OPFI.NYSEOppfi INC
SCHEDULE 13D/A: OppFi Inc. Insiders Update Holdings: Significant Sales and Earnout Forfeiture Revealed in Latest SEC Filing
Sentiment:
Beneficial Ownership Update
An amended Schedule 13D filing reveals updated beneficial ownership stakes for key insiders of OppFi Inc., including recent sales of Class A Common Stock by LTHS Capital Group and LTHS Revocable Trust, and details on the company's complex 'Up-C' structure and tax agreements.
Worse than expectedThe forfeiture of 25,500,000 Earnout Units indicates that the company failed to meet specific performance targets by July 20, 2024, which is a negative outcome relative to initial expectations set during the Business Combination.The significant volume of Class A Common Stock sales by LTHS Capital Group and LTHS Revocable Trust, even if part of a Rule 10b5-1 plan, represents a reduction in insider holdings and could be interpreted as a lack of strong conviction or a move to monetize holdings, which is generally viewed as a negative signal.
Summary
- This Amendment No. 4 to Schedule 13D updates beneficial ownership information for key individuals and entities related to OppFi Inc., including Todd G. Schwartz and Theodore G. Schwartz.
- Todd G. Schwartz beneficially owns 60,953,035 shares, representing 70.2% of the combined Class A and Class V Common Stock outstanding as of May 13, 2025.
- Theodore G. Schwartz beneficially owns 23,349,286 shares, representing 26.9% of the combined Class A and Class V Common Stock outstanding as of May 13, 2025.
- The company operates under an 'Up-C' structure established through a Business Combination on July 20, 2021, involving FG New America Acquisition Corp. and Opportunity Financial, LLC.
- 25,500,000 Earnout Units (Class V Voting Stock equivalent) were forfeited on July 21, 2024, as earnout targets were not met by the July 20, 2024 deadline.
- Since July 30, 2021, 10,116,992 Class V shares were cancelled by other Members, 1,724,810 Class V shares by Theodore G. Schwartz/affiliates, and 25,500,000 due to Earnout forfeiture.
- 734,851 new Class V shares were issued to OppFi Shares, LLC (OFS) in connection with the Issuer's acquisition of equity interests in Bitty Holdings, LLC.
- OFS now holds of record 60,380,142 shares of Class V Voting Stock.
- LTHS Capital Group and LTHS Revocable Trust sold significant amounts of Class A Common Stock in April and May 2025 through Rule 10b5-1 trading plans, with Volume Weighted Average Prices (VWAP) ranging from $7.9427 to $12.4721 per share.
- Todd G. Schwartz received a grant of 122,280 Restricted Stock Units (RSUs) on April 1, 2025, with 25% vesting immediately and the remainder quarterly over three years.
- Theodore G. Schwartz received several RSU settlements (18,484 shares on Nov 16, 2022; 46,729 shares on June 8, 2023; 72,196 shares on June 7, 2024) and a new RSU grant of 49,328 shares on June 5, 2024.
Sentiment
Score: 4
Explanation: The filing indicates significant insider sales and the failure to meet earnout targets, which are negative signals. While there are new RSU grants, the overall tone regarding performance targets and insider selling leans negative, despite the routine nature of a 13D filing.
Positives
- Todd G. Schwartz's RSU grant aligns his incentives with long-term company performance, as the majority vests over three years.
- The issuance of new Class V shares to OFS in connection with the Issuer's acquisition of equity interests in Bitty Holdings, LLC, suggests strategic growth initiatives and expansion.
Negatives
- The forfeiture of 25,500,000 Earnout Units on July 21, 2024, indicates that specific performance targets set during the Business Combination were not met by the July 20, 2024 deadline, suggesting underperformance relative to initial expectations.
- Significant sales of Class A Common Stock by LTHS Capital Group and LTHS Revocable Trust (affiliates of Theodore G. Schwartz) in April and May 2025 could be perceived negatively by the market, potentially signaling a lack of strong conviction or a move to monetize holdings.
Risks
- Concentrated Ownership and Voting Power: Todd G. Schwartz and Theodore G. Schwartz, along with their affiliated entities, control a substantial majority of the voting power (70.2% and 26.9% respectively, with overlap), which could limit the influence of other shareholders and potentially impact corporate governance decisions.
- Tax Receivable Agreement (TRA) Liabilities: The Issuer is obligated to pay 90% of certain U.S. federal, state, and local income tax savings to the Members. Early termination events (such as a change of control or material breach) could accelerate these payments, creating a significant lump-sum cash obligation for the Issuer.
- Earnout Target Failure: The failure to meet earnout targets for 25,500,000 units by July 20, 2024, suggests that the company's performance did not align with specific growth or financial milestones anticipated at the time of the Business Combination.
- Insider Sales: While conducted under a Rule 10b5-1 trading plan, the continued and significant volume of Class A Common Stock sales by key shareholders like LTHS Capital Group and LTHS Revocable Trust could be interpreted by the market as a negative signal regarding future performance or valuation, potentially leading to downward pressure on the stock price.
Future Outlook
The Reporting Persons do not have any present plans or proposals that would result in major corporate actions, although they may review, reconsider, and change their position or purpose, and may seek to influence management or the Board regarding the Issuer's business and affairs.
Management Comments
- Todd G. Schwartz and Theodore G. Schwartz, through their affiliated trusts, have purchased shares of Class A Common Stock in the open market using personal funds to demonstrate confidence in the Issuer and its strategy.
Industry Context
This Schedule 13D filing primarily details changes in beneficial ownership and related agreements for OppFi Inc., a financial technology company. The 'Up-C' structure and Tax Receivable Agreement are common in SPAC mergers involving private companies, designed to provide tax benefits to pre-IPO owners. The forfeiture of earnout units suggests that the company's performance did not meet specific growth or financial targets set during its public listing, which can be a common challenge for companies post-SPAC merger. Insider sales, even if pre-planned, are a routine part of market activity but can be scrutinized by investors for signals about future performance or valuation.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Executive Officer | All executive officers of FGNA | NA | 2021-07-20 | Cessation of roles upon Business Combination Closing. |
| Director | All members of the board of directors of FGNA | NA | 2021-07-20 | Cessation of roles upon Business Combination Closing. |
| Director | NA | Todd G. Schwartz | 2021-07-20 | Appointment upon Business Combination Closing. |
| Director | NA | Theodore G. Schwartz | 2021-07-20 | Appointment upon Business Combination Closing. |
| Director | NA | Jared Kaplan | 2021-07-20 | Appointment upon Business Combination Closing. |
| Director | NA | Christina Favilla | 2021-07-20 | Appointment upon Business Combination Closing. |
| Director | NA | Jocelyn Moore | 2021-07-20 | Appointment upon Business Combination Closing. |
| Director | NA | David Vennettilli | 2021-07-20 | Appointment upon Business Combination Closing. |
| Director | NA | Greg Zeeman | 2021-07-20 | Appointment upon Business Combination Closing. |
| Executive Chairman of the Board | NA | Todd G. Schwartz | 2021-07-20 | Appointment upon Business Combination Closing. |
| Chief Executive Officer | NA | Todd G. Schwartz | 2022-02-23 | Appointment to new role. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Bylaws Amendment | The Issuer adopted its Second Amended and Restated Bylaws. | 2021-07-20 | Standard procedure following a business combination to align corporate governance with the new entity structure. |
| Certificate of Incorporation Amendment | The Issuer adopted its Second Amended and Restated Certificate of Incorporation. | 2021-07-20 | Standard procedure following a business combination to align corporate governance with the new entity structure, including the dual-class share structure. |
| Limited Liability Company Agreement Amendment | The Third Amended and Restated Limited Liability Company Agreement of OppFi (OppFi A&R LLCA) was entered into, recapitalizing OppFi's ownership structure, designating the Issuer as sole manager, and establishing Exchange Rights for OppFi Units. | 2021-07-20 | Formalizes the 'Up-C' structure, defining the relationship between the Issuer and OppFi, and outlining the mechanism for converting Class V Voting Stock into Class A Common Stock. |
| Investor Rights Agreement | An Investor Rights Agreement was established, granting the Members' Representative the right to nominate five directors, providing certain registration rights, and imposing lock-up periods on certain shares. | 2021-07-20 | Ensures significant influence of the original OppFi members on the Issuer's board and provides liquidity pathways for their holdings, while also managing initial market supply. |
| Tax Receivable Agreement | A Tax Receivable Agreement was established, obligating the Issuer to pay 90% of certain tax savings to the Members. | 2021-07-20 | Provides a mechanism for the original OppFi members to benefit from tax attributes generated by the Business Combination and subsequent exchanges, potentially creating a significant future liability for the Issuer. |
Related Party Transactions
- The entire Business Combination and subsequent 'Up-C' structure, including the OppFi A&R LLCA, Investor Rights Agreement, and Tax Receivable Agreement, are inherently related-party transactions involving the Issuer and its founding members/entities.
- The acquisition of equity interests in Bitty Holdings, LLC by the Issuer, resulting in new Class V Voting Stock issued to OFS, is a related party transaction given OFS's ownership structure.
- Purchases of Class A Common Stock by TGS Revocable Trust and LTHS Revocable Trust in the open market using personal funds are related party transactions.
- Sales of Class A Common Stock by LTHS Capital Group and LTHS Revocable Trust (affiliates of Theodore G. Schwartz) are related party transactions.
- Grants of Restricted Stock Units (RSUs) to Todd G. Schwartz (CEO) and Theodore G. Schwartz (Director) are related party transactions.
Stakeholder Impact
- Shareholders: Existing public shareholders face potential dilution from future exercises of Exchange Rights and RSU vesting. The significant voting power held by the Reporting Persons (70.2% by Todd G. Schwartz's group) means limited influence for minority shareholders. The forfeiture of earnout units indicates underperformance relative to initial targets, which could negatively impact shareholder confidence. Insider sales may also be viewed negatively.
- Employees: The RSU grants to management (Todd G. Schwartz, Theodore G. Schwartz) are a form of compensation and retention, aligning their interests with long-term company value.
- Creditors: The Tax Receivable Agreement creates a potential future liability for the Issuer, which could impact its financial flexibility and creditworthiness, especially if early termination clauses are triggered.
Next Steps
- Continued vesting of Todd G. Schwartz's RSUs in equal quarterly increments over the next three years.
- Vesting of Theodore G. Schwartz's 49,328 RSUs on the earlier of the one-year anniversary of the grant date (June 5, 2024) or the next annual meeting of the Issuer.
- Potential future exercises of Exchange Rights by Members, leading to the issuance of Class A Common Stock and cancellation of Class V Voting Stock.
- Potential future influence by Reporting Persons on management or the Board regarding the Issuer's business and affairs.
Key Dates
| Date | Description |
|---|---|
| 2021-02-09 | Date of the Business Combination Agreement. |
| 2021-07-20 | Closing Date of the Business Combination, when FGNA changed its name to OppFi Inc. and the Investor Rights Agreement and Tax Receivable Agreement were dated. |
| 2021-07-21 | Date of Amendment No. 1 to the Registration Statement on Form 8-A. |
| 2021-07-23 | Date of Amendment No. 1 to the Original Schedule 13D and Joint Filing Agreement. |
| 2021-07-26 | Date of Current Report on Form 8-K filing for OppFi A&R LLCA and Tax Receivable Agreement. |
| 2021-07-30 | Date of the initial Schedule 13D filing. |
| 2022-02-23 | Todd G. Schwartz appointed Chief Executive Officer of the Issuer. |
| 2022-07-20 | Vesting date for 18,484 RSUs received by Theodore G. Schwartz. |
| 2022-11-16 | Theodore G. Schwartz received 18,484 shares of Class A Common Stock in settlement of RSUs. |
| 2023-06-07 | Vesting date for 46,729 RSUs received by Theodore G. Schwartz. |
| 2023-06-08 | Theodore G. Schwartz received 46,729 shares of Class A Common Stock in settlement of RSUs. |
| 2024-03-12 | Date of Amendment No. 2 to the Original Schedule 13D. |
| 2024-03-28 | Date of Amendment No. 3 to the Original Schedule 13D. |
| 2024-06-05 | Vesting date for 72,196 RSUs received by Theodore G. Schwartz; also date of grant for 49,328 RSUs to Theodore G. Schwartz. |
| 2024-06-07 | Theodore G. Schwartz received 72,196 shares of Class A Common Stock in settlement of RSUs. |
| 2024-07-20 | Deadline for achievement of Earnout Targets. |
| 2024-07-21 | Earnout Units were forfeited as targets were not satisfied. |
| 2025-04-01 | Todd G. Schwartz received a grant of 122,280 RSUs. |
| 2025-04-11 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-14 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-15 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-16 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-17 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-21 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-22 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-23 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-04-24 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-05-09 | LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-05-12 | Date of event requiring filing of this statement; LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-05-13 | Date for outstanding share count calculation; LTHS Capital Group and LTHS Revocable Trust sold Class A Common Stock. |
| 2025-05-14 | Signature date of the Schedule 13D filing. |
Recommendation
holdKeywords
OppFi Inc., Schedule 13D, Beneficial Ownership, Class A Common Stock, Class V Common Stock, Todd G. Schwartz, Theodore G. Schwartz, Insider Sales, Restricted Stock Units, Earnout Forfeiture, Tax Receivable Agreement, Corporate Governance, Up-C Structure, SEC Filing
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