8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 1, 2022

MVB FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

West Virginia	001-38314	20-0034461
(State or other jurisdiction<br> <br>of incorporation)	(Commission<br> <br>File No.)	(IRS Employer<br> <br>Identification No.)
301 Virginia Avenue, Fairmont, West Virginia	26554-2777
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(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (304) 363-4800

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br> <br>Symbol(s)	Name of each exchange<br> <br>on which registered
Common Stock, $1.00 par value	MVBF	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

EXPLANATORY NOTE

Effective as of October 1, 2022 (the “Closing Date”), MVB Bank, Inc. (the “Bank”) the wholly-owned subsidiary of MVB Financial Corp. (“MVB”), completed the purchase of 3,748,392.93 Class B Common Units (the “MVB Investment”) of Warp Speed Holdings LLC, (“Warp Speed”), pursuant to the terms of the Equity Purchase Agreement between the Bank and Warp Speed dated March 13, 2022, as thereby assigned by the Bank to MVB effective as of April 28, 2022 (as assigned, the “Purchase Agreement”). Immediately prior to the closing of the MVB Investment, the pre-closing members of Warp Speed contributed to Warp Speed all of their equity interests in certain entities under common control of the sellers specified in the Purchase Agreement, in exchange for equity interests in Warp Speed (the “Put-Together Transaction”). As of the Closing Date, Warp Speed serves as a holding company for the entities contributed in the Put-Together Transaction.

On October 3, 2022, MVB filed a Current Report on Form 8-K to report the closing of the MVB Investment. In that filing MVB reported that it would amend the Form 8-K at a later date to provide certain financial information required by Item 9.01 of Form 8-K. This amendment is being filed to provide the financial information required by Item 9.01.

Item 9.01.	Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The audited financial statements of CalCon Mutual Mortgage LLC (“CalCon”) for the year ended December 31, 2021 are filed herewith as Exhibit 99.1 and incorporated herein by reference.

The unaudited financial statements of CalCon for the nine months ended September 30, 2022 are filed herewith as Exhibit 99.2 and incorporated herein by reference.

The audited consolidated financial statements of OneTrust International LLC (“OneTrust”) for the year ended December 31, 2021 are filed herewith as Exhibit 99.3 and incorporated herein by reference.

The unaudited financial statements of OneTrust for the nine months ended September 30, 2022 are filed herewith as Exhibit 99.4 and incorporated herein by reference.

(b) Pro Forma Financial Information

The unaudited pro forma consolidated financial statements of MVB as of and for the nine months ended September 30, 2022 and the unaudited pro forma consolidated financial statements for the year ended December 31, 2021, after giving effect to the MVB Investment, are filed herewith as Exhibit 99.5 and incorporated herein by reference.

(d) Exhibits

23.1	Consent of Spiegel Accountancy Corp.
23.2	Consent of Marcelo Gutiérrez Suárez, CPA.
99.1	Audited financial statements of CalCon for the year ended December 31, 2021.
99.2	Unaudited financial statements of CalCon for the nine months ended September 30, 2022.
99.3	Audited financial statements of OneTrust for the year ended December 31, 2021.
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99.4	Unaudited financial statements of OneTrust for the nine months ended September 30, 2022.
99.5	Unaudited pro forma consolidated financial statements of MVB as of and for the nine months ended September 30, 2022 and the unaudited pro forma consolidated financial statements for the year ended December 31, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned thereunto duly authorized.

	MVB FINANCIAL CORP.
Date: December 15, 2022	By:	/s/ Donald T. Robinson
		Donald T. Robinson
		President and Chief Financial Officer

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

MVB Financial Corp.

301 Virginia Avenue

Fairmont, West Virginia

We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (333-186910, 333-189512, 333-225392, 333-260228 and 333-266266) and on Forms S-3 (333-261539, 333-180317) of MVB Financial Corp. and its subsidiaries of our report dated March 29, 2022, relating to the consolidated financial statements of CalCon Mutual Mortgage LLC, which are included in this Current Report on Form 8-K/A dated December 15, 2022.

/s/ Spiegel Accountancy Corp.
Pleasant Hill, California
December 15, 2022

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT AUDITOR

We consent to the incorporation by reference in the Registration Statements on Forms S-8 (333-186910, 333-189512, 333-225392, 333-260228 and 333-266266) and on Form S-3 (333-261539, 333-180317) of MVB Financial Corp. and its subsidiaries of our report dated April 1, 2022, relating to the financial statements of OneTrust International LLC appearing in this Current Report on Form 8-K/A dated December 15, 2022.

/s/ Marcelo Gutiérrez Suárez, CPA
San Juan, Puerto Rico
December 15, 2022

EX-99.1

Exhibit 99.1

CalCon Mutual Mortgage LLC

December 31, 2021 and 2020

Audited Consolidated Financial Statements

SPIEGEL<br> <br>ACCOUNTANCYCORP

2300 Contra Costa Blvd., Suite 425 • Pleasant Hill, CA 94523 • Phone (925) 977-4000 • Fax (925) 363-3370

CalCon Mutual Mortgage LLC

Table of Contents

YearsEnded December 31, 2021 and 2020

Independent Auditor’s Report	1 - 3
Consolidated Balance Sheets	4
Consolidated Statements of Income and Expense	5
Consolidated Statements of Changes in Members’ Equity	6
Consolidated Statements of Cash Flows	7
Notes to Financial Statements	8 - 37
Supplementary Schedule I - Operating Expenses	39
Supplementary Schedule II:
Computation of HUD Adjusted Net Worth Requirement.	40
Computation of HUD Liquidity Requirement	41
Supplementary Schedule III:
Computation of GNMA Adjusted Net Worth Requirement	42
Computation of GNMA Capital Requirement	43
Computation of GNMA Liquid Assets Requirement	44
Computation of GNMA Insurance Requirement	45
Audit Firm Summary	46
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on<br>an Audit of Financial Statements Performed in Accordance with Government Auditing Standards	47 - 48
Report on Compliance for the Major HUD Program and on Internal Control Over Compliance Required by<br>the Consolidated Audit Guide for Audits of HUD Programs	49 - 52
Schedule of Findings, Questioned Costs and Recommendations for<br>HUD-Approved Title II Non-Supervised Mortgagees and Loan Correspondents	53
Schedule of the Status of Prior Audit Findings, Questioned Costs and Recommendations for HUD-Approved Title II Non-Supervised Mortgagees and Loan Correspondents	54

Spiegel Accountancy Corp.

INDEPENDENT AUDITOR’S REPORT

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Report on the Audit of theConsolidated Financial Statements

Opinion

We have audited the consolidated financial statements of CalCon Mutual Mortgage LLC, which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of income and expense, changes in members’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of CalCon Mutual Mortgage LLC as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of CalCon Mutual Mortgage LLC and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about CalCon Mutual Mortgage LLC’s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued.

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS and *Government Auditing Standards,*we:

•	Exercise professional judgment and maintain professional skepticism throughout the audit.
•	Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to<br>fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
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•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are<br>appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of CalCon Mutual Mortgage LLC’s internal control. Accordingly, no such opinion is expressed.
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•	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting<br>estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
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•	Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise<br>substantial doubt about CalCon Mutual Mortgage LLC’s ability to continue as a going concern for a reasonable period of time.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying supplementary schedules as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary schedules as listed in the table of contents are fairly stated in all material respects in relation to the consolidated financial statements as a whole.

The accompanying Schedule of the Status of Prior Audit Findings, Questioned Costs and Recommendations has not been subjected to the auditing procedures applied in the audit of the consolidated financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards ****

In accordance with Government Auditing Standards, we have also issued our report dated March 29, 2022 on our consideration of CalCon Mutual Mortgage LLC’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering CalCon Mutual Mortgage LLC’s internal control over financial reporting and compliance.

Pleasant Hill, California<br> <br>March 29,<br>2022	Spiegel Accountancy Corp.<br><br><br>Certified Public Accountants

Calcon Mutual Mortgage LLC

Consolidated Balance Sheets

	December 31,
	2021		2020
ASSETS
Assets:
Cash and Cash Equivalents	$	41,137,279	$	19,795,907
Mortgage Loans Held for Sale at Fair Value		253,169,656		403,961,571
Mortgage Loans Receivable, Net		70,117,236		22,863,706
Loan Fees and Other Receivables		9,364,200		7,432,604
Derivative Assets		2,845,650		6,890,125
Mortgage Servicing Rights		8,385,572		11,492,146
Prepaid Expenses		4,431,464		3,542,981
Property and Equipment, Net		143,650		225,803
Deposits and Other Assets		1,743,608		3,648,442
Notes Receivable		—		2,462,498
Total Assets	$	391,338,315	$	482,315,783
LIABILITIES AND EOUITY
Liabilities:
Accounts Payable and Accrued Liabilities	$	9,691,640	$	11,316,191
Derivative Liabilities		324,199		6,537,656
Warehouse Lines of Credit		300,038,134		401,458,793
Deferred Revenue		742,268		—
Secondary Market Reserve		2,000,000		500,000
Notes Payable		12,230,670		8,664,045
Total Liabilities		325,026,911		428,476,685
Members’ Equity:
Class B Members		64,725,458		53,839,098
Non-Controlling Interest		1,585,946		—
Total Members’ Equity		66,311,404		53,839,098
Total Liabilities and Equity	$	391,338,315	$	482,315,783

See Notes to Consolidated Financial Statements

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Calcon Mutual Mortgage LLC

Consolidated Statements of Income and Expense

	Years Ended December 31,
	2021			2020
Mortgage Lending Income:
Gain on Sale of Mortgage Loans and Loan Origination Fees	$	61,211,092		$	98,126,509
Loan Fees from Lending Activities		10,046,316			11,132,731
Gain on Retention/ Fair Value Change of Mortgage Servicing Rights		12,846,212			11,428,635
Gain on Sale of Mortgage Servicing Rights		3,236,035			—
Mortgage Servicing Fees		3,589,438			1,206,453
Interest Income from Lending Activities		17,906,172			9,469,370
Total Mortgage Lending Income		108,835,265			131,363,698
Mortgage Lending Expense:
Loan Originator Commissions		18,005,351			20,625,458
Warehouse Lines of Credit Interest Expense		13,147,403			8,907,143
Loan Expense Related to Lending Activities		5,405,805			5,990,519
Mortgage Servicing Fee Expense		2,150,089			648,721
Provision for Secondary Market Reserve		664,994			627,055
Total Mortgage Lending Expense		39,373,642			36,798,896
Gross Profit		69,461,623			94,564,802
Operating Expense:
Salaries, Payroll Taxes and Employee Benefits		25,631,185			32,476,757
Occupancy and Equipment Rent		1,535,087			1,627,035
Advertising and Marketing		2,839,360			2,393,620
General and Administrative		24,538,836			12,055,364
Total Operating Expense		54,544,468			48,552,776
Income from Operations		14,917,155			46,012,026
Other Income and (Expense):
Gain on Forgiveness of Note Payable		4,964,200			—
Interest Income		19,870			1,085,934
Other (Expense) Income, Net		118,635			342,015
Interest Expense		(289,470	)		(77,455	)
Total Other Income and Expense		4,813,235			1,350,494
Net Income Before Non-controlling Interest		19,794,444			47,362,520
Net Loss from Non-controlling Interest		(64,054	)		—
Net Income Attributable to the Company		19,730,390			47,362,520

See Notes to Consolidated Financial Statements

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Calcon Mutual Mortgage LLC

Consolidated Statements of Changes in Members’ Equity

Years Ended December 31, 2021 and 2020

	Class B			Non-controlling<br>Interest			Total Equity
Balance at December 31, 2019	$	15,860,580		$	—		$	15,860,580
Contributions		974,792			—			974,792
Distributions		(10,358,794	)		—			(10,358,794	)
Net Income		47,362,520			—			47,362,520
Balance at December 31, 2020		53,839,098			—			53,839,098
Contributions		5,297,079			1,650,000			6,947,079
Distributions		(14,205,163	)		—			(14,205,163	)
Net Income (Loss)		19,794,444			(64,054	)		19,730,390
Balance at December 31, 2021	$	64,725,458		$	1,585,946		$	66,311,404

See Notes to Consolidated Financial Statements

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Calcon Mutual Mortgage LLC

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2021			2020
Cash Flows From Operating Activities:
Net Income	$	19,730,390		$	47,362,520
Adjustment to Reconcile Net Income to Net Cash Flows From Operating Activities:
Gain on Forgiveness of Note Payable		(4,964,200	)		—
Captive Insurance Amortization		3,191,558			2,361,586
Depreciation		82,152			101,474
Gain on Sale of Mortgage Servicing Rights		(3,236,035	)		—
Gain on Retention of Mortgage Servicing Rights		(13,754,611	)		(11,492,146	)
Fair Value Adjustment of Mortgage Servicing Rights		908,399			—
Loss on Sale of Investment Securities		—			74,843
Amortization of Deferred Revenue		(45,643	)		—
Provision for Secondary Market Reserve		664,994			627,055
Increase (Decrease) in Operating Assets:
Mortgage Loans Held for Sale		150,791,915			(190,123,687	)
Mortgage Loans Receivable		78,448,416			(15,372,943	)
Loan Fees and Other Receivables		14,821,785			(3,751,561	)
Derivative Instruments		(2,168,982	)		1,145,093
Prepaid Expenses		297,646			(63,507	)
Deposits and Other Assets		2,762,834			(3,414,637	)
Decrease (Increase) in Operating Liabilities:
Accounts Payable and Accrued Liabilities		(4,671,341	)		2,565,977
Related Parties Payable		—			198,141
Deferred Revenue		787,911
Secondary Market Reserve		(164,994	)		(627,055	)
Net Cash Provided by (Used in) Operating Activities		243,482,194			(170,408,847	)
Cash Flows From Investing Activities:
Proceeds from Sale of Mortgage Servicing Rights		19,188,821			526,795
Purchase of Property and Equipment		—			(88,944	)
Proceeds from Related Party Notes		—			2,521,545
Issuance of Related Party Note		32,498			(1,700,000	)
Net Cash Provided by Investing Activities		19,221,319			1,259,396
Cash Flows From Financing Activities:
Proceeds from Warehouse Lines of Credit		1,870,980,601			2,156,181,235
Repayments on Warehouse Lines of Credit		(2,096,913,291	)		(1,962,512,781	)
Proceeds from Notes Payable		—			4,964,200
Repayments of Notes Payable		(5,593,454	)		(2,978,568	)
Contributions		2,719,165			974,792
Non-controlling Interest Contributions		1,650,000			—
Dividend Distributions		(14,205,163	)		(9,349,582	)
Net Cash (Used) Provided by Financing Activities		(241,362,142	)		187,279,296
Net Increase in Cash and Cash Equivalents		21,341,372			18,129,845
Cash and Cash Equivalents - Beginning of Year		19,795,907			1,666,062
Cash and Cash Equivalents - End of Year	$	41,137,279		$	19,795,907
Supplementary Disclosure of Cash Flow Information:
Cash Paid for:
Interest	$	8,656,780		$	8,802,903

See Notes to Consolidated Financial Statements

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CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization

CalCon Mutual Mortgage LLC dba OneTrust Home Loans, Tabor Mortgage Group and Warp Speed Mortgage LLC (CalCon), which was incorporated in 2013 in the state of Delaware. CalCon is principally engaged in the origination of mortgage loans secured by residential real estate located in various states throughout the United States. Generally, such loans are subsequently sold to financial institutions or to other entities that sell such loans to investors. CalCon is registered with the Nationwide Mortgage Licensing System & Registry as well as applicable state licensing agencies. Additionally, CalCon is approved by the U.S. Department of Housing and Urban Development (HUD) to act as a non-supervised mortgagee and with the Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), and the Governmental National Mortgage Association (GNMA) to act as a seller/servicer.

Merger

On January I, 2021, CalCon merged with Yellowstone RE Holdings (Yellowstone), an entity under common control. CalCon purchases, owns, and occasionally sells pools of residential and commercial mortgage loans, including discounted and distressed mortgage loan purchases, all of which are secured by deeds of trust or mortgage contracts.

The transfer of assets and liabilities is further discussed in Note 13.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of CalCon; and its wholly owned subsidiary OTHLJV20, LLC, which has consolidating joint ventures with Schumacher Mortgage LLC; Team One Home Loans LLC, and Ardorio Lending LLC (altogether, the Company). All significant intercompany accounts, transactions, and profits have been eliminated in the consolidation.

Basis of Presentation and Use of Estimates

The Company’s consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. The accrual basis of accounting requires the use of estimates and assumptions that affect the assets, liabilities, revenues and expenses reported in the consolidated financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the Company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.

• 8 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, cash and cash equivalents include money market securities and all highly liquid investments with original maturities of ninety days or less.

Mortgage Loans Held for Sale

The Company records originations of mortgage loans held for sale at fair value and estimates the fair value based on quoted market prices. In determining fair value, consideration is given to commitments on hand from investors and prevailing market prices. The fair value option was elected for mortgage loans held for sale because the Company believes fair value best reflects future economic performance.

Mortgage Loans Receivable

Mortgage loans receivable are recorded at their outstanding principal balance with interest thereon being accrued as earned. Mortgage loans will have varying terms at the discretion of the Company. Some loans have a draw component for construction purposes. Draws are funded and a receivable is recorded as the work is completed and verified. Company loans will have varying terms up to thirty years and provide for monthly payments of interest and principal or monthly payments of interest with a “balloon payment” at the end of the term.

The Company will not recognize interest income on loans once they are determined to be impaired until the interest is collected in cash. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the underlying collateral.

Loan origination fees related to mortgage loans are deferred and recognized over the life of the loan, which ranges from one to thirty years.

• 9 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Allowance for Losses on Mortgage Loans Receivable

The allowance for losses on mortgage loans receivable is established as losses are estimated to have occurred through a provision for loan loss that is charged to earnings. Loan losses are charged against the allowance when management believes the loan balance is not collectible. Subsequent recoveries, if any, are credited to income. The allowance for losses on loans is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

Derivative Instruments

In connection with the origination of mortgage loans, the Company enters into commitments to originate loans whereby the interest rate on the loans is determined prior to funding (interest rate lock commitments). The Company follows the provisions of derivatives and hedging accounting guidance, which require it to record derivative instruments at fair value. Therefore, interest rate lock commitments and investor forward loan sale contracts the Company intends to sell through mandatory delivery execution are recorded at fair value. The fair value of interest rate lock commitments is determined based on current secondary market prices for underlying loans with similar coupons, maturity and credit quality, subject to the anticipated loan funding probability or pull-through factor, net of direct costs.

• 10 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Mortgage Servicing Rights

The Company originates mortgage loans for sale to the secondary market and sells the loans on either a servicing-retained or servicing-released basis. The Company has obligations to service residential first mortgage loans that are acquired through loans sold on a servicing-retained basis. These mortgage servicing rights (MSRs) are recognized as assets at the time a loan is sold on a servicing-retained basis and capitalized at fair value. Changes in fair value are recorded in fair value adjustments of mortgage servicing rights in the accompanying consolidated statements of income and expense.

Fair market value is based on the present value of estimated future cash flows using a discount rate commensurate with the risk involved. Estimates of fair market value include assumptions about contractual service fees, projected costs to service, prepayment speeds, default, interest rates and other factors, which are subject to change over time. Changes in these underlying assumptions could cause the fair market value of MSRs to specifically change in the future. The Company obtains a valuation from an independent third party on a monthly basis to support the reasonableness of the fair value estimate generated by the Company’s internal model.

The key assumptions used in determining the fair value of MSRs when they are initially recorded were as follows for the years ended December 31, 2021 and 2020:

	2021			2020
Discount Rates		9.75	%		10.00	%
Annual Prepayment Speeds		9.60	%		15.00	%
Cost of Servicing	$	79		$	80

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets ranging from three to seven years.

• 11 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Secondary Market Reserve

Mortgage Loans Held for Sale

The Company sells residential mortgage loans originated into the secondary mortgage market. When the Company sells the mortgage loans, the Company makes representations and warranties to the purchasers about various characteristics of each loan such as the manner of origination, the nature and extent of underwriting standards applied, and the types of documentation being provided. Typically, these representations and warranties extend for the life of the loan. If a defect in the origination process is identified, the Company may be required to either repurchase the loan or indemnify the purchaser for losses it sustains on the loan. If there are no such defects, the Company has no liability to the purchaser for losses it sustains on the loan. The Company maintains a secondary market reserve to account for the expected losses on loans sold during the current accounting period, as well as adjustments to previous estimates of expected losses on loans sold. In each case, these estimates are based on the most recent data regarding loan repurchases and actual credit losses on repurchased loans, among other factors.

Mortgage Loans Receivable

The allowance for loan loss is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

Subscriptions Receivable

The Company has subscriptions receivable from prospective members. These receivables are classified as contra equity assets until cash is collected. At December 31, 2021 and 2020, the Company had no subscriptions receivable. During the year ended December 31, 2020, $874,999 of the subscriptions receivable were forgiven as part of member redemption requests, and the remaining $474,492 was contributed.

• 12 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue

Gain on Sale of Mortgage Loans and Loan Origination Fees

Gains and losses recognized upon the funding of loans are determined using the specific identification method. In conjunction with the sale of loans, the Company records realized gain or loss on the sale of loans when the loan is transferred to the buyer including settled forward commitments. For loans that have been funded and not yet sold, the Company recognizes the difference between fair value and carrying value as unrealized gain or loss on loans. Loan origination fees are recognized when the loan is funded. Realized and unrealized changes in interest rate lock commitments and investor forward loan sale contracts are recorded and recognized when settled or there is a change in fair value.

Loan Fees from Lending Activities

Loan origination fees earned on loans held for sale are recognized when the related loan is funded for loans held for sale. Loan origination fees for mortgage loans receivable are deferred and amortized over the life of the respective loan.

Mortgage Servicing Rights

The Company records retained mortgage servicing rights at fair value when the related loan is sold, and records changes in valuation on a monthly basis. Gains and sales on mortgage servicing rights are recorded when the transaction occurs. Servicing fee income is recorded when earned.

Interest Income from Lending Activities

Interest income on mortgage loans held for sale is recognized as earned based upon the principal amount outstanding and contractual interest rates.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the asset has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, (ii) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (iii) the Company does not maintain effective control over transferred assets through an agreement to repurchase them before their maturity.

• 13 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy established under applicable accounting guidance which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. The three levels are defined as follows:

Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are those other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the Company’s own financial model using assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

Valuation Process and Techniques

The Company has various processes and controls in place to ensure that fair value is reasonably estimated. A model validation policy governs the use and control of valuation models used to estimate fair value. This policy requires review and approval of models by personnel who are independent of the executive management as well as periodic reassessments of models to ensure that they are continuing to perform as designed. In addition, detailed reviews of trading gains and losses are conducted on a daily basis by personnel who are independent of executive management. A price verification group, which is also independent of executive management, utilizes available market information including executed trades, market prices and market-observable valuation model inputs to ensure that fair values are reasonably estimated. The Company performs due diligence procedures over third-party service providers in order to support their use in the valuation process. Where market information is not available to support internal valuations, independent reviews of the valuations are performed, and any material exposures are escalated through a management review process.

• 14 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements (Continued)

Valuation Process and Techniques (Continued)

While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

During the years ended December 31, 2021 and 2020, there were no changes to the valuation techniques that had, or are expected to have, a material impact on Company’s financial position or results of operations.

The following methods and assumptions were used to estimate the fair value of the following asset groups:

Investment securities are based on quoted market prices and are classified as Level 1.

Mortgage loans held for sale are based on the selling price to investors who use secondary market prices for loans with similar credit and risk profile characteristics and are classified as Level 2. Non-performing and impaired mortgage loans are reported at the net realizable value of the collateral based on an observable market price or a current appraised value, and these loans are classified as Level 2. If an appraised value is not available or there is no observable market price, the Company reports the loan as Level 3. There were no loans classified as Level 3.

Interest rate lock commitments are valued based on quoted prices for similar assets in an active market with similar credit and risk profile characteristics, net of origination fees and direct production costs subject to a pull-through factor and are classified as Level 3.

• 15 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements (Continued)

Valuation Process and Techniques (Continued)

Investor forward loan sale contracts traded in the over-the-counter market are determined using quantitative models that utilize multiple market inputs including interest rates, prices and indices to generate continuous yield or pricing curves and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. When third-party pricing services are used, the methods and assumptions are reviewed by the Company. The fair values of derivative assets and liabilities include adjustments for market liquidity, counterparty credit quality and other instrument-specific factors where appropriate. Investor forward loan sale contracts are classified as Level 2.

Mortgage loans receivable that are performing are reported at their amortized cost. For non-performing loans in which a specific allowance is established, the Company reports the loan at the net realizable value of the underlying collateral based on an observable market price or a current appraised value. These loans are classified as Level 2. If an appraised value is not available or if there is no observable market price, the Company reports the loan as Level 3. At December 31, 2021 and 2020, there were no loans classified as Level 2 or 3.

Mortgage servicing rights are recorded at fair value based on the present value of estimated cash flows using a discount rate commensurate with the risks involved. While there is an active market for similar assets, and certain inputs such as fee rates and discount rates are observable, most of the other inputs are based on historical company data. Management obtains an independent, third-party valuation specialist to perform this analysis. Thus, mortgage servicing rights are classified as Level 3.

• 16 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

The Company is treated as a partnership under the Internal Revenue Code and a similar section of the state code. The members of a partnership are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in these consolidated financial statements.

The Company has evaluated its current tax positions and has concluded that as of December 31, 2021 and 2020, no significant uncertain tax positions exist for which a reserve would be necessary.

The Company’s income tax returns are subject to review and examination by federal, state and local governmental authorities. As of December 31, 2021, there are three years open to examination by the Internal Revenue Service, state and local governmental authorities. To the extent penalties and interest are incurred through the examinations, they would be included in operating expenses on the consolidated statements of income and expense.

Recent Accounting Pronouncements

Accounting Standards Issued but Not Yet Effective

Credit Losses - In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326), and was clarified by FASB ASU 2019-04, Codification Improvements, and FASB ASUs 2019-05 and 2019-11, Targeted Transition Relief and Clarification. Prior to this pronouncement, generally accepted accounting principles required use of the incurred loss method for recognizing credit losses in the reserve. The incurred loss method recognizes a credit loss when it is probable that a loss has been incurred. The new guidance replaces the incurred loss method with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The pronouncement also allows for the irrevocable election of the fair value measurement for certain financial assets. FASB ASUs 2018-19 and 2019- 10, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, have deferred the adoptions of these standards until interim and annual periods beginning after December 15, 2022. Management is currently evaluating the guidance and the impact it will have on the Company’s consolidated financial statements.

• 17 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (Continued)

Accounting Standards Issued but Not Yet Effective (Continued)

Leases - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) which was updated by FASB ASU 2018-10, Codification Improvements to Leases, FASB ASUs 2018-11 and 2019-01, Targeted Improvements, FASB ASU 2020-05, Leases, and FASB ASU 2021-09, Discount Rate for Lessees that Are Not Public Business Entities. The new lease standards require lessees to recognize virtually all leases as right-of-use assets and lease liabilities on the balance sheet, as well as disclose key information regarding leasing arrangements. The new lease standard also requires the separation of the lease agreement from other contract components, such as maintenance services. The guidance in these standards are effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Management is currently evaluating the guidance and the impact it will have on the Company’s consolidated financial statements.

Accounting Standards Issued andAdopted

Reference Rate Reform - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. On January 2021, the FASB issued ASU 2021-01, Reference Rate Reform. These standards provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the benefits of) reference rate reform on financial reporting. The amendments in ASU 2020-04 are elective and apply to all entities, subject to meeting certain criteria, that have contracts, amended contracts during 2021, hedging relationships, and other transactions that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The guidance is effective upon issuance and allows application to contract changes as early as March 12, 2020 through December 31, 2022. The Company has adopted the guidance and changed all applicable LIBOR rates for its warehouse lenders and other lines of credit and debt obligations, as applicable.

2.	CASH CONCENTRATION

The Company maintains funds in various financial institutions that are members of the Federal Deposit Insurance Corporation. As such, funds are insured based on Federal Reserve limits. The Company has not experienced any losses in the past, and management believes it is not exposed to any significant credit risk on the current account balances. At times, cash balances may exceed insured amounts.

• 18 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

3.	MORTGAGE LOANS HELD FOR SALE

All mortgage loans held for sale are secured by residential property and are collateral for the warehouse lines of credit. Mortgage loans held for sale consisted of the following as of December 31,

	2021		2020
Mortgage Loans Held for Sale
(Unpaid Principal Balance)	$	245,095,615	$	384,538,603
Fair Value Adjustment		8,074,041		19,422,968
Mortgage Loans Held for Sale at Fair Value	$	253,169,656	$	403,961,571
4.	MORTGAGE LOANS RECEIVABLE
---	---

The Company had the following mortgage loans receivable at December 31,

	2021			2020
Mortgage loans receivable consisted of notes to individuals secured by deeds of trust, bearing<br>interest at various rates from 2.00% to 12.00% per annum, partially or fully amortized. These notes have original maturity dates from December 2022 through October 2052.	$	187,130,448			34,891,526
Less: Construction Loan Commitments		(117,013,212	)		(12,027,820	)
Less: Allowance for Loan Losses		—			—
Mortgage Loans Receivable, Net	$	70,117,236		$	22,863,706

The Company expects to collect $1,137,761 in principal payments over the next twelve months.

Mortgage Loans in Foreclosure

At December 31, 2021 and 2020, the Company had loans amounting to $521,228 and $159,721, respectively, that were in the process of foreclosure. Real estate owned is included in mortgage loans receivable at December 31, 2021 and 2020. Management does not anticipate any losses related to these foreclosures.

• 19 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

4.	MORTGAGE LOANS RECEIVABLE (CONTINUED)

Mortgage Loans in Foreclosure (Continued)

Loan Modifications

At December 31, 2021 and 2020, the Company did not have any material loan modifications.

Mortgage Loans Concentrations

As of December 31, 2021, all mortgage loans receivable are primarily secured by first deeds of trust. There were 193 loans outstanding and the largest loan was $21,000,000. The loans are located in 42 different states.

As of December 31, 2020, all mortgage loans receivable are primarily secured by first deeds of trust. There were 106 loans outstanding and the largest loan was $716,100. The loans are located in 38 different states.

5.	DERIVATIVE INSTRUMENTS

Derivative instruments are commitments to extend to borrowers, either at fixed or floating rates, and contracts to sell mortgage loans to investors at specific future dates and interest rates. Commitments to extend credit are generally agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. The market risk associated with the commitments to sell loans occurs when the estimated amount of the commitments to extend credit is not the same as the outstanding commitments to sell loans and from the possible inability of counterparties to meet the terms of their commitments.

• 20 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

5.	DERIVATIVE INSTRUMENTS (CONTINUED)

The Company recognized pre-tax net realized and unrealized gains/(losses) of $6,435,937 and $(15,324,750) for the years ended December 31, 2021 and 2020, respectively, on its hedging activity related to interest rate lock commitments and investor forward loan sale contracts. The Company had the following derivative instruments as of December 31,

	2021
	Volume		Fair Value
Interest Rate Lock Commitments	$	104,277,241	$	2,845,650
Investor Forward Loan Sale Contracts	$	223,500,000	$	(324,199	)
Total Derivative Instruments			$	2,521,451
	2020
---	---	---	---	---	---
	Volume		Fair Value
Interest Rate Lock Commitments	$	237,084,795	$	6,890,125
Investor Forward Loan Sale Contracts	$	607,115,762	$	(6,537,656	)
Total Derivative Instruments			$	352,469

The following table represents the quantitative information about interest rate lock commitments and the fair value measurements as of December 31,

	Loan Funding Probability<br>(Pull-Through)
	2021			2020
Weighted Average		87	%		86	%

The Company had margin calls with a broker dealer totaling $280,235 and $4,713,219 at December 31, 2021 and 2020, respectively, which are located in loan fees and other receivables on the accompanying consolidated balance sheets.

• 21 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

6.	MORTGAGE SERVICING RIGHTS

Tue unpaid principal balance of mortgage servicing rights at December 31, 2021 and 2020 was $814,121,971 and $1,413,064,269, respectively. The following summarizes MSR activity for the years ended December 31,

	2021			2020
Beginning Balance	$	11,492,146		$	—
Capitalized Mortgage Servicing Rights		13,754,611			11,492,611
Fair Value Adjustment and Payoffs		(908,399	)		—
Sale of Mortgage Servicing Rights		(19,188,821	)		—
Gain on Sale of Mortgage Servicing Rights		3,236,035			—
Mortgage Servicing Rights	$	8,385,572		$	11,492,146

During the year ended December 31, 2021, the Company sold MSRs with an unpaid principal balance of $1,782,517,355 for $19,188,821. No MSRs were sold during the year ended December 31, 2020.

The following table illustrates the impact of adverse changes on the discount rate and prepayment speeds at two different data points at December 31,

	Discount Rates						Prepayment Speeds
	10%<br>Adverse<br>Change			20%<br>Adverse<br>Change			10%<br>Adverse<br>Change			20%<br>Adverse<br>Change
Mortgage Servicing Rights	$	(326,218	)	$	(627,910	)	$	(344,397	)	$	(665,618	)
	Discount Rates						Prepayment Speeds
---	---	---	---	---	---	---	---	---	---	---	---	---
	10%<br>Adverse<br>Change			20%<br>Adverse<br>Change			10%<br>Adverse<br>Change			20%<br>Adverse<br>Change
Mortgage Servicing Rights	$	(546,619	)	$	(1,051,408	)	$	(424,725	)	$	(818,119	)

• 22 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

7.	PREPAID EXPENSES

Business Continuation Insurance

During the years ended December 31, 2021 and 2020, management paid $4,362,938 and $3,481,700, respectively, of insurance premiums to a related insurance company (the Insurer) for the purpose of providing business continuation insurance to the Company. The policies purchased are on a one-year claims made basis and the Insurer’s loss is limited to the amount specified in the insurance policies issued.

At December 31, 2021 and 2020, the unamortized balance was $4,002,110 and $3,191,558, respectively.

The agreement between the Insurer and the Company requires that the premiums paid by the Company be deposited into the accounts of the Insurer. The accounts of the Insurer cannot be accessed by the Company. Early termination of the insurance policies by the Company requires any unearned insurance premiums to be refunded by the Insurer. The Company has no liability for any claims made to the Insurer.

During the year ended December 31, 2021, the Company financed the purchase through a $4,144,791 short term loan with a financial institution. The loan carries a 2.85% interest rate and requires equal monthly payments of $524,978 over an eight-month period starting February 1, 2022.

During the year ended December 31, 2020, the Company financed the purchase through a $3,307,615 short term loan with a financial institution. The loan carries a 2.85% interest rate and requires equal monthly payments of $418,941 over an eight-month period starting February 1, 2020.

8.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31,

	2021			2020
Furniture and Office Equipment	$	—		$	499,331
Computer Software		350,204			350,204
Total Property and Equipment		350,204			849,535
Less: Accumulated Depreciation		(206,554	)		(623,732	)
Property and Equipment, Net	$	143,650		$	225,803

• 23 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

8.	PROPERTY AND EQUIPMENT (CONTINUED)

Depreciation charged to operations for the years ended December 31, 2021 and 2020 was $82,152 and $101,474, respectively. During the year ended December 31, 2021, the Company disposed of fully depreciated furniture and equipment of $499,331. No disposals occurred during the year ended December 31, 2020.

9.	WAREHOUSE LINES OF CREDIT

At December 31, 2021 and 2020, the Company had warehouse lines of credit agreement with three financial institutions, whereby the Company received advances under the agreements up to a combined maximum of $561,000,000 and $507,000,000, respectively.

The Company had the following outstanding warehouse lines of credit at December 31,

	2021		2020
Merchants Bank	$	202,117,058	$	132,799,517
Centier Bank		57,204,901		44,675,817
NB		40,716,175		200,572,864
Yellowstone (Note 1)		—		23,410,595
Total	$	300,038,134	$	401,458,793

Merchants Bank

Advances are due to be repaid upon the earlier of the sale of the mortgage loans that are pledged as collateral or a specified period of time from the date on which the advance is received. The warehouse line of credit borrowings are personally guaranteed by certain members of the Company. Interest is payable when the loans are purchased and accrues at an applicable interest rate depending on duration of the warehouse period. At December 31, 2021 and 2020, the applicable interest rates ranged from 2.00% to 6.75% and 2.00% to 3.50%, respectively. The warehouse line of credit agreement contains financial covenants concerning minimum tangible net worth, which were met at December 31, 2021 and 2020. As further explained in Note 9, the Company also had a warehouse line agreement with the bank through its related party entity Yellowstone, which it periodically used to fund loans held for sale. This warehouse line agreement was consolidated with the merger of Yellowstone into the Company on January 31, 2021.

• 24 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

9.	WAREHOUSE LINES OF CREDIT (CONTINUED)

Merchants Bank (Continued)

The Company has a participation agreement with its warehouse lender, whereby the Company provides funds to the warehouse lender to reduce its cost of capital on mortgage lending activities. Through this arrangement, the Company participates in revenue earned by the financial institution on the loan interest paid to the warehouse lender by the Company. At December 31, 2021, the outstanding balance on the loan receivable was $17,000,000. The Company earned $3,845,223 from the arrangement, which is included as a reduction to interest expense in accompanying consolidated statements of income and expense. The Company had this agreement through its related party, Yellowstone, for the year ended December 31, 2020. This participation agreement has the right of offset with the warehouse line of credit and has therefore been present net on the accompany consolidated balance sheets.

Centier Bank

Advances are due to be repaid upon the earlier of the sale of the mortgage loans that are pledged as collateral or a specified period of time from the date on which the advance is received. The warehouse line of credit borrowings are personally guaranteed by certain members of the Company. Interest is payable when the loans are purchased and accrues at an applicable interest rate depending on duration of the warehouse period. At December 31, 2021 and 2020, the applicable interest rates ranged from 2.00% to 12.00% and 2.00% to 3.50%, respectively. The warehouse line of credit agreements contain financial covenants concerning minimum tangible net worth, which were met at December 31, 2021 and 2020.

Advances are due to be repaid upon the earlier of the sale of the mortgage loans that are pledged as collateral or a specified period of time from the date on which the advance is received. Interest is payable when the loans are purchased and accrues at an applicable interest rate depending on duration of the warehouse period. At December 31, 2021 and 2020, the applicable interest rates were 2.20% to 2.50% and 2.50%, respectively. The warehouse line of credit agreement contains a financial covenant concerning minimum tangible net worth, which was met at December 31, 2021 and 2020.

• 25 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

10.	SECONDARY MARKET RESERVE

The following is a summary of the secondary market reserve activity for the years ended December 31,

	2021			2020
Beginning Balance	$	500,000		$	500,000
Charge-Offs		(164,994	)		(627,055	)
Provision for Secondary Market Reserve		1,664,994			627,055
Ending Balance	$	2,000,000		$	500,000
11.	NOTES PAYABLE
---	---

Paycheck Protection Program Loan

During 2020, the Company received a loan from a financial institution in the amount of $4,964,200 under the Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan was subject to a note dated April 23, 2020 and could be forgiven to the extent proceeds of the loan were used for eligible expenditures such as payroll and other expenses described in the CARES Act. The loan bore interest at a rate of 1.00% and was payable in monthly installments of principal and interest beginning 6 months from the date of the note. The loan was repayable at any time with no prepayment penalty. During 2021, the note was forgiven in its entirety and the Company recorded a gain on extinguishrment of debt, which is reflected in the consolidated statements of income and expense, as well as the consolidated statements of cash flows as a non-cash item.

Insurance Loans

At December 31, 2021 and 2020, the Company has insurance loans of $4,144,791 and $3,307,615, respectively, which are discussed in Note 7.

Former Member Notes

During 2020, the Company paid for the redemptions of $1,009,212 in outstanding member units through the issuance of notes payable. At December 31, 2020, the amount due on these notes was $392,230. These notes were paid off in 2021.

• 26 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

11.	NOTES PAYABLE (CONTINUED)

Current Member Notes

The Company obtained notes payable from Yellowstone RE Holdings. These notes were from various members participating in a member loan program. The notes bear interest at LIBOR plus 3.00%. The note balance of $699,534 was paid off in January 2022.

Merchants Bank

At December 31, 2021, the Company has a loan of $2,952,487, which bears interest of 3.59%, and is due in 2024. Loan repayments are approximately $980,000 per year through 2024. Interest expense on this note was $118,965, which is located in other income and expense on the accompanying consolidated statements of income and expense.

PACREP Investment Company, LLC

At December 31, 2021, the Company has a note payable of $4,433,858 bearing interest at Libor plus a margin of 150 basis points per annum, with interest payable quarterly and principal payable upon the payoff of the mortgage loans that are pledged as collateral. This note was transferred from Yellowstone in the amount of $5,231,041. Interest expense on this note was $73,560 for the year ended December 31, 2021, which is located in other income and expense on the accompanying consolidated statements of income and expense.

12.	RELATED PARTY TRANSACTIONS

Yellowstone Transactions

As discussed in Note 1, on January 31, 2021, Yellowstone, which was under common control, merged into the Company. The following asset, liabilities, and equity were transferred:

Assets
Operating Cash	$	2,341,616
Loan Fees and Other Receivables	$	16,753,381
Prepaid Expenses	$	232,896
Loans Held for Investment	$	125,701,946
Deposits	$	858,000

• 27 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

12.	RELATED PARTY TRANSACTIONS

Yellowstone Transactions (Continued)

Liabilities
Related Party Payables	$	2,430,000
Accounts Payable	$	3,046,789
Warehouse Line of Credit	$	124,512,033
Notes Payable	$	9,979,488
Loan Loss Reserve	$	1,000,000
Equity	$	4,919,530

Operating Accounts

At December 31, 2020, the Company had a net payable of $54,668 related to third party mortgage loans sold to Yellowstone whereby funds were advanced to pay for borrower loan obligations. The payable is located in loan fees and other receivables on the accompanying consolidated balance sheets.

Warehouse Line of Credit

At December 31, 2020, the Company had a warehouse line of credit agreement with Yellowstone up to a maximum of $50,000,000 based upon a percentage of construction and portfolio mortgage loans, which were pledged as collateral against the advances received. Advances were due to be repaid upon the earlier of the sale of the mortgage loans that were pledged as collateral or a specified period of time from the date on which the advance was received. Interest was accrued on a monthly basis at an applicable interest rate depending on duration of the warehouse period. At December 31, 2021 and 2020, the applicable interest rates ranged from 2.50% to 4.50% and 3.00% to 5.00%, respectively. During 2021, Yellowstone merged into the Company and related party facility merged into the existing Merchants Bank agreement.

Discounted Note Purchase

On December 23, 2019, the Company purchased a discounted participation in a third-party loan from Yellowstone for $2,000,000. This loan had a maturity date of December 31, 2020, with additional consideration required for the option to extend to June 30, 2021. The secured loan bore interest at 4.50%, with a contingent interest payment due at maturity. The note was paid off during the year ended December 31, 2020.

• 28 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

12.	RELATED PARTY TRANSACTIONS (CONTINUED)

Notes Receivables

At December 31, 2020, the Company had notes receivable totaling $2,430,000 related to general purpose matters. The notes bore interest of 10.00%. The notes receivable is included in notes receivable on the accompanying consolidated balance sheets. Interest income generated on this note for the year ended December 31, 2020 was $33,336. The note was eliminated with the merger of Yellowstone in 2021.

OneTrust International LLC

The Company receives outsourced operations support services from OneTrust International LLC, an entity under common control. During the years ended December 31, 2021 and 2020, the expenses were $7,045,971 and $4,104,222, respectively. The payable at December 31, 2021 and 2020 was $1,094,865 and $658,354, respectively, and is located in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.

Island Vibez Management, LLC

The Company has a consulting agreement with a management services company to provide specific strategic finance and management services. The Company expensed $3,226,856 and $5,698,868 for the years ended December 31, 2021 and 2020, respectively, related to these services. The amount is included in general and administrative expenses in the accompanying consolidated statements of the income and expense.

13.	TRUST LIABILITIES

The Company collects funds from borrowers in advance for payment of credit, taxes and insurance. The Company is required to maintain these funds in a separate trust account for the benefit of these borrowers. Total funds held in trust for others at December 31, 2021 and 2020 were $573,997 and 2,136,522, respectively. The trust assets and liabilities are not included on the accompanying consolidated balance sheets.

• 29 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

14.	FAIR VALUE MEASUREMENTS

The following table represents the Company’s fair value hierarchy for its assets measured at fair value on a recurring basis as of December 31,

	2021
	Level 1		Level2			Level 3
Mortgage Loans Held for Sale	$	—	$	253,169,656		$	—
Interest Rate Lock Commitments		—		—			2,845,650
Mortgage Servicing Rights		—		—			8,385,572
Investor Forward Loan Sale Contracts		—		(324,199	)		—
Total	$	—	$	252,845,457		$	11,231,222
	2020
	Level1		Level 2			Level 3
Investments Securities, Net	$	—	$	—		$	—
Mortgage Loans Held for Sale		—		403,961,571			—
Interest Rate Lock Commitments		—		—			6,890,125
Mortgage Servicing Rights		—		—			11,492,146
Investor Forward Loan Sale Contracts		—		(6,537,656	)		—
Total	$	—	$	397,423,915		$	18,382,270

The following table presents a reconciliation of Level 3 assets measured at fair value on a recurring basis for the following years ended:

	Interest Rate<br>Lock<br>Commitments
Balance at December 31 2019	$	1,531,800
Net Transfers and Revaluations		5,358,325
Balance at December 31, 2020		6,890,125
Net Transfers and Revaluations		(4,044,475	)
Balance at December 31, 2021	$	2,845,650

At December 31, 2021 and 2020, there were no non-recurring assets or liabilities recorded at fair value.

Due to their short term nature, the carrying values of loan fees and other receivables, prepaid expenses, certain notes receivable, accounts payable and accrued liabilities, warehouse lines of credit and certain notes payable approximate their fair values at December 31, 2021 and 2020.

• 30 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

15.	RETIREMENT PLAN

The Company has a 40l(k) plan (the Plan) which covers all eligible employees who have met the minimum eligibility requirements. Employees may elect to contribute up to a maximum percentage allowable, not to exceed federal tax law limitations, which may be adjusted each year based on cost-of-living calculations. The Company’s contributions are discretionary and are determined on an annual basis. For the years ended December 31, 2021 and 2020, Company contributions to the Plan were $318,342 and 390,372, respectively.

16.	PROFITS INTEREST PLAN

The Company has a profits interest plan that allows key employees and consultants to receive interests in the Company’s profits through an entity established to hold Class C units of the Company (the holding company). Key employees and consultants are granted equivalent units in the holding company that enable them to share in the Company’s profits. Unless otherwise stated in the profits interest award agreement, units in the holding company will vest equally over four years beginning on the anniversary of the grant date. At December 31, 2021 and 2020, the Company had 12,500 fully vested units in both years. There was no vesting expense for the years ended December 31, 2021 and 2020.

17.	LEASE COMMITMENTS

The Company leases office facilities under non-cancellable operating leases through 2025. The Company also leases office facilities and equipment on a month-to-month basis. These leases sometimes require the Company to pay for insurance and maintenance. Office and equipment lease expenses charged to operations for the years ended December 31, 2021 and 2020 were $1,535,087 and $1,627,035, respectively.

At December 31, 2021, future minimum lease payments are as follows:

	Amount
2022	$	763,729
2023		300,222
2024		127,143
2025		39,224
Total Future Minimum Lease Payments	$	1,230,319

• 31 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

18.	ADVERTISING AND MARKETING

The Company expenses advertising and marketing costs as incurred, which amounted to $2,839,360 and $2,393,620 for the years ended December 31, 2021 and 2020, respectively.

19.	RISKS AND UNCERTAINTIES

Mortgage Operations

In the normal course of its business, the Company is exposed to certain economic and compliance risks including credit risk, investor risk, repurchase risk, concentration risk, interest rate risk, regulatory risk, securitization risk and operating risk.

Credit Risk

The Company is dependent on its warehouse lending partners and termination of one or more of these relationships could affect the Company’s financial results and overall operations. The Company expects that warehouse lines of credit will remain available to finance its mortgage lending activities and that the Company will be able to obtain access to additional warehouse lines of credit, if needed. However, there is no certainty that these lending relationships or any other current relationships will continue or that the Company will be able to obtain new credit facilities. If the warehouse lines of credit become unavailable or diminished, the reduction in the Company’s borrowing ability could have a material adverse effect on the results of its operations and financial position.

Investor Risk

The Company has requirements to maintain certain net worth and liquidity amounts for their approvals with government-sponsored entities as well as other third-party aggregators. Failure to meet these financial covenant requirements could have an adverse impact on the Company’s financial position.

Repurchase Risk

The Company has mortgage loan purchase agreements with various investors. The Company is obligated to perform certain procedures in accordance with these agreements. The agreements provide for conditions whereby the Company may be required to either repurchase mortgage loans or provide indemnification for losses suffered by investors due to borrower default for various reasons, among which may be one of the following: (i) a mortgage loan is originated in violation of the investor’s requirements, (ii) the Company breaches any term of the agreement, and/or (iii) an early payment default occurs from a mortgage originated by the Company.

• 32 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

19.	RISKS AND UNCERTAINTIES (CONTINUED)

Concentration Risk

The Company sells loans to various investors. For years ended December 31, 2021 and 2020, mortgage loans sold to the largest three investors consisted of approximately 73% and 75%, respectively, of its mortgage loan sales.

Interest Rate Risk

Until a rate guarantee is extended to a borrower, the Company is not exposed to interest rate risk. At December 31, 2021, the Company had commitments to extend credit for which interest rates were guaranteed to borrowers, subject to loan approval. If mortgage interest rates change between the time the rate guarantee is made to the borrower and the time such loan is priced for sale to an investor, there is a potential loss on the sale of the loan. In most cases, the Company elects to absorb price risk on a portion of its rate guarantees by waiting to formally commit loans to actual commitments until after closing and offsetting that risk through hedging activities.

In order to manage the price risk on this population of rate guarantees, the Company enters into mandatory delivery forward sale commitments to investors at different times during the period that the underlying loans are in process. This latter method of loan sales generally entails the assumption of somewhat greater interest rate risk but also usually produces a higher gain on loan sales. The Company mitigates this risk through its hedging activities. The Company is also subject to risks associated with changes in interest rates to the extent that such fluctuations may have an effect on loan production volumes.

Regulatory Risk

The Company is subject to comprehensive regulation and supervision by federal and state regulatory authorities covering all aspects of the organization, management and operations. Many regulations have undergone significant changes and will significantly change in the future. The Company continually evaluates the regulations to determine the extent of the impact on Company operations. Any of the various regulatory agencies may take enforcement actions against the Company in the event management does not operate in accordance with applicable regulations, policies and directives. Regulatory enforcement could adversely affect the business, financial condition and results of operations.

• 33 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

19.	RISKS AND UNCERTAINTIES (CONTINUED)

Securitization Risk

The Company originates mortgages for different agencies. Some of these investors aggregate these securities for the purposes of securitizing them in the public markets. To the extent that these investors are unable to finance these loans in the securitization markets at attractive prices, the marketability and liquidity of these loans could become impaired. As of December 31, 2021 and 2020, the secondary market provided adequate liquidity for these loans.

The Company is selling and servicing loans through a contractual agreement with an approved seller-servicer of GNMA I and II loans. The terms of the contractual agreement make the Company subject to similar risk and liabilities as the authorized seller/servicer. The Company also received approval as a seller-servicer of GNMA I and II loans during October 2021. The contractual agreement requires the Company to provide funds to the authorized seller/servicer for situations where money is advanced on the borrower’s behalf to i) pay security holders when borrower payments are late, ii) address errors in the calculation of principal and interest, iii) account for losses associated with removal of a loan from the loan pool, and iv) pay for tax and insurance when borrower payments are late. Liability risk exists when the Company is required to buyback defective mortgage loans and if GNMA incurs costs, losses or expenses as a result of the Company’s default.

The Company is required to advance a percentage of loans currently being serviced to cover these contingent expenses.

The Company is responsible for servicing GNMA I and II loans with an unpaid principal balance as of December 31, 2021 and 2020 of $26,749,532 and $502,077,083, respectively. The Company has advanced $939,474 and $3,521,739 at December 31, 2021 and 2020, respectively, to address these contingencies, which is located in loan fees and other receivables on the accompanying consolidated balance sheets, and which management believes is fully collectable.

During November 2021, the Company receive its approval as a GNMA seller/servicer. As of December 31, 2021, the Company did not have any outstanding loan pools related to this agreement.

• 34 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

19.	RISKS AND UNCERTAINTIES (CONTINUED)

Operating Risk

The impact of COVID-19, and its variants, continue to cause uncertainty in global and national markets, which may continue for a currently indeterminable period of time. The pandemic may continue to cause labor disruptions, supply chain shortages, increased consumer costs and related inflation. These negative factors either individually, or cumulatively, may cause an impact to financing and investing operations, the consequence of which cannot be readily determined, but may impact the Company’s ability to meet future obligations.

20.	CAPITAL AND LIQUIDITY REQUIREMENTS

The Company is subject to various capital and liquidity requirements in connection with agreements that the Company has entered into with the warehouse lines of credit, HUD, FHLMC and FNMA. Failure to maintain capital requirements could result in the Company’s inability to originate and service loans for the respective warehouse lenders and, therefore, could have a direct material effect on the Company’s financial position.

The Company’s actual capital and liquidity amounts and the minimum amounts required for adequacy purposes by the warehouse lenders are as follows:

As of December 31, 2021:	Actual Capital		Minimum Capital<br>Requirements
HUD	$	60,261,496	$	2,500,000
FHLMC	$	64,692,960	$	4,536,237
FNMA	$	64,725,458	$	4,536,237
GNMA	$	60,261,496	$	2,500,000
Warehouse Line 1	$	64,725,458	$	2,800,000
Warehouse Line 2	$	64,725,458	$	5,000,000
Warehouse Line 3	$	64,725,458		No Requirement

• 35 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

20.	CAPITAL AND LIQUIDITY REQUIREMENTS (CONTINUED)
As of December 31, 2021:	Actual Liquidity		Minimum<br>Liquidity<br>Requirements
---	---	---	---	---
HUD	$	41,137,279	$	500,000
FHLMC	$	41,137,279	$	285,073
FNMA	$	41,137,279	$	285,073
GNMA	$	41,137,279	$	1,000,000
Warehouse Line 1	$	41,137,279		No Requirement
Warehouse Line 2	$	41,137,279		No Requirement
Warehouse Line 3	$	41,137,279		No Requirement
As of December 31, 2020:	Actual Capital		Minimum<br>Capital<br>Requirements
HUD	$	51,358,358	$	2,500,000
FHLMC	$	51,358,358	$	2,698,432
FNMA	$	51,358,358	$	318,845
Warehouse Line 1	$	53,839,098	$	2,800,000
Warehouse Line 2	$	53,839,098	$	5,000,000
Warehouse Line 3	$	53,839,098		No Requirement
Related Party Warehouse Line	$	53,839,098		No Requirement
As of December 31, 2020:	Actual Liquidity		Minimum<br>Liquidity<br>Requirements
HUD	$	19,795,907	$	500,000
FHLMC	$	19,795,907	$	318,845
FNMA	$	19,795,907	$	318,845
Warehouse Line 1	$	19,795,907		No Requirement
Warehouse Line 2	$	19,795,907		No Requirement
Warehouse Line 3	$	19,795,907		No Requirement
Related Party Warehouse Line	$	19,795,907		No Requirement
21.	CONTINGENCIES
---	---

The Company has claims arising in the normal course of business. In the opinion of the Company’s legal counsel and management, any outcome will be immaterial to the consolidated financial statements.

• 36 -

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

22.	CASH FLOW INFORMATION

Supplemental cash flow information was as follows for the years ended December 31,

	2021		2020
Cash Paid For:
Interest Expense	$	8,656,780	$	8,802,903
Taxes	$	—	$	—
Non-Cash Transactions:
Finance Buyout of Former Members	$	—	$	1,009,212
Finance of Captive Insurance Policy	$	4,144,791	$	3,307,615
Debt Forgiveness	$	4,964,200	$	—
Yellowstone Merger - See Note 12	$	—	$	—
23.	RECLASSIFICATIONS
---	---

Reclassifications have been made to the prior year financial statements in order to conform to the classifications used in the current year financial statements. These reclassifications have no effect on the prior year net income, net worth or liquidity.

24.	SUBSEQUENT EVENTS

The Company has evaluated subsequent events through March 29, 2022, the date the financial statements were available to be issued, and there was the following significant matter to report:

On March 16, 2022, an outside investor acquired an interest in the Company’s parent entity, Warp Speed Holdings, which will create a change of control.

• 37 -

Supplementary Schedules

CalCon Mutual Mortgage LLC

Consolidated Supplementary Schedule I - Operating Expenses

	Years Ended December 31,
	2021		2020
Operating Expenses:
Salaries, Payroll Taxes and Employee Benefits:
Salaries	$	22,044,945	$	29,194,314
Payroll Taxes		2,275,121		2,423,784
Employee Benefits		1,311,119		858,659
Total Salaries, Payroll Taxes and Employee Benefits		25,631,185		32,476,757
Occupancy and Equipment Rent:
Occupancy Rent		1,349,521		1,442,572
Equipment Rent		185,566		184,463
Total Occupancy and Equipment Rent		1,535,087		1,627,035
Advertising and Marketing		2,839,360		2,393,620
General and Administrative:
Accounting		267,578		89,615
Bad Debt		134,886		12,225
Bank Charges		26,554		18,516
Depreciation		82,152		101,474
Dues and Subscriptions		512,252		413,670
Janitorial		17,057		18,072
Insurance		3,983,377		2,621,530
Licenses and Fees		363,759		694,479
Meals and Entertainment		15,509		4,377
Miscellaneous Fees		528,255		323,248
Office Expense		91,310		110,690
Office Supplies		122,982		193,617
Outside Services		15,252,372		5,362,639
Postage and Delivery		205,950		121,113
Professional Fees		1,384,093		661,220
Software Licensing		1,183,211		996,841
Travel		206,898		140,803
Utilities		141,073		150,681
Printing and Reproduction		10,544		11,754
Property Taxes		9,024		8,800
Total General and Administrative		24,538,836		12,055,364
Total Operating Expenses	$	54,544,468	$	48,552,776

See Notes to Consolidated Financial Statements

• 39 -

CalCon Mutual Mortgage LLC

Supplementary Schedule II

Computation of HUD Adjusted Net Worth Requirement

December 31, 2021

Net Worth Requirement:
FHA Servicing Portfolio	$	—
FHA Originations		255,900,274
FHA Purchases		—
Subtotal - FHA Loan Activity		255,900,274
FHA Origination Servicing Retained		1,805,277
FHA Purchase Servicing Retained		—
Subtotal - Servicing Retained		1,805,277
Total Adjusted FHA Loan Activity		254,094,997
Net Worth Required Baseline		1,000,000
Additional Net Worth Required		2,290,950
Total Minimum Net Worth Required		2,500,000
Members’ Equity Ending Balance		64,725,458
Less Unacceptable Assets:
Related Party Receivable		32,498
Prepaid Expenses		4,431,464
Adjusted Net Worth		60,261,496
Adjusted Net Worth Above Required Minimum Amount	$	57,761,496

See Notes to Consolidated Financial Statements

• 40 -

CalCon Mutual Mortgage LLC

Supplementary Schedule II (Continued)

Computation of HUD Liquidity Requirement

December 31, 2021

Liquidity Requirement:
Cash and Cash Equivalents	$	41,137,279
Less Unacceptable Assets		—
Total Liquid Assets		41,137,279
Liquidity Required		500,000
Liquidity Above the Program Requirement	$	40,637,279

See Notes to Consolidated Financial Statements

• 41 -

CalCon Mutual Mortgage LLC

Supplementary Schedule III

Computation of GNMA Adjusted Net Worth Requirement

December 31, 2021

Adjusted Net Worth Calculation:
Members’ Equity per Statement of Financial
Condition at the End of Reporting Period	$	64,725,458
Less:
Unacceptable Assets
Prepaid Expenses		4,431,464
Related Party Notes Receivable		32,498
Total Unacceptable Assets		4,463,962
Adjusted Net Worth	$	60,261,496
Required Net Worth Calculation:
Unpaid Principal Balance of Securities Outstanding<br>(Note: Numbers of Pools = 0)	$	—
Plus:
Outstanding Balance of Commitment Authority Issued and Requested		—
Total Outstanding Portfolio and Authority		—
Required Net Worth		2,500,000
Excess Net Worth	$	57,761,496

See Notes to Consolidated Financial Statements

• 42 -

CalCon Mutual Mortgage LLC

Supplementary Schedule III (Continued)

Computation of GNMA Capital Requirement

December 31, 2021

Capital Requirement for Nondepository Institutions:			****
Total Adjusted Net Worth	$	60,261,496
Total Assets	$	391,338,315
				Meets 6% Requirement?
Total Adjusted Net Worth/Total Assets		15.40	%		Yes

See Notes to Consolidated Financial Statements

• 43 -

CalCon Mutual Mortgage LLC

Supplementary Schedule III (Continued)

Computation of GNMA Liquid Assets Requirement

December 31, 2021

Liquid Assets Calculation:
Required Net Worth	$	2,500,000
Acceptable Liquid Assets:
Cash and Cash Equivalents		41,137,279
Total Liquid Assets	$	41,137,279
Required Liquid Assets:	$	1,000,000
			Meets Requirement?
Excess Liquid Assets	$	40,137,279		Yes

See Notes to Consolidated Financial Statements

• 44 -

CalCon Mutual Mortgage LLC

Supplementary Schedule III (Continued)

Presentation of GNMA Insurance Requirement

December 31, 2021

A. Identification of Affiliated Ginnie Mae Issuers:
Affiliated Ginnie Mae Issuers:
CalCon Mutual Mortgage LLC
Affiliated Ginnie Mae Issuer #:		4441
Affiliated Issuers on Same Insurance Policies:		Not Applicable
B. Required Insurance Calculation:
Servicing Portfolio:
Ginnie Mae	$	—
Fannie Mae		707,408,331
Freddie Mac		80,964,353
Conventional (Other)		26,121,971
Total Servicing Portfolio	$	814,494,655
Required Fidelity Coverage	$	1,293,118
Required Servicing Errors and Omissions Coverage	$	1,293,118
C. Verification of Insurance Coverage:
Fidelity Bond Coverage at End of Reporting Period	$	2,750,000
Mortgage Servicing Errors and Omissions Coverage at End of Reporting Period	$	1,000,000
D. Insurance Coverage:
Fidelity Bond Coverage	$	1,456,882
Required Mortgage Servicing Errors and Omissions Coverage	$	(293,118)
E.  Ginnie Mae Loss Payable Endorsement:
Fidelity Bond Coverage		No
Mortgage Servicing Errors and Omissions Coverage		No

See Notes to Consolidated Financial Statements

• 45 -

CalCon Mutual Mortgage LLC

Audit Firm Summary

December 31, 2021

Audit Firm:	Spiegel Accountancy Corp.
Lead Auditor:	Henry S. Chavez, CPA
Address:	2300 Contra Costa Blvd., Suite 425
	Pleasant Hill, California 94523
Phone:	(925) 977-4000
Federal ID:	26-4802175

• 46 -

Spiegel Accountancy Corp.

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING ****

STANDARDS ****

Independent Auditor’s Report

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Calcon Mutual Mortgage LLC (CalCon Mutual Mortgage LLC or the Company), which comprise the consolidated balance sheet as of December 31, 2021, and the related consolidated statements of income and expense, changes in members’ equity, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March 29, 2022.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Company’s internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Company’s internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or its employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Company’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be· material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

• 47 -

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Company’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, with which noncompliance could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instance of noncompliance that is required to be reported under Government AuditingStandards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, but not to provide an opinion on the effectiveness of the Company’s internal control over financial reporting or compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Company’s internal control over financial reporting and compliance. Accordingly, this communication is not suitable for any other purpose.

Pleasant Hill, California	Spiegel Accountancy Corp.
March 29, 2022	Certified Public Accountants

• 48 -

Spiegel Accountancy Corp.

REPORT ON COMPLIANCE FOR THE MAJOR HUD PROGRAM AND ON

INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE CONSOLIDATED ****

AUDIT GUIDE FOR AUDITS OF HUD PROGRAMS ****

Independent Auditor’s Report

To the Members and Board of Directors

Calcon Mutual Mortgage LLC

San Diego, California

Report on Compliance with Each MajorProgram

We have audited Calcon Mutual Mortgage LLC (Calcon Mutual Mortgage LLC or the Company)‘s compliance with the compliance requirements) described in the Consolidated Audit Guide for Audits of HUD Programs (the Guide that could have a direct and material effect on the Company’s major U.S. Department of Housing and Urban Development (HUD) programs for the year ended December 3 I, 2021. The Company’s major HUD programs and the related direct and material compliance requirements are as follows:

Name of Major HUD Program	Direct and Material Compliance Requirements
HUD Title II Program	Quality Control Plan, Branch Office Operations, Loan Origination, Loan Servicing, Federal Financial and Activity Reports, Lender Annual Recertification, Adjusted Net Worth, Liquidity, Licensing. Loan Settlement, Escrow Accounts, and<br>Kickbacks.
GNMA Program	Federal Financial Reports, Eligibility to Issue Mortgage- Backed Securities, Review of Custodial Documents, Issuer’s administration of Pooled Mortgage, Review of Monthly Accounting Reports and Quarterly Submission, Securities<br>Marketing and Trading Practices, Adjusted Net Worth, Institutionwide Capital Requirements; Liquid Asset Requirement

In our opinion, Calcon Mutual Mortgage LLC complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major HUD programs for the year ended December 3 I, 202I.

Basis for Opinionon Each Major HUD Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the Guide. Our responsibilities under those standards and the Guide are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

• 49 -

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Basis for Opinion on Each Major HUD Program (Continued)

We are required to be independent of Calcon Mutual Mortgage LLC and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major HUD program. Our audit does not provide a legal determination of’ s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to Calcon Mutual Mortgage LLC’s HUD programs.

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and to express an opinion on Calcon Mutual Mortgage LLC’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Guide will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about Calcon Mutual Mortgage LLC’s compliance with the requirements of each major HUD program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Guide, we:

•	Exercise professional judgment and maintain professional skepticism throughout the audit.
•	Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform<br>audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding Calcon Mutual Mortgage LLC’s compliance with the compliance requirements referred to above and performing such other procedures<br>as we consider necessary in the circumstances.
---	---

• 50 -

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Auditor’s Responsibilities for the Audit of Compliance (Continued)

•

Obtain an understanding of Calcon Mutual Mortgage LLC’s internal control over compliance relevant to the<br>audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Guide, but not for the purpose of expressing an opinion on the effectiveness of<br>Calcon Mutual Mortgage LLC’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a compliance requirement of a HUD program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement of a HUD program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a compliance requirement of a HUD program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that have not been identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of Calcon Mutual Mortgage LLC’s internal control over compliance. Accordingly, no such opinion is expressed.

• 51 -

To the Members and Board of Directors

CalCon Mutual Mortgage LLC

San Diego, California

Purpose of This Report

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Guide. Accordingly, this communication is not suitable for any other purpose.

Pleasant Hill, California	Spiegel Accountancy Corp.
March 29, 2022	Certified Public Accountants

• 52 -

Spiegel Accountancy Corp.

CalCon Mutual Mortgage LLC

Schedule of Findings, Questioned Costs and Recommendations

for HUD-Approved Title II Non-Supervised Mortgagees

and Loan Correspondents

December 31, 2021

Current YearFindings

Our audit disclosed no finding that are required to be reported herein under the Consolidated Audit Guide for Audits of HUD Programs.

• 53 -

CalCon Mutual Mortgage LLC

Schedule of the Status of Prior Audit Findings, Questioned Costs and Recommendations

for HUD-Approved Title II Non-Supervised Mortgagees

and Loan Correspondents

December 31, 2021

REGARDING THEPREVIOUS COMPLIANCE AUDIT

Audit report dated March 27, 2021 for the year ended December 31, 2020 issued by Spiegel Accountancy Corp.

No open findings from the prior year audit report.

REGARDING AUDITS, ATTESTATIONS, REVIEWS OR OTHER STUDIES OR MONITORING REPORTS

There were no letters or reports issued by HUD OIG, contract administrators or other federal agencies during the year covered by this audit.

REGARDING DEFICIENCES LISTED IN LETTERS OR REPORTS ISSUED BY HUD MANAGEMENT

There were no letters or reports issued by HUD management during the audit period.

• 54 -

EX-99.2

Exhibit 99.2

CalCon Mutual Mortgage LLC

September 30, 2022

Consolidated Financial Statements

Calcon Mutual Mortgage LLC

Consolidated Balance Sheets

Consolidated Balance Sheet	1
Consolidated Statement of Income and Expense	2
Consolidated Statement of Changes in Members’ Equity	3
Consolidated Statement of Cash Flows	4
Notes to Financial Statements	5 - 14

Calcon Mutual Mortgage LLC

Consolidated Balance Sheets

	September 30, 2022
ASSETS
Assets:
Cash and Cash Equivalents	$	16,275,735
Mortgage Loans Held for Sale at Fair Value		367,637,618
Mortgage Loans Receivable, Net		118,136,409
Loan Fees and Other Receivables		15,854,672
Derivative Assets		756,236
Mortgage Servicing Rights		6,412,612
Prepaid Expenses		1,349,411
Property and Equipment, Net		98,345
Deposits and Other Assets		125,705
Total Assets	$	526,646,743
LIABILITIES AND EOUITY
Liabilities:
Accounts Payable and Accrued Liabilities	$	9,673,030
Derivative Liabilities		3,688,969
Warehouse Lines of Credit		455,823,829
Deferred Revenue		2,384,478
Secondary Market Reserve		1,085,758
Notes Payable		6,823,392
Total Liabilities		479,479,456
Members’ Equity:
Class B Members		44,093,740
Non-Controlling Interest		3,073,547
Total Members’ Equity		47,167,287
Total Liabilities and Equity	$	526,646,743

See Notes to Consolidated Financial Statements

1

Calcon Mutual Mortgage LLC

Consolidated Statements of Income and Expense

Nine Months Ended September 30, 2022

	September 30, 2022
Mortgage Lending Income:
Gain on Sale of Mortgage Loans and Loan Origination Fees	$	35,703,245
Loan Fees from Lending Activities		9,321,460
Gain on Retention/Fair Value Change of Mortgage Servicing Rights		7,111,661
Loss on Sale of Mortgage Servicing Rights		(105,978	)
Mortgage Servicing Fees		900,851
Interest Income from Lending Activities		16,518,251
Total Mortgage Lending Income		69,449,490
Mortgage Lending Expense:
Loan Originator Commissions		10,471,336
Warehouse Lines of Credit Interest Expense		10,589,672
Loan Expense Related to Lending Activities		5,047,998
Mortgage Servicing Fee Expense		1,257,378
Provision for Secondary Market Reserve		173,421
Total Mortgage Lending Expense		27,539,805
Gross Profit		41,909,685
Operating Expenses:
Salaries, Payroll Taxes and Employee Benefits		18,900,357
Occupancy and Equipment Rent		1,245,321
Advertising and Marketing		4,974,593
General and Administrative		16,793,058
Total Operating Expense		41,913,329
Loss from Operations		(3,644	)
Other Income and (Expenses):
Interest Income		693
Interest Expense		(229,216	)
Total Other Income and (Expense)		(228,523	)
Net Loss Before Non-controlling Interest		(232,167	)
Net Income from Non-controlling Interest		(1,675,101	)
Net Loss Attributable to the Company	$	(1,907,268	)

See Notes to Consolidated Financial Statements

2

Calcon Mutual Mortgage LLC

Consolidated Statements of Changes in Members’ Equity

Nine Months Ended September 30, 2022

	Class B			Non-Controlling<br>Interest			Total Equity
Balance at December 31, 2021	$	64,725,458		$	1,585,946		$	66,311,404
Contributions	****	—	****		812,500			812,500
Distributions		(18,724,450	)		(1,000,000	)		(19,724,450	)
Net Income (Loss)		(1,907,268	)		1,675,101			(232,167	)
Balance at September 30, 2022	$	44,093,740		$	3,073,547		$	47,167,287

See Notes to Consolidated Financial Statements

3

CalCon Mutual Mortgage LLC

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2022

	September 30, 2022
Cash Flows from Operating Activities:
Net Loss	$	(232,167	)
Adjustment to Reconcile Net Income to Net Cash Flows from Operating Activities:
Captive Insurance Amortization		(4,144,791	)
Depreciation		45,305
Gain on Sale of Mortgage Servicing Rights		105,978
Gain on Retention of Mortgage Servicing Rights		(4,945,558	)
Fair Value Adjustment of Mortgage Servicing Rights		(2,166,103	)
Amortization of Deferred Revenue		(982,685	)
Provision for Secondary Market Reserve		173,421
Increase (Decrease) in Operating Assets:
Mortgage Loans Held for Sale		(114,467,962	)
Mortgage Loans Receivable		(48,019,173	)
Loan Fees and Other Receivables		(6,490,472	)
Derivative Instruments		5,454,184
Prepaid Expenses		3,082,053
Deposits and Other Assets		1,617,903
Decrease (Increase) in Operating Liabilities:
Accounts Payable and Accrued Liabilities		(18,610	)
Deferred Revenue		2,624,895
Secondary Market Reserve		(1,087,663	)
Net Cash Used in Operating Activities		(169,451,445	)
Cash Flows From Investing Activities:
Proceeds from Sale of Mortgage Servicing Rights		8,978,643
Net Cash Provided by Investing Activities		8,978,643
Cash Flows From Financing Activities:
Proceeds from Warehouse Lines of Credit		1,388,098,548
Repayments on Warehouse Lines of Credit		(1,232,312,853	)
Repayments of Notes Payable		(1,262,487	)
Distributions		(18,724,450	)
Non-controlling Interest Contributions		812,500
Non-controlling Interest Distributions		(1,000,000	)
Net Cash Provided by Financing Activities		135,611,258
Net Increase in Cash and Cash Equivalents		(24,861,544	)
Cash and Cash Equivalents – Beginning of Period		41,137,279
Cash and Cash Equivalents – End of Period	$	16,275,735
Supplementary Disclosure of Cash Flow Information:
Cash Paid for Interest	$	9,807,138

See Notes to Consolidated Financial Statements

4

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization

CalCon Mutual Mortgage LLC dba OneTrust Home Loans, Tabor Mortgage Group and Warp Speed Mortgage LLC (CalCon), which was incorporated in 2013 in the state of Delaware. CalCon is principally engaged in the origination of mortgage loans secured by residential real estate located in various states throughout the United States. Generally, such loans are subsequently sold to financial institutions or to other entities that sell such loans to investors. CalCon is registered with the Nationwide Mortgage Licensing System & Registry as well as applicable state licensing agencies. Additionally, CalCon is approved by the U.S. Department of Housing and Urban Development (HUD) to act as a non-supervised mortgagee and with the Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), and the Governmental National Mortgage Association (GNMA) to act as a seller/servicer.

Merger

On January 1, 2021, CalCon merged with Yellowstone RE Holdings (Yellowstone), an entity under common control. CalCon purchases, owns, and occasionally sells pools of residential and commercial mortgage loans, including discounted and distressed mortgage loan purchases, all of which are secured by deeds of trust or mortgage contracts.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of CalCon; and its wholly owned subsidiary OTHLJV20, LLC, which has consolidating joint ventures with Schumacher Mortgage LLC; Team One Home Loans LLC, and Ardorio Lending LLC (altogether, the Company). All significant intercompany accounts, transactions, and profits have been eliminated in the consolidation.

Basis of Presentation and Use of Estimates

The Company’s consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The accrual basis of accounting requires the use of estimates and assumptions that affect the assets, liabilities, revenues and expenses reported in the consolidated financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the Company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.

5

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation and Use of Estimates (Continued)

In the Company’s opinion, the accompanying financial statements contain all normal recurring adjustments necessary for a fair presentation of its financial statements for interim periods in accordance with U.S. GAAP. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The information presented in these interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s financial statements as of and for the year ended December 31, 2021. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Mortgage Servicing Rights

The Company originates mortgage loans for sale to the secondary market and sells the loans on either a servicing-retained or servicing-released basis. The Company has obligations to service residential first mortgage loans that are acquired through loans sold on a servicing-retained basis. These mortgage servicing rights (MSRs) are recognized as assets at the time a loan is sold on a servicing-retained basis and capitalized at fair value. Changes in fair value are recorded in fair value adjustments of mortgage servicing rights in the accompanying consolidated statements of income and expense.

Fair market value is based on the present value of estimated future cash flows using a discount rate commensurate with the risk involved. Estimates of fair market value include assumptions about contractual service fees, projected costs to service, prepayment speeds, default, interest rates and other factors, which are subject to change over time. Changes in these underlying assumptions could cause the fair market value of MSRs to specifically change in the future. The Company obtains a valuation from an independent third party on a monthly basis to support the reasonableness of the fair value estimate generated by the Company’s internal model.

The key assumptions used in determining the fair value of MSRs when they are initially recorded were as follows:

	September 30, 2022
Discount Rates		12.50	%
Annual Prepayment Speeds		8.60	%
Cost of Servicing	$	94

6

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

1.	SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy established under applicable accounting guidance which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. The three levels are defined as follows:

Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are those other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the Company’s own financial model using assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

2.	MORTGAGE LOANS HELD FOR SALE

All mortgage loans held for sale are secured by residential property and are collateral for the warehouse lines of credit. Mortgage loans held for sale consisted of the following as of:

	September 30, 2022
Mortgage Loans Held for Sale (Unpaid Principal Balance)	$	372,923,235
Fair Value Adjustment		5,285,617
Mortgage Loans Held for Sale at Fair Value	$	367,637,618

7

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

3.	MORTGAGE LOANS RECEIVABLE

The Company had the following mortgage loans receivable at:

	September 30, 2022
Mortgage loans receivable consisted of notes to individuals secured by deeds of trust, bearing<br>interest at various rates from 2.00% to 12.00% per annum, partially or fully amortized. These notes have original maturity dates from December 2022 through October 2052.	$	410,174,133
Less: Construction Loan Commitments		(248,968,300	)
Mortgage Loans Receivable, Net	$	161,205,833

Mortgage Loans in Foreclosure

At September 30, 2022, the Company had loans amounting to $2,668,699 that were in the process of foreclosure. Real estate owned is included in mortgage loans receivable at September 30, 2022. Management does not anticipate any losses related to these foreclosures.

Loan Modifications

At September 30, 2022, the Company did not have any material loan modifications.

4.	DERIVATIVE INSTRUMENTS

Derivative instruments are commitments to extend to borrowers, either at fixed or floating rates, and contracts to sell mortgage loans to investors at specific future dates and interest rates. Commitments to extend credit are generally agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. The market risk associated with the commitments to sell loans occurs when the estimated amount of the commitments to extend credit is not the same as the outstanding commitments to sell loans and from the possible inability of counterparties to meet the terms of their commitments.

The Company recognized pre-tax net realized and unrealized gains of $23,701,211 for the nine months ended September 30, 2022, on its hedging activity related to interest rate lock commitments and investor forward loan sale contracts. The Company had the following derivative instruments as of:

	September 30, 2022
	Volume		Fair Value
Interest Rate Lock Commitments	$	93,677,461	$	756,236
Investor Forward Loan Sale Contracts	$	425,000,000		(3,688,969	)
Total Derivative Instruments			$	(2,932,733	)

8

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

4.	DERIVATIVE INSTRUMENTS (CONTINUED)

The following table represents the quantitative information about interest rate lock commitments and the fair value measurements as of:

	Loan Funding Probability<br>(Pull-Through)
	September 30, 2022
Weighted Average		91	%

The Company had margin calls with a broker dealer totaling $3,937,500 at September 30, 2022, which are located in loan fees and other receivables on the accompanying consolidated balance sheets.

5.	MORTGAGE SERVICING RIGHTS

The following summarizes MSR activity for the nine months ended:

	September 30, 2022
Beginning Balance	$	8,385,572
Capitalized Mortgage Servicing Rights		4,945,558
Fair Value Adjustment and Payoffs		1,794,350
Sale of Mortgage Servicing Rights		(9,009,332	)
Gain on Sale of Mortgage Servicing Rights		296,464
Mortgage Servicing Rights	$	6,412,612

The following table illustrates the impact of adverse changes on the discount rate and prepayment speeds at two different data points at:

	September 30,2022
	Discount Rates						Prepayment Speeds
	10%<br>Adverse<br>Change			20%<br>Adverse<br>Change			10%<br>Adverse<br>Change			20%<br>Adverse<br>Change
Mortgage Servicing Rights	$	(271,188	)	$	(517,855	)	$	(183,118	)	$	(354,711	)

9

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

6.	WAREHOUSE LINES OF CREDIT

At September 30, 2022, the Company had warehouse lines of credit agreement with two financial institutions, whereby the Company received advances under the agreements up to a combined maximum of $800,000,000.

The Company had the following outstanding warehouse lines of credit at:

	September 30, 2022
Merchants Bank	$	(439,525,118	)
Centier Bank		(16,298,711	)
Total	$	(455,823,829	)
7.	SECONDARY MARKET RESERVE
---	---

The following is a summary of the secondary market reserve activity for the nine months ended:

	September 30, 2022
Beginning Balance	$	2,000,000
Charge-Offs		173,421
Provision for Secondary Market Reserve		(1,087,663	)
Ending Balance	$	1,085,758
8.	NOTES PAYABLE
---	---

Merchants Bank

At September 30, 2022, the Company has a loan of $2,389,820, which bears interest of 3.59%, and is due in 2024. Loan repayments are approximately $980,000 per year through 2024.

PACREP Investment Company. LLC

At September 30, 2022, the Company has a note payable of $4,433,572 bearing interest at Libor plus a margin of 150 basis points per annum, with interest payable quarterly and principal payable upon the payoff of the mortgage loans that are pledged as collateral. This note was transferred from Yellowstone in the amount of $5,231,041.

9.	TRUST LIABILITIES

The Company collects funds from borrowers in advance for payment of credit, taxes and insurance. The Company is required to maintain these funds in a separate trust account for the benefit of these borrowers. Total funds held in trust for others at September 30, 2022, was $12,057,539. The trust assets and liabilities are not included on the accompanying consolidated balance sheets.

10

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

10.	FAIR VALUE MEASUREMENTS

The following table represents the Company’s fair value hierarchy for its assets measured at fair value on a recurring basis as of:

	September 30, 2022
	Level 1		Level 2			Level 3
Mortgage Loans Held for Sale	$	—	$	367,637,618		$	—
Interest Rate Lock Commitments		—		—			756,236
Mortgage Servicing Rights		—		—			6,412,612
Investor Forward Loan Sale Contracts		—		(3,688,969	)		—
Total	$	—	$	363,948,649		$	7,168,848

The following table presents a reconciliation of Level 3 assets measured at fair value on a recurring basis for the following nine months ended:

	Interest Rate<br>Lock<br>Commitments
Balance at December 31, 2021	$	2,845,650
Net Transfers and Revaluations		(2,089,414	)
Balance at September 30, 2022	$	756,236

At September 30, 2022, there were no non-recurring assets or liabilities recorded at fair value.

Due to their short-term nature, the carrying values of loan fees and other receivables, prepaid expenses, certain notes receivable, accounts payable and accrued liabilities, warehouse lines of credit and certain notes payable approximate their fair values at September 30, 2022.

11.	RISKS AND UNCERTAINTIES

Mortgage Operations

In the normal course of its business, the Company is exposed to certain economic and compliance risks including credit risk, investor risk, repurchase risk, concentration risk, interest rate risk, regulatory risk, securitization risk and operating risk.

11

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

11.	RISKS AND UNCERTAINTIES (CONTINUED)

Credit Risk

The Company is dependent on its warehouse lending partners and termination of one or more of these relationships could affect the Company’s financial results and overall operations. The Company expects that warehouse lines of credit will remain available to finance its mortgage lending activities and that the Company will be able to obtain access to additional warehouse lines of credit, if needed. However, there is no certainty that these lending relationships or any other current relationships will continue or that the Company will be able to obtain new credit facilities. If the warehouse lines of credit become unavailable or diminished, the reduction in the Company’s borrowing ability could have a material adverse effect on the results of its operations and financial position.

Investor Risk

The Company has requirements to maintain certain net worth and liquidity amounts for their approvals with government-sponsored entities as well as other third-party aggregators. Failure to meet these financial covenant requirements could have an adverse impact on the Company’s financial position.

Repurchase Risk

The Company has mortgage loan purchase agreements with various investors. The Company is

obligated to perform certain procedures in accordance with these agreements. The agreements provide for conditions whereby the Company may be required to either repurchase mortgage loans or provide indemnification for losses suffered by investors due to borrower default for various reasons, among which may be one of the following: (i) a mortgage loan is originated in violation of the investor’s requirements, (ii) the Company breaches any term of the agreement, and/or (iii) an early payment default occurs from a mortgage originated by the Company.

Concentration Risk

The Company sells loans to various investors. For nine months ended September 30, 2022, mortgage loans sold to the largest three investors consisted of approximately 53% of its mortgage loan sales.

Interest Rate Risk

Until a rate guarantee is extended to a borrower, the Company is not exposed to interest rate risk. At September 30, 2022, the Company had commitments to extend credit for which interest rates were guaranteed to borrowers, subject to loan approval. If mortgage interest rates change between the time the rate guarantee is made to the borrower and the time such loan is priced for sale to an investor, there is a potential loss on the sale of the loan. In most cases, the Company elects to absorb price risk on a portion of its rate guarantees by waiting to formally commit loans to actual commitments until after closing and offsetting that risk through hedging activities.

12

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

11.	RISKS AND UNCERTAINTIES (CONTINUED)

Interest Rate Risk (Continued)

In order to manage the price risk on this population of rate guarantees, the Company enters into mandatory delivery forward sale commitments to investors at different times during the period that the underlying loans are in process. This latter method of loan sales generally entails the assumption of somewhat greater interest rate risk but also usually produces a higher gain on loan sales. The Company mitigates this risk through its hedging activities. The Company is also subject to risks associated with changes in interest rates to the extent that such fluctuations may have an effect on loan production volumes.

Regulatory Risk

The Company is subject to comprehensive regulation and supervision by federal and state regulatory authorities covering all aspects of the organization, management and operations. Many regulations have undergone significant changes and will significantly change in the future. The Company continually evaluates the regulations to determine the extent of the impact on Company operations.

Any of the various regulatory agencies may take enforcement actions against the Company in the event management does not operate in accordance with applicable regulations, policies and directives. Regulatory enforcement could adversely affect the business, financial condition and results of operations.

Securitization Risk

The Company originates mortgages for different agencies. Some of these investors aggregate these securities for the purposes of securitizing them in the public markets. To the extent that these investors are unable to finance these loans in the securitization markets at attractive prices, the marketability and liquidity of these loans could become impaired. As of September 30, 2022, the secondary market provided adequate liquidity for these loans.

Operating Risk

The impact of COVID-19, and its variants, continue to cause uncertainty in global and national markets, which may continue for a currently indeterminable period of time. The pandemic may continue to cause labor disruptions, supply chain shortages, increased consumer costs and related inflation. These negative factors either individually, or cumulatively, may cause an impact to financing and investing operations, the consequence of which cannot be readily determined, but may impact the Company’s ability to meet future obligations.

12.	CONTINGENCIES

The Company has claims arising in the normal course of business. In the opinion of the Company’s legal counsel and management, any outcome will be immaterial to the consolidated financial statements.

13

CalCon Mutual Mortgage LLC

Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2022

13.	SUBSEQUENT EVENTS

The Company has evaluated subsequent events through December 15, 2022, the date the financial statements were available to be issued.

On October 1, 2022, MVB Bank, Inc. (the “Bank”) and wholly-owned subsidiary of MVB Financial Corp. (“MVB”), completed the purchase of 3,748,392.93 Class B Common Units (the “MVB Investment”) of Warp Speed Holdings LLC, a Wyoming limited liability company (“Warp Speed”), pursuant to the terms of the Equity Purchase Agreement between the Bank and Warp Speed dated March 13, 2022, as thereby assigned by the Bank to MVB effective as of April 28, 2022 (as assigned, the “Purchase Agreement”). The MVB Investment represented 37.5% of the outstanding equity interests of Warp Speed on a fully-diluted basis.

Immediately prior to the closing of the MVB Investment, the pre-closing members of Warp Speed contributed to Warp Speed all of their equity interests in certain entities under common control of the sellers specified in the Purchase Agreement, in exchange for equity interests in Warp Speed (the “Put-Together Transaction”). As of October 1, 2022, Warp Speed serves as a holding company for the entities contributed in the Put-Together Transaction, which are focused on residential and commercial loan origination and servicing, business and personal insurance brokerage and data analytics. The Company is included as part of a number of entities that were contributed by the Warp Speed members to Warp Speed as part of the Put-Together Transaction.

14

EX-99.3

Exhibit 99.3

MARCELO R. GUTIERREZ SUAREZ<br><br><br>Certified Public Accountant & Consultant

ONETRUST INTERNATIONAL LLC

FINANCIAL STATEMENTS

TOGETHER WITH INDEPENDENT AUDITOR’S REPORT

DECEMBER 31, 2021

35 Juan C: Borbon, Suite 67-319, Guaynabo, PR 00969 • Tel (787) 448-5970 • Fax (787) 919-0144

E-mail: mgutierrezcpa@gmaiLcom

ONETRUST INTERNATIONAL LLC

FINANCIAL STATEMENTS

DECEMBER 31, 2021

Table of Contents

INDEPENDENT AUDITOR’S REPORT	1-2
FINANCIAL STATEMENTS:
Statement of Financial Position	3
Statement of Operations	4
Statement of Changes in Members’ Equity	5
Statement of Cash Flows	6
NOTES TO FINANCIAL STATEMENTS	7-13
MARCELO R. GUTIERREZ SUAREZ<br><br><br>Certified Public Accountant & Consultant
---

INDEPENDENT AUDITOR’S REPORT

To the Members of

OneTrust International LLC

San Juan, PR

Opinion

I have audited the accompanying statement of financial position of OneTrust International LLC (“the Company”) as of December 31, 2021, and the related statements of operations, changes in members’ equity and cash flows for the year then ended, and the related notes to financial statements.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

I conducted my audit in accordance with auditing standards generally accepted in the United States of America. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am required to be independent of the Company and to meet my other ethical responsibilities in accordance with the relevant ethical requirements relating to my audit. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Emphasis of Matter

As discussed in Note 2 to the financial statements, the Company is member of a group of affiliated companies through common ownership. Because of these relationships, it is possible that the tenns of the related transactions are not the same as those that would result from transactions among unrelated parties.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

Independent Auditor’s Report

OneTrust International LLC

Auditor’sResponsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, I:

•	Exercise professional judgment and maintain professional skepticism throughout the audit.
•	Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or<br>error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
---	---
•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are<br>appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
---	---
•	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting<br>estimates made by management, as well as evaluate the overall presentation of the financial statements.
---	---
•	Conclude whether, in my judgment, there are conditions or events, considered in the aggregate, that raise<br>substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
---	---

I am required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that I identified during the audit.

Report on Other Legal and Regulatory Requirements

I further certify that the associates of my Firm are neither members nor employees of OneTrust International LLC.

/s/ Marcelo Gutierrez Suarez<br><br><br>Marcelo Gutierrez Suarez, CPA<br> <br>Certified Public Accountant<br><br><br>April 1, 2022<br> <br>License Number 4118, In-force<br> <br>San Juan, Puerto Rico<br><br><br>Expires December 1, 2024

ONETRUST INTERNATIONAL LLC

STATEMENT OF FINANCIAL POSITION

DECEMBER 31, 2021

	Amount
ASSETS
CURRENT ASSETS:
Cash	$	719,223
Accounts Receivable		1,279,292
Prepaid Expenses		260,454
Total Current Assets		2,258,969
PROPERTY AND EQUIPMENT, Net		36,350
OTHER ASSETS		8,887
Total Assets	$	2,304,206
LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses	$	387,379
Income Tax Payable		50,559
Total Liabilities		437,938
MEMBERS’ EQUITY:
Paid-in Capital		96,203
Accumulated Earnings		1,770,065
Total Members’ Equity		1,866,268
Total Liabilities and Members’ Equity	$	2,304,206

The accompanying notes are an integral part of these financial statements. “See IndependentAuditor’s Report”

3

ONETRUST INTERNATIONAL LLC

STATEMENT OF OPERATIONS

DECEMBER 31, 2021

	Amount
REVENUES	$	7,369,178
OPERATING EXPENSES:
Salaries and Benefits		2,630,353
Rent		274,651
Professional Services		915,619
General and Administrative		700,730
Total Operating Expenses		4,521,353
INCOME BEFORE OTHER (INCOME) EXPENSES		2,847,825
OTHER (INCOME) EXPENSES		(226,098	)
INCOME BEFORE INCOME TAX EXPENSE		3,073,923
INCOME TAX EXPENSE		155,138
NET INCOME	$	2,918,785

The accompanying notes are an integral part of these financial statements. “SeeIndependent Auditor’s Report”

4

ONETRUST INTERNATIONAL LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

DECEMBER 31, 2021

	Paid-inCapital		AccumulatedEarnings			TotalMembers’Equity
Balance - December 31, 2020	$	95,003	$	2,068,274		$	2,163,277
Members’ Contributions		1,200					1,200
Net Income				2,918,785			2,918,785
Members’ Distributions				(3,216,994	)		(3,216,994	)
Balance - December 31, 2021	$	96,203	$	1,770,065		$	1,866,268

The accompanying notes are an integral part of these financial statements. “SeeIndependent Auditor’s Report”

5

ONETRUST INTERNATIONAL LLC

STATEMENT OF CASH FLOWS

DECEMBER 31, 2021

	Amount
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	2,918,785
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		9,300
Non Operating Gain		(53,805	)
Decrease (Increase) in Assets-
Accounts Receivable		261,892
Prepaid Expenses		(143,137	)
Decrease in Liabilities-
Accounts Payable and Accrued Expenses		(23,575	)
Income Tax Payable		(15,022	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,954,438
CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of Notes Receivable to Related Party		410,000
NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES		410,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Members’ Contributions		1,200
Members’ Distributions		(3,216,994	)
NET CASH FLOWS USED IN FINANCING ACTIVITIES		(3,215,794	)
INCREASE IN CASH		148,644
CASH, Beginning of Year		570,579
CASH, End of Year	$	719,223

The accompanying notes are an integral part of these financial statements. “SeeIndependent Auditor’s Report”

6

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

1. Nature of Business and Summary of Significant Accounting Policies

ONETRUST INTERNATIONAL LLC, (the Company) was organized on June 14, 2019 in the city of San Juan, Puerto Rico as a domestic for profit limited liability company. The Company commenced operations on June 2019 and is engaged in providing mortgage loan servicing, consulting, centralized management, shared service center, and investment banking services.

The Company is a limited liability company. In a limited liability company (LLC), no member, manager, agent or employee of the LLC is personally liable for debts, obligations or liabilities of the LLC, whether arising from contract, tort or otherwise, for the acts or omission of any member, director, manager, agent or employee of the LLC, unless the individual signed a specific personal guarantee.

The following is a summary of significant accounting policies followed by the Company in the preparation of its financial statements:

a) Cash

Cash includes currency and deposits with financial institutions used as working capital to fund daily operations.

b) Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivable are included in net cash provided by operating activities in the statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts annually. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. During the period ended December 31, 2021, no allowance for doubtful accounts was recognized. No balances were written off from accounts receivable. The Company does not have any off-balance-sheet credit exposure related to its customers.

c) Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is 5 years for software. Total depreciation for the period ended December 31, 2021 amounted to $9,300 and is presented within general and administrative expenses in the accompanying statement of operations.

7

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

Maintenance and repairs are charged to operations when incurred. Betterments and renewals, which substantially increase the life of the individual assets, are capitalized.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized in current operations is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.

d) Paycheck Protection Program

The Paycheck Protection Program note (“the PPP loan”) represents proceeds received as a result of an agreement with a banking institution in connection with the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), as amended by the Paycheck Protection Program Flexibility Act (“Flexibility Act”). This program was created by the Congress of the United States of America to keep workers on the payroll in response to the Coronavirus (“COVID-19”) pandemic crisis.

The PPP loan is issued by financial institutions and guaranteed by the United States Small Business Administration (SBA). Loan repayments are deferred and principal payments as well as the accrued interest can be forgiven (after the SBA remits the loan forgiven amount to the borrower) subject to compliance with certain conditions and approval by the borrower and the SBA. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the coverage period, as defined. Although management believes that the Company has complied with the conditions and substantially all amounts due in relation to the PPP loan will be forgiven, the loan forgiveness application is still under review.

For purposes of derecognizing the PPP loan, management of the Company has elected the model of accounting under FASB ASC 450-30 Gain Contingencies. Under this model, the earnings impact of a gain contingency is recognized when all the contingencies related to receipt of the assistance have been met and the gain is realized or realizable.

e) Leases

The Company has entered in a non-cancelable lease agreement where it acts as a lessee. The Company accounts for leases in accordance with the provisions of FASB ASC 840 “Leases”. FASB ASC 840 requires that the Company evaluate each lease for classification as either a capital lease or an operating lease. The Company performs this evaluation at the date of inception of the lease and when a modification is made to a lease.

8

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

f) Revenue Recognition

The Company recognizes revenue when the services are provided.

g) Advertising Costs

Advertising costs are expensed as incurred. Total advertising expense for the period ended December 31, 2021 amounted to $8,239 and is presented within general and administrative expenses in the accompanying statement of operations.

h) Income Tax

Income tax is accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In accordance with FASB ASC 740, Income Taxes, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes the effect of income tax positions only if such positions were probable of being sustained. No liability for unrecognized tax benefits has been recorded in the accompanying statement of financial position as of December 31, 2021.

i) Members’ Account

The Company’s limited liability operating agreement provides for one class of membership.

j) Commitments and Contingencies

Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

9

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

k) Use of Estimates

The preparation of the financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

I) Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes FASB ASC Topic 840, Leases, and makes other conforming amendments to U.S. GAAP. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-statement of financial position via a right of use asset and lease liability, and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2021 (as amended in June 2020 by ASU 2020-05, Effective Dates for Certain Entities), that is, for year 2022. While the Company expects ASU 2016-02 to add right-of-use assets and lease liabilities to the statement of financial position, it is evaluating other effects that the new standard will have on the financial statements.

2. Transactions with Related Parties

The Company is member of a group of affiliated companies through common ownership. Because of these relationships, it is possible that the terms of the related transactions are not the same as those that would result from transactions among unrelated parties.

During the period ended December 31, 2021, the Company billed a total of $7,369,178 to its affiliates for services. The amount is included as revenues in the accompanying statement of operations. The balance due from the related parties at December 31, 2021 amounted to approximately $1,279,292 and is recorded within accounts receivable in the accompanying statement of financial position.

10

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

3. Income Tax

The Company operates for tax purposes as a C corporation, the maximum tax rate for a C corporation is 37.5% under the laws of the Commonwealth of Puerto Rico. On November 19, 2019, the Company received a grant from the Department of Economic Development and Commerce in order to operate with a tax exemption under the Act No. 20 of January 17, 2012 as amended (“the Act”). The Act provides for certain tax benefits for those local companies that provide eligible services activities outside of Puerto Rico.

Under the Act, the Company is subject to income tax on its export services income on a preferential tax rate of 4% based on the grant received. In order to maintain the exemption status under the Act, the Company must comply with various- requirements as described in the grant.

Income tax expense attributable to income from continuing operations for the year ended December 31, 2021 is as follows:

Expected tax expense (37.5%)	$	1,099,097
Less: tax relief under Act # 20		(981,860	)
Income tax expense under Act# 20 (4%)	$	117,237
Income tax expense excluded from Act # 20		37,901
Income tax expense	$	155,138

4. Property and Equipment

Property and equipment as of December 31, 2021 consist of the following:

	Useful Lives<br>(in years)		Amount
Software		5	$	46,500
Less: Accumulated depreciation				(10,150	)
Total property and equipment, net			$	36,350

11

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

5. Paycheck Protection Program Note

On May 9, 2020, the Company received loan proceeds in the amount of $53,805 under the PPP loan. The PPP loan provides qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business.

During 2020, management of the Company submitted the PPP Loan Forgiveness Application (“the PPP Forgiveness Application”) in the amount of $53,805. On May 20, 2021, the Company received notice from the SBA that the PPP funds were used appropriately, and all amounts were fully forgiven.

6. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash. The Company maintains its cash accounts at several high quality financial institutions, which may exceed at times the federally insured deposit limits. The amount by which cash deposits exceeded the amount insured by the Federal Deposit Insurance Corporation as of December 31, 2021 was approximately $579,444. The Company has not experienced any losses in such bank accounts while such financial institutions have strong credit ratings; therefore, management believes that credit risk related to these bank accounts are minimal and does not anticipate any non performance.

During the period ended December 31, 2021, three related party customers accounted for 100% of the Company’s revenues. A total of 100% of accounts receivable outstanding as of December 31, 2021 is concentrated in those three companies.

7. Leases

The Company leases its office, acting as a lessee, under a non cancelable operating lease that expires on February 28, 2024 and requires monthly payments of $14,687 of which approximately $5,800 are related to operating expenses such as taxes, utilities and others.

Year	Amount
2022	$	176,244
2023		176,244
2024		29,374
Total	$	381,862

During the period ended December 31, 2021, rent expense under this lease amounted to $274,651 and is presented as rent expense in the accompanying statement of operations.

12

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

The Company subleases part of the above mentioned office to four related parties, acting as a lessor, under non cancelable operating leases that expire on February 28, 2024 and require monthly payments of $3,247, $200, $1,607 and $7,306, respectively.

At December 31, 2021, minimum guaranteed income on all non cancelable operating leases is as follows:

Year	Amount
2022	$	148,320
2023		148,320
2024		24,720
Total	$	321,360

During the period ended December 31, 2021, rent income under these leases amounted to $146,719 and is presented as other income in the accompanying statement of operations.

8. Subsequent Events

The Company has evaluated subsequent events from the statement of financial position date through April 1, 2022, the date at which the financial statements were available to be issued.

13

EX-99.4

Exhibit 99.4

ONETRUST INTERNATIONAL LLC

FINANCIAL STATEMENTS

SEPTEMBER 30, 2022

ONETRUST INTERNATIONAL LLC

FINANCIAL STATEMENTS

SEPTEMBER 30, 2022

Table of Contents

FINANCIAL STATEMENTS:
Statement of Financial Position	1
Statement of Operations	2
Statement of Changes in Members’ Equity	3
Statement of Cash Flows	4
NOTES TO FINANCIAL STATEMENTS	5-6

ONETRUST INTERNATIONAL LLC

STATEMENT OF FINANCIAL POSITION

SEPTEMBER 30, 2022

	Amount
ASSETS
CURRENT ASSETS:
Cash	$	1,261,951
Accounts Receivable		726,183
Prepaid Expenses		276,551
Total Current Assets		2,264,685
PROPERTY AND EQUIPMENT, Net		29,375
OTHER ASSETS		8,887
Total Assets	$	2,302,947
LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses	$	582,919
Total Liabilities		582,919
MEMBERS’ EQUITY:
Paid-in Capital		96,203
Accumulated Earnings		1,623,825
Total Members’ Equity		1,702,028
Total Liabilities and Members’ Equity	$	2,302,947

The accompanying notes are an integral part of these financial statements.

1

ONETRUST INTERNATIONAL LLC

STATEMENT OF OPERATIONS

SEPTEMBER 30, 2022

	Amount
REVENUES	$	5,942,102
OPERATING EXPENSES:
Salaries and Related Expenses		2,215,617
Occupancy, Equipment and Software		790,305
General and Administrative		372,044
Depreciation		6,975
Employee Benefits		208,945
Total Operating Expenses		3,593,886
INCOME BEFORE OTHER INCOME		2,348,216
OTHER INCOME		5,544
NET INCOME	$	2,353,760

The accompanying notes are an integral part of these financial statements.

2

ONETRUST INTERNATIONAL LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

SEPTEMBER 30, 2022

	Paid-In Capital		Accumulated<br>Earnings			Total Members’<br>Equity
Balance - December 31, 2021	$	96,203	$	1,770,065		$	1,866,268
Net Income		—		2,353,760			2,353,760
Members’ Distributions		—		(2,500,000	)		(2,500,000	)
Balance – September 30, 2022	$	96,203	$	1,623,825		$	1,720,028

The accompanying notes are an integral part of these financial statements.

3

ONETRUST INTERNATIONAL LLC

STATEMENT OF CASH FLOWS

SEPTEMBER 30, 2022

	Amount
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	2,353,760
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		6,975
Changes in in Assets-
Accounts Receivable		553,109
Prepaid Expenses		(16,097	)
Changes in Liabilities-
Accounts Payable and Accrued Expenses		195,540
Income Tax Payable		(50,559	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		3,042,728
CASH FLOWS FROM FINANCING ACTIVITIES:
Members’ Distributions		(2,500,000	)
NET CASH FLOWS USED IN FINANCING ACTIVITIES		(2,500,000	)
INCREASE IN CASH		542,728
CASH, Beginning of Year		719,223
CASH, End of Period	$	1,261,951

The accompanying notes are an integral part of these financial statement

4

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2022

1. Nature of Business and Summary of Significant Accounting Policies

ONETRUST INTERNATIONAL LLC, (the Company) was organized on June 14, 2019 in the city of San Juan, Puerto Rico as a domestic for profit limited liability company. The Company commenced operations on June 2019 and is engaged in providing mortgage loan servicing, consulting, centralized management, shared service center, and investment banking services.

The Company is a limited liability company. In a limited liability company (LLC), no member, manager, agent or employee of the LLC is personally liable for debts, obligations or liabilities of the LLC, whether arising from contract, tort or otherwise, for the acts or omission of any member, director, manager, agent or employee of the LLC, unless the individual signed a specific personal guarantee.

In the Company’s opinion, the accompanying financial statements contain all normal recurring adjustments necessary for a fair presentation of its financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The information presented in these interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s financial statements as of and for the year ended December 31, 2021. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

2. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash. The Company maintains its cash accounts at several high quality financial institutions, which may exceed at times the federally insured deposit limits. The amount by which cash deposits exceeded the amount insured by the Federal Deposit Insurance Corporation as of September 30, 2022, was approximately $1,011,951. The Company has not experienced any losses in such bank accounts while such financial institutions have strong credit ratings; therefore, management believes that credit risk related to these bank accounts are minimal and does not anticipate any nonperformance.

During the period ended September 30, 2022, three related party customers accounted for 100% of the Company’s revenues. A total of 100% of accounts receivable outstanding as of September 30, 2022 is concentrated in five related parties.

3. Subsequent Events

The Company has evaluated subsequent events from the statement of financial position date through December 15, 2022, the date at which the financial statements were available to be issued.

On October 1, 2022, MVB Bank, Inc. (the “Bank”) and wholly-owned subsidiary of MVB Financial Corp. (“MVB”), completed the purchase of 3,748,392.93 Class B Common Units (the “MVB Investment”) of Warp Speed Holdings LLC, a Wyoming limited liability company (“Warp Speed”), pursuant to the terms of the Equity Purchase Agreement between the Bank and Warp Speed dated March 13, 2022, as thereby assigned by the Bank to MVB effective as of April 28, 2022 (as assigned, the “Purchase Agreement”). The MVB Investment represented 37.5% of the outstanding equity interests of Warp Speed on a fully-diluted basis.

Immediately prior to the closing of the MVB Investment, the pre-closing members of Warp Speed contributed to Warp Speed all of their equity interests in certain entities under common control of the sellers specified in the Purchase Agreement, in exchange for equity interests in Warp Speed (the “Put-Together Transaction”). As of October 1, 2022,

5

ONETRUST INTERNATIONAL LLC

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2022

Warp Speed serves as a holding company for the entities contributed in the Put-Together Transaction, which are focused on residential and commercial loan origination and servicing, business and personal insurance brokerage and data analytics. The Company is included as part of a number of entities that were contributed by the Warp Speed members to Warp Speed as part of the Put-Together Transaction.

6

EX-99.5

Exhibit 99.5

MVB Financial Corp.

Unaudited Pro Forma Consolidated Balance Sheet and Statements of Income

The unaudited pro forma consolidated balance sheet assumes that MVB Financial Corp.’s (“MVB”) investment in Warp Speed Holdings LLC (“Warp Speed”) occurred on September 30, 2022 and the unaudited pro forma consolidated statements of income assume that MVB’s investment in Warp Speed occurred on January 1, 2021. The unaudited pro forma adjustments are based on available information and certain estimates and assumptions that MVB believes are factually supportable, directly attributable to the transaction and are expected to have a continuing impact with respect to MVB’s consolidated statements of operations. The unaudited pro forma consolidated statements of income are not necessarily indicative of what actual results of operations would have been had the transaction occurred on the first day of the period presented, nor does it purport to represent the results of operations for future periods.

The consideration paid by MVB for the investment in Warp Speed was comprised of $38.4 million in cash, plus 313,030 shares of newly-issued common stock of MVB, with an aggregate value of $9.7 million. As a result of the investment, MVB owns 37.5% of Warp Speed and will account for its investment in Warp Speed as an equity method investment in its consolidated financial statements.

The pro forma information has been prepared in accordance with Article 11 of Regulation S-X and are based upon and should be read in conjunction with the historical consolidated financial statements and notes thereto as filed in MVB’s Annual Report on Form 10-K for the year ended December 31, 2021, MVB’s Quarterly Report on Form 10-Q for the period ended September 30, 2022 and the financial statements of Calcon Mutual Mortgage LLC (“Calcon”) and OneTrust International LLC (“OneTrust”), filed as Exhibits 99.1, 99.2, 99.3 and 99.4 to this Current Report on Form 8-K. Warp Speed serves as a holding company for four entities: Calcon, OneTrust, Yellowstone Global Investments LLC (“Yellowstone”) and Click2Bind Insurance Services, LLC (“Click2Bind”). MVB has obtained from the staff of the Securities and Exchange Commission a waiver from the requirements of Rule 3-05 of Regulation S-X to provide audited financial statements for Yellowstone and Click2Bind. Accordingly, MVB has not provided financial statements with respect to these entities.

Unaudited Pro Forma Consolidated Balance Sheet

As of September 30, 2022

(in thousands)	MVBHistorical			Pro FormaAdjustments					Pro FormaCombined
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	6,852		$	—				$	6,852
Interest-bearing balances with banks		73,094			(38,404	)	(i	)		44,590
					10,000		(ii	)
					(100	)	(ii	)
Total cash and cash equivalents		79,946			(28,504	)				51,442
Investment securities<br>available-for-sale		366,742			—					366,742
Equity securities		34,101			—					34,101
Loans<br>held-for-sale		19,977			—					19,977
Loans receivable		2,471,395			—					2,471,395
Allowance for loan losses		(26,515	)		—					(26,515	)
Loans receivable, net		2,444,880			—					2,444,880
Premises and equipment		24,668			—					24,668
Bank-owned life insurance		42,992			—					42,992
Equity method investments		37,871			47,983		(iii	)		87,268
					1,414		(iv	)
Accrued interest receivable and other assets		84,757			(502	)	(iv	)		84,255
Goodwill		3,988			—					3,988
TOTAL ASSETS	$	3,139,922		$	20,391				$	3,160,313
LIABILITIES
Deposits:
Noninterest-bearing	$	1,411,772		$	—				$	1,411,772
Interest-bearing		1,285,186			—					1,285,186
Total deposits		2,696,958			—					2,696,958
Accrued interest payable and other liabilities		42,144			912		(iv	)		43,056
Repurchase agreements		9,910			—					9,910
FHLB and other borrowings		73,328			10,000		(ii	)		83,228
					(100	)	(ii	)
Subordinated debt		73,222			—					73,222
Total liabilities		2,895,562			10,812					2,906,374
STOCKHOLDERS’ EQUITY
Common stock		13,135			313		(i	)		13,448
Additional paid-in capital		146,950			9,266		(i	)		156,216
Retained earnings		140,546			—					140,546
Accumulated other comprehensive income		(39,977	)		—					(39,977	)
Treasury stock		(16,741	)		—					(16,741	)
Total equity attributable to parent		243,913			9,579					253,492
Noncontrolling interest		447			—					447
Total stockholders’ equity		244,360			9,579					253,939
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,139,922		$	20,391				$	3,160,313

Unaudited Pro Forma Consolidated Income Statement

Nine Months Ended September 30, 2022

(in thousands, except per share data)	MVBHistorical			Pro FormaAdjustments					Pro FormaCombined
INTEREST INCOME
Interest and fees on loans	$	79,074		$	—				$	79,074
Interest on deposits with banks		654			—					654
Interest on investment securities		2,383			—					2,383
Interest on tax-exempt loans and securities		3,144			—					3,144
Total interest income		85,255			—					85,255
INTEREST EXPENSE
Interest on deposits		4,291			—					4,291
Interest on short-term borrowings		326			393		(v	)		719
Interest on subordinated debt		2,284			—					2,284
Total interest expense		6,901			393					7,294
NET INTEREST INCOME		78,354			(393	)				77,961
Provision for loan losses		11,500			—					11,500
Net interest income after provision for loan losses		66,854			(393	)				66,461
NONINTEREST INCOME
Payment card and service charge income		9,970			—					9,970
Insurance and investment services income		667			—					667
Gain on sale of<br>available-for-sale securities, net		650			—					650
Gain on sale of equity securities, net		(56	)		—					(56	)
Gain on sale of loans, net		3,786			—					3,786
Holding loss on equity securities, net		(146	)		—					(146	)
Compliance and consulting income		11,355			—					11,355
Equity method investment income		666			1,045		(vi	)		1,711
Equity method investment gain.		1,874			—					1,874
Other operating income		3,204			—					3,204
Total noninterest income		31,970			1,045					33,015
NONINTEREST EXPENSE
Salaries and employee benefits		55,260			—					55,260
Occupancy expense		3,009			—					3,009
Equipment depreciation and maintenance		4,012			—					4,012
Data processing and communications		3,110			—					3,110
Marketing, contributions and sponsorships		746			—					746
Professional fees		8,034			—					8,034
Insurance, tax and assessment expense		1,777			—					1,777
Travel, entertainment, dues and subscriptions		6,355			—					6,355
Other operating expenses		6,343			(271	)	(vii	)		6,072
Total noninterest expense		88,646			(271	)				88,375
Income before income taxes		10,178			923					11,101
Income taxes		2,161			240		(viii	)		2,401
Net income before noncontrolling interest		8,017			683					8,700
Net loss attributable to noncontrolling interest		521			—					521
Net income	$	8,538		$	683				$	9,221
Weighted-average shares outstanding:
Basic		12,170,028			313,030		(ix	)		12,483,058
Diluted		12,852,574			313,030		(ix	)		13,165,604
Earnings per share:
Basic	$	0.70							$	0.74
Diluted	$	0.66							$	0.70

Unaudited Pro Forma Consolidated Income Statement

Year Ended December 31, 2021

(in thousands, except per share data)	MVBHistorical			Pro FormaAdjustments					Pro FormaCombined
INTEREST INCOME
Interest and fees on loans	$	75,282		$	—				$	75,282
Interest on deposits with banks		506			—					506
Interest on investment securities		2,405			—					2,405
Interest on tax-exempt loans and securities		5,236			—					5,236
Total interest income		83,429			—					83,429
INTEREST EXPENSE
Interest on deposits		3,977			—					3,977
Interest on short-term borrowings		105			560		(v	)		665
Interest on subordinated debt		2,188			—					2,188
Total interest expense		6,270			560					6,830
NET INTEREST INCOME		77,159			(560	)				76,599
Release of allownace for loan losses		(6,275	)		—					(6,275	)
Net interest income after provision for loan losses		83,434			(560	)				82,874
NONINTEREST INCOME
Payment card and service charge income		7,524			—					7,524
Insurance and investment services income		1,003			—					1,003
Gain on sale of<br>available-for-sale securities, net		3,875			—					3,875
Gain on sale of equity securities, net		5			—					5
Gain on sale of loans, net		4,178			—					4,178
Holding gain on equity securities, net		3,776			—					3,776
Compliance and consulting income		9,625			—					9,625
Equity method investment income		17,428			9,695		(vi	)		27,123
Gains on acquisition and divestiture activity		10,783			—					10,783
Other operating income		4,399			—					4,399
Total noninterest income		62,596			9,695					72,291
NONINTEREST EXPENSE
Salaries and employee benefits		60,210			—					60,210
Occupancy expense		4,347			—					4,347
Equipment depreciation and maintenance		4,642			—					4,642
Data processing and communications		4,431			—					4,431
Marketing, contributions and sponsorships		525			—					525
Professional fees		10,770			—					10,770
Insurance, tax and assessment expense		2,032			—					2,032
Travel, entertainment, dues and subscriptions		5,092			—					5,092
Other operating expenses		5,403			—					5,403
Total noninterest expense		97,452			—					97,452
Income before income taxes		48,578			9,135					57,713
Income taxes		9,882			2,375		(viii	)		12,257
Net income before noncontrolling interest		38,696			6,760					45,456
Net loss attributable to noncontrolling interest		425			—					425
Net income		39,121			6,760					45,881
Preferred dividends		35			—					35
Net income available to common shareholders	$	39,086		$	6,760				$	45,846
Weighted-average shares outstanding:
Basic		11,778,557			313,030		(ix	)		12,091,587
Diluted		12,613,620			313,030		(ix	)		12,926,650
Earnings per share:
Basic	$	3.32							$	3.79
Diluted	$	3.10							$	3.55

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AND STATEMENTS OF INCOME

1. Adjustments to Unaudited Pro Forma Consolidated Balance Sheet and Statements of Income

The adjustments included in the unaudited pro forma consolidated financial statements as of and for the nine months ended September 30, 2022 and the unaudited pro forma consolidated statement of income for the year ended December 31, 2021 are as follows:

(i)	Reflects the payment of $38.4 million of cash and the issuance of 313,030 shares of MVB common stock, with<br>a value of $30.60 per share, for an aggregate value of $9.6 million;
(ii)	Reflects a senior term loan of $10.0 million, net of $0.1 million of related fees, in connection<br>with the investment in Warp Speed;
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(iii)	Reflects the recording of $48.0 million as an equity method investment in Warp Speed;<br>
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(iv)	Reflects the capitalization of direct transactions costs of $1.4 million;
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(v)	Reflects the recognition of interest expense of $0.4 million and $0.6 million for the nine<br>months ended September 30, 2022 and year ended December 31, 2021, respectively, at an annual rate of 2.75%, plus term secured overnight financing rate, as a result of the senior term loan;
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(vi)	Reflects the recording of MVB’s share of Warp Speed net income of $1.0 million and<br>$9.7 million for the nine months ended September 30, 2022 and year ended December 31, 2021, respectively (note that the Warp Speed net income for the nine months ended September 30, 2022 is net of the elimination of intercompany<br>income of $0.3 million between MVB and Warp Speed from Warp Speed’s statement of income);
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(vii)	Reflects the elimination of intercompany expense of $0.3 million between MVB and Warp Speed from<br>MVB’s statement of income for the nine months ended September 30, 2022;
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(viii)	Reflects the recording of the income tax impact of the aforementioned statement of income items; and<br>
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(ix)	Reflects the increase in weighted-average shares outstanding for the issuance of 313,030 MVB common shares.<br>
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