lpro-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 001-39326

OPEN LENDING CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware			EIN 84-5031428
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1501 S. MoPac Expressway Suite 450 Austin, Texas			78746
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (512) 892-0400

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Common stock, par value $0.01 per share

LPRO

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 11, 2021, the registrant had 126,190,351 shares of common stock, $0.01 par value per share, outstanding.

OPEN LENDING CORPORATION

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I.	Financial Information	3

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations and Comprehensive Income	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equit y (D ef i cit)	5

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36

Item 4.	Controls and Procedures	37

PART II.	Other Information	38

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Default Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

SIGNATURES		40

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OPEN LENDING CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except share data)


	March 31, 2021		December 31, 2020

Assets
Current assets
Cash and cash equivalents	$	127,011	$	101,513
Restricted cash	2,631		2,635
Accounts receivable	6,803		4,352
Current contract assets	52,736		50,386
Prepaid expenses	932		1,873
Other current assets	980		2,018

Total current assets	191,093		162,777
Property and equipment, net	1,608		1,201
Operating lease right-of-use assets, net	5,600		5,733
Non-current contract assets	44,482		38,956
Deferred tax asset, net	83,888		85,218
Other non-current assets	124		124
Total assets	$	326,795	$	294,009
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	2,991	$	3,442
Accrued expenses	3,994		3,033
Income tax payable	4,791		1,640
Current portion of debt	3,125		4,888
Other current liabilities	4,109		4,005
Total current liabilities	19,010		17,008

Long-term debt, net of deferred financing costs	170,212		152,859
Non-current operating lease liabilities	5,019		5,138
Other non-current liabilities	92,369		92,382
Total liabilities	$	286,610	$	267,387
Commitment and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding	—		—
Common stock, $0.01 par value; 550,000,000 shares authorized, 128,198,185 shares issued and 126,803,096 shares outstanding as of March 31, 2021 and December 31, 2020, respectively	1,282		1,282
Additional paid-in capital	491,947		491,246
Accumulated deficit	(415,544)		(428,406)
Treasury stock at cost, 1,395,089 shares at March 31, 2021 and December 31, 2020, respectively	(37,500)		(37,500)
Total stockholders’ equity	40,185		26,622
Total liabilities and stockholders’ equity	$	326,795	$	294,009

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

Table of Contents

OPEN LENDING CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited, in thousands, except share data)


	Three Months Ended March 31,
	2021		2020
Revenue
Program fees	$	14,911	$	12,712
Profit share	27,730		3,774
Claims administration service fees	1,367		944
Total revenue	44,008		17,430
Cost of services	3,362		2,495
Gross profit	40,646		14,935
Operating expenses
General and administrative	8,212		3,569
Selling and marketing	2,397		2,078
Research and development	591		359
Operating income	29,446		8,929

Interest expense	(3,289)		(764)
Interest income	84		17
Loss on extinguishment of debt	(8,778)		—
Other (expense) income	(131)		1
Income before income taxes	17,332		8,183
Provision for income taxes	4,470		11
Net income and comprehensive income	$	12,862	$	8,172
Preferred distribution to redeemable convertible Series C preferred units	—		(40,475)
Accretion to redemption value of redeemable convertible Series C preferred units	—		47,537
Net income attributable to common stockholders	$	12,862	$	15,234
Net income and comprehensive income per common share
Basic	$	0.10	$	0.40
Diluted	$	0.10	$	0.16
Weighted average common shares outstanding
Basic	126,803,096		37,631,052
Diluted	126,837,832		51,909,655

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

Table of Contents

OPEN LENDING CORPORATION

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited, in thousands, except share and unit data)


	Redeemable Convertible Series C Preferred Units			Common Units			Series A and B Preferred Units			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
	Units	Amount		Units	Amount		Units	Amount		Shares	Amount		Amount		Amount		Shares	Amount		Amount
Balance as of December 31, 2020	—	$	—	—	$	—	—	$	—	128,198,185	$	1,282	$	491,246	$	(428,406)	(1,395,089)	$	(37,500)	$	26,622
Share-based compensation	—	—		—	—		—	—		—	—		701		—		—	—		701
Net income	—	—		—	—		—	—		—	—		—		12,862		—	—		12,862
Balance as of March 31, 2021	—	$	—	—	$	—	—	$	—	128,198,185	$	1,282	$	491,947	$	(415,544)	(1,395,089)	$	(37,500)	$	40,185














	Redeemable Convertible Series C Preferred Units			Common Units			Series A and B Preferred Units			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity (Deficit)
	Units	Amount		Units	Amount		Units	Amount		Shares	Amount		Amount		Amount		Shares	Amount		Amount
Balance as of December 31, 2019, as originally reported	21,906,852	$	304,943	25,381,873	$	7,524	29,058,266	$	478

SEC Form 10-Q filed by Open Lending Corporation