Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2014 | |
Document Information [Line Items] | ' |
Document Type | 'S-1/A |
Amendment Flag | 'false |
Document Period End Date | 30-Sep-14 |
Trading Symbol | 'ck0001409970 |
Entity Registrant Name | 'LENDINGCLUB CORP |
Entity Central Index Key | '0001409970 |
Entity Filer Category | 'Smaller Reporting Company |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Assets: | ' | ' | ' |
Cash and cash equivalents | $82,674 | $49,299 | $52,551 |
Restricted cash | 25,221 | 12,208 | 7,484 |
Loans at fair value (includes $396,081, $1,158,302, and $1,580,656 from consolidated Trust, respectively) | 2,533,671 | 1,829,042 | 781,215 |
Accrued interest receivable (includes $2,765, $10,061, and $13,849 from consolidated Trust, respectively) | 22,348 | 15,975 | 5,521 |
Property, equipment and software, net | 23,686 | 12,595 | 1,578 |
Intangible assets, net | 37,690 | ' | ' |
Goodwill | 72,592 | ' | ' |
Other assets | 16,521 | 23,921 | 2,366 |
Due from related parties | 443 | 355 | 115 |
Total assets | 2,814,846 | 1,943,395 | 850,830 |
Liabilities: | ' | ' | ' |
Accounts payable | 3,354 | 4,524 | 1,210 |
Accrued interest payable (includes $3,347, $11,176, and $15,939 from consolidated Trust, respectively) | 25,723 | 17,741 | 6,678 |
Accrued expenses and other liabilities | 26,004 | 9,128 | 3,366 |
Payable to investors | 17,366 | 3,918 | 2,050 |
Notes and certificates, at fair value (includes $396,081, $1,158,302, and $1,580,656 from consolidated Trust, respectively) | 2,551,640 | 1,839,990 | 785,316 |
Term loan | 49,219 | 0 | ' |
Total liabilities | 2,673,306 | 1,875,301 | 798,620 |
Commitments and contingencies (see Note 16) | ' | ' | ' |
Stockholders' Equity: | ' | ' | ' |
Preferred stock | 177,300 | 103,244 | 103,023 |
Common stock, $0.01 par value; 360,000,000, 360,000,000 and 372,000,000 shares authorized at December 31, 2012, December 31, 2013 and September 30, 2014 (unaudited), respectively; 45,167,448, and 54,986,640 shares issued and outstanding at December 31, 2012 and December 31, 2013, respectively, and 60,921,190 and 310,300,049 shares issued and outstanding as of September 30, 2014 (unaudited), actual and pro forma (unaudited), respectively | 609 | 138 | 123 |
Additional paid-in capital | 37,817 | 15,041 | 6,713 |
Treasury stock (70,560 shares of common stock held at December 31, 2012) | ' | ' | -12 |
Accumulated deficit | -74,186 | -50,329 | -57,637 |
Total stockholders' equity | 141,540 | 68,094 | 52,210 |
Total liabilities and stockholders' equity | 2,814,846 | 1,943,395 | 850,830 |
Pro Forma | ' | ' | ' |
Assets: | ' | ' | ' |
Cash and cash equivalents | 82,674 | ' | ' |
Restricted cash | 25,221 | ' | ' |
Loans at fair value (includes $396,081, $1,158,302, and $1,580,656 from consolidated Trust, respectively) | 2,533,671 | ' | ' |
Accrued interest receivable (includes $2,765, $10,061, and $13,849 from consolidated Trust, respectively) | 22,348 | ' | ' |
Property, equipment and software, net | 23,686 | ' | ' |
Intangible assets, net | 37,690 | ' | ' |
Goodwill | 72,592 | ' | ' |
Other assets | 16,521 | ' | ' |
Due from related parties | 443 | ' | ' |
Total assets | 2,814,846 | ' | ' |
Liabilities: | ' | ' | ' |
Accounts payable | 3,354 | ' | ' |
Accrued interest payable (includes $3,347, $11,176, and $15,939 from consolidated Trust, respectively) | 25,723 | ' | ' |
Accrued expenses and other liabilities | 26,004 | ' | ' |
Payable to investors | 17,366 | ' | ' |
Notes and certificates, at fair value (includes $396,081, $1,158,302, and $1,580,656 from consolidated Trust, respectively) | 2,551,640 | ' | ' |
Term loan | 49,219 | ' | ' |
Total liabilities | 2,673,306 | ' | ' |
Commitments and contingencies (see Note 16) | ' | ' | ' |
Stockholders' Equity: | ' | ' | ' |
Common stock, $0.01 par value; 360,000,000, 360,000,000 and 372,000,000 shares authorized at December 31, 2012, December 31, 2013 and September 30, 2014 (unaudited), respectively; 45,167,448, and 54,986,640 shares issued and outstanding at December 31, 2012 and December 31, 2013, respectively, and 60,921,190 and 310,300,049 shares issued and outstanding as of September 30, 2014 (unaudited), actual and pro forma (unaudited), respectively | 3,103 | ' | ' |
Additional paid-in capital | 212,623 | ' | ' |
Accumulated deficit | -74,186 | ' | ' |
Total stockholders' equity | 141,540 | ' | ' |
Total liabilities and stockholders' equity | $2,814,846 | ' | ' |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | |||
Member Loans at fair value | $2,533,671 | $1,829,042 | $781,215 |
Accrued interest receivable from consolidated Trust | 22,348 | 15,975 | 5,521 |
Accrued interest payable from consolidated Trust | 25,723 | 17,741 | 6,678 |
Notes and certificates, at fair value from consolidated Trust | 2,551,640 | 1,839,990 | 785,316 |
Common stock, par value | $0.01 | $0.01 | $0.01 |
Common stock, shares authorized | 372,000,000 | 360,000,000 | 360,000,000 |
Common stock, shares issued | 60,921,190 | 54,986,640 | 45,167,448 |
Common stock, shares outstanding | 60,921,190 | 54,986,640 | 45,167,448 |
Treasury stock, shares | ' | ' | 70,560 |
Consolidated Trust | ' | ' | ' |
Member Loans at fair value | 1,580,656 | 1,158,302 | 396,081 |
Accrued interest receivable from consolidated Trust | 13,849 | 10,061 | 2,765 |
Accrued interest payable from consolidated Trust | 15,939 | 11,176 | 3,347 |
Notes and certificates, at fair value from consolidated Trust | 1,580,656 | 1,158,302 | 396,081 |
Pro Forma | ' | ' | ' |
Member Loans at fair value | 2,533,671 | ' | ' |
Accrued interest receivable from consolidated Trust | 22,348 | ' | ' |
Accrued interest payable from consolidated Trust | 25,723 | ' | ' |
Notes and certificates, at fair value from consolidated Trust | $2,551,640 | ' | ' |
Common stock, par value | $0.01 | ' | ' |
Common stock, shares authorized | 372,000,000 | ' | ' |
Common stock, shares issued | 310,300,049 | ' | ' |
Common stock, shares outstanding | 310,300,049 | ' | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 9 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 |
Operating Revenue: | ' | ' | ' | ' | ' |
Transaction fees | $133,835 | $55,214 | $26,013 | $85,830 | $13,701 |
Servicing fees | 6,301 | 2,485 | 1,474 | 3,951 | 1,222 |
Management fees | 4,163 | 2,083 | 720 | 3,083 | 206 |
Other revenue (expense) | -438 | 4,708 | 720 | 5,111 | 407 |
Total operating revenue | 143,861 | 64,490 | 28,927 | 97,975 | 15,536 |
Net Interest Income (Expense): | ' | ' | ' | ' | ' |
Total interest income | 252,298 | 124,771 | 56,861 | 187,507 | 32,660 |
Total interest expense | -253,054 | -124,727 | -56,642 | -187,447 | -32,030 |
Net interest (expense) income | -756 | 44 | 219 | 60 | 630 |
Benefit/(provision) for losses on loans at amortized cost | ' | ' | 42 | ' | -368 |
Fair valuation adjustments, loans | -84,963 | -37,877 | -18,775 | -57,629 | -6,732 |
Fair valuation adjustments, notes and certificates | 84,865 | 37,848 | 18,180 | 57,596 | 6,731 |
Net interest income (expense) after loss provision and fair value adjustments | -854 | 15 | -334 | 27 | 261 |
Total net revenue | 143,007 | 64,505 | 28,593 | 98,002 | 15,797 |
Operating Expenses: | ' | ' | ' | ' | ' |
Sales and marketing | 60,808 | 26,577 | 14,723 | 39,037 | 12,571 |
Origination and servicing | 26,135 | 11,044 | 6,134 | 17,217 | 5,099 |
General and administrative | 78,862 | 22,434 | 11,974 | 34,440 | 10,071 |
Total operating expenses | 165,805 | 60,055 | 32,831 | 90,694 | 27,741 |
Income (loss) before income taxes | -22,798 | 4,450 | -4,238 | 7,308 | -11,944 |
Income tax expense | 1,059 | 0 | 0 | 0 | 0 |
Net income (loss) | ($23,857) | $4,450 | ($4,238) | $7,308 | ($11,944) |
Basic net income (loss) per share attributable to common stockholders | ($0.41) | $0 | ($0.10) | $0 | ($0.34) |
Diluted net income (loss) per share attributable to common stockholders | ($0.41) | $0 | ($0.10) | $0 | ($0.34) |
Weighted-average shares of common stock used in computing basic net income (loss) per common share | 57,958,838 | 50,457,948 | 41,359,676 | 51,557,136 | 35,125,628 |
Weighted-average shares of common stock used in computing diluted net income (loss) per common share | 57,958,838 | 79,153,912 | 41,359,676 | 81,426,976 | 35,125,628 |
Basic pro forma net income (loss) per share (unaudited) | ($0.08) | ' | ' | $0.03 | ' |
Weighted-average shares outstanding used to calculate basic pro forma net income (loss) per common share (unaudited) | 303,608,800 | ' | ' | 291,766,192 | ' |
Diluted pro forma net income (loss) per share (unaudited) | ($0.08) | ' | ' | $0.02 | ' |
Weighted-average shares outstanding used to calculate diluted pro forma net income (loss) per common share (unaudited) | 303,608,800 | ' | ' | 323,331,550 | ' |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series E Convertible Preferred Stock | Series F Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit |
In Thousands, except Share data | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series E Convertible Preferred Stock | Series F Convertible Preferred Stock | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | ||||||||||
Beginning Balances at Mar. 31, 2012 | $36,337 | ' | ' | ' | ' | $84,806 | ' | ' | ' | ' | $91 | $4,839 | ' | ' | ' | ($53,399) |
Beginning Balances (in shares) at Mar. 31, 2012 | ' | ' | ' | ' | ' | 225,661,228 | ' | ' | ' | ' | 36,444,948 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 86,752 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock | 34 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | 24 | ' | ' | ' | ' |
Exercise of warrants to purchase convertible preferred stock (in Shares) | ' | ' | ' | ' | ' | ' | 2,272,292 | 1,431,912 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrants to purchase convertible preferred stock | ' | 606 | 165 | ' | ' | ' | 606 | 267 | ' | ' | ' | ' | ' | -102 | ' | ' |
Stock-based compensation and warrant expense | 1,110 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,110 | ' | ' | ' | ' |
Issuance of convertible preferred stock for cash (net of issuance costs) (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Issuance of convertible preferred stock for cash (net of issuance costs) | ' | ' | ' | 17,344 | ' | ' | ' | ' | 17,344 | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock upon exercise of options (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,635,712 | ' | ' | ' | ' | ' |
Issuance of common stock upon exercise of options | 864 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22 | 842 | ' | ' | ' | ' |
Other (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -70,560 | ' |
Other | -12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -12 | ' |
Net income (loss) | -4,238 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4,238 |
Ending Balances at Dec. 31, 2012 | 52,210 | ' | ' | ' | ' | 103,023 | ' | ' | ' | ' | 123 | 6,713 | ' | ' | -12 | -57,637 |
Ending Balances (in shares) at Dec. 31, 2012 | ' | ' | ' | ' | ' | 239,365,432 | ' | ' | ' | ' | 45,167,448 | ' | ' | ' | -70,560 | ' |
Exercise of warrants to purchase common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 957,876 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock | 150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 148 | ' | ' | ' | ' |
Exercise of warrants to purchase convertible preferred stock (in Shares) | ' | ' | ' | ' | ' | ' | 829,356 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrants to purchase convertible preferred stock | ' | 221 | ' | ' | ' | ' | 221 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation and warrant expense | 6,490 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,490 | ' | ' | ' | ' |
Issuance of common stock upon exercise of options (in shares) | 8,931,876 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,931,876 | ' | ' | ' | ' | ' |
Issuance of common stock upon exercise of options | 1,715 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23 | 1,692 | ' | ' | ' | ' |
Other (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -70,560 | ' | ' | ' | ' | ' |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -10 | -2 | ' | ' | 12 | ' |
Net income (loss) | 7,308 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,308 |
Ending Balances at Dec. 31, 2013 | 68,094 | ' | ' | ' | ' | 103,244 | ' | ' | ' | ' | 138 | 15,041 | ' | ' | ' | -50,329 |
Ending Balances (in shares) at Dec. 31, 2013 | ' | ' | ' | ' | ' | 240,194,788 | ' | ' | ' | ' | 54,986,640 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 295,720 | ' | ' | ' | ' | ' |
Exercise of warrants to purchase common stock | 102 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | 99 | ' | ' | ' | ' |
Exercise of warrants to purchase convertible preferred stock (in Shares) | ' | ' | ' | ' | ' | ' | 321,737 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrants to purchase convertible preferred stock | ' | ' | ' | ' | ' | ' | 86 | ' | ' | ' | ' | ' | -86 | ' | ' | ' |
Stock-based compensation and warrant expense | 27,089 | ' | ' | ' | ' | 6,405 | ' | ' | ' | ' | ' | 20,684 | ' | ' | ' | ' |
Issuance of convertible preferred stock for cash (net of issuance costs) (in shares) | ' | ' | ' | ' | 6,390,556 | ' | ' | ' | ' | 6,390,556 | ' | ' | ' | ' | ' | ' |
Issuance of convertible preferred stock for cash (net of issuance costs) | ' | ' | ' | ' | 64,803 | ' | ' | ' | ' | 64,803 | ' | ' | ' | ' | ' | ' |
Issuance of preferred stock for the acquisition of Springstone (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,443,930 | ' | ' | ' | ' | ' | ' |
Issuance of preferred stock for the acquisition of Springstone | ' | ' | ' | ' | 2,762 | ' | ' | ' | ' | 2,762 | ' | ' | ' | ' | ' | ' |
Issuance of common stock upon exercise of options (in shares) | 5,638,830 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,638,830 | ' | ' | ' | ' | ' |
Issuance of common stock upon exercise of options | 2,997 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 56 | 2,941 | ' | ' | ' | ' |
Reclassification of early exercise liability related to stock options | -622 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -622 | ' | ' | ' | ' |
Vesting of early exercise stock options | 172 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 172 | ' | ' | ' | ' |
Par value adjustment for stock split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 412 | -412 | ' | ' | ' | ' |
Net income (loss) | -23,857 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -23,857 |
Ending Balances at Sep. 30, 2014 | $141,540 | ' | ' | ' | ' | $177,300 | ' | ' | ' | ' | $609 | $37,817 | ' | ' | ' | ($74,186) |
Ending Balances (in shares) at Sep. 30, 2014 | ' | ' | ' | ' | ' | 249,351,011 | ' | ' | ' | ' | 60,921,190 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2014 | |
Series E Convertible Preferred Stock | Series E Convertible Preferred Stock | Series F Convertible Preferred Stock | |
Issuance of convertible preferred stock for cash, issuance costs | $200 | $153,000 | $197,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 |
Cash Flows from Operating Activities: | ' | ' | ' | ' | ' |
Net income (loss) | ($23,857) | $4,450 | ($4,238) | $7,308 | ($11,944) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' | ' | ' | ' |
Provision (benefit) for loan losses | ' | ' | -42 | ' | 368 |
Fair value adjustments of loans, notes and certificates, net | 99 | 29 | 595 | 33 | 1 |
Change in loan servicing liability carried at fair value | 2,776 | 731 | ' | 936 | ' |
Change in loan servicing asset carried at fair value | -986 | -153 | ' | -534 | ' |
Stock-based compensation and warrant expense, net | 25,889 | 3,345 | 1,110 | 6,490 | 660 |
Depreciation and amortization | 6,620 | 907 | 236 | 1,663 | 150 |
Loss (gain) on sales of loans at fair value | 2,110 | -3,862 | -329 | -3,862 | ' |
Other, net | 238 | ' | -118 | 30 | -43 |
Loss on disposal of property, equipment and software | 212 | ' | ' | ' | ' |
Purchase of whole loans sold at fair value | -1,096,592 | -246,571 | -9,290 | -442,362 | ' |
Proceeds from sales of whole loans at fair value | 1,094,482 | 250,433 | 9,619 | 446,224 | ' |
Net change in operating assets and liabilities excluding the effects of the acquisition: | ' | ' | ' | ' | ' |
Accrued interest receivable | -6,373 | -7,280 | -3,170 | -10,454 | -2,351 |
Other assets | 13,184 | -153 | -649 | -21,021 | -1,468 |
Due from related parties | -88 | -197 | -75 | -240 | -40 |
Accounts payable | -1,107 | 1,120 | 330 | 1,788 | 620 |
Accrued interest payable | 7,982 | 7,871 | 4,070 | 11,063 | 2,604 |
Accrued expenses and other liabilities | 10,806 | 5,532 | 1,558 | 4,077 | 357 |
Net cash provided by (used in) operating activities | 35,395 | 16,202 | -393 | 1,139 | -11,086 |
Cash Flows from Investing Activities: | ' | ' | ' | ' | ' |
Purchase of loans at fair value | -1,534,276 | -1,115,774 | -598,622 | -1,618,404 | -320,014 |
Purchase of loans at amortized cost | ' | ' | ' | ' | -1,064 |
Principal payments of loans at fair value | 739,505 | 341,256 | 160,787 | 511,232 | 105,306 |
Principal payments of loans at amortized cost | ' | ' | 345 | ' | 1,349 |
Proceeds from recoveries and sales of charged-off loans at fair value | 5,178 | 1,180 | 247 | 1,716 | ' |
Proceeds from recoveries and sales of charged-off loans at amortized cost | ' | ' | 22 | ' | ' |
Payments for business acquisition, net of cash acquired | -109,464 | ' | ' | ' | ' |
Net change in restricted cash | -11,432 | -1,264 | -2,622 | -4,724 | -4,000 |
Purchase of property, equipment and software | -14,989 | -7,736 | -1,302 | -10,435 | -383 |
Net cash used in investing activities | -925,478 | -782,338 | -441,145 | -1,120,615 | -218,806 |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Payable to investors | 12,933 | -1,593 | 1,517 | 1,868 | 533 |
Proceeds from issuance of notes and certificates | 1,534,010 | 1,115,694 | 606,862 | 1,618,269 | 319,704 |
Payments on notes and certificates | -732,342 | -339,048 | -163,946 | -504,330 | -101,950 |
Payments on charged-off notes and certificates from recoveries/sales of related charged off loans at fair value | -5,153 | -1,139 | -219 | -1,669 | ' |
Proceeds from term loan, net of discount | 49,813 | ' | ' | ' | ' |
Payment for debt issuance cost | -1,192 | ' | ' | ' | ' |
Principal payments on term loan | -625 | ' | ' | ' | ' |
Payments on loans payable | ' | ' | -370 | ' | -2,601 |
Prepaid offering costs | -1,887 | ' | ' | ' | ' |
Repurchase of common stock | ' | ' | -12 | ' | ' |
Proceeds from stock options exercised | 2,997 | 1,531 | 864 | 1,715 | 158 |
Net cash provided by financing activities | 923,458 | 775,771 | 462,845 | 1,116,224 | 247,800 |
Net (decrease) increase in cash and cash equivalents | 33,375 | 9,635 | 21,307 | -3,252 | 17,908 |
Cash and cash equivalents, beginning of period | 49,299 | 52,551 | 31,244 | 52,551 | 13,336 |
Cash and cash equivalents, end of period | 82,674 | 62,186 | 52,551 | 49,299 | 31,244 |
Supplemental Disclosure of Cash Flow Information: | ' | ' | ' | ' | ' |
Cash paid for interest | 244,531 | 116,746 | 52,511 | 176,195 | 28,063 |
Reclassification of loans at amortized cost to loans held at fair value | ' | ' | 2,109 | ' | ' |
Non-cash investing activity-accrual of property, equipment and software, net | 1,132 | ' | ' | 2,275 | ' |
Non-cash financing activities-accruals for prepaid offering costs | 1,053 | ' | ' | ' | ' |
Non-cash investing and financing activity-issuance of Series F convertible preferred stock for business acquisition | 2,762 | ' | ' | ' | ' |
Series A Convertible Preferred Stock | ' | ' | ' | ' | ' |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Proceeds from exercise of warrants | ' | ' | 606 | 221 | 10 |
Series B Convertible Preferred Stock | ' | ' | ' | ' | ' |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Proceeds from exercise of warrants | ' | ' | 165 | ' | ' |
Common stock warrants | ' | ' | ' | ' | ' |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Proceeds from exercise of warrants | 101 | 326 | 34 | 150 | ' |
Supplemental Disclosure of Cash Flow Information: | ' | ' | ' | ' | ' |
Non-cash exercise of warrants | 86 | 137 | ' | 137 | 2,345 |
Series D Convertible Preferred Stock | ' | ' | ' | ' | ' |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Proceeds from issuance of convertible preferred stock, net of issuance costs | ' | ' | ' | ' | 31,946 |
Series E Convertible Preferred Stock | ' | ' | ' | ' | ' |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Proceeds from issuance of convertible preferred stock, net of issuance costs | ' | ' | 17,344 | ' | ' |
Series F Convertible Preferred Stock | ' | ' | ' | ' | ' |
Cash Flows from Financing Activities: | ' | ' | ' | ' | ' |
Proceeds from issuance of convertible preferred stock, net of issuance costs | 64,803 | ' | ' | ' | ' |
Preferred Stock B warrants | ' | ' | ' | ' | ' |
Supplemental Disclosure of Cash Flow Information: | ' | ' | ' | ' | ' |
Non-cash exercise of warrants | ' | ' | $102 | ' | ' |
Basis_of_Presentation_and_Cons
Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation and Consolidation | ' |
1. Basis of Presentation and Consolidation | |
Our consolidated financial statements include LendingClub Corporation and its wholly owned subsidiaries; Springstone Financial, LLC (Springstone) and LC Advisors, LLC, (LCA). “Trust” refers to LC Trust I, an independent Delaware business trust that acquires and holds loans for the sole benefit of certain investors that purchase trust certificates (Certificates) issued by the Trust and that are related to underlying loans. The accompanying consolidated financial statements, have been prepared by LendingClub Corporation (“LendingClub,” “we,” “our,” the “Company” and “us”) in conformity with U.S. generally accepted accounting principles (GAAP) for financial information. | |
We did not have any items of other comprehensive income (loss) during any of the periods presented in the consolidated financial statements and therefore, we are not required to report comprehensive income (loss). | |
Subsequent to the issuance of our December 31, 2012 consolidated financial statements, we corrected the classification of our preferred stock to present the preferred stock within permanent stockholders’ equity rather than temporary equity as previously presented. This revision is in accordance with ASC 480—Distinguishing Liabilities from Equity (ASC 480) and resulted in a change to stockholders’ deficit from $50.8 million to stockholders’ equity of $52.2 million as of December 31, 2012. The revision had no effect on our consolidated statements of operations, reported assets and liabilities on the consolidated balance sheet, or the consolidated statements of cash flows. | |
During the year ended December 31, 2013, we changed the definitions used to classify operating expenses. Operating expenses were formerly classified as sales, marketing and customer service, engineering, and general and administrative. Our new categories of operating expenses are: sales and marketing; origination and servicing; and general and administrative. As a result of the new classification, loan origination and servicing costs which were previously included in sales, marketing and customer service are now included as a separate financial statement line and engineering costs which represent engineering and product development related expenses are categorized within general and administrative expenses. The changes had no impact to the total operating expenses or net income. Prior period amounts have been reclassified to conform to the current presentation. We previously referred to “Transaction Fees” as “Origination Fees” and “General and Administrative—Engineering and Product Development” as “General and Administrative—Technology.” | |
On April 15, 2014, a 2-for-1 equity stock split approved by our board of directors became effective, in which each outstanding share of each series or class of equity capital stock was split into two outstanding shares of such series or class of equity capital stock. Additionally, another 2-for-1 equity stock split approved by our board of directors became effective on September 5, 2014, in which each outstanding share of each series or class of equity capital stock was split into two outstanding shares of such series or class of equity capital stock. All share and per share data has been adjusted to reflect these stock splits. The par value of each of the outstanding shares remains the same at $0.01. | |
On April 17, 2014, we acquired all the outstanding limited liability company interests of Springstone. Our interim consolidated financial statements include Springstone’s results of operations and financial position from this date. See “Note 7—Springstone Acquisition.” | |
Unaudited interim consolidated financial information | |
The accompanying interim consolidated balance sheet as of September 30, 2014, the interim consolidated statements of operations, and cash flows for the nine months ended September 30, 2013 and 2014, the interim consolidated statement of stockholders’ equity for the nine months ended September 30, 2014, and the related footnote disclosures are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, considered necessary to present fairly our financial position as of September 30, 2014 and our results of operations and cash flows for the nine months ended September 30, 2013 and 2014. The results of operations for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |
Unaudited pro forma balance sheet | |
Immediately prior to the closing of a qualifying initial public offering as defined in Note 12—Stockholders’ Equity, all of the outstanding shares of convertible preferred stock will automatically convert into shares of common stock. In addition, the outstanding preferred stock warrants will automatically be converted into warrants to purchase common stock upon effectiveness of a qualified initial public offering, and certain of these warrants will automatically be net exercised for shares of common stock upon the completion of our initial public offering. The unaudited pro forma balance sheet information, as set forth in the accompanying consolidated balance sheets, gives effect to the automatic conversion of all outstanding shares of convertible preferred stock as of September 30, 2014. The shares of common stock issuable and the proceeds expected to be received in a qualified initial public offering are excluded from such pro forma information. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Summary of Significant Accounting Policies | ' | ||||
2. Summary of Significant Accounting Policies | |||||
Change in Fiscal Year | |||||
On December 19, 2012, our board of directors approved a change in our fiscal year-end from March 31 to December 31. The change was effective as of December 31, 2012. | |||||
Revenue Recognition | |||||
Revenue primarily results from fees earned. Fees include loan transaction fees paid by issuing banks and service providers, servicing fees paid by investors and management fees paid by certain certificate holders. We also have other smaller sources of revenue reported as other revenue. | |||||
Transaction Fees | |||||
Transaction fees are paid by the issuing banks to us for the work we perform through our platform in facilitating originations. The amount of these fees is based upon the terms of the loan, including grade, rate, term and other factors. As of March 31, 2012, December 31, 2012 and December 31, 2013, these fees ranged from 1.11% to 5.00% and, as of September 30, 2014, ranged from 1.00% to 6.00% of the initial principal amount of a loan. In addition, with our acquisition of Springstone, transaction fees include fees earned from issuing banks and service providers for education and patient finance loans. Where applicable, the transaction fees are included in the annual percentage rate calculation provided to the borrower and is subtracted from the gross loan proceeds prior to disbursement of the loan funds to the borrower. A loan is considered issued when we record the transfer of funds to the borrower’s account on our platform and we initiate an ACH transaction to transfer funds from our platform’s correspondent bank account to the borrower’s bank account. | |||||
Servicing Fees | |||||
Investors typically pay us a servicing fee on each payment received from a borrower or on the investors’ month-end principal balance of loans serviced. The servicing fee compensates us for the costs we incur in servicing the related loan, including managing payments from borrowers, payments to investors and maintaining investors’ account portfolios. We record servicing fees paid by note holders and certain certificate holders as a component of operating revenue when received. Servicing fees can be, and have been, modified or waived at management’s discretion. | |||||
Management Fees | |||||
Accredited investors and qualified purchasers can invest in limited partner interests in funds managed by LCA, a registered investment advisor and our wholly-owned subsidiary. LCA acts as the general partner for six private funds (Funds) in which it has made no capital contributions and does not receive any allocation of the Funds’ income, expenses, gains, losses or any carried interest. Each Fund invests in a certificate pursuant to a set investment strategy. LCA charges limited partners in the Funds a management fee payable monthly in arrears, based on a limited partner’s capital account balance at month end. | |||||
LCA also earns management fees on separately managed accounts (SMA), payable monthly in arrears, based on the month-end balances in the SMA accounts. | |||||
Management fees are a component of operating revenue in the consolidated statements of operations and are recorded as earned. Management fees can be, and have been, modified or waived at the discretion of LCA. | |||||
Other Revenue | |||||
Other revenue consists primarily of revenue from gains and losses on sales of whole loans. | |||||
Fair Valuation Adjustments of Loans at Fair Value and Notes and Certificates at Fair Value | |||||
We include in earnings the estimated unrealized fair value gains or losses during the period on loans, and the offsetting estimated unrealized fair value gains or losses on related notes and certificates. At each reporting period, we recognize fair valuation adjustments for the loans and the related notes and certificates. The fair valuation adjustment for a given principal amount of a loan will be approximately equal to the corresponding estimated fair valuation adjustment on the combined principal amounts of related notes and certificates because the same net cash flows of the loans and the related notes and/or certificates are used in the discounted cash flow valuation calculations. | |||||
Whole Loan Sales | |||||
From January 1, 2013 through June 30, 2013, transaction fees and direct loan origination and acquisition costs for loans that were subsequently sold to unrelated third-party purchasers and met the accounting requirements for a sale of loans were deferred and included in the overall net investment in the loans purchased. Accordingly, the transaction fees for such loans were not included in transaction fee revenue and the direct loan origination costs for such loans were not included in operating expenses. A gain or loss on the whole loan sales was recorded on the sale date. | |||||
Effective July 1, 2013, we elected the fair value option for whole loans acquired and subsequently sold to unrelated third-party purchasers. Under this election, all transaction fees and all direct costs incurred in the origination process are recognized in earnings as earned or incurred and are not deferred. Beginning July 1, 2013, transaction fees for whole loans sold to unrelated third-party purchasers are included in “Transaction Fees” and direct loan origination costs are included in “Origination and Servicing” operating expense on the consolidated statement of operations. Gains and losses from whole loan sales are recorded in “Other Revenue” in the consolidated statements of operations. | |||||
As part of the sale agreements, we retained the rights to service these sold whole loans. We calculate a gain or loss on the whole loan sale with servicing retained based on the net proceeds from the whole loan sale, minus the net investment in the loans being sold. The net investment in the loans sold has been reduced or increased by the recording of any applicable net servicing asset or liability respectively. Gains on whole loan sales were previously reported in “Gain from Sales of Loan” and have been reclassified to “Other Revenue” in the consolidated statement of operations. | |||||
Additionally, as needed, we will record a liability for significant estimated post-sale obligations or contingent obligations to the purchasers of the loans. No such liability was recorded at December 31, 2012, December 31, 2013 or September 30, 2014. | |||||
Servicing Assets and Liabilities at Fair Value | |||||
We record servicing assets and liabilities at their estimated fair values when we sell whole loans to unrelated third-party or whole loan buyers or when the servicing contract commences. The gain or loss on a loan sale is recorded in “Other Revenue” while the component of the gain or loss that is based on the degree to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee is recorded as an offset in servicing assets or liabilities. Servicing assets and liabilities are recorded in “Other Assets” and “Accrued Expenses and Other Liabilities,” respectively, on the consolidated balance sheets. Over the life of the loan, changes in the estimated fair value of servicing assets and liabilities are reported in “Servicing Fees” on the consolidated statement of operations in the period in which the changes occur. | |||||
We use a discounted cash flow model to estimate the fair value of the loan servicing asset or liability which considers the contractual servicing fee revenue we earn on the loans, estimated market rate servicing fee to service such loans, the current principal balances of the loans and projected servicing revenues over the remaining terms of the loans. | |||||
Cash and Cash Equivalents | |||||
Cash and cash equivalents include unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts. We consider all highly liquid investments with stated maturity dates of three months or less from the date of purchase to be cash equivalents. | |||||
Restricted Cash | |||||
Restricted cash consists primarily of our funds in certain checking, money market and certificate of deposit accounts that are: (i) pledged to or held in escrow by our correspondent banks as security for transactions processed on or related to our platform; (ii) pledged through a credit support agreement with a certificate holder or (iii) received from investors but not yet applied to their accounts on the platform and transferred to segregated bank accounts that hold investors’ funds. | |||||
Loans at Fair Value and Notes and Certificates at Fair Value | |||||
We use fair value measurements to record loans, notes and certificates at fair value on a recurring basis and in our fair value disclosures. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Changes in the fair value of the loans and notes and certificates are recognized, on a gross basis, in earnings. | |||||
We determine the fair value of the loans, notes and certificates in accordance with the fair value hierarchy that requires an entity to maximize the use of observable inputs. The fair value hierarchy includes the following three levels based on the objectivity of the inputs, which were used for categorizing the assets or liabilities for which fair value is being measured and reported: | |||||
Level 1 | — | Quoted market prices in active markets for identical assets or liabilities. | |||
Level 2 | — | Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). | |||
Level 3 | — | Valuation generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted | |||
cash flow methodologies or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. The fair value election for loans, notes and certificates allows for symmetrical accounting of the timing and amounts recognized for both expected unrealized losses and charge-offs on the loans and the related notes and certificates, consistent with the member payment dependent design of the notes and certificates. | |||||
Our and the Trust’s obligation to pay principal and interest on any note or certificate is equal to the pro-rata portion of the payments, if any, received on the related loan subject to applicable fees. The gross effective interest rate associated with notes or certificates is the same as the interest rate earned on the underlying loan. The discounted cash flow methodology used to estimate the notes’ and certificates’ fair values uses the same projected net cash flows as their related loan. The discount rates for the projected net cash flows of the notes and certificates are our estimates of the rates of return, including risk premiums (if significant) that investors in unsecured consumer credit obligations would require when investing in notes issued pursuant to a shelf registration statement and certificates issued by the Trust with cash flows dependent on specific credit grades of loans. | |||||
For additional discussion on this topic, including the adjustments to the estimated fair values of loans, notes and certificates, as discussed above, see “Note 4—Fair Value of Financial Instruments Measured at Fair Value.” | |||||
Accrued Interest and Other Receivables | |||||
Interest income on loans is calculated based on the contractual interest rate of the loan and recorded as interest income as earned. Loans reaching 120 days delinquent are classified as non-accrual loans, and we stop accruing interest and reverse all accrued but unpaid interest as of such date. | |||||
Property, Equipment and Software, Net | |||||
Property, equipment and software consists of computer equipment and software, office furniture and equipment, construction in progress, leasehold improvements and internal use software and website development costs which are recorded at cost, less accumulated depreciation and amortization. | |||||
Computer equipment and software and furniture and fixtures are depreciated or amortized on a straight line basis over two to five years. Costs associated with construction projects are transferred to the leasehold improvement account upon project completion. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life. | |||||
Internal use software and website development costs are capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Internal use software and website development costs are amortized on a straight line basis over the project’s estimated useful life, generally three years. Capitalized internal use software development costs consist of salaries and payroll related costs for employees and fees paid to third-party consultants who are directly involved in development efforts. Costs related to preliminary project activities and post implementation activities including training and maintenance are expensed as incurred. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. We evaluate potential impairments of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events or changes in circumstances that could result in impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our overall business and significant negative industry or economic trends. Determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. For the year ended December 31, 2013, the nine months ended December 31, 2012 the year ended March 31, 2012 and for the nine months ended September 30, 2014, there was no impairment of long-lived assets. | |||||
Consolidation Policies | |||||
Our policy is to consolidate the financial statements of entities in which we have a controlling financial interest. We determine whether we have a controlling financial interest in an entity by evaluating whether the entity is a voting interest entity or variable interest entity (VIE) and if the accounting guidance requires consolidation. | |||||
Voting interest entities are entities that have sufficient equity and provide the equity investors voting rights that enable them to make significant decisions relating to the entities’ operations. For these types of entities, our determination of whether we have a controlling financial interest is based on ownership of a majority of the entities’ voting equity interest or through control of management of the entities. | |||||
VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. We determine whether we have a controlling financial interest in a VIE by considering whether our involvement with the VIE is significant and whether we are the primary beneficiary of the VIE based on the following: | |||||
• | we have the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; | ||||
• | the aggregate indirect and direct variable interests held by us have the obligation to absorb losses or the right to receive benefits from the entity that could be significant to the VIE; and | ||||
• | qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE. | ||||
We believe our beneficial ownership of a controlling financial interest in the Trust has qualified and continues to qualify as an equity investment in a VIE that should be consolidated for financial accounting and reporting purposes. We perform on-going reassessments on the status of the entities and whether facts or circumstances have changed in relation to our involvement in VIEs which could cause our conclusion to change. | |||||
All intercompany transactions and balances have been eliminated. | |||||
Business Combination (Unaudited) | |||||
We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Our estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustments to our preliminary estimates to goodwill provided that we are within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. | |||||
Goodwill and Intangible Assets (Unaudited) | |||||
Goodwill represents the fair value of acquired businesses in excess of the aggregate fair value of the identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Our annual impairment testing date is April 1. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit (defined as business for which financial information is available and reviewed regularly by management) exceeds its carrying value. A qualitative assessment may consider macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital or company-specific factors, such as market capitalization in excess of net assets, trends in revenue generating activities and merger or acquisition activity. | |||||
If we elect to bypass qualitatively assessing goodwill or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, we estimate the fair values of our reporting units and compare them to their carrying values. The estimated fair values of the reporting units are generally established using an income approach based on a discounted cash flow model or a market approach which compares each reporting unit to comparable companies in their respective industries. | |||||
Intangible assets are amortized over their useful lives in a manner that best reflects their economic benefit. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We do not have any indefinite-lived intangible assets. | |||||
Due from Related Parties | |||||
Due from related parties represents asset management fees due to LCA from investors in the Funds. | |||||
Payable to Investors | |||||
Payable to investors primarily represents payments-in-process received from investors and payments on notes, certificates and loan payments that, as of the last day of the period, have not been credited to investors’ accounts on the platform or transferred to the investors’ separate bank accounts. | |||||
Sales and Marketing Expense | |||||
Sales and marketing costs, including borrower and investor acquisition costs, are expensed as incurred and included in “Sales and Marketing” on the consolidated statement of operations. | |||||
Stock-Based Compensation | |||||
All stock-based awards made to employees are recognized in the consolidated financial statements based on their respective grant date fair values. Any benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash inflow and cash outflow from operating activities. The stock-based compensation related to awards that are expected to vest is amortized using the straight-line method over the award’s vesting term, which is generally four years. | |||||
The fair value of share-option awards is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model considers, among other factors, the underlying fair value of common stock, the expected term of the option award, expected volatility of our common stock and expected future dividends, if any. | |||||
Forfeitures of awards are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates or if future forfeitures are expected to differ from recent actual or previously expected forfeitures. Stock-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those stock-based awards that are expected to vest. | |||||
Share option awards issued to non-employees are recorded at their fair value on the awards’ vesting date. We use the Black-Scholes option pricing model to estimate the fair value of share options granted to non-employees at each vesting date to determine the appropriate charge to stock-based compensation. | |||||
Income Taxes | |||||
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||
We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. | |||||
We account for uncertain tax positions using a two-step process whereby (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. | |||||
We recognize interest and penalties accrued on any unrecognized tax benefits as a component of provision for income tax in the consolidated statement of operations. | |||||
Use of Estimates | |||||
The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. These judgments, assumptions and estimates include but are not limited to the following: (i) fair value determinations for loans, notes and certificates; (ii) stock-based compensation expense; (iii) provision for income taxes, net of valuation allowance for deferred tax assets; (iv) consolidation of variable interest entities; and (v) fair value determinations for servicing assets and liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. | |||||
Concentrations of Credit Risk | |||||
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, loans financed directly by us and the related accrued interest receivable, and deposits with service providers. We hold our cash and cash equivalents and restricted cash in accounts at regulated domestic financial institutions. We are exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds the FDIC insured amounts. | |||||
Impact of New Accounting Standards (Unaudited) | |||||
In May, 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board issued Accounting Standards Update (ASU) 2014-09 “Revenue from Contracts with Customers” which provides a single comprehensive revenue recognition model for all contracts with customers. The standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. This ASU is effective for annual reporting periods beginning after December 15, 2016 for public entities. Early adoption is not permitted. We are currently evaluating the impact of the new update on our consolidated financial statements. | |||||
In August, 2014, FASB issued ASU 2014-13 “Consolidation (Topic 810)—Measuring the Financial Assets and The Financial Liabilities of a Consolidated Collateralized Financing Entity” to amend the existing standards. This ASU provides an alternative to current fair value measurement guidance to an entity that consolidates a collateralized financing entity (CFE) that has elected the fair value option for the financial assets and financial liabilities. If elected, the entity could measure both the financial assets and the financial liabilities of the CFE by using the fair value of the financial assets or financial liabilities, whichever is more observable. The election would effectively eliminate any measurement difference previously reflected in earnings and attributed to the reporting entity in the consolidated statements of operations. The guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period. We are currently evaluating the impact of the new update on our consolidated financial statements. |
Net_Income_Loss_Per_Share_and_
Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders | ' | ||||||||||||||||||||
3. Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders | |||||||||||||||||||||
Basic net income (loss) per share (EPS) is the amount of net income (loss) available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of net income (loss) available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, convertible preferred stock and warrants. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. | |||||||||||||||||||||
We calculate EPS using the two-class method. The two-class method allocates net income that otherwise would have been available to common shareholders to holders of participating securities. We consider all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. As such, net income allocated to these participating securities, which include participation rights in undistributed earnings (see “Note 12—Stockholders’ Equity”), are subtracted from net income to determine total undistributed net income to be allocated to common stockholders. All participating securities are excluded from basic weighted-average common shares outstanding. | |||||||||||||||||||||
The following table details the computation of the basic and diluted net income (loss) per share (dollars in thousands, except shares and per share data): | |||||||||||||||||||||
Year Ended | Nine Months | Year Ended | Nine Months | ||||||||||||||||||
March 31, | Ended | December 31, | Ended September 30, | ||||||||||||||||||
2012 | December 31, | 2013 | |||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Net income (loss) | $ | (11,944 | ) | $ | (4,238 | ) | $ | 7,308 | $ | 4,450 | $ | (23,857 | ) | ||||||||
Less: Net income allocated to participating securities (1) | — | — | (7,117 | ) | (4,450 | ) | — | ||||||||||||||
Net income (loss) available to common shareholders after required adjustments for the calculation of basic and diluted net income per common share | $ | (11,944 | ) | $ | (4,238 | ) | $ | 191 | $ | — | $ | (23,857 | ) | ||||||||
Basic weighted-average common shares outstanding | 35,125,628 | 41,359,676 | 51,557,136 | 50,457,948 | 57,958,838 | ||||||||||||||||
Weighted-average effect of dilutive securities: | |||||||||||||||||||||
Stock Options | — | — | 28,542,404 | 27,170,816 | — | ||||||||||||||||
Warrants | — | — | 1,327,436 | 1,525,148 | — | ||||||||||||||||
Diluted weighted-average common shares outstanding | 35,125,628 | 41,359,676 | 81,426,976 | 79,153,912 | 57,958,838 | ||||||||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic | $ | (0.34 | ) | $ | (0.10 | ) | $ | 0 | $ | — | $ | (0.41 | ) | ||||||||
Diluted | $ | (0.34 | ) | $ | (0.10 | ) | $ | 0 | $ | — | $ | (0.41 | ) | ||||||||
-1 | In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities. | ||||||||||||||||||||
Unaudited Pro Forma Net Income (Loss) per Share | |||||||||||||||||||||
Pro forma basic and diluted net income (loss) per share were computed to give effect to the automatic conversion of Series A convertible preferred stock, Series B convertible preferred stock, Series C convertible preferred stock, Series D convertible preferred stock, Series E convertible preferred stock and Series F convertible preferred stock using the if converted method as though the conversion had occurred as of the beginning of the period presented or the original date of issuance, if later, and the issuance of shares of common stock upon the automatic conversion and exercise of certain warrants to purchase shares of Series A convertible preferred stock and the automatic exercise of certain warrants to purchase common stock upon the completion of our initial public offering. | |||||||||||||||||||||
The unaudited basic and diluted pro forma per common share calculations are presented below (in thousands except share and per share amounts): | |||||||||||||||||||||
Year Ended | Nine Months | ||||||||||||||||||||
December 31, | Ended | ||||||||||||||||||||
2013 | September 30, | ||||||||||||||||||||
2014 | |||||||||||||||||||||
Net income (loss) available to common stockholders, as reported | $ | 7,308 | $ | (23,857 | ) | ||||||||||||||||
Weighted-average shares used to compute net income (loss) per share available to common stockholders, basic | 51,557,136 | 57,958,838 | |||||||||||||||||||
Pro forma adjustments to reflect conversion of convertible preferred stock | 239,822,864 | 245,622,114 | |||||||||||||||||||
Pro forma adjustments to reflect conversion of convertible preferred stock warrants and certain common stock warrants(1) | 386,192 | 27,848 | |||||||||||||||||||
Weighted-average shares to compute pro forma net income (loss) per share available to common stockholders, basic | 291,766,192 | 303,608,800 | |||||||||||||||||||
Dilutive effect of stock options | 28,542,404 | — | |||||||||||||||||||
Dilutive effect of warrants | 3,022,954 | — | |||||||||||||||||||
Weighted-average shares to compute pro forma net income (loss) per share available to common stockholders, diluted | 323,331,550 | 303,608,800 | |||||||||||||||||||
Proforma net income (loss) per common share: | |||||||||||||||||||||
Basic | $ | 0.03 | $ | (0.08 | ) | ||||||||||||||||
Diluted | $ | 0.02 | $ | (0.08 | ) | ||||||||||||||||
-1 | Assumes the automatic conversion and exercise of warrants to purchase a maximum of 331,616 shares of Series A convertible preferred stock and automatic exercise of warrants to purchase a maximum of 54,576 shares of common stock for the year ended December 31, 2013. Assumes the automatic exercise of warrants to purchase a maximum of 27,848 shares of common stock for the nine months ended September 30, 2014. Upon the completion of our initial public offering, these warrants will automatically be net exercised for common stock, resulting in the issuance of fewer shares. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments Measured at Fair Value | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Fair Value of Financial Instruments Measured at Fair Value | ' | ||||||||||||||||||||||||
4. Fair Value of Financial Instruments Measured at Fair Value | |||||||||||||||||||||||||
Loans, Notes and Certificates | |||||||||||||||||||||||||
Our marketplace is where borrowers and investors engage in transactions relating to standard or custom program loans. Standard program loans are unsecured, fixed rate, three or five year personal loans in amounts ranging from $1,000 to $35,000 made to borrowers meeting strict credit criteria, including a FICO score of at least 660. Custom program loans are generally new offerings and loans that do not meet the requirements of the standard program and/or loans with longer maturities than we believe to be attractive to most note investors. Currently, custom program loans include small business, education and patient finance loans. Small business loans are unsecured and fixed rate loans in amounts ranging from $15,000 to $100,000, with various maturities between one and five years. | |||||||||||||||||||||||||
Education and patient finance loans are issued in amounts ranging from $499 to $40,000 with various maturities between 24 and 84 months for term loans as well as a revolving product with a promotional period ranging from six to 24 months that is interest free if the loan balance is paid in full during that period. Loans facilitated by Springstone are originated, owned and serviced by the issuing banks and are therefore not recorded on our consolidated balance sheet nor are the loans’ cash flows recorded on our consolidated statement of cash flows. | |||||||||||||||||||||||||
Investors can invest in loans that are offered through our marketplace. We issue notes and the Trust issues certificates. | |||||||||||||||||||||||||
We use fair value measurements to record fair value adjustments to loans and the related notes and certificates that are recorded at fair value on a recurring basis. | |||||||||||||||||||||||||
Loans and the related notes and certificates do not trade in an active market with readily observable prices. Accordingly, the fair value of loans and the related notes and certificates are determined using a discounted cash flow methodology utilizing assumptions market participants use for credit losses, discount rates, changes in the interest rate environment, and other factors. Fair value measurements of our loans and the related notes and certificates use significant unobservable inputs and, accordingly, we classify them as Level 3. | |||||||||||||||||||||||||
We have ongoing monitoring procedures in place for our Level 3 assets and liabilities that use such valuation models. These procedures are designed to provide reasonable assurance that models continue to perform as expected after approved. All valuation models are subject to ongoing review by business-unit-level management and the executive management team. | |||||||||||||||||||||||||
At December 31, 2012, December 31, 2013, and September 30, 2014, loans, notes and certificates measured at fair value on a recurring basis were (in thousands): | |||||||||||||||||||||||||
Loans at Fair Value | Notes and Certificates at Fair Value | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | September 30, | ||||||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||
Aggregate principal balance outstanding | $ | 791,774 | $ | 1,849,042 | $ | 2,566,477 | $ | 795,842 | $ | 1,859,982 | $ | 2,584,441 | |||||||||||||
Fair valuation adjustments | (10,559 | ) | (20,000 | ) | (32,806 | ) | (10,526 | ) | (19,992 | ) | (32,801 | ) | |||||||||||||
Fair value | $ | 781,215 | $ | 1,829,042 | $ | 2,533,671 | $ | 785,316 | $ | 1,839,990 | $ | 2,551,640 | |||||||||||||
At December 31, 2013, loans underlying notes and certificates had original terms of 36 months or 60 months, had monthly payments with fixed interest rates ranging from 5.42% to 26.06% and had various maturity dates through December 2018. At September 30, 2014, outstanding loans underlying notes and certificates had original maturities between 12 and 60 months, had monthly payments with fixed interest rates ranging from 5.42% to 29.90% and had various maturity dates through September 2019 (unaudited). | |||||||||||||||||||||||||
Loan Servicing Rights | |||||||||||||||||||||||||
We record servicing assets and liabilities at their estimated fair values when we sell whole loans to unrelated third-party whole loan buyers or when the servicing contract commences, and on a recurring basis thereafter. | |||||||||||||||||||||||||
At December 31, 2013, loans underlying loan servicing rights had a total principal balance of $0.41 billion, original terms between 36 months and 60 months and had monthly payments with fixed interest rates ranging from 6.00% to 26.06% and various maturity dates through December, 2018. At September 30, 2014, loans underlying loan servicing rights had a total principal balance of $1.37 billion, original terms between 12 and 60 months, had monthly payments with fixed interest rates ranging from 5.90% to 33.15% and had various maturity dates through September 2019 (unaudited). | |||||||||||||||||||||||||
We determined the fair values of loans, notes and certificates and servicing assets and liabilities using significant unobservable inputs and methods that are categorized in the fair value hierarchy on Level 3, as follows (in thousands): | |||||||||||||||||||||||||
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Fair Value | ||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Loans at fair value | $ | — | $ | — | $ | 781,215 | $ | 781,215 | |||||||||||||||||
Total assets | $ | — | $ | — | $ | 781,215 | $ | 781,215 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 785,316 | $ | 785,316 | |||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 785,316 | $ | 785,316 | |||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Loans at fair value | $ | — | $ | — | $ | 1,829,042 | $ | 1,829,042 | |||||||||||||||||
Servicing asset | 534 | 534 | |||||||||||||||||||||||
Total assets | $ | — | $ | — | $ | 1,829,576 | $ | 1,829,576 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 1,839,990 | $ | 1,839,990 | |||||||||||||||||
Servicing liability | 936 | 936 | |||||||||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 1,840,926 | $ | 1,840,926 | |||||||||||||||||
September 30, 2014 (unaudited) | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Loans at fair value | $ | — | $ | — | $ | 2,533,671 | $ | 2,533,671 | |||||||||||||||||
Servicing asset | 1,520 | 1,520 | |||||||||||||||||||||||
Total assets | $ | — | $ | — | $ | 2,535,191 | $ | 2,535,191 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 2,551,640 | $ | 2,551,640 | |||||||||||||||||
Servicing liability | 3,712 | 3,712 | |||||||||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 2,555,352 | $ | 2,555,352 | |||||||||||||||||
Instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. Our fair value approach for Level 3 instruments primarily uses unobservable inputs, but may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the Level 3 category presented in the tables below may include changes in fair value that were attributable to both observable and unobservable inputs. | |||||||||||||||||||||||||
The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis at December 31, 2012, December 31, 2013 and September 30, 2014 (in thousands): | |||||||||||||||||||||||||
Loans | Notes and | ||||||||||||||||||||||||
Certificates | |||||||||||||||||||||||||
Fair value at December 31, 2012 | $ | 781,215 | $ | 785,316 | |||||||||||||||||||||
Purchases of loans | 2,064,628 | — | |||||||||||||||||||||||
Issuances of notes and certificates | — | 1,618,269 | |||||||||||||||||||||||
Principal payments | (511,232 | ) | (504,330 | ) | |||||||||||||||||||||
Whole loan sales | (446,224 | ) | — | ||||||||||||||||||||||
Recoveries from sale and collection of charged-off loans | (1,716 | ) | (1,669 | ) | |||||||||||||||||||||
Carrying value before fair value adjustments | 1,886,671 | 1,897,586 | |||||||||||||||||||||||
Fair valuation adjustments, included in earnings | (57,629 | ) | (57,596 | ) | |||||||||||||||||||||
Fair value at December 31, 2013 | $ | 1,829,042 | $ | 1,839,990 | |||||||||||||||||||||
Purchases of loans (unaudited) | 2,628,758 | — | |||||||||||||||||||||||
Issuances of notes and certificates (unaudited) | — | 1,534,011 | |||||||||||||||||||||||
Whole loan sales (unaudited) | (1,094,482 | ) | — | ||||||||||||||||||||||
Principal payments (unaudited) | (739,506 | ) | (732,343 | ) | |||||||||||||||||||||
Recoveries from sale and collection of charged-off loans (unaudited) | (5,178 | ) | (5,153 | ) | |||||||||||||||||||||
Carrying value before fair value adjustments (unaudited) | 2,618,634 | 2,636,505 | |||||||||||||||||||||||
Fair valuation adjustments, included in earnings (unaudited) | (84,963 | ) | (84,865 | ) | |||||||||||||||||||||
Fair value at September 30, 2014 (unaudited) | $ | 2,533,671 | $ | 2,551,640 | |||||||||||||||||||||
The fair values of loans and the related notes and certificates are determined using a discounted cash flow model utilizing estimates for credit losses, changes in the interest rate environment, and other factors. For notes and certificates, we also consider risk factors such as our continued profitability, ability to operate on a cash-flow positive basis and liquidity position. The majority of fair valuation adjustments included in earnings is attributable to changes in estimated instrument-specific future credit losses. All fair valuation adjustments were related to Level 3 instruments for the year ended December 31, 2013 and for the nine months ended September 30, 2014 (unaudited). A specific loan that is projected to have higher future default losses than previously estimated has lower expected future cash flows over its remaining life, which reduces its estimated fair value. Conversely, a specific loan that is projected to have lower future default losses than previously estimated has increased expected future cash flows over its remaining life, which increases its fair value. Because the payments to holders of notes and certificates directly reflect the payments received on loans, a reduction or increase of the expected future payments on loans will decrease or increase the estimated fair values of the related notes and certificates. Expected losses and actual loan charge-offs on loans are offset to the extent that the loans are financed by notes and certificates that absorb the related loan losses. | |||||||||||||||||||||||||
The fair value adjustments for loans were largely offset by the fair value adjustments of the notes and certificates due to the member payment dependent design of the notes and certificates and because the principal balances of the loans were very close to the combined principal balances of the notes and certificates. Accordingly, the net fair value adjustment losses for loans, notes and certificates were $0.001 million, $0.6 million, $0.03 million and $0.1 million for the year ended March 31, 2012, the nine months ended December 31, 2012, the year ended December 31, 2013 and the nine months ended September 30, 2014 (unaudited), respectively. | |||||||||||||||||||||||||
At December 31, 2012, we had 576 loans that were 90 days or more past due (which includes non-accrual loans) or loans where the borrower has filed for bankruptcy or is deceased; these loans had a total outstanding principal balance of $6.4 million, aggregate adverse fair value adjustments totaling $5.7 million and an aggregate fair value of $0.7 million. At December 31, 2013, we had 989 loans that were 90 days or more past due (which includes non-accrual loans) or loans where the borrower has filed for bankruptcy or is deceased; these loans had a total outstanding principal balance of $10.2 million, aggregate adverse fair value adjustments totaling $9.1 million and an aggregate fair value of $1.1 million. At September 30, 2014, we had 1,304 loans that were 90 days or more past due (which includes non-accrual loans) or loans where the borrower has filed for bankruptcy or is deceased; these loans had a total outstanding principal balance of $15.2 million, aggregate adverse fair value adjustments of $13.8 million and an aggregate fair value of $1.4 million. (Unaudited.) | |||||||||||||||||||||||||
We place loans on non-accrual status upon becoming 120 days past due. At December 31, 2013, we had 111 loans that were over 120 days past due and classified as non-accrual loans, which had a total outstanding principal balance of $1.1 million, aggregate adverse fair value adjustments totaling $0.9 million and an aggregate fair value of $0.2 million. At September 30, 2014, we had 51 loans that were over 120 days past due and classified as non-accrual loans, which had a total outstanding principal balance of $0.5 million, aggregate adverse fair value adjustments of $0.4 million and an aggregate fair value of $0.1 million. (Unaudited.) | |||||||||||||||||||||||||
Significant Unobservable Inputs | |||||||||||||||||||||||||
The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements at December 31, 2013 and September 30, 2014: | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Range of Inputs | |||||||||||||||||||||||||
Unobservable Input | Minimum | Maximum | Weighted | ||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Discount rate | 5.9 | % | 15.9 | % | 10.2 | % | ||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Net cumulative expected loss | 2.1 | % | 23.7 | % | 10.1 | % | ||||||||||||||||||
Servicing asset/liability | Market servicing rate (% per annum on loan balance) | 0.4 | % | 0.4 | % | 0.4 | % | ||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||||
Range of Inputs | |||||||||||||||||||||||||
Unobservable Input | Minimum | Maximum | Weighted | ||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Discount rate | 5.2 | % | 23.6 | % | 10.6 | % | ||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Net cumulative expected loss | 0.3 | % | 21.8 | % | 9.7 | % | ||||||||||||||||||
Servicing asset/liability | Market servicing rate (% per annum on loan balance) | 0.5 | % | 0.7 | % | 0.5 | % | ||||||||||||||||||
The valuation technique used for our Level 3 assets and liabilities, as presented in the previous table, is described as follows: | |||||||||||||||||||||||||
Loans, Notes and Certificates | |||||||||||||||||||||||||
Discounted Cash Flow. Discounted cash flow valuation techniques generally consist of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount. | |||||||||||||||||||||||||
Significant unobservable inputs presented in the previous table are those we consider significant to the estimated fair values of the Level 3 assets and liabilities. We consider unobservable inputs to be significant, if by their exclusion, the estimated fair value of the Level 3 asset or liability would be impacted by a significant percentage change, or based on qualitative factors such as the nature of the instrument and significance of the unobservable inputs relative to other inputs used within the valuation. Following is a description of the significant unobservable inputs provided in the table. | |||||||||||||||||||||||||
Discount Rate. Discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, the fair value, of the loans, notes and certificates. The discount rates for the projected net cash flows of loans are our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in the various credit grades of loans. The discount rates for the projected net cash flows of the notes and certificates are our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in notes issued pursuant to a shelf registration statement and certificates issued by the Trust with cash flows dependent on specific grades of loans. Discount rates for existing loans, notes and certificates are adjusted to reflect the time value of money. A risk premium component is implicitly included in the discount rates to reflect the amount of compensation market participants require due to the uncertainty inherent in the instruments’ cash flows resulting from risks such as credit and liquidity. | |||||||||||||||||||||||||
Net Cumulative Expected Loss. Net cumulative expected loss is an estimate of the net cumulative principal payments that will not be repaid over the entire life of a new loans, note or certificate, expressed as a percentage of the original principal amount of the loans, note or certificate. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new loans, note or certificate. Therefore, the total net losses estimated to occur over the remaining maturity of existing loans, notes and certificates are less than the estimated net cumulative losses of comparable new loans, notes and certificates. A given month’s estimated net losses are a function of two variables: | |||||||||||||||||||||||||
(i) | estimated default rate, which is an estimate of the probability of not collecting the remaining contractual principal amounts owed and, | ||||||||||||||||||||||||
(ii) | estimated net loss severity, which is the percentage of contractual principal cash flows lost in the event of a default, net of the average net recovery, expected to be received on a defaulted loans, note or certificate. | ||||||||||||||||||||||||
Loan Servicing Rights | |||||||||||||||||||||||||
Discounted Cash Flow. Discounted cash flow valuation techniques generally consist of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount. | |||||||||||||||||||||||||
Significant unobservable inputs presented in the table above are those we consider significant to the estimated fair values of the Level 3 assets and liabilities. We consider unobservable inputs to be significant, if by their exclusion, the estimated fair value of the Level 3 asset or liability would be impacted by a significant percentage change, or based on qualitative factors such as the nature of the instrument and significance of the unobservable inputs relative to other inputs used within the valuation. | |||||||||||||||||||||||||
The following is a description of the significant unobservable inputs provided in the table. | |||||||||||||||||||||||||
Market Servicing Rate. We estimate an adequate servicing compensation assumption as a measure of what a market participant would earn to service the loans that we sell to third parties. We estimated this market servicing rate based on observable market rates for other loan types in the industry, adjusted for the unique loan attributes that are present in such loans we sell (i.e., unsecured fixed rate fully amortizing loans, ACH loan payments, intermediate terms, prime credit grades and sizes) and a market servicing benchmarking analysis performed by an independent valuation firm. | |||||||||||||||||||||||||
Discount Rate. Discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, the fair value, of the loan servicing rights. The discount rates for the projected net cash flows of loan servicing rights are our estimates of the rates of return that investors in servicing rights for unsecured consumer credit obligations would require for the various credit grades of the underlying loans. Discount rates for servicing rights on existing loans are adjusted to reflect the time value of money. A risk premium component is implicitly included in the discount rates to reflect the amount of compensation market participants require due to the uncertainty inherent in the instruments’ cash flows resulting from risks such as credit and liquidity. | |||||||||||||||||||||||||
Net Cumulative Expected Loss. Net cumulative expected loss is an estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new loan. A given month’s estimated net losses are a function of two variables: | |||||||||||||||||||||||||
(i) | estimated default rate, which is an estimate of the probability of not collecting the remaining contractual principal amounts owed, and | ||||||||||||||||||||||||
(ii) | estimated net loss severity, which is the percentage of contractual principal cash flows lost in the event of a default, net of the average net recovery, expected to be received on a defaulted loan. | ||||||||||||||||||||||||
The following table presents additional information about Level 3 servicing assets and liabilities measured at fair value on a recurring basis for the year ended December 31, 2013 and for the nine months ended September 30, 2014 (unaudited) (in thousands): | |||||||||||||||||||||||||
Servicing | Servicing | ||||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Fair value at December 31, 2012 | $ | — | $ | — | |||||||||||||||||||||
Additions | 587 | 1,273 | |||||||||||||||||||||||
Changes in fair value due to: | |||||||||||||||||||||||||
Realization of expected cash flows | (53 | ) | (337 | ) | |||||||||||||||||||||
Changes in market inputs or assumptions used in the valuation model | — | — | |||||||||||||||||||||||
Fair value at December 31, 2013 | $ | 534 | $ | 936 | |||||||||||||||||||||
Additions (unaudited) | 1,885 | 3,464 | |||||||||||||||||||||||
Changes in fair value due to: | |||||||||||||||||||||||||
Realization of expected cash flows (unaudited) | (555 | ) | (1,275 | ) | |||||||||||||||||||||
Changes in market inputs or assumptions used in the valuation model (unaudited) | (344 | ) | 587 | ||||||||||||||||||||||
Fair value at September 30, 2014 (unaudited) | $ | 1,520 | $ | 3,712 | |||||||||||||||||||||
Our and the Trust’s obligation to pay principal and interest on any note or certificate is equal to the pro-rata portion of the payments, if any, received on the related loan subject to applicable fees. The gross effective interest rate associated with notes or certificates is the same as the interest rate earned on the underlying loan. At December 31, 2013 and September 30, 2014, the discounted cash flow methodology used to estimate the notes’ and certificates’ fair values uses the same projected net cash flows as their related loan. The discount rates for the projected net cash flows of the notes and certificates are our estimates of the rates of return, including risk premiums (if significant) that investors in unsecured consumer credit obligations would require when investing in notes issued pursuant to a shelf registration statement and certificates issued by the Trust with cash flows dependent on specific credit grades of loans. | |||||||||||||||||||||||||
Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity | |||||||||||||||||||||||||
The discounted cash flow technique that we use to determine the fair value of our Level 3 loans, notes and certificates value requires determination of relevant inputs and assumptions, some of which represent significant unobservable inputs as indicated in the preceding table. Accordingly, changes in these unobservable inputs may have a significant impact on fair value. Certain of these unobservable inputs will (in isolation) have a directionally consistent impact on the fair value of the instrument for a given change in that input. Alternatively, the fair value of the instrument may move in an opposite direction for a given change in another input. For example, increases in the discount rate and net cumulative expected loss rate each will reduce the estimated fair value of loans, notes and certificates. When multiple inputs are used within the valuation technique of a loan, note or certificate, a change in one input in a certain direction may be offset by an opposite change in another input. | |||||||||||||||||||||||||
The discounted cash flow valuation technique we use to determine the fair value of Level 3 loan servicing rights requires certain significant unobservable inputs including adequate servicing compensation, net cumulative loss rates, and discount rates. An increase in any of these unobservable inputs will reduce the fair value of the loan servicing rights and alternatively, a decrease in any one of these inputs would result in the loan servicing rights increasing in value. |
Property_Equipment_and_Softwar
Property, Equipment and Software, net | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Property, Equipment and Software, net | ' | ||||||||||||
5. Property, Equipment and Software, net | |||||||||||||
Property, equipment and software consist of the following (in thousands): | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Internally developed software | $ | 358 | $ | 4,188 | $ | 12,364 | |||||||
Computer equipment | 1,104 | 4,019 | 7,610 | ||||||||||
Leasehold improvements | 33 | 2,700 | 4,488 | ||||||||||
Construction in progress | 35 | 1,978 | 126 | ||||||||||
Purchased software | 453 | 913 | 2,829 | ||||||||||
Furniture and fixtures | 65 | 836 | 2,244 | ||||||||||
Other | 21 | 26 | — | ||||||||||
Total property and equipment | 2,069 | 14,660 | 29,661 | ||||||||||
Accumulated depreciation and amortization | (491 | ) | (2,065 | ) | (5,975 | ) | |||||||
Property, equipment and software, net | $ | 1,578 | $ | 12,595 | $ | 23,686 | |||||||
Depreciation and amortization expense on property, equipment and software for the year ended March 31, 2012, the nine months ended December 31, 2012 and year ended December 31, 2013 was $0.2 million, $0.2 million and $1.7 million, respectively. Depreciation and amortization expense on property, equipment and software for the nine months ended September 30, 2014 and September 30, 2013 was $4.1 million and $0.9 million, respectively (unaudited). |
Other_Assets
Other Assets | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Other Assets | ' | ||||||||||||
6. Other Assets | |||||||||||||
Other assets consist of the following (in thousands): | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Receivable from investors | $ | — | $ | 18,116 | $ | 740 | |||||||
Prepaid expenses | 1,538 | 3,546 | 3,777 | ||||||||||
Prepaid compensation | — | — | 2,988 | ||||||||||
Prepaid offering costs | — | — | 2,940 | ||||||||||
Loan servicing assets at fair value | — | 534 | 1,520 | ||||||||||
Tenant improvement receivable | — | 504 | — | ||||||||||
Accounts receivable | 79 | 439 | 2,538 | ||||||||||
Debt issuance costs, net | — | — | 993 | ||||||||||
Deposits | 696 | 193 | 354 | ||||||||||
Other | 53 | 589 | 671 | ||||||||||
Total other assets | $ | 2,366 | $ | 23,921 | $ | 16,521 | |||||||
Springstone_Acquisition_unaudi
Springstone Acquisition (unaudited) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Springstone Acquisition (unaudited) | ' | ||||||||
7. Springstone Acquisition (unaudited) | |||||||||
On April 17, 2014, we acquired all of the outstanding limited liability company interests of Springstone Financial, LLC (Springstone). As a result of the closing of the acquisition, Springstone became our wholly owned subsidiary. | |||||||||
Springstone facilitates education and patient finance loans through a network of providers utilizing two issuing banks. Each of Springstone’s issuing banks originates, holds, and services the loans they issue. Springstone earns fee revenue from providers for facilitating loans to their customers. The acquisition of Springstone expands the services we offer. We have included the financial results of Springstone in the consolidated financial statements from the date of acquisition. | |||||||||
Under the terms of the purchase agreement, the sellers received at the closing an aggregate of $113 million in cash and $25 million worth of shares of our Series F convertible preferred stock. In connection with the acquisition, we also paid $2.4 million for transaction costs incurred by Springstone. For accounting purposes, the purchase price was $111.8 million, which was comprised of $109.0 million in cash and shares of Series F convertible preferred stock with an aggregate value of $2.8 million. To secure the retention of certain key employees, a total of $25.6 million comprised of $22.1 million of shares of Series F convertible preferred stock (Escrow Shares) and $3.5 million of cash were placed in a third-party escrow and are subject to certain vesting and forfeiture conditions applicable to these employees continuing employment over a three-year period from the closing. These amounts will be accounted for as a compensation arrangement and expensed over the three-year vesting period. Additionally, $19.0 million of the cash consideration and certain Escrow Shares were placed in a third-party escrow for 15 months from the closing date to secure, in part, the indemnification obligations of the sellers under the purchase agreement. | |||||||||
The cash portion of the consideration was funded by a combination of cash from us and proceeds from a debt financing and Series F convertible preferred stock financing (see Note 10—Term Loan and Note 12—Stockholders’ Equity). | |||||||||
We have completed the allocation of the purchase price to acquired assets and liabilities with the exception of finalizing the determination of certain contingent liabilities and the finalization of any deferred tax asset or liability as of the acquisition date. The preliminary purchase price allocation as of the acquisition date is as follows (in thousands): | |||||||||
Fair Value | |||||||||
Assets: | |||||||||
Cash | $ | 2,256 | |||||||
Restricted cash | 1,581 | ||||||||
Property, equipment and software | 366 | ||||||||
Other assets | 599 | ||||||||
Identified intangible assets | 40,200 | ||||||||
Goodwill | 72,592 | ||||||||
Liabilities: | |||||||||
Accounts payable | 239 | ||||||||
Accrued expenses and other liabilities | 5,536 | ||||||||
Total purchase consideration | $ | 111,819 | |||||||
The goodwill balance is primarily attributed to the expected operational synergies, the combined workforce and the future development initiative of the combined workforce. Goodwill is expected to be deductible for U.S. income tax purposes. | |||||||||
The amounts of net revenue and earnings (losses) of Springstone included in our consolidated statement of operations from the acquisition date of April 17, 2014 to September 30, 2014 were $10.4 million and $(4.4) million, respectively. We have recognized acquisition-related costs of $2.3 million for the nine months ended September 30, 2014 and have reported this in general and administrative expense. We did not recognize acquisition-related costs for the nine months ended September 30, 2013. | |||||||||
The following pro forma financial information summarizes the combined results of operations for us and Springstone, as though the companies were combined as of January 1, 2013. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have resulted had the acquisition occurred as of January 1, 2013, nor is it indicative of future operating results. The pro forma results presented include interest expense on the debt financing, amortization of acquired intangible assets, compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees and tax expenses (in thousands): | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
(unaudited) | |||||||||
Total net revenue | $ | 148,317 | $ | 75,891 | |||||
Net loss(1) | $ | (21,403 | ) | $ | (15,623 | ) | |||
Basic net loss per share attributable to common stockholders | $ | (0.37 | ) | $ | (0.31 | ) | |||
Diluted net loss per share attributable to common stockholders | $ | (0.37 | ) | $ | (0.31 | ) | |||
-1 | Net loss for the nine months ended September 30, 2013 includes $8.6 million of one-time acquisition-related costs and compensation expenses. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
8. Goodwill and Other Intangible Assets (Unaudited) | |||||||||||||||||
Goodwill | |||||||||||||||||
Goodwill consisted of the following (in thousands): | |||||||||||||||||
Balance at December 31, 2013. | $ | — | |||||||||||||||
Acquisition of Springstone | 72,592 | ||||||||||||||||
Balance at September 30, 2014 | $ | 72,592 | |||||||||||||||
There was no impairment of goodwill during the nine months ended September 30, 2014. During the third quarter of 2014, we recorded an immaterial amount of adjustment to goodwill for the finalization of the net working capital balance and a revenue refund liability as of the acquisition date. | |||||||||||||||||
Intangible Assets | |||||||||||||||||
Intangible assets acquired are as follows as of September 30, 2014 (unaudited) (dollars in thousands): | |||||||||||||||||
Gross | Accumulated | Net | Remaining | ||||||||||||||
Carrying | Amortization | Carrying | Useful | ||||||||||||||
Value | Value | Life | |||||||||||||||
Customer relationships | $ | 39,500 | $ | (2,382 | ) | $ | 37,118 | 13.5 | |||||||||
Technology | 400 | (60 | ) | 340 | 2.5 | ||||||||||||
Brand name | 300 | (68 | ) | 232 | 1.5 | ||||||||||||
Total intangible assets subject to amortization | $ | 40,200 | $ | (2,510 | ) | $ | 37,690 | 13.3 | |||||||||
The customer relationship intangible assets are being amortized on an accelerated basis over a 14 year period. The technology and brand name intangible assets are being amortized straight line over three and two years, respectively. Amortization expense associated with other intangible assets for the nine months ended September 30, 2014 was $2.5 million. | |||||||||||||||||
The expected future amortization expense for intangible assets as of September 30, 2014 is as follows (unaudited) (in thousands): | |||||||||||||||||
Remainder of 2014 | $ | 1,388 | |||||||||||||||
2015 | 5,287 | ||||||||||||||||
2016 | 4,801 | ||||||||||||||||
2017 | 4,287 | ||||||||||||||||
2018 | 3,872 | ||||||||||||||||
Thereafter | 18,055 | ||||||||||||||||
Total | $ | 37,690 | |||||||||||||||
Accrued_Expenses_and_Other_Lia
Accrued Expenses and Other Liabilities | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Accrued Expenses and Other Liabilities | ' | ||||||||||||
9. Accrued Expenses and Other Liabilities | |||||||||||||
Accrued expenses and other liabilities consist of the following (in thousands): | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Accrued compensation | $ | 2,414 | $ | 5,243 | $ | 8,902 | |||||||
Accrued service fees | 952 | 2,057 | 7,128 | ||||||||||
Loan servicing liability at fair value | — | 936 | 3,712 | ||||||||||
Contingent liabilities | — | — | 1,875 | ||||||||||
Deferred rent | — | 653 | 1,045 | ||||||||||
Deferred tax liability | — | — | 1,004 | ||||||||||
Transaction fee refund reserve | — | — | 682 | ||||||||||
Deferred revenue | — | — | 472 | ||||||||||
Early stock option exercise liability | — | — | 450 | ||||||||||
Other accrued expenses | — | 239 | 734 | ||||||||||
Total accrued expenses and other liabilities | $ | 3,366 | $ | 9,128 | $ | 26,004 | |||||||
Term_Loan
Term Loan | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Term Loan | ' | ||||
10. Term Loan (Unaudited) | |||||
In connection with the acquisition of Springstone, we entered into a Credit and Guaranty Agreement with several lenders on April 16, 2014, under which the lenders made a $50.0 million term loan to us. In connection with our entry into the credit agreement, we entered into a Pledge and Security Agreement with Morgan Stanley Senior Funding, Inc. as Collateral Agent. | |||||
The term loan matures on April 16, 2017 and requires principal payments of $312,500 per quarter plus interest, with the remaining then-unpaid principal amount payable at maturity. The term loan can be prepaid at any time without premium or penalty, subject to a minimum prepayment of $1.0 million. The term loan is required to be prepaid in certain circumstances, including upon sales of assets other than loans and upon the issuance of debt or redeemable capital stock. | |||||
Borrowings under the credit agreement bear interest, which at our option may be either (i) a floating base rate tied to an underlying index plus an additional 1.25% per annum or (ii) a Eurocurrency rate (for an interest period of one, two, three or six months) plus an additional 2.25% per annum. If a Eurocurrency rate loan is selected, customary breakage costs are payable in the case of any prepayment on a date other than the last day of an interest period. The weighted-average interest rate on the term loan was 2.65% for the nine months ended September 30, 2014. | |||||
The term loan is also guaranteed by Springstone and LCA and is secured by a first priority lien and security interest in substantially all of our and our subsidiaries’ assets, not otherwise pledged or restricted, subject to certain exceptions. | |||||
The credit agreement and pledge and security agreement contain certain affirmative and negative covenants applicable to us and our subsidiaries. These include restrictions on our ability to make certain restricted payments, including restrictions on our ability to pay dividends, incur additional indebtedness, place liens on assets, merge or consolidate, make investments and enter into certain transactions with our affiliates. The credit agreement also requires us to maintain a maximum total leverage ratio (as defined in the credit agreement) of less than 5.50:1 initially, and decreasing to 3.50:1 after September 30, 2015 (on a consolidated basis). The total leverage ratio as of September 30, 2014 was 2.25:1. | |||||
As of September 30, 2014, the carrying value of the term loan was $49.2 million. At September 30, 2014, the current portion of the term loan was $1.2 million and the noncurrent portion outstanding was $48.0 million. We did not have a term loan outstanding balance at December 31, 2013. | |||||
In connection with the term loan, we capitalized $1.2 million of debt issuance costs. As of September 30, 2014, the net balance of debt issuance costs was $1.0 million. Interest expense on the term loan, including amortization of debt issuance cost, was $0.2 million during the nine months ended September 30, 2014. We did not have interest on the term loan for the nine months ended September 30, 2013. | |||||
Future principal payments on the term loan are payable as follows (unaudited, in thousands): | |||||
Remainder of 2014 | $ | 312 | |||
2015 | 1,250 | ||||
2016 | 1,250 | ||||
2017 | 46,563 | ||||
Total principal payments | $ | 49,375 | |||
Unamortized discounts, net | (156 | ) | |||
Total | $ | 49,219 | |||
RelatedParty_Transactions
Related-Party Transactions | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Related-Party Transactions | ' | ||||||||||||
11. Related-Party Transactions | |||||||||||||
Several of our executive officers and directors (including immediate family members) have opened investor accounts with us, made deposits and withdrawals to their accounts and purchased notes and certificates. All note and certificate purchases made by related parties were transacted on terms and conditions that were not more favorable than those obtained by other investors. | |||||||||||||
The following table summarizes deposits and withdrawals made by related parties whose transactions totaled $120,000 or more for the year ended March 31, 2012, the nine months ended December 31, 2012, the year ended December 31, 2013 and for the nine months ended September 30, 2014. | |||||||||||||
Role | Year Ended | ||||||||||||
31-Mar-12 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
Daniel Ciporin | Director | $ | 209,500 | $ | 158,113 | ||||||||
John J. Mack | Director | 1,700,000 | 199,265 | ||||||||||
Total | $ | 1,909,500 | $ | 357,378 | |||||||||
Role | Nine Months Ended | ||||||||||||
31-Dec-12 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
Daniel Ciporin | Director | $ | 500,000 | $ | 129,698 | ||||||||
Jeffrey Crowe | Director | 150,000 | — | ||||||||||
John J. Mack | Director | 529,540 | 451,617 | ||||||||||
Total | $ | 1,179,540 | $ | 581,315 | |||||||||
Role | Year Ended | ||||||||||||
31-Dec-13 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
Daniel Ciporin | Director | $ | 600,000 | $ | 128,288 | ||||||||
Jeffrey Crowe | Director | 800,000 | 444,227 | ||||||||||
John J. Mack | Director | 405,118 | 617,779 | ||||||||||
Larry Summers | Director | 530,898 | — | ||||||||||
Total | $ | 2,336,016 | $ | 1,190,294 | |||||||||
Role | Nine Months Ended | ||||||||||||
30-Sep-14 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
(unaudited) | |||||||||||||
Daniel Ciporin | Director | $ | 500,000 | $ | 62,855 | ||||||||
John J. Mack | Director | 950,000 | 69,317 | ||||||||||
Larry Summers | Director | 200,000 | — | ||||||||||
Total | $ | 1,650,000 | $ | 132,172 | |||||||||
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Stockholders' Equity | ' | ||||||||||||
12. Stockholders’ Equity | |||||||||||||
Convertible Preferred Stock (in thousands, except share and per share amounts) (September 30, 2014 amounts unaudited) | |||||||||||||
We have shares of preferred stock authorized and outstanding as follows: | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Preferred stock, $0.01 par value; 246,470,064 total shares authorized at December 31, 2012, December 31, 2013 and 250,614,174 total shares authorized at September 30, 2014: | |||||||||||||
Series A convertible preferred stock, 68,025,100 shares designated at December 31, 2012, December 31, 2013 and 67,651,596 shares designated at September 30, 2014; 65,270,988, 66,100,340 and 66,422,077 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $17,371, $17,599 and $17,685 at December 31, 2012, December 31, 2013 and September 30, 2014 | $ | 17,181 | $ | 17,402 | $ | 17,487 | |||||||
Series B convertible preferred stock, 65,642,104 shares designated at December 31, 2012, December 31, 2013 and 65,577,300 shares designated at September 30, 2014; 65,577,300 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $12,268 at December 31, 2012, December 31, 2013 and September 30, 2014 | 12,164 | 12,164 | 12,164 | ||||||||||
Series C convertible preferred stock, 62,486,436 shares designated at December 31, 2012, December 31, 2013 and September 30, 2104; 62,486,436 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $24,490 at December 31, 2012, December 31, 2013 and September 30, 2014 | 24,388 | 24,388 | 24,388 | ||||||||||
Series D convertible preferred stock, 36,030,712 shares designated at December 31, 2012, December 31, 2013 and September 30, 2014; 36,030,712 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $32,044 at December 31, 2012, December 31, 2013 and September 30, 2014 | 31,943 | 31,943 | 31,943 | ||||||||||
Series E convertible preferred stock, 14,285,712 shares designated at December 31, 2012, December 31, 2013 and 10,000,000 shares designated at September 30, 2014; 10,000,000 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $17,500 at December 31, 2012, December 31, 2013 and September 30, 2014 | 17,347 | 17,347 | 17,347 | ||||||||||
Series F convertible preferred stock, 0, 0 and 8,868,130 shares designated at December 31, 2012, December 31, 2013 and September 30, 2014; 0, 0 and 8,834,486 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $0, $0 and $89,858 at December 31, 2012, December 31, 2013 and September 30, 2014 | — | — | 89,661 | ||||||||||
Subtotal | $ | 103,023 | $ | 103,244 | $ | 192,990 | |||||||
Unamortized compensation associated with Series F convertible preferred stock | — | — | (15,690 | ) | |||||||||
Total preferred stock | $ | 103,023 | $ | 103,244 | $ | 177,300 | |||||||
At December 31, 2013 and September 30, 2014, we had 1,635,760 and 1,189,392 shares of Series A convertible preferred stock subject to outstanding warrants and reserved for future issuance, respectively. Warrants to purchase Series A convertible preferred stock are fully exercisable with an exercise price of $0.2663 per share. The warrants expire in 2015 and 2018. | |||||||||||||
In June 2012, we issued 10.0 million shares of Series E convertible at $1.75 per share for aggregate gross cash consideration of $17.5 million. The shares are convertible into shares of our common stock, par value $0.01 per share, initially on a one-for-one basis, as adjusted from time to time pursuant to the anti-dilution provisions of the our certificate of incorporation. The two investors in the Series E convertible preferred stock were KPCB Holdings, Inc., as nominee (KPCB), and John J. Mack, a member of the our board of directors. In conjunction with the Series E financing, our board of directors appointed Mary Meeker, General Partner of KPCB, as a director. In connection with our private placement of Series E convertible preferred stock, we incurred transaction expenses of $0.2 million that were recorded as a reduction to gross proceeds. | |||||||||||||
In connection with the sale of Series E convertible preferred stock in June 2012, we filed an Amended and Restated Certificate of Incorporation with the State of Delaware, which reduced the total number of shares that we were authorized to issue from 632,184,352 shares to 606,470,064 shares, 360,000,000 shares of which were designated as common stock, and 246,470,064 shares of which were designated as preferred stock. Of the total shares of preferred stock, 68,025,100 shares were designated as Series A Preferred Stock, 65,642,104 shares were designated as Series B Preferred Stock, 62,486,436 shares were designated as Series C Preferred Stock, 36,030,712 shares were designated as Series D Preferred Stock and 14,285,712 shares were designated as Series E Preferred Stock. The number of authorized shares of common stock may be increased or decreased (but not below the number of shares of common stock then outstanding) by the affirmative vote of the holders of a majority of our preferred stock and common stock (voting together as a single class on an as-converted to common stock basis). | |||||||||||||
In connection with the Springstone acquisition, we sold an aggregate of 6,390,556 shares of our Series F convertible preferred stock, par value $0.01 per share (Financing Shares) for aggregate gross proceeds of approximately $65.0 million, pursuant to a Series F Preferred Stock Purchase Agreement. We sold the Financing Shares pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended; all investors in the financing were “accredited investors” (as defined under Rule 501 of Regulation D) and we made no general solicitation for the sale of the Financing Shares. The Financing Shares are convertible into shares of common stock, par value $0.01 per share, on a one-for-one basis, as adjusted from time to time pursuant to the anti-dilution provisions of our Restated Certificate of Incorporation. (Unaudited.) | |||||||||||||
In connection with the sale of Series F convertible preferred stock in April 2014, we filed a Restated Certificate of Incorporation with the State of Delaware, which increased the total number of shares that we were authorized to issue from 606,470,064 shares to 622,614,174, 372,000,000 shares of which were designated as common stock and 250,614,174 shares of which were designated as preferred stock. Of the total shares of preferred stock, 67,651,596 shares were designated as Series A Preferred Stock, 65,577,300 shares were designated as Series B Preferred Stock, 62,486,436 shares were designated as Series C Preferred Stock, 36,030,712 shares were designated as Series D Preferred Stock, 10,000,000 shares were designated as Series E Preferred Stock and 8,868,130 were designated as Series F Preferred Stock. (Unaudited.) | |||||||||||||
As part of the Springstone acquisition, the sellers received shares of our Series F convertible preferred stock having an aggregate value of $25 million (Share Consideration). $22.1 million of the Share Consideration is subject to certain vesting and forfeiture conditions over a three-year period for key continuing employees. This is accounted for as a compensation arrangement and expensed over the three-year vesting period. For the nine months ended September 30, 2014, we recognized $6.4 million of compensation expense, which is reported in general and administrative expenses related to this arrangement. (Unaudited.) | |||||||||||||
The outstanding shares of convertible preferred stock are not mandatorily or otherwise redeemable. The sale of all, or substantially all, of our assets, a consolidation or merger with another company, or a transfer of voting control in excess of 50% our voting power are all events that are deemed to be a liquidation and would trigger the payment of liquidation preferences under the preferred stock agreements. All such events require approval of our board of directors. However, in such events all holders of equal or more subordinate equity instruments would also be entitled to also receive the same form of consideration after any liquidation preferences. Therefore, based on the guidance of ASC 480-10-S99, the non-redeemable convertible preferred stock has been classified within stockholders’ equity on the consolidated balance sheet. See further discussion of the revision to the classification of our preferred stock from temporary equity to permanent stockholders’ equity in Note 2—Summary of Significant Accounting Policies—Reclassifications. The significant terms of outstanding Series A, Series B, Series C, Series D, Series E and Series F convertible preferred stock are as follows: | |||||||||||||
Conversion—Each share of convertible preferred stock is convertible, at the option of the holder, initially, into one share of common stock (subject to adjustments for events of dilution). Each share of convertible preferred stock will automatically be converted upon the earlier of: (i) the closing of an underwritten public offering of our common stock with aggregate gross proceeds that are at least $30.0 million; or (ii) the consent of the holders of a 55% majority of outstanding shares of convertible preferred stock, voting together as a single class, on an as-converted to common stock basis. Our preferred stock agreements contain certain anti-dilution provisions, whereby if we issue additional shares of capital stock for an effective price lower than the conversion price for a series of preferred stock immediately prior to such issue, then the existing conversion price of such series of preferred stock will be reduced. We determined that while our convertible preferred stock contains certain anti-dilution features, the conversion feature embedded within its convertible preferred stock does not require bifurcation under the guidance of ASC 815, Derivatives and Hedging Activities. | |||||||||||||
Liquidation preference—Upon any liquidation, winding up or dissolution of us, whether voluntary or involuntary (Liquidation Event), before any distribution or payment shall be made to the holders of any common stock, the holders of convertible preferred stock shall, on a pari passu basis, be entitled to receive by reason of their ownership of such stock, an amount per share of Series A convertible preferred stock equal to $0.2663 (as adjusted for stock splits, recapitalizations and the like) plus all declared and unpaid dividends (Series A Preferred Liquidation Preference), an amount per share of Series B convertible preferred stock equal to $0.1871 (as adjusted for stock splits, recapitalizations and the like) plus all declared and unpaid dividends (Series B Preferred Liquidation Preference), an amount per share of Series C convertible preferred stock equal to $0.3919 (as adjusted for stock splits, recapitalizations and the like), an amount per share of Series D convertible preferred stock equal to $0.8894, an amount per share of Series E convertible preferred stock equal to $1.75 and an amount per share of Series F convertible preferred stock equal to $10.17 (unaudited) (as adjusted for stock splits, recapitalizations and the like). However, if upon any such Liquidation Event, our assets shall be insufficient to make payment in full to all holders of convertible preferred stock of their respective liquidation preferences, then the entire assets of ours legally available for distribution shall be distributed with equal priority between the preferred holders based upon the amounts such series was to receive. Any excess assets, after payment in full of the liquidation preferences to the convertible preferred stockholders, are then allocated to the holders of common and preferred stockholders, pro-rata, on an as-if-converted to common stock basis. | |||||||||||||
Dividends—If and when declared by the Board, the holders of Series A, Series B, Series C, Series D and Series E convertible preferred stock, on a pari passu basis, will be entitled to receive non-cumulative dividends at a rate of 6% per annum in preference to any dividends on common stock (subject to adjustment for certain events). The holders of Series A, Series B, Series C, Series D, Series E and Series F convertible preferred stock are also entitled to receive with common stockholders, on an as-if-converted basis, any additional dividends issued by us. As of December 31, 2013 and September 30, 2014, we have not declared any dividends. | |||||||||||||
Voting rights—Generally, preferred stockholders had one vote for each share of common stock that would have been issuable upon conversion of preferred stock. Voting as a separate class, and on an as-converted to common stock basis, the Series A convertible preferred stockholders were entitled to elect two members of our board of directors and the holders of Series B convertible preferred stockholders were entitled to elect one member of our board of directors. The Series C and Series D convertible preferred stockholders were not entitled to elect any members of our board of directors. The Series E convertible preferred stockholders were entitled to nominate members to our board of directors, and any nominee was subject to the vote of all convertible preferred stockholders. The holders of common stock, voting as a separate class, were entitled to elect one member of our board directors. The remaining directors were elected by the convertible preferred stockholders and common stockholders voting together as a single class on an as-converted to common stock basis. | |||||||||||||
In connection with the filing our Restated Certificate of Incorporation in April 2014, the Series A convertible preferred stockholders, voting together as a separate class on an as-converted to common stock basis, are entitled to elect two members of our board of directors and the holders of Series B convertible preferred stockholders, voting together as a separate class on an as-converted to common stock basis, are entitled to elect one member of our board of directors. The Series C, Series D, Series E and Series F convertible preferred stockholders are not entitled to elect any members of our board of directors. The holders of preferred stock, voting together as a separate class on an as-converted to common stock basis, are entitled to elect one member of our board of directors. The holders of common stock, voting together as a separate class, are entitled to elect one member of our board of directors. The remaining directors are elected by the convertible preferred stockholders and common stockholders voting together as a single class on an as-converted to common stock basis. (Unaudited.) | |||||||||||||
Common Stock | |||||||||||||
We have shares of common stock authorized and reserved for future issuance as follows as of: | |||||||||||||
December 31, 2013 | September 30, 2014 | ||||||||||||
(unaudited) | |||||||||||||
Options to purchase common stock | 43,314,728 | 54,587,814 | |||||||||||
Options available for future issuance | 7,756,492 | 3,359,320 | |||||||||||
Common stock warrants | 780,940 | 625,988 | |||||||||||
Total common stock authorized and reserved for future issuance | 51,852,160 | 58,573,122 | |||||||||||
During the year ended December 31, 2013, we issued 8,931,876 shares of common stock in exchange for proceeds of $1.7 million upon the exercise of employee stock options. During the nine months ended September 30, 2014, we issued 5,638,830 shares of common stock in exchange for proceeds of $3.0 million upon the exercise of employee stock options (unaudited). During the year ended December 31, 2013, we issued 957,876 shares of common stock for proceeds of $0.2 million upon the exercise of warrants to purchase common stock. During the nine months ended September 30, 2014, we issued 295,720 common shares for proceeds of $0.1 million upon the exercise of common stock warrants (unaudited). Common stock warrants are fully exercisable with exercise prices of $0.01 to $0.3919 per share and expire in 2021. |
StockBased_Compensation_and_Ot
Stock-Based Compensation and Other Employee Benefit Plans | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Stock-Based Compensation and Other Employee Benefit Plans | ' | ||||||||||||||||||||
13. Stock-Based Compensation and Other Employee Benefit Plans | |||||||||||||||||||||
Stock Incentive Plan | |||||||||||||||||||||
Under our 2007 Stock Incentive Plan (Option Plan), we may grant options to purchase shares of common stock to employees, executives, directors and consultants at exercise prices not less than the fair market value on the date of grant for incentive stock options and not less than 85% of the fair market value on the date of grant for non-statutory options. As of September 30, 2014 (unaudited), we had reserved 83,954,536 shares of our common stock for issuance under our 2007 Plan, of which 3,359,320 were issued and remained available for future grant. The options granted through September 30, 2014 are stock options that generally expire ten years from the date of grant and generally vest 25% 12 months from the date of grant, and quarterly thereafter, provided the grantee remains continuously employed by us through each vesting date (service-based options); however, our board of directors retains the authority to grant options with different terms. As discussed further below, certain stock options with ten year terms vest immediately upon achievement of specified performance goals provided the grantee remains continuously employed by us through each performance measurement date (performance-based options). As of December 31, 2013 and September 30, 2014 (unaudited), there were no performance-based options outstanding. | |||||||||||||||||||||
For the year ended March 31, 2012, we granted stock options to purchase a total of 14,333,676 shares of common stock with a weighted-average exercise price of $0.18 per share, a weighted-average grant date fair value of $0.11 per share and a total estimated fair value of approximately $1.5 million. Of the total stock option granted, 12,006,348 were service-based stock options and 2,327,328 were performance-based stock options. | |||||||||||||||||||||
For the nine months ended December 31, 2012, we granted stock options to purchase a total of 15,244,944 shares of common stock with a weighted-average exercise price of $0.60 per share, a weighted-average grant date fair value of $0.35 per share and a total estimated fair value of approximately $10.6 million. All of these stock options were service-based stock options. | |||||||||||||||||||||
For the year ended December 31, 2013, we granted stock options to purchase a total of 12,707,000 shares of common stock with a weighted-average exercise price of $2.44 per share, a weighted-average grant date fair value of $2.71 per share and a total estimated fair value of approximately $34.4 million. All of these stock options were service-based stock options. | |||||||||||||||||||||
For the nine months ended September 30, 2014, we granted service-based stock options to purchase 18,511,572 shares of common stock with a weighted-average exercise price of $5.91 per share, a weighted-average grant date fair value of $4.37 per share and a total estimated fair value of approximately $81.0 million (unaudited). | |||||||||||||||||||||
The fair value of the shares of common stock underlying stock options has historically been established by the board of directors primarily based upon a valuation provided by an independent third-party valuation firm. Because there is no public market for our common stock, our board of directors has relied upon this independent valuation and other factors, including, but not limited to, the current status of the technical and commercial success of our operations, our financial condition, the stage of our product design and development, and competition to establish the fair value of our common stock at the time of grant of the option. | |||||||||||||||||||||
We used the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions: | |||||||||||||||||||||
Year Ended | Nine Months Ended | Year Ended | Nine Months Ended | ||||||||||||||||||
March 31, | December 31, | December 31, | September 30, | ||||||||||||||||||
2012 | 2012 | 2013 | 2013 | 2014 | |||||||||||||||||
(unaudited) | |||||||||||||||||||||
Assumed forfeiture rate (annual %) | 8 | % | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||
Expected dividend yield | — | — | — | — | — | ||||||||||||||||
Weighted-average assumed stock price volatility | 63.5 | % | 63.5 | % | 59.1 | % | 63.5 | % | 54 | % | |||||||||||
Weighted-average risk-free rate | 1.15 | % | 1.01 | % | 1.46 | % | 1.1 | % | 1.9 | % | |||||||||||
Weighted-average expected life (years) | 6.26 | 6.28 | 6.3 | 6.25 | 6.38 | ||||||||||||||||
The assumed forfeiture rate is the annual percentage of unvested stock options that are assumed to be forfeited or cancelled due to grantees discontinuing employment with us. Because service-based stock options normally vest over a four year period, the forfeiture assumption is used to estimate the number of stock options that are expected to vest in future periods, which affects the estimate of the forfeiture-adjusted aggregate stock-based compensation expense related to the stock options. The forfeiture assumption was developed considering our actual annual forfeiture rates for unvested stock options over the past four years and analyzing the distribution of unvested stock options held by executive officers, senior managers and other employees as of December 31, 2013 and September 30, 2014 (unaudited). Holding other assumptions constant, a higher forfeiture rate reduces the number of options expected to vest in future periods, which lowers the estimated forfeiture-adjusted aggregate stock-based compensation expense related to any affected stock options. | |||||||||||||||||||||
We have paid no cash dividends and do not anticipate paying any cash dividends in the foreseeable future and, therefore, used an expected dividend yield of 0.0% in our option-pricing model. | |||||||||||||||||||||
The stock price volatility assumption is derived using a set of peer group public companies. For the year ended March 31, 2012 and the nine months ended December 31, 2012, the peer group companies were small- or micro-capitalization companies that conduct business in the consumer finance or investment management sectors. For the year ended December 31, 2013, we updated the set of peer group public companies used to derive the stock price volatility assumption. The new peer group included small-, mid- and large-capitalization companies that conduct business in the consumer finance, investment management and technology sectors. The weighted-average historical stock price volatility of the set of peer companies used in the fiscal year ended December 31, 2013 was substantially the same as the weighted-average historical stock price volatility, measured over the same time periods, as the peer companies used in the nine months ended December 31, 2012 and the year ended December 31, 2012. The change in this option valuation assumption did not have a material impact on the valuation of the stock options granted during the year ended December 31, 2013. | |||||||||||||||||||||
The expected life represents the period of time that stock options are estimated to be outstanding, giving consideration to the contractual terms of the awards, vesting schedules and expectations of future exercise patterns and post-vesting employee termination behavior. Given our limited operating history, the simplified method was applied to calculate the expected term. The risk-free interest rate is based on the U.S. treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. | |||||||||||||||||||||
Options activity under the Option Plan is summarized as follows: | |||||||||||||||||||||
Stock Options Issued | Weighted- | ||||||||||||||||||||
and | Average | ||||||||||||||||||||
Outstanding | Exercise Price | ||||||||||||||||||||
Balances, December 31, 2012 | 41,020,888 | $ | 0.3 | ||||||||||||||||||
Shares subject to options: | |||||||||||||||||||||
Granted | 12,707,000 | $ | 2.44 | ||||||||||||||||||
Exercised | (8,931,876 | ) | $ | 0.19 | |||||||||||||||||
Forfeited or expired | (1,481,284 | ) | $ | 0.48 | |||||||||||||||||
Balances, December 31, 2013 | 43,314,728 | $ | 0.94 | ||||||||||||||||||
Shares subject to options: | |||||||||||||||||||||
Granted (unaudited) | 18,511,572 | $ | 5.91 | ||||||||||||||||||
Exercised (unaudited) | (5,638,830 | ) | $ | 0.53 | |||||||||||||||||
Forfeited or expired (unaudited) | (1,599,656 | ) | $ | 2.41 | |||||||||||||||||
Outstanding at September 30, 2014 (unaudited) | 54,587,814 | $ | 2.63 | ||||||||||||||||||
Options to purchase 8,931,876 shares with a total intrinsic value (fair value less exercise price) of $26.2 million were exercised during the year ended December 31, 2013. Options to purchase 5,638,830 shares (unaudited) of common stock with a total instrinsic value of $40.4 million (unaudited) were exercised during the nine months ended September 30, 2014. We capitalized $1.2 million (unaudited) of stock-based compensation expense associated with the cost of developing software for internal use during the nine months ended September 30, 2014. The total fair value of stock options vested during the nine months ended September 30, 2014 was $14.7 million (unaudited). | |||||||||||||||||||||
A summary of outstanding options, vested options and options vested and expected to vest at December 31, 2013, is as follows: | |||||||||||||||||||||
Shares Subject to | Weighted- | Weighted- | |||||||||||||||||||
Stock Options Issued | Average | Average | |||||||||||||||||||
and | Remaining | Exercise Price | |||||||||||||||||||
Outstanding | Contractual | ||||||||||||||||||||
Life | |||||||||||||||||||||
(Years) | |||||||||||||||||||||
Shares subject to: | |||||||||||||||||||||
Options outstanding | 43,314,728 | 8.07 | $ | 0.94 | |||||||||||||||||
Vested options | 15,502,936 | 6.93 | $ | 0.24 | |||||||||||||||||
Options vested and expected to vest | 41,451,548 | 8.03 | $ | 0.91 | |||||||||||||||||
A summary of outstanding options, vested options and options vested and expected to vest at September 30, 2014, is as follows: | |||||||||||||||||||||
Shares Subject to | Weighted- | Weighted- | |||||||||||||||||||
Stock Options Issued | Average | Average | |||||||||||||||||||
and | Remaining | Exercise Price | |||||||||||||||||||
Outstanding | Contractual | ||||||||||||||||||||
Life | |||||||||||||||||||||
(Years) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Shares subject to: | |||||||||||||||||||||
Options outstanding | 54,587,814 | 8.16 | $ | 2.63 | |||||||||||||||||
Vested options | 20,138,530 | 6.84 | $0.58 | ||||||||||||||||||
Options vested and expected to vest | 51,863,779 | 8.11 | $ | 2.53 | |||||||||||||||||
Stock-Based Compensation Expense | |||||||||||||||||||||
Total stock-based compensation expense recorded for stock options, warrants and Escrow Shares related to the Acquisition is summarized as follows: | |||||||||||||||||||||
Year Ended | Nine Months | Year Ended | Nine Months Ended | ||||||||||||||||||
March 31, | Ended | December 31, | September 30, | ||||||||||||||||||
2012 | December 31, | 2013 | |||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Stock-Based Compensation Expense: | |||||||||||||||||||||
Sales and marketing | $ | 152 | $ | 216 | $ | 1,313 | $ | 767 | $ | 5,029 | |||||||||||
Origination and servicing | 31 | 60 | 424 | 170 | 1,427 | ||||||||||||||||
General and administrative: | |||||||||||||||||||||
Engineering and product development | 95 | 406 | 2,171 | 1,019 | 3,487 | ||||||||||||||||
Other | 382 | 428 | 2,375 | 1,390 | 15,946 | ||||||||||||||||
Total stock-based compensation expense | $ | 660 | $ | 1,110 | $ | 6,283 | $ | 3,346 | $ | 25,889 | |||||||||||
In the nine months ended September 30, 2014, stock-based compensation included $3.0 million of expense for the accelerated vesting of stock options for a terminated employee that was accounted for as a stock option modification (unaudited). | |||||||||||||||||||||
As of December 31, 2013 and September 30, 2014, total unrecognized compensation cost was $35.1 million and $97.8 million (unaudited), and these costs are expected to be recognized over the next 3.4 years and 3.6 years, respectively. | |||||||||||||||||||||
No net income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options. | |||||||||||||||||||||
401(k) Plan | |||||||||||||||||||||
We maintain a 401(k) defined contribution plan that covers substantially all of our employees. Participants may elect to contribute their annual compensation up to the maximum limit allowed by federal tax law. In the second quarter of 2014, we approved an employer 401(k) match of up to 3% of an employee’s eligible compensation with a maximum annual match of $5,000 per employee. Total 401(k) match expense for the nine months ended September 30, 2014 was $0.6 million (unaudited). For the fiscal year 2014 401(k) match, the match will be retroactively applied to employees’ eligible contributions from January 1, 2014. |
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Income Taxes | ' | ||||||||||||||||||||||||
14. Income Taxes | |||||||||||||||||||||||||
For the year ended March 31, 2012 and the nine months ended December 31, 2012, we recorded no benefit for income taxes on the taxable losses due to the full valuation allowance. For the year ended December 31, 2013, we recorded income taxes related to pre-tax income due to the availability of deferred tax assets subject to a full valuation allowance to offset current year income. | |||||||||||||||||||||||||
Our effective tax rate differs from the statutory federal rate for the year ended March 31, 2012, the nine months ended December 31, 2012, and year ended December 31, 2013, as follows (in thousands): | |||||||||||||||||||||||||
Year Ended March 31, | Nine Months Ended | Year Ended | |||||||||||||||||||||||
2012 | December 31, | December 31, | |||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Pretax Income (Loss) | $ | (11,944 | ) | $ | (4,238 | ) | $ | 7,308 | |||||||||||||||||
Tax at federal statutory rate | $ | (4,061 | ) | 34 | % | $ | (1,441 | ) | 34 | % | $ | 2,485 | 34 | % | |||||||||||
State tax, net of federal tax benefit | (855 | ) | 7.16 | % | (151 | ) | 3.56 | % | 563 | 7.7 | % | ||||||||||||||
Share-based compensation expense | 181 | (1.52 | )% | (314 | ) | 7.41 | % | (593 | ) | (8.11 | )% | ||||||||||||||
Tax credits | (140 | ) | 1.17 | % | — | 0 | % | (459 | ) | (6.28 | )% | ||||||||||||||
Change in valuation allowance | 5,409 | (45.28 | )% | 1,934 | (45.63 | )% | (2,534 | ) | (34.67 | )% | |||||||||||||||
Change in unrecognized tax benefit | — | 0 | % | 150 | (3.54 | )% | 518 | 7.09 | % | ||||||||||||||||
Other | (534 | ) | 4.47 | % | (178 | ) | 4.2 | % | 20 | 0.27 | % | ||||||||||||||
$ | — | 0 | % | $ | — | 0 | % | $ | — | 0 | % | ||||||||||||||
The significant components of our deferred tax assets and liabilities at December 31, 2012 and 2013 are as follows (in thousands): | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Deferred tax assets | |||||||||||||||||||||||||
Net operating loss carryforwards | $ | 21,856 | $ | 18,818 | |||||||||||||||||||||
Reserves and accruals | 1,365 | 2,804 | |||||||||||||||||||||||
Organizational and start-up costs | 529 | 516 | |||||||||||||||||||||||
Credits & California incentives | 254 | 216 | |||||||||||||||||||||||
Gross deferred tax asset | 24,004 | 22,354 | |||||||||||||||||||||||
Valuation allowance | (23,939 | ) | (22,338 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 65 | $ | 16 | |||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||
Depreciation and amortization | $ | (65 | ) | $ | (16 | ) | |||||||||||||||||||
Net deferred tax liability | $ | (65 | ) | $ | (16 | ) | |||||||||||||||||||
Our management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2013, a full valuation allowance of $22.3 million has been recorded to recognize only deferred tax assets that are more likely than not to be realized. | |||||||||||||||||||||||||
At December 31, 2013, we had federal and state net operating loss (NOL) carry-forwards of approximately $43.9 million and $40.7 million, respectively, to offset future taxable income. Our federal and state net operating loss carry-forwards will begin expiring in 2027 and 2016, respectively. Additionally, at December 31, 2013, we had federal and state research and development (R&D) tax credit carry-forwards of approximately $0.6 million and $0.5 million, respectively. The federal credit carry-forwards will begin expiring in 2016 and the state credits may be carried forward indefinitely. | |||||||||||||||||||||||||
In general, a corporation’s ability to utilize its NOL and R&D carry-forwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carry-forwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the capital (as defined) of a company by certain stockholders or public groups. | |||||||||||||||||||||||||
The following is a reconciliation of our unrecognized tax benefits (in thousands): | |||||||||||||||||||||||||
Nine Months Ended | Year Ended | ||||||||||||||||||||||||
December 31, 2012 | December 31, 2013 | ||||||||||||||||||||||||
Balance as of the beginning of the calendar/fiscal year | $ | 240 | $ | 367 | |||||||||||||||||||||
Additions for tax positions related to the prior year | — | 523 | |||||||||||||||||||||||
Additions for tax positions related to the current year | 127 | 190 | |||||||||||||||||||||||
Balance as of the end of the calendar/fiscal year | $ | 367 | $ | 1,080 | |||||||||||||||||||||
If the cumulative unrecognized tax benefit is recognized, there will be no effect on our effective tax rate due to the full valuation allowance. | |||||||||||||||||||||||||
Due to the nature of the unrecognized tax benefits and the existence of tax attributes, we have not accrued any interest or penalties associated with unrecognized tax benefits in the consolidated statement of operations nor have we recognized a liability in the consolidated balance sheet. | |||||||||||||||||||||||||
We do not believe the total amount of unrecognized benefit as of December 31, 2013 will increase or decrease significantly in the next 12 months. | |||||||||||||||||||||||||
We file income tax returns in the United States and various state jurisdictions. As of December 31, 2013, our federal tax returns for 2009 and earlier and our state tax returns for 2008 and earlier were no longer subject to examination by the taxing authorities. However, our tax attribute carry-forwards from closed tax years may be subject to examination to the extent utilized in an open tax year. | |||||||||||||||||||||||||
For the nine months ended September 30, 2014, we recorded $1.1 million for income tax expense. The $1.1 million of income tax expense relates to the amortization of tax deductible goodwill from the acquisition of Springstone, which gives rise to an indefinite-lived deferred tax liability. There was no income tax benefit recorded on the pre-tax loss due to an increase in deferred tax asset valuation allowance. We recorded no income taxes for the nine months ended September 30, 2013. (Unaudited.) |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments Not Measured at Fair Value on a Recurring Basis in the Balance Sheet | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value of Financial Instruments Not Measured at Fair Value on a Recurring Basis in the Balance Sheet | ' |
15. Fair Value of Financial Instruments Not Measured at Fair Value on a Recurring Basis in the Balance Sheet | |
Following are descriptions of the valuation methodologies used for estimating the fair values of financial instruments not recorded at fair value on a recurring basis in the balance sheet; these financial instruments are carried at historical cost or amortized cost in the balance sheets. | |
Short-term financial assets: Short-term financial assets include cash and cash equivalents, restricted cash, and accrued interest. These assets are carried at historical cost. The carrying amount approximates fair value due to the short term nature of the financial instruments. | |
Short-term financial liabilities: Short-term financial liabilities include accounts payable, accrued interest payable, and payables to investors. These liabilities are carried at historical cost. The carrying amount approximates fair value due to the short term nature of the financial instruments. | |
Term loan: Based on the frequent interest reset feature of the term loan, we consider the carrying value of the term loan to be approximately its fair value as of September 30, 2014. (Unaudited.) |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies | ' | ||||
16. Commitments and Contingencies | |||||
Commitments | |||||
Operating Leases | |||||
Corporate Headquarters. We have several lease agreements for space at 71 Stevenson Street in San Francisco, California, where our corporate headquarters is located. These leases commenced in April 2011, September 2012, June 2013, December 2013 and August 2014. These leases expire June 30, 2022 with a renewal option that would extend the lease for five years. On October 1, 2014, we entered into a single master lease agreement for our corporate headquarters that superseded all other existing lease agreements for the space. Under this lease agreement, we generally have an option to extend the leases for five years. | |||||
Other Real Estate. In December 2012, we renewed the lease for a New York City office for a one year term that expires on January 31, 2014. We also have an operating lease agreement for space in Westborough, Massachusetts where Springstone is headquartered. On September 15, 2014, we amended our lease agreement to lease additional office space. This lease expires in January 31, 2020 with a renewal option that would extend the lease for five years. | |||||
Total facilities rental expense for the nine months ended September 30, 2014 was $2.5 million. Total facilities rental expense for the nine months ended September 30, 2013 was $1.3 million. We did not have any sublease rental expense for the nine months ended September 30, 2014. Sublease rental expense for the nine months ended September 30, 2013 was $0.4 million. Minimum rental expense for the nine months ended September 30, 2014 and September 30, 2013 were $2.2 million and $1.1 million, respectively. (Unaudited.) | |||||
Total facilities rental expense for the year ended March 31, 2012, the nine month period ended December 31, 2012, and the year ended December 31, 2013 was $0.5 million, $0.6 million, and $1.9 million, respectively. Sublease rental expense for the year ended March 31, 2012, the nine month period ended December 31, 2012, and the year ended December 31, 2013 was $0.4 million, $0.5 million, and $0.6 million, respectively. Minimum rental expense for the year ended March 31, 2012, the nine month period ended December 31, 2012, and the year ended December 31, 2013 was $0.1 million, $0.1 million, and $1.3 million, respectively. As part of these lease agreements, we currently have pledged $0.2 million of cash and arranged for $0.2 million letter of credit as security deposits. | |||||
At December 31, 2013, the future minimum lease payments payable under the contracts for leased premises is as follows (in thousands): | |||||
Year-Ended December 31, | Future Minimum | ||||
Lease Payments | |||||
2014 | $ | 2,748 | |||
2015 | 3,293 | ||||
2016 | 3,379 | ||||
2017 | 3,598 | ||||
2018 | 3,808 | ||||
Thereafter | 1,925 | ||||
Total | $ | 18,751 | |||
Contingencies | |||||
Loan Funding Commitments | |||||
For loans listed on the platform as a result of direct marketing efforts, we have committed to invest in such loans if investors do not provide funding for all or a portion of such loans. At September 30, 2014, there were 722 such loans on the platform with an unfunded balance of $9.0 million. All of these loans were fully funded by investors by October 8, 2014 (unaudited). | |||||
In connection with transitional activities related to the acquisition of Springstone, in June 2014, we entered into a contingent loan purchase agreement with an issuing bank that originates loans facilitated by Springstone and a third-party investor that has agreed to purchase certain of those loans from such bank. The contingent loan purchase commitment provides that we will purchase such loans from the bank if the third-party investor defaults on its loan purchase obligations to the bank through December 31, 2014. The contingent loan purchase commitment limits the aggregate amount of such loan originations from inception of the contingent loan purchase commitment through December 31, 2014 to a maximum of $5.0 million. As of September 30, 2014, the amount remaining under the overall limit on the cumulative amount of such loan originations through December 31, 2014 was $2.2 million. We were not required to purchase any such loans pursuant to the contingent loan purchase commitment during the quarter ended September 30, 2014. We do not expect we will be required to purchase any such loans under the contingent loan purchase commitment through its expiration on December 31, 2014. (Unaudited.) | |||||
Credit Support Agreement | |||||
We are subject to a credit support agreement with a certificate investor. The credit support agreement requires us to pledge and restrict cash in support of its contingent obligation to reimburse the investor for credit losses on loans underlying the investor’s certificate that are in excess of a specified aggregate loss threshold. We are contingently obligated to pledge cash, not to exceed $5.0 million, to support this contingent obligation and which cash balance is premised upon the investor’s certificate purchase volume. As of December 31, 2012 and December 31, 2013, approximately $2.3 million and $3.4 million, respectively, was pledged and restricted to support this contingent obligation. As of September 30, 2014, approximately $3.4 million was pledged and restricted to support this contingent obligation (unaudited). | |||||
As of December 31, 2012 and December 31, 2013 and as of September 30, 2014 (unaudited), the credit losses pertaining to the investor’s certificate have not exceeded the specified threshold, nor are future credit losses expected to exceed the specified threshold, and thus no expense or liability has been recorded. We currently do not anticipate recording losses resulting from our contingent obligation under this credit support agreement. If losses related to the credit support agreement are later determined to be likely to occur and are estimable, our results of operations could be affected in the period in which such losses are recorded. | |||||
Legal (2014 amounts unaudited) | |||||
In the second quarter of 2014, we offered to settle a dispute with a consultant that previously performed work for us. The dispute arose over how much compensation for the work performed was to be provided in cash and in equity and as to equity what valuations were to be used. In the third quarter of 2014, we amended our offer to the claimant for 120,000 shares of our common stock and cash consideration of $215,000. Subsequent to September 30, 2014, this offer was further amended to 80,000 shares of our common stock, an option to purchase 40,000 shares of our common stock, and cash consideration of $215,000. | |||||
During the second quarter of 2014, we also received notice from the California Employment Development Department (“EDD”) that it had commenced an examination of our records concerning the employment relationship of certain individuals who performed services for us from 2011 through 2014. Based on the EDD’s determination, certain of these individuals should have been classified as employees with appropriate tax withholding and employer related taxes incurred and paid. The EDD has completed its examination and issued a Final Notice of Assessment, which serves as the EDD’s official notice of its determination relating to this matter. We intend to pay the assessment during the fourth quarter of 2014 and have recorded a liability for this payment as of September 30, 2014. | |||||
Additionally, during the third quarter, we settled a claim, which arose in a prior quarter by a former employee who had asserted a claim of wrongful termination. | |||||
In connection with these matters, we recorded an additional net charge to operations of $0.2 million during the third quarter of 2014. As of September 30, 2014, the accrued liability for these matters was $1.9 million. This aggregate amount represents the probable estimate of tax and settlement liabilities. As settlements have been agreed upon, for the matters indicated above, during the quarter or subsequent to the quarter-end, we do not believe the ultimate liability for such matters will be significantly different from the accrued aggregate liability at September 30, 2014. | |||||
We received a Civil Investigative Demand from the Consumer Financial Protection Bureau (“CFPB”) dated June 5, 2014 related to the operations of Springstone. The purpose of the investigation is to determine whether Springstone is engaging in unlawful acts or practices in connection with the marketing, issuance, and servicing of loans for healthcare related financing. As of September 30, 2014, we had provided all of the documents requested by the CFPB. We are continuing to evaluate this matter. As of September 30, 2014, there are no probable or estimable losses related to this matter. | |||||
In addition to the foregoing, we may be subject to legal proceedings and regulatory actions in the ordinary course of business. We do not anticipate that the ultimate liability, if any, arising out of any such matter will have a material effect on our financial condition, results of operations or cash flows. |
Segment_Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2014 | |
Segment Reporting | ' |
17. Segment Reporting | |
We report segment information using the “management approach.” Under this approach, operating segments are identified in substantially the same manner as they are reported internally and used by us for purposes of evaluating performance and allocating resources. Based on this approach, we have one reportable segment. Our management reporting process is based on our internal operating structure, which is subject to change and is not necessarily similar to that of other comparable companies. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events | ' |
18. Subsequent Events (Unaudited) | |
On October 17, 2014, we entered into a lease agreement to lease additional office space at our corporate headquarters. The lease agreement commences in the fourth quarter of 2014 with a lease term of 4.5 years and an option to extend the leases for five years. The annual lease payments for this additional lease are approximately $1.2 million. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Change in Fiscal Year | ' | ||||
Change in Fiscal Year | |||||
On December 19, 2012, our board of directors approved a change in our fiscal year-end from March 31 to December 31. The change was effective as of December 31, 2012. | |||||
Revenue Recognition | ' | ||||
Revenue Recognition | |||||
Revenue primarily results from fees earned. Fees include loan transaction fees paid by issuing banks and service providers, servicing fees paid by investors and management fees paid by certain certificate holders. We also have other smaller sources of revenue reported as other revenue. | |||||
Transaction Fees | |||||
Transaction fees are paid by the issuing banks to us for the work we perform through our platform in facilitating originations. The amount of these fees is based upon the terms of the loan, including grade, rate, term and other factors. As of March 31, 2012, December 31, 2012 and December 31, 2013, these fees ranged from 1.11% to 5.00% and, as of September 30, 2014, ranged from 1.00% to 6.00% of the initial principal amount of a loan. In addition, with our acquisition of Springstone, transaction fees include fees earned from issuing banks and service providers for education and patient finance loans. Where applicable, the transaction fees are included in the annual percentage rate calculation provided to the borrower and is subtracted from the gross loan proceeds prior to disbursement of the loan funds to the borrower. A loan is considered issued when we record the transfer of funds to the borrower’s account on our platform and we initiate an ACH transaction to transfer funds from our platform’s correspondent bank account to the borrower’s bank account. | |||||
Servicing Fees | |||||
Investors typically pay us a servicing fee on each payment received from a borrower or on the investors’ month-end principal balance of loans serviced. The servicing fee compensates us for the costs we incur in servicing the related loan, including managing payments from borrowers, payments to investors and maintaining investors’ account portfolios. We record servicing fees paid by note holders and certain certificate holders as a component of operating revenue when received. Servicing fees can be, and have been, modified or waived at management’s discretion. | |||||
Management Fees | |||||
Accredited investors and qualified purchasers can invest in limited partner interests in funds managed by LCA, a registered investment advisor and our wholly-owned subsidiary. LCA acts as the general partner for six private funds (Funds) in which it has made no capital contributions and does not receive any allocation of the Funds’ income, expenses, gains, losses or any carried interest. Each Fund invests in a certificate pursuant to a set investment strategy. LCA charges limited partners in the Funds a management fee payable monthly in arrears, based on a limited partner’s capital account balance at month end. | |||||
LCA also earns management fees on separately managed accounts (SMA), payable monthly in arrears, based on the month-end balances in the SMA accounts. | |||||
Management fees are a component of operating revenue in the consolidated statements of operations and are recorded as earned. Management fees can be, and have been, modified or waived at the discretion of LCA. | |||||
Other Revenue | |||||
Other revenue consists primarily of revenue from gains and losses on sales of whole loans. | |||||
Fair Valuation Adjustments of Loans at Fair Value and Notes and Certificates at Fair Value | ' | ||||
Fair Valuation Adjustments of Loans at Fair Value and Notes and Certificates at Fair Value | |||||
We include in earnings the estimated unrealized fair value gains or losses during the period on loans, and the offsetting estimated unrealized fair value gains or losses on related notes and certificates. At each reporting period, we recognize fair valuation adjustments for the loans and the related notes and certificates. The fair valuation adjustment for a given principal amount of a loan will be approximately equal to the corresponding estimated fair valuation adjustment on the combined principal amounts of related notes and certificates because the same net cash flows of the loans and the related notes and/or certificates are used in the discounted cash flow valuation calculations. | |||||
Whole Loan Sales | ' | ||||
Whole Loan Sales | |||||
From January 1, 2013 through June 30, 2013, transaction fees and direct loan origination and acquisition costs for loans that were subsequently sold to unrelated third-party purchasers and met the accounting requirements for a sale of loans were deferred and included in the overall net investment in the loans purchased. Accordingly, the transaction fees for such loans were not included in transaction fee revenue and the direct loan origination costs for such loans were not included in operating expenses. A gain or loss on the whole loan sales was recorded on the sale date. | |||||
Effective July 1, 2013, we elected the fair value option for whole loans acquired and subsequently sold to unrelated third-party purchasers. Under this election, all transaction fees and all direct costs incurred in the origination process are recognized in earnings as earned or incurred and are not deferred. Beginning July 1, 2013, transaction fees for whole loans sold to unrelated third-party purchasers are included in “Transaction Fees” and direct loan origination costs are included in “Origination and Servicing” operating expense on the consolidated statement of operations. Gains and losses from whole loan sales are recorded in “Other Revenue” in the consolidated statements of operations. | |||||
As part of the sale agreements, we retained the rights to service these sold whole loans. We calculate a gain or loss on the whole loan sale with servicing retained based on the net proceeds from the whole loan sale, minus the net investment in the loans being sold. The net investment in the loans sold has been reduced or increased by the recording of any applicable net servicing asset or liability respectively. Gains on whole loan sales were previously reported in “Gain from Sales of Loan” and have been reclassified to “Other Revenue” in the consolidated statement of operations. | |||||
Additionally, as needed, we will record a liability for significant estimated post-sale obligations or contingent obligations to the purchasers of the loans. No such liability was recorded at December 31, 2012, December 31, 2013 or September 30, 2014. | |||||
Servicing Asset/Liability | ' | ||||
Servicing Assets and Liabilities at Fair Value | |||||
We record servicing assets and liabilities at their estimated fair values when we sell whole loans to unrelated third-party or whole loan buyers or when the servicing contract commences. The gain or loss on a loan sale is recorded in “Other Revenue” while the component of the gain or loss that is based on the degree to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee is recorded as an offset in servicing assets or liabilities. Servicing assets and liabilities are recorded in “Other Assets” and “Accrued Expenses and Other Liabilities,” respectively, on the consolidated balance sheets. Over the life of the loan, changes in the estimated fair value of servicing assets and liabilities are reported in “Servicing Fees” on the consolidated statement of operations in the period in which the changes occur. | |||||
We use a discounted cash flow model to estimate the fair value of the loan servicing asset or liability which considers the contractual servicing fee revenue we earn on the loans, estimated market rate servicing fee to service such loans, the current principal balances of the loans and projected servicing revenues over the remaining terms of the loans. | |||||
Cash and Cash Equivalents | ' | ||||
Cash and Cash Equivalents | |||||
Cash and cash equivalents include unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts. We consider all highly liquid investments with stated maturity dates of three months or less from the date of purchase to be cash equivalents. | |||||
Restricted Cash | ' | ||||
Restricted Cash | |||||
Restricted cash consists primarily of our funds in certain checking, money market and certificate of deposit accounts that are: (i) pledged to or held in escrow by our correspondent banks as security for transactions processed on or related to our platform; (ii) pledged through a credit support agreement with a certificate holder or (iii) received from investors but not yet applied to their accounts on the platform and transferred to segregated bank accounts that hold investors’ funds. | |||||
Loans at Fair Value and Notes and Certificates at Fair Value | ' | ||||
Loans at Fair Value and Notes and Certificates at Fair Value | |||||
We use fair value measurements to record loans, notes and certificates at fair value on a recurring basis and in our fair value disclosures. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Changes in the fair value of the loans and notes and certificates are recognized, on a gross basis, in earnings. | |||||
We determine the fair value of the loans, notes and certificates in accordance with the fair value hierarchy that requires an entity to maximize the use of observable inputs. The fair value hierarchy includes the following three levels based on the objectivity of the inputs, which were used for categorizing the assets or liabilities for which fair value is being measured and reported: | |||||
Level 1 | — | Quoted market prices in active markets for identical assets or liabilities. | |||
Level 2 | — | Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). | |||
Level 3 | — | Valuation generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted | |||
cash flow methodologies or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. The fair value election for loans, notes and certificates allows for symmetrical accounting of the timing and amounts recognized for both expected unrealized losses and charge-offs on the loans and the related notes and certificates, consistent with the member payment dependent design of the notes and certificates. | |||||
Our and the Trust’s obligation to pay principal and interest on any note or certificate is equal to the pro-rata portion of the payments, if any, received on the related loan subject to applicable fees. The gross effective interest rate associated with notes or certificates is the same as the interest rate earned on the underlying loan. The discounted cash flow methodology used to estimate the notes’ and certificates’ fair values uses the same projected net cash flows as their related loan. The discount rates for the projected net cash flows of the notes and certificates are our estimates of the rates of return, including risk premiums (if significant) that investors in unsecured consumer credit obligations would require when investing in notes issued pursuant to a shelf registration statement and certificates issued by the Trust with cash flows dependent on specific credit grades of loans. | |||||
For additional discussion on this topic, including the adjustments to the estimated fair values of loans, notes and certificates, as discussed above, see “Note 4—Fair Value of Financial Instruments Measured at Fair Value.” | |||||
Accrued Interest and Other Receivables | ' | ||||
Accrued Interest and Other Receivables | |||||
Interest income on loans is calculated based on the contractual interest rate of the loan and recorded as interest income as earned. Loans reaching 120 days delinquent are classified as non-accrual loans, and we stop accruing interest and reverse all accrued but unpaid interest as of such date. | |||||
Property, Equipment and Software, Net | ' | ||||
Property, Equipment and Software, Net | |||||
Property, equipment and software consists of computer equipment and software, office furniture and equipment, construction in progress, leasehold improvements and internal use software and website development costs which are recorded at cost, less accumulated depreciation and amortization. | |||||
Computer equipment and software and furniture and fixtures are depreciated or amortized on a straight line basis over two to five years. Costs associated with construction projects are transferred to the leasehold improvement account upon project completion. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life. | |||||
Internal use software and website development costs are capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Internal use software and website development costs are amortized on a straight line basis over the project’s estimated useful life, generally three years. Capitalized internal use software development costs consist of salaries and payroll related costs for employees and fees paid to third-party consultants who are directly involved in development efforts. Costs related to preliminary project activities and post implementation activities including training and maintenance are expensed as incurred. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. We evaluate potential impairments of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events or changes in circumstances that could result in impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our overall business and significant negative industry or economic trends. Determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. For the year ended December 31, 2013, the nine months ended December 31, 2012 the year ended March 31, 2012 and for the nine months ended September 30, 2014, there was no impairment of long-lived assets. | |||||
Consolidation Policies | ' | ||||
Consolidation Policies | |||||
Our policy is to consolidate the financial statements of entities in which we have a controlling financial interest. We determine whether we have a controlling financial interest in an entity by evaluating whether the entity is a voting interest entity or variable interest entity (VIE) and if the accounting guidance requires consolidation. | |||||
Voting interest entities are entities that have sufficient equity and provide the equity investors voting rights that enable them to make significant decisions relating to the entities’ operations. For these types of entities, our determination of whether we have a controlling financial interest is based on ownership of a majority of the entities’ voting equity interest or through control of management of the entities. | |||||
VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. We determine whether we have a controlling financial interest in a VIE by considering whether our involvement with the VIE is significant and whether we are the primary beneficiary of the VIE based on the following: | |||||
• | we have the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; | ||||
• | the aggregate indirect and direct variable interests held by us have the obligation to absorb losses or the right to receive benefits from the entity that could be significant to the VIE; and | ||||
• | qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE. | ||||
We believe our beneficial ownership of a controlling financial interest in the Trust has qualified and continues to qualify as an equity investment in a VIE that should be consolidated for financial accounting and reporting purposes. We perform on-going reassessments on the status of the entities and whether facts or circumstances have changed in relation to our involvement in VIEs which could cause our conclusion to change. | |||||
All intercompany transactions and balances have been eliminated. | |||||
Business Combination (Unaudited) | ' | ||||
Business Combination (Unaudited) | |||||
We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Our estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustments to our preliminary estimates to goodwill provided that we are within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. | |||||
Goodwill and Intangible Assets | ' | ||||
Goodwill and Intangible Assets (Unaudited) | |||||
Goodwill represents the fair value of acquired businesses in excess of the aggregate fair value of the identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Our annual impairment testing date is April 1. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit (defined as business for which financial information is available and reviewed regularly by management) exceeds its carrying value. A qualitative assessment may consider macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital or company-specific factors, such as market capitalization in excess of net assets, trends in revenue generating activities and merger or acquisition activity. | |||||
If we elect to bypass qualitatively assessing goodwill or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, we estimate the fair values of our reporting units and compare them to their carrying values. The estimated fair values of the reporting units are generally established using an income approach based on a discounted cash flow model or a market approach which compares each reporting unit to comparable companies in their respective industries. | |||||
Intangible assets are amortized over their useful lives in a manner that best reflects their economic benefit. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We do not have any indefinite-lived intangible assets. | |||||
Due from Related Parties | ' | ||||
Due from Related Parties | |||||
Due from related parties represents asset management fees due to LCA from investors in the Funds. | |||||
Payable to Investors | ' | ||||
Payable to Investors | |||||
Payable to investors primarily represents payments-in-process received from investors and payments on notes, certificates and loan payments that, as of the last day of the period, have not been credited to investors’ accounts on the platform or transferred to the investors’ separate bank accounts. | |||||
Sales and Marketing Expense | ' | ||||
Sales and Marketing Expense | |||||
Sales and marketing costs, including borrower and investor acquisition costs, are expensed as incurred and included in “Sales and Marketing” on the consolidated statement of operations. | |||||
Stock-Based Compensation | ' | ||||
Stock-Based Compensation | |||||
All stock-based awards made to employees are recognized in the consolidated financial statements based on their respective grant date fair values. Any benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash inflow and cash outflow from operating activities. The stock-based compensation related to awards that are expected to vest is amortized using the straight-line method over the award’s vesting term, which is generally four years. | |||||
The fair value of share-option awards is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model considers, among other factors, the underlying fair value of common stock, the expected term of the option award, expected volatility of our common stock and expected future dividends, if any. | |||||
Forfeitures of awards are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates or if future forfeitures are expected to differ from recent actual or previously expected forfeitures. Stock-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those stock-based awards that are expected to vest. | |||||
Share option awards issued to non-employees are recorded at their fair value on the awards’ vesting date. We use the Black-Scholes option pricing model to estimate the fair value of share options granted to non-employees at each vesting date to determine the appropriate charge to stock-based compensation. | |||||
Income Taxes | ' | ||||
Income Taxes | |||||
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||
We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. | |||||
We account for uncertain tax positions using a two-step process whereby (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. | |||||
We recognize interest and penalties accrued on any unrecognized tax benefits as a component of provision for income tax in the consolidated statement of operations. | |||||
Use of Estimates | ' | ||||
Use of Estimates | |||||
The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. These judgments, assumptions and estimates include but are not limited to the following: (i) fair value determinations for loans, notes and certificates; (ii) stock-based compensation expense; (iii) provision for income taxes, net of valuation allowance for deferred tax assets; (iv) consolidation of variable interest entities; and (v) fair value determinations for servicing assets and liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. | |||||
Concentrations of Credit Risk | ' | ||||
Concentrations of Credit Risk | |||||
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, loans financed directly by us and the related accrued interest receivable, and deposits with service providers. We hold our cash and cash equivalents and restricted cash in accounts at regulated domestic financial institutions. We are exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds the FDIC insured amounts. | |||||
Impact of New Accounting Standards | ' | ||||
Impact of New Accounting Standards (Unaudited) | |||||
In May, 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board issued Accounting Standards Update (ASU) 2014-09 “Revenue from Contracts with Customers” which provides a single comprehensive revenue recognition model for all contracts with customers. The standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. This ASU is effective for annual reporting periods beginning after December 15, 2016 for public entities. Early adoption is not permitted. We are currently evaluating the impact of the new update on our consolidated financial statements. | |||||
In August, 2014, FASB issued ASU 2014-13 “Consolidation (Topic 810)—Measuring the Financial Assets and The Financial Liabilities of a Consolidated Collateralized Financing Entity” to amend the existing standards. This ASU provides an alternative to current fair value measurement guidance to an entity that consolidates a collateralized financing entity (CFE) that has elected the fair value option for the financial assets and financial liabilities. If elected, the entity could measure both the financial assets and the financial liabilities of the CFE by using the fair value of the financial assets or financial liabilities, whichever is more observable. The election would effectively eliminate any measurement difference previously reflected in earnings and attributed to the reporting entity in the consolidated statements of operations. The guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period. We are currently evaluating the impact of the new update on our consolidated financial statements. |
Net_Income_Loss_Per_Share_and_1
Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Basic and Diluted Net Income (Loss) per Share | ' | ||||||||||||||||||||
The following table details the computation of the basic and diluted net income (loss) per share (dollars in thousands, except shares and per share data): | |||||||||||||||||||||
Year Ended | Nine Months | Year Ended | Nine Months | ||||||||||||||||||
March 31, | Ended | December 31, | Ended September 30, | ||||||||||||||||||
2012 | December 31, | 2013 | |||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Net income (loss) | $ | (11,944 | ) | $ | (4,238 | ) | $ | 7,308 | $ | 4,450 | $ | (23,857 | ) | ||||||||
Less: Net income allocated to participating securities (1) | — | — | (7,117 | ) | (4,450 | ) | — | ||||||||||||||
Net income (loss) available to common shareholders after required adjustments for the calculation of basic and diluted net income per common share | $ | (11,944 | ) | $ | (4,238 | ) | $ | 191 | $ | — | $ | (23,857 | ) | ||||||||
Basic weighted-average common shares outstanding | 35,125,628 | 41,359,676 | 51,557,136 | 50,457,948 | 57,958,838 | ||||||||||||||||
Weighted-average effect of dilutive securities: | |||||||||||||||||||||
Stock Options | — | — | 28,542,404 | 27,170,816 | — | ||||||||||||||||
Warrants | — | — | 1,327,436 | 1,525,148 | — | ||||||||||||||||
Diluted weighted-average common shares outstanding | 35,125,628 | 41,359,676 | 81,426,976 | 79,153,912 | 57,958,838 | ||||||||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic | $ | (0.34 | ) | $ | (0.10 | ) | $ | 0 | $ | — | $ | (0.41 | ) | ||||||||
Diluted | $ | (0.34 | ) | $ | (0.10 | ) | $ | 0 | $ | — | $ | (0.41 | ) | ||||||||
-1 | In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities. | ||||||||||||||||||||
Pro Forma | ' | ||||||||||||||||||||
Basic and Diluted Net Income (Loss) per Share | ' | ||||||||||||||||||||
The unaudited basic and diluted pro forma per common share calculations are presented below (in thousands except share and per share amounts): | |||||||||||||||||||||
Year Ended | Nine Months | ||||||||||||||||||||
December 31, | Ended | ||||||||||||||||||||
2013 | September 30, | ||||||||||||||||||||
2014 | |||||||||||||||||||||
Net income (loss) available to common stockholders, as reported | $ | 7,308 | $ | (23,857 | ) | ||||||||||||||||
Weighted-average shares used to compute net income (loss) per share available to common stockholders, basic | 51,557,136 | 57,958,838 | |||||||||||||||||||
Pro forma adjustments to reflect conversion of convertible preferred stock | 239,822,864 | 245,622,114 | |||||||||||||||||||
Pro forma adjustments to reflect conversion of convertible preferred stock warrants and certain common stock warrants(1) | 386,192 | 27,848 | |||||||||||||||||||
Weighted-average shares to compute pro forma net income (loss) per share available to common stockholders, basic | 291,766,192 | 303,608,800 | |||||||||||||||||||
Dilutive effect of stock options | 28,542,404 | — | |||||||||||||||||||
Dilutive effect of warrants | 3,022,954 | — | |||||||||||||||||||
Weighted-average shares to compute pro forma net income (loss) per share available to common stockholders, diluted | 323,331,550 | 303,608,800 | |||||||||||||||||||
Proforma net income (loss) per common share: | |||||||||||||||||||||
Basic | $ | 0.03 | $ | (0.08 | ) | ||||||||||||||||
Diluted | $ | 0.02 | $ | (0.08 | ) | ||||||||||||||||
-1 | Assumes the automatic conversion and exercise of warrants to purchase a maximum of 331,616 shares of Series A convertible preferred stock and automatic exercise of warrants to purchase a maximum of 54,576 shares of common stock for the year ended December 31, 2013. Assumes the automatic exercise of warrants to purchase a maximum of 27,848 shares of common stock for the nine months ended September 30, 2014. Upon the completion of our initial public offering, these warrants will automatically be net exercised for common stock, resulting in the issuance of fewer shares. |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments Measured at Fair Value (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Loans, Notes and Certificates Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||||||||||
At December 31, 2012, December 31, 2013, and September 30, 2014, loans, notes and certificates measured at fair value on a recurring basis were (in thousands): | |||||||||||||||||||||||||
Loans at Fair Value | Notes and Certificates at Fair Value | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | September 30, | ||||||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||
Aggregate principal balance outstanding | $ | 791,774 | $ | 1,849,042 | $ | 2,566,477 | $ | 795,842 | $ | 1,859,982 | $ | 2,584,441 | |||||||||||||
Fair valuation adjustments | (10,559 | ) | (20,000 | ) | (32,806 | ) | (10,526 | ) | (19,992 | ) | (32,801 | ) | |||||||||||||
Fair value | $ | 781,215 | $ | 1,829,042 | $ | 2,533,671 | $ | 785,316 | $ | 1,839,990 | $ | 2,551,640 | |||||||||||||
Loans, Notes and Certificates and Servicing Assets and Liabilities | ' | ||||||||||||||||||||||||
We determined the fair values of loans, notes and certificates and servicing assets and liabilities using significant unobservable inputs and methods that are categorized in the fair value hierarchy on Level 3, as follows (in thousands): | |||||||||||||||||||||||||
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Fair Value | ||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Loans at fair value | $ | — | $ | — | $ | 781,215 | $ | 781,215 | |||||||||||||||||
Total assets | $ | — | $ | — | $ | 781,215 | $ | 781,215 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 785,316 | $ | 785,316 | |||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 785,316 | $ | 785,316 | |||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Loans at fair value | $ | — | $ | — | $ | 1,829,042 | $ | 1,829,042 | |||||||||||||||||
Servicing asset | 534 | 534 | |||||||||||||||||||||||
Total assets | $ | — | $ | — | $ | 1,829,576 | $ | 1,829,576 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 1,839,990 | $ | 1,839,990 | |||||||||||||||||
Servicing liability | 936 | 936 | |||||||||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 1,840,926 | $ | 1,840,926 | |||||||||||||||||
September 30, 2014 (unaudited) | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Loans at fair value | $ | — | $ | — | $ | 2,533,671 | $ | 2,533,671 | |||||||||||||||||
Servicing asset | 1,520 | 1,520 | |||||||||||||||||||||||
Total assets | $ | — | $ | — | $ | 2,535,191 | $ | 2,535,191 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 2,551,640 | $ | 2,551,640 | |||||||||||||||||
Servicing liability | 3,712 | 3,712 | |||||||||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 2,555,352 | $ | 2,555,352 | |||||||||||||||||
Quantitative Information about Significant Unobservable Inputs Used for Fair Value Measurements | ' | ||||||||||||||||||||||||
The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements at December 31, 2013 and September 30, 2014: | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Range of Inputs | |||||||||||||||||||||||||
Unobservable Input | Minimum | Maximum | Weighted | ||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Discount rate | 5.9 | % | 15.9 | % | 10.2 | % | ||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Net cumulative expected loss | 2.1 | % | 23.7 | % | 10.1 | % | ||||||||||||||||||
Servicing asset/liability | Market servicing rate (% per annum on loan balance) | 0.4 | % | 0.4 | % | 0.4 | % | ||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||||
Range of Inputs | |||||||||||||||||||||||||
Unobservable Input | Minimum | Maximum | Weighted | ||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Discount rate | 5.2 | % | 23.6 | % | 10.6 | % | ||||||||||||||||||
Loans, notes & certificates and servicing asset/liability | Net cumulative expected loss | 0.3 | % | 21.8 | % | 9.7 | % | ||||||||||||||||||
Servicing asset/liability | Market servicing rate (% per annum on loan balance) | 0.5 | % | 0.7 | % | 0.5 | % | ||||||||||||||||||
Loans, Notes and Certificates | ' | ||||||||||||||||||||||||
Additional Information about Level 3 Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||||||||||
The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis at December 31, 2012, December 31, 2013 and September 30, 2014 (in thousands): | |||||||||||||||||||||||||
Loans | Notes and | ||||||||||||||||||||||||
Certificates | |||||||||||||||||||||||||
Fair value at December 31, 2012 | $ | 781,215 | $ | 785,316 | |||||||||||||||||||||
Purchases of loans | 2,064,628 | — | |||||||||||||||||||||||
Issuances of notes and certificates | — | 1,618,269 | |||||||||||||||||||||||
Principal payments | (511,232 | ) | (504,330 | ) | |||||||||||||||||||||
Whole loan sales | (446,224 | ) | — | ||||||||||||||||||||||
Recoveries from sale and collection of charged-off loans | (1,716 | ) | (1,669 | ) | |||||||||||||||||||||
Carrying value before fair value adjustments | 1,886,671 | 1,897,586 | |||||||||||||||||||||||
Fair valuation adjustments, included in earnings | (57,629 | ) | (57,596 | ) | |||||||||||||||||||||
Fair value at December 31, 2013 | $ | 1,829,042 | $ | 1,839,990 | |||||||||||||||||||||
Purchases of loans (unaudited) | 2,628,758 | — | |||||||||||||||||||||||
Issuances of notes and certificates (unaudited) | — | 1,534,011 | |||||||||||||||||||||||
Whole loan sales (unaudited) | (1,094,482 | ) | — | ||||||||||||||||||||||
Principal payments (unaudited) | (739,506 | ) | (732,343 | ) | |||||||||||||||||||||
Recoveries from sale and collection of charged-off loans (unaudited) | (5,178 | ) | (5,153 | ) | |||||||||||||||||||||
Carrying value before fair value adjustments (unaudited) | 2,618,634 | 2,636,505 | |||||||||||||||||||||||
Fair valuation adjustments, included in earnings (unaudited) | (84,963 | ) | (84,865 | ) | |||||||||||||||||||||
Fair value at September 30, 2014 (unaudited) | $ | 2,533,671 | $ | 2,551,640 | |||||||||||||||||||||
Servicing Asset/Liability | ' | ||||||||||||||||||||||||
Additional Information about Level 3 Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||||||||||
The following table presents additional information about Level 3 servicing assets and liabilities measured at fair value on a recurring basis for the year ended December 31, 2013 and for the nine months ended September 30, 2014 (unaudited) (in thousands): | |||||||||||||||||||||||||
Servicing | Servicing | ||||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Fair value at December 31, 2012 | $ | — | $ | — | |||||||||||||||||||||
Additions | 587 | 1,273 | |||||||||||||||||||||||
Changes in fair value due to: | |||||||||||||||||||||||||
Realization of expected cash flows | (53 | ) | (337 | ) | |||||||||||||||||||||
Changes in market inputs or assumptions used in the valuation model | — | — | |||||||||||||||||||||||
Fair value at December 31, 2013 | $ | 534 | $ | 936 | |||||||||||||||||||||
Additions (unaudited) | 1,885 | 3,464 | |||||||||||||||||||||||
Changes in fair value due to: | |||||||||||||||||||||||||
Realization of expected cash flows (unaudited) | (555 | ) | (1,275 | ) | |||||||||||||||||||||
Changes in market inputs or assumptions used in the valuation model (unaudited) | (344 | ) | 587 | ||||||||||||||||||||||
Fair value at September 30, 2014 (unaudited) | $ | 1,520 | $ | 3,712 | |||||||||||||||||||||
Property_Equipment_and_Softwar1
Property, Equipment and Software, net (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Property, Equipment and Software | ' | ||||||||||||
Property, equipment and software consist of the following (in thousands): | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Internally developed software | $ | 358 | $ | 4,188 | $ | 12,364 | |||||||
Computer equipment | 1,104 | 4,019 | 7,610 | ||||||||||
Leasehold improvements | 33 | 2,700 | 4,488 | ||||||||||
Construction in progress | 35 | 1,978 | 126 | ||||||||||
Purchased software | 453 | 913 | 2,829 | ||||||||||
Furniture and fixtures | 65 | 836 | 2,244 | ||||||||||
Other | 21 | 26 | — | ||||||||||
Total property and equipment | 2,069 | 14,660 | 29,661 | ||||||||||
Accumulated depreciation and amortization | (491 | ) | (2,065 | ) | (5,975 | ) | |||||||
Property, equipment and software, net | $ | 1,578 | $ | 12,595 | $ | 23,686 | |||||||
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Other Assets | ' | ||||||||||||
Other assets consist of the following (in thousands): | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Receivable from investors | $ | — | $ | 18,116 | $ | 740 | |||||||
Prepaid expenses | 1,538 | 3,546 | 3,777 | ||||||||||
Prepaid compensation | — | — | 2,988 | ||||||||||
Prepaid offering costs | — | — | 2,940 | ||||||||||
Loan servicing assets at fair value | — | 534 | 1,520 | ||||||||||
Tenant improvement receivable | — | 504 | — | ||||||||||
Accounts receivable | 79 | 439 | 2,538 | ||||||||||
Debt issuance costs, net | — | — | 993 | ||||||||||
Deposits | 696 | 193 | 354 | ||||||||||
Other | 53 | 589 | 671 | ||||||||||
Total other assets | $ | 2,366 | $ | 23,921 | $ | 16,521 | |||||||
Springstone_Acquisition_unaudi1
Springstone Acquisition (unaudited) (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Preliminary Purchase Price Allocation | ' | ||||||||
The preliminary purchase price allocation as of the acquisition date is as follows (in thousands): | |||||||||
Fair Value | |||||||||
Assets: | |||||||||
Cash | $ | 2,256 | |||||||
Restricted cash | 1,581 | ||||||||
Property, equipment and software | 366 | ||||||||
Other assets | 599 | ||||||||
Identified intangible assets | 40,200 | ||||||||
Goodwill | 72,592 | ||||||||
Liabilities: | |||||||||
Accounts payable | 239 | ||||||||
Accrued expenses and other liabilities | 5,536 | ||||||||
Total purchase consideration | $ | 111,819 | |||||||
Summary of Pro Forma Financial Information | ' | ||||||||
The pro forma results presented include interest expense on the debt financing, amortization of acquired intangible assets, compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees and tax expenses (in thousands): | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
(unaudited) | |||||||||
Total net revenue | $ | 148,317 | $ | 75,891 | |||||
Net loss(1) | $ | (21,403 | ) | $ | (15,623 | ) | |||
Basic net loss per share attributable to common stockholders | $ | (0.37 | ) | $ | (0.31 | ) | |||
Diluted net loss per share attributable to common stockholders | $ | (0.37 | ) | $ | (0.31 | ) | |||
-1 | Net loss for the nine months ended September 30, 2013 includes $8.6 million of one-time acquisition-related costs and compensation expenses. |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Goodwill | ' | ||||||||||||||||
Goodwill consisted of the following (in thousands): | |||||||||||||||||
Balance at December 31, 2013. | $ | — | |||||||||||||||
Acquisition of Springstone | 72,592 | ||||||||||||||||
Balance at September 30, 2014 | $ | 72,592 | |||||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||||||
Intangible assets acquired are as follows as of September 30, 2014 (unaudited) (dollars in thousands): | |||||||||||||||||
Gross | Accumulated | Net | Remaining | ||||||||||||||
Carrying | Amortization | Carrying | Useful | ||||||||||||||
Value | Value | Life | |||||||||||||||
Customer relationships | $ | 39,500 | $ | (2,382 | ) | $ | 37,118 | 13.5 | |||||||||
Technology | 400 | (60 | ) | 340 | 2.5 | ||||||||||||
Brand name | 300 | (68 | ) | 232 | 1.5 | ||||||||||||
Total intangible assets subject to amortization | $ | 40,200 | $ | (2,510 | ) | $ | 37,690 | 13.3 | |||||||||
Schedule of Expected Future Amortization Expense for Intangible Assets | ' | ||||||||||||||||
The expected future amortization expense for intangible assets as of September 30, 2014 is as follows (unaudited) (in thousands): | |||||||||||||||||
Remainder of 2014 | $ | 1,388 | |||||||||||||||
2015 | 5,287 | ||||||||||||||||
2016 | 4,801 | ||||||||||||||||
2017 | 4,287 | ||||||||||||||||
2018 | 3,872 | ||||||||||||||||
Thereafter | 18,055 | ||||||||||||||||
Total | $ | 37,690 | |||||||||||||||
Accrued_Expenses_and_Other_Lia1
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Accrued Expenses and Other Liabilities | ' | ||||||||||||
Accrued expenses and other liabilities consist of the following (in thousands): | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Accrued compensation | $ | 2,414 | $ | 5,243 | $ | 8,902 | |||||||
Accrued service fees | 952 | 2,057 | 7,128 | ||||||||||
Loan servicing liability at fair value | — | 936 | 3,712 | ||||||||||
Contingent liabilities | — | — | 1,875 | ||||||||||
Deferred rent | — | 653 | 1,045 | ||||||||||
Deferred tax liability | — | — | 1,004 | ||||||||||
Transaction fee refund reserve | — | — | 682 | ||||||||||
Deferred revenue | — | — | 472 | ||||||||||
Early stock option exercise liability | — | — | 450 | ||||||||||
Other accrued expenses | — | 239 | 734 | ||||||||||
Total accrued expenses and other liabilities | $ | 3,366 | $ | 9,128 | $ | 26,004 | |||||||
Term_Loan_Tables
Term Loan (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Schedule of Future Principal Payments on the Term Loan | ' | ||||
Future principal payments on the term loan are payable as follows (unaudited, in thousands): | |||||
Remainder of 2014 | $ | 312 | |||
2015 | 1,250 | ||||
2016 | 1,250 | ||||
2017 | 46,563 | ||||
Total principal payments | $ | 49,375 | |||
Unamortized discounts, net | (156 | ) | |||
Total | $ | 49,219 | |||
RelatedParty_Transactions_Tabl
Related-Party Transactions (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Summary of Deposits and Withdrawals Made by Related Parties | ' | ||||||||||||
The following table summarizes deposits and withdrawals made by related parties whose transactions totaled $120,000 or more for the year ended March 31, 2012, the nine months ended December 31, 2012, the year ended December 31, 2013 and for the nine months ended September 30, 2014. | |||||||||||||
Role | Year Ended | ||||||||||||
31-Mar-12 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
Daniel Ciporin | Director | $ | 209,500 | $ | 158,113 | ||||||||
John J. Mack | Director | 1,700,000 | 199,265 | ||||||||||
Total | $ | 1,909,500 | $ | 357,378 | |||||||||
Role | Nine Months Ended | ||||||||||||
31-Dec-12 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
Daniel Ciporin | Director | $ | 500,000 | $ | 129,698 | ||||||||
Jeffrey Crowe | Director | 150,000 | — | ||||||||||
John J. Mack | Director | 529,540 | 451,617 | ||||||||||
Total | $ | 1,179,540 | $ | 581,315 | |||||||||
Role | Year Ended | ||||||||||||
31-Dec-13 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
Daniel Ciporin | Director | $ | 600,000 | $ | 128,288 | ||||||||
Jeffrey Crowe | Director | 800,000 | 444,227 | ||||||||||
John J. Mack | Director | 405,118 | 617,779 | ||||||||||
Larry Summers | Director | 530,898 | — | ||||||||||
Total | $ | 2,336,016 | $ | 1,190,294 | |||||||||
Role | Nine Months Ended | ||||||||||||
30-Sep-14 | |||||||||||||
Related Party | Deposits | Withdrawals | |||||||||||
(unaudited) | |||||||||||||
Daniel Ciporin | Director | $ | 500,000 | $ | 62,855 | ||||||||
John J. Mack | Director | 950,000 | 69,317 | ||||||||||
Larry Summers | Director | 200,000 | — | ||||||||||
Total | $ | 1,650,000 | $ | 132,172 | |||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Convertible Preferred Stock | ' | ||||||||||||
Convertible Preferred Stock (in thousands, except share and per share amounts) | |||||||||||||
December 31, | September 30, | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
(unaudited) | |||||||||||||
Preferred stock, $0.01 par value; 246,470,064 total shares authorized at December 31, 2012, December 31, 2013 and 250,614,174 total shares authorized at September 30, 2014: | |||||||||||||
Series A convertible preferred stock, 68,025,100 shares designated at December 31, 2012, December 31, 2013 and 67,651,596 shares designated at September 30, 2014; 65,270,988, 66,100,340 and 66,422,077 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $17,371, $17,599 and $17,685 at December 31, 2012, December 31, 2013 and September 30, 2014 | $ | 17,181 | $ | 17,402 | $ | 17,487 | |||||||
Series B convertible preferred stock, 65,642,104 shares designated at December 31, 2012, December 31, 2013 and 65,577,300 shares designated at September 30, 2014; 65,577,300 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $12,268 at December 31, 2012, December 31, 2013 and September 30, 2014 | 12,164 | 12,164 | 12,164 | ||||||||||
Series C convertible preferred stock, 62,486,436 shares designated at December 31, 2012, December 31, 2013 and September 30, 2104; 62,486,436 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $24,490 at December 31, 2012, December 31, 2013 and September 30, 2014 | 24,388 | 24,388 | 24,388 | ||||||||||
Series D convertible preferred stock, 36,030,712 shares designated at December 31, 2012, December 31, 2013 and September 30, 2014; 36,030,712 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $32,044 at December 31, 2012, December 31, 2013 and September 30, 2014 | 31,943 | 31,943 | 31,943 | ||||||||||
Series E convertible preferred stock, 14,285,712 shares designated at December 31, 2012, December 31, 2013 and 10,000,000 shares designated at September 30, 2014; 10,000,000 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $17,500 at December 31, 2012, December 31, 2013 and September 30, 2014 | 17,347 | 17,347 | 17,347 | ||||||||||
Series F convertible preferred stock, 0, 0 and 8,868,130 shares designated at December 31, 2012, December 31, 2013 and September 30, 2014; 0, 0 and 8,834,486 shares issued and outstanding at December 31, 2012, December 31, 2013 and September 30, 2014; aggregate liquidation preference of $0, $0 and $89,858 at December 31, 2012, December 31, 2013 and September 30, 2014 | — | — | 89,661 | ||||||||||
Subtotal | $ | 103,023 | $ | 103,244 | $ | 192,990 | |||||||
Unamortized compensation associated with Series F convertible preferred stock | — | — | (15,690 | ) | |||||||||
Total preferred stock | $ | 103,023 | $ | 103,244 | $ | 177,300 | |||||||
Shares of Common Stock Authorized and Reserved for Future Issuance | ' | ||||||||||||
We have shares of common stock authorized and reserved for future issuance as follows as of: | |||||||||||||
December 31, 2013 | September 30, 2014 | ||||||||||||
(unaudited) | |||||||||||||
Options to purchase common stock | 43,314,728 | 54,587,814 | |||||||||||
Options available for future issuance | 7,756,492 | 3,359,320 | |||||||||||
Common stock warrants | 780,940 | 625,988 | |||||||||||
Total common stock authorized and reserved for future issuance | 51,852,160 | 58,573,122 | |||||||||||
StockBased_Compensation_and_Ot1
Stock-Based Compensation and Other Employee Benefit Plans (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted | ' | ||||||||||||||||||||
We used the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions: | |||||||||||||||||||||
Year Ended | Nine Months Ended | Year Ended | Nine Months Ended | ||||||||||||||||||
March 31, | December 31, | December 31, | September 30, | ||||||||||||||||||
2012 | 2012 | 2013 | 2013 | 2014 | |||||||||||||||||
(unaudited) | |||||||||||||||||||||
Assumed forfeiture rate (annual %) | 8 | % | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||
Expected dividend yield | — | — | — | — | — | ||||||||||||||||
Weighted-average assumed stock price volatility | 63.5 | % | 63.5 | % | 59.1 | % | 63.5 | % | 54 | % | |||||||||||
Weighted-average risk-free rate | 1.15 | % | 1.01 | % | 1.46 | % | 1.1 | % | 1.9 | % | |||||||||||
Weighted-average expected life (years) | 6.26 | 6.28 | 6.3 | 6.25 | 6.38 | ||||||||||||||||
Options Activity Under Option Plan | ' | ||||||||||||||||||||
Options activity under the Option Plan is summarized as follows: | |||||||||||||||||||||
Stock Options Issued | Weighted- | ||||||||||||||||||||
and | Average | ||||||||||||||||||||
Outstanding | Exercise Price | ||||||||||||||||||||
Balances, December 31, 2012 | 41,020,888 | $ | 0.3 | ||||||||||||||||||
Shares subject to options: | |||||||||||||||||||||
Granted | 12,707,000 | $ | 2.44 | ||||||||||||||||||
Exercised | (8,931,876 | ) | $ | 0.19 | |||||||||||||||||
Forfeited or expired | (1,481,284 | ) | $ | 0.48 | |||||||||||||||||
Balances, December 31, 2013 | 43,314,728 | $ | 0.94 | ||||||||||||||||||
Shares subject to options: | |||||||||||||||||||||
Granted (unaudited) | 18,511,572 | $ | 5.91 | ||||||||||||||||||
Exercised (unaudited) | 5,638,830 | $ | 0.53 | ||||||||||||||||||
Forfeited or expired (unaudited) | (1,599,656 | ) | $ | 2.41 | |||||||||||||||||
Outstanding at September 30, 2014 (unaudited) | 54,587,814 | $ | 2.63 | ||||||||||||||||||
A summary of outstanding options, vested options and options vested and expected to vest at December 31, 2013, is as follows: | |||||||||||||||||||||
Shares Subject to | Weighted- | Weighted- | |||||||||||||||||||
Stock Options Issued | Average | Average | |||||||||||||||||||
and | Remaining | Exercise Price | |||||||||||||||||||
Outstanding | Contractual | ||||||||||||||||||||
Life | |||||||||||||||||||||
(Years) | |||||||||||||||||||||
Shares subject to: | |||||||||||||||||||||
Options outstanding | 43,314,728 | 8.07 | $ | 0.94 | |||||||||||||||||
Vested options | 15,502,936 | 6.93 | $ | 0.24 | |||||||||||||||||
Options vested and expected to vest | 41,451,548 | 8.03 | $ | 0.91 | |||||||||||||||||
A summary of outstanding options, vested options and options vested and expected to vest at September 30, 2014, is as follows: | |||||||||||||||||||||
Shares Subject to | Weighted- | Weighted- | |||||||||||||||||||
Stock Options Issued | Average | Average | |||||||||||||||||||
and | Remaining | Exercise Price | |||||||||||||||||||
Outstanding | Contractual | ||||||||||||||||||||
Life | |||||||||||||||||||||
(Years) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Shares subject to: | |||||||||||||||||||||
Options outstanding | 54,587,814 | 8.16 | $ | 2.63 | |||||||||||||||||
Vested options | 20,138,530 | 6.84 | $0.58 | ||||||||||||||||||
Options vested and expected to vest | 51,863,779 | 8.11 | $ | 2.53 | |||||||||||||||||
Schedule of Stock-Based Compensation Expense Recorded for Stock Options, Warrants and Series F Convertible Preferred Stock | ' | ||||||||||||||||||||
Total stock-based compensation expense recorded for stock options, warrants and Escrow Shares related to the Acquisition is summarized as follows: | |||||||||||||||||||||
Year Ended | Nine Months | Year Ended | Nine Months Ended | ||||||||||||||||||
March 31, | Ended | December 31, | September 30, | ||||||||||||||||||
2012 | December 31, | 2013 | |||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Stock-Based Compensation Expense: | |||||||||||||||||||||
Sales and marketing | $ | 152 | $ | 216 | $ | 1,313 | $ | 767 | $ | 5,029 | |||||||||||
Origination and servicing | 31 | 60 | 424 | 170 | 1,427 | ||||||||||||||||
General and administrative: | |||||||||||||||||||||
Engineering and product development | 95 | 406 | 2,171 | 1,019 | 3,487 | ||||||||||||||||
Other | 382 | 428 | 2,375 | 1,390 | 15,946 | ||||||||||||||||
Total stock-based compensation expense | $ | 660 | $ | 1,110 | $ | 6,283 | $ | 3,346 | $ | 25,889 | |||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||||||||||||||||||||||
Our effective tax rate differs from the statutory federal rate for the year ended March 31, 2012, the nine months ended December 31, 2012, and year ended December 31, 2013, as follows (in thousands): | |||||||||||||||||||||||||
Year Ended March 31, | Nine Months Ended | Year Ended | |||||||||||||||||||||||
2012 | December 31, | December 31, | |||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Pretax Income (Loss) | $ | (11,944 | ) | $ | (4,238 | ) | $ | 7,308 | |||||||||||||||||
Tax at federal statutory rate | $ | (4,061 | ) | 34 | % | $ | (1,441 | ) | 34 | % | $ | 2,485 | 34 | % | |||||||||||
State tax, net of federal tax benefit | (855 | ) | 7.16 | % | (151 | ) | 3.56 | % | 563 | 7.7 | % | ||||||||||||||
Share-based compensation expense | 181 | (1.52 | )% | (314 | ) | 7.41 | % | (593 | ) | (8.11 | )% | ||||||||||||||
Tax credits | (140 | ) | 1.17 | % | — | 0 | % | (459 | ) | (6.28 | )% | ||||||||||||||
Change in valuation allowance | 5,409 | (45.28 | )% | 1,934 | (45.63 | )% | (2,534 | ) | (34.67 | )% | |||||||||||||||
Change in unrecognized tax benefit | — | 0 | % | 150 | (3.54 | )% | 518 | 7.09 | % | ||||||||||||||||
Other | (534 | ) | 4.47 | % | (178 | ) | 4.2 | % | 20 | 0.27 | % | ||||||||||||||
$ | — | 0 | % | $ | — | 0 | % | $ | — | 0 | % | ||||||||||||||
Deferred Tax Assets and Liabilities | ' | ||||||||||||||||||||||||
The significant components of our deferred tax assets and liabilities at December 31, 2012 and 2013 are as follows (in thousands): | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Deferred tax assets | |||||||||||||||||||||||||
Net operating loss carryforwards | $ | 21,856 | $ | 18,818 | |||||||||||||||||||||
Reserves and accruals | 1,365 | 2,804 | |||||||||||||||||||||||
Organizational and start-up costs | 529 | 516 | |||||||||||||||||||||||
Credits & California incentives | 254 | 216 | |||||||||||||||||||||||
Gross deferred tax asset | 24,004 | 22,354 | |||||||||||||||||||||||
Valuation allowance | (23,939 | ) | (22,338 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 65 | $ | 16 | |||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||
Depreciation and amortization | $ | (65 | ) | $ | (16 | ) | |||||||||||||||||||
Net deferred tax liability | $ | (65 | ) | $ | (16 | ) | |||||||||||||||||||
Changes in Unrecognized Tax Benefit | ' | ||||||||||||||||||||||||
The following is a reconciliation of our unrecognized tax benefits (in thousands): | |||||||||||||||||||||||||
Nine Months Ended | Year Ended | ||||||||||||||||||||||||
December 31, 2012 | December 31, 2013 | ||||||||||||||||||||||||
Balance as of the beginning of the calendar/fiscal year | $ | 240 | $ | 367 | |||||||||||||||||||||
Additions for tax positions related to the prior year | — | 523 | |||||||||||||||||||||||
Additions for tax positions related to the current year | 127 | 190 | |||||||||||||||||||||||
Balance as of the end of the calendar/fiscal year | $ | 367 | $ | 1,080 | |||||||||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Schedule Of Future Minimum Lease Payments Payable | ' | ||||
At December 31, 2013, the future minimum lease payments payable under the contracts for leased premises is as follows (in thousands): | |||||
Year-Ended December 31, | Future Minimum | ||||
Lease Payments | |||||
2014 | $ | 2,748 | |||
2015 | 3,293 | ||||
2016 | 3,379 | ||||
2017 | 3,598 | ||||
2018 | 3,808 | ||||
Thereafter | 1,925 | ||||
Total | $ | 18,751 | |||
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 0 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 05, 2014 | Apr. 15, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 |
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | ' | ' | ' | ' | ' | ' |
Stockholders' equity | ' | ' | $141,540 | $68,094 | $52,210 | $36,337 |
Shares outstanding, equity stock split ratio | 2 | 2 | ' | ' | ' | ' |
Common stock, par value | ' | ' | $0.01 | $0.01 | $0.01 | ' |
Total Preferred Stock and Stockholders' Deficit | ' | ' | ' | ' | ' | ' |
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | ' | ' | ' | ' | ' | ' |
Stockholders' equity | ' | ' | ' | ' | ($50,800) | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Class of Stock [Line Items] | ' | ' | ' | ' |
Minimum origination fee charged | 1.00% | 1.11% | 1.11% | 1.11% |
Maximum origination fee charged | 6.00% | 5.00% | 5.00% | 5.00% |
Highly liquid investments classified as cash equivalent, maturity period | '3 months | ' | '3 months | ' |
Maximum period for loan classified as non-accrual loan | '120 days | ' | '120 days | ' |
Impairment of long-lived assets, held for use | $0 | $0 | $0 | $0 |
Stock awards, vesting period | ' | ' | '4 years | ' |
Computer Software, Intangible Asset | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' |
Intangible assets, useful life | '3 years | ' | '3 years | ' |
Minimum | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful life | '2 years | ' | '2 years | ' |
Maximum | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful life | '5 years | ' | '5 years | ' |
Basic_and_Diluted_Net_Income_L
Basic and Diluted Net Income (Loss) per Share (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | ||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' | ' | ' | ||
Net (loss) income | ($23,857) | $4,450 | ($4,238) | $7,308 | ($11,944) | ||
Less: Net income allocated to participating securities | ' | -4,450 | [1] | ' | -7,117 | [1] | ' |
Net income (loss) available to common shareholders after required adjustments for the calculation of basic and diluted earnings per common share | ($23,857) | ' | ($4,238) | $191 | ($11,944) | ||
Basic weighted average common shares outstanding | 57,958,838 | 50,457,948 | 41,359,676 | 51,557,136 | 35,125,628 | ||
Weighted average effect of dilutive securities: | ' | ' | ' | ' | ' | ||
Stock Options | ' | 27,170,816 | ' | 28,542,404 | ' | ||
Warrants | ' | 1,525,148 | ' | 1,327,436 | ' | ||
Diluted weighted average common shares outstanding | 57,958,838 | 79,153,912 | 41,359,676 | 81,426,976 | 35,125,628 | ||
Net income (loss) per common share: | ' | ' | ' | ' | ' | ||
Basic | ($0.41) | $0 | ($0.10) | $0 | ($0.34) | ||
Diluted | ($0.41) | $0 | ($0.10) | $0 | ($0.34) | ||
[1] | In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities. |
Basic_and_Diluted_Pro_Forma_Pe
Basic and Diluted Pro Forma Per Common Share (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | ||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' | ' | ' | ||
Net income (loss) available to common stockholders, as reported | ($22,798) | $4,450 | ($4,238) | $7,308 | ($11,944) | ||
Weighted-average shares used to compute net income (loss) per share available to common stockholders, basic | 57,958,838 | 50,457,948 | 41,359,676 | 51,557,136 | 35,125,628 | ||
Weighted-average shares to compute pro forma net income (loss) per share available to common stockholders, basic | 303,608,800 | ' | ' | 291,766,192 | ' | ||
Weighted-average shares to compute pro forma net income (loss) per share available to common stockholders, diluted | 303,608,800 | ' | ' | 323,331,550 | ' | ||
Proforma net income (loss) per common share: | ' | ' | ' | ' | ' | ||
Basic | ($0.08) | ' | ' | $0.03 | ' | ||
Diluted | ($0.08) | ' | ' | $0.02 | ' | ||
Scenario, Previously Reported [Member] | ' | ' | ' | ' | ' | ||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' | ' | ' | ||
Net income (loss) available to common stockholders, as reported | ($23,857) | ' | ' | $7,308 | ' | ||
Convertible Preferred Stock | ' | ' | ' | ' | ' | ||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' | ' | ' | ||
Pro forma adjustments to reflect conversion of convertible preferred stock | 245,622,114 | ' | ' | 239,822,864 | ' | ||
Stock Warrant [Member] | ' | ' | ' | ' | ' | ||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' | ' | ' | ||
Pro forma adjustments to reflect conversion of convertible preferred stock | 27,848 | [1] | ' | ' | 386,192 | [1] | ' |
Dilutive effect of warrants | ' | ' | ' | 3,022,954 | ' | ||
Stock Options | ' | ' | ' | ' | ' | ||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' | ' | ' | ||
Dilutive effect of warrants | ' | ' | ' | 28,542,404 | ' | ||
[1] | Assumes the automatic conversion and exercise of warrants to purchase a maximum of 331,616 shares of Series A convertible preferred stock and automatic exercise of warrants to purchase a maximum of 54,576 shares of common stock for the year ended December 31, 2013. Assumes the automatic exercise of warrants to purchase a maximum of 27,848 shares of common stock for the nine months ended September 30, 2014. Upon the completion of our initial public offering, these warrants will automatically be net exercised for common stock, resulting in the issuance of fewer shares. |
Basic_and_Diluted_Pro_Forma_Pe1
Basic and Diluted Pro Forma Per Common Share (Parenthetical) (Detail) (Maximum) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' |
Warrants Exercise purchase, common stock | 27,848 | 54,576 |
Series A Convertible Preferred Stock | ' | ' |
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' |
Warrants Exercise purchase, common stock | ' | 331,616 |
Loans_Notes_and_Certificates_a
Loans, Notes and Certificates, and Loan Servicing Rights - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Number of loans, 90 days or more past due | 1,304 | 576 | 989 | ' |
Total outstanding principal balance of loans that were 90 days past due | $15,200,000 | $6,400,000 | $10,200,000 | ' |
Aggregate adverse fair value adjustments 90 days or more past due | 13,800,000 | 5,700,000 | 9,100,000 | ' |
Fair Value of loans that were 90 days or more past due | 1,400,000 | 700,000 | 1,100,000 | ' |
Number of loans, over 120 days past due | 51 | ' | 111 | ' |
Total outstanding principal balance of loans that were 120 days past due | 500,000 | ' | 1,100,000 | ' |
Aggregate adverse fair value adjustments 120 days or more past due | 400,000 | ' | 900,000 | ' |
Fair value of financing receivable held as assets over 120 days past due | 100,000 | ' | 200,000 | ' |
Loan Servicing Rights | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Payment frequency for the debt instrument | 'Monthly | ' | 'Monthly | ' |
Debt instrument, interest rate, effective percentage rate range, minimum | 5.90% | ' | 6.00% | ' |
Debt instrument, interest rate, effective percentage rate range, maximum | 33.15% | ' | 26.06% | ' |
Debt instrument, maturity date, description | 'Various maturity dates through September 2019 (unaudited). | ' | 'Various maturity dates through December, 2018. | ' |
Principal balance of underlying loan servicing rights | 1,370,000,000 | ' | 410,000,000 | ' |
Loan Servicing Rights | Minimum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Notes and certificates term | '12 months | ' | '36 months | ' |
Loan Servicing Rights | Maximum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Notes and certificates term | '60 months | ' | '60 months | ' |
Notes And Certificates At Fair Value | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Payment frequency for the debt instrument | 'Monthly | ' | 'Monthly | ' |
Debt instrument, interest rate, effective percentage rate range, minimum | 5.42% | ' | 5.42% | ' |
Debt instrument, interest rate, effective percentage rate range, maximum | 29.90% | ' | 26.06% | ' |
Debt instrument, maturity date, description | 'Various maturity dates through September 2019 (unaudited). | ' | 'Various maturity dates through December 2018. | ' |
Notes And Certificates At Fair Value | Investment Income | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Net fair value adjustment gains/(losses) | 100,000 | 600,000 | 30,000 | 1,000 |
Notes And Certificates At Fair Value | Minimum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Notes and certificates term | '12 months | ' | '36 months | ' |
Notes And Certificates At Fair Value | Maximum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Notes and certificates term | '60 months | ' | '60 months | ' |
Personal Loans | Minimum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan amount | 1,000 | ' | ' | ' |
Loan maturity period | '3 years | ' | ' | ' |
Personal Loans | Maximum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan amount | 35,000 | ' | ' | ' |
Loan maturity period | '5 years | ' | ' | ' |
Small Business Loans | Minimum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan amount | 15,000 | ' | ' | ' |
Loan maturity period | '1 year | ' | ' | ' |
Small Business Loans | Maximum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan amount | 100,000 | ' | ' | ' |
Loan maturity period | '5 years | ' | ' | ' |
Education and Patient Finance Loans | Minimum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan amount | 499 | ' | ' | ' |
Education and Patient Finance Loans | Minimum | Term Loan | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan maturity period | '24 months | ' | ' | ' |
Education and Patient Finance Loans | Minimum | Promotional | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan maturity period | '6 months | ' | ' | ' |
Education and Patient Finance Loans | Maximum | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan amount | $40,000 | ' | ' | ' |
Education and Patient Finance Loans | Maximum | Term Loan | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan maturity period | '84 months | ' | ' | ' |
Education and Patient Finance Loans | Maximum | Promotional | ' | ' | ' | ' |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ' | ' | ' | ' |
Loan maturity period | '24 months | ' | ' | ' |
Loans_and_Notes_and_Certificat
Loans and Notes and Certificates (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Fair value | $2,533,671 | $781,215 | $1,829,042 |
Fair Value | 2,551,640 | 785,316 | 1,839,990 |
Fair Value, Measurements, Recurring | Notes And Certificates At Fair Value | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Aggregate principal balance outstanding | 2,584,441 | 795,842 | 1,859,982 |
Fair valuation adjustments | -32,801 | -10,526 | -19,992 |
Fair Value | 2,551,640 | 785,316 | 1,839,990 |
Fair Value, Measurements, Recurring | Loans at Fair Value | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Aggregate principal balance outstanding | 2,566,477 | 791,774 | 1,849,042 |
Fair valuation adjustments | -32,806 | -10,559 | -20,000 |
Fair value | $2,533,671 | $781,215 | $1,829,042 |
Loans_Loan_Servicing_Rights_Re
Loans, Loan Servicing Rights, Related Notes and Certificates (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Loans at fair value | $2,533,671 | $1,829,042 | $781,215 |
Servicing asset | 1,520 | 534 | ' |
Total assets | 2,535,191 | 1,829,576 | 781,215 |
Notes and certificates | 2,551,640 | 1,839,990 | 785,316 |
Servicing liability | 3,712 | 936 | ' |
Total Liabilities | 2,555,352 | 1,840,926 | 785,316 |
Fair Value, Inputs, Level 3 | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Loans at fair value | 2,533,671 | 1,829,042 | 781,215 |
Servicing asset | 1,520 | 534 | ' |
Total assets | 2,535,191 | 1,829,576 | 781,215 |
Notes and certificates | 2,551,640 | 1,839,990 | 785,316 |
Servicing liability | 3,712 | 936 | ' |
Total Liabilities | $2,555,352 | $1,840,926 | $785,316 |
Additional_Information_about_L
Additional Information about Loans, Notes and Certificates Measured at Fair Value on Recurring Basis (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Loans, notes and certificates measured at fair value on recurring basis | ' | ' |
Loans, Fair value, Beginning Balance | $1,829,042 | $781,215 |
Loans, Purchases of loans | 2,628,758 | 2,064,628 |
Loans, Issuances of notes and certificates | 0 | 0 |
Loans, Principal payments | -739,506 | -511,232 |
Loans, Whole loan sales | -1,094,482 | -446,224 |
Loans, Recoveries from sale and collection of charged-off loans | -5,178 | -1,716 |
Loans, Carrying value before fair value adjustments | 2,618,634 | 1,886,671 |
Loans, Fair value adjustments, included in earnings | -84,963 | -57,629 |
Loans, Fair value, Ending Balance | 2,533,671 | 1,829,042 |
Notes and Certificates, Fair value, Beginning Balance | 1,839,990 | 785,316 |
Notes and Certificates, Purchases of loans | 0 | 0 |
Notes and Certificates, Issuances of notes and certificates | 1,534,011 | 1,618,269 |
Notes and Certificates, Principal payments | -732,343 | -504,330 |
Notes and Certificates, Whole loan sales | 0 | 0 |
Notes and Certificates, Recoveries and sale of charged-off loans | -5,153 | -1,669 |
Notes and Certificates, Carrying value before fair value adjustments | 2,636,505 | 1,897,586 |
Notes and Certificates, Fair value adjustments, included in earnings | -84,865 | -57,596 |
Notes and Certificates, Fair value, Ending Balance | $2,551,640 | $1,839,990 |
Quantitative_Information_about
Quantitative Information about Significant Unobservable Inputs Used for Fair Value Measurements (Detail) (Fair Value, Inputs, Level 3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Minimum | Loans, Notes & Certificates and Servicing Asset/Liability | ' | ' |
Fair Value Inputs [Abstract] | ' | ' |
Discount rate | 5.20% | 5.90% |
Net cumulative expected loss | 0.30% | 2.10% |
Minimum | Servicing Asset/Liability | ' | ' |
Fair Value Inputs [Abstract] | ' | ' |
Market servicing rate (% per annum on loan balance) | 0.50% | 0.40% |
Maximum | Loans, Notes & Certificates and Servicing Asset/Liability | ' | ' |
Fair Value Inputs [Abstract] | ' | ' |
Discount rate | 23.60% | 15.90% |
Net cumulative expected loss | 21.80% | 23.70% |
Maximum | Servicing Asset/Liability | ' | ' |
Fair Value Inputs [Abstract] | ' | ' |
Market servicing rate (% per annum on loan balance) | 0.70% | 0.40% |
Weighted Average | Loans, Notes & Certificates and Servicing Asset/Liability | ' | ' |
Fair Value Inputs [Abstract] | ' | ' |
Discount rate | 10.60% | 10.20% |
Net cumulative expected loss | 9.70% | 10.10% |
Weighted Average | Servicing Asset/Liability | ' | ' |
Fair Value Inputs [Abstract] | ' | ' |
Market servicing rate (% per annum on loan balance) | 0.50% | 0.40% |
Additional_Information_about_S
Additional Information about Servicing Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Servicing Assets, Changes in fair value due to: | ' | ' |
Servicing Assets, Fair value, Ending Balance | $1,520 | $534 |
Servicing Liabilities, Fair value, Ending Balance | 3,712 | 936 |
Fair Value, Measurements, Recurring | ' | ' |
Servicing Asset at Fair Value, Amount [Roll Forward] | ' | ' |
Servicing Assets, Fair value, Beginning Balance | 534 | ' |
Servicing Assets, Additions | 1,885 | 587 |
Servicing Assets, Changes in fair value due to: | ' | ' |
Servicing Assets, Realization of expected cash flows | -555 | -53 |
Servicing Assets, Changes in market inputs or assumptions used in the valuation model | -344 | ' |
Servicing Assets, Fair value, Ending Balance | 1,520 | 534 |
Servicing Liabilities, Fair value, Beginning Balance | 936 | ' |
Servicing Liabilities, Fair value, Ending Balance | 3,712 | 936 |
Servicing Liabilities, Additions | 3,464 | 1,273 |
Servicing Liabilities, Changes in fair value due to: | ' | ' |
Servicing Liabilities, Realization of expected cash flows | -1,275 | -337 |
Servicing Liabilities, Changes in market inputs or assumptions used in the valuation model | $587 | ' |
Property_Equipment_and_Softwar2
Property, Equipment and Software (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Internally developed software | $12,364 | $4,188 | $358 |
Computer equipment | 7,610 | 4,019 | 1,104 |
Leasehold improvements | 4,488 | 2,700 | 33 |
Construction in progress | 126 | 1,978 | 35 |
Purchased software | 2,829 | 913 | 453 |
Furniture and fixtures | 2,244 | 836 | 65 |
Other | ' | 26 | 21 |
Total property, equipment and software | 29,661 | 14,660 | 2,069 |
Accumulated depreciation and amortization | -5,975 | -2,065 | -491 |
Property, equipment and software, net | $23,686 | $12,595 | $1,578 |
Property_Equipment_and_Softwar3
Property, Equipment and Software, net - Additional Information (Detail) (Property, Equipment and Software, USD $) | 9 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 |
Property, Equipment and Software | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Depreciation and amortization expense | $4.10 | $0.90 | $0.20 | $1.70 | $0.20 |
Other_Assets_Detail
Other Assets (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Other Assets [Abstract] | ' | ' | ' |
Other assets | $16,521 | $23,921 | $2,366 |
Prepaid Expenses | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 3,777 | 3,546 | 1,538 |
Prepaid Compensation | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 2,988 | ' | ' |
Prepaid Offering Cost | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 2,940 | ' | ' |
Accounts Receivable | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 2,538 | 439 | 79 |
Loan Servicing Assets at Fair Value | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 1,520 | 534 | ' |
Debt Issuance Costs, Net | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 993 | ' | ' |
Receivable from Investors | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 740 | 18,116 | ' |
Deposits | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | 354 | 193 | 696 |
Tenant Improvement Receivable | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | ' | 504 | ' |
Other | ' | ' | ' |
Other Assets [Abstract] | ' | ' | ' |
Other assets | $671 | $589 | $53 |
Springstone_Acquisition_Additi
Springstone Acquisition - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 6 Months Ended | 9 Months Ended | 0 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Apr. 17, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 17, 2014 | Apr. 17, 2014 | Apr. 17, 2014 | |
Series F Convertible Preferred Stock | Springstone Financial, Llc | Springstone Financial, Llc | Springstone Financial, Llc | Springstone Financial, Llc | Springstone Financial, Llc | Springstone Financial, Llc | ||||
Series F Convertible Preferred Stock | Series F Convertible Preferred Stock | |||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, date of acquisition | ' | ' | ' | ' | ' | ' | 17-Apr-14 | ' | ' | ' |
Business acquisition, name of acquired entity | ' | ' | ' | ' | ' | ' | 'Springstone | ' | ' | ' |
Business acquisition, percentage of voting interests acquired | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' |
Business acquisition, description of acquired entity | ' | ' | ' | ' | ' | ' | 'Springstone facilitates education and patient finance loans through a network of providers utilizing two issuing banks. Each of Springstone's issuing banks originates, holds, and services the loans they issue. Springstone earns fee revenue from providers for facilitating loans to their customers. | ' | ' | ' |
Business acquisition, cash consideration | ' | ' | ' | ' | $113,000,000 | ' | ' | ' | ' | ' |
Business acquisition, shares consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 |
Transaction costs incurred by Springstone | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | ' |
Business acquisition, purchase price of acquired entity | ' | ' | ' | ' | 111,800,000 | ' | ' | ' | ' | ' |
Business acquisition, amount of cash paid | ' | ' | ' | ' | 109,000,000 | ' | ' | ' | ' | ' |
Business acquisition, Values of shares of Series F convertible preferred stock given along with cash | ' | ' | ' | 2,762,000 | ' | ' | ' | ' | 2,800,000 | ' |
Business acquisition, consideration placed in third party escrow to secure retention of key employees | ' | ' | ' | ' | ' | ' | ' | 25,600,000 | ' | ' |
Business acquisition, value of shares placed in third party escrow to secure retention of key employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,100,000 |
Cash consideration held in escrow subject to vesting condition | ' | ' | ' | ' | ' | ' | ' | 3,500,000 | ' | ' |
Vesting period for compensation arrangement | ' | ' | '4 years | ' | ' | ' | ' | ' | '3 years | ' |
Business acquisition, cash placed in third party escrow to secure indemnification obligations | ' | ' | ' | ' | ' | ' | ' | 19,000,000 | ' | ' |
Indemnification escrow holding period | ' | ' | ' | ' | '15 months | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | 10,400,000 | ' | ' | ' | ' |
Earnings | ' | ' | ' | ' | ' | -4,400,000 | ' | ' | ' | ' |
Acquisition related costs reported in general and administrative expense | $2,300,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Preliminary_Purchase_Price_All
Preliminary Purchase Price Allocation (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Apr. 17, 2014 |
In Thousands, unless otherwise specified | Springstone Financial, Llc | ||
Assets: | ' | ' | ' |
Cash | ' | ' | $2,256 |
Restricted cash | ' | ' | 1,581 |
Property, equipment and software | ' | ' | 366 |
Other assets | ' | ' | 599 |
Identified intangible assets | ' | ' | 40,200 |
Goodwill | 72,592 | ' | 72,592 |
Liabilities: | ' | ' | ' |
Accounts payable | ' | ' | 239 |
Accrued expenses and other liabilities | ' | ' | 5,536 |
Total purchase consideration | ' | ' | $111,819 |
Summary_of_Pro_Forma_Financial
Summary of Pro Forma Financial Information (Detail) (Springstone Financial, Llc, USD $) | 9 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | ||
Springstone Financial, Llc | ' | ' | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ||
Total net revenue | $148,317 | $75,891 | ||
Net loss | ($21,403) | [1] | ($15,623) | [1] |
Basic net loss per share attributable to common stockholders | ($0.37) | ($0.31) | ||
Diluted net loss per share attributable to common stockholders | ($0.37) | ($0.31) | ||
[1] | Net loss for the nine months ended September 30, 2013 includes $8.6 million of one-time acquisition-related costs and compensation expenses. |
Summary_of_Pro_Forma_Financial1
Summary of Pro Forma Financial Information (Parenthetical) (Detail) (Springstone Financial, Llc, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Springstone Financial, Llc | ' |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' |
One-time acquisition-related costs and compensation expenses adjustments | $8.60 |
Schedule_of_Goodwill_Detail
Schedule of Goodwill (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Goodwill [Line Items] | ' |
Beginning balance | ' |
Acquisition of Springstone | 72,592 |
Ending balance | $72,592 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Impairment of goodwill | $0 |
Amortization expense | $2,500,000 |
Customer Relationships | ' |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Intangible assets, amortized period | '14 years |
Technology | ' |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Intangible assets, amortized period | '3 years |
Brand Name | ' |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Intangible assets, amortized period | '2 years |
Schedule_of_Intangible_Assets_
Schedule of Intangible Assets (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Finite-Lived Intangible Assets [Line Items] | ' |
Gross Carrying Value | $40,200 |
Accumulated Amortization | -2,510 |
Net Carrying Value | 37,690 |
Remaining Useful Life | '13 years 3 months 18 days |
Customer Relationships | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Gross Carrying Value | 39,500 |
Accumulated Amortization | -2,382 |
Net Carrying Value | 37,118 |
Remaining Useful Life | '13 years 6 months |
Technology | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Gross Carrying Value | 400 |
Accumulated Amortization | -60 |
Net Carrying Value | 340 |
Remaining Useful Life | '2 years 6 months |
Brand Name | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Gross Carrying Value | 300 |
Accumulated Amortization | -68 |
Net Carrying Value | $232 |
Remaining Useful Life | '1 year 6 months |
Schedule_of_Expected_Future_Am
Schedule of Expected Future Amortization Expense for Intangible Assets (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets [Line Items] | ' |
Remainder of 2014 | $1,388 |
2015 | 5,287 |
2016 | 4,801 |
2017 | 4,287 |
2018 | 3,872 |
Thereafter | 18,055 |
Net Carrying Value | $37,690 |
Accrued_Expenses_and_Other_Lia2
Accrued Expenses and Other Liabilities (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Other Liabilities Disclosure Abstract | ' | ' | ' |
Accrued compensation | $8,902 | $5,243 | $2,414 |
Accrued service fees | 7,128 | 2,057 | 952 |
Loan servicing liability at fair value | 3,712 | 936 | ' |
Contingent liabilities | 1,875 | ' | ' |
Deferred rent | 1,045 | 653 | ' |
Deferred tax liability | 1,004 | ' | ' |
Transaction fee refund reserve | 682 | ' | ' |
Deferred revenue | 472 | ' | ' |
Early stock option exercise liability | 450 | ' | ' |
Other accrued expenses | 734 | 239 | ' |
Total accrued expenses and other liabilities | $26,004 | $9,128 | $3,366 |
Term_Loan_Additional_Informati
Term Loan - Additional Information (Detail) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 16, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Floating Base Rate | Eurocurrency Rate | Term Loan | Term Loan | 30-Sep-15 | Maximum | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of Term loan | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' |
Credit agreement issuance date | ' | ' | ' | ' | ' | 16-Apr-14 | ' | ' | ' |
Term loan, maturity date | ' | ' | ' | ' | ' | 16-Apr-17 | ' | ' | ' |
Term loan, requires quarterly principal payments | ' | ' | ' | ' | ' | 312,500 | ' | ' | ' |
Term loan, payment frequency | ' | ' | ' | ' | ' | 'Per quarter | ' | ' | ' |
Term loan can be prepaid at any time without premium or penalty, subject to a minimum prepayment | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Term loan, weighted average interest rate | ' | ' | ' | ' | ' | 2.65% | ' | ' | ' |
Borrowings interest rate description | ' | ' | ' | ' | ' | 'Borrowings under the credit agreement bear interest, which at our option may be either (i) a floating base rate tied to an underlying index plus an additional 1.25% per annum or (ii) a Eurocurrency rate (for an interest period of one, two, three or six months) plus an additional 2.25% per annum. If a Eurocurrency rate loan | ' | ' | ' |
Borrowings interest rate spread | ' | ' | ' | 1.25% | 2.25% | ' | ' | ' | ' |
Leverage ratio | 225.00% | ' | ' | ' | ' | ' | ' | 350.00% | 550.00% |
Effective date of decrease in leverage ratio | ' | ' | ' | ' | ' | ' | ' | 30-Sep-15 | ' |
Agreement description | 'The credit agreement and pledge and security agreement contain certain affirmative and negative covenants applicable to us and our subsidiaries. These covenants include restrictions on our ability to make certain restricted payments, including restrictions on our ability to pay dividends, incur additional indebtedness, place liens on assets, merge or consolidate, make investments and enter into certain transactions with our affiliates. The credit agreement also requires us to maintain a maximum total leverage ratio (as defined in the credit agreement) of less than 5.50:1 initially, and decreasing to 3.50:1 after September 30, 2015 (on a consolidated basis). The total leverage ratio as of September 30, 2014 was 2.25:1. | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan | 49,219,000 | ' | 0 | ' | ' | ' | ' | ' | ' |
Term loan, outstanding current portion | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan, noncurrent portion of the outstanding balance | 48,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance cost, capitalized | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance cost, net balance | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense including debt issuance cost | $200,000 | $0 | ' | ' | ' | ' | ' | ' | ' |
Schedule_of_Future_Principal_P
Schedule of Future Principal Payments on the Term Loan (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ' | ' |
Remainder of 2014 | $312 | ' |
2015 | 1,250 | ' |
2016 | 1,250 | ' |
2017 | 46,563 | ' |
Total principal payments | 49,375 | ' |
Unamortized discount, net | -156 | ' |
Total | $49,219 | $0 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (Minimum, USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Minimum | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related party transaction threshold | $120,000 | $120,000 | $120,000 | $120,000 |
Summary_of_Deposits_and_Withdr
Summary of Deposits and Withdrawals Made by Related Parties (Detail) (Deposits and Withdrawals $120000 or More, USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Deposits | $1,650,000 | $1,179,540 | $2,336,016 | $1,909,500 |
Withdrawals | 132,172 | 581,315 | 1,190,294 | 357,378 |
Daniel Ciporin - Director | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Deposits | 500,000 | 500,000 | 600,000 | 209,500 |
Withdrawals | 62,855 | 129,698 | 128,288 | 158,113 |
John J. Mack - Director | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Deposits | 950,000 | 529,540 | 405,118 | 1,700,000 |
Withdrawals | 69,317 | 451,617 | 617,779 | 199,265 |
Jeffrey Crowe - Director | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Deposits | ' | 150,000 | 800,000 | ' |
Withdrawals | ' | ' | 444,227 | ' |
Larry Summers - Director | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Deposits | $200,000 | ' | $530,898 | ' |
Convertible_Preferred_Stock_De
Convertible Preferred Stock (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Convertible preferred stock: | ' | ' | ' |
Subtotal | $192,990 | $103,244 | $103,023 |
Preferred stock | 177,300 | 103,244 | 103,023 |
Series A Convertible Preferred Stock | ' | ' | ' |
Convertible preferred stock: | ' | ' | ' |
Preferred stock | 17,487 | 17,402 | 17,181 |
Series B Convertible Preferred Stock | ' | ' | ' |
Convertible preferred stock: | ' | ' | ' |
Preferred stock | 12,164 | 12,164 | 12,164 |
Series C Convertible Preferred Stock | ' | ' | ' |
Convertible preferred stock: | ' | ' | ' |
Preferred stock | 24,388 | 24,388 | 24,388 |
Series D Convertible Preferred Stock | ' | ' | ' |
Convertible preferred stock: | ' | ' | ' |
Preferred stock | 31,943 | 31,943 | 31,943 |
Series E Convertible Preferred Stock | ' | ' | ' |
Convertible preferred stock: | ' | ' | ' |
Preferred stock | 17,347 | 17,347 | 17,347 |
Series F Convertible Preferred Stock | ' | ' | ' |
Convertible preferred stock: | ' | ' | ' |
Unamortized compensation associated with Series F convertible preferred stock | -15,690 | ' | ' |
Preferred stock | $89,661 | ' | ' |
Convertible_Preferred_Stock_Pa
Convertible Preferred Stock (Parenthetical) (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | |||
Class of Stock [Line Items] | ' | ' | ' |
Preferred stock, par value | $0.01 | $0.01 | $0.01 |
Convertible preferred stock, shares authorized | 250,614,174 | 246,470,064 | 246,470,064 |
Series A Convertible Preferred Stock | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Convertible preferred stock, shares authorized | 67,651,596 | 68,025,100 | 68,025,100 |
Convertible preferred stock, shares issued | 66,422,077 | 66,100,340 | 65,270,988 |
Convertible preferred stock, shares outstanding | 66,422,077 | 66,100,340 | 65,270,988 |
Convertible preferred stock, aggregate liquidation preference | $17,685 | $17,599 | $17,371 |
Series B Convertible Preferred Stock | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Convertible preferred stock, shares authorized | 65,577,300 | 65,642,104 | 65,642,104 |
Convertible preferred stock, shares issued | 65,577,300 | 65,577,300 | 65,577,300 |
Convertible preferred stock, shares outstanding | 65,577,300 | 65,577,300 | 65,577,300 |
Convertible preferred stock, aggregate liquidation preference | 12,268 | 12,268 | 12,268 |
Series C Convertible Preferred Stock | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Convertible preferred stock, shares authorized | 62,486,436 | 62,486,436 | 62,486,436 |
Convertible preferred stock, shares issued | 62,486,436 | 62,486,436 | 62,486,436 |
Convertible preferred stock, shares outstanding | 62,486,436 | 62,486,436 | 62,486,436 |
Convertible preferred stock, aggregate liquidation preference | 24,490 | 24,490 | 24,490 |
Series D Convertible Preferred Stock | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Convertible preferred stock, shares authorized | 36,030,712 | 36,030,712 | 36,030,712 |
Convertible preferred stock, shares issued | 36,030,712 | 36,030,712 | 36,030,712 |
Convertible preferred stock, shares outstanding | 36,030,712 | 36,030,712 | 36,030,712 |
Convertible preferred stock, aggregate liquidation preference | 32,044 | 32,044 | 32,044 |
Series E Convertible Preferred Stock | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Convertible preferred stock, shares authorized | 10,000,000 | 14,285,712 | 14,285,712 |
Convertible preferred stock, shares issued | 10,000,000 | 10,000,000 | 10,000,000 |
Convertible preferred stock, shares outstanding | 10,000,000 | 10,000,000 | 10,000,000 |
Convertible preferred stock, aggregate liquidation preference | 17,500 | 17,500 | 17,500 |
Series F Convertible Preferred Stock | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Preferred stock, par value | $0.01 | ' | ' |
Convertible preferred stock, shares authorized | 8,868,130 | 0 | 0 |
Convertible preferred stock, shares issued | 8,834,486 | 0 | 0 |
Convertible preferred stock, shares outstanding | 8,834,486 | 0 | 0 |
Convertible preferred stock, aggregate liquidation preference | $89,858 | $0 | $0 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | Apr. 17, 2014 | Jun. 30, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 17, 2014 | Sep. 30, 2014 | Apr. 17, 2014 | Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Director | Director | Series A Convertible Preferred Stock | Series A Convertible Preferred Stock | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series B Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Series C Convertible Preferred Stock | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Series D Convertible Preferred Stock | Series D Convertible Preferred Stock | Series E Convertible Preferred Stock | Series E Convertible Preferred Stock | Series E Convertible Preferred Stock | Series E Convertible Preferred Stock | Series F Convertible Preferred Stock | Series F Convertible Preferred Stock | Series F Convertible Preferred Stock | Series F Convertible Preferred Stock | Series F Convertible Preferred Stock | Series F Convertible Preferred Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | ||||||
Director | Director | Director | Director | Director | Director | Director | Director | Director | Director | Springstone Financial, Llc | Springstone Financial, Llc | Springstone Financial, Llc | Minimum | Maximum | ||||||||||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock warrants and reserved for future issuance | ' | ' | ' | ' | ' | ' | ' | 1,189,392 | 1,635,760 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price | ' | ' | ' | ' | ' | ' | ' | $0.27 | $0.27 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | $0.39 |
Warrants expiration year | ' | ' | ' | ' | ' | ' | ' | '2018 | '2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2021 | ' | ' | ' | ' |
Issuance of convertible preferred stock for cash,shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | 6,390,556 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate gross cash consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $17,500,000 | ' | ' | ' | $64,803,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.01 | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, conversion basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'On a one-for-one basis, as adjusted from time to time pursuant to the anti-dilution provisions of the our certificate of incorporation. | ' | ' | 'On a one-for-one basis, as adjusted from time to time pursuant to the anti-dilution provisions of our Restated Certificate of Incorporation. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of convertible preferred stock for cash, issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200 | ' | 153,000 | ' | 197,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital stock, shares authorized | ' | ' | ' | 606,470,064 | ' | 622,614,174 | 632,184,352 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 372,000,000 | ' | 360,000,000 | 360,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | 250,614,174 | ' | 246,470,064 | 246,470,064 | ' | ' | ' | 67,651,596 | 68,025,100 | 68,025,100 | 65,577,300 | 65,642,104 | 65,642,104 | 62,486,436 | 62,486,436 | 62,486,436 | 36,030,712 | 36,030,712 | 36,030,712 | ' | 10,000,000 | 14,285,712 | 14,285,712 | 8,868,130 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Par value of preferred stock issued | $0.01 | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, shares consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' |
Business acquisition, value of shares placed in third party escrow to secure retention of key employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,100,000 | ' | ' | ' | ' | ' |
Vesting period for compensation arrangement | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' |
Compensation expense | 25,889,000 | 3,346,000 | 1,110,000 | 6,283,000 | 660,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,400,000 | ' | ' | ' | ' | ' | ' |
Percentage of voting power threshold for payment of liquidation preference | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Majority of outstanding shares of convertible preferred stock | 55.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from public offering of common stock | 30,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock conversion into number of common share | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, liquidation preference | ' | ' | ' | ' | ' | ' | ' | $0.27 | ' | ' | $0.19 | ' | ' | $0.39 | ' | ' | $0.89 | ' | ' | ' | $1.75 | ' | ' | $10.17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non cumulative dividends rate | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stockholder's number of vote for each share of common stock | '1 | ' | ' | '1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Board of Directors convertible preferred stockholders are entitled to elect | ' | ' | ' | ' | ' | ' | ' | 2 | 2 | ' | 1 | 1 | ' | 0 | 0 | ' | 0 | 0 | ' | ' | 0 | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of board of directors common stockholders are entitled to elect | 1 | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued from exercise of common stock warrant | 5,638,830 | ' | ' | 8,931,876 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,638,830 | 8,635,712 | 8,931,876 | ' | ' |
Proceeds upon the exercise of stock options | 2,997,000 | 1,531,000 | 864,000 | 1,715,000 | 158,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | 1,700,000 | ' | ' |
Shares issued from exercise of common stock warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 295,720 | 86,752 | 957,876 | ' | ' |
Proceeds from common stock warrant exercises | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000 | ' | $200,000 | ' | ' |
Shares_of_Common_Stock_Authori
Shares of Common Stock Authorized and Reserved for Future Issuance (Detail) | Sep. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Total common stock authorized and reserved for future issuance | 58,573,122 | 51,852,160 |
Options to purchase common stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total common stock authorized and reserved for future issuance | 54,587,814 | 43,314,728 |
Options available for future issuance | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total common stock authorized and reserved for future issuance | 3,359,320 | 7,756,492 |
Common stock warrants | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total common stock authorized and reserved for future issuance | 625,988 | 780,940 |
StockBased_Compensation_and_Ot2
Stock-Based Compensation and Other Employee Benefit Plans - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Fair market value of non-statutory options | 85.00% | ' | ' | ' | ' |
Percentage of option vested at one year anniversary | 25.00% | ' | ' | ' | ' |
Performance-based options outstanding | 54,587,814 | ' | 41,020,888 | 43,314,728 | ' |
Option granted to purchase of common stock | 18,511,572 | ' | 15,244,944 | 12,707,000 | 14,333,676 |
Options exercisable, weighted average exercise price | $5.91 | ' | $0.60 | $2.44 | $0.18 |
Common stock, Weighted average grant date fair value per share | ' | ' | $0.35 | $2.71 | $0.11 |
Options granted, total estimated fair value | ' | ' | $10,600,000 | $34,400,000 | $1,500,000 |
Stock awards, vesting period | ' | ' | ' | '4 years | ' |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Cash dividends | 0 | ' | ' | ' | ' |
Options to purchase shares | 5,638,830 | ' | ' | 8,931,876 | ' |
Total intrinsic value of options exercised | 40,400,000 | ' | ' | 26,200,000 | ' |
Total fair value of stock options vested | 14,700,000 | ' | ' | ' | ' |
Expense related to accelerated vesting of stock options | 3,000,000 | ' | ' | ' | ' |
Unrecognized compensation cost | 97,800,000 | ' | ' | 35,100,000 | ' |
Unrecognized compensation cost expected period for recognition | '3 years 7 months 6 days | ' | ' | '3 years 4 months 24 days | ' |
Income tax expense (benefit) from share based compensation | ' | ' | ' | 0 | ' |
Employer 401(k) plan match to employee's eligible earnings, percentage | 3.00% | ' | ' | ' | ' |
Employer maximum annual match per employee for 401(k) plan | 5,000 | ' | ' | ' | ' |
Employer 401 (k) total match expense | 600,000 | ' | ' | ' | ' |
Developing software | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Stock-based compensation expense, capitalized amount | 1,200,000 | ' | ' | ' | ' |
Service Based Stock Options | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Option granted to purchase of common stock | 18,511,572 | ' | ' | ' | 12,006,348 |
Options exercisable, weighted average exercise price | $5.91 | ' | ' | ' | ' |
Common stock, Weighted average grant date fair value per share | $4.37 | ' | ' | ' | ' |
Options granted, total estimated fair value | $81,000,000 | ' | ' | ' | ' |
Stock awards, vesting period | '4 years | ' | ' | '4 years | ' |
Performance Based Stock Options | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Options expiration in period from the date of grant | '10 years | ' | ' | ' | ' |
Performance-based options outstanding | 0 | ' | ' | 0 | ' |
Option granted to purchase of common stock | ' | ' | ' | ' | 2,327,328 |
Stock Option | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Options expiration in period from the date of grant | '10 years | ' | ' | ' | ' |
BlackScholes_Option_Pricing_Mo
Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted (Detail) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' | ' | ' |
Assumed forfeiture rate (annual %) | 5.00% | 5.00% | 5.00% | 5.00% | 8.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted-average assumed stock price volatility | 54.00% | 63.50% | 63.50% | 59.10% | 63.50% |
Weighted-average risk-free rate | 1.90% | 1.10% | 1.01% | 1.46% | 1.15% |
Weighted-average expected life (years) | '6 years 4 months 17 days | '6 years 3 months | '6 years 3 months 11 days | '6 years 3 months 18 days | '6 years 3 months 4 days |
Options_Activity_Under_Option_
Options Activity Under Option Plan (Detail) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Balances, Beginning | 43,314,728 | ' | 41,020,888 | ' |
Granted | 18,511,572 | 15,244,944 | 12,707,000 | 14,333,676 |
Exercised | -5,638,830 | ' | -8,931,876 | ' |
Forfeited or expired | -1,599,656 | ' | -1,481,284 | ' |
Balances, Ending | 54,587,814 | 41,020,888 | 43,314,728 | ' |
Balances, Beginning | $0.94 | ' | $0.30 | ' |
Granted | $5.91 | $0.60 | $2.44 | $0.18 |
Exercised | $0.53 | ' | $0.19 | ' |
Forfeited or expired | $2.41 | ' | $0.48 | ' |
Balances, Ending | $2.63 | $0.30 | $0.94 | ' |
Stock Options Issued and Outstanding, Vested Options | 20,138,530 | ' | 15,502,936 | ' |
Stock Options Issued and Outstanding, Options Vested and Expected to Vest | 51,863,779 | ' | 41,451,548 | ' |
Weighted Average Remaining Contractual Life, Options Outstanding | '8 years 1 month 28 days | ' | '8 years 26 days | ' |
Weighted Average Remaining Contractual Life, Vested Options | '6 years 10 months 2 days | ' | '6 years 11 months 5 days | ' |
Weighted Average Remaining Contractual Life, Options Vested and Expected to Vest | '8 years 1 month 10 days | ' | '8 years 11 days | ' |
Weighted Average Exercise Price, Vested Options | $0.58 | ' | $0.24 | ' |
Weighted Average Exercise Price, Options Vested and Expected to Vest | $2.53 | ' | $0.91 | ' |
Schedule_of_StockBased_Compens
Schedule of Stock-Based Compensation Expense Recorded for Stock Options, Warrants and Series F Convertible Preferred Stock (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Stock-based compensation expense | $25,889 | $3,346 | $1,110 | $6,283 | $660 |
Sales and Marketing | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Stock-based compensation expense | 5,029 | 767 | 216 | 1,313 | 152 |
Origination And Servicing | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Stock-based compensation expense | 1,427 | 170 | 60 | 424 | 31 |
General and Administrative | Engineering And Product Development | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Stock-based compensation expense | 3,487 | 1,019 | 406 | 2,171 | 95 |
General and Administrative | Other | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Stock-based compensation expense | $15,946 | $1,390 | $428 | $2,375 | $382 |
Reconciliation_Of_Income_Tax_R
Reconciliation Of Income Tax Rate (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 |
Effective Income Tax Rate Reconciliation, Amount | ' | ' | ' | ' | ' |
Pretax Income (Loss) | ' | ' | ($4,238) | $7,308 | ($11,944) |
Tax at federal statutory rate | ' | ' | -1,441 | 2,485 | -4,061 |
State tax, net of federal tax benefit | ' | ' | -151 | 563 | -855 |
Share-based compensation expense | ' | ' | -314 | -593 | 181 |
Tax credits | ' | ' | ' | -459 | -140 |
Change in valuation allowance | ' | ' | 1,934 | -2,534 | 5,409 |
Change in unrecognized tax benefit | ' | ' | 150 | 518 | ' |
Other | ' | ' | -178 | 20 | -534 |
Income tax expense | $1,059 | $0 | $0 | $0 | $0 |
Tax at federal statutory rate | ' | ' | 34.00% | 34.00% | 34.00% |
State tax, net of federal tax benefit | ' | ' | 3.56% | 7.70% | 7.16% |
Share-based compensation expense | ' | ' | 7.41% | -8.11% | -1.52% |
Tax credits | ' | ' | 0.00% | -6.28% | 1.17% |
Change in valuation allowance | ' | ' | -45.63% | -34.67% | -45.28% |
Change in unrecognized tax benefit | ' | ' | -3.54% | 7.09% | 0.00% |
Other | ' | ' | 4.20% | 0.27% | 4.47% |
Effective Income Tax Rate Reconciliation, Percent, Total | ' | ' | 0.00% | 0.00% | 0.00% |
Deferred_Tax_Assets_and_Liabil
Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ' | ' |
Net operating loss carryforwards | $18,818 | $21,856 |
Reserves and accruals | 2,804 | 1,365 |
Organizational and start-up costs | 516 | 529 |
Credits & California incentives | 216 | 254 |
Gross deferred tax asset | 22,354 | 24,004 |
Valuation allowance | -22,338 | -23,939 |
Net deferred tax assets | 16 | 65 |
Deferred tax liability | ' | ' |
Depreciation and amortization | -16 | -65 |
Net deferred tax liability | ($16) | ($65) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | |
Summary Of Net Deferred Tax Assets [Line Items] | ' | ' | ' | ' | ' |
Deferred tax assets valuation allowance | ' | ' | $23,939,000 | $22,338,000 | ' |
Accrued interest or penalties associated with unrecognized tax benefits | 0 | ' | ' | 0 | ' |
Income tax expense | 1,059,000 | 0 | 0 | 0 | 0 |
Minimum | ' | ' | ' | ' | ' |
Summary Of Net Deferred Tax Assets [Line Items] | ' | ' | ' | ' | ' |
Percentage of ownership change, limitations on utilization of net operating loss (NOL) and research and development (R&D) credit carry forwards | ' | ' | ' | 50.00% | ' |
Ownership change test period, limitations on utilization of net operating loss (NOL) and research and development (R&D) credit carry forwards | ' | ' | ' | '3 years | ' |
Federal | ' | ' | ' | ' | ' |
Summary Of Net Deferred Tax Assets [Line Items] | ' | ' | ' | ' | ' |
Net federal operating loss | ' | ' | ' | 43,900,000 | ' |
Net operating losses carry forwards, expiration year | ' | ' | ' | '2027 | ' |
Research and development tax credit carry forward | ' | ' | ' | 600,000 | ' |
Research and development tax credit expiration year | ' | ' | ' | '2016 | ' |
State and Local Jurisdiction | ' | ' | ' | ' | ' |
Summary Of Net Deferred Tax Assets [Line Items] | ' | ' | ' | ' | ' |
Net federal operating loss | ' | ' | ' | 40,700,000 | ' |
Net operating losses carry forwards, expiration year | ' | ' | ' | '2016 | ' |
Research and development tax credit carry forward | ' | ' | ' | $500,000 | ' |
Unrecognized_Tax_Benefit_Detai
Unrecognized Tax Benefit (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ' | ' |
Balance as of the beginning of the calendar/fiscal year | $240 | $367 |
Additions for tax positions related to the prior year | ' | 523 |
Additions for tax positions related to the current year | 127 | 190 |
Balance as of the end of the calendar/fiscal year | $367 | $1,080 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Oct. 17, 2014 | Nov. 05, 2014 | Nov. 05, 2014 | |
Loan | Maximum | San Francisco | Westborough [Member] | New York | Subsequent Event | Subsequent Event | Subsequent Event | ||||||
Further Amendment | Further Amendment | ||||||||||||
Stock Options | |||||||||||||
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease agreement expiration date | ' | ' | ' | ' | ' | ' | ' | 30-Jun-22 | 31-Jan-20 | 31-Jan-14 | ' | ' | ' |
Lease agreement renewal term | ' | ' | ' | ' | ' | ' | ' | '5 years | '5 years | '1 year | '5 years | ' | ' |
Rental expense | ' | $2,500,000 | $1,300,000 | $600,000 | $1,900,000 | $500,000 | ' | ' | ' | ' | ' | ' | ' |
Sublease rental expense | ' | ' | 400,000 | 500,000 | 600,000 | 400,000 | ' | ' | ' | ' | ' | ' | ' |
Minimum rental expense | ' | 2,200,000 | 1,100,000 | 100,000 | 1,300,000 | 100,000 | ' | ' | ' | ' | 1,200,000 | ' | ' |
Security deposit made under lease agreement, cash | 200,000 | 200,000 | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Security deposit made under lease agreement | 200,000 | 200,000 | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Unfunded loan balance | 9,000,000 | 9,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of unfunded loans | ' | 722 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Date of fully funded loans | ' | 8-Oct-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent Loan Purchase Commitment limit | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' |
Remaining limit of Contingent Loan Purchase Commitment | 2,200,000 | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum cash pledged | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pledged and restricted to support contingent obligation | 3,400,000 | 3,400,000 | ' | 2,300,000 | 3,400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation settlement, amount offered, shares of common stock | 120,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,000 | 40,000 |
Litigation settlement, amount offered, cash consideration | 215,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 215,000 | ' |
Amount reserved for estimated tax and settlement liabilities | 200,000 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimates range of possible losses in excess of amount accrued | $1,900,000 | $1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating_Leases_Future_Minimu
Operating Leases Future Minimum Rent Payable (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | ' |
2014 | $2,748 |
2015 | 3,293 |
2016 | 3,379 |
2017 | 3,598 |
2018 | 3,808 |
Thereafter | 1,925 |
Total | $18,751 |
Segment_Reporting_Additional_I
Segment Reporting - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Number of reportable segments | 1 |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2012 | Oct. 17, 2014 |
Subsequent Event | ||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Lease commencement date | ' | ' | ' | ' | ' | 'Fourth quarter of 2014 |
Lease term | ' | ' | ' | ' | ' | '4 years 6 months |
Lease extension term | ' | ' | ' | ' | ' | '5 years |
Annual lease payments | $2.20 | $1.10 | $0.10 | $1.30 | $0.10 | $1.20 |