Offerpad Solutions Inc

Previous wording

During the first quarter of 2024, we generated solid operating results against a backdrop of continued volatility in the mortgage interest rate environment, sustained elevated levels of inflation in the broader economy and various other macroeconomic and geopolitical concerns. Our revenue increased to $285.4 million during the first quarter of 2024, which represents the third consecutive quarter-over-quarter improvement. Additionally, we achieved both quarter-over-quarter and year-over-year improvements in our gross profit margin during the first quarter of 2024, reflecting our continued progress toward improving the stability of our gross profit margin, and we currently anticipate this positive trajectory will continue on a quarter-over-quarter basis during the second quarter of 2024. Further, we increased our real estate inventory acquisition pace during the first quarter of 2024 as compared to the fourth quarter of 2023 and we had $266.1 million of homes in real estate inventory as of March 31, 2024.

Current wording

Against this backdrop, we achieved year-over-year improvements in our revenue and net loss during the second quarter of 2024, and our gross profit margin improved on a quarter-over-quarter basis for the second consecutive quarter, reflecting our continued progress toward improving the stability of our gross profit margin. Further, we slightly increased our real estate inventory acquisition pace during the second quarter of 2024 as compared to the first quarter of 2024 and we had $307.8 million of homes in real estate inventory as of June 30, 2024.

Previous wording

While our revenue and gross profit margin improved during the first quarter of 2024, the ongoing challenging residential real estate market conditions, combined with the impact of typical seasonal decline in the residential real estate market during the fall and winter, continued to have an impact on our operating results during the first quarter of 2024. Additionally, the combination of higher mortgage interest rates, sustained elevated levels of inflation and a limited supply of single-family resale homes have greatly reduced the affordability of homes. These factors have required us to use pricing adjustments and other incentives in recent periods, which had a negative impact on our operating results during the first quarter of 2024. Further, there continues to be uncertainty regarding the near-term macroeconomic conditions, including the path of ongoing inflation in the broader economy, the direction of mortgage interest rates, which have continued to increase during the second quarter of 2024 and the impact of geopolitical conflicts. We anticipate that the ongoing higher mortgage interest rate environment, economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the second quarter of 2024. Due to these conditions, we’re proactively optimizing our capital allocation across our highest performing and most efficient markets, and may be required to use similar pricing adjustments and incentives in the future.

Current wording

While we generated solid operating results during the first half of 2024, the ongoing challenging residential real estate market conditions continued to have an impact on our operating results. These conditions have required us to use pricing adjustments and other incentives in recent periods, which had a negative impact on our operating results during the first half of 2024. Further, there continues to be uncertainty regarding the near-term macroeconomic conditions, including the path of ongoing inflation in the broader economy, the direction of mortgage interest rates and the impact of geopolitical conflicts. We anticipate that the ongoing higher mortgage interest rate environment, economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the third quarter of 2024. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future.

Previous wording

In order to drive additional value from our agent partnership program, we implemented various enhancements to the program during the first quarter of 2024. Under the enhanced program, our partner agents can continue to request a cash offer on behalf of their clients, and now also have the ability to list an acquired home and ready for resale. Additionally, partner agents in the top tier of the program have access to sellers in defined zones and have the potential to list other Offerpad-owned homes in their zone.

Current wording

In order to drive additional value from our agent partnership program, we implemented various enhancements to the program during the first half of 2024. Under the enhanced program, our partner agents can continue to request a cash offer on behalf of their clients, and now also have the ability to list an acquired home and ready for resale. Additionally, partner agents in the top tier of the program have access to sellers in defined zones and have the potential to list other Offerpad-owned homes in their zone.

Previous wording

Since our launch in 2015, we have expanded into 25 markets as of December 31, 2023, which covered roughly 22% of the 4.7 million homes sold in the United States in 2023. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach to our asset-light platform offerings, which include our listing and renovation services, and our agent partnership program, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through these other service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we began offering renovation services in two additional markets during the first quarter of 2024, bringing our total markets served to 27 as of March 31, 2024.

Current wording

Since our launch in 2015, we have expanded into 25 markets as of December 31, 2023, which covered roughly 22% of the 4.7 million homes sold in the United States in 2023. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach to our asset-light platform offerings, which include our listing and renovation services, and our agent partnership program, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through these other service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we began offering renovation services in two additional markets during the first half of 2024, bringing our total markets served to 27 as of June 30, 2024.

Previous wording

Our renovation services represent an important component of our asset-light platform offerings. Through our renovation services offering, we are able to leverage our existing logistics, operations, technology and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee. Although our renovation services offering is in the early stages, representing approximately 2% of our total consolidated revenue during the three months ended March 31, 2024, we believe these services could be a more significant component of our business over time.

Current wording

Our renovation services represent an important component of our asset-light platform offerings. Through our renovation services offering, we are able to leverage our existing logistics, operations, technology and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee. Although our renovation services offering is in the early stages, representing approximately 2% of our total consolidated revenue during each of the three and six months ended June 30, 2024, we believe these services could be a more significant component of our business over time.

Previous wording

Another component of our asset-light platform offerings includes our program that allows investors and single-family rental companies an opportunity to purchase homes from homeowners, matching investors with sellers. These transactions occur in several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing. We expect this program will allow us to help more homeowners sell their home and expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home. This offering represented less than 1% of our total consolidated revenue during the three months ended March 31, 2024.

Current wording

Another component of our asset-light platform offerings includes our program that allows investors and single-family rental companies an opportunity to purchase homes from homeowners, matching investors with sellers. These transactions occur in several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing. We expect this program will allow us to help more homeowners sell their home and expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home. This offering represented less than 1% of our total consolidated revenue during each of the three and six months ended June 30, 2024.

Previous wording

Offerpad Home Loans (“OPHL”): We provide access to mortgage services through our in-house mortgage solution, OPHL, or through a third-party lending partner.

Current wording

Offerpad Home Loans (“OPHL”): We have historically provided access to mortgage services through either our in-house mortgage solution, OPHL, or a third-party lending partner.

Previous wording

Bundle Rewards: The Offerpad Bundle Rewards program allows customers to receive multiple discounts when selling and buying a home with Offerpad, and by obtaining their home loan with OPHL.

Current wording

Bundle Rewards: The Offerpad Bundle Rewards program allows customers to receive discounts when combining multiple Offerpad products and services, including selling and buying a home.

Previous wording

Our ancillary products and services represented less than 1% of our total consolidated revenue during the three months ended March 31, 2024.

Current wording

Our ancillary products and services represented less than 1% of our total consolidated revenue during each of the three and six months ended June 30, 2024.

Previous wording

Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our real estate inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter real estate inventory holding periods limit pricing exposure. As we increased our scale and improved our workflow optimization in prior years, our average real estate inventory holding period of homes sold improved from 138 days in 2016 to 101 days during 2022 and 97 days during the fourth quarter of 2023, which is consistent with our expected average real estate inventory holding period and our historical norm.

Current wording

Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our real estate inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter real estate inventory holding periods limit pricing exposure. As we increased our scale and improved our workflow optimization in prior years, our average real estate inventory holding period of homes sold improved from 138 days in 2016 to 97 days during the fourth quarter of 2023, which is consistent with our expected average real estate inventory holding period and our historical norm. The average holding period of homes sold increased to 113 days during the first quarter of 2024, reflecting the anticipated, normal seasonal increase.

Previous wording

During the first quarter of 2024, the average holding period of homes sold increased to 113 days, reflecting the anticipated, normal seasonal increase. Based on current residential real estate market conditions, we anticipate our average real estate inventory holding period in the second quarter of 2024 will remain consistent at around 110 days.

Current wording

During the second quarter of 2024, the average holding period of homes sold decreased to 106 days, as we increased our home acquisition pace for the second consecutive quarter and our overall real estate inventory mix shifted to include a greater composition of newer acquired homes. Based on current residential real estate market conditions, we anticipate our average real estate inventory holding period in the third quarter of 2024 will remain consistent at around 110 days.

Previous wording

The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023.

Previous wording

General and administrative expense decreased by $2.5 million, or 17.4%, to $12.0 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease in expense was primarily attributable to a decrease in fees associated with our credit facilities, and decreased average employee headcount.

Current wording

General and administrative expense decreased by $2.2 million, or 17.1%, to $10.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease in expense was primarily attributable to a decrease in fees associated with our credit facilities and decreased average employee headcount.

Previous wording

Technology and development expense decreased by $0.5 million, or 20.9%, to $1.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease in expense was primarily attributable to decreased average employee headcount.

Current wording

Technology and development expense decreased by $1.3 million, or 58.3%, to $1.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease in expense was primarily attributable to decreased average employee headcount.

Previous wording

Change in fair value of warrant liabilities represents a gain of $0.3 million for the three months ended March 31, 2024 and a loss of $0.4 million for the three months ended March 31, 2023, as a result of the fair value adjustment of our warrant liabilities.

Current wording

Change in fair value of warrant liabilities represents a loss of less than $0.1 million for the three months ended June 30, 2024 and a gain of $0.4 million for the three months ended June 30, 2023, as a result of the fair value adjustment of our warrant liabilities.

Previous wording

Other income, net during the three months ended March 31, 2024 represents interest income earned on our cash and cash equivalents.

Current wording

Other income, net during the three months ended June 30, 2024 principally represents interest income earned on our cash and cash equivalents. Other income, net during the three months ended June 30, 2023 principally represents interest income earned on our cash and cash equivalents, which was partially offset by the loss that was recorded as a result of the fair value adjustment of the derivative financial instruments that were entered into to manage risks that were principally associated with interest rate fluctuations.

Previous wording

Revenue decreased by $324.2 million, or 53.2%, to $285.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily attributable to lower sales volumes and a lower average sales price per home. We sold 847 homes during the three months ended March 31, 2024 compared to 1,609 homes during the three months ended March 31, 2023, representing a decrease of 47.4%. Additionally, the average resale home price decreased from $379,000 in the three months ended March 31, 2023 to $332,000 in the three months ended March 31, 2024. During the three months ended March 31, 2023, we focused on selling our existing inventory of homes acquired prior to the significant market transition that occurred in the middle of 2022, resulting in a higher number of homes sold during the first quarter of 2023 as compared to the first quarter of 2024. The decrease in average sales price per home during the three months ended March 31, 2024 was primarily due to our increased focus on geographic markets that tend to share relatively lower median price points as higher mortgage interest rates and sustained elevated levels of inflation in the broader economy have continued to negatively impact the residential real estate market conditions. We have also continued to refine our target home purchase price range to focus on acquiring homes with the greatest price stability within each market.

Current wording

Revenue decreased by $303.2 million, or 36.1%, to $536.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily attributable to lower sales volumes and a lower average sales price per home. We sold 1,589 homes during the six months ended June 30, 2024 compared to 2,259 during the six months ended June 30, 2023, representing a decrease of 29.7%. Additionally, the average resale home price decreased from $374,000 in the six months ended June 30, 2023 to $333,000 in the six months ended June 30, 2024. During the early stages of 2023, we focused on selling our existing inventory of homes acquired prior to the significant market transition that occurred in the middle of 2022, resulting in a higher number of homes sold during the first half of 2023 as compared to the first half of 2024. This was partially offset by the increase in homes sold in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease in average sales price per home during the six months ended June 30, 2024 was primarily due to our increased focus on geographic markets that tend to share relatively lower median price points as higher mortgage interest rates and sustained elevated levels of inflation in the broader economy have continued to negatively impact the residential real estate market conditions. We have also continued to refine our target home purchase price range to focus on acquiring homes with the greatest price stability within each market.

Previous wording

Cost of revenue decreased by $339.5 million, or 56.4%, to $262.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This decrease was primarily attributable to lower sales volumes, a lower average home acquisition price and a decrease in the real estate inventory valuation adjustment.

Current wording

Cost of revenue decreased by $318.2 million, or 39.3%, to $492.0 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was primarily attributable to lower sales volumes, a lower average home acquisition price, and a decrease in the real estate inventory valuation adjustment.

Previous wording

Gross profit margin was 7.9% for the three months ended March 31, 2024 compared to 1.2% for the three months ended March 31, 2023. The increase in gross profit margin was primarily due to an increase in the difference between the average home resale price and the average home acquisition price during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, and a $6.7 million decrease in the real estate inventory valuation adjustment during the three months ended March 31, 2024 compared to the three months ended March 31, 2023. These changes were primarily due to our focus on selling our existing inventory of homes acquired prior to the significant market transition that occurred in the middle of 2022 during the first quarter of 2023, resulting in a lower gross profit margin during the first quarter of 2023 as compared to the first quarter of 2024.

Current wording

Gross profit margin was 8.3% for the six months ended June 30, 2024 compared to 3.5% for the six months ended June 30, 2023. The increase in gross profit margin was primarily due to an increase in the difference between the average home resale price and the average home acquisition price during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, and a $6.3 million decrease in the real estate inventory valuation adjustment during the six months ended

Previous wording

Sales, marketing and operating expense decreased by $19.9 million, or 47.0%, to $22.5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease in expense was primarily attributable to the decrease in variable costs associated with the decrease in homes sold, a $3.6 million decrease in advertising expense as we reduced marketing efforts in response to the ongoing challenging residential real estate market conditions, and decreased average employee headcount.

Current wording

Sales, marketing and operating expense decreased by $28.7 million, or 40.2%, to $42.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in expense was primarily attributable an $11.0 million decrease in advertising expense as we repositioned and optimized our marketing efforts in response to the ongoing challenging residential real estate market conditions, a decrease in variable costs associated with the decrease in homes sold and decreased average employee headcount.

Previous wording

Interest expense decreased by $2.5 million, or 34.0%, to $4.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease in expense was primarily attributable to an $89.7 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $347.4 million during the three months ended March 31, 2023 to $257.7 million during the three months ended March 31, 2024. This decrease was partially offset by a 0.86% increase in the weighted average variable interest rates associated with these senior and mezzanine secured credit facilities.

Current wording

Interest expense decreased by $0.2 million, or 2.0%, to $9.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in expense was primarily attributable to a $104.8 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $386.9 million during the six months ended June 30, 2023 to $282.1 million during the six months ended June 30, 2024. This decrease was partially offset by a 0.8% increase in the weighted average variable interest rates associated with these senior and mezzanine secured credit facilities.

Previous wording

We recorded income tax expenses of $0.1 million during each of the three months ended March 31, 2024 and 2023, respectively, and our effective tax rate was an expense of 0.7% and 0.2% for the respective periods. Our effective tax rate during the three months ended March 31, 2024 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.

Current wording

We recorded income tax expense of $0.1 million and $0.2 million during the six months ended June 30, 2024 and 2023, respectively, and our effective tax rate was an expense of 0.2% for each of the respective periods. Our effective tax rate during the six months ended June 30, 2024 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.

Previous wording

Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of March 31, 2024, we had cash and cash equivalents of $68.6 million and had a total undrawn borrowing capacity under our senior and mezzanine secured credit facilities of $796.0 million, $306.2 million of which is committed and $489.8 million uncommitted.

Current wording

Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of June 30, 2024, we had cash and cash equivalents of $56.9 million and had a total undrawn borrowing capacity under our senior and mezzanine secured credit facilities of $747.1 million, $207.3 million of which is committed and $539.8 million uncommitted.

Previous wording

With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three months ended March 31, 2024, and may incur additional losses in the future. Since our launch in 2015, we have invested in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software and technology platform. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of asset-light platform services.

Current wording

With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three and six months ended June 30, 2024, and may incur additional losses in the future. Since our launch in 2015, we have invested in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software and technology platform. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of asset-light platform services.

Previous wording

The following summarizes our cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Previous wording

Net cash provided by operating activities was $2.4 million and $426.4 million for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, net cash provided by operating activities primarily resulted from a $9.8 million decrease in real estate inventory as a result of sales volumes increasing at a higher rate compared to home acquisitions, and a $5.6 million decrease in accounts receivable due to a decreased number of home sales pending receipt of cash from the title company as compared to December 31, 2022. Net cash provided by operating activities during the three months ended March 31, 2024 was also impacted by the $17.5 million net loss during the period, which included $3.9 million of non-cash stock-based compensation expense.

Current wording

Net cash (used in) provided by operating activities was ($52.0) million and $371.5 million for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, net cash used in operating activities primarily resulted from a $32.4 million increase in real estate inventory as a result of home acquisitions increasing at a higher rate compared to sales volumes. Net cash used in operating activities during the six months ended June 30, 2024 was also impacted by the $31.3 million net loss during the period, which included $7.1 million of non-cash stock-based compensation expense.

Previous wording

For the three months ended March 31, 2023, net cash provided by operating activities primarily resulted from a $484.8 million decrease in real estate inventory due to an intentional reduction in inventory levels given the dramatic decline in consumer demand for residential real estate, which began toward the end of the second quarter of 2022 and continued through the first quarter of 2023. During this period of time, we focused on selling our existing inventory of homes acquired in the first half of 2022 and significantly reduced the number of new homes acquired in the second half of 2022 and into the first quarter of 2023. Net cash provided by operating activities during the three months ended March 31, 2023 was also impacted by the $59.4 million net loss during the period, which included a $7.3 million non-cash inventory valuation adjustment as a result of the softened consumer demand for residential real estate.

Current wording

For the six months ended June 30, 2023, net cash provided by operating activities primarily resulted from a $446.1 million decrease in real estate inventory due to an intentional reduction in real estate inventory levels given the dramatic decline in consumer demand for residential real estate, which began toward the end of the second quarter of 2022 and continued through the first quarter of 2023. During this period of time, we focused on selling our existing real estate inventory of homes acquired in the first half of 2022 and significantly reduced the number of new homes acquired in the second half of 2022 and throughout the first quarter of 2023. Net cash provided by operating activities during the six months ended June 30, 2023 was also impacted by the $81.8 million net loss during the period, which included a $7.5 million non-cash real estate inventory valuation adjustment as a result of the softening consumer demand for residential real estate.

Previous wording

Net cash used in investing activities was $0.3 million and $1.3 million during the three months ended March 31, 2024 and 2023, respectively. Net cash used in investing activities during the three months ended March 31, 2024 principally represents purchases of property and equipment.

Current wording

Net cash used in investing activities was $0.3 million and $2.0 million during the six months ended June 30, 2024 and 2023, respectively. Net cash used in investing activities during the six months ended June 30, 2024 principally represents purchases of property and equipment.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2023 principally represents purchases of derivative instruments.

Current wording

Net cash used in investing activities during the six months ended June 30, 2023 principally represents purchases of derivative instruments.

Previous wording

Net cash used in financing activities was $3.5 million and $422.5 million during the three months ended March 31, 2024 and 2023, respectively. Net cash used in financing activities during the three months ended March 31, 2024 primarily consisted of $245.6 million of repayments of credit facilities and other debt, which was partially offset by $242.1 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $3.5 million was directly related to the decrease in financed real estate inventory during the period.

Current wording

Net cash provided by (used in) financing activities was $45.4 million and ($387.6) million during the six months ended June 30, 2024 and 2023, respectively. Net cash provided by financing activities during the six months ended June 30, 2024 primarily consisted of $495.9 million of borrowings from credit facilities and other debt, which was partially offset by $450.5 million of repayments of credit facilities and other debt. This net increase in credit facility funding of $45.4 million was directly related to the increase in financed real estate inventory during the period.

Previous wording

Net cash used in financing activities during the three months ended March 31, 2023 primarily consisted of $700.6 million of repayments of credit facilities and other debt, which was partially offset by $186.4 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $514.2 million was directly related to the decrease in financed inventory during the period. This was partially offset by $90.0 million of proceeds from the issuance of pre-funded warrants, net of issuance costs of $0.8 million.

Current wording

Net cash used in financing activities during the six months ended June 30, 2023 primarily consisted of $889.8 million of repayments of credit facilities and other debt, which was partially offset by $412.0 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $477.8 million was directly related to the decrease in financed real estate inventory during the period. This was partially offset by $90.0 million of proceeds from the issuance of pre-funded warrants, net of issuance costs of $0.8 million.