Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

On July 20, 2021, OppFi established the OppFi Inc. 2021 Equity Incentive Plan (“Plan”), which provides for the grant of awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based awards to employees, non-employee directors, officers, and consultants. As of September 30, 2022, the maximum aggregate number of shares of Class A Common Stock that may be issued under the Plan (including from outstanding awards) was 11,772,630 shares. As of September 30, 2022, OppFi had only granted awards in the form of options, restricted stock units, and performance stock units.

Stock options:

A summary of the Company’s stock option activity for the nine months ended September 30, 2022 is as follows:


	Number of Common Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	3,375,000	$	15.23	—	$	—
Granted	553,794	3.94		—	—
Exercised	—	—		—	—
Forfeited	(1,949,822)	14.29		—	—
Outstanding as of September 30, 2022	1,978,972	$	12.99	8.8	$	—
Exercisable as of September 30, 2022	1,075,000	$	15.23	8.8	$	—

For the three and nine months ended September 30, 2022, the Company recognized negative stock-based compensation expense of $0.1 million and $0.1 million, respectively, due to forfeitures. As of September 30, 2022 and December 31, 2021, the Company had unrecognized stock-based compensation related to unvested stock options of $1.9 million and $6.1 million, respectively, that is expected to be recognized over an estimated weighted average period of approximately 3.0 years and 3.5 years, respectively. The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2022 was $1.96.

The fair value of each option grant during the nine months ended September 30, 2022 was estimated on the grant date using the Black-Scholes option pricing model based on the following assumptions:


Volatility	60.00	%	-	65.00	%
Risk-free rate	1.71%		-	3.02%
Expected term (years)				6.1 years
Dividend yield				0.00	%

Restricted stock units:

A summary of the Company’s restricted stock unit (“RSU”) activity for the nine months ended September 30, 2022 is as follows:


	Shares	Weighted Average Grant Date Fair Value
Unvested - beginning of period	1,818,530	$	7.58
Granted	1,913,043	3.40
Vested	(410,962)	6.83
Forfeited	(1,197,275)	5.24
Unvested - end of period	2,123,336	$	4.55

For the three and nine months ended September 30, 2022, the Company recognized stock-based compensation of $0.3 million and $1.4 million related to RSUs, respectively. As of September 30, 2022 and December 31, 2021, total unrecognized compensation expense related to RSUs was $9.0 million and $12.2 million, respectively, which will be recognized over a weighted average vesting period of approximately 3.3 years and 3.6 years, respectively.

Performance stock units:

A summary of the Company’s performance stock unit (“PSU”) activity for the nine months ended September 30, 2022 is as follows:


	Shares	Weighted Average Grant Date Fair Value
Unvested - beginning of period	78,907	$	7.69
Granted	425,264	3.81
Vested	—	—
Forfeited	(55,451)	7.69
Unvested - end of period	448,720	$	4.01

For the three and nine months ended September 30, 2022, the Company recognized stock-based compensation of $0.3 million and $0.4 million related to PSUs, respectively. As of September 30, 2022 and December 31, 2021, total unrecognized compensation expense related to PSUs was $1.4 million and $0.5 million, respectively, which will be recognized over a weighted average vesting period of approximately 3.6 years and 3.8 years, respectively.

Employee Stock Purchase Plan: On July 20, 2021, the Company established the OppFi Inc. 2021 Employee Stock Purchase Plan (“ESPP”). The ESPP permits eligible employees to contribute up to 10% of their compensation, not to exceed the IRS allowable limit, to purchase shares of Class A Common Stock during six month offerings. Eligible employees will purchase the shares at a price per share equal to the lesser of 85% of the fair market value of the Class A Common Stock on the first trading day of the offering period or the last trading day of the offering period. The offering periods begin each January 1 and July 1, with the initial offering period beginning on January 1, 2022. As of September 30, 2022, the maximum aggregate number of shares of Class A Common Stock that may be issued under the ESPP was 1,200,000 and consists of authorized but unissued or reacquired shares of Class A Common Stock. The maximum aggregate number of shares of Class A Common Stock that may be issued under the ESPP shall be cumulatively increased on each January 1, through and including January 1, 2030, by a number of shares equal to the smallest of (a) one percent of the number of shares of Class A Common Stock issued and outstanding on the immediately preceding December 31, (b) 2,400,000 shares, or (c) an amount determined by the Board. As of September 30, 2022, there were 44,627 shares of Class A Common Stock purchased under the ESPP. As of December 31, 2021, no shares of Class A Common Stock had been purchased under the ESPP.

ESPP employee payroll contributions accrued as of September 30, 2022 were $0.1 million and are included within accrued expenses on the consolidated balance sheets. Payroll contributions accrued as of September 30, 2022 will be used to purchase shares at the end of the ESPP offering period ending on December 31, 2022. Payroll contributions ultimately used to purchase

shares are reclassified to stockholders’ equity on the purchase date. During the three and nine months ended September 30, 2022, the Company recognized ESPP compensation expense of $30 thousand and $63 thousand, respectively.

Profit unit interests: Prior to the Business Combination, OppFi-LLC issued profit unit interests, which were recapitalized as OppFi Units in connection with the adoption by the Members in accordance with the terms of the OppFi A&R LLCA immediately prior to the Closing.

Total profit interest compensation expense for the three and nine months ended September 30, 2021 was $0.2 million and $0.2 million, respectively.

The compensation expense accounted for all vested units based on the following assumptions:


Expected term	3 years
Volatility	68.0	%
Discount for lack of marketability	45.0	%
Risk free rate	0.2	%

A summary of the Company’s profit unit interests activity for the nine months ended September 30, 2021 is as follows:


		Avg Fair Value
	Units	at Grant Date
Outstanding at December 31, 2020	12,202,135	$	0.08
Granted	—	—
Forfeited	(54,800)	0.08
Outstanding at March 31, 2021	12,147,335	0.08
Granted	—	—
Forfeited	—	—
Outstanding at June 30, 2021	12,147,335	0.08
Granted	—	—
Forfeited	(536,278)	0.10
Exchange in reverse recapitalization	(11,611,057)	0.08
Outstanding at September 30, 2021	—	$	—

A summary of the Company’s non-vested units activity for the nine months ended September 30, 2021 is as follows:


		Avg Fair Value
	Units	at Grant Date
Non-vested units at December 31, 2020	4,738,333	$	0.12
Granted	—	—
Vested	(325,835)	0.15
Forfeited	(54,800)	0.08
Non-vested units at March 31, 2021	4,357,698	0.12
Granted	—	—
Vested	(2,522,476)	0.07
Forfeited	—	—
Non-vested units at June 30, 2021	1,835,222	0.20
Granted	—	—
Vested	(84,990)	0.20
Forfeited	(536,278)	0.10
Exchange in reverse recapitalization	(1,213,954)	0.22
Non-vested units at September 30, 2021	—	$	—

Subsequent to the Business Combination, there was no unrecognized compensation expense related to profit unit interests.