S-1/A: Figure Tech Solutions Launches Blockchain Common Stock Offering

Figure Technology Solutions, Inc. introduces Series A Blockchain Common Stock, convertible to Class A Common Stock, to trade on its Alternative Trading System (ATS) with strict KYC requirements.

Summary

• Figure Technology Solutions, Inc. (FTS) has authorized and designated Series A Blockchain Common Stock, which will be convertible into Class A Common Stock on a one-for-one basis.
• The blockchain stock will be eligible for trading on FTS's Alternative Trading System (ATS) upon completion of this offering, but will not be listed on NASDAQ or any other national securities exchange.
• Trading of blockchain stock on the ATS will require payment in YLDS, FTS's SEC-registered interest-bearing transferable stablecoin.
• Transfers of blockchain stock are restricted to 'Permitted Holders' who have completed a Know Your Customer (KYC) and anti-money laundering (AML) onboarding process.
• FTS reported net income of $119 million and Adjusted EBITDA of $170 million for the nine months ended September 30, 2025.
• For the year ended December 31, 2024, FTS reported net income of $20 million and Adjusted EBITDA of $101 million.
• The company's total stockholders' equity was $1.2 billion as of September 30, 2025, and $363 million as of December 31, 2024.
• FTS's proprietary Loan Origination System (LOS) has reduced the median time to fund a home equity loan to 10 days from an industry median of 42 days, with an average production cost of $730 per loan in 2024.
• Figure Connect, an electronic marketplace launched in June 2024, facilitated approximately $2.4 billion in HELOC volume by third parties from launch to September 2025.
• The company's DART platform, a lien and eNote registry built on Provenance Blockchain, was utilized by 91% of loans originated through its LOS for the quarter ended September 30, 2025.
• FTS operates Figure Exchange, a digital asset marketplace, which has facilitated over $1 billion in trading volume since its August 2024 launch, with $368 million in the nine months ended September 30, 2025.
• YLDS, launched in February 2025, had approximately $21.5 million outstanding as of September 30, 2025, and pays a constant interest rate of SOFR minus 0.35% as of October 1, 2025.
• FTS launched On-Chain Public Equity Network (OPEN) in January 2026, aiming to modernize public equity infrastructure using blockchain technology.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong financial growth, significant operational efficiencies, and a leading position in emerging blockchain-based financial markets. However, the inherent risks of a nascent industry, regulatory uncertainty, and reliance on a few key partners temper the overall sentiment.

Positives

• Strong financial performance with net income of $119 million and Adjusted EBITDA of $170 million for the nine months ended September 30, 2025, demonstrating significant growth over the prior year.
• Rapid growth in Ecosystem Volume, with a compound annual growth rate of 86% from 2020 to 2024, and Consumer Loan Marketplace Volume reaching $5.67 billion for the nine months ended September 30, 2025.
• Significant efficiency gains in loan origination, reducing HELOC funding time to a median of 10 days (from 42 days industry median) and average production cost to $730 per loan (from $11,230 industry average).
• High adoption of blockchain technology, with over $60 billion in real-world and digital asset transactions recorded on Provenance Blockchain since late 2018 to October 14, 2025.
• Leading market share in the non-bank HELOC lending market in 2024, as reported by Home Equity Lending News.
• Successful launch and growth of Figure Connect, facilitating $2.4 billion in HELOC volume by third parties from June 2024 to September 2025.
• Introduction of YLDS, an SEC-registered, interest-bearing stablecoin, offering a yield to token holders (SOFR minus 0.35% as of Oct 1, 2025), differentiating it from most non-yielding stablecoins.
• Established a robust regulatory and licensing apparatus, including over 180 lending and servicing licenses, 48 money transmitter licenses, and an SEC-registered broker-dealer with ATS authority, creating a competitive moat.
• High partner retention rate, with 93% of origination partners from 2023 remaining on the platform in 2024, and 185% net volume retention in 2024.
• Low credit losses on originated loans, consistently remaining approximately 1% or less as of September 30, 2025, well below typical rating agency assumptions for similar securitizations.

Negatives

• FTS has a history of net losses, with an accumulated deficit of $202 million as of September 30, 2025, and may continue to generate losses in the future due to significant investments in growth.
• Substantially all revenue is currently derived from the HELOC product, making the company susceptible to fluctuations in that market and potentially limiting attractiveness to partners seeking broader credit products.
• Significant partner concentration, with the top 10 partners contributing 56% of origination volume for the nine months ended September 30, 2025, posing a risk if these partners reduce volume or terminate relationships.
• The digital asset industry is highly volatile, rapidly evolving, and subject to significant competition, which could adversely affect Figure Exchange's performance and demand for digital asset products.
• Revenue from Figure Exchange is concentrated in Bitcoin, Ether, and HASH, making it vulnerable to price declines or market deterioration in these specific digital assets.
• The Guarantor Vehicle, Fig SIX Mortgage LLC, had not yet purchased HELOCs via Figure Connect as of September 30, 2025, instead purchasing residual equity from FTS's securitization, indicating a delay in its intended function.
• The company has identified material weaknesses in its internal control over financial reporting as of December 31, 2024, specifically regarding an effective control environment and risk assessment/monitoring.
• The dual-class stock structure concentrates voting control with Michael Cagney, limiting other stockholders' ability to influence corporate matters and potentially depressing stock price.
• The blockchain stock is a new issue with no established public trading market, and its liquidity and price parity with Class A common stock are not assured.
• Holders of blockchain stock may experience settlement delays when converting to and selling Class A common stock due to multi-step processes and reliance on third-party intermediaries.
• The regulatory environment for blockchain technologies and digital assets is uncertain and evolving, posing risks of increased compliance costs, regulatory scrutiny, and potential operational changes.

Risks

• Failure to effectively manage rapid growth could adversely affect business, financial condition, and results of operations.
• Revenue growth rate and financial performance in prior years may not be indicative of future performance due to macroeconomic conditions, changing interest rates, and market acceptance of new products.
• Limited operating history makes it difficult to evaluate current business and prospects, increasing investment risk.
• If loans originated or purchased by FTS underperform, financial losses could be incurred, impacting funding sources' confidence.
• Increases in borrower default rates could make FTS and its loans less attractive to loan purchasers, warehouse lenders, and securitization investors.
• HELOCs and other loans are subject to federal, state, and local lending laws; non-compliance could lead to unenforceability, refunds, litigation, and penalties.
• Recharacterization of HELOCs as closed-end or variable-rate credit by a court or regulator would subject FTS to more prescriptive laws and materially adverse effects.
• The status of a digital asset, product, or service as a security is highly uncertain; mischaracterization or regulatory changes could lead to scrutiny, fines, and operational impact.
• Depositing and withdrawing digital assets from Figure Exchange involve risks of loss due to errors or malicious actors, potentially leading to customer disputes and liabilities.
• FTS's business is significantly impacted by interest rates; changes in prevailing rates or U.S. monetary policies could adversely affect financial performance.
• Technology disruptions, failures, cyberattacks, or other breaches could disrupt business, cause legal/reputational harm, and adversely affect financial results.
• Failure to adequately maintain, protect, and enforce intellectual property rights or facing infringement allegations could adversely affect business.
• Non-compliance with federal, state, and local laws related to lending, money transmission, consumer protection, and loan financings could result in fines, sanctions, or business model changes.
• Failure to obtain and maintain appropriate state licenses could prevent FTS from producing or servicing loans in some states.
• The use of blockchain technology in primary and secondary loan markets is early stage; lack of acceptance or slow adoption could adversely affect business.
• The future development and growth of the digital asset market is uncertain; if it does not grow as expected, FTS's business could be adversely affected.
• FTS may need additional capital, and there is no assurance that financing will be available on favorable terms or at all.
• Difficulties in reintegrating FMH operations or failing to realize expected benefits from the Recombination could adversely affect financial performance.
• The dual-class structure concentrates voting control with Michael Cagney, limiting other stockholders' influence and potentially depressing stock price.
• An active trading market for the blockchain stock does not exist and may not develop, and price parity with Class A common stock is not guaranteed.
• User actions to send and receive digital assets from self-custodial wallets involve risks of asset loss, for which FTS does not insure.
• The market price of Class A common stock may be volatile, directly affecting blockchain stock price, and investors could lose part or all of their investment.
• Blockchain stock is transferable only among KYC/AML-onboarded wallets, limiting liquidity and free transferability.
• Quarterly results are likely to fluctuate due to various factors, potentially adversely affecting stock prices.
• If securities or industry analysts publish inaccurate or unfavorable research, stock prices could decline.
• As an emerging growth company, reduced disclosure requirements may make FTS's stock less attractive to investors.
• FTS's controlled company status allows it to rely on NASDAQ exemptions, potentially reducing protections for other stockholders.
• Future sales of common stock or blockchain stock could depress prices due to dilution or market perception.
• The management and security of digital assets collateral presents risk of potential loss and legal/reputational consequences.
• Declines in digital asset collateral value can trigger margin calls, leading to financial losses and borrower dissatisfaction.
• Reliance on automation and third-party data for loan underwriting carries risks of inaccurate data or technology failure, leading to poor loan performance.
• Inaccurate credit and pricing decisions or ineffective loss rate forecasting could adversely affect business.
• Reliance on accuracy and completeness of borrower information; misrepresented information or fraud could harm financial condition and reputation.
• Loan underwriting may not accurately predict default likelihood for all loans, resulting in substantial losses.
• Unique features of LOS (online notaries, AVMs, lien data) may expose FTS to greater loss risk.
• FTS's gain-on-sale origination model is affected by capital market funding costs and availability.
• Reliance on warehouse credit facilities for funding loans; termination or unavailability could prevent finding replacement financing.
• Securitizations, whole loan sales, and warehouse facilities expose FTS to risks; inability to access these markets could reduce funding or increase costs.
• Counterparties may terminate servicing rights, adversely affecting business.
• Failure of vendors to perform or ineffective vendor oversight could disrupt operations.
• The use of blockchain technology, AI, and machine learning could lead to liability or harm reputation if not properly managed or if underlying technologies fail.
• Policymakers' less developed consideration of digital assets may harm FTS's ability to react to adverse legislation.
• Failure to comply with trade compliance and economic sanctions laws could adversely affect reputation and results.
• Failure to obtain and maintain appropriate state licenses could prevent loan production or servicing in some states.
• Litigation, regulatory actions, and compliance issues could result in significant fines, penalties, and business model changes.
• Compliance and risk management policies may be insufficient to identify all risks.
• Changes in tax laws and examinations by tax authorities could materially adversely affect financial results.
• Estimates or judgments relating to critical accounting policies based on incorrect assumptions could adversely affect financial results.
• Changes in GAAP may cause financial reporting fluctuations.
• Failure to comply with anti-bribery, anti-corruption, and similar laws could lead to penalties.
• Failure to safeguard and manage fiat currencies and digital assets could adversely impact business.
• Temporary or permanent blockchain fork could adversely affect business.
• Technical issues with digital asset integration or network upgrades could adversely affect business.
• High transaction fees demanded by miners/validators could adversely affect business.
• Uncertainty in U.S. and non-U.S. tax treatment of digital assets could adversely impact business.
• Concentration of trading volume from a small number of customers on Figure Exchange poses a risk.
• Concentration of Figure Exchange revenue in Bitcoin, Ether, and HASH poses a risk.
• Redemption risk, pricing risk, and regulatory risk associated with stablecoins may adversely affect business.
• Loss of critical banking or insurance relationships could adversely impact business.
• Reliance on external financial and tax advisors whose advice may be wrong or inaccurate.
• If FTS were deemed an investment company under the Investment Company Act, it could be impractical to continue business as contemplated.
• Business model and structure give rise to conflicts of interest, which if not addressed, could violate fiduciary duties.
• Marketing practices involving third parties may expose FTS to risks of alleged RESPA violations.
• Acceptance of various payment methods exposes FTS to evolving rules and compliance requirements.
• Requirements of being a public company may strain resources and divert management attention.

Future Outlook

FTS anticipates continued growth by onboarding new origination partners, increasing penetration with existing partners, and expanding on-chain loan production. The company plans to add incremental products and markets, including DSCR loans, personal loans, and student loans, and expand Figure Connect volume through new loan buyers and the Figure Certified program. FTS also aims to drive YLDS adoption by institutional and retail users and continuously innovate its technology stack to streamline underwriting, enhance loan registration, and optimize trading efficiency. The company expects its technology investments to drive future innovations and growth across the financial ecosystem.

Management Comments

• Management believes that the presentation of Adjusted Net Revenue and Adjusted EBITDA provides useful information to investors and others in understanding and evaluating operating results in the same manner as management and the board of directors.
• Management believes that incorporating current market conditions in the carrying value of marketable securities, retained security interests, publicly-traded face-amount certificate liabilities, and loans provides better information regarding the company's economic exposure to these assets.
• Management believes that the estimates and assumptions used in preparing the consolidated financial statements provide a reasonable basis for their fair presentation.

Industry Context

StockSavvy.ai notes that Figure Technology Solutions is positioning itself as a transformative force in capital markets by leveraging blockchain technology to address inefficiencies in consumer credit and digital asset markets. The company's focus on reducing loan origination times and costs significantly outperforms traditional industry averages, as seen with its HELOC product. Its expansion into digital asset exchanges (Figure Exchange) and interest-bearing stablecoins (YLDS) places it in direct competition with both traditional fintech firms and emerging crypto platforms. The regulatory clarity sought by FTS, particularly with SEC-registered YLDS, could provide a competitive advantage in a largely unregulated or ambiguously regulated digital asset space, potentially attracting institutional adoption. However, the nascent nature of blockchain adoption in real-world assets (less than 0.1% currently on blockchain) indicates a significant greenfield opportunity but also inherent market development risks. The company's strategy to displace legacy systems aligns with broader digital transformation trends in finance, but faces challenges from established players and the rapid evolution of blockchain technology itself.

Comparison to Industry Standards

• HELOC funding time: FTS's median of 10 days significantly outperforms the industry median of approximately 42 days, representing a 76% reduction in processing time.
• Average production cost per loan: FTS's average cost of $730 for 2024 is substantially lower than the mortgage industry average of $11,230 for Q4 2024, indicating over 93% cost savings.
• Credit losses: FTS's originated loans have loss rates of less than 1% of volume as of September 30, 2025, which is well below the 6% rating agencies typically assume for securitizations of similar loan products.
• Third-party review expenses: FTS's sample-based review approach (approx. 20% of loan pool) for securitizations reduces expenses by as much as 80% compared to typical 100% reviews in prime jumbo, non-prime, and re-performing loan transactions.
• Tokenized private credit market share: FTS holds approximately 75% of the tokenized private credit market based on outstanding loans originated as of September 30, 2025, according to RWA.xyz, demonstrating a dominant position in this emerging segment.
• Yield-bearing stablecoins: YLDS offers a yield (SOFR minus 0.35%) to token holders, differentiating it from 95% of the $310 billion stablecoins in circulation as of September 30, 2025, which do not yield interest, according to CoinGecko.

Management Changes

Corporate Governance

Legal Proceedings

• The company is, from time to time, involved in various disputes, litigation, arbitration, and regulatory inquiry and investigation matters that arise in the ordinary course of business.
• Management believes there are no known actions or threats that would result in a material adverse effect on the company's financial condition, results of operations, or cash flows.
• The company is not aware of any unasserted claims that it believes are material and probable of assertion where the risk of loss is expected to be reasonably possible.

Related Party Transactions

• Provenance Foundation Term Note: FT entered into an interest-bearing term note with the Provenance Foundation, initially for $5 million (July 2022), amended to $9 million (June 2023). The note was repaid in full by December 31, 2025.
• Gas Fee Service Provider: FCC entered into a services agreement with Provenance Foundation in February 2025, where Provenance pays HASH for blockchain transaction fees on behalf of FCC, and FCC reimburses Provenance in cash.
• Expense Reimbursement Agreement: FTS entered into a master services agreement with Provenance Foundation in July 2022, providing technology, legal, HR, and accounting services for a fee equal to cost plus 5%. Provenance paid FTS $0.1 million (9 months ended Sep 30, 2025), $18.0 thousand (2024), and $72.0 thousand (2023).
• Reflow Services LLC: FTS holds a 17% interest in Reflow. FTS received profit distributions of $0.9 million (9 months ended Sep 30, 2025), $0.9 million (2024), and $0.5 million (2023).
• Reflow Management Agreement: FTS performs support services for Reflow for a management fee. FTS received $0.6 million (2024) and $0.3 million (2023) from Reflow. No payments received in the nine months ended September 30, 2025.
• Domestic Solana Fund: FTS holds a 4.8% interest in this fund, managed by FIA. FTS made contributions and received distributions related to this fund.
• Transactions with Michael Cagney: FTS incurred $0.5 million (9 months ended Sep 30, 2025), $2 million (2024), and $1 million (2023) in travel costs for Mr. Cagney and other affiliates. Mr. Cagney also holds $0.5 million of YLDS issued by FCC on normal market terms.
• DSCR Loan issued to Todd Stevens: FTS issued a $120.7 thousand DSCR loan to Todd Stevens (Chief Capital Officer) on May 8, 2025, at 6.90% interest, maturing June 1, 2055. The loan was repaid in full on August 15, 2025, for $121.2 thousand.
• Stock Option Awards Granted to Mr. Cagney: On March 20, 2024, FTS granted option awards to Mr. Cagney covering 4,559,904 shares of Class B common stock under the 2018 Plan.

Stakeholder Impact

• Shareholders (Class A & Blockchain Stock): Potential for increased liquidity and new trading opportunities through the ATS, but also risks from market volatility, settlement delays, and the concentrated voting power of Class B holders. The value of blockchain stock is expected to be substantially similar to Class A, but price parity is not guaranteed.
• Shareholders (Class B Stock): Maintain significant voting control, influencing corporate decisions and potentially affecting the market price of other stock classes.
• Customers (Lending): Benefit from faster, more efficient, and lower-cost HELOC origination processes. Access to new digital asset trading and lending products (Figure Exchange, Democratized Prime).
• Customers (Digital Assets): Gain access to SEC-registered, interest-bearing stablecoins (YLDS) and cross-asset collateralization for margin lending, potentially offering more stable and yielding digital asset options.
• Origination Partners: Benefit from FTS's turnkey LOS, enhanced capital markets execution certainty through Figure Connect, and ease of onboarding. Access to a broader pool of capital and ability to deepen customer relationships.
• Loan Purchasers and Securitization Investors: Benefit from increased transparency, standardized collateral, and enhanced reporting through Provenance Blockchain and Portfolio Manager. Access to attractive risk-adjusted returns and rated HELOC securitizations.
• Employees: Retention efforts through equity incentive plans (2025 Plan, Founder Retention Award) aim to align interests with company growth. Increased headcount in accounting and finance is expected to address internal control weaknesses.
• Regulatory Authorities: The company's proactive regulatory compliance and extensive licensing apparatus demonstrate commitment to operating within established frameworks, potentially setting a standard in the digital asset space. However, evolving regulations pose ongoing compliance challenges and potential scrutiny.

Next Steps

• FTS expects to continue to onboard new origination partners and increase penetration with existing partners.
• The company plans to add incremental products and markets, including DSCR loans, personal loans, and student loans.
• FTS intends to expand Figure Connect volume by onboarding new loan buyers and including third-party homogeneous assets via the Figure Certified program (launched Q4 2025).
• FTS plans to build out an institutional sales team and target retail users via social media and paid ads to drive YLDS adoption.
• Continuous innovation in the technology stack is expected, with new products and capabilities to streamline underwriting, enhance loan registration, and optimize trading efficiency.
• The company expects the closing of the sale of the blockchain stock to take place on or about February 11, 2026.
• Any open market sales of Class A common stock by underwriters are expected on or about February 11, 2026.
• The Guarantor Vehicle is expected to begin purchasing HELOCs via Figure Connect in the near term, with a minimum monthly commitment of $150 million from December 8, 2025, onwards.
• FTS will settle trades on its ATS in YLDS as a first step towards YLDS becoming the de-facto currency of Figure Exchange.
• FTS intends to encourage warehouse lenders and loan buyers to utilize YLDS on Figure Connect and Figure Exchange.
• The company will continue to assess the realizability of its deferred tax assets in future periods.

Key Dates

Recommendation

Figure Technology Solutions demonstrates impressive growth and innovation in both traditional lending and emerging blockchain-based financial services, evidenced by strong revenue and EBITDA increases, and significant efficiency gains. The introduction of Series A Blockchain Common Stock and the OPEN network presents substantial long-term opportunities. However, the company operates in a highly volatile and uncertain regulatory environment, particularly concerning digital assets, which poses significant risks. The identified material weaknesses in internal controls and the concentrated voting power of the dual-class structure also warrant caution. While the growth trajectory is compelling, the inherent risks and the early stage of some key initiatives suggest a 'hold' recommendation for seasoned investors, advising to monitor regulatory developments, the successful remediation of internal control weaknesses, and the sustained adoption of its blockchain-based platforms before making further investment decisions.

Keywords

Blockchain, Fintech, Digital Assets, HELOC, Loan Origination System, Figure Connect, Provenance Blockchain, YLDS, Stablecoin, Alternative Trading System, ATS, Tokenization, Consumer Credit, Mortgage, Regulated Financial Services, SEC Filing, S-1/A, Figure Technology Solutions