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You may be missing out. There's a technique trending in financial forecasting that's
about to take off. It's called Financial Astrology. For just $35 on Amazon, you can
learn all about this revolutionary approach from a book by Commander David Williams
who has a PhD in Dentistry and is a recipient of the Senior Colgate Award. Even better,
get hold of the Financial Astrology Almanac 2023 also from Amazon authored by
Malcolm Bucholtz who recently completed his General Certificate in Distilling.

Confession: I did not use astrology to do my Q1.2023 forecast (below) for Upstart.
However, it's probably worth as much as if I did. So swallow what follows with a bucket
of salt. Comments and questions are always welcome.

Note that "Guidance" below comes from Upstart's Jan 31st and Feb 14th press releases.

Note also that this forecast comes with a couple of riddles. First, it appears that
Stock Based Compensation will be about $75M for Q1 which is more than twice as high
as Q4 and 60% of all of 2022. Second, there's a doughnut hole of around -$12M that has
no explanation.

Ears <long Upstart>

INCOME STATEMENT
                                           Actual       Estimate
                                          Q4.2022       Q1.2023
                                         ---------     ---------
Revenue from fees                          155,597       110,000 Guidance
Interest Income and Adjustments             -8,684       -10,000 Guidance
Total revenue                              146,913       100,000 Guidance

Direct Expenses                             71,809        49,500 Note 1
Fixed Expenses                             133,602       174,500 Note 2
                                           -------      --------
Total operating expenses                   205,411       224,000

Other income (expense)                       2,771         3,000 Note 3
Restructuring charges                            0       -15,000 Guidance
Stock based compensation reversal                0         3,000 Guidance
Unknown charges                                  0       -12,000 Note 4
Provision for taxes                           -464             0 Note 5
                                           -------      --------
Total non-operating expenses & taxes         2,307        21,000

Net income                                 -55,263      -145,000 Guidance

Net income per share diluted                 -0.67         -1.77
Weighted-average shares diluted             82,771        81,900 Guidance

--------------------------------------------------------------------------

EFFECT ON CASH
                                           Actual       Estimate
                                          Q4.2022       Q1.2023
                                         ---------     ---------
Net income                                 -55,263      -145,000 Guidance
Add back fair value adjustments             43,455        45,000 Note 6
Add back stock based compensation           33,910        75,000 Note 7
Add back depreciation & amortization         3,654         3,868 Note 8
Reverse non-cash SBC reversal                    0        -3,000 Note 9
                                           -------      --------
Change in Cash                              25,756       -24,132

--------------------------------------------------------------------------

NOTES

1: Direct Expenses for Upstart are the costs of acquiring, onboarding,
   and servicing a borrower. They can be calculated by multiplying the
   complement of Contribution Margin by Revenue from Fees. Upstart's
   guidance for Q1 is 55% for Contribution Margin and $110M for
   Revenue from Fees. Thus, the calculation is (1-55%) * $110M = $49.5M.

2: Fixed Expenses in Q4.2022 were $133M. I used this as a base. Because
   Direct Expenses are forecast to be lower in Q1 than Q4, I subtracted
   the change in Direct Expense from Q4 to Q1 of -$22M from the base to
   get $111M. Because Stock Based Compensation Expense is forecast to be
   higher in Q1 than Q4, I added the change in Stock Based Compensation
   of +$41M to the $111M to get $224M for Fixed Expenses.

3: Other Income (Expense) includes dividends received on their cash
   balance minus interest paid on their convertible notes. I estimated
   this at $3M net for Q1, up from $2.8M in Q4.

4: When I subtract all estimated expenses from their guided revenue,
   there is still a "gap" of -$12M to get to their $145M projected loss.

5: Taxes have been immaterial for Upstart since going public. They are
   likely to range somewhere between +$1M and -$1M for Q1. To keep it
   simple, I'm just leaving them at zero.

6: Fair value adjustments reflect the change in value of the loans on
   the balance sheet and other financial instruments. These accounting
   entries are non-cash, so we add the amount back to Net Income.

7: Stock Based Compensation is also a non-cash entry, so we add back.

8: Depreciation & Amortization is also a non-cash entry, so we add back.

9: Upstart guided for a one time reversal of Stock Based Compensation
   of $3M in Q1.2023. This is non-cash, so we add back. Because this is
   is a reversal, it is subtracted.

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