Jonathan Coblentz: Sure. Let me try to clarify. And we can certainly talk more about this when we have a one-on-one later, David. So in March we’ll have drawn 25 million, right, and we’ll have issued 5% warrants. The two draw €“ additional draws are scheduled for April and June. They’re also each 25 million, right, and with each of those draws is 2.5% warrants. Does that…
David Scharf: That help…
Jonathan Coblentz: So David, I was just trying to, for Q1, right. For the Q1 EPS you would model the 5%, and then for Q2 you would assume the subsequent draws, but actually it’s a little less than that because it’s average outstanding. So it’ll €“ we can go through some of the details.
David Scharf: Okay. But yes, big picture is an investor. I’m probably looking at 10% dilution at the end of 2023 versus the end of 2022. Is that kind of a ballpark?
Jonathan Coblentz: That’s right.
David Scharf: Got it. Got it. And related to that, just based on kind of the current liquidity environment, if in the second half of €“ of the current year towards the latter stage, if there was something in the environment that signaled to you that origination activity should be reaccelerated and it’s, for example, you planned on growing your year-end balances double-digits versus single-digit is mentioned today, based on your funding sources would that in order to achieve that kind of balance sheet growth, would that require additional warrant issuance?
Jonathan Coblentz: No. No David, at this time, no. We would not anticipate that. You’ve known us now for some time and we’ve got several ways that we can fund the growth to the portfolio. So no, we would not expect say raising cap €“ in the scenario you described, we would not expect raising capital in a manner that would indicate more dilution, no.
David Scharf: Got it. Got it. And then maybe just a quick follow up on the expense side. I know you spoke to the 2023 outlook directionally in the cost savings that were announced last month. I guess bigger picture, we obviously focus on efficiency ratios, OpEx €“ we obviously focus on efficiency ratios, OpEx as a percentage of manage receivables for all of our lenders. Is there a range, I mean is there sort of a targeted operating model that you have in mind? As we’ve learned given the macro backdrop that there are always going to be peaks and valleys of originations, but if an investor wants to know what is kind of a normalized targeted efficiency ratio for Oportun, if it’s a, call it a 10% to 12% AR grower, CAGR over a given three to four-year period. Is there a range we ought to think about notwithstanding kind of the unique backdrop we have right now?
Jonathan Coblentz: Sure. I think that’s a great question, David. So first of all you’ve seen us get much leaner and be very disciplined about OpEx. We got down to 52% and that’s as a percentage. I know you’re using a different basis, but our reported metric is as a percentage of total revenue. And that’s an all-time low for us since being a public company. When you combined, continued revenue growth and actual expend OpEx reduction, you would expect that ratio to continue to go down and it could clearly get into the 40s. And I think when you talk about targets, though we’re not providing any guidance for future years. We want to continue to run the business lean as we focus on increasing profitability which is Raul shared with you when you look at adjusted EBITDA and what 2Q through 4Q should look like implied by our guidance, it starts to get pretty interesting.
David Scharf: Got it. Great. Thank you very much.
Jonathan Coblentz: Thank you, David.
Operator: Thank you. Next question is coming from Rick Shane from JPMorgan. Your line is now live.
Rick Shane: Back again, guys? And following up on really David’s two questions. So when you think about the puts and takes for expenses for the year, you talked about the reduction from the reduction in force but presumably there is an offset if we think about these being essentially penny warrants which is at least how I’m taking what I heard earlier, there’s probably a $12 million to $15 million expense associated with issuing discount warrants. Is that the right way to think of it? So we’ve got the, and I don’t necessarily like to say benefit from reduction in force, but the impact of the reduction in force potentially offset by options expense or warrant expense.
Jonathan Coblentz: Yes, I think that’s a good way of looking at it. I would also point out, when we look at our future prospects, and again we’re only giving you our view of 2023, but again, looking at what’s implied by adjusted EBITDA about how we would exit the year and what that would mean for a run rate into 2024. We think our future performance will more than offset the expense of this particular transaction, which has been very helpful to us in improving liquidity.
Raul Vazquez: The other thing I would add Rick €“ go ahead.
