Financial Performance - Mogo Inc reported a quarterly loss of $0.04 per share, better than the Zacks Consensus Estimate of a loss of $0.07, and an improvement from a loss of $0.12 per share a year ago, representing an earnings surprise of 42.86% [1] - The company posted revenues of $12.07 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.97%, although this is a decline from year-ago revenues of $13.3 million [2] - Over the last four quarters, Mogo has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Mogo shares have declined approximately 19.1% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $11.22 million, and for the current fiscal year, it is -$0.24 on revenues of $45.87 million [7] Industry Context - The Technology Services industry, to which Mogo belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that Mogo's stock may outperform the market based on current estimates [5][6]

[Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents Mogo Inc.'s interim condensed consolidated financial statements, including statements of financial position, operations, changes in equity, and cash flows, for the period ended March 31, 2025 [Interim Condensed Consolidated Statements of Financial Position](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position) As of March 31, 2025, Mogo Inc. reported a decrease in total assets and total equity compared to December 31, 2024, while total liabilities also saw a reduction, primarily driven by a decrease in marketable securities and investment portfolio | Metric | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :----------------------- | :-------------------------- | :-------------------------- | | Total Assets | 170,241 | 189,648 | | Total Liabilities | 101,182 | 108,431 | | Total Equity | 69,059 | 81,217 | - Marketable securities decreased from **$26,085 thousand** to **$16,322 thousand**, and the investment portfolio decreased from **$11,991 thousand** to **$9,473 thousand**[4](index=4&type=chunk) [Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) For the three months ended March 31, 2025, Mogo Inc. experienced a significant increase in net loss compared to the same period in 2024, primarily due to a substantial revaluation loss, while total revenue slightly decreased and gross profit remained relatively stable | Metric | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :---------------------------------- | :------------------------------------------ | :------------------------------------------ | | Total Revenue | 17,330 | 17,925 | | Gross Profit | 11,612 | 11,555 | | Loss from Operations | (1,379) | (1,889) | | Net Loss | (11,871) | (3,610) | | Basic and Diluted Loss Per Share | (0.49) | (0.15) | - The company recorded a revaluation loss of **$7,662 thousand** in Q1 2025, compared to a revaluation gain of **$1,088 thousand** in Q1 2024, significantly impacting the net loss[8](index=8&type=chunk) [Interim Condensed Consolidated Statements of Changes in Equity (Deficit)](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20%28Deficit%29) Mogo Inc.'s total equity decreased from $81,217 thousand at December 31, 2024, to $69,059 thousand at March 31, 2025, primarily driven by the net loss for the period and a foreign currency translation reserve loss | Metric | December 31, 2024 (CAD '000s) | March 31, 2025 (CAD '000s) | | :-------------------------------- | :-------------------------- | :------------------------- | | Total Equity, beginning of period | 81,217 | 81,217 | | Net Loss | (11,871) | (11,871) | | Foreign Currency Translation Reserve | (762) | (762) | | Stock-based Compensation | 475 | 475 | | Total Equity, end of period | 69,059 | 69,059 | - The deficit increased from **$(345,508) thousand** to **$(357,379) thousand** during the three months ended March 31, 2025[11](index=11&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, Mogo Inc. generated positive cash flow from operating activities, a significant improvement from a net cash outflow in the prior year, with investing activities also providing cash, while financing activities resulted in a net cash outflow | Cash Flow Activity | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net Cash from Operating Activities | 560 | (3,866) | | Net Cash from Investing Activities | 1,989 | (1,520) | | Net Cash from Financing Activities | (1,246) | 1,072 | | Net Increase (Decrease) in Cash | 1,290 | (4,333) | | Cash and Cash Equivalent, End of Period | 9,820 | 11,800 | - The positive operating cash flow in Q1 2025 was primarily driven by non-cash adjustments to net loss, including a large revaluation loss, and changes in working capital[14](index=14&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, explaining the company's operations, accounting policies, financial instrument risks, and equity structure [1. Nature of operations](index=6&type=section&id=1.%20Nature%20of%20operations) Mogo Inc. is a Canadian financial technology company offering digital solutions for wealth creation and financial freedom, with services including commission-free stock trading, managed investing solutions (Moka), digital loans and mortgages, and a low-cost payments platform (Carta Worldwide) - Mogo provides digital solutions for wealth creation and financial freedom, including commission-free stock trading and managed investing through Moka[16](index=16&type=chunk) - The company also offers digital loans and mortgages, and operates Carta Worldwide, a payments platform for card programs in Europe and Canada[16](index=16&type=chunk) [2. Basis of presentation](index=6&type=section&id=2.%20Basis%20of%20presentation) These interim condensed consolidated financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and are presented on a going concern basis, with management concluding adequate resources for at least the next 12 months based on assessed resources and cash flow projections - Statements are prepared under International Accounting Standard 34 Interim Financial Reporting and are consistent with the last annual consolidated financial statements[17](index=17&type=chunk) - Management has affirmed the company's ability to continue as a going concern for at least 12 months, based on cash flow projections and available investor/debt lender base[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The functional currency of the parent company and its Canadian subsidiaries is Canadian dollars, while other subsidiaries operate with GBP, EUR, MAD, or SGD[23](index=23&type=chunk) [3. Material accounting policies](index=7&type=section&id=3.%20Material%20accounting%20policies) The accounting policies remain consistent with the annual consolidated financial statements for the year ended December 31, 2024, and while management considered the impact of US tariffs on estimates, particularly for loan loss provisions and investment portfolio valuations, no material impact on expected credit loss provisions was found - Accounting policies are consistent with the annual consolidated financial statements for the year ended December 31, 2024[24](index=24&type=chunk) - Forward-looking macroeconomic assumptions for loan loss provisions were updated to include potential tariff impacts, but these changes did not materially affect expected credit loss provisions[26](index=26&type=chunk) - IFRS 18 Presentation and Disclosure in Financial Statements, issued in April 2024, will be effective for annual reporting periods beginning on or after January 1, 2027, and the Company is currently assessing its impact[29](index=29&type=chunk) [4. Loans receivable](index=8&type=section&id=4.%20Loans%20receivable) Loans receivable, net, decreased slightly from $58,620 thousand at December 31, 2024, to $56,996 thousand at March 31, 2025, while the allowance for loan losses increased during the period, reflecting ongoing credit risk management | Metric | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :---------------------- | :-------------------------- | :-------------------------- | | Gross Loans Receivable | 71,975 | 72,696 | | Allowance for Loan Losses | (14,979) | (14,076) | | Loans Receivable, Net | 56,996 | 58,620 | | Allowance for Loan Losses Changes | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Balance, beginning of period | 14,076 | 12,555 | | Provision for Loan Losses | 4,814 | 4,705 | | Charge offs | (3,930) | (3,770) | | Balance, end of period | 14,979 | 13,492 | - If a pessimistic scenario forecast were assigned 100% probability, the allowance for credit losses would be **$1,431 thousand** higher than reported at March 31, 2025[32](index=32&type=chunk) [5. Marketable securities](index=10&type=section&id=5.%20Marketable%20securities) Marketable securities significantly decreased from $26,085 thousand at December 31, 2024, to $16,322 thousand at March 31, 2025, primarily due to a reduction in holdings of WonderFi Technologies Inc | Security | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :----------------------- | :-------------------------- | :-------------------------- | | WonderFi Technologies Inc. | 15,983 | 25,654 | | Others | 339 | 431 | | Total | 16,322 | 26,085 | [6. Intangible assets](index=10&type=section&id=6.%20Intangible%20assets) The net book value of intangible assets decreased from $31,080 thousand at December 31, 2024, to $29,639 thousand at March 31, 2025, with amortization expense for the three months ended March 31, 2025, totaling $1,867 thousand | Metric | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :-------------------- | :-------------------------- | :-------------------------- | | Net Book Value | 29,639 | 31,080 | - Amortization of intangible assets for the three months ended March 31, 2025, was **$1,867 thousand**, a decrease from **$2,296 thousand** in the same period of 2024[35](index=35&type=chunk) [7. Credit facility](index=11&type=section&id=7.%20Credit%20facility) Mogo Inc. amended its $60,000 thousand senior secured credit facility on February 26, 2025, extending the maturity date to January 2, 2029, and reducing the interest rate by 100 basis points to 7% plus the greater of 2% and SOFR, with an outstanding balance of $48,241 thousand as of March 31, 2025 - The credit facility maturity date was extended to **January 2, 2029**, from January 2, 2026[36](index=36&type=chunk) - The interest rate was reduced by **100 basis points** to **7%** plus the greater of **2%** and SOFR[36](index=36&type=chunk) | Metric | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :----------------------- | :-------------------------- | :-------------------------- | | Principal and Interest Balance | 48,241 | 48,792 | | Interest Expense (Q1) | 1,446 | 1,656 | [8. Debentures](index=12&type=section&id=8.%20Debentures) The debentures balance decreased to $33,546 thousand at March 31, 2025, from $35,287 thousand at December 31, 2024, with maturity dates effectively extended to January 2, 2029, due to a subordination agreement with the credit facility | Metric | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :---------------- | :-------------------------- | :-------------------------- | | Principal Balance | 34,714 | 35,257 | | Total Debentures | 33,546 | 35,287 | - Debentures pay interest at a coupon rate between **8-10%** per annum, with payments made quarterly in cash or Common Shares at Mogo's option[40](index=40&type=chunk) | Year | Principal Component of Quarterly Payment (CAD '000s) | Principal Due on Maturity (CAD '000s) | Total (CAD '000s) | | :--- | :--------------------------------------------------- | :------------------------------------ | :---------------- | | 2025 | 1,589 | — | 1,589 | | 2026 | 2,268 | — | 2,268 | | 2027 | 2,454 | — | 2,454 | | 2028 | 2,657 | — | 2,657 | | 2029 | 668 | 25,078 | 25,746 | [9. Revenue](index=13&type=section&id=9.%20Revenue) Total revenue for the three months ended March 31, 2025, was $17,330 thousand, a slight decrease from $17,925 thousand in the prior year, with wealth revenue and payments revenue increasing while interest revenue and other subscription-related revenue decreased | Revenue Type | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :------------------------ | :------------------------------------------ | :------------------------------------------ | | Interest Revenue | 6,599 | 7,234 | | Wealth Revenue | 3,481 | 2,472 | | Payments Revenue | 2,555 | 1,909 | | Other Subscription Related Revenue | 4,695 | 6,310 | | Total Revenue | 17,330 | 17,925 | [10. Geographic information](index=13&type=section&id=10.%20Geographic%20information) Canada remains the primary source of revenue and location of non-current assets for Mogo Inc., though revenue from Europe showed growth, while non-current assets in Canada slightly decreased | Geographic Region | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :------------------ | :------------------------------------------ | :------------------------------------------ | | Canada Revenue | 15,022 | 16,221 | | Europe Revenue | 2,308 | 1,704 | | Total Revenue | 17,330 | 17,925 | | Geographic Region | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :------------------ | :-------------------------- | :-------------------------- | | Canada Non-Current Assets | 69,049 | 70,623 | | Europe Non-Current Assets | 203 | 233 | | Other Non-Current Assets | 15 | 16 | | Total Non-Current Assets | 69,267 | 70,872 | [11. Expense by nature and function](index=14&type=section&id=11.%20Expense%20by%20nature%20and%20function) Total operating expenses decreased to $12,991 thousand for the three months ended March 31, 2025, from $13,444 thousand in the prior year, with personnel expense increasing while depreciation and amortization, hosting and software licenses, and professional services decreased | Expense by Nature | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :------------------------ | :------------------------------------------ | :------------------------------------------ | | Personnel Expense | 5,886 | 5,102 | | Depreciation and Amortization | 1,954 | 2,376 | | Hosting and Software Licenses | 1,297 | 1,411 | | Marketing | 1,110 | 1,183 | | Professional Services | 681 | 878 | | Total Operating Expenses | 12,991 | 13,444 | | Expense by Function | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | | Technology and Development | 4,134 | 3,844 | | Marketing | 1,162 | 1,237 | | Customer Service and Operations | 2,706 | 2,974 | | General and Administration | 4,989 | 5,389 | | Total Operating Expenses | 12,991 | 13,444 | [12. Revaluation loss (gain)](index=16&type=section&id=12.%20Revaluation%20loss%20%28gain%29) Mogo Inc. recorded a significant revaluation loss of $7,662 thousand for the three months ended March 31, 2025, a substantial shift from a revaluation gain of $1,088 thousand in the prior year, primarily driven by an unrealized loss on the investment portfolio and marketable securities | Component | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Unrealized (Gain) Loss on Investment Portfolio and Marketable Securities | 10,090 | (919) | | Gain on Modification of Debentures | (1,367) | (84) | | Total Revaluation Loss (Gain) | 7,662 | (1,088) | [13. Other non-operating expense](index=16&type=section&id=13.%20Other%20non-operating%20expense) Other non-operating expenses increased to $416 thousand for the three months ended March 31, 2025, from $254 thousand in the prior year, mainly due to higher acquisition costs and other expenses | Component | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :------------------ | :------------------------------------------ | :------------------------------------------ | | Acquisition Costs and Other | 416 | 240 | | Restructuring Charges | — | 14 | | Total | 416 | 254 | [14. Fair value of financial instruments](index=17&type=section&id=14.%20Fair%20value%20of%20financial%20instruments) This section details the fair value measurement of financial instruments, outlining the valuation process using a three-level hierarchy and presenting classifications and fair values as of March 31, 2025 [(a) Valuation process](index=17&type=section&id=%28a%29%20Valuation%20process) The fair value of financial instruments is determined using a three-level hierarchy based on the observability of inputs, where Level 1 uses quoted prices in active markets, Level 2 uses observable inputs from non-active markets or similar instruments, and Level 3 relies on unobservable inputs - **Level 1**: Unadjusted quoted prices in an active market for identical assets and liabilities[58](index=58&type=chunk) - **Level 2**: Quoted prices in markets that are not active or inputs derived from quoted prices of similar assets/liabilities in active markets[58](index=58&type=chunk) - **Level 3**: Unobservable inputs supported by little or no market activity, significant to the estimated fair value[58](index=58&type=chunk) [(b) Accounting classifications and fair values](index=18&type=section&id=%28b%29%20Accounting%20classifications%20and%20fair%20values) As of March 31, 2025, marketable securities are classified as Level 1, while the investment portfolio, loans receivable, and other receivables are classified as Level 3, and the credit facility is Level 2, with debentures being Level 3 for fair value measurement | Financial Instrument | Fair Value Hierarchy Level (March 31, 2025) | | :------------------- | :------------------------------------------ | | Marketable Securities | Level 1 | | Investment Portfolio | Level 3 | | Cash and Cash Equivalent | Level 1 | | Restricted Cash | Level 1 | | Loans Receivable | Level 3 | | Other Receivables | Level 3 | | Credit Facility | Level 2 | | Debentures | Level 3 | | Financial Instrument | Carrying Amount (March 31, 2025, CAD '000s) | Fair Value (March 31, 2025, CAD '000s) | | :------------------- | :------------------------------------------ | :------------------------------------- | | Marketable Securities | 16,322 | 16,322 | | Investment Portfolio | 9,473 | 9,473 | | Loans Receivable | 71,975 | 71,975 | | Debentures | 33,546 | 37,986 | [(c) Measurement of fair values](index=20&type=section&id=%28c%29%20Measurement%20of%20fair%20values) Level 3 fair values for the investment portfolio are measured using techniques like recent investment prices, implied multiples, and option pricing models, with significant unobservable inputs including revenue multiples and equity volatility, where a 5% movement in adjusted market multiple would result in a $474 thousand change in profit or loss - Investment portfolio valuation uses revenue multiples (**1.65-2.4**), equity volatility (**50-110%**), and discount for lack of marketability (**0-20%**) as significant unobservable inputs[64](index=64&type=chunk) - Loans receivable valuation uses discounted cash flows, considering expected timing and amount of cash flows and discount rates[64](index=64&type=chunk) | Sensitivity Analysis (Investment Portfolio) | Profit or Loss Increase (CAD '000s) | Profit or Loss Decrease (CAD '000s) | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | | March 31, 2025 (5% movement in market multiple) | 474 | (474) | [15. Nature and extent of risk arising from financial instruments](index=22&type=section&id=15.%20Nature%20and%20extent%20of%20risk%20arising%20from%20financial%20instruments) This section outlines the company's exposure to various financial instrument risks, including credit risk from loans receivable, interest rate risk from its credit facility, and liquidity risk management strategies [Credit risk](index=22&type=section&id=Credit%20risk) Mogo Inc. is exposed to credit risk primarily from its loans receivable, which it manages through ongoing credit evaluations, monitoring loan portfolio aging, and maintaining an allowance for loan losses, though there is a risk of increased loan losses if underwriting models based on historical data are not predictive - Credit risk arises primarily from loans receivable, managed through ongoing credit evaluations, loan portfolio monitoring, and an allowance for loan losses[69](index=69&type=chunk)[70](index=70&type=chunk) - Underwriting models are based on historical performance, and there is a risk that delinquency and loss rates could increase significantly if historical data is not representative[71](index=71&type=chunk)[72](index=72&type=chunk) [Interest rate risk](index=22&type=section&id=Interest%20rate%20risk) The company is exposed to interest rate risk mainly through its credit facility, which bears interest at a variable rate of 7% plus SOFR with a 2% SOFR floor, while debentures have fixed interest rates and are not subject to this variability - The credit facility's interest rate is **7%** plus SOFR (Secured Overnight Financing Rate), with a **2% SOFR floor**[73](index=73&type=chunk) - As at March 31, 2025, SOFR was **4.32%** (December 31, 2024 – **4.49%**)[73](index=73&type=chunk) [Liquidity risk](index=23&type=section&id=Liquidity%20risk) Mogo Inc. manages liquidity risk by planning to refinance outstanding amounts under its credit facility and debentures as they become due, with the debentures effectively extending their maturity dates due to subordination to the credit facility - Management intends to refinance outstanding credit facility and debenture amounts as they become due[75](index=75&type=chunk) | Contractual Obligation | 2025 (CAD '000s) | 2026 (CAD '000s) | 2027 (CAD '000s) | 2028 (CAD '000s) | 2029 (CAD '000s) | | :--------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Commitments - Operational | 29,204 | 9,754 | 9,200 | 7,983 | 6,059 | | Commitments - Principal Repayments | 1,589 | 2,268 | 2,454 | 2,657 | 73,987 | | Total Contractual Obligations | 30,793 | 12,022 | 11,654 | 10,640 | 80,046 | [16. Equity](index=24&type=section&id=16.%20Equity) This section details Mogo Inc.'s equity structure, including share capital, treasury share reserve, stock options, and warrants, as of March 31, 2025 [(a) Share capital](index=24&type=section&id=%28a%29%20Share%20capital) Mogo Inc.'s authorized share capital includes an unlimited number of Common Shares and preferred shares, with 24,472,377 Common Shares issued and outstanding as of March 31, 2025 - The company has an unlimited number of authorized Common Shares and preferred shares[78](index=78&type=chunk) - As at March 31, 2025, there were **24,472,377 Common Shares** issued and outstanding, unchanged from December 31, 2024[78](index=78&type=chunk) [(b) Treasury share reserve](index=24&type=section&id=%28b%29%20Treasury%20share%20reserve) As of March 31, 2025, Mogo Inc. held 190,706 Common Shares in its treasury share reserve, consistent with the prior period - The company held **190,706 Common Shares** in its treasury share reserve as at March 31, 2025 and December 31, 2024[79](index=79&type=chunk) [(c) Options](index=24&type=section&id=%28c%29%20Options) The number of stock options outstanding slightly increased to 2,776 thousand at March 31, 2025, from 2,760 thousand at December 31, 2024, with total stock-based compensation costs for the three months ended March 31, 2025, amounting to $475 thousand | Metric | March 31, 2025 (000s) | December 31, 2024 (000s) | | :-------------------- | :-------------------- | :----------------------- | | Options Outstanding | 2,776 | 2,760 | | Options Exercisable | 1,709 | 1,543 | - Stock-based compensation costs for the three months ended March 31, 2025, were **$475 thousand**, a decrease from **$561 thousand** in the same period of 2024[83](index=83&type=chunk) - Options are valued using the Black-Scholes model with assumptions including a risk-free interest rate of **2.76%** and expected volatility of **88%** for Q1 2025[82](index=82&type=chunk) [(d) Warrants](index=26&type=section&id=%28d%29%20Warrants) The number of warrants outstanding remained at 769 thousand at March 31, 2025, with 580 thousand exercisable, and an additional 1,018,519 USD stock warrants are classified as a derivative financial liability due to their USD exercise price, with a balance of $nil for the current period | Metric | March 31, 2025 (000s) | December 31, 2024 (000s) | | :-------------------- | :-------------------- | :----------------------- | | Warrants Outstanding | 769 | 769 | | Warrants Exercisable | 580 | 402 | - **1,018,519 USD stock warrants** are classified as a derivative financial liability and are subject to revaluation under the Black Scholes model[86](index=86&type=chunk) [17. Related party transactions](index=27&type=section&id=17.%20Related%20party%20transactions) Related party transactions primarily involve debenture holders, including shareholders, officers, directors, and management, with the related party debentures balance at $133 thousand at March 31, 2025, incurring $3 thousand in interest expense for the quarter | Metric | March 31, 2025 (CAD '000s) | December 31, 2024 (CAD '000s) | | :------------------------ | :-------------------------- | :-------------------------- | | Related Party Debentures Balance | 133 | 136 | | Metric | Three months ended March 31, 2025 (CAD '000s) | Three months ended March 31, 2024 (CAD '000s) | | :------------------------ | :------------------------------------------ | :------------------------------------------ | | Related Party Debentures Interest Expense | 3 | 6 | - Related party debentures bear an annual coupon interest of **8.0%**[88](index=88&type=chunk)

[Part I](index=8&type=section&id=PART%20I) [Key Information](index=8&type=section&id=ITEM%203.%20KEY%20INFORMATION) The company faces principal economic, operational, regulatory, and strategic risks that could materially affect its business and financial condition [Risk Factors](index=9&type=section&id=D.%20Risk%20Factors) Key risks include loan defaults from economic conditions, model inaccuracies, a history of losses, and evolving regulations - Worsening economic conditions could increase loan default rates, harming operating results; as of December 31, 2024, loans to members constituted approximately **31% of the company's assets**[36](index=36&type=chunk) - The company has a history of losses, with an accumulated deficit of approximately **$346 million** as of December 31, 2024, despite having shareholder equity of about $81 million[43](index=43&type=chunk) - The business is subject to extensive and evolving regulations, including the Canadian government's reduction of the criminal interest rate to **35% APR** effective January 1, 2025[57](index=57&type=chunk)[59](index=59&type=chunk) - The company's investment in WonderFi (an approximate **13% stake**) exposes it to risks within the volatile cryptocurrency sector[61](index=61&type=chunk)[83](index=83&type=chunk) - The company's increasing reliance on Artificial Intelligence (AI) introduces operational, regulatory, and reputational risks[140](index=140&type=chunk)[141](index=141&type=chunk) [Information on the Company](index=34&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) The company's history, business segments, organizational structure, and properties are detailed [History and Development of the Company](index=34&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) The current entity was formed via a reverse acquisition in 2019, with minimal capital expenditures since - On June 21, 2019, the company completed a plan of arrangement with Mogo Finance Technology Inc, which was accounted for as a **reverse acquisition**[17](index=17&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk) - The company's common shares were consolidated on a **three-for-one basis** on August 10, 2023[150](index=150&type=chunk) [Business Overview](index=35&type=section&id=B.%20Business%20Overview) The company operates in Wealth, Payments, and Lending, supported by a significant investment portfolio - Mogo operates across three core business lines: **Wealth (Intelligent Investing), Payments (Carta Worldwide), and Lending (MogoMoney)**[155](index=155&type=chunk) - The payments subsidiary, Carta, processed over **$11 billion** in transaction volume in 2024 and operates primarily in Europe[157](index=157&type=chunk) - As of December 31, 2024, Mogo's investment portfolio was valued at approximately **$38 million**, which includes an approximate **13% stake in WonderFi** valued at $25.7 million[167](index=167&type=chunk)[168](index=168&type=chunk) - In February 2025, Mogo extended its credit facility with Fortress Investment Group to January 2029 and **reduced the interest rate by 100 basis points** to SOFR plus 7%[169](index=169&type=chunk) Revenue by Geographic Market | ($000s) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Subscription and services revenue:** | | | | | Canada | 35,216 | 32,668 | 35,112 | | Europe | 7,892 | 6,117 | 6,531 | | Other | – | – | 98 | | **Interest revenue:** | | | | | Canada | 28,098 | 26,436 | 27,208 | | **Total revenue** | **71,206** | **65,221** | **68,949** | [Organizational Structure](index=50&type=section&id=C.%20Organizational%20Structure) The company operates through wholly-owned subsidiaries with an authorized capital of unlimited common and preferred shares Significant Subsidiaries (as of Dec 31, 2024) | Name of Entity | Place of Incorporation | Ownership Interest | | :--- | :--- | :--- | | Mogo Finance Technology Inc. | British Columbia | 100% | | Mogo Financial Inc | Manitoba | 100% | | MogoTrade Inc. | Canada | 100% | | Mogo Asset Management Inc. | Canada | 100% | | Moka Financial Technologies Inc | Canada | 100% | | Carta Solutions Holding Corp. | Canada | 100% | | Carta Financial Services Ltd | United Kingdom | 100% | - As of December 31, 2024, the company had **24,472,377 common shares** and no preferred shares issued and outstanding[222](index=222&type=chunk) [Property, Plants and Equipment](index=50&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) Operating on a remote-first basis, the company leases administrative properties and plans to reduce its physical footprint - The company is **remote-first** for its North American and European operations and does not own any real property[227](index=227&type=chunk) - Mogo plans to **not renew leases** in Winnipeg, PEI, and Cyprus, reflecting a shift to remote work and cloud solutions for data storage[228](index=228&type=chunk) [Operating and Financial Review and Prospects](index=54&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) The company's financial performance shows revenue growth and an improved net loss, driven by subscription and services [Operating Results](index=54&type=section&id=A.%20Operating%20Results) Revenue grew 9% to $71.2 million and net loss improved by 24%, though Adjusted EBITDA declined Key Performance Indicators (Year Ended) | ($000s, except percentages) | Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | Change % | | :--- | :--- | :--- | :--- | | **Revenue** | **$71,206** | **$65,221** | **9%** | | Subscription and services revenue | 43,108 | 38,785 | 11% | | Wealth revenue | 10,670 | 9,203 | 16% | | Payments revenue | 8,634 | 7,166 | 20% | | **Net (loss)** | **(13,680)** | **(17,887)** | **(24)%** | | **Adjusted EBITDA** | **6,649** | **7,669** | **(13)%** | | **Adjusted net loss** | **(4,064)** | **(2,872)** | **42%** | - Total Mogo members grew by **4% to 2,194,000** as of December 31, 2024, from 2,110,000 a year earlier[238](index=238&type=chunk) - Cost of revenue for FY2024 increased to **$24.5 million (34% of revenue)** from $18.6 million (28% of revenue) in FY2023, primarily due to a **39% increase** in the provision for loan losses[276](index=276&type=chunk) - For FY2024, total other expenses decreased to **$3.6 million** from $8.3 million in FY2023, mainly because a prior year loss from its Coinsquare investment did not recur[300](index=300&type=chunk) [Liquidity and Capital Resources](index=70&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company manages liquidity through cash flow monitoring, supported by a credit facility, debentures, and an investment portfolio Cash Flow Summary (Year Ended) | ($000s) | Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | | :--- | :--- | :--- | | Cash provided by (used in) operating activities | (1,271) | (9,167) | | Cash used in investing activities | (2,794) | (3,086) | | Cash (used in) provided by financing activities | (3,517) | (861) | | **Net decrease in cash for the period** | **(7,603)** | **(13,135)** | - As of December 31, 2024, the company had approximately **$49 million outstanding** on its Credit Facility and **$35 million** in outstanding debentures[80](index=80&type=chunk) - Subsequent to year-end, in February 2025, the company amended its credit facility, extending the maturity to **January 2029** and reducing the interest rate to 7% plus SOFR[315](index=315&type=chunk)[338](index=338&type=chunk) - The allowance for loan losses as a percentage of gross loans receivable increased to **19.4%** as at Dec 31, 2024, from 16.9% at the end of 2023[334](index=334&type=chunk) [Research and Development, Patents and Licenses, etc.](index=77&type=section&id=C.%20Research%20and%20Development%2C%20Patents%20and%20Licenses%2C%20etc.) Investment in capitalized software development has decreased significantly over the past three years Investment in Intangible Assets | ($000s) | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | :--- | | Investment in intangible assets | 3,175 | 3,206 | 7,482 | [Critical Accounting Estimates](index=77&type=section&id=E.%20Critical%20Accounting%20Estimates) Significant management judgment is required for loan loss provisions, fair value of investments, and goodwill valuation - Key areas requiring significant management estimates include: **provision for loan losses, fair value of privately held investments, valuation of goodwill, and impairment testing of intangible assets**[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) [Directors, Senior Management and Employees](index=80&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) The company's leadership, compensation, board structure, and employee base are outlined, showing a reduction in headcount [Directors and Senior Management](index=80&type=section&id=A.%20Directors%20and%20Senior%20Management) The leadership team and board members collectively own approximately 8% of the company's common shares - Key leadership includes **David Feller (Chairman & CEO), Gregory Feller (President, CFO & Director), and Justin Carter (COO)**[358](index=358&type=chunk) - As of December 31, 2024, directors and executive officers collectively owned approximately **8%** of the Company's outstanding Common Shares[368](index=368&type=chunk) [Compensation](index=83&type=section&id=B.%20Compensation) Executive compensation combines salary, bonuses, and equity incentives, guided by the Corporate Governance, Compensation and Nominating Committee Executive Compensation for Fiscal Year 2024 | Name and Principal Position | Salary | Option-based Awards | All Other Compensation | Total Compensation | | :--- | :--- | :--- | :--- | :--- | | David Feller, CEO | $417,819.28 | $40,615.55 | $4,428.14 | $462,862.97 | | Gregory Feller, President & CFO | $530,525.03 | $40,615.55 | $83,538.85 | $654,679.43 | | Justin Carter, COO | $223,417.57 | - | $4,428.14 | $227,845.71 | - Non-executive directors receive an annual retainer of **$35,000**, with an additional **$30,000** for chairing a committee[392](index=392&type=chunk) - Upon termination without cause, David and Gregory Feller are entitled to **24 months' pay** in lieu of notice, while Justin Carter is entitled to one month plus an additional month per year of service, up to a maximum of 18 months[396](index=396&type=chunk) [Board Practices](index=86&type=section&id=C.%20Board%20Practices) The Board operates with three primary committees, with the Audit and CGCNC composed of independent directors - The Board has three primary committees: **Audit Committee, Corporate Governance, Compensation and Nominating Committee (CGCNC), and Investment Committee**[401](index=401&type=chunk)[409](index=409&type=chunk) - The Audit Committee consists of three independent directors: **Christopher Payne (Chair), Kees Van Winters, and Kristin McAlister**[402](index=402&type=chunk) [Employees](index=88&type=section&id=D.%20Employees) The company's workforce has been significantly reduced over the past two years to 174 full-time employees Employee Headcount by Function | | As of Dec 31, 2022 | As of Dec 31, 2023 | As of Dec 31, 2024 | | :--- | :--- | :--- | :--- | | General & Administrative | 65 | 44 | 42 | | Customer Service & Operations | 131 | 105 | 85 | | Technology | 65 | 55 | 47 | | **TOTAL** | **261** | **204** | **174** | [Major Shareholders and Related Party Transactions](index=91&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) Two shareholders own over 5% of common shares, and related party transactions include insider-held debentures Principal Shareholders (>5%) as of Feb 25, 2025 | Principal Shareholder | Shares Beneficially Owned | % | | :--- | :--- | :--- | | Michael Wekerle | 1,837,282 | 7.5 | | Tidal Investments, LLC | 1,330,643 | 5.4 | - Related party transactions in 2024 included **$0.1 million** in debentures held by related parties and **$88,000** in sponsorship expenses paid to a company owned by a director[422](index=422&type=chunk)[423](index=423&type=chunk) [Financial Information](index=94&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) The company has no material litigation and does not intend to pay dividends, reinvesting earnings for growth - The company **does not intend to pay dividends** on its common shares in the foreseeable future, planning instead to reinvest earnings to finance growth[430](index=430&type=chunk) - The company believes that none of its current litigation is **material** to its consolidated financial condition or results of operations[427](index=427&type=chunk) [The Offer and Listing](index=95&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) The company's common shares are dual-listed on the Toronto Stock Exchange (TSX) and NASDAQ under the symbol 'MOGO' - The company's common shares are listed on the **TSX** (since June 25, 2015) and **NASDAQ** (since April 18, 2018) under the symbol 'MOGO'[434](index=434&type=chunk)[435](index=435&type=chunk) [Additional Information](index=96&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) Details on material contracts, exchange controls, and tax implications for non-Canadian and U.S. shareholders are provided - The company's material contracts primarily relate to its **revolving credit facility** and associated subordination agreements with DB FSLF 50 LLC[455](index=455&type=chunk) - Canada has **no system of exchange controls**, and there are no Canadian restrictions on the repatriation of capital or earnings to non-resident investors[457](index=457&type=chunk) - For U.S. Holders, the company **does not expect to be treated as a Passive Foreign Investment Company (PFIC)** for the current taxable year, but this is a factual determination made annually[130](index=130&type=chunk)[480](index=480&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=109&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to interest rate, currency, and other price risks from its credit facility and investments - The company is exposed to interest rate risk on its credit facility tied to the Secured Overnight Financing Rate (SOFR); a **100-basis point change in SOFR** would impact annual credit facility interest expense by **$315,000**[511](index=511&type=chunk) - Currency risk exists due to financial instruments denominated in U.S. dollars; a **5% change in the USD exchange rate** would result in an unrealized gain or loss of **$166,000**[512](index=512&type=chunk) [Controls and Procedures](index=112&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and internal controls over financial reporting were effective as of year-end - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were **effective**[523](index=523&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2024[526](index=526&type=chunk) [Additional Disclosures](index=114&type=section&id=ITEM%2016.%20%5BRESERVED%5D) Governance topics include the audit committee expert, auditor fees and changes, and cybersecurity risk management - The Board has determined that **Christopher Payne** qualifies as an 'audit committee financial expert' as defined by the SEC[532](index=532&type=chunk) Principal Accountant Fees | ($) | Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | | :--- | :--- | :--- | | Audit Fees | $1,171,629 | $1,235,850 | | Audit Related Fees | $247,170 | – | | Tax Fees | $108,305 | $155,492 | | All Other Fees | $13,433 | $30,896 | | **Total Fees Paid** | **$1,540,537** | **$1,422,238** | - Effective October 1, 2024, **KPMG LLP resigned** as the company's auditor and was replaced by **MNP LLP**[542](index=542&type=chunk) - The company has a share repurchase program, and in 2024, it repurchased a total of **44,741 common shares**[541](index=541&type=chunk) - The company has established a cybersecurity risk management framework and governance structure, and **no material cybersecurity incidents** have been identified[554](index=554&type=chunk)[559](index=559&type=chunk)[560](index=560&type=chunk)

[Certain Interpretation Matters](index=3&type=section&id=CERTAIN%20INTERPRETATION%20MATTERS) This Annual Information Form is for the financial year ended December 31, 2024, with all monetary amounts in Canadian dollars unless otherwise specified - This Annual Information Form (AIF) is for the financial year ended **December 31, 2024**, and is dated **March 31, 2025**. All monetary amounts are in **Canadian dollars** unless otherwise specified[6](index=6&type=chunk)[7](index=7&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) The document contains forward-looking statements about future financial outlook, business strategy, and operational results, subject to various known and unknown risks and uncertainties - The document contains forward-looking statements regarding future financial outlook, business strategy, growth plans, and operational results. These statements are based on management's current expectations and are subject to numerous known and unknown risks and uncertainties[8](index=8&type=chunk)[11](index=11&type=chunk) - Key areas covered by forward-looking statements include expectations on revenue, expenses, cash needs, product expansion, member growth, and performance of the investment portfolio[10](index=10&type=chunk)[12](index=12&type=chunk) - The company identifies significant risk factors that could cause actual results to differ materially, including credit market disruptions, member default rates, regulatory changes, competition, and risks related to its investment portfolio and use of AI[13](index=13&type=chunk)[14](index=14&type=chunk)[17](index=17&type=chunk) [Corporate Structure](index=7&type=section&id=CORPORATE%20STRUCTURE) Mogo Inc. operates through key subsidiaries, focusing on online lending, passive investing, stock trading, and European payments [Name, Address, and Incorporation](index=7&type=section&id=NAME,%20ADDRESS,%20AND%20INCORPORATION) This section details the corporate history of **Mogo Inc.**, including its incorporation, various name changes, and the pivotal **2019** business combination with **Mogo Finance Technology Inc.** through a plan of arrangement, resulting in the current corporate structure listed on the **TSX** and **Nasdaq** under the symbol '**MOGO**', with a **three-for-one share consolidation** completed in **August 2023** - In **June 2019**, the company completed a business combination with **Mogo Finance**, which was accounted for as a reverse acquisition. The combined entity was named **Mogo Inc.** and continued on the **TSX** and **Nasdaq** under the symbol '**MOGO**'[21](index=21&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk) - On **August 10, 2023**, the company consolidated its issued and outstanding Common Shares on a **three-for-one** basis[23](index=23&type=chunk) - The company's head office is located at **516-409 Granville St, Vancouver, BC, V6C 1T2**[25](index=25&type=chunk) [Intercorporate Relationships](index=8&type=section&id=INTERCORPORATE%20RELATIONSHIPS) **Mogo Inc.** operates through several direct and indirect subsidiaries, including **Mogo Finance Inc.** for online lending, **Moka Financial Technologies Inc.** for the passive investing app, **MogoTrade Inc.** for the commission-free stock trading platform, and **Carta Solutions Holding Corp** for the European payments business - **Mogo's** business is structured through key wholly-owned subsidiaries: **Mogo Finance** (lending), **Moka** (investing), **MogoTrade** (stock trading), and **Carta** (payments)[26](index=26&type=chunk) - **Carta Financial Services Ltd.**, an indirect subsidiary operating in the **UK**, is highlighted as a material subsidiary responsible for European payments[26](index=26&type=chunk) [Business Description](index=8&type=section&id=BUSINESS%20DESCRIPTION) **Mogo** is a financial technology company focused on helping Canadians achieve financial freedom through three core business lines: wealth, payments, and lending, with a central focus on its '**Intelligent Investing**' wealth platform and a significant payments business through its subsidiary **Carta**, maintaining an investment portfolio with a focus on crypto-related assets [General Overview](index=8&type=section&id=GENERAL) **Mogo** is a financial technology company focused on helping Canadians achieve financial freedom through three core business lines: wealth, payments, and lending. Its strategy combines technology and behavioral science, with a central focus on its '**Intelligent Investing**' wealth platform. The company also operates a significant payments business through its subsidiary **Carta** and maintains an investment portfolio with a focus on crypto-related assets - The company operates across three main business lines: wealth, payments, and lending[28](index=28&type=chunk) - The '**Intelligent Investing**' platform is central to its business, designed to help investors build long-term wealth and provide a pathway for borrowers to transition from debt to investing[29](index=29&type=chunk)[30](index=30&type=chunk) - The payments business, operated by subsidiary **Carta Worldwide**, processed over **$11 billion** in volume in **2024**[31](index=31&type=chunk) - **Mogo** holds a significant investment portfolio with a focus on crypto-related investments[32](index=32&type=chunk) [Products and Services](index=8&type=section&id=PRODUCTS%20AND%20SERVICES) **Mogo's** offerings are categorized into Wealth, Lending, Payments, and an Investment Portfolio, featuring '**IntelligentInvesting.ai**' with the **Moka** app for automated investing and the **MogoTrade** app for commission-free stock trading, **MogoMoney** for unsecured credit up to **$5,000**, **Carta** for **B2B** card issuing, and the **Mogo Ventures** investment portfolio valued at approximately **$38 million** including a **13%** stake in **WonderFi** - Wealth products include **Moka** (automated investing in **ETFs** like the **S&P 500**) and **MogoTrade** (commission-free stock trading on major North American exchanges), bundled under the '**Intelligent Investing**' subscription[34](index=34&type=chunk)[36](index=36&type=chunk) - Lending product '**MogoMoney**' provides unsecured open credit of up to **$5,000** with rates up to **34.37%**[39](index=39&type=chunk) - Payments subsidiary **Carta** provides **B2B** card issuing and processing infrastructure, handling approximately **$11.5 billion** in annual transaction volume[41](index=41&type=chunk) - The '**Mogo Ventures**' investment portfolio was valued at approximately **$38 million** as of **December 31, 2024**, and includes a **13%** stake in **WonderFi Technologies Inc.**[42](index=42&type=chunk)[46](index=46&type=chunk) [Product Development](index=10&type=section&id=PRODUCT%20DEVELOPMENT) The company maintains a strong focus on product innovation, led directly by the **CEO**, prioritizing convenience, transparency, and simplicity to improve the financial health of its members, with plans to continue investing in products like **MogoTrade** and **Moka** that meet its **ROI** criteria - Product development is a core focus, led by the **CEO**, with an emphasis on creating user-centric financial products[43](index=43&type=chunk) - The company expects to continue investing in key products like **MogoTrade** and **Moka** based on their potential for return on investment[43](index=43&type=chunk) [Our Platforms](index=10&type=section&id=OUR%20PLATFORMS) **Mogo's** technology is built on distinct platforms: **MogoTrade** and **Moka** are cloud-native with a microservices architecture, the core **Mogo** platform emphasizes ease of use, automation, analytics, and 'plug-and-play' functionality, and the **Carta** platform, a **B2B** offering with data centers in North America and Europe, is expected to complete a migration to **Oracle Cloud Infrastructure** in **2025**, maintained by **51 full-time** technology and credit risk analysis employees as of **December 31, 2024** - **MogoTrade** and **Moka** platforms are built entirely in the cloud using a microservices architecture[44](index=44&type=chunk) - The core **Mogo** platform is built on four key strengths: Ease of Use, Automation, Analytics-Based decisioning, and Plug-&-Play Functionality[51](index=51&type=chunk) - The **Carta** platform is a **B2B** offering that is migrating to **Oracle Cloud Infrastructure** in **2025** and exited its Canadian payments business to focus on Europe[49](index=49&type=chunk)[53](index=53&type=chunk) - As of **Dec 31, 2024**, the company had **51 full-time employees** dedicated to technology and credit risk analysis for platform maintenance[54](index=54&type=chunk) [Specialized Skill and Knowledge](index=12&type=section&id=SPECIALIZED%20SKILL%20AND%20KNOWLEDGE) As of **December 31, 2024**, **Mogo** had a total of **211 team members**, including employees and temporary contractors, possessing a wide range of competencies across technology, credit risk, finance, and operations, crucial for the company's success and innovation in the financial services industry - The company had **211 team members** (employees and contractors) as of **December 31, 2024**[55](index=55&type=chunk) - The team includes **41 software developers**, designers, data scientists, product managers, and marketers, alongside traditional financial services roles[55](index=55&type=chunk) [Sales and Marketing](index=12&type=section&id=SALES%20AND%20MARKETING) **Mogo's** marketing strategy centers on establishing '**Intelligent Investing**' as a trusted, aspirational wealth brand in Canada, employing a multi-channel approach including web optimization, content marketing, performance marketing, and strategic partnerships with **Postmedia** and **Fundstrat**, while **Carta's** marketing is a **B2B** effort focused on the European market through direct sales and industry lead generation - The marketing strategy for **Mogo** and **Moka** focuses on building the '**Intelligent Investing**' brand as a premium, principle-driven alternative to traditional wealth management and speculative trading[56](index=56&type=chunk)[57](index=57&type=chunk) - Key marketing channels include web/funnel optimization, content-driven education, performance marketing, and strategic partnerships, notably with **Postmedia** for national reach and **Fundstrat** for market insights[58](index=58&type=chunk)[64](index=64&type=chunk) - **Carta's** sales and marketing is a **B2B** approach targeting fintechs and banks primarily in the European market[61](index=61&type=chunk) [Competitive Conditions](index=13&type=section&id=COMPETITIVE%20CONDITIONS) **Mogo** competes in a rapidly transforming financial services industry against other fintech companies (**Wealthsimple**, **Questrade**), traditional banks, and consumer finance companies, differentiating itself by focusing on long-term financial outcomes through its '**Intelligent Investing**' platform, which promotes a disciplined, value-based investment philosophy and uniquely offers an integrated pathway from borrowing to investing - Competitors include fintechs like **Wealthsimple** and **Questrade**, large Canadian banks, credit unions, and consumer credit companies[62](index=62&type=chunk) - **Mogo's** key differentiator is its '**Intelligent Investing**' platform, which is designed with a behavioral-first, long-term wealth-building philosophy inspired by investors like **Warren Buffett**[63](index=63&type=chunk) - **Carta** competes with both legacy payment processors (**TSYS**, **FISERV**) and modern platforms (**Marqeta**, **Galileo**), differentiating through product, service level, and pricing[66](index=66&type=chunk)[67](index=67&type=chunk) [Intangible Properties](index=14&type=section&id=INTANGIBLE%20PROPERTIES) **Mogo** protects its intellectual property through a combination of copyright, trademark, design patent, and trade secret laws, rather than utility patents, holding registered trademarks in Canada, the **US**, **UK**, and **EU**, with pending design applications for its graphical user interface, and utilizing confidentiality and **IP** assignment agreements with employees and consultants to safeguard proprietary information - The company protects its **IP** using copyright, trademark, and trade secret laws, and has no issued utility patents[68](index=68&type=chunk) - **Mogo** has pending industrial design and design applications in Canada and the **U.S.** for its '**Display Screen Having Graphical User Interface for Investment Management**'[68](index=68&type=chunk) - The company owns various registered trademarks and domain names related to the **Mogo**, **Moka**, and **Intelligent Investing** brands[71](index=71&type=chunk) [Credit Facility](index=14&type=section&id=CREDIT%20FACILITY) As of **December 31, 2024**, **Mogo** had one primary credit facility with **Fortress Investment Group** to finance its loan products, which was amended in **February 2025** to extend the maturity to **2029**, reduce the interest rate by **100 basis points**, and allow for a potential increase in capital from **$60 million** to **$100 million**, with an outstanding balance of **$48.8 million** at year-end **2024** Credit Facility Details | Metric | Value | | :--- | :--- | | Facility Size | **$60 million** (potential to increase to **$100 million**) | | Lender | **Fortress Investment Group** | | Maturity Date | **January 2, 2029** (extended **Feb 2025**) | | Interest Rate | **SOFR + 7%** (reduced from **SOFR + 8%** in **Feb 2025**) | | Balance at Dec 31, 2024 | **$48.8 million** | - The facility is subject to financial and portfolio performance covenants, including requirements for minimum tangible net worth, maximum leverage, and limits on loan default rates[75](index=75&type=chunk)[77](index=77&type=chunk) [Employees](index=15&type=section&id=EMPLOYEES) As of **December 31, 2024**, **Mogo** and its subsidiaries had **174 full-time** and **4 part-time employees**, with the largest departments being Customer Service & Operations and Technology & Development Employee Count by Functional Area (as of Dec 31, 2024) | Functional Area | Full-time Employees | Part-time Employees | | :--- | :--- | :--- | | Technology & Development | **47** | **0** | | Customer Service & Operations | **85** | **2** | | General and Administrative | **40** | **1** | | Marketing | **2** | **1** | | **Total** | **174** | **4** | [Foreign Operations](index=15&type=section&id=FOREIGN%20OPERATIONS) The company's foreign operations are primarily conducted through its subsidiary, **Carta**, which is focused on the European market, with approximately **91%** of **Carta's** revenues in **2024** derived from its European operations - **Carta's** operations are concentrated in Europe, with card programs in over **11 countries**[78](index=78&type=chunk) - Approximately **91%** of **Carta's 2024** revenue was generated from its European operations[78](index=78&type=chunk) [General Development of the Business](index=16&type=section&id=GENERAL%20DEVELOPMENT%20OF%20THE%20BUSINESS) Over the past three years, **Mogo** has undergone a significant strategic transformation, launching new wealth products, forming strategic partnerships, becoming the largest shareholder in **WonderFi**, and prioritizing profitability through cost-cutting and a sharpened focus on its digital wealth and lending platforms [Current Financial Year – Recent Developments](index=16&type=section&id=CURRENT%20FINANCIAL%20YEAR%20%E2%80%93%20RECENT%20DEVELOPMENTS) In early **2025**, **Mogo** undertook significant strategic actions, including a favorable amendment to its senior secured credit facility with **Fortress**, which extended the maturity by **three years** to **2029** and reduced the interest rate, and the exit of its legacy institutional brokerage business to sharpen its focus on higher-margin core offerings - In **February 2025**, **Mogo** extended its credit facility with **Fortress** to **January 2, 2029**, and reduced the interest rate by **100 basis points** to **SOFR plus 7%**[80](index=80&type=chunk) - Subsequent to year-end **2024**, **Mogo** exited its institutional brokerage business, which contributed **$5.3 million** in **2024** revenue at a negligible operating margin[80](index=80&type=chunk) [Three Year History](index=16&type=section&id=THREE%20YEAR%20HISTORY) Over the past three years, **Mogo** has undergone a significant strategic transformation. Key developments include launching new wealth products like **Moka.ai** and '**Buffett Mode**', forming strategic partnerships with **Postmedia** and **Fundstrat**, and becoming the largest shareholder in the regulated crypto exchange **WonderFi**. A major theme has been the prioritization of profitability, leading to cost-cutting measures, the wind-down of non-core products like **MogoCrypto**, and a sharpened focus on its digital wealth and lending platforms [2024 Developments](index=16&type=section&id=2024%20Developments) In **2024**, **Mogo** launched the next generation of its wealth-building app, **Moka.ai**, and added **Bitcoin** to its treasury management strategy, also resuming its share repurchase program and securing an extension of its **$60 million credit facility** with **Fortress Investment Group** to **January 2026** - Launched **Moka.ai**, an enhanced version of its wealth-building app, in **March 2024**[81](index=81&type=chunk) - The Board approved a treasury management strategy to include **Bitcoin** and **Bitcoin ETFs**, authorizing an initial investment of up to **$5.0 million**[81](index=81&type=chunk) - Resumed share repurchases, buying back **44,741 shares** at an average price of **$2.30**[81](index=81&type=chunk) [2023 Developments](index=17&type=section&id=2023%20Developments) **2023** was a pivotal year focused on strategic realignment and partnerships, with **Mogo** launching its '**Buffett Mode**' investing app, partnering with **Postmedia** and **Fundstrat**, becoming the largest shareholder of **WonderFi**, executing a **3-for-1 share consolidation** to regain **Nasdaq compliance**, and accelerating its path to profitability by winding down legacy products like **MogoCard** and **MogoProtect** - Became the largest shareholder of **WonderFi** (**TSX:WNDR**), Canada's only fully regulated crypto exchange, holding an approximate **13% ownership stake**[85](index=85&type=chunk) - Completed a **three-for-one share consolidation** in **August 2023** to regain compliance with **Nasdaq's minimum bid price rule**[85](index=85&type=chunk)[86](index=86&type=chunk) - Prioritized profitability by winding down legacy products, including the **MogoCard** prepaid card and **MogoProtect** identity fraud monitoring[86](index=86&type=chunk) - Launched '**Buffett Mode**' self-directed investing app and formed strategic partnerships with **Postmedia** and **Tom Lee's Fundstrat**[84](index=84&type=chunk)[85](index=85&type=chunk) [2022 Developments](index=18&type=section&id=2022%20Developments) In **2022**, **Mogo** aggressively pursued profitability through significant cost-cutting, including a **33% reduction in workforce** and the exit of its **MogoCrypto** product and **Moka France** operations, resulting in the company reporting its first positive quarterly adjusted **EBITDA** since **2020** in **Q4 2022**, while also growing its member base to **2 million** and forming **Mogo Ventures** to manage its investment portfolio - Implemented significant cost reduction initiatives, including an approximate **33% reduction in workforce**, leading to a **$9.2 million decrease in quarterly operating expenses** from **Q1 to Q4 2022**[88](index=88&type=chunk)[92](index=92&type=chunk) - Exited the **MogoCrypto** product and monetized the digital assets on its balance sheet, with remaining crypto exposure primarily through its investment in **Coinsquare** (now **WonderFi**)[92](index=92&type=chunk) - Grew its member base to **2 million members**[92](index=92&type=chunk) - Formed **Mogo Ventures** to manage its investment portfolio, including legacy investments in companies like **Hootsuite** and **Alida**[92](index=92&type=chunk) [Risk Factors](index=19&type=section&id=RISK%20FACTORS) The company outlines a comprehensive set of risks that could materially affect its business, broadly categorized into economic, operational, regulatory, financial, and strategic risks, including the impact of economic downturns on loan defaults, reliance on proprietary credit models, extensive and evolving regulations, cybersecurity threats, dependence on concentrated debt financing with restrictive covenants, and risks associated with its significant investment in the volatile cryptocurrency sector via **WonderFi** - **Economic and Credit Risk:** Worsening economic conditions may increase member loan default rates. The company's allowance for loan losses is based on subjective factors and may not be adequate[90](index=90&type=chunk)[93](index=93&type=chunk) - **Operational and Technology Risk:** The business relies heavily on its **proprietary credit scoring model**, is vulnerable to **cybersecurity incidents**, and must comply with complex data privacy laws. It also depends on third-party platforms like the **Apple App Store** and **Google Play** for distribution[94](index=94&type=chunk)[144](index=144&type=chunk)[168](index=168&type=chunk) - **Regulatory Risk:** The business is subject to extensive regulation. This includes changes to the **criminal rate of interest** for its lending products, **CIRO** regulations for **MogoTrade**, and evolving rules for cryptocurrency, which affects its investment in **WonderFi**[108](index=108&type=chunk)[110](index=110&type=chunk)[115](index=115&type=chunk) - **Financial Risk:** The company has a history of losses, relies on a **highly concentrated source of debt financing** (**Credit Facility**), and must adhere to **restrictive covenants**. Its total indebtedness was **$48.8 million** on its **Credit Facility** and **$35.3 million** in debentures as of **Dec 31, 2024**[96](index=96&type=chunk)[129](index=129&type=chunk)[134](index=134&type=chunk) - **Investment and Market Risk:** **Mogo's** approximate **13% stake** in **WonderFi** exposes it to the **volatility and reputational risks** of the cryptocurrency market, including negative publicity from **fraudulent actors** in the space[113](index=113&type=chunk)[136](index=136&type=chunk) [Dividends and Distributions](index=37&type=section&id=DIVIDENDS%20AND%20DISTRIBUTIONS) The company has not declared dividends in the past three financial years and does not intend to pay dividends in the foreseeable future, planning to reinvest all future earnings for business development and growth - **No dividends** have been declared on the Company's securities in the **three most recently completed financial years**[195](index=195&type=chunk) - The Company does **not intend to pay dividends** in the **foreseeable future**, as it plans to **reinvest all future earnings** to finance **business development and growth**[196](index=196&type=chunk) [Description of Capital Structure](index=38&type=section&id=DESCRIPTION%20OF%20CAPITAL%20STRUCTURE) The company's capital structure consists of **unlimited Common Shares**, with **24,472,377** currently issued and outstanding, and **unlimited Preferred Shares** with **0** issued, where each Common Share grants **one vote** and dividend rights Capital Structure as of AIF Date | Security Type | Authorized | Issued and Outstanding | | :--- | :--- | :--- | | **Common Shares** | **Unlimited** | **24,472,377** | | **Preferred Shares** | **Unlimited** | **0** | - Each **Common Share** entitles the holder to **one vote** at shareholder meetings and to receive dividends when declared[198](index=198&type=chunk) [Market for Securities](index=38&type=section&id=MARKET%20FOR%20SECURITIES) The company's common shares trade on the **TSX** and **Nasdaq** under the symbol '**MOGO**', with details on monthly trading prices and volumes provided for the **2024 fiscal year**, and no outstanding securities subject to escrow or contractual transfer restrictions [Trading Price and Volume](index=38&type=section&id=TRADING%20PRICE%20AND%20VOLUME) The company's common shares trade on the **TSX** and **Nasdaq** under the symbol '**MOGO**'. This section provides a table detailing the monthly high and low trading prices and average trading volumes on both exchanges for the **2024 fiscal year** 2024 Monthly Trading Summary (Sample - High/Low Price) | Month | TSX High (CAD) | TSX Low (CAD) | Nasdaq High (USD) | Nasdaq Low (USD) | | :--- | :--- | :--- | :--- | :--- | | **Jan 2024** | **$2.62** | **$1.89** | **$1.97** | **$1.40** | | **Mar 2024** | **$3.08** | **$2.34** | **$2.25** | **$1.74** | | **Jun 2024** | **$2.29** | **$1.91** | **$1.68** | **$1.31** | | **Sep 2024** | **$1.72** | **$1.49** | **$1.28** | **$1.09** | | **Dec 2024** | **$2.40** | **$1.82** | **$1.73** | **$1.27** | [Escrowed Securities and Securities Subject to a Contractual Restriction on Transfer](index=38&type=section&id=ESCROWED%20SECURITIES%20AND%20SECURITIES%20SUBJECT%20TO%20A%20CONTRACTUAL%20RESTRICTION%20ON%20TRANSFER) As of the date of this **AIF**, the company reports that, to its knowledge, there are **no outstanding securities** subject to **escrow arrangements** or **contractual restrictions on transfer** - To the knowledge of the Company, **no securities** are currently subject to **escrow** or **contractual transfer restrictions**[200](index=200&type=chunk) [Prior Sales](index=39&type=section&id=PRIOR%20SALES) During **2024**, the company issued several securities not listed on a marketplace, consisting of **stock options** and **warrants**, with a table detailing the issue dates, exercise prices, and number of securities for these issuances Unlisted Securities Issued in 2024 | Security Type | Issue Date | Exercise Price | Number of Securities | | :--- | :--- | :--- | :--- | | **Options** | **Mar 31, 2024** | **$2.71** | **64,400** | | **Options** | **Jun 30, 2024** | **$2.04** | **145,041** | | **Options** | **Sep 30, 2024** | **$1.63** | **5,800** | | **Options** | **Dec 31, 2024** | **$1.86** | **54,500** | | **Warrants** | **Aug 9, 2024** | **$2.15** | **500,000** | [Directors and Officers](index=39&type=section&id=DIRECTORS%20AND%20OFFICERS) This section lists the company's directors and executive officers, including their positions and principal occupations, with key figures like **David Feller** (**Chair & CEO**) and **Gregory Feller** (**President & CFO**), who collectively owned or controlled approximately **8%** of the company's **issued and outstanding Common Shares** [Name, Occupation and Security Holding](index=39&type=section&id=NAME,%20OCCUPATION%20AND%20SECURITY%20HOLDING) This section lists the company's directors and executive officers as of the **AIF** date, including their positions and principal occupations. Key figures include **David Feller** (**Chair & CEO**) and **Gregory Feller** (**President & CFO**). Collectively, the directors and executive officers beneficially owned or controlled approximately **8%** of the company's **issued and outstanding Common Shares** - Key executive officers include **David Feller** (**Chair & CEO**), **Gregory Feller** (**President & CFO**), and **Justin Carter** (**COO**)[204](index=204&type=chunk) - As of the **AIF** date, directors and executive officers as a group beneficially owned or controlled approximately **8%** of the Company's **issued and outstanding Common Shares**[205](index=205&type=chunk) [Biographies](index=40&type=section&id=BIOGRAPHIES) Professional biographies are provided for the company's directors and key officers, including **David Feller**, the founder and **CEO**; **Gregory Feller**, co-founder, President, and **CFO** with a background in investment banking; and other directors with experience in technology, private equity, and entrepreneurship - **David Feller**, founder and **CEO**, has led **Mogo** for over **20 years**[207](index=207&type=chunk) - **Gregory Feller**, President and **CFO**, has a background in technology investment banking at firms including **Citadel Securities**, **UBS**, and **Lehman Brothers**[208](index=208&type=chunk) - Director **Christopher Payne** co-founded **X.com** with **Elon Musk**, which later became **PayPal**[210](index=210&type=chunk) [Cease Trade Orders, Bankruptcies, Penalties or Sanctions](index=41&type=section&id=CEASE%20TRADE%20ORDERS,%20BANKRUPTCIES,%20PENALTIES%20OR%20SANCTIONS) The company confirms that none of its directors, executive officers, or major shareholders have been subject to any corporate **cease trade orders**, personal or corporate bankruptcies, or significant penalties or sanctions from courts or securities regulators within the last **10 years** - **No director** or executive officer has been subject to a **cease trade order** for more than **30 days** in the **past 10 years**[215](index=215&type=chunk) - **No director**, executive officer, or major shareholder has been involved in a **bankruptcy** or similar proceeding in the **past 10 years**[216](index=216&type=chunk) - **No director** or executive officer has been subject to **penalties or sanctions** by a court or securities regulator[217](index=217&type=chunk) [Interests of Management and Others in Material Transactions](index=41&type=section&id=INTERESTS%20OF%20MANAGEMENT%20AND%20OTHERS%20IN%20MATERIAL%20TRANSACTIONS) To the best of the company's knowledge, there have been **no material interests**, direct or indirect, held by directors, senior management, or shareholders with more than **10%** ownership in any transaction within the **last three years** that has materially affected the company - The company reports **no material interests** of directors, senior management, or major shareholders in any material transaction within the **last three years**[219](index=219&type=chunk) [Legal Proceedings and Regulatory Actions](index=42&type=section&id=LEGAL%20PROCEEDINGS%20AND%20REGULATORY%20ACTIONS) The company is involved in legal proceedings considered **normal to its business** but believes none are **material** to its financial condition or results of operations, and neither the Company nor its subsidiaries are involved in any **regulatory action** that would have a **material adverse effect** on the Company - The company states it is involved in legal proceedings considered **normal to its business** but believes none are **material** to its financial condition or results of operations[220](index=220&type=chunk) - Neither the Company nor its subsidiaries are involved in any **regulatory action** that would have a **material adverse effect** on the Company[221](index=221&type=chunk) [Transfer Agent and Registrar](index=42&type=section&id=TRANSFER%20AGENT%20AND%20REGISTRAR) The transfer agent and registrar for the Common Shares is **Computershare Investor Services Inc.**, located in **Vancouver, British Columbia** - The transfer agent and registrar for the Common Shares is **Computershare Investor Services Inc.**, located in **Vancouver, British Columbia**[222](index=222&type=chunk) [Material Contracts](index=42&type=section&id=MATERIAL%20CONTRACTS) The **only material contracts** listed, other than those in the **ordinary course of business**, are related to the company's **revolving credit facility** and associated **subordination agreements**, specifically the **Second Amended and Restated Revolving Credit and Guarantee Agreement** dated **February 26, 2025**, with **DB FSLF 50 LLC**, with copies available on the **SEDAR+** website - The **only material contracts** listed, other than those in the **ordinary course of business**, are related to the company's **revolving credit facility** and associated **subordination agreements**[223](index=223&type=chunk) - The primary material contract is the **Second Amended and Restated Revolving Credit and Guarantee Agreement** dated **February 26, 2025**, with **DB FSLF 50 LLC**[225](index=225&type=chunk) - Copies of these contracts are available on the **SEDAR+** website[224](index=224&type=chunk) [Experts](index=42&type=section&id=EXPERTS) The company's annual consolidated financial statements as of **December 31, 2024**, were audited by **MNP LLP**, an **independent registered public accounting firm**, which has confirmed its **independence** under all relevant **Canadian and U.S. professional and regulatory standards** - The company's annual consolidated financial statements as of **December 31, 2024**, were audited by **MNP LLP**, an **independent registered public accounting firm**[225](index=225&type=chunk) - **MNP LLP** has confirmed its **independence** with respect to the Company under all relevant **Canadian and U.S. professional and regulatory standards**[227](index=227&type=chunk) [Information on the Audit Committee](index=43&type=section&id=INFORMATION%20ON%20THE%20AUDIT%20COMMITTEE) The Audit Committee's charter, outlining its purpose, composition, and responsibilities, is attached as **Appendix A** to this Annual Information Form, with all members considered **independent** and **financially literate** under applicable Canadian and **U.S.** securities rules, and at least one member qualifying as an '**audit committee financial expert**' as defined by the **SEC** [The Audit Committee's Charter](index=43&type=section&id=THE%20AUDIT%20COMMITTEE%27S%20CHARTER) The company's Audit Committee Charter, which outlines the committee's purpose, composition, and responsibilities, is attached as **Appendix A** to this Annual Information Form - The full text of the Audit Committee Charter is provided in **Appendix A** of the **AIF**[228](index=228&type=chunk) [Composition of the Audit Committee](index=43&type=section&id=COMPOSITION%20OF%20THE%20AUDIT%20COMMITTEE) The Audit Committee is composed of three directors: **Christopher Payne** (**Chair**), **Kristin McAlister**, and **Kees Van Winters**. All members are considered **independent** and **financially literate** under applicable Canadian and **U.S.** securities rules - The Audit Committee consists of three directors: **Christopher Payne** (**Chair**), **Kristin McAlister**, and **Kees Van Winters**[229](index=229&type=chunk) - All three members are **independent** and **financially literate** in accordance with **NI 52-110** and **Nasdaq rules**[229](index=229&type=chunk) [Relevant Education and Experience](index=43&type=section&id=RELEVANT%20EDUCATION%20AND%20EXPERIENCE) The Board has determined that all members of the Audit Committee are **financially literate**, meaning they can read and understand complex financial statements, and at least one member qualifies as an '**audit committee financial expert**' as defined by the **SEC** - All committee members are deemed **financially literate**, capable of understanding complex financial statements comparable to the company's[230](index=230&type=chunk)[231](index=231&type=chunk) - At least one member of the committee is designated as an '**audit committee financial expert**' per **SEC** definition[231](index=231&type=chunk) [Audit Committee Oversight](index=43&type=section&id=AUDIT%20COMMITTEE%20OVERSIGHT) The Audit Committee's charter mandates that it must **pre-approve all audit and non-audit services** provided by the **external auditors**, a process designed to ensure the **auditor's independence** is not compromised - The Audit Committee is required to **pre-approve all audit and non-audit services** to be performed by the **external auditors**[232](index=232&type=chunk) - The pre-approval process includes considering the potential impact of non-audit services on the **auditor's independence**[232](index=232&type=chunk) [External Auditor Service Fees (By Category)](index=43&type=section&id=EXTERNAL%20AUDITOR%20SERVICE%20FEES%20(BY%20CATEGORY)) This section provides a breakdown of fees paid to the company's auditors for the fiscal years ended **December 31, 2023**, and **2024**. **Total fees paid** increased from **$1,422,238** in **2023** to **$1,540,538** in **2024**, with the majority of fees related to **audit services** Auditor Fees (2023 vs. 2024) | Fee Category | FY 2024 | FY 2023 | | :--- | :--- | :--- | | **Audit Fees** | **$1,171,629** | **$1,235,850** | | **Audit-Related Fees** | **$247,170** | **$0** | | **Tax Fees** | **$108,305** | **$155,492** | | **All Other Fees** | **$13,433** | **$30,896** | | **Total Fees Paid** | **$1,540,538** | **$1,422,238** | [Additional Information](index=44&type=section&id=ADDITIONAL%20INFORMATION) Additional information relating to the Company, including financial statements and management circulars, can be found on **SEDAR+** (**www.sedarplus.ca**) and **EDGAR** (**www.sec.gov**) - Additional information relating to the Company, including financial statements and management circulars, can be found on **SEDAR+** (**www.sedarplus.ca**) and **EDGAR** (**www.sec.gov**)[234](index=234&type=chunk)[235](index=235&type=chunk) [Appendix A – Audit Committee Charter](index=44&type=section&id=APPENDIX%20A%20%E2%80%93%20AUDIT%20COMMITTEE%20CHARTER) The Audit Committee Charter outlines the committee's mandate, composition, and extensive responsibilities, including assisting the Board with oversight of accounting, financial reporting, internal controls, and risk management, direct responsibility for the appointment, compensation, and oversight of the external auditor, and functions involving reviewing financial statements, overseeing the audit process, monitoring internal controls, and establishing procedures for handling complaints regarding financial matters - **Purpose and Composition:** The committee assists the Board in oversight of financial reporting and risk management. It must consist of a **minimum of three independent and financially literate directors**[236](index=236&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) - **External Auditor Oversight:** The committee is **directly responsible for recommending, compensating, and overseeing** the work of the external auditor, to whom the auditor must **report directly**. It must also **pre-approve all audit and non-audit services**[248](index=248&type=chunk)[259](index=259&type=chunk) - **Financial Review:** The committee reviews **annual and quarterly financial statements**, **MD&A**, and **earnings press releases** before public disclosure. It also discusses **critical accounting policies** and **major financial risk exposures** with management[255](index=255&type=chunk)[259](index=259&type=chunk)[262](index=262&type=chunk) - **Internal Controls and Compliance:** The committee is responsible for establishing procedures for the **confidential submission of complaints ('whistleblowing')** regarding accounting or auditing matters and reviews **related-party transactions** for **conflicts of interest**[266](index=266&type=chunk)[267](index=267&type=chunk)

Financial Data and Key Metrics Changes - In 2024, the company grew revenue by 9% to $71.2 million, driven by a 16% increase in wealth revenue and a 21% increase in payments revenue [6][10] - Adjusted EBITDA for the full year was $6.7 million, above the midpoint of the increased guidance [7][46] - The company ended the year with $49.1 million in cash, marketable securities, and investments, up from $36.2 million in Q3 [7][48] - Positive net income was reported at $10.4 million compared to $8.5 million in the prior period [46] Business Line Data and Key Metrics Changes - Wealth assets under management grew 22% year-over-year, reaching $428 million [7] - Wealth revenue reached a $12 million annual run rate, with a 19% increase in Q4 [8][45] - Payments revenue grew 21% in 2024, reaching $8.6 million, with total payments volume processing increasing 16% year-over-year to $11.5 billion [9][41] Market Data and Key Metrics Changes - The payments business, Carta Worldwide, saw a 14% year-over-year increase in payments volume to $3.2 billion in Q4, with revenue growing at a higher rate of 27% to $2.4 million [41] - The company anticipates 20% to 25% growth in wealth for 2025 and mid to high teens growth for payments [46][51] Company Strategy and Development Direction - The company is focusing on high-margin areas by exiting its institutional brokerage operations to streamline its business [10][49] - There is a significant opportunity in wealth management driven by AI, with a focus on scaling wealth and payments in a disciplined manner [10][34] - The company aims to transform the wealth management industry by applying first principles thinking and leveraging AI to align its business model with investor success [15][35] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious approach to lending due to economic uncertainties, particularly regarding U.S.-Canadian tariff disputes [52][66] - The company is prioritizing growth and investment in its key areas, with a focus on delivering better performance and lower costs through AI-driven platforms [35][54] - Management believes that the future of investing will be won by platforms that deliver the best results rather than those with the most features [29][36] Other Important Information - The company has monetized portions of its investment portfolio, including a stake in Canadian Crypto Exchange WonderFi, providing flexibility for future capital requirements [42][48] - The decision to exit the institutional brokerage business was made to eliminate distractions and focus on core objectives [60] Q&A Session Summary Question: Timing on the decision to leave the institutional brokerage business - Management indicated that the institutional brokerage business was a legacy operation that was never core to their strategy and was volatile, making it a distraction [58][60] Question: Potential acquisitions to scale wealth and payments - Management stated that while acquisitions are not a priority at the moment, they remain open to opportunities that align with their growth strategy [62] Question: Pulling back in the lending business - Management confirmed that the decision to be cautious in lending is proactive, influenced by macroeconomic uncertainties, particularly regarding tariffs [66]

Group 1: Bitcoin's Mainstream Acceptance - Bitcoin has gained legitimacy and mainstream status, with the SEC acknowledging it through spot Bitcoin ETFs like iShares Bitcoin Trust by BlackRock [1] - Companies like MicroStrategy have successfully used Bitcoin to enhance shareholder value, with its stock soaring 20x since 2020 [1] Group 2: Companies Embracing Bitcoin - More companies outside the tech sector are replacing cash reserves with Bitcoin or investing in it [3] - Alliance Resource Partners, the largest coal producer in the Eastern U.S., is diversifying into Bitcoin mining, having mined over $30 million worth of Bitcoin by April 2024 [6][11] - Semler Scientific adopted Bitcoin as its primary treasury reserve asset in May 2024, leading to a significant increase in its stock price from $26 to a peak of $81.56 [15] - Mogo Inc. approved an initial investment of up to $5 million in Bitcoin and Bitcoin ETFs, which initially boosted its stock price [21] Group 3: Financial Performance and Outlook - Alliance Resource Partners reported a revenue of $2.4 billion and net income of $360.9 million for the full year 2024, with a forecast of coal sales volumes between 32.25 million to 34.25 million tons for 2025 [7][8] - Semler Scientific holds 3,192 Bitcoins valued at an average price of $87,854 each, with a market capitalization growth of over 200% since adopting Bitcoin [19][20] - Mogo's Q3 2024 revenues rose 8.28% YoY to $12.69 million, with significant growth in its payment solutions business [22][23]

Core Insights - Mogo Inc reported a quarterly loss of $0.01 per share, outperforming the Zacks Consensus Estimate of a loss of $0.11, marking a 90.91% earnings surprise [1] - The company generated revenues of $12.96 million for the quarter ended September 2024, slightly missing the Zacks Consensus Estimate by 1.34%, but showing an increase from $12.06 million year-over-year [2] - Mogo shares have declined approximately 47.3% year-to-date, contrasting with the S&P 500's gain of 21.2% [3] Financial Performance - Over the last four quarters, Mogo has exceeded consensus EPS estimates three times [2] - The current consensus EPS estimate for the upcoming quarter is -$0.10 on projected revenues of $13.47 million, and for the current fiscal year, it is -$0.42 on revenues of $52.5 million [7] Market Outlook - The Zacks Industry Rank places Technology Services in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Mogo's current Zacks Rank is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6]

[Interim Condensed Consolidated Statements of Financial Position](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position) The company's total assets decreased to **$183.2 million**, while total equity declined to **$70.6 million** as of September 30, 2024 Interim Condensed Consolidated Statements of Financial Position (Unaudited, in thousands of Canadian Dollars) | | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalent | 9,765 | 16,133 | | Restricted cash | 2,665 | 1,737 | | Marketable securities | 12,517 | 26,332 | | Loans receivable, net | 60,349 | 61,717 | | Prepaid expenses, and other receivables and assets | 13,428 | 13,067 | | Investment portfolio | 11,274 | 11,436 | | Property and equipment | 372 | 526 | | Right-of-use assets | 593 | 670 | | Investment in sublease, net | 1,069 | 1,228 | | Intangible assets | 32,834 | 36,562 | | Goodwill | 38,355 | 38,355 | | **Total assets** | **183,221** | **207,763** | | **Liabilities** | | | | Accounts payable, accruals and other | 24,958 | 24,082 | | Lease liabilities | 2,297 | 2,709 | | Credit facility | 49,317 | 49,405 | | Debentures | 35,324 | 36,783 | | Derivative financial liabilities | - | 34 | | Deferred tax liability | 729 | 1,026 | | **Total liabilities** | **112,625** | **114,039** | | **Equity** | | | | Share capital | 389,717 | 389,806 | | Contributed surplus | 37,210 | 35,503 | | Foreign currency translation reserve | (430) | 243 | | Deficit | (355,901) | (331,828) | | **Total equity** | **70,596** | **93,724** | | **Total equity and liabilities** | **183,221** | **207,763** | [Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Total revenue increased to **$53.2 million** for the nine months ended September 30, 2024, with a net loss of **$24.1 million** Interim Condensed Consolidated Statements of Operations (Unaudited, in thousands of Canadian Dollars) | | Three months ended Sep 30, 2024 | Three months ended Sep 30, 2023 | Nine months ended Sep 30, 2024 | Nine months ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | | | | | | Subscription and services | 10,689 | 9,519 | 31,816 | 28,598 | | Interest revenue | 6,996 | 6,661 | 21,347 | 19,466 | | **Total Revenue** | **17,685** | **16,180** | **53,163** | **48,064** | | **Gross profit** | **11,898** | **11,387** | **35,299** | **35,198** | | Loss from operations | (398) | (843) | (3,584) | (3,652) | | Net loss | (8,112) | (9,504) | (24,073) | (26,396) | | Total comprehensive loss | (8,661) | (9,483) | (24,746) | (26,495) | | Basic and diluted loss per share | (0.33) | (0.38) | (0.99) | (1.06) | [Interim Condensed Consolidated Statements of Changes in Equity (Deficit)](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Deficit)) Total equity decreased to **$70.6 million** as of September 30, 2024, primarily due to a net loss of **$24.1 million** - Total equity decreased from **$93.7 million** at the end of 2023 to **$70.6 million** as of September 30, 2024. The decrease was primarily driven by a net loss of **$24.1 million** for the nine-month period[9](index=9&type=chunk) Changes in Equity for the nine months ended September 30, 2024 (in thousands of Canadian Dollars) | | Share capital | Contributed surplus | Foreign currency translation reserve | Deficit | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Balance, Dec 31, 2023** | **389,806** | **35,503** | **243** | **(331,828)** | **93,724** | | Net loss | — | — | — | (24,073) | (24,073) | | Foreign currency translation reserve | — | — | (673) | — | (673) | | Stock-based compensation | — | 1,724 | — | — | 1,724 | | Other changes | (89) | (17) | — | — | (106) | | **Balance, Sep 30, 2024** | **389,717** | **37,210** | **(430)** | **(355,901)** | **70,596** | [Interim Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a reduced net cash outflow of **$6.4 million** for the nine months ended September 30, 2024, driven by improved operating cash flow Consolidated Statements of Cash Flows (Unaudited, in thousands of Canadian Dollars) | | Nine months ended Sep 30, 2024 | Nine months ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | (1,809) | (6,967) | | Net cash used in investing activities | (1,996) | (2,104) | | Net cash used in financing activities | (2,541) | (2,443) | | **Net decrease in cash and cash equivalent** | **(6,368)** | **(11,553)** | | Cash and cash equivalent, beginning of period | 16,133 | 29,268 | | **Cash and cash equivalent, end of period** | **9,765** | **17,715** | - For the nine months ended September 30, 2024, the company experienced a net cash outflow of **$6.4 million**, a significant improvement from the **$11.6 million** outflow in the same period of 2023. This was primarily due to a reduction in cash used in operating activities[13](index=13&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, financial instrument risks, and specific balance sheet and income statement items [1. Nature of operations](index=7&type=section&id=1.%20Nature%20of%20operations) Mogo Inc. is a Canadian financial technology company offering digital financial health solutions, including trading, investing, loans, and payments, and completed a 3-for-1 share consolidation in August 2023 - Mogo offers a suite of digital financial products: commission-free stock trading, Moka for managed investing, digital loans and mortgages, and the Carta Worldwide payments platform[15](index=15&type=chunk) - The company completed a **3-for-1** share consolidation on August 14, 2023. All share and per-share amounts in the report are adjusted to reflect this consolidation[16](index=16&type=chunk) [2. Basis of presentation](index=7&type=section&id=2.%20Basis%20of%20presentation) The unaudited interim financial statements are prepared under IAS 34 and IFRS on a going concern basis, presented in Canadian dollars, and include a reclassification of investment portfolio assets - The financial statements have been prepared on a going concern basis, with management concluding the Company has adequate resources for the foreseeable future (at least 12 months from November 6, 2024)[19](index=19&type=chunk)[20](index=20&type=chunk) - The statements are presented in Canadian dollars, and the functional currencies of various international subsidiaries include GBP, EUR, MAD, and SGD[25](index=25&type=chunk) - A reclassification was made in the current year, moving a portion of the investment portfolio to marketable securities to improve presentation, with no effect on reported results[24](index=24&type=chunk) [3. Material accounting policies](index=8&type=section&id=3.%20Material%20accounting%20policies) Accounting policies remain consistent with the 2023 annual statements, and the adoption of IAS 1 amendments had no material impact on the financial statements - Accounting policies are consistent with the annual statements for the year ended December 31, 2023[26](index=26&type=chunk) - The adoption of amendments to IAS 1 on January 1, 2024, regarding the classification of liabilities, did not materially impact the financial statements[28](index=28&type=chunk) [4. Loans receivable](index=9&type=section&id=4.%20Loans%20receivable) Net loans receivable decreased to **$60.3 million** as of September 30, 2024, while the allowance for loan losses increased to **$13.9 million**, with a pessimistic scenario potentially increasing it by **$1.14 million** Loans Receivable, Net (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Gross loans receivable | 74,236 | 74,272 | | Allowance for loan losses | (13,887) | (12,555) | | **Loans receivable, net** | **60,349** | **61,717** | Allowance for Loan Losses by Stage (in thousands of CAD) | | Stage 1 (Lower Risk) | Stage 2 (Medium/Higher Risk) | Stage 3 (Non-performing) | Total | | :--- | :--- | :--- | :--- | :--- | | **Sep 30, 2024** | (6,107) | (2,550) | (6,215) | **(13,887)** | | **Dec 31, 2023** | (6,445) | (2,074) | (4,844) | **(12,555)** | - Management's allowance model considers macroeconomic factors like unemployment and inflation. A pessimistic scenario would increase the allowance for credit losses by **$1.14 million** as of September 30, 2024[32](index=32&type=chunk) [5. Marketable securities](index=11&type=section&id=5.%20Marketable%20securities) The company's marketable securities significantly decreased to **$12.5 million** as of September 30, 2024, primarily due to a reduction in the value of its WonderFi Technologies Inc. holdings Marketable Securities (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | WonderFi Technologies Inc. | 12,175 | 25,654 | | Others | 342 | 678 | | **Total** | **12,517** | **26,332** | [6. Property and equipment](index=11&type=section&id=6.%20Property%20and%20equipment) The net book value of property and equipment, consisting of computer equipment, decreased to **$372 thousand** as of September 30, 2024, due to depreciation charges Property and Equipment, Net Book Value (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Net book value | 372 | 526 | - Depreciation expense for property and equipment was **$169 thousand** for the nine months ended September 30, 2024, compared to **$268 thousand** for the same period in 2023[36](index=36&type=chunk) [7. Intangible assets](index=12&type=section&id=7.%20Intangible%20assets) The net book value of intangible assets decreased to **$32.8 million** as of September 30, 2024, driven by **$6.2 million** in amortization, partially offset by **$2.4 million** in additions Intangible Assets, Net Book Value (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Net book value | 32,834 | 36,562 | - Amortization of intangible assets for the nine months ended September 30, 2024, was **$6.2 million**, slightly lower than the **$6.1 million** recorded in the same period of 2023[37](index=37&type=chunk) [8. Credit facility](index=13&type=section&id=8.%20Credit%20facility) The company's **$60 million** senior secured credit facility's maturity was extended to January 2, 2026, and a waiver was granted for a potential tangible net worth covenant breach - The maturity date of the **$60 million** senior secured credit facility was extended from July 2, 2025, to January 2, 2026[39](index=39&type=chunk) - The company was granted a waiver for a potential breach of its tangible net worth covenant, which was at risk due to unrealized losses on its investment in WonderFi Technologies Inc[42](index=42&type=chunk) Credit Facility Balance (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Balance, end of the period | 49,317 | 49,405 | [9. Debentures](index=14&type=section&id=9.%20Debentures) The company's debentures, with an outstanding balance of **$35.3 million** as of September 30, 2024, are subordinated to the credit facility, extending their maturity to January 2, 2026, with payment options in cash or shares Debentures Balance (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Principal balance | 35,453 | 37,020 | | Discount | (867) | (1,000) | | Interest payable | 738 | 763 | | **Total Balance** | **35,324** | **36,783** | - The debentures are subordinated to the credit facility, which extends their maturity dates to January 2, 2026, aligning with the credit facility's maturity[48](index=48&type=chunk) - Debenture principal repayments are payable in either cash or Common Shares at Mogo's option[50](index=50&type=chunk) [10. Derivative financial liabilities](index=15&type=section&id=10.%20Derivative%20financial%20liabilities) The company's derivative financial liabilities, related to stock warrants, were reduced to **zero** as of September 30, 2024, due to fair value changes and the expiry of **891,000** warrants - Stock warrants with a USD-denominated exercise price are classified as a liability and revalued at each reporting date; the liability was reduced to **zero** as of Q3 2024[52](index=52&type=chunk)[55](index=55&type=chunk) Warrants Outstanding (Derivative Liability, in thousands) | | Warrants outstanding (000s) | Weighted average exercise price $ | | :--- | :--- | :--- | | Balance, Dec 31, 2023 | 1,910 | 29.06 | | Warrants expired | (891) | 41.84 | | **Balance, Sep 30, 2024** | **1,019** | **17.88** | [11. Geographic information](index=16&type=section&id=11.%20Geographic%20information) The company primarily generates revenue and holds non-current assets in Canada, with a smaller portion of revenue from Europe [11a. Revenue](index=16&type=section&id=11a.%20Revenue) For the nine months ended September 30, 2024, total revenue grew to **$53.2 million**, with Canada contributing **$47.4 million** and Europe **$5.7 million** Revenue by Geographic Location (in thousands of CAD) | | Nine months ended Sep 30, 2024 | Nine months ended Sep 30, 2023 | | :--- | :--- | :--- | | Canada | 47,449 | 43,395 | | Europe | 5,714 | 4,669 | | **Total** | **53,163** | **48,064** | [11b. Non-current assets](index=17&type=section&id=11b.%20Non-current%20assets) The company's non-current assets are predominantly located in Canada, totaling **$73.0 million** as of September 30, 2024 Non-current Assets by Geographic Location (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Canada | 73,037 | 77,032 | | Europe | 163 | 263 | | Other | 23 | 46 | | **Total** | **73,223** | **77,341** | [12. Expense by nature and function](index=17&type=section&id=12.%20Expense%20by%20nature%20and%20function) Total operating expenses for the nine months ended September 30, 2024, were **$38.9 million**, with personnel and depreciation/amortization as the largest categories by nature Operating Expenses by Nature (Nine months ended Sep 30, in thousands of CAD) | Expense Category | 2024 | 2023 | | :--- | :--- | :--- | | Personnel expense | 15,430 | 15,486 | | Depreciation and amortization | 6,426 | 6,682 | | Hosting and software licenses | 4,187 | 4,129 | | Marketing | 3,113 | 2,065 | | Professional services | 2,435 | 2,056 | | **Total** | **38,883** | **38,850** | [13. Revaluation loss](index=18&type=section&id=13.%20Revaluation%20loss) The company recorded a significant revaluation loss of **$12.5 million** for the nine months ended September 30, 2024, primarily due to **$13.4 million** in unrealized losses on its investment portfolio and marketable securities Revaluation Loss Components (Nine months ended Sep 30, in thousands of CAD) | | 2024 | 2023 | | :--- | :--- | :--- | | Unrealized loss on investment portfolio and marketable securities | 13,351 | 3,962 | | Unrealized foreign exchange (gain) | (725) | 91 | | Loss (gain) on modification of debentures | (364) | (195) | | Other items | 235 | 91 | | **Total** | **12,497** | **3,972** | [14. Other non-operating (income) expense](index=18&type=section&id=14.%20Other%20non-operating%20(income)%20expense) Other non-operating expenses substantially decreased to **$68 thousand** for the nine months ended September 30, 2024, mainly due to lower restructuring charges compared to the prior year Other Non-operating (Income) Expense (in thousands of CAD) | | Nine months ended Sep 30, 2024 | Nine months ended Sep 30, 2023 | | :--- | :--- | :--- | | Restructuring charges | 14 | 3,030 | | Acquisition costs and other | 54 | 215 | | **Total** | **68** | **3,245** | [15. Fair value of financial instruments](index=19&type=section&id=15.%20Fair%20value%20of%20financial%20instruments) The company classifies financial instruments into a three-level fair value hierarchy, with Level 1 assets valued using quoted prices and Level 3 assets using unobservable inputs, and a 5% market multiple change impacting profit or loss by **$561 thousand** [15b. Accounting classifications and fair values](index=20&type=section&id=15b.%20Accounting%20classifications%20and%20fair%20values) As of September 30, 2024, financial assets measured at fair value totaled **$23.8 million**, including **$12.5 million** in Level 1 marketable securities and **$11.3 million** in Level 3 investment portfolio Fair Value Hierarchy of Financial Assets (Sep 30, 2024, in thousands of CAD) | Asset Type | Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | | :--- | :--- | :--- | :--- | :--- | :--- | | Marketable securities | 12,517 | 12,517 | — | — | 12,517 | | Investment portfolio | 11,274 | — | — | 11,274 | 11,274 | [15c. Measurement of fair values](index=22&type=section&id=15c.%20Measurement%20of%20fair%20values) Level 3 fair values for unlisted equity investments are determined using recent investment prices and revenue multiples, with a 5% market multiple movement impacting profit or loss by **$561 thousand** - Valuation techniques for Level 3 unlisted equities include using revenue multiples ranging from **0.6x to 3.0x** and discounts for lack of marketability up to **20%**[74](index=74&type=chunk) Sensitivity Analysis of Level 3 Investment Portfolio (in thousands of CAD) | | Profit or loss Increase | Profit or loss Decrease | | :--- | :--- | :--- | | **Sep 30, 2024** | | | | Adjusted market multiple (5% movement) | 561 | (561) | [16. Nature and extent of risk arising from financial instruments](index=24&type=section&id=16.%20Nature%20and%20extent%20of%20risk%20arising%20from%20financial%20instruments) The company faces credit risk from unsecured loans, interest rate risk from its variable-rate credit facility, and liquidity risk managed through refinancing plans, with **$84.4 million** in contractual obligations due in 2026 - Credit risk is primarily from unsecured consumer loans; the company uses underwriting models based on historical data to manage this risk but cannot guarantee future delinquency rates will match historical levels[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - The company is exposed to interest rate risk through its credit facility, which has a variable rate tied to **SOFR (4.96% as at Sep 30, 2024)**[84](index=84&type=chunk) - The company has total contractual obligations of **$84.4 million** due in 2026, primarily related to the credit facility and debentures maturing[87](index=87&type=chunk) [17. Equity](index=26&type=section&id=17.%20Equity) As of September 30, 2024, the company had **24.5 million** common shares outstanding, with **3.4 million** stock options and **769 thousand** warrants outstanding, including **500,000** new warrants issued to Postmedia [17c. Options](index=26&type=section&id=17c.%20Options) As of September 30, 2024, **3.4 million** stock options were outstanding with a weighted average exercise price of **$5.14**, resulting in **$1.7 million** in stock-based compensation expense for the nine-month period Stock Option Activity (in thousands) | | Options outstanding (000s) | Weighted average exercise price $ | | :--- | :--- | :--- | | Balance, Dec 31, 2023 | 3,498 | 5.56 | | Options issued | 215 | 2.38 | | Exercised | (2) | 2.12 | | Forfeited | (306) | 7.89 | | **Balance, Sep 30, 2024** | **3,405** | **5.14** | - Total stock-based compensation costs related to options for the nine months ended September 30, 2024 was **$1.7 million**[96](index=96&type=chunk) [17d. Warrants](index=28&type=section&id=17d.%20Warrants) As of September 30, 2024, **769 thousand** warrants were outstanding with a weighted average exercise price of **$5.02**, including **500,000** new warrants issued to Postmedia Warrant Activity (in thousands) | | Warrants outstanding (000s) | Weighted average exercise price $ | | :--- | :--- | :--- | | Balance, Dec 31, 2023 | 358 | 20.53 | | Warrants issued | 500 | 2.15 | | Warrants expired | (89) | 51.15 | | **Balance, Sep 30, 2024** | **769** | **5.02** | - On August 9, 2024, Mogo issued **500,000 warrants** to Postmedia as part of a marketing collaboration agreement with an exercise price of **$2.15** and an expiry date of August 9, 2027[100](index=100&type=chunk) [18. Related party transactions](index=29&type=section&id=18.%20Related%20party%20transactions) Related party debentures held by shareholders, officers, and directors decreased to **$138 thousand** as of September 30, 2024, incurring **$11 thousand** in interest expense for the first nine months of 2024 - Related party transactions include debentures held by shareholders, officers, and directors[103](index=103&type=chunk) Related Party Debentures (in thousands of CAD) | | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Debentures Balance | 138 | 290 | | Interest Expense (YTD) | 11 | 18 (for 9 months ended Sep 30, 2023) |

Core Viewpoint - Mogo Inc (MOGO) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance Indicators - Mogo is projected to earn -$0.42 per share for the fiscal year ending December 2024, reflecting a year-over-year decline of 23.5% [8]. - Over the past three months, the Zacks Consensus Estimate for Mogo has increased by 22.8%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Mogo's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Data and Key Metrics Changes - Revenue increased by 10% year-over-year to $17.6 million [3][17] - Positive cash flow from operations of $0.5 million, compared to negative $1.8 million in Q2 of the previous year [18][20] - Adjusted EBITDA was $1.4 million, down modestly year-over-year but up 40% sequentially from Q1 [18] Business Line Data and Key Metrics Changes - Payments business, Carta, saw a 12% year-over-year increase in payment volume to $2.8 billion, with an annual run rate exceeding $10 billion [16] - Wealth business showed year-over-year growth, with significant product improvements and 21 updates released in the last quarter [8][19] - Average Revenue Per User (ARPU) for wealth products is $180, compared to an overall ARPU of $25 across all products [19][31] Market Data and Key Metrics Changes - The wealth industry is estimated at over $6 trillion in investable assets, with $2 trillion currently in mutual funds, indicating a significant market opportunity [4][6] - 75% of Canadians nearing retirement have saved less than $100,000, highlighting the need for better investment solutions [6] Company Strategy and Development Direction - The company aims to disrupt the wealth space in Canada by offering a fully managed solution alongside a self-directed investing app [7][15] - Strategic partnerships with Postmedia and Tom Lee of Fundstrat to enhance market presence and educate consumers on wealth building [14][28] - Focus on product improvements and customer experience to drive growth, with a goal of increasing word-of-mouth referrals [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the payments business and the long-term potential of the wealth business [24][28] - The company expects subscription services revenue to grow in the mid-teens for the full year and has introduced adjusted EBITDA guidance of $5 million to $6 million [21] - Anticipated savings from potential future interest rate reductions on the credit facility, with each 1% decrease equating to $0.5 million in cash savings [37] Other Important Information - The company ended the quarter with cash and total investments of approximately $41 million [20] - The wealth business is positioned as a core part of the company's strategy, with a focus on behavioral science to improve investment habits [7][10] Q&A Session Summary Question: Thoughts on cash flow moving forward - Management highlighted the importance of being cash flow positive on a consolidated basis and the ability to self-fund investments in the loan book [22][23] Question: Strategy for wealth and payments business - Management expects continued growth in the payments business and emphasized the importance of product improvements in the wealth business [24][26] Question: State of consumer credit and lending business outlook - The lending business is currently flat, with a focus on prioritizing wealth and payments, but management sees long-term value in lending [34][35] Question: Economics of the partnership with Tom Lee - The partnership is a marketing collaboration with no equity involved, and costs will be reflected in marketing expenses [36] Question: Impact of declining interest rates on expenses - Management indicated that a 1% decrease in interest rates could lead to $0.5 million in cash savings [37]