues.

NOTE 7. SECURITIZATIONS

Personal Loan Securitizations

Prosper served as the sole sponsor of two securitizations of unsecured personal whole loans facilitated through the Company’s marketplace that were previously held in consolidated warehouse trusts: PMIT 2023-1 in September 2023 and PMIT 2024-1 in March 2024, respectively. These transactions benefit the Company by reducing the financing costs associated with the underlying Borrower Loans. Both securitizations issued senior notes and residual certificates to finance the purchase of Borrower Loans. The notes were sold to third-party investors and a majority-owned affiliate of the sole sponsor of the securitizations, PFL, retained the residual certificates. In addition to the residual certificates, Prosper’s continued involvement includes servicing responsibilities over the life of the underlying loans.

PMIT 2023-1 and PMIT 2024-1 (together, the “PMITs”) are deemed VIEs, and the Company consolidates them as the primary beneficiary. Through Prosper’s role as the servicer, it has the power to direct the activities that most significantly affect the PMITs’ economic performance. Additionally, because the Company holds the residual certificates, it has a variable interest that could potentially be significant to the PMITs. In evaluating whether Prosper is the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of the Company’s involvement with the PMITs. Management assesses whether Prosper is the primary beneficiary of the PMITs on an on-going basis. For the PMITs, the creditors have no recourse to the general credit of Prosper and the liabilities of the PMITs can only be settled by their respective assets. Additionally, the assets of the PMITs can be used only to settle obligations of the PMITs. Because Prosper consolidates the PMITs’ securitization trusts, the Borrower Loans held in those trusts are included in Borrower Loans, at Fair Value, and the notes sold to third-party investors are presented in Notes Issued by Securitization Trusts on the consolidated balance sheets. Because Prosper holds 100% of the residual certificates issued by the PMITs, they eliminate through consolidation and are thus not presented on the consolidated balance sheets.

PMIT 2023-1

In September 2023, Prosper closed the PMIT 2023-1 securitization. Based on the terms of the underlying agreements, the PWIIT Warehouse Line (see Note 11, Debt) agreed to contribute Borrower Loans with an aggregate outstanding principal balance of $275.9 million as of the established cutoff date of August 31, 2023, to the PMIT 2023-1 securitization. On September 25, 2023, these Borrower Loans, with an updated aggregate outstanding principal balance of $266.1 million, were contributed to the PMIT 2023-1 securitization.

The notes under PMIT 2023-1 were issued in five classes: Class A in the amount of $165.5 million, Class B in the amount of $25.4 million, Class C in the amount of $25.1 million, Class D in the amount of $22.3 million and Class E in the amount of $13.1 million (collectively, the “2023-1 Notes”). The Class A, Class B, Class C, Class D and Class E notes bear interest at fixed rates of 7.06%, 7.48%, 8.29%, 11.24% and 15.49%, respectively. Principal and interest payments began in October 2023 and are payable monthly. The 2023-1 Notes are recorded at amortized cost, net of original issue discounts totaling approximately $0.8 million. These discounts, along with debt issuance costs incurred of $2.7 million, are deferred and amortized into interest expense over the contractual lives of the 2023-1 Notes using the effective interest method.

As of December 31, 2025 the outstanding principal and accrued interest of the 2023-1 Notes was $43.3 million, secured by an aggregate outstanding principal balance of $43.1 million of borrower loans, and approximately $5.4 million in cash collections held in collateral and reserve accounts included in Restricted Cash on the Consolidated Balance Sheets. As of December 31, 2024, the outstanding principal and accrued interest of these notes was $107.6 million, secured by an aggregate outstanding principal balance of $112.3 million of borrower loans included in Borrower Loans, at Fair Value on the Consolidated Balance Sheets, and approximately $10.1 million in cash collections held in collateral and reserve accounts included in Restricted Cash on the Consolidated Balance Sheets.

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PMIT 2024-1

In March 2024, Prosper closed the PMIT 2024-1 securitization. Based on the terms of the underlying agreements, the PWIT Warehouse Line (see Note 11, Debt) agreed to contribute Borrower Loans with an aggregate outstanding principal balance of $148.9 million as of the established cutoff date of February 14, 2024, to the PMIT 2024-1 securitization. On March 28, 2024, these Borrower Loans, with an updated aggregate outstanding principal balance of $138.0 million, were contributed to the PMIT 2024-1 securitization.

The notes under PMIT 2024-1 were issued in four classes: Class A in the amount of $105.2 million, Class B in the amount of $10.8 million, Class C in the amount of $10.3 million and Class D in the amount of $10.2 million (collectively, the “2024-1 Notes”). The Class A, Class B, Class C and Class D notes bear interest at fixed rates of 6.12%, 6.13%, 6.96%, 10.98%, respectively. The 2024-1 Notes are recorded at amortized cost, net of debt issuance costs incurred of $1.5 million. These debt issuance costs are deferred and amortized into interest expense over the contractual lives of the 2024-1 Notes using the effective interest method. As of December 31, 2025, the outstanding principal and accrued interest of the 2024-1 Notes was $25.1 million, secured by an aggregate outstanding principal balance of $25.4 million of borrower loans included in “Borrower Loans, at Fair Value” on the Consolidated Balance Sheets, and approximately $3.4 million in cash collections held in collateral and reserve accounts included in “Restricted Cash” on the Consolidated balance Sheets. As of December 31, 2024, the outstanding principal and accrued interest of the 2024-1 Notes was $71.9 million, secured by an aggregate outstanding principal balance of $74.3 million of borrower loans included in “Borrower Loans, at Fair Value” on the Consolidated Balance Sheets, and approximately $6.8 million in cash collections held in collateral and reserve accounts included in “Restricted Cash” on the Consolidated Balance Sheets.

Credit Card Securitization

PMCC 2024-1

In November 2024, PMI closed the PMCC 2024-1 Transaction, a securitization of Credit Card receivables previously classified as Prosper Allocations on Coastal’s balance sheet. Based on the terms of the underlying agreements, PMI and Coastal agreed to transfer Credit Card receivables with an aggregate outstanding principal balance of $90.9 million as of the established cutoff date of September 30, 2024, to the PMCC 2024-1 Transaction. On November 1, 2024, these Credit Card receivables, with an updated aggregate outstanding principal balance of approximately $94.7 million, along with associated interest receivable of $2.2 million, were transferred to the PMCC 2024-1 Transaction. PMCC 2024-1 issued notes and a residual certificate to finance the payment to Coastal for the transfer of the Credit Card receivables. The notes were sold to third-party investors, and the residual certificate was acquired by PMI, as the sole sponsor of the PMCC 2024-1 Transaction. In addition to the residual certificate, PMI’s continued involvement includes servicing responsibilities over the life of the underlying Credit Card receivables, including curing any Asset Deficiency (see below).

PMCC 2024-1 is structured as a limited liability company and is wholly owned by PMI, but is considered a deemed VIE due to its lack of equity at risk. PMI consolidates it as the primary beneficiary, as through its role as the servicer, the Company has the power to direct the activities that most significantly affect the PMCC 2024-1 Transaction’s economic performance. Additionally, because the Company holds the residual certificate, it has a variable interest that could potentially be significant to PMCC 2024-1. In evaluating whether PMI is the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of the Company’s involvement with PMCC 2024-1. Management assesses whether PMI is the primary beneficiary of the VIE on an on-going basis. For PMCC 2024-1, the creditors have no recourse to the general credit of Prosper and the liabilities of the limited liability company can only be settled by PMCC 2024-1’s assets. Additionally, the assets of PMCC 2024-1 can be used only to settle obligations of PMCC 2024-1. As discussed in Note 2, Summary of Significant Accounting Policies, because the transfers of the underlying Credit Card receivables from Coastal to PMCC 2024-1 do not meet the requirements for sales accounting treatment under ASC 860, Transfers and Servicing, the Company has recorded on its consolidated balance sheet a Receivable from Credit Card Partner that effectively consists of the underlying Credit Card receivables securitized through PMCC 2024-1. Notes sold to third-party investors are presented in Notes Issued by Securitization Trust on the consolidated balance sheets. The only residual certificate issued by PMCC 2024-1 is held by PMI, and thus eliminates through consolidation and is not presented on the consolidated balance sheets.

The notes under PMCC 2024-1 were issued in four classes: Class A in the amount of $46.3 million, Class B in the amount of $10.7 million, Class C in the amount of $11.1 million and Class D in the amount of $14.8 million (collectively, the “PMCC 2024-1 Notes”). The Class A, Class B, Class C and Class D notes bear interest at fixed rates of 6.15%, 7.15%, 10.05% and 14.64%, respectively. No principal payments will be due on the PMCC 2024-1 Notes for the first two years of the PMCC 2024-1 Transaction, though November 1, 2026, which is referred to as the revolving period. At the end of that two-year period, if the revolving period is not extended, the PMCC 2024-1 Transaction enters the amortization period, whereby the PMCC 2024-1 Notes will be repaid in accordance with a waterfall calculation, generally tied to the collections of the associated Credit Card receivables. Interest is payable monthly. These notes are recorded at amortized cost, net of original issue discounts totaling

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$0.3 million. These discounts, along with debt issuance costs incurred of $2.2 million, are being deferred and amortized into interest expense over the two-year revolving period of the notes using the effective interest method. As of December 31, 2025, the outstanding principal and accrued interest of the PMCC 2024-1 Notes was $83.2 million, secured by a total outstanding balance of Credit Card receivables (inclusive of principal, interest and fees) of $94.3 million, and approximately $0.9 million in cash held in a reserve account and included in Restricted Cash on the consolidated balance sheets. As of December 31, 2024, the outstanding principal and accrued interest of the PMCC 2024-1 Notes was $83.2 million, secured by a total outstanding balance of Credit Card receivables (inclusive of principal, interest and fees) of $94.9 million, and approximately $0.9 million in cash held in a reserve account and included in Restricted Cash on the consolidated balance sheets. For the year ended December 31, 2025 and 2024, the Company recorded $16.7 million and $3.6 million, respectively, in Total Interest Income, Net related to the PMCC 2024-1 Credit Card receivables and Notes Issued by Securitization Trust.

Until the end of the amortization period, PMCC 2024-1 is required to cure any Asset Deficiency, which is deemed to have occurred if the ratio of (i) notes outstanding to (ii) the aggregate pool balance plus amounts in the excess funding account minus the dilutional balance, exceeds 89.5%. In order to maintain this ratio, PMI will purchase additional Credit Card receivables from the accounts designated as eligible for the securitization, and may designate additional eligible accounts from Prosper Allocations, as necessary.

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NOTE 8. FAIR VALUE OF ASSETS AND LIABILITIES

Financial Instruments Recorded at Fair Value

For a description of the fair value hierarchy and an overview of Prosper’s fair value methodologies related to the Credit Card Derivative and Receivable from Credit Card Partner, see Note 2, Summary of Significant Accounting Policies. Refer to Note 4, Borrower Loans, Loans Held for Sale and Notes, at Fair Value, for further details on the methodologies utilized to value Borrow Loans and Notes issued through the Note Channel. The Convertible Preferred Stock Warrant Liability is valued using a Black-Scholes option pricing model. Refer to Note 13 for additional information. Prosper did not transfer any assets or liabilities in or out of level 3 during the years ended December 31, 2025 and 2024.

When utilizing market data and bid-ask spreads, Prosper uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, Prosper uses prices obtained from independent third-party pricing services to measure the fair value of financial instruments. Prosper's primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information, such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar securities. The Company does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in a material difference in the recorded amounts.

The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands):


Balance at December 31, 2025	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Borrower Loans, at Fair Value (Note 4)	$	—	$	—	$	309,737	$	309,737
Receivable from Credit Card Partner, at Fair Value (Note 5 and 7)	—		—		99,865		99,865
Servicing Assets (Note 6)	—		—		17,402		17,402
Credit Card Derivative (Note 5)	—		—		48,290		48,290
Total Assets	$	—	$	—	$	475,294	$	475,294
Liabilities:
Notes, at Fair Value (Note 4)	$	—	$	—	$	243,900	$	243,900
Convertible Preferred Stock Warrant Liability (Note 13)	—		—		230,060		230,060
Loan Trailing Fee Liability (Note 10)	—		—		3,328		3,328
Credit Card servicing obligation liability (Note 5)	—		—		9,276		9,276
Total Liabilities	$	—	$	—	$	486,564	$	486,564


Balance at December 31, 2024	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Borrower Loans, at Fair Value	$	—	$	—	$	461,785	$	461,785
Receivable from Credit Card Partner, at Fair Value (Note 5 and 7)	—		—		104,153		104,153
Servicing Assets	—		—		13,718		13,718
Credit Card Derivative (Note 5)	—		—		38,739		38,739
Total Assets	$	—	$	—	$	618,395	$	618,395
Liabilities:
Notes, at Fair Value	$	—	$	—	$	283,030	$	283,030
Convertible Preferred Stock Warrant Liability	—		—		261,249		261,249
Loan Trailing Fee Liability (Note 10)	—		—		3,004		3,004
Credit Card servicing obligation liability (Note 5)	—		—		8,947		8,947
Total Liabilities	$	—	$	—	$	556,230	$	556,230

As PMI’s Borrower Loans, Receivable from Credit Card Partner, Credit Card Derivative, Servicing Assets, Notes, Credit Card servicing obligation liability, loan trailing fee liability and Convertible Preferred Stock Warrant Liability do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, gains and losses for assets and liabilities within the Level 3 category may

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include changes in fair value that were attributable to both observable and unobservable inputs. Prosper did not transfer any assets or liabilities in or out of Level 3 for the year ended December 31, 2025 and 2024.

Significant Unobservable Inputs

The following tables present quantitative information about the ranges of significant unobservable inputs used for the Company’s Level 3 fair value measurements at December 31, 2025 and 2024:


	December 31,
	2025					2024
Borrower Loans and Notes:
Discount rate	5.0	%	—	15.5	%	5.7	%	—	10.9	%
Default rate	1.9	%	—	14.5	%	2.6	%	—	22.6	%

At December 31, 2025 and 2024, the discounted cash flow methodology used to estimate the Note fair values used the same projected cash flows as the related Borrower Loans.


	December 31,
	2025					2024
Servicing Assets:
Discount rate	15.0	%	—	25.0	%	15.0	%	—	25.0	%
Default rate	2.0	%	—	15.0	%	2.6	%	—	22.6	%
Prepayment rate	13.3	%	—	35.6	%	8.3	%	—	29.8	%
Market servicing rate (1) (2)	0.593	%	—	0.842	%	0.633	%	—	0.842	%
(1) Servicing assets associated with loans enrolled in a relief program offered by the Company as of December 31, 2025 and 2024, were measured using a market servicing rate assumption of 84.2 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption.
(2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2025 and 2024, the market rate for collection fees and non-sufficient fund fees was assumed to be 10 basis points and 7 basis points, respectively, for a weighted-average total market servicing rate of 69.3 basis points to 94.2 basis points and 70.3 basis points to 91.2 basis points, respectively.


	December 31,
	2025					2024
Loan Trailing Fee Liability:
Discount rate	15.0	%	—	25.0	%	15.0	%	—	25.0	%
Default rate	2.0	%	—	15.0	%	2.6	%	—	22.6	%
Prepayment rate	13.3	%	—	35.6	%	8.3	%	—	29.8	%

Ranges of inputs are not applied to the Credit Card Derivative and Credit Card servicing obligation liability, as they are valued at the portfolio level. Refer below for a summary of the significant unobservable inputs associated with those Level 3 fair value measurements.

Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis

The following table presents additional information about Level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis for the year ended December 31, 2025 and 2024 (in thousands):

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	Assets				Liabilities
	Borrower Loans		Loans Held for Sale		Notes		Total
Fair Value at January 1, 2024	$	545,038	$	161,501	$	(321,966)	$	384,573
Purchase of Borrower Loans/Issuance of Notes	186,073		2,054,646		(184,200)		2,056,519
Principal repayments on Borrower Loans	(349,740)		(22,554)		195,169		(177,125)
Borrower Loans sold to third parties	(4,454)		(2,055,338)		—		(2,059,792)
Other changes	(1,550)		(303)		424		(1,429)
Change in fair value	(49,271)		(2,263)		27,543		(23,991)
Transfer of Loans Held for Sale to Borrower Loans upon PMIT 2024-1 Transaction, at Fair Value	135,689		(135,689)		—		—
Fair Value at December 31, 2024	$	461,785	$	—	$	(283,030)	$	178,755
Purchase of Borrower Loans/Issuance of Notes	164,625		2,487,702		(163,892)		2,488,435
Principal repayments on Borrower Loans	(283,762)		—		183,753		(100,009)
Borrower Loans sold to third parties	(2,632)		(2,487,702)		—		(2,490,334)
Other changes	(1,577)		—		474		(1,103)
Change in fair value	(28,702)		—		18,795		(9,907)
Fair Value at December 31, 2025	$	309,737	$	—	$	(243,900)	$	65,837

Effective March 28, 2024, the outstanding balance of Loans Held for Sale was reduced to zero following the contribution of loans held in consolidated warehouse trusts to the PMIT 2024-1 securitization transaction, which followed the PMIT 2023-1 securitization transaction in September 2023, as more fully described in Note 7, Securitizations. The Company has not designated any new personal loans as Loans Held for Sale since these transactions, other than loans that are purchased and immediately sold through the Whole Loan Channel. This movement of loans through the Whole Loan Channel is reflected in the accompanying consolidated statements of cash flows and the Level 3 tables above. Details on the fair value of the Servicing Asset associated with loans sold through the Whole Loan Channel are discussed below.

The following table presents additional information about the Level 3 Receivable from Credit Card Partner, measured at fair value on a recurring basis for the year ended December 31, 2025 (in thousands):


	Receivable from Credit Card Partner
Fair Value at January 1, 2024	$	—
Transfer of Credit Card principal and interest receivables upon securitization	96,907
Purchases of Credit Card principal receivables	9,254
Principal repayments on Credit Card receivables	(11,885)
Other changes	415
Change in fair value	9,462
Fair Value at December 31, 2024	$	104,153
Purchases of Credit Card principal receivables	75,181
Principal repayments on Credit Card receivables	(62,311)
Other changes	160
Change in fair value	(17,318)
Fair Value at December 31, 2025	$	99,865

The following table presents additional information about the Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2025 and 2024 (in thousands):

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	Servicing Assets
Fair Value at January 1, 2024	$	12,249
Additions	10,997
Less: Change in fair value	(9,528)
Fair Value at December 31, 2024	$	13,718
Additions	13,609
Less: Change in fair value	(9,925)
Fair Value at December 31, 2025	$	17,402

The following table presents additional information about the Level 3 Credit Card Derivative measured at fair value on a recurring basis for the year ended December 31, 2025 and 2024 (in thousands):


	Credit Card Derivative
Fair Value at January 1, 2024	$	36,848
Change in fair value	13,335
Reduction to fair value upon PMCC 2024-1 securitization (Notes 5 and 7)	(11,444)
Fair Value at December 31, 2024	$	38,739
Change in fair value	9,551
Fair Value at December 31, 2025	$	48,290

The following table presents additional information about the Level 3 Credit Card servicing obligation liability measured at fair value on a recurring basis for the year ended December 31, 2025 and 2024 (in thousands).


	Credit Card Servicing Obligation Liability
Fair Value at January 1, 2024	$	9,732
Reduction to fair value upon PMCC 2024-1 securitization (Note 5)	(2,846)
Other changes in fair value	2,061
Fair Value at December 31, 2024	$	8,947
Change in fair value	329
Fair Value at December 31, 2025	$	9,276

The following table presents additional information about the Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the year ended December 31, 2025 and 2024 (in thousands):


	Convertible Preferred Stock Warrant Liability
Fair Value at January 1, 2024	$	215,041



Change in fair value	46,208
Fair Value at December 31, 2024	$	261,249
Reclassification to Convertible Preferred Stock upon exercise of Series F Warrants (Note 13)	(73,292)


Change in fair value	42,103
Fair Value at December 31, 2025	$	230,060

Loan Trailing Fee

The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below.

The following table presents additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the year ended December 31, 2025 and 2024 (in thousands):

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	Loan Trailing Fee Liability
Balance at January 1, 2024	$	2,942
Issuances	1,959
Cash payment of Loan Trailing Fee	(2,597)
Change in fair value	700
Balance at December 31, 2024	$	3,004
Issuances	2,477
Cash payment of Loan Trailing Fee	(2,657)
Change in fair value	504
Balance at December 31, 2025	$	3,328

Significant Recurring Level 3 Fair Value Input Sensitivity

Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2025 and 2024 for Borrower Loans are presented in the following table (in thousands, except percentages).


Borrower Loans	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	309,737		$	461,785
Weighted-average discount rate	8.53		%	7.72		%
Weighted-average default rate	11.79		%	12.59		%

Fair value resulting from:
100 basis point increase in discount rate	$	307,014		$	457,584
200 basis point increase in discount rate	304,354			453,483
Fair value resulting from:
100 basis point decrease in discount rate	$	312,526		$	466,090
200 basis point decrease in discount rate	315,384			470,502

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	307,253		$	456,385
Applying a 1.2 multiplier to default rate	304,767			451,011
Fair value resulting from:
Applying a 0.9 multiplier to default rate	$	312,219		$	467,211
Applying a 0.8 multiplier to default rate	314,699			472,663

Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2025 and 2024 for Notes are presented in the following table (in thousands, except percentages).

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Notes	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	243,900		$	283,030
Weighted-average discount rate	8.67		%	7.70		%
Weighted-average default rate	11.48		%	13.25		%

Fair value resulting from:
100 basis point increase in discount rate	$	241,752		$	280,451
200 basis point increase in discount rate	239,655			277,934
Fair value resulting from:
100 basis point decrease in discount rate	$	246,096		$	285,669
200 basis point decrease in discount rate	248,352			288,381

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	241,944		$	279,718
Applying a 1.2 multiplier to default rate	239,987			276,422
Fair value resulting from:
Applying a 0.9 multiplier to default rate	$	245,853		$	286,358
Applying a 0.8 multiplier to default rate	247,806			289,702

Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2025 and 2024 for Servicing Assets is presented in the following table (in thousands, except percentages).


Servicing Assets	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	17,402		$	13,718
Weighted-average market servicing rate	0.598		%	0.640		%
Weighted-average prepayment rate	21.65		%	18.70		%
Weighted-average default rate	11.84		%	14.03		%

Fair value resulting from:
Market servicing rate increase of 0.025%	$	16,398		$	12,843
Market servicing rate decrease of 0.025%	18,405			14,593

Fair value resulting from:
Applying a 1.1 multiplier to prepayment rate	$	16,949		$	13,415
Applying a 0.9 multiplier to prepayment rate	17,863			14,026

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	17,114		$	13,448
Applying a 0.9 multiplier to default rate	17,689			13,989

Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2025 for Receivable from Credit Card Partner is presented in the following table (in thousands, except percentages).

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Receivable from Credit Card Partner	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	99,865		$	104,153
Discount rate on Credit Card receivable cash flows	23.15		%	22.44		%
Prepayment rate on Credit Card receivables	8.22		%	8.14		%
Default rate on Credit Card receivables	15.00		%	14.80		%

Fair value resulting from:
100 basis point increase in discount rate	$	99,689		$	103,923
200 basis point increase in discount rate	99,518			103,699
Fair value resulting from:
100 basis point decrease in discount rate	$	100,045		$	104,390
200 basis point decrease in discount rate	100,231			104,633

Fair value resulting from:
Applying a 1.1 multiplier to prepayment rate	$	99,676		$	103,911
Applying a 0.9 multiplier to prepayment rate	100,055			104,398

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	97,376		$	101,503
Applying a 0.9 multiplier to default rate	102,459			106,916

Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2025 and 2024 for the Credit Card Derivative is presented in the following table (in thousands, except percentages).


Credit Card Derivative	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	48,290		$	38,739
Outstanding Credit Card Principal Balance, Prosper and Coastal Allocations	330,409			303,245
Discount rate on Prosper Allocations	23.15		%	22.44		%
Discount rate on Coastal Program Fee	23.15		%	22.44		%
Prepayment rate applied to Credit Card portfolio	8.22		%	8.14		%
Default rate applied to Credit Card portfolio	15.33		%	15.65		%

Fair value resulting from:
100 basis point increase in both discount rates	$	47,654		$	38,225
200 basis point increase in both discount rates	47,036			37,725
Fair value resulting from:
100 basis point decrease in both discount rates	$	48,945		$	39,269
200 basis point decrease in both discount rates	49,619			39,814

Fair value resulting from:
Applying a 1.1 multiplier to prepayment rate	$	47,625		$	38,210
Applying a 0.9 multiplier to prepayment rate	48,964			39,275

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	38,254		$	29,252
Applying a 0.9 multiplier to default rate	58,663			48,556

Change in Estimate - Credit Card Derivative

Effective December 31, 2024, to calculate the relevant portfolio interest rate for the Credit Card Derivative valuation, the Company implemented a forward projection for the attrition of cardholders enrolled in hardship and settlement programs. These

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programs were launched in the second quarter of 2024 and management believes they should be segregated from the base population of cardholders for the purposes of analyzing the fair value of the Credit Card Derivative cash flows. The effect of this change in estimate increased the Credit Card Derivative by $4.5 million as of December 31, 2024.

Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2025 and 2024 for Credit Card servicing obligation liability is presented in the following table (in thousands, except percentages).


Credit Card servicing obligation liability	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	9,276		$	8,947
Discount rate on Credit Card portfolio servicing obligation	23.15		%	22.44		%
Prepayment rate applied to Credit Card portfolio	8.22		%	8.14		%
Default rate applied to Credit Card portfolio	15.33		%	15.65		%
Market servicing rate	2.00		%	2.00		%

Fair value resulting from:
Market servicing rate increase of 0.10%	$	9,761		$	9,415
Market servicing rate decrease of 0.10%	8,792			8,481

Fair value resulting from:
Applying a 1.1 multiplier to prepayment rate	$	9,174		$	8,849
Applying a 0.9 multiplier to prepayment rate	9,380			9,047

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	9,056		$	8,730
Applying a 0.9 multiplier to default rate	9,501			9,170

These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other

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assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects.

Assets and Liabilities Not Recorded at Fair Value

The following tables present the fair value hierarchy for assets and liabilities not recorded at fair value (in thousands):


Balance at December 31, 2025	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Fair Value
Assets:
Cash and Cash Equivalents	$	46,755	$	46,755	$	—	$	—	$	46,755
Restricted Cash - Cash and Cash Equivalents	92,854		92,854		—		—		92,854
Restricted Cash - Certificates of Deposit	1,509		—		1,509		—		1,509
Accounts Receivable	11,947		—		11,947		—		11,947
Total Assets	$	153,065	$	139,609	$	13,456	$	—	$	153,065
Liabilities:
Accounts Payable and Accrued Liabilities	$	56,501	$	—	$	56,501	$	—	$	56,501
Transaction Fee Refund Liability (Note 17)	17,191		—		—		17,191		17,191
Payable to Investors	77,604		—		77,604		—		77,604
Notes Issued by Securitization Trust	149,902		—		151,325		—		151,325

Term Loan (Note 11)	75,000		—		76,089		—		76,089
Total Liabilities	$	376,198	$	—	$	361,519	$	17,191	$	378,710


Balance at December 31, 2024	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Fair Value
Assets:
Cash and Cash Equivalents	$	30,334	$	30,334	$	—	$	—	$	30,334
Restricted Cash - Cash and Cash Equivalents	111,724		111,724		—		—		111,724
Restricted Cash - Certificates of Deposit	3,029		—		3,029		—		3,029
Accounts Receivable	7,545		—		7,545		—		7,545
Total Assets	$	152,632	$	142,058	$	10,574	$	—	$	152,632
Liabilities:
Accounts Payable and Accrued Liabilities	$	49,346	$	—	$	49,346	$	—	$	49,346
Transaction Fee Refund Liability (Note 17)	9,212		—		—		9,212		$	9,212
Payable to Investors	91,945		—		91,945		—		91,945
Notes Issued by Securitization Trust	258,960		—		260,985		—		260,985
Term Loan (Note 11)	75,540		—		76,581		—		76,581
Total Liabilities	$	485,003	$	—	$	478,857	$	9,212	$	488,069

The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, Transaction Fee Refund Liability and Payable to Investors approximate their carrying values because of their short-term nature.

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NOTE 9. GOODWILL

Prosper’s Goodwill balance of $36.4 million at December 31, 2025 did not change during the year ended December 31, 2025. The Goodwill is associated with the Company’s Personal Loan reporting unit, which has a negative carrying amount as of December 31, 2025. The Company recorded no goodwill impairment for the years ended December 31, 2025, 2024 and 2023.

NOTE 10. OTHER LIABILITIES

Other Liabilities consists of the following for the periods indicated (in thousands):


	December 31,
	2025		2024
Deferred revenue	$	11,819	$	8,501
Credit Card servicing obligation liability (Notes 5 and 8)	9,276		8,947
Operating lease liabilities (Note 16)	9,193		12,167
Loan trailing fee liability (Note 8)	3,328		3,004
Deferred income tax liability (Note 15)	839		808
Other	323		322
Total Other Liabilities	$	34,778	$	33,749

NOTE 11. DEBT

Term Loans

On November 14, 2022, the Company entered into a Credit Agreement (the “2022 Credit Agreement”) with a third-party financial institution, which provided for a $75.0 million senior secured credit facility (the “2022 Term Loan”), originally set to mature on November 14, 2026. Prior to that maturity date, on November 14, 2025, the Company entered into a new Credit Agreement (the “2025 Credit Agreement”) with a separate third-party financial institution. The 2025 Credit Agreement provides for a $75.0 million senior unsecured credit facility (the “2025 Term Loan”), maturing on November 14, 2030. Proceeds received from 2025 Term Loan were used to repay all of the outstanding principal and interest on the 2022 Term Loan, totaling $68.4 million, and the 2022 Credit Agreement was terminated at that time. Refer to the following sections for descriptions of key terms and features of the 2022 and 2025 Credit Agreements.

2022 Credit Agreement

Proceeds received from the 2022 Term Loan were net of a 2% original issue discount, and the Company also incurred approximately $0.4 million in initial debt issuance costs. Additional debt modification costs totaling approximately $0.8 million were subsequently incurred upon executing Amendments 1 and 2 of the 2022 Credit Agreement (see below). Both the original issue discount and the debt issuance and modification costs were being amortized over the life of the 2022 Term Loan to Interest Expense on Term Loan using the effective interest method. Upon the repayment of the 2022 Term Loan in November 2025, unamortized original issue discount and debt issuance and modification costs totaling $0.9 million were amortized into Interest Expense on Term Loan on an accelerated basis.

In June and November 2024, the Company signed Amendments 1 and 2, respectively, to the 2022 Credit Agreement, which primarily provided for temporary reductions in the minimum tangible net worth and minimum asset coverage ratios (see below) for specified periods. In exchange, the Company incurred the debt modification fees referenced above, and agreed to make quarterly $2.5 million principal repayments on the 2022 Term Loan, starting on December 31, 2024. The Company made four quarterly $2.5 million principal repayments prior to the full repayment in November 2025.

Following Amendment 2 to the 2022 Credit Agreement, borrowings under 2022 Term Loan accrued interest at the Secured Overnight Financing Rate (“SOFR”) plus 11.0% per annum. Interest was required to be paid in cash as incurred each month, and was recorded in Interest Expense on Term Loan on the Company’s consolidated statements of operations. The Company’s obligations under the 2022 Term Loan were guaranteed by its wholly-owned subsidiaries PHL and BillGuard, and were secured by a first priority, perfected lien on substantially all of the assets of PMI (subject to exclusions such as certain cash amounts and deposit accounts), PHL and BillGuard, as well as equity interests in all of PMI’s subsidiaries, with the exception of PGT.

The 2022 Credit Agreement contained a number of covenants that, among other things and subject to certain exceptions and thresholds, restricted PMI’s ability to incur certain new indebtedness; incur certain liens; sell or otherwise dispose of all or substantially all its assets; make loans, advances, and guarantees; and pay dividends or make other distributions

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on equity interests. In addition, the 2022 Credit Agreement contained certain financial covenants with which the Company was required to remain in compliance as of the last business day of each month during the life of the 2022 Term Loan:

•a minimum tangible net worth

•a minimum net liquidity

•a maximum leverage ratio

•a minimum asset coverage ratio

The Company was in compliance with all covenants for all applicable monthly periods through the termination date of November 14, 2025.

2025 Credit Agreement

Proceeds received from the 2025 Term Loan were net of $0.2 million in debt issuance costs, which are being amortized over the life of the 2025 Term Loan to Interest Expense on Term Loan using the effective interest method. The 2025 Credit agreement also provides the option to upsize the credit facility by up to $25.0 million upon the Company’s request and subject to lender approval. As of December 31, 2025, the Company had not exercised this option, and no amount was due under this incremental facility.

Borrowings under the 2025 Term Loan accrue interest at SOFR plus 7.0% per annum, and interest is payable in cash on a quarterly basis. The 2025 Term Loan is an unsecured senior credit facility.

The 2025 Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions and thresholds, restrict the Company’s ability to incur new indebtedness (including finance leases); incur certain liens; and make fundamental changes to the business. In addition, the 2025 Credit Agreement contains certain financial covenants with which the Company must remain in compliance as of the last business day of each quarter during the life of the 2025 Term Loan:

•a minimum tangible net worth

•a minimum net liquidity

•a maximum leverage ratio

The Company is in compliance with all covenants as of December 31, 2025, as well as applicable quarterly periods for the year then ended. In addition, the Company believes it is in Compliance with all covenants through the date of issuance of these consolidated financial statements. The 2025 Credit Agreement also contains certain customary representations and warranties and affirmative covenants, and certain reporting obligations. The 2025 Term Loan lender will be permitted to accelerate all outstanding borrowings, terminate outstanding commitments and exercise other specified remedies upon the occurrence of certain events of default (subject to certain grace periods and exceptions), which include, among other things, payment defaults, breaches of representations and warranties, covenant defaults, certain cross-defaults to other indebtedness, certain events of bankruptcy and insolvency, certain judgments and change of control.

Prosper Warehouse Trust Agreements

Prosper consolidated two warehouse VIEs, PWIT and PWIIT (together, the “Warehouse VIEs”), that each entered into an agreement (together, the “Warehouse Agreements”) with certain lenders for committed revolving lines of credit (“Warehouse Lines”) during 2018 and 2019, respectively. In connection with the Warehouse Agreements, the Warehouse VIEs each entered into a security agreement with a bank as administrative agent and a national banking association as collateral trustee and paying agent. Proceeds under the Warehouse Lines could only be used to purchase certain unsecured consumer loans and related rights and documents from Prosper and to pay fees and expenses related to the Warehouse Lines. Both Warehouse VIEs were consolidated because Prosper was the primary beneficiary of the VIEs. The assets of the VIEs could be used only to settle obligations of the VIEs. Additionally, the creditors of the Warehouse Lines had no recourse to the general credit of Prosper. The loans held in the Warehouse VIEs were included in Loans Held for Sale, at Fair Value and Warehouse Lines were in Warehouse Lines in the consolidated balance sheets.

PWIT Warehouse Line

On January 19, 2018, Prosper, through PWIT, entered into a $100 million Warehouse Agreement with a national banking association. The PWIT Warehouse Agreement subsequently was amended in June 2018, May 2021 and May 2023, to increase the committed line of credit between two classes of loans with two separate lenders, adjust the interest rate and unused

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commitment fee, expand the eligibility criteria for unsecured consumer loans that could be financed through the PWIT Warehouse Line, reduce the advance rate and extend the term of the Warehouse Agreement.

In March 2024, as part of the PWIT 2024-1 securitization (see Note 7, Securitizations), all outstanding loans in the warehouse were transferred to either the PMIT 2024-1 Transaction or PFL, with proceeds used to pay down the outstanding principal and interest on the PWIT Warehouse line. The facility was terminated as of March 31, 2024.

PWIIT Warehouse Line

On March 28, 2019, through PWIIT, Prosper entered into a second Warehouse Agreement for a $300 million Warehouse Line with a national banking association different than that of PWIT. The PWIIT Warehouse Agreement was subsequently amended in May 2021, May 2023 and July 2023, the cumulative impact of which was to break the committed line of credit into two classes of loans with two separate lenders, adjust the interest rate and extend the term of the Warehouse Agreement. In conjunction with the PMIT 2023-1 securitization (see Note 7, Securitizations), the entire portfolio of Loans Held for Sale in the PWIIT Warehouse Line was transferred to either the PMIT 2023-1 securitization or PFL. Proceeds from the sale of these loans were used to pay down the outstanding principal and interest on the PWIIT Warehouse Line, and the facility was terminated on September 25, 2023.

NOTE 12. NET INCOME (LOSS) PER SHARE

PMI computes its net income (loss) per share in accordance with ASC Topic 260, Earnings Per Share (“ASC Topic 260”). Under ASC Topic 260, basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities.

PMI’s net income (loss) per share is calculated using the two-class method in accordance with ASC Topic 260. The two-class method allocates earnings that otherwise would have been available to common shareholders to holders of participating securities. Management considers all series of our Convertible Preferred Stock to be participating securities due to their rights to participate in dividends with Common Stock. As such, earnings allocated to these participating securities, which include participation rights in undistributed earnings, are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders.

All participating securities are excluded from basic weighted-average common shares outstanding. Prior to any conversion to common shares, each series of Prosper’s Convertible Preferred Stock is entitled to participate on an if-converted basis in distributions of earnings, when and if declared by the Board of Directors (the “Board”), that are made to common stockholders and consequently, these shares were considered participating securities. During the year ended December 31, 2025, 2024 and 2023, certain shares issued as a result of the early exercise of stock options which are subject to a repurchase right by PMI were entitled to receive non-forfeitable dividends during the vesting period and consequently, are considered participating securities.

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Basic and diluted net income (loss) per share were calculated as follows for the periods presented (in thousands, except share and per share amounts):


	December 31,
	2025		2024		2023
Numerator:
Net Loss	$	(35,702)	$	(54,079)	$	(106,462)


Denominator:
Weighted average shares used in computing basic and diluted net loss per share	77,860,750		77,226,337		76,092,569





Net Loss Per Share – Basic and Diluted	$	(0.46)	$	(0.70)	$	(1.40)

The following common stock equivalents were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been anti-dilutive (number of shares):


	December 31,
	2025	2024	2023
Excluded Securities:
Convertible Preferred Stock issued and outstanding	209,979,779	158,365,655	158,365,655
Stock options issued and outstanding	77,957,017	82,695,982	80,863,096


Warrants issued and outstanding	705,349	705,349	1,080,349
Series E-1 Convertible Preferred Stock warrants	35,544,141	35,544,141	35,544,141
Series F Convertible Preferred Stock warrants	126,106,580	177,720,704	177,720,704
Total Excluded Securities	450,292,866	455,031,831	453,573,945

NOTE 13. CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK

Convertible Preferred Stock

Under PMI’s amended and restated certificate of incorporation, preferred stock is issuable in series and the Board of Directors is authorized to determine the rights, preferences, and terms of each series.

In January 2013, PMI issued and sold 69,340,760 shares of Series A Convertible Preferred Stock in a private placement at a purchase price of $0.29 per share for $19.8 million, net of issuance costs. In connection with that sale, PMI issued 25,585,910 shares at par value $0.01 per share of Series A-1 Convertible Preferred Stock to the holders of shares of PMI’s Convertible Preferred Stock that was outstanding immediately prior to the sale (“Old Preferred Shares”) in consideration for such stockholders participating in the sale. In connection with the Series A sale, Old Preferred Shares were converted into shares of Common Stock at a ratio of 1:1 if the holder of the Old Preferred Shares participated in the Series A sale or at a 10:1 ratio if the holder of the Old Preferred Shares did not participate. In addition, each such participating holder received a share of Series A-1 Convertible Preferred Stock for every dollar of liquidation preference associated with an Old Preferred Share held by such holder. Each share of Series A-1 preferred stock has a liquidation preference of $2.00 and converts into Common Stock at a ratio of 1,000,000:1. The Series A and Series A-1 Convertible Preferred Stock were sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering.

In September 2013, PMI issued and sold 41,443,670 shares of Series B Convertible Preferred Stock in a private placement at a purchase price of $0.60 per share for approximately $24.9 million, net of issuance costs. The Series B Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering.

In May 2014, PMI issued and sold 24,404,770 shares of Series C Convertible Preferred Stock in a private placement at a purchase price of $2.87 per share for approximately $69.9 million, net of issuance costs. The Series C Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. The purpose of the Series C private placement was to raise funds for general corporate needs and for the tender offer discussed below.

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On June 18, 2014, PMI issued a Tender Offer Statement to purchase up to 6,963,785 shares, in the aggregate, of its Series A Convertible Preferred Stock and Series B Convertible Preferred Stock at a price equal to $2.87 per share. Upon closure of the tender offer on July 16, 2014, 782,540 shares of Series A Convertible Preferred Stock and 5,667,790 shares of Series B Convertible Preferred Stock were purchased for an aggregate price of $18.5 million.

In April 2015, PMI issued and sold 23,888,640 shares of Series D Convertible Preferred Stock in a private placement at a purchase price of $6.91 per share for proceeds of approximately $164.8 million, net of issuance costs. The Series D Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. The purpose of the Series D private placement was to raise funds for general corporate needs and for the share repurchase discussed below.

In December 2016, PMI authorized 40,000,000 shares of Series E Convertible Preferred Stock. These shares are reserved for the Convertible Preferred Stock warrants that were also issued in December 2016

On December 16, 2016, PMI issued a warrant to purchase 20,267,135 shares of Series E-1 Convertible Preferred Stock of PMI at an exercise price of $0.01 per share (the “First Series E-1 Warrant”) to Pinecone Investments LLC (“Pinecone”), an affiliate of Colchis Capital Management, L.P. (“Colchis”).

On February 27, 2017, PMI issued to Pinecone Investments LLC a second warrant (the “Second Series E-1 Warrant,” and together with the First Series E-1 Warrant, the “Series E-1 Warrants”) to purchase 15,277,006 shares of Series E-1 Convertible Preferred Stock at an exercise price of $0.01 per share. The Series E-1 Warrants are immediately exercisable, in whole or in part, by paying in cash the full purchase price payable in respect of the number of shares purchased. The Series E-1 Warrants were issued pursuant to the Warrant Agreement dated December 16, 2016 between PMI and Colchis, as previously described in PMI’s Current Report on Form 8-K as filed with the SEC on December 22, 2016.

In connection with the Consortium Purchase Agreement entered into with affiliates of the Consortium (“Warrant Holders”) a warrant agreement was signed (the “Series F Warrant Agreement”). Pursuant to the Series F Warrant Agreement, PMI issued to the Consortium three warrants (together, the “Series F Warrant”) to purchase up to an aggregate 177,720,706 shares of PMI’s Series F Convertible Preferred Stock at an exercise price of $0.01 per share (the “Series F Warrant Shares”).

The Warrant Holders' right to exercise the Series F Warrant was subject to monthly vesting during the term of the Consortium Purchase Agreement based upon the volume of loans the Consortium elected to purchase (if any) in each month, subject to certain cure rights such as offering additional loans for sale in subsequent periods. Under the terms of the Series F Warrant Agreement, the Series F Warrant Shares may also vest in full upon a change of control of PMI, insolvency of PMI or PFL, certain breaches of contract by PMI or PFL that are not cured within a defined cure period and upon the occurrence of certain events set forth in the Warrant Agreement.

The Series F Warrant will be exercisable with respect to vested Series F Warrant Shares, in whole or in part, at any time prior to the tenth anniversary of its date of issuance. The number of shares underlying the Series F Warrant may be adjusted following certain events such as stock splits, dividends, reclassifications and certain other issuances by PMI.

On September 20, 2017, Prosper issued and sold 37,249,497 shares of Series G Convertible Preferred Stock in a private placement at a purchase price of $1.34 per share for proceeds of approximately $47.9 million, net of issuance costs. The Series G Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(a)(2) of the Securities Act regarding sales by an issuer not involving a public offering. The purpose of the Series G private placement was to raise funds for general corporate purposes.

On December 23, 2019, Prosper entered into a Stock Repurchase Agreement with an investor to repurchase 7,221,020 shares, in the aggregate, of Series A, Series A-1, and Series B Convertible Preferred Stock and Common Stock for nominal consideration. Upon execution of the Agreement, 2,130,035 shares of Series A Convertible Preferred Stock, 2,245,600 shares of Series A-1 Convertible Preferred Stock, 648,720 shares of Series B Convertible Preferred Stock and 2,196,665 shares of Common Stock were repurchased. Upon repurchase of Convertible Preferred Stock, the difference between repurchase price and the carrying amount of the Convertible Preferred Stock was recognized in Additional Paid-In Capital. Additionally, the difference between the repurchase price and par value of the Common Stock was recorded through Additional Paid-In Capital.

Prosper Grantor Trust

On July 13, 2020, the Company established Prosper Grantor Trust (“PGT”), a revocable grantor trust administered by an independent trustee, with the intention of contributing assets to PGT for the benefit of PMI employees in the event of a change in control through an Eligible Employee Retention Plan. PGT was determined to be a VIE and PMI was determined to be its primary beneficiary due to the fact that the Company, through its role as the grantor, has both (a) the power to direct the activities that most significantly affect the VIE’s economic performance, including its funding decisions and investment

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strategy, and (b) the obligation to absorb losses that could be potentially significant to the economic performance of the VIE by virtue of the Company’s requirement to fund PGT in the event that it is unable to meet its obligations to PMI’s employees. PMI also maintains a contingent call liability on PGT’s assets in the event of a bankruptcy. As a result, PGT is fully consolidated into PMI’s consolidated financial statements.

On July 21, 2020, PGT entered into a Stock Transfer Agreement with a PMI investor to purchase 34,670,420 shares of Series A Convertible Preferred Stock and 16,577,495 shares of Series B Convertible Preferred Stock for nominal consideration. Upon execution of the Stock Transfer Agreement, these shares were purchased by a consolidated VIE of the Company, and thus the difference between the fair value of the repurchased stock and the purchase price is included in Convertible Preferred Stock Held by Consolidated VIE on PMI’s accompanying consolidated balance sheet as of December 31, 2025. These shares remain outstanding for legal purposes and retain their voting rights, but are excluded from the earnings per share calculation.

The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of Convertible Preferred Stock as of December 31, 2025 are disclosed in the table below (amounts in thousands, except share and par value amounts):


	Par Value		Authorized Shares	Outstanding and Issued Shares		Liquidation Preference, Outstanding Shares
Series A	$	0.01	68,558,220	66,428,185	*	$	19,160
Series A-1	$	0.01	24,760,915	22,515,315		45,031
Series B	$	0.01	35,775,880	35,127,160	*	21,190
Series C	$	0.01	24,404,770	24,404,770		70,075
Series D	$	0.01	23,888,640	23,888,640		165,000
Series E-1	$	0.01	35,544,141	—		—
Series E-2	$	0.01	16,858,078	—		—
Series F	$	0.01	177,720,707	51,614,127		43,563
Series G	$	0.01	37,249,497	37,249,497		50,000
Total			444,760,848	261,227,694		$	414,019

* Series A and Series B Convertible Preferred Stock totals are inclusive of 34,670,420 and 16,577,495 shares, respectively, held by PGT, a consolidated VIE.

Dividends

Dividends on shares of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, and Series G Convertible Preferred Stock are payable only if and when declared by the Board of Directors. No dividends will be paid with respect to the Common Stock until any declared dividends on the Convertible Preferred Stock have been paid or set aside for payment to the preferred stockholders. After payment of any such dividends, any additional dividends or distributions will be distributed among all holders of Common Stock and preferred stock in proportion to the number of shares of Common Stock that would be held by each such holder if all shares of preferred stock were converted to Common Stock at the then effective conversion rate. The Series A-1 convertible preferred shares have no dividend rights. To date, no dividends have been declared on any of PMI’s preferred stock or Common Stock.

Conversion

Under the terms of PMI’s amended and restated certificate of incorporation, the holders of preferred stock have the right to convert such preferred stock into Common Stock at any time. In addition, all preferred stock automatically converts into Common Stock (x) immediately prior to the closing of an initial public offering that values Prosper at least at $2 billion and that results in aggregate proceeds to Prosper of at least $100 million or (y) upon a written request from the holders of at least 60% of the voting power of the outstanding preferred stock (on an as-converted basis, provided that: (i) the Series A-1 Convertible Preferred Stock shall not be converted without at least 14% of the voting power of the outstanding Series A-1 Convertible Preferred Stock; (ii) the Series D shall not be converted without at least 60% of the voting power of the outstanding Series D; (iii) the Series E-1 and Series E-2 shall not be converted without at least 60% of the voting power of the outstanding Series E-1 and Series E-2, voting together as a single class; (iv) the Series F shall not be converted without at least 60% of the voting power of the outstanding Series F, and (v) the shares of Series G Preferred Stock will not be automatically converted unless the holders of at least 60% of the outstanding shares of Series G Preferred Stock approve such conversion). In addition, if a holder of the Series A Convertible Preferred Stock has converted any of the Series A Convertible Preferred Stock, then all of such holder’s shares of Series A-1 Convertible Preferred Stock also will be converted upon a liquidation event (as defined under the certificate of incorporation). In lieu of any fractional shares of Common Stock to which a holder would otherwise be entitled,

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PMI shall pay such holder cash in an amount equal to the fair market value of such fractional shares, as determined by its Board of Directors. At present, each of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, and Series F Convertible Preferred Stock converts into PMI Common Stock at a 1:1 ratio. The Series A-1 Convertible Preferred Stock converts into Common Stock at a 1,000,000:1 ratio and the Series G Convertible Preferred Stock converts into Common Stock at a 1:1.36 ratio. The Series G Convertible Preferred Stock conversion ratio reflects the Series G true-up that occurred at end of the vesting period for the Series E-2 and Series F Preferred Stock warrants.

For the Series G true-up, the conversion price of the Series G Convertible Preferred Stock was reduced to a number equal to the Series G Preferred Stock original issuance price, divided by the quotient obtained by dividing the Series G true-up amount by the total number of Series G Preferred Stock issued as of the Series G closing date. The Series G true-up amount means the aggregate number of shares of Series G Preferred Stock that would have been issued to the purchasers of the Series G Preferred Stock on the Series G closing date, if warrants to purchase shares of Series E-2 Preferred Stock or Series F Preferred Stock that were exercisable or exercised as of the true-up time (end of vesting period) had been exercisable or exercised as of such Series G closing date.

Liquidation Rights

PMI’s Convertible Preferred Stock has been classified as temporary equity on the consolidated balance sheet. The preferred stock is not redeemable; however, in the event of a voluntary or involuntary liquidation, dissolution, change in control or winding up of PMI, holders of the Convertible Preferred Stock may have the right to receive its liquidation preference under the terms of PMI’s certificate of incorporation.

Each holder of Series E-1, Series E-2 and Series F Convertible Preferred Stock is entitled to receive prior and in preference to any distribution of proceeds from a liquidation event (as defined under the certificate of incorporation) to the holders of Series A, Series B, Series C, Series D, Series G and Series A-1 Convertible Preferred Stock or Common Stock, an amount per share for (i) each share of Series E-1 Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, (ii) each share of Series E-2 Convertible Preferred Stock equal to the sum of two-thirds the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (iii) each share of Series F Convertible Preferred Stock equal to the sum of two-thirds of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share.

After the payment or setting aside for payment to the holders of Series E-1, Series E-2, and Series F Convertible Preferred Stock each holder of Series A, Series B, Series C and Series D, Series E-2, Series F and Series G Convertible Preferred Stock is entitled to receive, on a pari passu basis, prior to and in preference to any distribution of proceeds from a liquidation event (as defined under the certificate of incorporation) to the holders of Series A-1 Convertible Preferred Stock or Common Stock, (i) an amount per share for each share of Series E-2 and Series F Convertible Preferred Stock equal to the sum of one-third of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (ii) an amount per share for each share of Series A, Series B, Series C, Series D and Series G Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share.

After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F and Series G Convertible Preferred Stock, the holders of Series A-1 Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution of proceeds to the holders of Common Stock, an amount per share for each such share of Series A-1 Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share.

After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, Series G and Series A-1 Convertible Preferred Stock, the entire remaining proceeds legally available for distribution will be distributed pro-rata to the holders of Series A Convertible Preferred Stock and Common Stock in proportion to the number of shares of Common Stock held by them assuming the Series A Convertible Preferred Stock has been converted into shares of Common Stock at the then effective conversion rate, provided that the maximum aggregate amount per share of Series A Convertible Preferred Stock which the holders of Series A Convertible Preferred Stock shall be entitled to receive is three times the original issue price for the Series A Convertible Preferred Stock.

At present, the liquidation preferences are equal to $0.29 per share for the Series A Convertible Preferred Stock, $2.00 per share for the Series A-1 Convertible Preferred Stock, $0.60 per share for the Series B Convertible Preferred Stock, $2.87 per share for the Series C Convertible Preferred Stock, $6.91 per share for the Series D Convertible Preferred Stock, $0.84 per share for the Series E-1 Convertible Preferred Stock, $0.84 per share for the Series E-2 Convertible Preferred Stock, $0.84 per share for the Series F Convertible Preferred Stock and $1.34 per share for the Series G Convertible Preferred Stock.

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Voting

Each holder of shares of Convertible Preferred Stock is entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Convertible Preferred Stock could be converted and each has voting rights and powers equal to the voting rights and powers of the Common Stock. The holders of Convertible Preferred Stock and the holders of Common Stock vote together as a single class (except with respect to certain matters that require separate votes or as required by law), and are entitled to notice of any stockholders’ meeting in accordance with the Bylaws of PMI.

Convertible Preferred Stock Warrant Liability

Series E-1 Warrants

In connection with the Settlement and Release Agreement dated November 17, 2016 among PMI, its wholly owned subsidiary PFL and Colchis, on December 16, 2016, PMI issued the First Series E-1 Warrant for 20,267,135 shares of Series E-1 convertible preferred stock. The Second Series E-1 Warrant for an additional 15,277,006 shares of Series E-1 Convertible Preferred Stock was granted on the signing of the Consortium Purchase Agreement on February 27, 2017. The Series E-1 warrants have an exercise price of $0.01 per share and expire ten years from the date of issuance in December 2026. Prosper recognized $6.0 million of expense and $7.1 million of expense from the re-measurement of the fair value of the warrants for the years ended December 31, 2025 and 2024, respectively. The expense resulting from remeasurement of the fair value of the warrants is recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the consolidated statements of operations.

To determine the fair value of the Series E-1 Warrants, the Company first determines the value of a share of Series E-1 Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derives the business equity value (“BEV”) of the Company using a variety of valuation methods, including discounted cash flow models and market based methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determines an estimated BEV, the option pricing method (“OPM”) is used to allocate the BEV to the various classes of equity, including the preferred stock. The concluded per share value for the Series E-1 Convertible Preferred Stock is utilized as an input to the Black-Scholes option pricing model.

The Company determined the fair value of the outstanding Series E-1 preferred stock warrants utilizing the following assumptions as of December 31, 2025 and 2024:


	December 31,
	2025		2024
Volatility	57.0	%	63.0	%
Risk-free interest rate	3.50	%	4.30	%
Expected term (in years)	2.75		2.75
Dividend yield	—	%	—	%

The above assumptions were determined as follows:

Volatility: The volatility is derived from historical volatilities of several unrelated publicly listed peer companies over a period approximately equal to the term of the warrant as the Company has limited information on the volatility of its preferred stock since there is currently no trading history. When making the selections of industry peer companies to be used in the volatility calculation, the Company considered the size, operational, and economic similarities to the Company’s principal business operations.

Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield in effect as of December 31, 2025, and for zero coupon U.S. Treasury notes with maturities approximately equal to the term of the warrant.

Expected Term: The expected term is the period of time for which the warrants are expected to be outstanding.

Dividend Yield: The expected dividend assumption is based on the Company’s current expectations about the Company’s anticipated dividend policy.

Series F Warrants

In connection with the Consortium Purchase Agreement on February 27, 2017, PMI issued warrants to purchase up to 177,720,706 shares of PMI's Series F Convertible Preferred Stock at $0.01 per share. The warrants expire ten years from the date of issuance in February 2027. On July 29, 2025, one warrant holder exercised warrants to purchase an aggregate of 51,614,124 shares of Series F Convertible Preferred Stock for cash proceeds of $0.5 million. The aggregate fair value of these warrants as of the date of the exercise was approximately $73.3 million, which was reclassified from Convertible Preferred

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Stock Warrant Liability to Convertible Preferred Stock on the date of exercise. Refer to the table below for the fair value assumptions used to determine the fair value of the Series F Warrants on the date of exercise. Prosper recognized $36.1 million of expense and $39.1 million of expense from the re-measurement of the fair value of the warrants for the years ended December 31, 2025 and 2024, respectively. The expense resulting from changes in the fair value of the warrant is recorded through Change in Fair Value of Convertible Preferred Stock Warrants on the consolidated statements of operations.

To determine the fair value of the Series F Warrants, the Company first determines the value of a share of Series F Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derives the BEV using valuation methods, including a combination of methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determines an estimated BEV, the OPM is used to allocate the BEV to the various classes of Prosper's equity, including its preferred stock. The concluded per share value for the Series F Convertible Preferred Stock warrants utilizes the Black-Scholes option pricing model.

The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of December 31, 2025 and 2024:


	December 31,
	2025		2024
Volatility	57.00	%	63.0	%
Risk-free interest rate	3.50	%	4.30	%
Expected term (in years)	2.75		2.75
Dividend yield	—	%	—	%

The above assumptions were determined using the same criteria described above for the Series E-1 Warrants.

Common Stock

PMI, through its Amended and Restated Certificate of Incorporation, is the sole issuer of Common Stock and related options, RSUs and warrants. On February 16, 2016, PMI amended and restated its Certificate of Incorporation to, among other things, effect a 5-for-1 forward stock split. On September 20, 2017, PMI further amended its Amended and Restated Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance. The total number of shares of stock which PMI has the authority to issue is 1,069,760,848, consisting of 625,000,000 shares of Common Stock, $0.01 par value per share, and 444,760,848 shares of preferred stock, $0.01 par value per share. As described above, the Company repurchased 2,196,665 shares of Common Stock on December 23, 2019. As of December 31, 2025, 79,138,710 shares of Common Stock were issued and 78,202,775 shares of Common Stock were outstanding. As of December 31, 2024, 78,401,384 shares of Common Stock were issued and 77,465,449 shares of Common Stock were outstanding. Each holder of common stock is entitled to one vote for each share of common stock held.

Common Stock Issued upon Exercise of Stock Options

During the year ended December 31, 2025 and 2024, PMI issued 737,326 and 540,055 shares of Common Stock, respectively, upon the exercise of vested options for cash proceeds of $47 thousand and $18 thousand, respectively.

NOTE 14. STOCK-BASED COMPENSATION

PMI grants equity awards primarily through the Company’s 2025 Equity Incentive Plan (the “2025 Plan”), which was approved by the Board on April 7, 2025, and was approved by a majority of the Company’s stockholders on April 25, 2025. As a result of the Board and stockholders’ respective approvals, the Company’s 2015 Equity Incentive Plan (as amended, the “2015 Plan”) was terminated, replaced and superseded by the 2025 Plan, except that any grants awarded under the 2015 Plan will remain in effect pursuant to their terms.

The 2025 Plan provides for grants in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and unrestricted stock. The maximum number of shares of common stock which may be issued under the 2025 Plan as of the date of the Board’s approval is 6,344,184 shares of common stock, plus any shares of common stock returned to the 2025 Plan (which, together with the 6,344,184 shares, may not exceed 91,417,252 shares of common stock). Under the 2025 Plan, incentive stock options may be granted solely to the Company’s employees, including its officers. Awards other than incentive stock options may be granted to the Company’s directors, consultants or employees, including its officers. The 2025 Plan is administered by the Board, which in turn has delegated

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authority to administer the plans to the Compensation Committee of the Board. The 2025 Plan will remain in effect through April 7, 2035, unless sooner terminated under the terms of the 2025 Plan.

Stock Option Activity

Stock option activity under the 2005 Plan and 2015 Plan is summarized for the year ended December 31, 2025 below:


	Options Issued and Outstanding	Weighted- Average Exercise Price		Weighted-Average Contractual Term (in years)	Aggregate intrinsic value1 (in thousands)
Balance as of January 1, 2025	83,441,624	$	0.16	4.98	$	36,174
Options granted	5,468,950	$	0.63
Options exercised	(737,326)	$	0.06
Options forfeited	(10,793,022)	$	0.35
Option expirations	(493,645)	$	0.02
Balance as of December 31, 2025	76,886,581	$	0.17	3.94	$	46,042
Options vested and expected to vest as of December 31, 2025	74,113,744	$	0.17	3.94	$	45,314
Options vested and exercisable at December 31, 2025	67,651,143	$	0.13	3.29	$	43,617

1. Aggregate intrinsic value represents the excess of the fair value of our Common Stock as of December 31, 2025 over the exercise price of the outstanding in-the-money options.

Additional information pertaining to PMI's Common Stock option activities is as follows:


	Year ended December 31,
	2025		2024		2023
Weighted-average grant date fair value of options granted (per share)	$	0.39	$	0.23	$	0.21

Other Information Regarding Stock Options

The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock-based compensation expense requires PMI to make assumptions and judgments about the variables used in the calculation, including the fair value of PMI’s Common Stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of PMI’s Common Stock, a risk-free interest rate, and expected dividends. Given the absence of a publicly traded market, the Company considered numerous objective and subjective factors to determine the fair value of PMI’s Common Stock at each grant date. These factors included, but were not limited to: (i) contemporaneous valuations of Common Stock performed by unrelated third-party specialists, (ii) the prices for PMI’s preferred stock sold to outside investors, (iii) the rights, preferences and privileges of PMI’s preferred stock relative to PMI’s Common Stock; (iv) the lack of marketability of PMI’s Common Stock, (v) developments in the business, (vi) secondary transactions of PMI’s common and preferred shares, and (vii) the likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of Prosper, given prevailing market conditions. As PMI’s stock is not publicly traded, volatility for stock options is based on an average of the historical volatilities of the Common Stock of several entities with characteristics similar to those of PMI. The expected term assumptions were determined based on the vesting terms, exercise terms and contractual lives of the options using the simplified method. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. PMI uses an expected dividend yield of zero as it does not anticipate paying any dividends in the foreseeable future.

PMI also estimates forfeitures of unvested stock options. Expected forfeitures are based on the Company’s historical experience. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest.

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The fair value of PMI’s stock option awards granted during the years ended December 31, 2025, 2024 and 2023 was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions:


	December 31,
	2025		2024		2023
Volatility of common stock	65.27	%	66.08	%	66.63	%
Risk-free interest rate	3.95	%	4.14	%	3.55	%
Expected life	6.0 years		6.0 years		6.0 years
Dividend yield	—	%	—	%	—	%

PMI did not grant any performance-based options in 2025, 2024, or 2023.

Restricted Stock Unit Activity

For the years ended December 31, 2025, 2024 and 2023, PMI did not grant any RSUs.

The following table summarizes the number of PMI’s RSU activity for the year ended December 31, 2025:


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2025	2,560,133	$	1.03
Forfeited	(500)	$	2.14

Unvested at December 31, 2025	2,559,633	$	1.03

Stock-Based Compensation

The following table presents the amount of stock-based compensation related to stock-based awards granted to employees recognized in the Company’s Consolidated Statements of Operations for the periods presented (in thousands):


	Years Ended December 31,
	2025		2024		2023
Origination and Servicing	$	109	$	86	$	83
Sales and Marketing	68		446		304
General and Administrative	1,130		1,084		1,188

Total Stock-Based Compensation	$	1,307	$	1,616	$	1,575

For the years ended December 31, 2025, 2024 and 2023, Prosper capitalized $0.3 million, $0.3 million and $0.2 million, respectively, of stock-based compensation as internal use software and website development costs. As of December 31, 2025, the unamortized stock-based compensation expense adjusted for forfeiture estimates related to Prosper's employees’ unvested stock-based awards was approximately $1.7 million, which will be recognized over a remaining weighted-average vesting period of approximately 2.6 years.

NOTE 15. INCOME TAXES

The domestic and foreign components of the Company’s Net Income (Loss) Before Income Taxes consists of the following for the periods presented (in thousands):


	Years Ended December 31,
	2025		2024		2023
United States	$	(35,534)	$	(53,963)	$	(106,384)
Foreign	—		—		—
Net Loss Before Income Taxes	$	(35,534)	$	(53,963)	$	(106,384)

The components of the Company’s Income Tax Expense are as follows for the periods presented (in thousands):

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	Years Ended December 31,
	2025		2024		2023
Current:
Federal	$	—	$	—	$	—
State	137		28		15
Foreign	—		—		—
Total Current Income Tax Expense	137		28		15
Deferred:
Federal	47		47		47
State	(16)		41		16
Foreign	—		—		—
Total Deferred Income Tax Expense	31		88		63
Total Income Tax Expense	$	168	$	116	$	78

The Company adopted ASU No. 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents required disclosures pursuant to ASU 2023-09 and reconciles the U.S. federal statutory income tax rate of 21% to the Company’s Net Loss Before Income Taxes for the year ended December 31, 2025 (dollar amounts in thousands):


	Year Ended December 31, 2025
	Amount ($)		Percent (%)
U.S. federal statutory tax rate	$	(7,462)	21	%
State and local income taxes, net of federal income tax effect (1)	92		—	%
Tax credits
Research and development tax credits	35		—	%
Changes in valuation allowances	(2,545)		7	%
Nontaxable or nondeductible items
Share-based payment awards	866		(2)	%
Convertible Preferred Stock Warrants	8,842		(25)	%
Other	295		(1)	%
Changes in unrecognized tax benefits	(9)		—	%
Other U.S. federal adjustments
Other	54		—	%
Effective income tax rate	$	168	—	%
(a) State taxes in Indiana, Massachusetts and Pennsylvania made up the majority (greater than 50%) of the tax effect in this category.

The following table reconciles the U.S. federal statutory income tax rate of 21% to the Company’s Net Loss Before Income Taxes for the following periods prior to the year ended December 31, 2025:


	Years Ended December 31,
	2024		2023
U.S. federal tax at statutory rate	21	%	21	%
State and local income taxes, net of federal income tax effect	8	%	8	%
Share-based payment awards	(1)	%	(1)	%
Convertible Preferred Stock Warrants	(25)	%	(12)	%
Changes in valuation allowances	5	%	(18)	%
Return-to-provision	(3)	%	(1)	%
State tax rate changes	(4)	%	2	%
Other	(1)	%	1	%
Income Tax Expense	—	%	—	%

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Temporary items that give rise to significant portions of deferred tax assets and liabilities are as follows for the periods presented (in thousands):


	December 31,
	2025		2024
Net operating loss carry forwards	$	97,359	$	100,301
Research and other credits	2,711		2,779
Stock compensation	594		1,550
Accrued liabilities	9,422		7,168
Lease liabilities	2,269		3,507
Property and equipment	4,992		3,998
Section 174 R&D capitalization	5,499		9,480
Total deferred tax assets	122,846		128,783
Net servicing rights	(1,184)		(509)
Intangible assets	(5,924)		(2,826)
Right-of-use assets	(1,661)		(2,559)
Total deferred tax liabilities	(8,769)		(5,894)
Total net deferred tax asset	114,077		122,889
Less: Valuation allowance	(114,916)		(123,697)
Net deferred tax liability	$	(839)	$	(808)

Under ASC 740, Accounting for Income Taxes, a valuation allowance must be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The amount of valuation allowance is based upon management’s best estimate of Prosper’s ability to realize the net deferred tax assets. A valuation allowance can subsequently be reduced when management believes that the assets are realizable on a more-likely-than-not basis. As of December 31, 2025, the Company continues to record a valuation allowance against its net deferred taxes. The valuation allowance as of December 31, 2025, decreased by $8.8 million to $114.9 million from the prior year.

The Internal Revenue Code imposes substantial restrictions on the utilization of net operating losses and tax credits in the event of an “ownership change” of a corporation. Accordingly, Prosper’s ability to utilize net operating losses and credit carryforwards may be limited in the future as the result of such an “ownership change.”

Prosper files federal and various state income tax returns, and has net operating loss carryforwards available to reduce future taxable income, if any, for both federal and state income tax purposes of approximately $359.1 million and $420.6 million, respectively, as of December 31, 2025, before any potential limitations for “ownership changes.” The state net operating loss carryforwards are primarily related to California. The federal and state net operating loss carryforwards will begin to expire in 2028 and 2027, respectively. All net operating loss carryforwards are subject to a full valuation allowance. Prosper has federal and California research and development tax credits of approximately $2.8 million and $1.6 million, respectively. The federal research credits will begin to expire in 2026 and the California research credits have no expiration date.

ASU 2023-09 requires entities to provide additional disclosures about income taxes paid by jurisdiction. Applying these updated requirements on a prospective basis, cash payments made for income taxes, net of refunds, are as follows (in thousands):


	Year Ended December 31, 2025
California	$	291
Massachusetts	80
Pennsylvania	47
Other	91
Total Income Taxes Paid, Net of Refunds Received	$	509

F-45

The following table summarizes the Company’s activity related to its unrecognized tax benefits (in thousands):


Balance at December 31, 2022	$	1,291
Change related to 2023 tax year position	—
Balance at December 31, 2023	$	1,291
Change related to 2024 tax year position	—
Balance at December 31, 2024	$	1,291
Change related to 2025 tax year position	—
Change related to positions of prior tax years	(112)
Balance at December 31, 2025	$	1,179

None of the unrecognized tax benefits would affect the Company’s effective tax rate if these amounts are recognized due to the full valuation allowance.

Prosper’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of Income Tax Expense. As of December 31, 2025, the Company has not incurred significant interest or penalties.

All tax returns will remain open for examination by federal and most state taxing authorities for three and four years, respectively, from the date of utilization of any net operating loss carryforwards or research and development credits.

NOTE 16. LEASES

Prosper has operating leases for corporate offices and, prior to December 2024, had operating leases for datacenters. These leases have remaining lease terms of one year to approximately four years. Some of the lease agreements include options to extend the lease term for up to an additional five years. Rental expense under operating lease arrangements was $3.5 million, $3.9 million and $4.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, Prosper subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease revenue from operating lease arrangements was $0.5 million, $0.4 million and $0.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Operating Lease Right-of-Use (“ROU”) Assets

The following table summarizes the operating lease ROU assets as of December 31, 2025, which are included in Property and Equipment, Net on the Consolidated Balance Sheets.


	December 31, 2025
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
ROU assets - office buildings	$	22,690	$	15,960	$	6,730

The Company identified certain impairment triggers related to its ROU assets in 2023, primarily due to the vacancy of a portion of the Company’s leased office space and the time expected to find a new subtenant. As a result of impairment testing performed on these ROU assets, the Company recorded an impairment charge of $196 thousand for the year ended December 31, 2023. No impairment charge was identified for the years ended December 31, 2025 and 2024.

In March 2024, the Company entered into an amendment to its Phoenix office lease, the most prominent impact of which was to extend the lease term for an additional period through October 2029. As a result of this lease modification, the Company recorded additional ROU operating lease assets and liabilities of $0.3 million.

Lease Liabilities

Future maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands). The present value of the future minimum lease payments represents the Company’s operating lease liabilities as of December 31, 2025 and

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are included in “Other Liabilities” on the consolidated balance sheets.


	December 31, 2025
2026	$	4,648
2027	3,834
2028	1,948
2029	410
Thereafter	—
Total future minimum lease payments	10,840
Less: Imputed interest	(1,647)
Present value of future minimum lease payments	$	9,193

Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. Supplemental cash flow information related to the Company’s operating leases is as follows (dollars in thousands):


	Years Ended December 31,
	2025		2024		2023
Non-cash operating activity:
ROU assets obtained or adjusted in exchange for new, amended and modified operating lease liabilities	$	—	$	35	$	(697)

The weighted-average remaining lease term and discount rate used in the calculation of the Company’s operating lease assets and liabilities are as follows (dollars in thousands):


	December 31, 2025


Weighted-average remaining lease term	2.51 years
Weighted-average discount rate	11.16	%

NOTE 17. COMMITMENTS AND CONTINGENCIES

In the normal course of its operations, Prosper becomes involved in various legal actions. Prosper maintains provisions it considers to be adequate for such actions. Prosper does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on Prosper's financial condition, results of operations or cash flows.

Operating Commitments

PMI, along with PFL, and WebBank have entered into: (i) an Asset Sale Agreement, dated July 1, 2016, between PFL and WebBank, as most recently amended by a Seventh Amendment dated February 28, 2024 (as amended, the “Sale Agreement”); (ii) the Marketing Agreement, dated July 1, 2016, between PMI and WebBank, as most recently amended by a Seventh Amendment dated February 28, 2024 (as amended, the “Marketing Agreement”); and (iii) the Stand By Purchase Agreement, dated July 1, 2016, between PMI and WebBank, as most recently amended by a Fourth Amendment dated February 28, 2024 (as amended, the “Purchase Agreement” and, collectively with the Sale Agreement and the Marketing Agreement, the “Origination and Sale Agreements”). Under the Origination and Sale Agreements, all Borrower Loans originated through the marketplace are made by WebBank under its bank charter.

The Origination and Sale Agreements contain terms through February 1, 2027. Prosper is required, under the Origination and Sale Agreements, to maintain certain collateral requirements. In addition, pursuant to the Marketing Agreement, the marketing fee that Prosper receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $100,000 through February 1, 2027, Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee is $1.2 million in 2026 and $0.1 million in 2027.

Additionally, under the Origination and Sale Agreements, Prosper is required to maintain minimum net liquidity of $15.0 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash, Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. As of December 31, 2025, Prosper was in compliance with the covenant.

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Transaction Fee Refund Liability

Loan Purchase Commitments

Prosper entered into an agreement with WebBank to purchase $32.1 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2025. Prosper will purchase these Borrower Loans within the first two business days of the year ending December 31, 2026.

Repurchase Obligation

Under the terms of the loan purchase agreements between Prosper and investors that participate in the Whole Loan Channel, Prosper may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow personal loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. Prosper recognizes a liability at fair value for the repurchase obligation when the Borrower Loans are sold. The fair value of the repurchase obligation is estimated based on historical experience. Repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase. The maximum potential amount of future payments associated with this obligation is the outstanding balances of the Borrower Loans issued to third parties through the Whole Loan Channel, which at December 31, 2025 is $3.8 billion. Prosper has accrued $0.3 million and $0.3 million as of December 31, 2025 and 2024, respectively, in regard to this obligation.

Under the terms of the indenture and investor registration agreement, Prosper may, in certain circumstances, become obligated to either repurchase a Note or indemnify the investor for any losses resulting from nonpayment of a Note purchased in the Retail Channel. The decision to repurchase or indemnify is in Prosper’s sole discretion. These circumstances include, but are not limited to, the occurrence of verifiable identity theft, a technical error in the automated bidding tools which results in the purchase of a Note that does not match the investor’s investment criteria, or situations in which a personal loan listing includes a Prosper Rating that is different from the Prosper Rating that should have appeared in the listing for the corresponding Borrower Loan because either PFL inaccurately input data into, or inaccurately applied, the formula for determining the Prosper Rating and, as a result, the interest of the investor is materially and adversely affected. During the year ended December 31, 2025, repurchases under this obligation were not material.

Regulatory Contingencies

Prosper accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, Prosper reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If Prosper determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, Prosper does not accrue for a potential litigation loss. If an unfavorable outcome is probable and Prosper can estimate a range of outcomes, an amount is recorded which management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then the low end of the range of the potential losses is recorded.

Cybersecurity Matter

On September 1, 2025, Prosper identified that an unauthorized third party gained access to the Company’s systems that contain proprietary and confidential information. The Company promptly initiated its cybersecurity response plans and began taking steps to investigate, contain and remediate the incident and enhance its security measures with the assistance of cybersecurity experts. The Company also informed law enforcement.

There is evidence that the unauthorized third party was able to obtain confidential, proprietary and personal information, including Social Security numbers, including through unauthorized queries made on Company databases that store customer and applicant data. There is no evidence of unauthorized access to customer accounts and funds as a result of the incident, and the Company’s customer-facing operations continued uninterrupted.

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Prosper Funding, LLC Data Breach Litigation. Prosper is also subject to lawsuits filed in state courts and has received demands for mass and individual arbitrations. The Company may receive additional federal and state lawsuits and arbitration demands in the future.

The Company has accrued for various legal and cybersecurity costs incurred related to this incident that are not covered by insurance. As the lawsuits described herein above are still in their early stages, however, the Company is unable to accurately predict the ultimate outcome of this incident, or estimate a loss or range of loss that the Company may incur in the event of an unfavorable outcome. Accordingly, the Company has not recorded a provision for any estimated losses in respect to the incident as of December 31, 2025.

NOTE 18. RELATED PARTIES

Since Prosper’s inception, it has engaged in various transactions with its directors, executive officers and holders of more than 10% of its voting securities, and immediate family members and other affiliates of its directors, executive officers, and 10% stockholders. Prosper believes that all of the transactions described below were made on terms no less favorable to Prosper than could have been obtained from unaffiliated third parties.

Prosper’s executive officers, directors who are not executive officers, and certain affiliates participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper for the year ended December 31, 2025 and 2024, as well as the Notes outstanding as of December 31, 2025 and 2024 are summarized below (in thousands):


	Aggregate Amount of Notes Purchased for the Year Ended December 31,				Interest Earned on Notes for the Year Ended December 31,
	2025		2024		2025		2024
Executive officers and management	$	34	$	44	$	8	$	10
Directors (excluding executive officers and management)	—		—		—		—
Total	$	34	$	44	$	8	$	10


	Notes Balance as of
	December 31, 2025		December 31, 2024
Executive officers and management	$	69	$	67
Directors (excluding executive officers and management)	—		—
Total	$	69	$	67

NOTE 19. EMPLOYEE BENEFIT PLANS

Prosper has a 401(k) plan that covers all employees meeting certain eligibility requirements. The 401(k) plan is designed to provide tax-deferred retirement benefits in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Eligible employees may defer up to 90% of eligible compensation up to the annual maximum as determined by the Internal Revenue Service. Prosper’s contributions to the plan are discretionary. On January 1, 2024, PMI temporarily suspended its discretionary matching contributions. As a result, no matching contributions were made during the 2024 and 2025 calendar years. Upon meeting specific business objectives, the Company reinstated its discretionary matching contributions effective January 1, 2026.

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NOTE 20. SIGNIFICANT CONCENTRATIONS

Prosper is dependent on third party funding sources such as banks, credit unions, asset managers, investment funds and insurance companies to provide the funds to allow WebBank to originate Borrower Loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the year ended December 31, 2025, three individual third parties purchased 21.0%, 14.4%, and 11.6% of all Borrower Loans originated. For the year ended December 31, 2024, three individual parties purchased 23.7%, 15.8% and 13.2% of all Borrower Loans originated. These purchases indicate that a significant portion of Prosper’s business is dependent on funding through the Whole Loan Channel, through which 94% and 92% of Borrower Loans were originated in the years ended December 31, 2025 and 2024, respectively.

Prosper receives all of its personal loan transaction fee revenue from WebBank for its services in facilitating originations of Borrower Loans issued by WebBank. The rate of the transaction fee for each individual Borrower Loan is based on the term and credit grade of the Borrower Loan and currently ranges from 1.00% to 9.99% for newly originated loans. No individual borrower or investor accounted for 10% or more of consolidated net revenue for any of the periods presented.

NOTE 21. SEGMENTS

Effective in the fourth quarter of 2025, the Company updated its operating and reportable segments to align with recent strategic business and management reporting changes. This realignment is reflected in the periodic financial reports provided to the Company’s Chief Executive Officer, who serves as the chief operating decision maker (“CODM”), for the purposes of evaluating performance, making operating decisions and allocating resources. As a result of these changes, the Company’s former Home Equity segment was eliminated and the related products and services are now combined with the Personal Loan segment, which includes both Personal Loan products and services, as well as general corporate expenses. The Company now has two reportable and operating segments: Personal Loan and Credit Card. Periods prior to the fourth quarter of 2025 have been recast to conform to the current reportable segment presentation.

The CODM evaluates the financial performance of the Company’s segments based upon segment revenues, as well as segment Adjusted Net Revenue and segment Adjusted EBITDA, both non-GAAP profitability measures. The Company does not prepare segment assets for the CODM to use to allocate resources or to assess performance of the segments and, therefore, total segment assets have not been disclosed.

The tables below present segment Total Net Revenue reconciled to segment Adjusted Net Revenue, significant segment operating expenses, and segment Adjusted EBITDA reconciled to Net Income (Loss) Before Taxes, as well as interest income and expense included in segment Adjusted Net Revenue and Adjusted EBITDA, for the periods indicated (in thousands).

F-50


	Year Ended December 31, 2025
	Personal Loan		Credit Card		Total
Total Net Revenue	$	192,197	$	20,352	$	212,549
Impact of interest rates on fair value of loans held in consolidated trusts	21		—		21
Segment Adjusted Net Revenue	$	192,218	$	20,352	$	212,570

Less: Segment Operating Expenses (1)
Compensation and Benefits (2)	69,395		10,428		79,823
Marketing and Advertising	45,998		8,825		54,823
Transaction Costs	7,756		11,611		19,367
Other Expenses (3)	28,316		827		29,143
Segment Adjusted EBITDA	40,753		$	(11,339)	$	29,414
Depreciation expense:
Origination and Servicing					(11,292)
General and Administrative - Other					(836)
Stock-based compensation					(1,307)
Change in Fair Value of Convertible Preferred Stock Warrants					(42,103)
Impact of interest rates on fair value of loans held in consolidated trusts					(21)
Interest income on cash and cash equivalents					2,942
Interest Expense on Term Loans					(12,331)
Net Loss Before Income Taxes					$	(35,534)

Interest Income (Expense) Included in Segment Adjusted EBITDA
Interest Income on Financial Instruments	$	57,032	$	24,872	$	81,904
Interest Expense on Financial Instruments	(51,689)		(8,081)		(59,770)
Total Interest Income, Net Included in Segment Adjusted EBITDA	$	5,343	$	16,791	$	22,134
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. These amounts exclude items that are adjusted out of Net Income (Loss) for the purposes of calculating Adjusted EBITDA.
(2) Compensation and Benefits includes costs related to certain outsourced headcount in operations.
(3) Other Expenses include, but are not limited to, costs related to professional services, insurance, facilities, software licenses, Cloud platform, and outsourced services in engineering and marketing.

F-51


	Year Ended December 31, 2024
	Personal Loan		Credit Card		Total
Total Net Revenue	$	146,016	$	27,339	$	173,355
Impact of interest rates on fair value of loans held in consolidated trusts	1,386		—		1,386
Accelerated amortization of PWIT debt issuance costs	733		—		733
Segment Adjusted Net Revenue	$	148,135	$	27,339	$	175,474

Less: Segment Operating Expenses (1)
Compensation and Benefits (2)	57,295		8,579		65,874
Marketing and Advertising	35,501		7,479		42,980
Transaction Costs	7,667		14,036		21,703
Other Expenses (3)	27,463		393		27,856
Segment Adjusted EBITDA	20,209		$	(3,148)	$	17,061
Depreciation expense:
Origination and Servicing					(9,199)
General and Administrative - Other					(1,532)
Amortization of intangibles					(85)
Stock-based compensation					(1,616)
Change in Fair Value of Convertible Preferred Stock Warrants					(46,208)
Impairment of long-lived assets					(463)
Impact of interest rates on fair value of loans held in consolidated trusts					(1,386)
Interest income on cash and cash equivalents					3,322
Interest Expense on Term Loan					(13,124)
Accelerated amortization of PWIT debt issuance costs					(733)
Net Loss Before Income Taxes					$	(53,963)

Interest Income (Expense) Included in Segment Adjusted EBITDA
Interest Income on Borrower Loans and Loans Held for Sale	$	84,968	$	4,881	$	89,849
Interest Expense on Financial Instruments	(72,509)		(1,317)		(73,826)
Accelerated amortization of PWIT debt issuance costs	733		—		733
Total Interest Income, Net Included in Segment Adjusted EBITDA	$	13,192	$	3,564	$	16,756
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. These amounts exclude items that are adjusted out of Net Income (Loss) for the purposes of calculating Adjusted EBITDA.
(2) Compensation and Benefits includes costs related to certain outsourced headcount in operations.
(3) Other Expenses include, but are not limited to, costs related to professional services, insurance, facilities, software licenses, Cloud platform, and outsourced services in engineering and marketing.

F-52


	Year Ended December 31, 2023
	Personal Loan		Credit Card		Total
Total Net Revenue	$	102,796	$	34,904	$	137,700
Impact of interest rates on fair value of loans held in consolidated trusts	2,629		—		2,629
Accelerated amortization of PWIIT debt issuance costs	1,880		—		1,880
Segment Adjusted Net Revenue	$	107,305	$	34,904	$	142,209

Less: Segment Operating Expenses (1)
Compensation and Benefits (2)	73,798		9,868		83,666
Marketing and Advertising	32,930		12,209		45,139
Transaction Costs	7,103		8,114		15,217
Other Expenses (3)	27,984		831		28,815
Segment Adjusted EBITDA	$	(34,510)	$	3,882	$	(30,628)
Depreciation expense:
Origination and Servicing					(8,774)
General and Administrative					(2,108)
Amortization of intangibles					(107)
Stock-based compensation					(1,575)
Change in Fair Value of Convertible Preferred Stock Warrants					(48,695)
Interest Expense on Term Loan					(12,265)
Impairment of operating lease right-of-use assets					(196)
Interest income on cash and cash equivalents					2,473
Impact of interest rates on fair value of loans held in consolidated trusts					(2,629)
Accelerated amortization of PWIIT debt issuance costs					(1,880)
Net Income Before Income Taxes					$	(106,384)

Interest Income (Expense) Included in Segment Adjusted EBITDA
Interest Income on Borrower Loans and Loans Held for Sale	$	115,663	$	—	$	115,663
Interest Expense on Financial Instruments	(91,983)		—		(91,983)
Accelerated amortization of PWIIT debt issuance costs	1,880		—		1,880
Total Interest Income, Net Included in Segment Adjusted EBITDA	$	25,560	$	—	$	25,560
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. These amounts exclude items that are adjusted out of Net Income (Loss) for the purposes of calculating Adjusted EBITDA.
(2) Compensation and Benefits includes costs related to certain outsourced headcount in operations.
(3) Other Expenses include, but are not limited to, costs related to professional services, insurance, facilities, software licenses, Cloud platform, and outsourced services in engineering and marketing.

NOTE 22. SUBSEQUENT EVENTS

Management has evaluated subsequent events or transactions occurring through the date the consolidated financial statements were issued and determined that no events or transactions are required to be disclosed herein.

F-53

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Prosper Funding LLC

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Prosper Funding LLC and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, member’s equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company earns significant amounts of revenues and incurs significant expenses with a related party, its direct parent company, Prosper Marketplace, Inc.

Basis for Opinion

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Financial Instruments – Refer to Note 2 Summary of Significant Accounting Policies, Note 7, Fair Value of Assets and Liabilities, and as follows:

•Borrower loans, at fair value – Refer Note 4 Borrower Loans and Notes, at Fair Value

•Servicing Assets – Refer to Note 5 Servicing Asset

Critical Audit Matter Description

The Company measures financial instruments at fair value including borrower loans and servicing assets. As of December 31, 2025, borrower loans were $245.3 million and servicing assets were $17.6 million. The Company estimates the fair values using discounted cash flow valuation methodologies incorporating significant unobservable inputs and valuation assumptions that are reflective of management’s own estimates of assumptions that market participants would use in pricing the instruments and requires significant management judgement or estimate. Significant unobservable inputs used in the valuation methodology for the servicing assets include the market servicing rate. For both financial instruments, significant unobservable inputs used in the valuation include discount rates, default rates and prepayment rates.

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Auditing the methodology and significant unobservable inputs used by management to estimate the fair values of financial instruments required a high degree of auditor judgment and subjectivity and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of financial instruments and unobservable inputs used by management to estimate the fair value included the following key procedures:

•We gained an understanding of the significance of inputs and assumptions using sensitivity analysis, identifying relevant inputs and assumptions for further testing.

•With the assistance of our fair value specialists, we developed independent estimates of fair value and compared our estimates to the Company’s estimates.

•We tested the source information derived from the Company’s data used in the valuation models.

•We evaluated the reasonableness of the market servicing rate assumption used in developing the fair value estimate of the servicing assets.

/s/ DELOITTE & TOUCHE LLP

San Francisco, CA

March 26, 2026

We have served as the Company's auditor since 2014.

F-55

Prosper Funding LLC

Consolidated Balance Sheets

(amounts in thousands)


	December 31,
	2025		2024
Assets:
Cash and Cash Equivalents	$	2,864	$	2,764
Restricted Cash	79,033		93,976
Borrower Loans, at Fair Value	245,337		285,578
Property and Equipment, Net	21,983		12,560
Servicing Assets	17,601		14,333
Receivable from Related Party	—		4,765
Other Assets	1,309		1,466
Total Assets	$	368,127	$	415,442
Liabilities and Member's Equity:
Accounts Payable and Accrued Liabilities	$	26,858	$	18,703
Payable to Related Party	12,460		—
Payable to Investors	77,971		93,018
Notes, at Fair Value	243,900		283,030
Other Liabilities	3,611		3,286
Total Liabilities	364,800		398,037
Member's Equity:
Member's Equity	$	9,998	$	9,998
(Accumulated Deficit) Retained Earnings	(6,671)		7,407
Total Member's Equity	3,327		17,405
Total Liabilities and Member's Equity	$	368,127	$	415,442

The accompanying notes are an integral part of these consolidated financial statements.

F-56

Prosper Funding LLC

Consolidated Statements of Operations

(amounts in thousands)


	Years Ended December 31,
	2025		2024		2023
Revenues:
Operating Revenues:
Administration Fee Revenue – Related Party	$	93,941	$	78,376	$	44,211
Servicing Fees, Net	34,567		26,921		26,208
Loss on Sale of Borrower Loans	(55,212)		(45,316)		(11,285)
Other Revenue	407		890		356
Total Operating Revenues	73,703		60,871		59,490
Interest Income (Expense):
Interest Income on Borrower Loans	42,733		49,986		52,188
Interest Expense on Notes	(40,045)		(47,033)		(48,572)
Total Interest Income, Net	2,688		2,953		3,616
Change in Fair Value of Financial Instruments, Net	(741)		(1,909)		118
Total Net Revenues	75,650		61,915		63,224
Expenses:
Administration Fee Expense – Related Party	81,325		65,869		57,683
Servicing and Other, Net	8,403		6,990		7,607
Total Expenses	89,728		72,859		65,290
Net Loss	$	(14,078)	$	(10,944)	$	(2,066)

The accompanying notes are an integral part of these consolidated financial statements.

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Prosper Funding LLC

Consolidated Statements of Member’s Equity

(amounts in thousands)


	Member’s Equity		Retained Earnings		Total
Balance at December 31, 2022	$	6,354	$	20,417	$	26,771
Contribution of Borrower Loans from Parent	2,010		—		2,010
Net Loss	—		(2,066)		(2,066)
Balance at December 31, 2023	8,364		18,351		26,715
Contribution of Borrower Loans from Parent (Note 4)	1,634		—		1,634
Net Loss	—		(10,944)		(10,944)
Balance at December 31, 2024	9,998		7,407		17,405
Net Loss	—		(14,078)		(14,078)
Balance at December 31, 2025	$	9,998	$	(6,671)	$	3,327

The accompanying notes are an integral part of these consolidated financial statements.

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Prosper Funding LLC

Consolidated Statements of Cash Flows

(amounts in thousands)


	Years Ended December 31,
	2025		2024		2023
Cash Flows from Operating Activities:
Net Loss	$	(14,078)	$	(10,944)	$	(2,066)
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Change in Fair Value of Financial Instruments, Net	741		1,909		(118)
Other Non-Cash Changes in Borrower Loans, Loans Held for Sale and Notes	(7)		(2)		98
Gain on Sale of Borrower Loans	(13,608)		(10,996)		(10,151)
Change in Fair Value of Servicing Rights	10,340		10,481		11,193
Depreciation and Amortization	7,955		6,765		6,268
Changes in Operating Assets and Liabilities:
Purchase of Loans Held for Sale, at Fair Value	(2,487,702)		(2,054,646)		(1,921,129)
Proceeds from Sales of Loans Held for Sale, at Fair Value	2,487,702		2,054,646		1,921,129
Other Assets	157		(1,290)		(92)
Accounts Payable and Accrued Liabilities	8,155		10,582		3,545
Payable to Investors	(15,047)		4,647		1,444
Net Related Party Receivable/Payable	8,857		(3,472)		(6,259)
Other Liabilities	325		(125)		(198)
Net Cash (Used in) Provided by Operating Activities	(6,210)		7,555		3,664
Cash Flows from Investing Activities:
Purchase of Borrower Loans, at Fair Value	(164,625)		(186,073)		(232,306)
Proceeds from Sales and Principal Payments of Borrower Loans, at Fair Value	184,863		196,567		191,079
Purchases of Property and Equipment	(9,010)		(7,379)		(6,097)
Net Cash Provided by (Used in) Investing Activities	11,228		3,115		(47,324)
Cash Flows from Financing Activities:
Proceeds from Issuance of Notes, at Fair Value	163,892		184,200		231,520
Payments of Notes, at Fair Value	(183,753)		(195,169)		(188,670)
Net Cash (Used in) Provided by Financing Activities	(19,861)		(10,969)		42,850
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(14,843)		(299)		(810)
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period	96,740		97,039		97,849
Cash, Cash Equivalents and Restricted Cash at End of the Period	$	81,897	$	96,740	$	97,039

Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest	$	40,521	$	47,459	$	47,758
Non-Cash Investing Activity - Accrual for Property and Equipment, Net	10,794		2,426		2,121
Non-Cash Financing Activity - Contribution of Borrower Loans by Parent (Note 4)	—		1,634		2,010

Reconciliation to Amounts on Consolidated Balance Sheets:
Cash and Cash Equivalents	$	2,864	$	2,764	$	3,351
Restricted Cash	79,033		93,976		93,688
Total Cash, Cash Equivalents and Restricted Cash	$	81,897	$	96,740	$	97,039

The accompanying notes are an integral part of these consolidated financial statements.

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PROSPER FUNDING LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND BUSINESS

Prosper Funding LLC (“PFL” and the “Company”) was formed in the state of Delaware in February 2012 as a limited liability company with Prosper Marketplace, Inc. (“PMI”) as its sole equity member. Except as the context otherwise requires, as used in these Notes to the consolidated financial statements of PFL refers to Prosper Funding LLC and its wholly owned subsidiary, Prosper Depositor LLC, a Delaware limited liability company, on a consolidated basis.

PFL was formed by PMI to hold Borrower Loans and issue Notes through the marketplace. Although PFL is consolidated with PMI for accounting and tax purposes, PFL has been organized and is operated in a manner that is intended to minimize the likelihood that it would be substantively consolidated with PMI in a bankruptcy proceeding. PFL’s intention is to minimize the likelihood that its assets would be subject to claims by PMI’s creditors if PMI were to file for bankruptcy, as well as to minimize the likelihood that PFL will become subject to bankruptcy proceedings directly. PFL seeks to achieve this by placing certain restrictions on its activities and implementing certain formal procedures designed to expressly reinforce its status as a distinct entity from PMI.

Since February 1, 2013, all Notes issued and sold through the marketplace are issued, sold and serviced by PFL. Pursuant to a Loan Account Program Agreement between PMI and WebBank, PMI manages the operation of the marketplace, as agent of WebBank, in connection with the submission of Borrower Loan applications by potential borrowers, the origination of related Borrower Loans by WebBank and the funding of such Borrower Loans by WebBank. Pursuant to an Administration Agreement between PFL and PMI, PMI manages all other aspects of the marketplace on behalf of PFL. As a result PFL earns significant revenues and incurs significant expenses with a related party, its direct parent company, PMI.

A borrower who wishes to obtain a loan through the marketplace must post a loan listing on the marketplace. PFL allocates listings to one of two investor funding channels: (i) the “Note Channel,” which allows investors to commit to purchase Notes from PFL, the payments of which are dependent on PFL’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows investors to commit to purchase 100% of a Borrower Loan directly from PFL.

All loans requested and obtained through the marketplace are unsecured obligations of individual borrowers with a fixed interest rate and original terms to maturity of 24, 36, 48 or 60 months as of December 31, 2025. All loans made through the marketplace are funded by WebBank, an FDIC-insured, Utah chartered industrial bank. After funding a loan, WebBank sells the loan to PFL, without recourse to WebBank, in exchange for the principal amount of the loan. WebBank does not have any obligation to purchasers of the Notes.

As of December 31, 2025, PFL’s marketplace was open to investors in 31 states and the District of Columbia. Additionally, as of December 31, 2025, PFL’s marketplace was open to borrowers in 47 states and the District of Columbia. Currently, the marketplace does not operate internationally.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES

Basis of Presentation

PFL’s consolidated financial statements include the accounts of PFL and its wholly-owned subsidiary, Prosper Depositor LLC. All intercompany balances and transactions between PFL and Prosper Depositor LLC have been eliminated in consolidation. PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

PFL did not have any items of other comprehensive income (loss) during any of the periods presented in the consolidated financial statements as of and for the years ended December 31, 2025, 2024 and 2023.

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Use of Estimates

The preparation of PFL’s consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include, but are not limited to, the following: valuation of Borrower Loans and associated Notes, valuation of servicing rights, valuation of loan trailing fee liability, repurchase obligations, and contingent liabilities. PFL bases its estimates on historical experience from all Borrower Loans and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from estimates.

Consolidation of Variable Interest Entities

A variable interest entity (“VIE”) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. PFL’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. PFL consolidates a VIE when it is deemed to be the primary beneficiary. PFL assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis.

Transfers of Financial Assets

PFL accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from PFL, the transferee has the right to pledge or exchange the assets without any significant constraints, and PFL has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, PFL considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. PFL measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments measured at fair value consist principally of Borrower Loans and Notes, Servicing Assets and loan trailing fee liabilities. The Company believes that applying the fair value option to these financial instruments achieves consistent accounting for certain assets and liabilities and more accurately reflects their in-period economic performance as compared to alternate methodologies. The estimated fair values of other financial instruments, including Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short-term nature.

The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly.

Level 3 — Unobservable inputs.

When developing fair value measurements, PFL maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments PFL must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability.

As observable market prices are not available for the Borrower Loans, Notes, and Servicing Assets, or for similar assets and liabilities, PFL believes the Borrower Loans, Notes, and Servicing Assets should be considered Level 3 financial instruments. PFL primarily uses a discounted cash flow model to estimate their fair value and key assumptions used in

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valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics.

The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is generally 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. Any unrealized gains or losses on the Borrower Loans and Notes for which the fair value option has been elected is recorded as a separate line item in the statement of operations. The effective interest rate associated with a group of Notes is less than the interest rate earned on the corresponding Borrower Loan due to the 1.0% servicing fee.

Refer to Note 8 for additional fair value disclosures.

Cash and Cash Equivalents

Cash includes various unrestricted deposits with highly rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, U.S. treasury securities and U.S. agency securities. Cash equivalents are recorded at cost, which approximates fair value.

Restricted Cash

Restricted Cash consists primarily of cash deposits, money market funds and short-term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors have on our marketplace that has not yet been invested in Borrower Loans or disbursed to the investor.

Borrower Loans and Notes

With respect to the Note Channel, PFL purchases Borrower Loans from WebBank, then issues Notes and holds the Borrower Loans until maturity. The obligation to repay a series of Notes funded through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans and Notes funded through the Note Channel are carried on PFL’s consolidated balance sheets as assets and liabilities, respectively.

PFL places Borrower Loans on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, PFL stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, PFL charges-off Borrower Loans when they are 120 days past due or reach the end of a settlement program. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods.

Management has elected the fair value option for Borrower Loans and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans and Notes are included in Change in Fair Value of Financial Instruments, Net on the consolidated statements of operations.

PFL primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans and Notes. The key assumptions used in the valuation include default rates and prepayment rates derived primarily from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics.

Servicing Assets

PFL records Servicing Assets at their estimated fair values for servicing rights retained when PFL sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets is recognized in revenue as Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain (Loss) on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market loan servicing rate, is recorded in Servicing Assets on the Consolidated Balance Sheets.

PFL uses a discounted cash flow model to estimate the fair value of Servicing Assets which considers the contractual servicing fee revenue that PFL earns on the Borrower Loans, estimated market servicing fees to service such loans, prepayment rates, default rates and the current principal balances of the Borrower Loans.

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Software and Website Development

Software and website development represents the software and website development costs that PMI transferred to PFL. PFL does not develop any of its own software or its website. Software and website development are included in Property and Equipment, Net and amortized to depreciation expense using the straight-line method over their expected lives, which are generally one to five years. PFL evaluates its software assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software and website development assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software and website development assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software and website development assets.

Payable to Investors

Payable to Investors primarily represents the Company's obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers.

Loan Trailing Fee Liability

On July 1, 2016, PMI signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to PMI. These agreements were effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by PMI, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by PMI to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, PMI is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to PMI is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net.” Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the Consolidated Statements of Operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates.

Revenue Recognition

Revenue primarily results from fees, net interest earned and gains on the sale of Borrower Loans. Fees consist of related party administrative fees and Servicing Fees paid by investors. The Company also has other smaller sources of revenue reported as Other Revenues including fees charged in relation to securitizations by third-party investors.

Administration Agreement License Fees

PFL primarily generates revenues through license fees it earns through an Administration Agreement with PMI. The Administration Agreement contains a license granted by PFL to PMI that entitles PMI to use the platform for and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement relating to corporate administration, loan platform services, Borrower Loan and Note servicing and marketing, and (ii) PMI’s performance of its duties and obligations to WebBank in relation to loan origination and funding. The license fees are primarily made up of (i) reimbursements for all incentives paid out to whole loan investors, (ii) a fee based on the number of listings that are posted to the platform and (iii) a $0.3 million fixed monthly fee.

On November 14, 2025, PFL and PMI executed Amendment 7 to the Administration Agreement, and as a result, effective on that date the license fee now includes a reimbursement of all whole loan investor performance-based payments and transaction fee refunds issued by PFL each month.

Servicing Fees

Investors who purchase Borrower Loans from PFL through the Whole Loan Channel typically pay PFL a servicing fee which is currently set at 1.0% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment, plus an additional 0.075% per annum to cover the Loan Trailing Fee. The servicing fee compensates PFL for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, managing payments to

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investors and maintaining investors’ account portfolios. PFL records Servicing Fees from investors as a component of operating revenue when received.

Transaction Fee Refunds

Prosper assumes WebBank’s obligation under Utah law to refund the pro-rated amount of any Transaction Fees collected in excess of 5%, in the event the underlying borrower prepays the loan in full before maturity. Liabilities under this obligation are estimated upon the origination of Borrower Loans and recorded within Accounts Payable and Accrued Liabilities on the accompanying consolidated Balance Sheets. The key assumptions used in the estimated refund liability include prepayment rates and default rates derived primarily from historical performance. Changes in the liability are recorded within Administration Fee - Related Party on the accompanying consolidated Statements of Operations. Refer to Note 8, Commitments and Contingencies, for details on the amounts recorded under this obligation.

Loss on Sale of Borrower Loans

PFL recognizes a Gain or Loss on Sale of Borrower Loans as the net proceeds received on a sale through the Whole Loan Channel, less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, incentives and repurchase obligations provided or received at the time of sale. Due to market volatility and incentives offered by competitors, incentives provided to Whole Loan Channel buyers have increased in recent years.

Interest Income on Borrower Loans and Interest Expense on Notes

PFL recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent PFL believes it to be collectable.

Administration Fee Expense - Related Party

Pursuant to the Administration Agreement between PFL and PMI, PMI manages the marketplace on behalf of PFL. Accordingly each month, PFL is required to pay PMI an administration fee that is based on (a) PMI’s finance and legal personnel costs, (b) the number of Borrower Loans originated through the marketplace, (c) Servicing Fees collected by or on behalf of PFL, and (d) nonsufficient funds fees collected by or on behalf of PFL.

Recent Accounting Pronouncements

Accounting Standards Adopted in the Current Period

No accounting standards were adopted in the current period for PFL.

Accounting Standards Issued, to be Adopted in Future Periods

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NOTE 3. PROPERTY AND EQUIPMENT, NET

Property and Equipment consist of the following as of the dates presented (in thousands):


	December 31,
	2025		2024
Internal-use software and web site development costs	$	63,353	$	49,836
Less: Accumulated depreciation and amortization	(41,370)		(37,276)
Total Property and Equipment, Net	$	21,983	$	12,560

Depreciation and amortization expense for the years ended December 31, 2025, 2024, and 2023 was $8.0 million, $6.8 million and $6.3 million, respectively. Internal-use software and web site development additions of $17.4 million, $7.7 million and $7.9 million were purchased from PMI in the years ended December 31, 2025, 2024, and 2023, respectively.

NOTE 4. BORROWER LOANS AND NOTES, AT FAIR VALUE

The fair value of Borrower Loans and Notes issued through the Note Channel is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such Borrower Loans and Notes include default and prepayment rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the payments, if any, received on the corresponding borrower loan, net of the servicing fee. As such, the fair value of Notes is approximately equal to the fair value of Borrower Loans originated through the Note Channel, adjusted for the servicing fee and the timing of borrower payments subsequently disbursed to the note holders. The effective interest rate associated with a series of notes will be less than the interest rate earned on the corresponding borrower loan due to the servicing fee.

The aggregate principal balances outstanding and fair values of Borrower Loans and Notes as of December 31, 2025 and 2024, are presented in the following table (in thousands):


	Borrower Loans				Notes
	December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Aggregate principal balance outstanding	$	255,132	$	300,782	$	256,929	$	301,246
Fair value adjustments	(9,795)		(15,204)		(13,029)		(18,216)
Fair value	$	245,337	$	285,578	$	243,900	$	283,030

As of December 31, 2025, outstanding Borrower Loans had original terms to maturity of 24, 36, 48 or 60 months, had monthly payments with fixed interest rates ranging from 6.00% to 33.00% and had various original maturity dates through December 2030. As of December 31, 2024, outstanding Borrower Loans had original maturities of either 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 6.00% to 33.00% and had various original maturity dates through December 2029.

As of December 31, 2025, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.2 million and a fair value of $0.4 million. As of December 31, 2024, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $3.1 million and a fair value of $0.4 million. PFL places loans on non-accrual status when they are over 120 days past due. As of December 31, 2025 and 2024, Borrower Loans in non-accrual status had a fair value of $0.3 million and $0.3 million, respectively.

On March 28, 2024, Prosper completed a securitization of Borrower Loans originated through Prosper’s marketplace platform, PMIT 2024-1. PFL served as the sole sponsor for this securitization. Loans eligible for securitization that were funded through the former PWIT Warehouse Line were contributed to the PMIT 2024-1 securitization. Loans that were not eligible for securitization, with an aggregate outstanding principal balance of $4.5 million and a fair value of $1.6 million, were contributed to PFL, and are included in Borrower Loans, at Fair Value on the accompanying consolidated balance sheets, to the extent they remain outstanding. The fair value of these Borrower Loans was recorded as a deemed Contribution of Borrower Loans from Parent on the consolidated statement of member’s equity and as a non-cash financing activity on the consolidated statement of cash flows.

NOTE 5. SERVICING ASSET

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PFL accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the consolidated statements of operations. The initial asset is recognized in Gain (Loss) on the Sale of Borrower Loans on the consolidated statements of operations when PFL sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets are measured at fair value throughout the servicing period. PFL recognized gains from the initial recognition of Servicing Assets on the sale of Borrower Loans in the amounts of $13.6 million, $11.0 million and $9.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. These amounts are recorded in Gain (Loss) on Sale of Borrower Loans on the consolidated statements of operations, and are offset primarily by incentives provided to loan buyers at the time of sale.

At December 31, 2025, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $3.8 billion, original terms of 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 5.75% to 33.00% and various original maturity dates through December 2030. As of December 31, 2024, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $3.5 billion, original terms of either 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 5.46% to 33.00% and various original maturity dates through December 2029.

Contractually-specified servicing fees and ancillary fees totaled $47.7 million, $39.6 million and $39.7 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in Servicing Fees, Net on the statements of operations.

Fair Value Valuation Method

PFL uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount.

Significant unobservable inputs presented in the table within Note 7 are those that PFL considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table.

Market Servicing Rate

PFL estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. With the assistance of a valuation specialist, PFL estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that PFL sells and services and information from backup service providers.

Discount Rate

The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management used a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with PFL’s Servicing Assets.

Default Rate

The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period.

Prepayment Rate

The prepayment rate presented in Note 7 is an annualized, average estimate considering all borrower loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or

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borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which PFL expects to collect fees on the Borrower Loans, which is used to project future servicing revenues.

NOTE 6. INCOME TAXES

PFL incurred no income tax provision for the year ended December 31, 2025 and 2024. PFL is a U.S. disregarded entity and its income and loss are included in the income tax reporting of its parent, PMI. Since PMI is in a taxable loss position, is not currently subject to income taxes, and has fully reserved against its deferred tax asset, the net effective tax rate for PFL is 0%.

NOTE 7. FAIR VALUE OF ASSETS AND LIABILITIES

PFL has elected to record certain financial instruments at fair value on the balance sheet. PFL classifies Borrower Loans and Notes as financial instruments and assesses their fair value each on a quarterly basis for financial statement presentation purposes. Gains and losses on these financial instruments are shown separately on the Consolidated Statements of Operations.

As of December 31, 2025 and 2024, the discounted cash flow methodology used to estimate the Notes fair values used the same projected cash flows as the related Borrower Loans. As demonstrated in the table below, the fair value adjustments for Borrower Loans were largely offset by the fair value adjustments of the Notes due to the borrower payment dependent design of the Notes and because the principal balances of the Borrower Loans approximated the principal balances of the Notes.

For a description of the fair value hierarchy and PFL’s fair value methodologies, see Note 2 - Summary of Significant Accounting Policies. PFL did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2025 and 2024.

Financial Instruments Recorded at Fair Value

The fair value of the Borrower Loans and Notes are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary cash flow assumptions used to value such Borrower Loans and Notes include default and prepayment rates derived primarily from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics.

The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands):


December 31, 2025	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Borrower Loans, at Fair Value	$	—	$	—	$	245,337	$	245,337
Servicing Assets	—		—		17,601		17,601
Total Assets	$	—	$	—	$	262,938	$	262,938
Liabilities:
Notes, at Fair Value	$	—	$	—	$	243,900	$	243,900

Loan Trailing Fee Liability (included in Other Liabilities)	—		—		3,328		3,328
Total Liabilities	$	—	$	—	$	247,228	$	247,228


December 31, 2024	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Borrower Loans, at Fair Value	$	—	$	—	$	285,578	$	285,578
Servicing Assets	—		—		14,333		14,333

Total Assets	$	—	$	—	$	299,911	$	299,911
Liabilities:
Notes, at Fair Value	$	—	$	—	$	283,030	$	283,030

Loan Trailing Fee Liability (included in Other Liabilities)	—		—		3,004		3,004
Total Liabilities	$	—	$	—	$	286,034	$	286,034

*Included in Other Liabilities on the consolidated balance sheets.

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As PFL’s Borrower Loans, Notes, Servicing Assets and loan trailing fee liability do not trade in an active market with readily observable prices, PFL uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. PFL did not transfer any assets or liabilities in or out of Level 3 for the years ended December 31, 2025, 2024 and 2023.

Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs used for PFL’s Level 3 fair value measurements at the dates presented:


	Range
Borrower Loans and Notes:	December 31, 2025					December 31, 2024
Discount rate	6.3	%	—	15.5	%	5.8	%	—	8.7	%
Default rate	2.3	%	—	14.5	%	2.9	%	—	22.6	%


	Range
Servicing Assets:	December 31, 2025					December 31, 2024
Discount rate	15.0	%	—	25.0	%	15.0	%	—	25.0	%
Default rate	1.9	%	—	15.0	%	2.9	%	—	22.6	%
Prepayment rate	3.4	%	—	41.4	%	13.6	%	—	28.1	%
Market servicing rate (1) (2)	0.593	%	—	0.842	%	0.633	%	—	0.842	%
(1) Servicing assets associated with loans enrolled in a relief program offered by the Company as of December 31, 2025 and 2024 were measured using a market servicing rate assumption of 84.2 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption.
(2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2025 and 2024, the market rate for collection fees and non-sufficient fund fees was assumed to be 10 basis points and 7 basis points, respectively, for a weighted-average total market servicing rate of 69.3 basis points to 94.2 basis points and 70.3 basis points to 91.2 basis points, respectively.


	Range
Loan Trailing Fee Liability:	December 31, 2025					December 31, 2024
Discount rate	15.0	%	—	25.0	%	15.0	%	—	25.0	%
Default rate	1.9	%	—	15.0	%	2.9	%	—	22.6	%
Prepayment rate	3.4	%	—	41.4	%	13.6	%	—	28.1	%

Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis

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Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Assets				Liabilities
	Borrower Loans		Loans Held for Sale		Notes		Total
Fair value at January 1, 2024	$	324,311	$	—	$	(321,966)	$	2,345
Originations	186,073		2,054,646		(184,200)		2,056,519
Borrower Loans contributed by Parent, at Fair Value	1,634		—		—		1,634
Principal repayments	(192,113)		—		195,169		3,056
Borrower Loans sold to third parties	(4,454)		(2,054,646)		—		(2,059,100)
Other changes	(421)		—		424		3
Change in fair value	(29,452)		—		27,543		(1,909)
Fair value at December 31, 2024	$	285,578	$	—	$	(283,030)	$	2,548
Originations	164,625		2,487,702		(163,892)		2,488,435
Principal repayments	(182,231)		—		183,753		1,522
Borrower Loans sold to third parties	(2,632)		(2,487,702)		—		(2,490,334)
Other changes	(467)		—		474		7
Change in fair value	(19,536)		—		18,795		(741)
Fair value at December 31, 2025	$	245,337	$	—	$	(243,900)	$	1,437

PFL did not designate any new personal loans as Loans Held for Sale for the periods presented, other than loans that are purchased and immediately sold through the Whole Loan Channel. This movement of loans through the Whole Loan Channel is reflected in the accompanying consolidated statements of cash flows and the Level 3 tables above. Details on the fair value of the Servicing Asset associated with loans sold through the Whole Loan Channel are discussed below.

The following table presents additional information about Level 3 Servicing Assets recorded at fair value (in thousands):


	Servicing Assets
Fair value at January 1, 2024	$	13,818
Additions	10,997
Change in fair value	(10,482)
Fair value at December 31, 2024	$	14,333
Additions	13,609
Change in fair value	(10,341)
Fair value at December 31, 2025	$	17,601

Loan Trailing Fee Liability

The fair value of the Loan Trailing Fee Liability (included in Other Liabilities on the accompanying Consolidated Balance Sheets) represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below.

The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands):

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	Loan Trailing Fee Liability
Fair Value at January 1, 2024	$	2,942
Issuances	1,959
Cash payment of Loan Trailing Fee	(2,597)
Change in fair value	700
Fair Value at December 31, 2024	$	3,004
Issuances	2,477
Cash payment of Loan Trailing Fee	(2,657)
Change in fair value	504
Fair Value at December 31, 2025	$	3,328

Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity

Key economic assumptions are used to compute the fair value of Borrower Loans. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2025 and 2024 for Borrower Loans are presented in the following table (in thousands, except percentages).


Borrower Loans:	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	245,337		$	285,578
Weighted-average discount rate	8.67		%	7.70		%
Weighted-average default rate	11.48		%	13.35		%

Fair value resulting from:
100 basis point increase in discount rate	$	243,180		$	282,980
200 basis point increase in discount rate	241,073			280,443
Fair value resulting from:
100 basis point decrease in discount rate	$	247,547		$	288,240
200 basis point decrease in discount rate	249,810			290,969

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	243,371		$	282,239
Applying a 1.2 multiplier to default rate	241,402			278,916
Fair value resulting from:
Applying a 0.9 multiplier to default rate	$	247,304		$	288,934
Applying a 0.8 multiplier to default rate	249,269			292,306

Key economic assumptions are used to compute the fair value of Notes. The sensitivity of the fair value to immediate changes in assumptions at December 31, 2025 and 2024 for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages).

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Notes:	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	243,900		$	283,030
Weighted-average discount rate	8.67		%	7.70		%
Weighted-average default rate	11.48		%	13.25		%

Fair value resulting from:
100 basis point increase in discount rate	$	241,752		$	280,451
200 basis point increase in discount rate	239,655			277,934
Fair value resulting from:
100 basis point decrease in discount rate	$	246,096		$	285,669
200 basis point decrease in discount rate	248,352			288,381

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	241,944		$	279,718
Applying a 1.2 multiplier to default rate	239,987			276,422
Fair value resulting from:
Applying a 0.9 multiplier to default rate	$	245,853		$	286,358
Applying a 0.8 multiplier to default rate	247,806			289,702

Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2025 and 2024 for Servicing Assets are presented in the following table (in thousands, except percentages).


Servicing Assets:	December 31, 2025			December 31, 2024
Fair value, using the following assumptions:	$	17,601		$	14,333
Weighted-average market servicing rate	0.598		%	0.635		%
Weighted-average prepayment rate	21.72		%	18.83		%
Weighted-average default rate	11.86		%	13.89		%

Fair value resulting from:
Market servicing rate increase of 0.025%	$	16,586		$	13,419
Market servicing rate decrease of 0.025%	18,615			15,247

Fair value resulting from:
Applying a 1.1 multiplier to prepayment rate	$	17,143		$	14,016
Applying a 0.9 multiplier to prepayment rate	18,068			14,655

Fair value resulting from:
Applying a 1.1 multiplier to default rate	$	17,310		$	14,052
Applying a 0.9 multiplier to default rate	17,892			14,616

NOTE 8. COMMITMENTS AND CONTINGENCIES

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In the normal course of its operations, PFL becomes involved in various legal actions. PFL maintains provisions it considers to be adequate for such actions. The Company does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on financial condition, results of operations or cash flows.

Operating Commitments

PMI, along with PFL, and WebBank has entered into: (i) an Asset Sale Agreement, dated July 1, 2016, between PFL and WebBank, as most recently amended by a Seventh Amendment dated February 28, 2024 (as amended, the “Sale Agreement”); (ii) the Marketing Agreement, dated July 1, 2016, between PMI and WebBank, as most recently amended by a Seventh Amendment dated February 28, 2024 (as amended, the “Marketing Agreement”); and (iii) the Stand By Purchase Agreement, dated July 1, 2016, between PMI and WebBank, as most recently amended by a Fourth Amendment dated February 28, 2024 (as amended, the “Purchase Agreement” and, collectively with the Sale Agreement and the Marketing Agreement, the “Origination and Sale Agreements”). Under the Origination and Sale Agreements, all Borrower Loans originated through the marketplace are made by WebBank under its bank charter.

Additionally, under the Origination and Sale Agreements, Prosper is required to maintain a minimum net liquidity of $15.0 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash, Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. As of December 31, 2025 the Company was in compliance with the covenant.

Transaction Fee Refund Liability

Prosper assumes WebBank’s liability under Utah law to refund the pro-rated amount of any transaction fees collected in excess of 5%, in the event the underlying borrower prepays the loan in full before maturity. For the year ended December 31, 2025 and 2024, PFL issued $16.3 million and $4.6 million, respectively, in refunds under this obligation. As of December 31, 2025 and 2024, PFL has accrued $17.2 million and $9.2 million, respectively, related to anticipated future refunds under this obligation. As a result of executing Amendment 7 to the Administration Agreement with PMI on November 14, 2025, all transaction fee refunds issued by PFL are now reimbursed by PMI and recorded in the Administration Fee Revenue – Related Party account on the consolidated statements of operations.

Loan Purchase Commitments

Under the terms of PFL's agreement with WebBank, PFL is committed to purchase $32.1 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2025. PFL will purchase these Borrower Loans within the first two business days of the year ending December 31, 2026.

Repurchase Obligation

Under the terms of the loan purchase agreements between PFL and investors that participate in the Whole Loan Channel, PFL may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow personal loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. The fair value of the indemnification and repurchase obligation is estimated based on historical experience. PFL recognizes a liability for the repurchase and indemnification obligation when the Borrower Loans are issued. Indemnified or repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase or at the time an indemnification payment is made. The maximum potential amount of future payments associated under this repurchase obligation is the outstanding balances of the Borrower Loans issued through the Whole Loan Channel, which at December 31, 2025 was $3.8 billion. PFL has accrued $0.3 million and $0.3 million as of December 31, 2025 and 2024 respectively in regard to this obligation.

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purchase of a Note that does not match the investor’s investment criteria, or situations in which a personal loan listing includes a Prosper Rating that is different from the Prosper Rating that should have appeared in the listing for the corresponding Borrower Loan because either PFL inaccurately input data into, or inaccurately applied, the formula for determining the Prosper Rating and, as a result, the interest of the investor is materially and adversely affected. During the year ended December 31, 2025, the Company’s repurchases under this obligation were not material.

Regulatory Contingencies

PFL accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, PFL reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If PFL determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, PFL does not accrue for a potential litigation loss. If an unfavorable outcome is probable and PFL can estimate a range of outcomes, PFL records the amount management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then PFL records the low end of the range of those potential losses.

Cybersecurity Matter

On September 1, 2025, Prosper identified that an unauthorized third party gained access to Prosper’s systems that contain proprietary and confidential information. Prosper promptly initiated its cybersecurity response plans and began taking steps to investigate, contain and remediate the incident and enhance its security measures with the assistance of cybersecurity experts. Prosper also informed law enforcement.

There is evidence that the unauthorized third party was able to obtain confidential, proprietary and personal information, including Social Security numbers, including through unauthorized queries made on Prosper databases that store customer and applicant data. There is no evidence of unauthorized access to customer accounts and funds as a result of the incident, and Prosper’s customer-facing operations continued uninterrupted.

As of March 20, 2026, multiple purported class-action lawsuits related to the September Incident have been filed against Prosper. The federal lawsuits filed against Prosper have been consolidated into one proceeding, captioned In re: Prosper Funding, LLC Data Breach Litigation. Prosper is also subject to lawsuits filed in state courts and has received demands for mass and individual arbitrations. The Company may receive additional federal and state lawsuits and arbitration demands in the future.

Prosper has accrued for various legal and cybersecurity software costs incurred related to this incident that are not covered by insurance at the PMI corporate level. Due to the significant uncertainties involved, however, Prosper is not able to accurately predict the ultimate outcome of this incident, or estimate a loss or range of loss that Prosper may incur. Accordingly, Prosper has not recorded a provision for any estimated losses in respect to the incident as of December 31, 2025.

NOTE 9. RELATED PARTIES

Since inception, PFL has engaged in various transactions with its directors, executive officers, PMI, and immediate family members and other affiliates of its directors, executive officers, and PMI. PFL believes that all of the transactions described below were made on terms no less favorable to PFL than could have been obtained from unaffiliated third parties.

PFL’s executive officers and directors who are not executive officers participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be related parties of PFL for the years ended December 31, 2025 and 2024 are summarized below (in thousands):


	Aggregate Amount of Notes Purchased for the Year Ended December 31,				Interest Earned on Notes for the Year Ended December 31,
	2025		2024		2025		2024
Executive officers and management	$	6	$	30	$	7	$	8
Directors (excluding executive officers and management)	—		—		—		—
Total	$	6	$	30	$	7	$	8

The balance of Notes held by officers and directors who are not executive officers are as follows (in thousands):

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	Notes Balance as of
	December 31, 2025		December 31, 2024
Executive officers and management	$	27	$	48
Directors (excluding executive officers and management)	—		—
Total	$	27	$	48

NOTE 10. SEGMENTS

PFL’s Chief Executive Officer, who serves as the chief operating decision maker, reviews financial information on a consolidated basis at the PMI level for purposes of allocating resources and evaluating financial performance. As a result, PFL has no operating segments.

NOTE 11. SIGNIFICANT CONCENTRATIONS

PFL is dependent on third party funding sources such as banks, asset managers, and insurance companies to provide the funds to allow WebBank to originate Borrower Loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the year ended December 31, 2025, three individual third parties purchased 21.0%, 14.4%, and 11.6% of such loans. For the year ended December 31, 2024, three individual third parties purchased 23.7%, 15.8% and 13.2% of such loans. These purchases indicate that a significant portion of PFL’s business is dependent on funding through the Whole Loan Channel, through which 94% and 92% of Borrower Loans were originated in the years ended December 31, 2025 and 2024, respectively.

NOTE 12. SUBSEQUENT EVENTS

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EXHIBIT INDEX


Exhibit Number						Description

2.1						Asset Transfer Agreement, dated January 22, 2013, between Prosper Marketplace, Inc. and Prosper Funding LLC (incorporated by reference to Exhibit 2.1 of PMI and PFL’s Current Report on Form 8-K, filed on January 28, 2013)

2.2						Agreement and Plan of Merger dated as of January 23, 2015 by and among Prosper Marketplace, Inc., American HealthCare Lending, LLC (“AHL”), Prosper Healthcare Lending, LLC and Shaun Sorensen, solely in his capacity as agent for AHL’s members and option holders (incorporated by reference to Exhibit 2.1 of PMI’s Current Report on Form 8-K, filed on January 27, 2015)

2.3						Agreement and Plan of Merger, dated as of September 23, 2015, by and among Prosper Marketplace, Inc., BillGuard, Inc., Beach Merger Sub, Inc. and Shareholder Representative Services LLC, solely in its capacity as the Stockholders’ Representative (incorporated by reference to Exhibit 2.1 of PMI’s Current Report on Form 8-K, filed on October 15, 2015)

2.4						Asset Transfer Agreement, dated August 17, 2021, between Prosper Marketplace, Inc. and Prosper Funding LLC (1)

3.1						Fifth Amended and Restated Limited Liability Company Agreement of Prosper Funding LLC, dated October 21, 2013 (incorporated by reference to Exhibit 3.1 of Post-Effective Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-179941), filed on October 23, 2013 by PFL and PMI)

3.2						Amended and Restated Certificate of Incorporation of PMI, as further amended on October 15, 2018 (incorporated by reference to Exhibit 3.2 of PMI and PFL’s Quarterly Report on Form 10-Q, filed on November 14, 2018)

3.3						Certificate of Formation of Prosper Funding LLC (incorporated by reference to Exhibit 3.2 of the Registration Statement on Form S-1/A, filed April 23, 2012 by PFL)

3.4						Bylaws of Prosper Marketplace, Inc., dated March 22, 2005, as amended by Amendment No. 1 dated February 15, 2016 and Amendment No. 2 dated May 19, 2020 (incorporated by reference to Exhibit 3.4 of PMI’s and PFL’s Quarterly Report on Form 10-Q (File No. 333-225797), filed August 14, 2020)

4.1						Form of PFL Borrower Payment Dependent Note (included as Exhibit A in Exhibit 4.5)

4.2						Form of PMI Borrower Payment Dependent Note (included as Exhibit A in Exhibit 4.4)

4.3						Supplemental Indenture, dated January 22, 2013, between Prosper Marketplace, Inc., Prosper Funding LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 of PMI and PFL’s Current Report on Form 8-K, filed on January 28, 2013)

4.4						Indenture, dated June 15, 2009, between Prosper Marketplace, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.2 of Pre-Effective Amendment No. 5 to PMI’s Registration Statement on Form S-1 (File No. 333-147019), filed on June 26, 2009)

4.5						Amended and Restated Indenture, dated January 22, 2013, between Prosper Funding LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.2 of PMI and PFL’s Current Report on Form 8-K, filed on January 28, 2013)

4.6						First Supplemental Indenture, dated May 10, 2013, between Prosper Funding LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 of PMI and PFL's Quarterly Report on Form 10-Q, filed on August 14, 2013)

10.1						Form of PFL Borrower Registration Agreement (2)

10.2						Form of PFL Investor Registration Agreement (incorporated by reference to Exhibit 10.2 of PMI and PFL’s Annual Report on Form 10-K filed on March 22, 2024)

10.3						Asset Sale Agreement, dated July 1, 2016, between PFL and WebBank (incorporated by reference to Exhibit 10.1 of PMI and PFL’s Current Report on Form 8-K/A, filed on March 7, 2017) (1)

10.4						First Amendment to Asset Sale Agreement, dated October 7, 2016, between PFL and WebBank (incorporated by reference to Exhibit 10.1 of PMI and PFL's Current Report on Form 8-K/A, filed on April 22, 2019) (1)

10.5						Second Amendment to Asset Sale Agreement, dated March 27, 2017, between PFL and WebBank (incorporated by reference to Exhibit 10.2 of PMI and PFL's Current Report on Form 8-K/A, filed on April 22, 2019) (1)


Exhibit Number						Description

10.6						Third Amendment to Asset Sale Agreement, dated February 1, 2019, between PFL and WebBank (incorporated by reference to Exhibit 10.1 of PMI and PFL's Current Report on Form 8-K/A, filed on April 24, 2019)

10.7						Fourth Amendment to Asset Sale Agreement, dated November 9, 2020, between PFL and WebBank (incorporated by reference to Exhibit 10.7 of PMI and PFL's Quarterly Report on Form 10-Q, filed on November 12, 2020)

10.8						Fifth Amendment to Asset Sale Agreement, dated June 25, 2021, between PFL and WebBank (incorporated by reference to Exhibit 10.1 of PMI and PFL's Current Report on Form 8-K/A, filed on July 1, 2021) (1)

10.9						Sixth Amendment to Asset Sale Agreement, dated October 5, 2022, between PFL and WebBank (incorporated by reference to Exhibit 10.1 of PMI and PFL's Current Report on Form 8-K, filed on October 11, 2022) (1)

10.10						Seventh Amendment to Asset Sale Agreement, dated February 28, 2024, between PFL and WebBank (incorporated by reference to Exhibit 10.10 of PMI and PFL’s Annual Report on Form 10-K filed on March 22, 2024) (1)

10.11						Marketing Agreement, dated July 1, 2016, between PMI and WebBank (incorporated by reference to Exhibit 10.2 of PMI and PFL’s Current Report on Form 8-K/A, filed on March 7, 2017) (1)

10.12						First Amendment to Marketing Agreement, dated October 7, 2016, between PMI and WebBank (incorporated by reference to Exhibit 10.3 of PMI and PFL's Current Report on Form 8-K/A, filed on April 22, 2019) (1)

10.13						Second Amendment to Marketing Agreement, dated November 17, 2017, between PMI and WebBank (incorporated by reference to Exhibit 10.4 of PMI and PFL's Current Report on Form 8-K/A, filed on April 22, 2019) (1)

10.14						Third Amendment to Marketing Agreement, dated February 1, 2019, between PMI and WebBank (incorporated by reference to Exhibit 10.2 of PMI and PFL's Current Report on Form 8-K/A, filed on April 24, 2019) (1)

10.15						Fourth Amendment to Marketing Agreement, dated September 21, 2020, between PMI and WebBank (incorporated by reference to Exhibit 10.5 of PMI and PFL's Quarterly Report on Form 10-Q, filed on November 12, 2020) (1)

10.16						Fifth Amendment to Marketing Agreement, dated November 9, 2020, between PMI and WebBank (incorporated by reference to Exhibit 10.6 of PMI and PFL's Quarterly Report on Form 10-Q, filed on November 12, 2020) (1)

10.17						Sixth Amendment to Marketing Agreement, dated June 25, 2021, between PMI and WebBank (incorporated by reference to Exhibit 10.2 of PMI and PFL's Current Report on Form 8-K/A, filed on July 1, 2021) (1)

10.18						Seventh Amendment to Marketing Agreement, dated February 28, 2024, between PMI and WebBank (incorporated by reference to Exhibit 10.18 of PMI and PFL’s Annual Report on Form 10-K filed on March 22, 2024) (1)

10.19						Administration Agreement, effective as of February 1, 2013, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.1 of PMI and PFL’s Current Report on Form 8-K, filed on January 28, 2013)

10.20						Amendment No. 1 to Administration Agreement, dated as of January 1, 2014, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.1 of PMI and PFL’s Current Report on Form 10-Q filed on May 14, 2014)

10.21						Amendment No. 2 to Administration Agreement, dated as of January 1, 2015, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.7 of PMI and PFL’s Annual Report on Form 10-K filed on April 6, 2015)

10.22						Amendment No. 3 to Administration Agreement, dated as of November 8, 2016 and made effective as of July 1, 2016, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.8 of PMI and PFL's Annual Report on Form 10-K, filed on March 20, 2017)


Exhibit Number						Description

10.23						Amendment No. 4 to Administration Agreement, dated as of January 25, 2018, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.32 of PMI and PFL's Annual Report on Form 10-K, filed on March 26, 2018)

10.24						Amendment No. 5 to Administration Agreement, dated as of November 12, 2018 and made effective as of October 1, 2018, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.16 of PMI and PFL's Annual Report on Form 10-K, filed on March 29, 2019)

10.25						Amendment No. 6 to Administration Agreement, dated as of May 12, 2021, between Prosper Funding LLC and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.3 of PMI and PFL's Quarterly Report on Form 10-Q, filed on May 13, 2021)

10.26						Amendment No. 7 to Administration Agreement, dated as of November 14, 2025, between Prosper Funding LLC and Prosper Marketplace, Inc. (2)

10.2 7						Services and Indemnity Agreement, dated March 1, 2012, among Global Securitization Services, LLC, Kevin Burns, Bernard Angelo, Prosper Marketplace, Inc. and Prosper Funding LLC (incorporated by reference to Exhibit 10.8 of Pre-Effective Amendment No. 3 to PFL and PMI’s Registration Statement on Form S-1 (File Nos. 333-179941 and 333-179941-01), filed on November 21, 2012) (3)

10.2 8						Stand By Purchase Agreement, dated July 1, 2016, between WebBank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.3 of PMI and PFL’s Current Report on Form 8-K, filed on July 8, 2016) (1)

10.2 9						First Amendment to Stand By Purchase Agreement, dated February 1, 2019, between WebBank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.3 of PMI and PFL's Current Report on Form 8-K/A, filed on April 24, 2019) (1)

10.30						Second Amendment to Stand By Purchase Agreement, dated November 9, 2020, between WebBank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.8 of PMI and PFL's Quarterly Report on Form 10-Q, filed on November 12, 2020) (1)

10.3 1						Third Amendment to Stand By Purchase Agreement, dated June 25, 2021, between WebBank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.3 of PMI and PFL's Current Report on Form 8-K/A, filed on July 1, 2021) (1)

10.3 2						Fourth Amendment to Stand By Purchase Agreement, dated February 28, 2024, between WebBank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.31 of PMI and PFL’s Annual Report on Form 10-K filed on March 22, 2024) (1)

10.3 3						Director Indemnification Agreement, dated January 15, 2013, between Prosper Marketplace, Inc. and Patrick (Pat) Grady (incorporated by reference to Exhibit 10.20 of PMI and PFL’s Annual Report on Form 10-K, filed on March 31, 2014) (3)

10.3 4						Form of Indemnification Agreement for PMI’s directors (other than Patrick Grady), officers and key employees (incorporated by reference to Exhibit 10.21 of PMI and PFL's Annual Report on Form 10-K, filed on March 18, 2016) (3)

10.3 5						Back-Up Servicing Agreement (Note Channel), dated as of February 24, 2017, among Prosper Funding LLC, Prosper Marketplace, Inc., and Vervent, Inc. (f/k/a First Associates Loan Servicing, LLC) (incorporated by reference to Exhibit 10.10 of PMI and PFL’s Quarterly Report on Form 10-Q, filed on May 15, 2017) (1)

10.3 6						Amended and Restated Services and Indemnity Agreement, dated May 30, 2013, between Prosper Funding LLC, Prosper Marketplace, Inc., Global Securitization Services, LLC, Bernard J. Angelo and David V. DeAngelis (incorporated by reference to Exhibit 10.1 of PMI and PFL’s Current Report on Form 8-K, filed on June 5, 2013) (3)

10.37						Prosper Marketplace, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 of PMI’s Registration Statement on Form S-8 filed on May 12, 2015) (3)

10.38						Amendment No. 1 to Prosper Marketplace, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 of PMI’s Registration Statement on Form S-8 filed on April 13, 2016) (3)

10.39						Amendment No. 2 to Prosper Marketplace, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 of PMI’s Registration Statement on Form S-8 filed on August 15, 2016) (3)

10.40						Amendment No. 3 to Prosper Marketplace, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 of PMI’s Registration Statement on Form S-8 filed on March 26, 2018) (3)


Exhibit Number						Description


10.41						Form of Stock Option Agreement under the Prosper Marketplace, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.29 of PMI and PFL’s Annual Report on Form 10-K, filed on March 18, 2016) (3)

10.42						Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under the Prosper Marketplace, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.30 of PMI and PFL’s Annual Report on Form 10-K, filed on March 18, 2016) (3)

10.4 3						Prosper Marketplace, Inc. 2025 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 of PMI’s Registration Statement on Form S-8 filed on November 13, 2025) (3)

10.44						Form of Stock Option Agreement under the Prosper Marketplace, Inc. 2025 Equity Incentive Plan (2)(3)

10.4 5						Prosper Marketplace, Inc. Amended and Restated Eligible Employee Retention Plan, amended and restated as of August 13, 2025 (incorporated by reference to Exhibit 10.1 of PMI and PFL's Quarterly Report on Form 10-Q, filed on August 14, 2025) (3)

10.4 6						Prosper Marketplace, Inc. Long-Term Cash Incentive Plan, effective November 5, 2020 (incorporated by reference to Exhibit 10.3 of PMI and PFL's Quarterly Report on Form 10-Q, filed on November 12, 2020) (3)

10.4 7						First Amendment to Prosper Marketplace, Inc. Long-Term Cash Incentive Plan, effective May 11, 2021 (incorporated by reference to Exhibit 10.2 of PMI and PFL's Quarterly Report on Form 10-Q, filed on May 13, 2021) (3)

10.4 8						Second Amendment to Prosper Marketplace, Inc. Long-Term Cash Incentive Plan, effective March 25, 2022 (incorporated by reference to Exhibit 10.46 of PMI and PFL’s Annual Report on Form 10-K filed on March 22, 2024) (3)

10.49						Third Amendment to Prosper Marketplace, Inc. Long-Term Cash Incentive Plan, effective March 21, 2024 (incorporated by reference to Exhibit 10.47 of PMI and PFL’s Annual Report on Form 10-K filed on March 22, 2024) (3)

10.5 0						Form of Prosper Marketplace, Inc. Severance and Change in Control Agreement (incorporated by reference to Exhibit 10.4 of PMI and PFL's Quarterly Report on Form 10-Q, filed on November 12, 2020) (3)

10.5 1						Form of Prosper Marketplace, Inc. Change in Control Severance Agreement (incorporated by reference to Exhibit 10.1 of PMI and PFL's Quarterly Report on Form 10-Q, filed on May 14, 2025) (3)

10.5 2						Warrant Agreement, dated as of February 27, 2017, among PMI, PF WarrantCo Holdings, LP, and, for certain limited purposes, New Residential Investment Corp (incorporated by reference to Exhibit 10.9 of PMI and PFL’s Quarterly Report on Form 10-Q, filed on May 15, 2017) (1)

10.5 3						First Amended and Restated Program Agreement, dated August 16, 2023, between Prosper Marketplace, Inc. and Coastal Community Bank (incorporated by reference to Exhibit 10.1 of PMI’s Current Report on Form 8-K, filed on August 22, 2023) (1)

10.5 4						First Amendment to the First Amended and Restated Program Agreement, effective as of March 25, 2024, by and between Coastal Community Bank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.1 of PMI’s Current Report on Form 8-K, filed on March 29, 2024) (1)

10.5 5						Second Amendment to the First Amended and Restated Program Agreement, effective as of August 28, 2024, by and between Coastal Community Bank and Prosper Marketplace, Inc. (incorporated by reference to Exhibit 10.1 of PMI’s Quarterly Report on Form 10-Q, filed on November 14, 2024) (1)

10.56						Third Amendment to the First Amended and Restated Program Agreement, effective as of December 23, 2025, by and between Coastal Community Bank and Prosper Marketplace, Inc. (1)(2)

10.5 7						Separation and General Release Agreement, dated January 15, 2025, by and between Melinda Marchesi and Prosper Marketplace, Inc. (1)(3) (incorporated by reference to Exhibit 10.52 of PMI’s Annual Report on Form 10-K, filed on March 26, 2025)

10.58						Credit Agreement, dated November 14, 2025, by and among Prosper Marketplace, Inc., as Borrower, and Platform Loan Holdings LLC, as lender (1)(2)

21.1						Subsidiaries of Prosper Marketplace, Inc. (2)


Exhibit Number						Description

21.2						Subsidiaries of Prosper Funding LLC (incorporated by reference to Exhibit 21.2 of PMI’s Annual Report on Form 10-K, filed on March 22, 2024)

23.1						Consent of Independent Registered Accounting Firm (2)

31.1						Certification of Principal Executive Officer of PMI pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

31.2						Certification of Principal Financial Officer of PMI pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

31.3						Certification of Principal Executive Officer of PFL pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

31.4						Certification of Principal Financial Officer of PFL pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

32.1						Certification of Principal Executive Officer and Principal Financial Officer of PMI pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to PMI's Annual Report on Form 10-K for the year ended December 31, 2025 (2)

32.2						Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to PFL’s Annual Report on Form 10-K for the year ended December 31, 2025 (2)

(1) Certain portions of this exhibit have been, as applicable, (i) omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406 of the Securities Act or (ii) marked by brackets and omitted because the information is (a) not material and (b) would be competitively harmful if disclosed.

(2) Filed herewith.

(3) Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, this 26th day of March 2026.


			PROSPER MARKETPLACE, INC.

			By:			/s/ David Kimball
						David Kimball
						Chief Executive Officer (Principal Executive Officer); Chairman of the Board

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Usama Ashraf and Edward R. Buell III, and each of them, their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for them and in their name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name

Title

Date

/s/ David Kimball

Chief Executive Officer (Principal Executive Officer);
Chairman of the Board

March 26, 2026

David Kimball

/s/ Usama Ashraf

President and Chief Financial Officer (Principal Financial Officer)

March 26, 2026

Usama Ashraf

/s/ Claire A. Huang

Director

March 26, 2026

Claire A. Huang

/s/ Thomas R. Kearney

Director

March 26, 2026

Thomas R. Kearney

/s/ Peter J. deSilva

Director

March 26, 2026

Peter J. deSilva


			PROSPER FUNDING LLC

			By:			/s/ David Kimball
						David Kimball
						Chief Executive Officer (Principal Executive Officer); Director

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Usama Ashraf and Edward R. Buell III, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Name

Title

/s/ David Kimball

Chief Executive Officer (Principal Executive Officer); Director

March 26, 2026

David Kimball

/s/ Usama Ashraf

President, Chief Financial Officer and Treasurer (Principal Financial Officer); Director

March 26, 2026

Usama Ashraf

/s/ Bernard J. Angelo

Director