Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 10, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 333-225797-01 | |
Entity Registrant Name | PROSPER MARKETPLACE, INC. | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001416265 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 73-1733867 | |
Entity Address, Address Line One | 221 Main Street | |
Entity Address, Address Line Two | 3rd Floor | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 415 | |
Local Phone Number | 593-5400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 70,859,235 | |
Prosper Funding LLC | ||
Entity Information [Line Items] | ||
Entity File Number | 333-225797 | |
Entity Registrant Name | PROSPER FUNDING LLC | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001542574 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-4526070 | |
Entity Address, Address Line One | 221 Main Street | |
Entity Address, Address Line Two | 3rd Floor | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 415 | |
Local Phone Number | 593-5400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Assets: | |||
Cash and Cash Equivalents | $ 53,129 | $ 50,145 | |
Restricted Cash | [1] | 168,141 | 163,723 |
Accounts Receivable | [1] | 722 | 605 |
Loans Held for Sale, at Fair Value | [1] | 240,379 | 274,621 |
Borrower Loans, at Fair Value | [1] | 351,101 | 378,263 |
Property and Equipment, Net | 29,725 | 28,446 | |
Prepaid and Other Assets | [1] | 6,240 | 5,196 |
Servicing Assets | 9,248 | 9,242 | |
Goodwill | 36,368 | 36,368 | |
Intangible Assets, Net | 457 | 500 | |
Total Assets | 895,510 | 947,109 | |
Liabilities, Convertible Preferred Stock and Stockholders' Deficit: | |||
Accounts Payable and Accrued Liabilities | 16,298 | 17,876 | |
Payable to Investors | 127,748 | 124,094 | |
Notes, at Fair Value | 218,494 | 208,379 | |
Notes Issued by Securitization Trust | [1] | 124,564 | 156,782 |
Certificates Issued by Securitization Trust, at Fair Value | [1] | 19,726 | 22,917 |
Warehouse Lines | [1] | 213,336 | 242,479 |
Other Liabilities | 25,890 | 25,057 | |
Convertible Preferred Stock Warrant Liability | 156,750 | 112,319 | |
Total Liabilities | 902,806 | 909,903 | |
Commitments and Contingencies (Note 16) | |||
Convertible Preferred Stock | 322,748 | 322,748 | |
Stockholders' Deficit: | |||
Common Stock – $0.01 par value; 625,000,000 shares authorized; 71,699,768 shares issued and 70,763,833 shares outstanding, as of March 31, 2021; 70,075,307 shares issued and 69,139,372 shares outstanding, as of December 31, 2020. | 232 | 215 | |
Additional Paid-In Capital | 156,322 | 155,952 | |
Less: Treasury Stock | (23,417) | (23,417) | |
Accumulated Deficit | (460,800) | (415,911) | |
Total Stockholders' Deficit | (327,663) | (283,161) | |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 895,510 | 947,109 | |
Prosper Funding LLC | |||
Assets: | |||
Cash and Cash Equivalents | 7,709 | 8,592 | |
Restricted Cash | 135,723 | 132,332 | |
Borrower Loans, at Fair Value | 219,012 | 209,670 | |
Property and Equipment, Net | 7,851 | 6,928 | |
Servicing Assets | 10,770 | 11,088 | |
Other Assets | 201 | 217 | |
Total Assets | 381,266 | 368,827 | |
Liabilities, Convertible Preferred Stock and Stockholders' Deficit: | |||
Accounts Payable and Accrued Liabilities | 2,760 | 2,361 | |
Payable to Related Party | 3,204 | 4,120 | |
Payable to Investors | 130,436 | 126,266 | |
Notes, at Fair Value | 218,494 | 208,379 | |
Other Liabilities | 2,488 | 2,613 | |
Total Liabilities | 357,382 | 343,739 | |
Stockholders' Deficit: | |||
Member's Equity | 11,404 | 11,404 | |
Accumulated Deficit | 12,480 | 13,684 | |
Total Stockholders' Deficit | 23,884 | 25,088 | |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 381,266 | 368,827 | |
Primary Beneficiary | |||
Assets: | |||
Restricted Cash | [2] | 25,549 | 25,203 |
Loans Held for Sale, at Fair Value | [2] | 240,379 | 274,621 |
Borrower Loans, at Fair Value | [2] | 132,089 | 168,593 |
Prepaid and Other Assets | [2] | 3,097 | 2,043 |
Total Assets | [2] | 401,114 | 470,460 |
Liabilities, Convertible Preferred Stock and Stockholders' Deficit: | |||
Notes Issued by Securitization Trust | [2] | 124,564 | 156,782 |
Certificates Issued by Securitization Trust, at Fair Value | [2] | 19,726 | 22,917 |
Warehouse Lines | [2] | 213,336 | 242,479 |
Total Liabilities | [2] | 357,626 | 422,178 |
Convertible Preferred Stock | $ 2,381 | $ 2,381 | |
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | ||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the condensed consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. See Note 6, Securitizations, and Note 10, Debt, to our Notes to Condensed Consolidated Financial Statements for add itional information. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 20, 2017 |
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Convertible preferred stock, authorized (in shares) | 444,760,848 | 444,760,848 | 444,760,848 |
Convertible preferred stock, issued (in shares) | 209,613,570 | 209,613,570 | |
Convertible preferred stock, outstanding (in shares) | 209,613,570 | 209,613,570 | |
Convertible preferred stock, aggregate liquidation preference | $ 370,456 | $ 370,456 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 625,000,000 | 625,000,000 | 625,000,000 |
Common stock, issued (in shares) | 71,699,768 | 70,075,307 | |
Common stock, outstanding (in shares) | 70,763,833 | 69,139,372 | |
Primary Beneficiary | |||
Convertible preferred stock, issued (in shares) | 51,247,915 | ||
Convertible preferred stock, outstanding (in shares) | 51,247,915 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Revenues: | ||
Gain (Loss) on Sale of Borrower Loans | $ 1,623,000 | $ 1,744,000 |
Total Operating Revenues | 26,394,000 | 29,226,000 |
Interest Income (Expense): | ||
Interest Income on Borrower Loans and Loans Held for Sale | 21,898,000 | 27,644,000 |
Interest Expense on Financial Instruments | (12,925,000) | (16,683,000) |
Net Interest Income (Expense), Net | 8,973,000 | 10,961,000 |
Change in Fair Value of Financial Instruments, Net | (2,251,000) | (36,942,000) |
Total Net Revenue | 33,116,000 | 3,245,000 |
Expenses: | ||
Origination and Servicing | 8,374,000 | 8,446,000 |
Sales and Marketing | 7,722,000 | 11,242,000 |
General and Administrative | 17,644,000 | 18,162,000 |
Change in Fair Value of Convertible Preferred Stock Warrants | 44,431,000 | (55,449,000) |
Other Income, Net | (187,000) | (320,000) |
Total Expenses | 77,984,000 | (17,919,000) |
Net (Loss) Income Before Taxes | (44,868,000) | 21,164,000 |
Income Tax Expense | (21,000) | (34,000) |
Net (Loss) Income | (44,889,000) | 21,130,000 |
Less: Net Income Allocated to Participating Securities | 0 | 15,755,000 |
Net (Loss) Income Attributable to Common Stockholders, Basic | $ (44,889,000) | $ 5,375,000 |
Net (Loss) Income Per Share - Basic (in dollars per share) | $ (0.65) | $ 0.08 |
Net (Loss) Income Per Share - Diluted (in dollars per share) | $ (0.65) | $ 0.02 |
Weighted-Average Shares - Basic (in shares) | 69,344,075 | 68,454,103 |
Weighted-Average Shares - Diluted (in shares) | 69,344,075 | 281,955,876 |
Prosper Funding LLC | ||
Operating Revenues: | ||
Gain (Loss) on Sale of Borrower Loans | $ 2,011,000 | $ 2,000,000 |
Total Operating Revenues | 12,449,000 | 14,474,000 |
Interest Income (Expense): | ||
Interest Income on Borrower Loans and Loans Held for Sale | 8,557,000 | 9,838,000 |
Interest Expense on Financial Instruments | (8,013,000) | (9,216,000) |
Net Interest Income (Expense), Net | 544,000 | 622,000 |
Change in Fair Value of Financial Instruments, Net | (228,000) | 63,000 |
Total Net Revenue | 12,765,000 | 15,159,000 |
Expenses: | ||
Administration Fee - Related Party | 12,432,000 | 12,364,000 |
Servicing | 1,413,000 | 1,193,000 |
General and Administrative | 124,000 | 54,000 |
Total Expenses | 13,969,000 | 13,611,000 |
Income Tax Expense | 0 | 0 |
Net (Loss) Income | (1,204,000) | 1,548,000 |
Administration Fee Revenue - Related Party | Prosper Funding LLC | ||
Operating Revenues: | ||
Revenues | 6,786,000 | 5,835,000 |
Transaction Fees, Net | ||
Operating Revenues: | ||
Revenues | 20,830,000 | 20,413,000 |
Servicing Fees, Net | ||
Operating Revenues: | ||
Revenues | 3,414,000 | 6,057,000 |
Servicing Fees, Net | Prosper Funding LLC | ||
Operating Revenues: | ||
Revenues | 3,601,000 | 6,459,000 |
Other Revenue | ||
Operating Revenues: | ||
Revenues | 527,000 | 1,012,000 |
Other Revenue | Prosper Funding LLC | ||
Operating Revenues: | ||
Revenues | $ 51,000 | $ 180,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Other Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net (Loss) Income | $ (44,889) | $ 21,130 |
Other Comprehensive (Loss) Income, Before Tax: | ||
Other Comprehensive (Loss) Income, Before Tax | 0 | 0 |
Other Comprehensive (Loss) Income, Net of Tax | 0 | 0 |
Comprehensive (Loss) Income, Net of Tax | $ (44,889) | $ 21,130 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Convertible Preferred Stock, Stockholders’ Deficit and Members' Equity (Unaudited) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Convertible Preferred Stock Held by Consolidated VIE | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Prosper Funding LLC | Prosper Funding LLCAccumulated Deficit | Prosper Funding LLCMember’s Equity |
Beginning balance (in shares) at Dec. 31, 2019 | 209,613,570 | 0 | ||||||||
Beginning balance at Dec. 31, 2019 | $ 322,748 | $ 0 | ||||||||
Ending balance (in shares) at Mar. 31, 2020 | 209,613,570 | 0 | ||||||||
Ending balance at Mar. 31, 2020 | $ 322,748 | $ 0 | ||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 73,629,136 | (5,177,235) | ||||||||
Beginning balance at Dec. 31, 2019 | $ (306,255) | $ 208 | $ (23,417) | $ 151,416 | $ (434,462) | $ 28,187 | $ 12,283 | $ 15,904 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exercise of vested stock options (in shares) | 3,740 | |||||||||
Exercise of vested stock options | 1 | 1 | ||||||||
Stock-based compensation expense | 557 | 557 | ||||||||
Net (Loss) Income | 21,130 | 21,130 | 1,548 | 1,548 | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 73,632,876 | (5,177,235) | ||||||||
Ending balance at Mar. 31, 2020 | $ (284,567) | $ 208 | $ (23,417) | 151,974 | (413,332) | 29,735 | 13,831 | 15,904 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 209,613,570 | 209,613,570 | (51,247,915) | |||||||
Beginning balance at Dec. 31, 2020 | $ 322,748 | $ 322,748 | $ (2,381) | |||||||
Ending balance (in shares) at Mar. 31, 2021 | 209,613,570 | 209,613,570 | (51,247,915) | |||||||
Ending balance at Mar. 31, 2021 | $ 322,748 | $ 322,748 | $ (2,381) | |||||||
Beginning balance (in shares) at Dec. 31, 2020 | 74,316,607 | (5,177,235) | ||||||||
Beginning balance at Dec. 31, 2020 | (283,161) | $ 215 | $ (23,417) | 155,952 | (415,911) | 25,088 | 13,684 | 11,404 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exercise of vested stock options (in shares) | 1,624,461 | |||||||||
Exercise of vested stock options | 34 | $ 17 | 17 | |||||||
Stock-based compensation expense | 353 | 353 | ||||||||
Net (Loss) Income | (44,889) | (44,889) | (1,204) | (1,204) | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 75,941,068 | (5,177,235) | ||||||||
Ending balance at Mar. 31, 2021 | $ (327,663) | $ 232 | $ (23,417) | $ 156,322 | $ (460,800) | $ 23,884 | $ 12,480 | $ 11,404 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from Operating Activities: | ||
Net (Loss) Income | $ (44,889) | $ 21,130 |
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by (Used in) Operating Activities: | ||
Change in Fair Value of Financial Instruments, Net | 2,250 | 36,938 |
Depreciation and Amortization | 2,246 | 2,006 |
Amortization of Operating Lease Right-of-use Asset | 856 | 901 |
Gain on Sales of Borrower Loans | (2,019) | (1,974) |
Change in Fair Value of Servicing Rights | 2,013 | 2,834 |
Stock-Based Compensation Expense | 319 | 505 |
Change in Fair Value of Convertible Preferred Stock Warrants | 44,431 | (55,449) |
Other, Net | 882 | 1,073 |
Changes in Operating Assets and Liabilities: | ||
Purchase of Loans Held for Sale at Fair Value | (406,234) | (399,550) |
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 450,897 | 392,244 |
Accounts Receivable | (117) | 663 |
Prepaid and Other Assets | 226 | 214 |
Accounts Payable and Accrued Liabilities | (889) | (5,151) |
Payable to Investors | 3,654 | (13,164) |
Other Liabilities | (1,086) | (1,496) |
Net Cash Provided by (Used in) Operating Activities | 52,540 | (18,276) |
Cash Flows from Investing Activities: | ||
Purchase of Borrower Loans Held at Fair Value | (48,958) | (41,301) |
Proceeds from Sales and Principal Payments of Borrower Loans Held at Fair Value | 65,201 | 80,928 |
Purchases of Property and Equipment | (3,092) | (3,362) |
Net Cash Provided by (Used in) Investing Activities | 13,151 | 36,265 |
Cash Flows from Financing Activities: | ||
Proceeds from Issuance of Notes Held at Fair Value | 49,861 | 40,575 |
Payments of Notes Held at Fair Value | (39,788) | (40,587) |
Principal Payments on Notes Issued by Securitization Trust | (32,491) | (61,969) |
Principal Payments on Certificates Issued by Securitization Trust | (5,485) | (4,833) |
Proceeds from Warehouse Lines | 30,750 | 22,749 |
Principal Payments on Warehouse Lines | (59,900) | 0 |
Payments of Debt Issuance Costs | (1,270) | 0 |
Proceeds from Exercise of Stock Options | 34 | 1 |
Net Cash Used in Financing Activities | (58,289) | (44,064) |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 7,402 | (26,075) |
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 213,868 | 220,408 |
Cash, Cash Equivalents and Restricted Cash at End of the Period | 221,270 | 194,333 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash Paid for Interest | 12,370 | 15,993 |
Non-Cash Investing Activity- Accrual for Property and Equipment, Net | 144 | 218 |
Reconciliation to Amounts on Consolidated Balance Sheets: | ||
Total Cash, Cash Equivalents and Restricted Cash | 221,270 | 194,333 |
Prosper Funding LLC | ||
Cash flows from Operating Activities: | ||
Net (Loss) Income | (1,204) | 1,548 |
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by (Used in) Operating Activities: | ||
Change in Fair Value of Financial Instruments, Net | 228 | (63) |
Other Non-Cash Changes in Borrower Loans, Loans Held for Sale and Notes | (88) | (47) |
Depreciation and Amortization | 1,092 | 1,025 |
Gain on Sales of Borrower Loans | (2,354) | (2,196) |
Change in Fair Value of Servicing Rights | 2,671 | 3,394 |
Changes in Operating Assets and Liabilities: | ||
Purchase of Loans Held for Sale at Fair Value | (406,234) | (399,550) |
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 406,234 | 399,550 |
Other Assets | 16 | 209 |
Accounts Payable and Accrued Liabilities | 399 | 255 |
Payable to Investors | 4,170 | (14,435) |
Net Related Party Receivable/Payable | (1,123) | 10,251 |
Other Liabilities | (125) | (454) |
Net Cash Provided by (Used in) Operating Activities | 3,682 | (513) |
Cash Flows from Investing Activities: | ||
Purchase of Borrower Loans Held at Fair Value | (48,958) | (41,301) |
Proceeds from Sales and Principal Payments of Borrower Loans Held at Fair Value | 39,518 | 40,222 |
Purchases of Property and Equipment | (1,807) | (583) |
Net Cash Provided by (Used in) Investing Activities | (11,247) | (1,662) |
Cash Flows from Financing Activities: | ||
Proceeds from Issuance of Notes Held at Fair Value | 49,861 | 40,575 |
Payments of Notes Held at Fair Value | (39,788) | (40,588) |
Net Cash Used in Financing Activities | 10,073 | (13) |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 2,508 | (2,188) |
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 140,924 | 117,861 |
Cash, Cash Equivalents and Restricted Cash at End of the Period | 143,432 | 115,673 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash Paid for Interest | 8,200 | 9,366 |
Non-Cash Investing Activity- Accrual for Property and Equipment, Net | 711 | 154 |
Reconciliation to Amounts on Consolidated Balance Sheets: | ||
Total Cash, Cash Equivalents and Restricted Cash | $ 143,432 | $ 115,673 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
BASIS OF PRESENTATION | Prosper Marketplace, Inc. (“PMI”) was incorporated in the state of Delaware on March 22, 2005. Except as the context requires otherwise, as used in these notes to the condensed consolidated financial statements of PMI, “Prosper,” “we,” “us,” and “our” refer to PMI and its wholly-owned subsidiaries, on a consolidated basis. The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and disclosure requirements for interim financial information and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020. The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date. Management believes these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. The preparation of Prosper’s condensed consolidated financial statements and related disclosures in conformity with US GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in Prosper’s financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes 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, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions. The accompanying interim condensed consolidated financial statements include the accounts of PMI, its wholly-owned subsidiaries and consolidated variable interest entities (“VIEs”). All intercompany balances have been eliminated in consolidation. Securitization Notes are notes held by certain third party investors pursuant to Prosper’s securitization transactions, and are distinguishable from the borrower payment dependent Notes available to investors through our Note Channel. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
BASIS OF PRESENTATION | Basis of Presentation Prosper Funding LLC (“PFL”) was formed in the state of Delaware in February 2012 as a limited liability company with Prosper Marketplace, Inc. (“PMI”) as its sole equity member. Except as the context otherwise requires, as used in these Notes to the condensed consolidated financial statements of Prosper Funding LLC, “PFL”, and the “Company” refers to Prosper Funding LLC and its wholly owned subsidiary, Prosper Depositor LLC, a Delaware limited liability company, on a consolidated basis. The unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and disclosure requirements for interim financial information and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020. The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date. Management believes these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. PFL did not have any items of other comprehensive income or loss for any of the periods presented in the condensed consolidated financial statements as of and for the three months ended March 31, 2021 and March 31, 2020. The preparation of PFL's condensed consolidated financial statements and related disclosures in conformity with US GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes 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, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. |
SUMMARY OF SIGNIFICANT ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | Summary of Significant Accounting Policies Prosper’s significant accounting policies are included in Note 2, Summary of Significant Accounting Policies, in Prosper’s Annual Report on Form 10-K for the year ended December 31, 2020. There have been no changes to these accounting policies during the first three months of 2021 unless noted below. Fair Value Measurements Financial instruments measured at fair value consist principally of Borrower Loans, Loans Held for Sale, Servicing Assets, Loan Trailing Fee Liabilities (Note 9), Notes, Certificates Issued by Securitization Trust and Convertible Preferred Stock Warrant Liability. The estimated fair values of other financial instruments, including Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short-term nature. The estimated fair values of Paycheck Protection Program loan (Note 9 and 10), Notes Issued by Securitization Trust and Warehouse Lines do not approximate their carrying values due primarily to differences in the stated and market rates associated with these instruments. Refer to Note 7, Fair Value of Assets and Liabilities, for additional fair value disclosures. Restricted Cash Restricted Cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors have on our marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank, then issues Notes and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s condensed consolidated balance sheets as assets and liabilities, respectively. In 2019, Prosper began refinancing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions, which issue senior notes, risk retention interests and residual certificates. Associated securitization trusts are deemed consolidated VIEs, and as a result the Borrower Loans held in the securitization trusts are included in “Borrower Loans, at Fair Value”. Senior notes sold to third party investors are included in “Notes Issued by Securitization Trust,” and the risk retention interest and residual certificates held by third party investors are included in “Certificates Issued by Securitization Trust, at Fair Value” on the accompanying condensed consolidated balance sheets. Refer to Note 6, Securitization for additional disclosures. Prosper uses Warehouse Lines to purchase Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. Loans Held for Sale are included in “Loans Held for Sale, at Fair Value” on the Consolidated Balance Sheets. See Note 10, Debt for more details on Warehouse Lines. Borrower Loans and Loans Held for Sale are purchased from WebBank. Prosper places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods. Prosper has elected the fair value option for Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans held in consolidated securitization trusts are partially offset by changes in fair value of the Certificates Issued by Securitization Trust. Changes in fair value of Loans Held for Sale are recorded through Proper's earnings and Prosper collects interest on Loans Held for Sale. Changes in the fair values of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. Prosper primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. The key assumptions used in the valuation include default rates and prepayment rates derived primarily from historical performance, and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. Leases Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not record ROU assets and lease liabilities. If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment. Consolidation of Variable Interest Entities The determination of whether to consolidate a VIE in which we have a variable interest requires a significant amount of analysis and judgment regarding whether we are the primary beneficiary of a VIE due to our holding a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support and (ii) whether a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity. Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate such VIE in the consolidated financial statements. Recent Accounting Pronouncements Accounting Standards Adopted by the Company in the Current Period In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries and the methodology for calculating income taxes in an interim period. The guidance also clarifies and simplifies other aspects of the accounting for income taxes, including a modification in the guidance for franchise taxes that are partially based on income and recognizing deferred taxes for a subsequent step-up in the tax basis of goodwill. The ASU is effective for the Company beginning in the first quarter of 2021. The Company has adopted ASU 2019-12 and concluded that the impact on its condensed consolidated financial statements was immaterial. Accounting Standards Issued, to be Adopted by the Company in Future Periods In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP on contract modifications and hedge accounting, in order to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative referenced rates, such as the Secured Overnight Financing Rate. This ASU can be adopted after its issuance date through December 31, 2022. The Company is currently evaluating the impact reference rate reform will have on its contracts that reference LIBOR in order to determine whether to adopt this guidance. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | Summary of Significant Accounting Policies PFL's significant accounting policies are included in Note 2, Summary of Significant Accounting Policies, in PFL’s Annual Report on Form 10-K for the year ended December 31, 2020. There have been no changes to these accounting policies during the first three months of 2021. Fair Value Measurements Financial instruments consist principally of Cash and Cash Equivalents, Restricted Cash, Borrower Loans, Loans Held for Sale, Accounts Receivable, Accounts Payable and Accrued Liabilities, Payable to Investors and Notes. The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short term nature. Refer to Note 7 for additional fair value disclosures. Restricted Cash Restricted Cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors have on our marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. Borrower Loans, Loans Held for Sale and Notes With respect to the Note Channel, PFL purchases Borrower Loans from WebBank, then issues Notes and holds the Borrower Loans until maturity. The obligation to repay a series of Notes funded through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans and Notes funded through the Note Channel are carried on PFL’s condensed consolidated balance sheets as assets and liabilities, respectively. PFL places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, PFL stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, PFL charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods. Management has elected the fair value option for Borrower Loans, Loans Held for Sale, and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans, Loans Held for Sale and Notes are included in “Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net” on the condensed consolidated statements of operations. PFL primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale and Notes. The key assumptions used in the valuation include default rates and prepayment rates derived primarily from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. Recent Accounting Pronouncements Accounting Standards Adopted In The Current Period No accounting standards were adopted in the current period for PFL. Accounting Standards Issued, To Be Adopted By PFL In Future Periods No issued and pending accounting standards were identified that are expected to have an impact on PFL. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
PROPERTY AND EQUIPMENT, NET | Property and Equipment, Net Property and Equipment consists of the following at the dates presented (in thousands): March 31, 2021 December 31, 2020 Operating lease right-of-use assets $ 17,048 $ 15,767 Computer equipment 14,219 13,841 Internal-use software and website development costs 35,286 33,176 Office equipment and furniture 2,872 2,872 Leasehold improvements 7,167 7,167 Assets not yet placed in service 4,982 5,035 Property and equipment 81,574 77,858 Less: Accumulated depreciation and amortization (51,849) (49,412) Total Property and Equipment, Net $ 29,725 $ 28,446 Depreciation and amortization expense for Property and Equipment, Net for the three months ended March 31, 2021 and March 31, 2020 wa s $2.2 million an d $2.0 million, respectively. These charges are included in General and Administrative expenses on the condensed consolidated statements of operations. Prosper capitalized internal-use software and website development costs in the amount of $2.0 million and $2.7 million for the three months ended March 31, 2021 and March 31, 2020, respectively. Additionally, disclosures ar ound the operating lease right-of-use ass ets are included in Note 15. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
PROPERTY AND EQUIPMENT, NET | Property and Equipment, Net Property and equipment consist of the following (in thousands): March 31, 2021 December 31, 2020 Internal-use software and web site development costs $ 28,967 $ 26,953 Less accumulated depreciation and amortization (21,116) (20,025) Total property and equipment, net $ 7,851 $ 6,928 |
BORROWER LOANS, LOANS HELD FOR
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE | Borrower Loans, Loans Held for Sale and Notes, at Fair Value The aggregate principal balances outstanding and fair values of Borrower Loans, Loans Held for Sale, and Notes as of March 31, 2021 and December 31, 2020, are presented in the following table (in thousands): Borrower Loans Loans Held for Sale Notes March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Aggregate principal balance outstanding $ 360,013 $ 393,642 $ 243,682 $ 279,113 $ 224,261 $ 217,110 Fair value adjustments (8,912) (15,379) (3,303) (4,492) (5,767) (8,731) Fair value $ 351,101 $ 378,263 $ 240,379 $ 274,621 $ 218,494 $ 208,379 PMI has offered assistance to qualified borrowers who are facing financial hardship as a result of the COVID-19 pandemic. These relief options include, among other things, the ability to delay up to four monthly loan payments, the ability to reduce minimum monthly payments for up to 12 months and extend the term of the loan by up to 11 months, and waived late and non-sufficient funds fees. Since COVID-19 relief was first offered in March 2020 and through March 31, 2021, approximately 12% of the total outstanding balances of all loans originated on our platform on a cumulative basis have enrolled in at least one of these COVID-19 relief programs. Approximately 3% of the total outstanding balances of all loans originated on our platform are actively enrolled in at least one relief program as of March 31, 2021. Borrower Loans At March 31, 2021, outstanding Borrower Loans had original terms to maturity of either 36 or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82%, and ha d various original maturity dates through March 2026. At December 31, 2020, outstanding Borrower Loans had original maturities of either 36 or 60 months, had mont hly payments with fixed interest rates ranging from 5.31% to 31.82%, and had various original maturity dates through December 2025. As of March 31, 2021, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $1.8 million and a fair value of $0.2 million . As of December 31, 2020, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.8 million and a fair value of $0.3 million . Prosper places loans on non-accrual status when they are over 120 days past due. As of March 31, 2021 and December 31, 2020, Borrower Loans in non-accrual status had a fair value of $0.2 million a nd $0.4 million, respectively. Loans Held for Sale At March 31, 2021, outstanding Loans Held for Sale had original terms to maturity between 36 months and 60 months, had mont hly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through March 2026. At December 31, 2020, outstanding Loans Held for Sale had original terms to maturity between 36 months and 60 months , had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through December 2025. Interest income earned on Loans Held for Sale by the Company was $7.6 million and $4.8 million for the three months e nded March 31, 2021 and March 31, 2020, respectively. As of March 31, 2021, Loans Held for Sale that were 90 days or more delinquent had an aggregate principal amount of $0.7 million and a fair value of $0.1 million. As of December 31, 2020, Loans Held for S ale that were 90 days or more delinquent had an aggregate principal amount of $0.8 million and a fair value of $0.1 million . Prosper places loans on non-accrual status when they are over 120 days past due. As of March 31, 2021 and December 31, 2020, Loans Held for Sale in non-accrual status had a fair value of $0.1 million (for both periods). |
Prosper Funding LLC | |
Entity Information [Line Items] | |
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE | Borrower Loans and Notes, at Fair Value The aggregate principal balances outstanding and fair values of Borrower Loans and Notes as of March 31, 2021 and December 31, 2020, are presented in the following table (in thousands): Borrower Loans Notes March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Aggregate principal balance outstanding $ 222,006 $ 215,373 $ 224,261 $ 217,110 Fair value adjustments (2,994) (5,703) (5,767) (8,731) Fair value $ 219,012 $ 209,670 $ 218,494 $ 208,379 At March 31, 2021, outstanding Borrower Loans had original terms to maturity of either 36 or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through March 2026. At December 31, 2020, outstanding Borrower Loans had original maturities of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82%, and had various original maturity da tes through December 2025. Since COVID-19 relief was first offered in March 2020 and through March 31, 2021, approximately 12% of the total outstanding balances of all loans originated on our platform on a cumulative basis have enrolled in at least one of these COVID-19 relief programs. Approximately 3% of the total outstanding balances of all loans originated on our platform are actively enrolled in at least one relief program as of March 31, 2021. As of March 31, 2021, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $0.8 million and a fair value of $0.1 million. As of December 31, 2020, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $1.4 million and a fair value of $0.1 million. PFL places loans on non-accrual status when they are over 120 days past due. As of March 31, 2021 and December 31, 2020, Borrower Loans in non-accrual status had a fair value of $0.1 million a nd $0.2 million, respectively. |
SERVICING ASSETS
SERVICING ASSETS | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
SERVICING ASSETS | Servicing Assets Prosper accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees. The initial asset or liability is recognized when Prosper sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets are measured at fair value throughout the servicing period. The total gains recognized on the sale of such Borrower Loans for the three months ended March 31, 2021 and 2020 were $1.6 million and $1.7 million , respectively, recognized in Gain on Sale of Borrower Loans on the condensed consolidated statements of operations . As of March 31, 2021, Borrower Loans that were sold but for which Prosper retained servicing rights had a total outstanding principal balance of $2.3 billion , original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging fro m 5.31% to 31.82%, and various original maturity dates through March 2026 . A t December 31, 2020, Borrower Loans that were sold but for which Prosper retained servicing rights had a total outstanding principal balance of $2.4 billion, original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82%, and various original maturity dates through December 2025. Contractually-specified servicing fees and ancillary fees totaling $5.8 million and $9.2 million for the three months ended March 31, 2021 and 2020 , respectively, are included on the condensed consolidated statements of operations in Servicing Fees, Net. Fair Value Valuation Method Prosper uses a discounted cash flow valuation methodology generally consisting 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 within Note 7 below are those that Prosper considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate Prosper estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. Prosper estimated these market servicing rates based on observable market rates for other loan types in the industry and bids from subservicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper sells and services and information from backup service providers. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. We used a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with Prosper’s servicing assets. Default Rate The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which we expect to collect fees on the Borrower Loans, which is used to project future servicing revenues. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
SERVICING ASSETS | Servicing Assets PFL accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the condensed consolidated statements of operations. The initial asset or liability is recognized when PFL sells Borrower Loans to unrelated third-party buyers through the Whole Loa n Channel and the servicing rights are retained. The total recognized gains on the sale of such Borrower Loans was $2.0 million for the three months ended March 31, 2021 and March 31, 2020 , respectively. As of March 31, 2021, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $2.3 billion , original terms of either 36 or 60 months , monthly payments with fixed interest rates ranging fr om 5.31% to 31.82%, and various original maturity dates th rough March 2026 . At December 31, 2020, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $2.4 billion, original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82%, and various original maturity dates through December 2025. Contractually-specified servicing fees and ancillary fees totaled $9.3 million and $8.5 million for the three months ended March 31, 2021 and March 31, 2020, respectively, and are included on the condensed consolidated statements of operations in Servicing Fees, Net. Fair Value Valuation Method PFL uses a discounted cash flow valuation methodology generally consisting 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 within Note 7 are those that PFL considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate PFL estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. PFL estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that PFL sells and services and information from backup service providers. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management used a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with PFL’s Servicing Assets. Default Rate The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which PFL expects to collect fees on the Borrower Loans, which is used to project future servicing revenues. |
SECURITIZATIONS
SECURITIZATIONS | 3 Months Ended |
Mar. 31, 2021 | |
Transfers and Servicing [Abstract] | |
SECURITIZATIONS | Securitizations In 2019, Prosper co-sponsored and retained residual certificates in securitizations of unsecured personal whole loans facilitated through our marketplace with an aggregate outstanding principal balance of $573.0 million through three securitization trusts (PMIT 2019-1, PMIT 2019-2, and PMIT 2019-4). Each securitization trust issued senior notes, a risk retention interest and residual certificates to finance the purchase of Borrower Loans. The risk retention interest represents the right to receive 5.0% of all amounts collected on the Borrower Loans held by the securitization trusts. The resulting senior notes were sold to third party investors. Prosper retained 65.5%, 16.4%, and 19.6% of the residual certificates issued by PMIT 2019-1, PMIT 2019-2, and PMIT 2019-4, respectively. The remaining residual certificates and all the risk retention interests are held by third-party investors. In addition to the retained residual certificates, Prosper's continued involvement includes loan servicing responsibilities over the life of the underlying loans. PMIT 2019-1, 2019-2 and 2019-4 are deemed VIEs. Prosper consolidated the VIEs as the primary beneficiary because Prosper, through its role as the servicer, has both the power to direct the activities that most significantly affect the VIEs' economic performance and a variable interest that could potentially be significant to the VIEs through holding the retained residual certificates. In evaluating whether Prosper is the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIEs. Management assesses whether Prosper is the primary beneficiary of the VIEs on an on-going basis. For these VIEs, the creditors have no recourse to the general credit of Prosper and the liabilities of the VIEs can only be settled by the respective VIEs' assets. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs. Because Prosper consolidates the securitization trusts, the loans held in the securitization trusts are included in “Borrower Loans, at Fair Value”, the notes sold to third party investors recorded in “Notes Issued by Securitization Trust”, and the risk retention interests and residual certificates held by third party investors in “Certificates Issued by Securitization Trust, at Fair Value” in the condensed consolidated balance sheets. PMIT 2019-1 The notes under the PMIT 2019-1 securitization were issued in three classes: Class A in the amount of $127.3 million, Class B in the amount of $25.0 million and Class C in the amount of $19.3 million (collectively, the “2019-1 Notes”). The Class A, Class B and Class C notes bear interest at a fixed rate of 3.54%, 4.03% and 5.27%, respectively. Principal and interest payments began in March 2019 and are payable monthly. These notes are recorded at amortized cost on the balance sheet. The associated debt issuance costs of $2.3 million are deferred and amortized into interest expense over the contractual life of the notes. The notes held by third-party investors and the unamortized debt issuance costs are included in “Notes Issued by Securitization Trust” with a balance of $25.7 million and are secured by Borrower Loans at fair value of $26.6 million included in “Borrower Loans, at Fair Value” on the condensed consolidated balance sheets as of March 31, 2021. The risk retention and residual certificates held by third party investors at fair value of $2.8 million are included in “Certificates Issued by Securitization Trust, at Fair Value” on the condensed consolidated balance sheets as of March 31, 2021. PMIT 2019-2 The notes under the PMIT 2019-2 securitization were issued in three classes: Class A in the amount of $110.1 million, Class B in the amount of $31.4 million and Class C in the amount of $32.7 million (collectively, the “2019-2 Notes”). The Class A, Class B and Class C notes bear interest at a fixed rate of 3.20%, 3.69% and 5.05%, respectively. Principal and interest payments began in July 2019 and are payable monthly. These notes are recorded at amortized cost on the balance sheet. The associated debt issuance costs of $1.9 million are deferred and amortized into interest expense over the contractual life of the notes. The notes held by third-party investors and the unamortized debt issuance costs are included in “Notes Issued by Securitization Trust” with a balance of $46.4 million and are secured by Borrower Loans at fair value of $49.8 million included in “Borrower Loans, at Fair Value” on the condensed consolidated balance sheets as of March 31, 2021. The risk retention and residual certificates held by third party investors at fair value of $8.4 million are included in “Certificates Issued by Securitization Trust, at Fair Value” on the condensed consolidated balance sheets as of March 31, 2021. PMIT 2019-4 The notes under the PMIT 2019-4 securitization were issued in three classes: Class A in the amount of $102.6 million, Class B in the amount of $19.5 million and Class C in the amount of $16.8 million (collectively, the “2019-4 Notes”). The Class A, Class B and Class C notes bear interest at a fixed rate of 2.48%, 3.20% and 4.95% respectively. Principal and interest payments began in December 2019 and are payable monthly. These notes are recorded at amortized cost on the balance sheet. The associated debt issuance costs of $1.2 million are deferred and amortized into interest expense over the contractual life of the notes. The notes held by third-party investors and the unamortized debt issuance costs are included in “Notes Issued by Securitization Trust” with a balance of $52.4 million and are secured by Borrower Loans at fair value of $55.7 million included in “Borrower Loans, at Fair Value” on the condensed consolidated balance sheets as of March 31, 2021. The risk retention interest and residual certificates held by third party investors at fair value of $8.5 million are included in “Certificates Issued by Securitization Trust, at Fair Value” in the condensed consolidated balance sheets as of March 31, 2021. |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
FAIR VALUE OF ASSETS AND LIABILITIES | Fair Value of Assets and Liabilities Prosper measures the fair value of assets and liabilities in accordance with its fair value hierarchy which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. The Company applies this framework whenever other standards require (or permit) assets or liabilities to be measured at fair value. Assets and liabilities carried at fair value on the balance sheets are classified among three levels based on the observability of the inputs used to determine fair value: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation methodologies for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar methodologies, 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. Fair values of assets or liabilities are determined based on the fair value hierarchy, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. Various valuation methodologies are utilized, depending on the nature of the financial instrument, including the use of market prices for identical or similar instruments, or discounted cash flow models. When possible, active and observable market data for identical or similar financial instruments are utilized. Alternatively, fair value is determined using assumptions that management believes a market participant would use in pricing the asset or liability. Prosper did not transfer any assets or liabilities in or out of Level 3 for the three months ended March 31, 2021 or March 31, 2020. Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust, Servicing Rights and loan trailing fee liability are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used in the discounted cash flow model include default and prepayment rates primarily derived from historical performance and discount rates applied to each credit grade based on the perceived credit risk of each credit grade. The Convertible Preferred Stock Warrant Liability is valued using a Black-Scholes option pricing model. Refer to Note 12 for further details. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): March 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 351,101 $ 351,101 Loans Held for Sale at Fair Value — — 240,379 240,379 Servicing Assets — — 9,248 9,248 Total Assets $ — $ — $ 600,728 $ 600,728 Liabilities: Notes, at Fair Value $ — $ — $ 218,494 $ 218,494 Certificates Issued by Securitization Trust, at Fair Value — — 19,726 19,726 Convertible Preferred Stock Warrant Liability — — 156,750 156,750 Loan Trailing Fee Liability — — 2,189 2,189 Total Liabilities $ — $ — $ 397,159 $ 397,159 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 378,263 $ 378,263 Loans Held for Sale at Fair Value — — 274,621 274,621 Servicing Assets — — 9,242 9,242 Total Assets $ — $ — $ 662,126 $ 662,126 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Certificates Issued by Securitization Trust, at Fair Value — — 22,917 22,917 Convertible Preferred Stock Warrant Liability — — 112,319 112,319 Loan Trailing Fee Liability — — 2,233 2,233 Total Liabilities $ — $ — $ 345,848 $ 345,848 As Prosper’s Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust, Convertible Preferred Stock Warrant Liability, servicing assets and loan trailing fee liability do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Prosper did not transfer any assets or liabilities in or out of Level 3 for the three months ended March 31, 2021 and March 31, 2020. Significant Unobservable Inputs The following tables present quantitative information about the ranges of significant unobservable inputs used for the Company’s Level 3 fair value measurements at March 31, 2021 and December 31, 2020: Range Borrower Loans, Loans Held for Sale and Notes: March 31, 2021 December 31, 2020 Discount rate 4.7% - 17.2% 4.5% - 17.7% Default rate 1.7% - 17.6% 2.3% - 17.9% Range Certificates Issued by Securitization Trust: March 31, 2021 December 31, 2020 Discount rate 1.8% - 14.0% 3.3% - 16.0% Default rate 1.7% - 14.4% 3.2% - 15.3% Prepayment rate 5.6% - 35.3% 7.6% - 35.4% Range Servicing Assets: March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% Market servicing rate (1) (2) 0.625% - 0.818% 0.625% - 0.818% (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of March 31, 2021 were measured using a market servicing rate assumption of 81.8 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 62.5 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of March 31, 2021 and December 31, 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a total market servicing rate range of 68.5 - 87.8 basis points and a total market servicing rate of 69.5 - 88.8 basis points, respectively. Range Loan Trailing Fee Liability March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% At March 31, 2021 and December 31, 2020, the discounted cash flow methodology used to estimate the Notes fair values used the same projected cash flows as the related Borrower Loans. Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis The following tables present additional information about Level 3 Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held For Sale Notes Certificates Issued by Securitization Trust Total Balance at January 1, 2021 $ 378,263 $ 274,621 $ (208,379) $ (22,918) $ 421,587 Purchase of Borrower Loans/Issuance of Notes 48,958 406,234 (49,861) — 405,331 Principal repayments (75,390) (34,871) 39,788 5,485 (64,988) Borrower Loans sold to third parties (1,009) (404,828) — — (405,837) Other changes (669) (135) 187 34 (583) Change in fair value 948 (642) (229) (2,327) (2,250) Balance at March 31, 2021 $ 351,101 $ 240,379 $ (218,494) $ (19,726) $ 353,260 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held for Sale Notes Certificates Issued by Securitization Trust Total Balance at January 1, 2020 $ 634,019 $ 142,026 $ (244,171) $ (52,168) $ 479,706 Purchase of Borrower Loans/Issuance of Notes 41,301 399,551 (40,575) — 400,277 Principal repayments (96,715) (18,560) 40,588 4,833 (69,854) Borrower Loans sold to third parties (2,263) (355,634) — — (357,897) Other changes (742) 105 138 38 (461) Change in fair value (53,196) (14,252) 18,529 11,981 (36,938) Balance at March 31, 2020 $ 522,404 $ 153,236 $ (225,491) $ (35,316) $ 414,833 The following tables present additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the three month periods ending March 31, 2021 and 2020 (in thousands): Servicing Assets Fair Value at January 1, 2021 $ 9,242 Additions 2,019 Less: Changes in fair value (2,013) Fair Value at March 31, 2021 $ 9,248 Servicing Assets Fair Value at January 1, 2020 $ 12,602 Additions 1,974 Less: Changes in fair value (2,834) Fair Value at March 31, 2020 $ 11,742 The following tables present additional information about the Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the three month periods ending March 31, 2021 and 2020 (in thousands): Convertible Preferred Stock Balance as of January 1, 2021 $ 112,319 Change in fair value 44,431 Balance as of March 31, 2021 $ 156,750 Convertible Preferred Stock Balance as of January 1, 2020 $ 149,996 Change in fair value (55,449) Balance as of March 31, 2020 $ 94,547 Loan Trailing Fee The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below. The following tables present additional information about the Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the three month periods ending March 31, 2021 and 2020 (in thousands): Loan Trailing Fee Liability Balance at January 1, 2021 $ 2,233 Issuances 410 Cash Payment of Loan Trailing Fee (544) Change in Fair Value 90 Balance at March 31, 2021 $ 2,189 Loan Trailing Fee Liability Balance at January 1, 2020 $ 2,997 Issuances 385 Cash Payment of Loan Trailing Fee (675) Change in Fair Value (61) Balance at March 31, 2020 $ 2,646 Significant Recurring Level 3 Fair Value Input Sensitivity Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Borrower Loans and Loans Held for Sale are presented in the following table (in thousands, except percentages). Borrower Loans and Loans Held for Sale March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 591,480 $ 652,884 Weighted-average discount rate 7.91 % 8.26 % Weighted-average default rate 11.13 % 11.58 % Fair value resulting from: 100 basis point increase in discount rate $ 586,021 $ 647,093 200 basis point increase in discount rate $ 580,693 $ 641,437 Fair value resulting from: 100 basis point decrease in discount rate $ 597,074 $ 658,817 200 basis point decrease in discount rate $ 602,809 $ 664,895 Fair value resulting from: 10 percent increase in default rate $ 585,825 $ 646,421 20 percent increase in default rate $ 580,203 $ 639,987 Fair value resulting from: 10 percent decrease in default rate $ 597,161 $ 659,377 20 percent decrease in default rate $ 602,871 $ 665,904 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Notes are presented in the following table (in thousands, except percentages). Notes March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 218,494 $ 208,379 Weighted-average discount rate 8.10 % 8.93 % Weighted-average default rate 11.55 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 216,475 $ 206,528 200 basis point increase in discount rate $ 214,504 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 220,563 $ 210,274 200 basis point decrease in discount rate $ 222,685 $ 212,217 Fair value resulting from: 10 percent increase in default rate $ 216,393 $ 206,304 20 percent increase in default rate $ 214,304 $ 204,238 Fair value resulting from: 10 percent decrease in default rate $ 220,605 $ 210,463 20 percent decrease in default rate $ 222,727 $ 212,558 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Certificates Issued by Securitization Trust are presented in the following table (in thousands, except percentages). Certificates Issued by Securitization Trust March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 19,726 $ 22,917 Weighted-average discount rate 9.64 % 11.12 % Weighted-average default rate 11.06 % 12.93 % Weighted-average prepayment rate 19.18 % 20.86 % Fair value resulting from: 100 basis point increase in discount rate $ 19,566 $ 22,729 200 basis point increase in discount rate $ 19,410 $ 22,545 Fair value resulting from: 100 basis point decrease in discount rate $ 19,890 $ 23,110 200 basis point decrease in discount rate $ 20,056 $ 23,308 Fair value resulting from: 10 percent increase in default rate $ 18,903 $ 21,798 20 percent increase in default rate $ 18,084 $ 20,690 Fair value resulting from: 10 percent decrease in default rate $ 20,544 $ 24,030 20 percent decrease in default rate $ 21,366 $ 25,150 Fair value resulting from: 10 percent increase in prepayment rate $ 19,734 $ 22,933 20 percent increase in prepayment rate $ 19,745 $ 22,958 Fair value resulting from: 10 percent decrease in prepayment rate $ 19,710 $ 22,891 20 percent decrease in prepayment rate $ 19,702 $ 22,872 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Servicing Assets is presented in the following table (in thousands, except percentages). Servicing Assets March 31, 2021 December 31, 2020 Fair value, using the following assumptions $ 9,248 $ 9,242 Weighted-average market servicing rate 0.642 % 0.631 % Weighted-average prepayment rate 19.66 % 19.84 % Weighted-average default rate 12.72 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 8,694 $ 8,689 Market servicing rate decrease of 0.025% $ 9,802 $ 9,796 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 9,069 $ 9,064 Applying a 0.9 multiplier to prepayment rate $ 9,429 $ 9,423 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 9,119 $ 9,116 Applying a 0.9 multiplier to default rate $ 9,377 $ 9,369 These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Assets and Liabilities Not Recorded at Fair Value The following table presents the fair value hierarchy for assets, and liabilities not recorded at fair value (in thousands): March 31, 2021 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value Assets: Cash and Cash Equivalents $ 53,129 $ 53,129 $ — $ — $ 53,129 Restricted Cash - Cash and Cash Equivalents 163,264 163,264 — — 163,264 Restricted Cash - Certificates of Deposit 4,877 — 4,877 — 4,877 Accounts Receivable 722 — 722 — 722 Total Assets $ 221,992 $ 216,393 $ 5,599 $ — $ 221,992 Liabilities: Accounts Payable and Accrued Liabilities $ 16,298 $ — $ 16,298 $ — $ 16,298 Payable to Investors 127,748 — 127,748 — 127,748 Notes Issued by Securitization Trust 124,564 — 126,895 — 126,895 Warehouse Lines 213,336 — 215,310 — 215,310 Paycheck Protection Program loan (Note 10) 8,526 — 8,540 — 8,540 Total Liabilities $ 490,472 $ — $ 494,791 $ — $ 486,251 December 31, 2020 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value Assets: Cash and Cash Equivalents $ 50,145 $ 50,145 $ — $ — $ 50,145 Restricted Cash - Cash and Cash Equivalents 158,846 158,846 — — 158,846 Restricted Cash - Certificates of Deposit 4,877 — 4,877 — 4,877 Accounts Receivable 605 — 605 — 605 Total Assets $ 214,473 $ 208,991 $ 5,482 $ — $ 214,473 Liabilities: Accounts Payable and Accrued Liabilities $ 17,876 $ — $ 17,876 $ — $ 17,876 Payable to Investors 124,094 — 124,094 — 124,094 Notes Issued by Securitization Trust 156,782 — 158,951 — 158,951 Warehouse Lines 242,479 — 242,261 — 242,261 Paycheck Protection Program loan (Note 10) 8,505 — 8,540 — 8,540 Total Liabilities $ 549,736 $ — $ 551,722 $ — $ 551,722 The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities and Payable to Investors approximate their carrying values because of their short-term nature. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
FAIR VALUE OF ASSETS AND LIABILITIES | Fair Value of Assets and Liabilities PFL has elected to record certain financial instruments at fair value on the balance sheet. PFL classifies Borrower Loans, Loans Held for Sale and Notes as financial instruments and assesses their fair value each on a quarterly basis for financial statement presentation purposes. Gains and losses on these financial instruments are shown separately on the condensed consolidated statements of operations. At March 31, 2021 and December 31, 2020, the discounted cash flow methodology used to estimate the Notes fair values used the same projected cash flows as the related Borrower Loans. As demonstrated in the table below, the fair value adjustments for Borrower Loans were largely offset by the fair value adjustments of the Notes due to the borrower payment dependent design of the Notes and because the principal balances of the Borrower Loans approximated the principal balances of the Notes. Assets and liabilities carried at fair value on the balance sheets are classified among three levels based on the observability of the inputs used to determine fair value: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation methodologies for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar methodologies, 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. Fair values of assets or liabilities are determined based on the fair value hierarchy, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. Various valuation methodologies are utilized, depending on the nature of the financial instrument, including the use of market prices for identical or similar instruments, or discounted cash flow models. When possible, active and observable market data for identical or similar financial instruments are utilized. Alternatively, fair value is determined using assumptions that management believes a market participant would use in pricing the asset or liability. PFL did not transfer any assets or liabilities in or out of Level 3 for the three months ended March 31, 2021 or 2020. Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans and Notes are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary cash flow assumptions used to value such Borrower Loans and Notes include default and prepayment rates derived primarily from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): March 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 219,012 $ 219,012 Servicing Assets — — 10,770 10,770 Total Assets $ — $ — $ 229,782 $ 229,782 Liabilities: Notes, at Fair Value $ — $ — $ 218,494 $ 218,494 Loan Trailing Fee Liability — — 2,189 2,189 Total Liabilities $ — $ — $ 220,683 $ 220,683 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 209,670 $ 209,670 Servicing Assets — — 11,088 11,088 Total Assets $ — $ — $ 220,758 $ 220,758 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Loan Trailing Fee Liability — — 2,233 2,233 Total Liabilities $ — $ — $ 210,612 $ 210,612 As PFL’s Borrower Loans, Notes, Servicing Assets and loan trailing fee liability do not trade in an active market with readily observable prices, PFL uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates 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 may include changes in fair value that were attributable to both observable and unobservable inputs. Significant Unobservable Inputs The following tables present quantitative information about the significant unobservable inputs used for PFL’s Level 3 fair value measurements at the dates presented: Range Borrower Loans and Notes March 31, 2021 December 31, 2020 Discount rate 4.8% - 14.7% 5.3% - 16.1% Default rate 2.4% - 15.6% 2.6% - 16.2% Range Servicing Assets March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% Market servicing rate (1) (2) 0.625% - 0.818% 0.625% - 0.818% (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of March 31, 2021 were measured using a market servicing rate assumption of 81.8 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 62.5 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of March 31, 2021 and December 31, 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a total market servicing rate range of 68.5 - 87.8 basis points and a total market servicing rate of 69.5 - 88.8 basis points, respectively. Range Loan Trailing Fee Liability March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis The following tables present additional information about Level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis for three months ended March 31, 2021 and 2020 (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held for Sale Notes Total Balance at January 1, 2021 $ 209,670 $ — $ (208,379) $ 1,291 Originations 48,958 406,234 (49,861) 405,331 Principal repayments (39,075) — 39,788 713 Borrower Loans sold to third parties (443) (406,234) — (406,677) Other changes (99) — 187 88 Change in fair value 1 — (229) (228) Balance at March 31, 2021 $ 219,012 $ — $ (218,494) $ 518 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held for Sale Notes Total Balance at January 1, 2020 $ 245,137 $ — $ (244,171) $ 966 Originations 41,301 399,550 (40,575) 400,276 Principal repayments (39,340) — 40,588 1,248 Borrower Loans sold to third parties (882) (399,550) — (400,432) Other changes (91) — 138 47 Change in fair value (18,466) — 18,529 63 Balance at March 31, 2020 $ 227,659 $ — $ (225,491) $ 2,168 The following tables present additional information about Level 3 Servicing Assets recorded at fair value (in thousands): Servicing Assets Fair Value at January 1, 2021 $ 11,088 Additions 2,354 Less: Changes in fair value (2,672) Fair Value at March 31, 2021 $ 10,770 Servicing Assets Fair Value at January 1, 2020 $ 14,888 Additions 2,196 Less: Changes in fair value (3,394) Fair Value at March 31, 2020 $ 13,690 Loan Trailing Fee Liability The fair value of the Loan Trailing Fee Liability represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below. The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Loan Trailing Fee Liability Fair Value at January 1, 2021 $ 2,233 Issuances 410 Cash payment of Loan Trailing Fee (544) Change in fair value 90 Fair Value at March 31, 2021 $ 2,189 Loan Trailing Fee Liability Fair Value at January 1, 2020 $ 2,997 Issuances 385 Cash payment of Loan Trailing Fee (675) Change in fair value (61) Fair Value at March 31, 2020 $ 2,646 Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity Key economic assumptions are used to compute the fair value of Borrower Loans. The sensitivity of the fair value to immediate changes in assumptions at March 31, 2021 and December 31, 2020 for Borrower Loans are presented in the following table (in thousands, except percentages). Borrower Loans: March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 219,012 $ 209,670 Weighted-average discount rate 8.10 % 8.93 % Weighted-average default rate 11.55 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 216,991 $ 207,810 200 basis point increase in discount rate $ 215,018 $ 205,994 Fair value resulting from: 100 basis point decrease in discount rate $ 221,084 $ 211,575 200 basis point decrease in discount rate $ 223,207 $ 213,527 Fair value resulting from: 10 percent increase in default rate $ 216,918 $ 207,594 20 percent increase in default rate $ 214,837 $ 205,528 Fair value resulting from: 10 percent decrease in default rate $ 221,116 $ 211,755 20 percent decrease in default rate $ 223,230 $ 213,851 Key economic assumptions are used to compute the fair value of Notes. The sensitivity of the fair value to immediate changes in assumptions at March 31, 2021 and December 31, 2020 for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages). Notes March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 218,494 $ 208,379 Weighted-average discount rate 8.10 % 8.93 % Weighted-average default rate 11.55 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 216,475 $ 206,528 200 basis point increase in discount rate $ 214,504 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 220,563 $ 210,274 200 basis point decrease in discount rate $ 222,685 $ 212,217 Fair value resulting from: 10 percent increase in default rate $ 216,393 $ 206,304 20 percent increase in default rate $ 214,304 $ 204,238 Fair value resulting from: 10 percent decrease in default rate $ 220,605 $ 210,463 20 percent decrease in default rate $ 222,727 $ 212,558 Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at March 31, 2021 and December 31, 2020 for Servicing Assets are presented in the following table (in thousands, except percentages). Servicing Assets March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 10,770 $ 11,088 Weighted-average market servicing rate 0.629 % 0.631 % Weighted-average prepayment rate 19.66 % 19.84 % Weighted-average default rate 12.72 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 10,124 $ 10,424 Market servicing rate decrease of 0.025% $ 11,415 $ 11,752 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 10,562 $ 10,874 Applying a 0.9 multiplier to prepayment rate $ 10,981 $ 11,304 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 10,620 $ 10,936 Applying a 0.9 multiplier to default rate $ 10,920 $ 11,239 These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | Goodwill and Other Intangible Assets, Net Goodwill Prosper’s goodwill balance of $36.4 million at December 31, 2020 did not change during the three months ended March 31, 2021. The Company recorded no goodwill impairment for the three months ended March 31, 2021 and 2020. Other Intangible Assets The following table presents the detail of other intangible assets subject to amortization as of the following date (dollars in thousands): March 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,593) 457 4.1 Brand name 60 (60) — — Total Intangible Assets subject to amortization $ 8,170 $ (7,713) $ 457 Prosper’s intangible asset balance w as $0.5 million and $0.5 million at March 31, 2021 and December 31, 2020, respectively. The user base and customer relationships intangible assets are being amortized on an accelerated basis over a three Amortization expense for the three months ended March 31, 2021 and 2020 was immaterial and $0.1 million, respectively. Estimated amortization of purchased intangible assets for future periods is as follows (in thousands): Year Ending December 31, 2021 (remainder thereof) $ 129 2022 136 2023 107 2024 85 Total $ 457 |
OTHER LIABILITIES
OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | Other Liabilities Other Liabilities consist of the following (in thousands): March 31, 2021 December 31, 2020 Operating lease liabilities $ 14,184 $ 13,342 Paycheck Protection Program loan (Note 10) 8,526 8,505 Loan trailing fee liability 2,189 2,233 Deferred income tax liability 510 489 Financing lease liabilities 155 — Deferred revenue 39 63 Other 287 425 Total Other Liabilities $ 25,890 $ 25,057 Additionally, disclosures around the operating lease liabilities are included in Note 15. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | Debt PWIT Warehouse Trust Agreements Prosper’s consolidated VIEs, PWIT and PWIIT (together, “Warehouse VIEs”), each entered into an agreement (together, “Warehouse Agreements”) with certain lenders for committed revolving lines of credit (“Warehouse Lines”) during 2018 and 2019, respectively. In connection with the Warehouse Agreements, the Warehouse VIEs each entered into a security agreement with a bank as administrative agent and a national banking association as collateral trustee and paying agent. Proceeds under the Warehouse Lines may only be used to purchase certain unsecured consumer loans and related rights and documents from Prosper and to pay fees and expenses related to the Warehouse Lines. Both Warehouse VIEs are consolidated because Prosper is the primary beneficiary of the VIEs. The assets of the VIEs can be used only to settle obligations of the VIEs. Additionally, the creditors of the Warehouse Lines have no recourse to the general credit of Prosper. The loans held in the Warehouse VIEs are included in Loans Held for Sale, at Fair Value and Warehouse Lines are in Warehouse Lines in the condensed consolidated balance sheets. Both Warehouse Agreements contain the same certain covenants including restrictions on each Warehouse VIE's ability to incur indebtedness, pledge assets, merge or consolidate and enter into certain affiliate transactions. Each Warehouse Agreement also requires Prosper to maintain a minimum tangible net worth of $25 million, minimum net liquidity of $15 million and a maximum leverage ratio of 5:1. Tangible net worth is defined as the sum of (i) (A) Convertible Preferred Stock, (B) total Stockholders’ Deficit and (C) Convertible Preferred Stock Warrant Liability, less the sum of (ii) (A) goodwill and (B) intangible assets. Net liquidity is defined as the sum of cash, cash equivalents and Available for Sale Investments. The leverage ratio is defined as the ratio of total consolidated indebtedness other than non-recourse securitization indebtedness, non-recourse or limited recourse warehouse indebtedness and borrower dependent notes, to tangible net worth. As of March 31, 2021, Prosper was in compliance with the covenants under each Warehouse Agreement. PWIT Warehouse Line On January 19, 2018, through PWIT, Prosper entered into a Warehouse Agreement for a Warehouse Line. Effective June 12, 2018, the Warehouse Agreement was amended. The amendments included increasing the committed line of credit from $100 million to $200 million, extending the term of the PWIT Warehouse Line (including the final maturity date), amending the monthly unused commitment fee and reducing the rate at which the PWIT Warehouse Line bears interest. Subsequently the Warehouse Agreement was amended on June 20, 2019 to extend the facility, to reduce the interest rate and unused commitment fee and to expand the eligibility criteria for unsecured consumer loans that can be financed through the PWIT Warehouse Line. Under the amended agreement, proceeds of loans made under the PWIT Warehouse Line may be borrowed, repaid and reborrowed until the earlier of June 20, 2021 and at the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over the 24 month period ending June 20, 2023, excluding the occurrence of any accelerated amortization event or event of default. Under the amended agreement, the PWIT Warehouse Line bears interest at a rate of LIBOR plus 2.9% and has an advance rate of 89%. Additionally, the PWIT Warehouse Line bears a monthly unused commitment fee of 0.50% per annum on the undrawn portion available under the PWIT Warehouse Line. As of March 31, 2021, Prosper had $101.3 million in debt and accrued interest outstanding under the PWIT Warehouse Line. This debt is secured by an aggregate outstanding principal balance of $116.5 million included in “Loans Held for Sale, at Fair Value” on the condensed consolidated balance sheets. At March 31, 2021 the undrawn portion available under the Warehouse Line was $98.7 million. Prosper incurred $1.8 million of deferred debt issuance costs, which are included in “Prepaids and Other Assets” and amortized to interest expense over the term of the revolving arrangement. Prosper purchased a swaption to limit the Company's exposure to increases in LIBOR. The swaption is recorded on the consolidated balance sheet at fair value in Prepaids and Other Assets. Any changes in the fair value are recorded in the Change in Fair Value of Financial Instruments, Net on the Consolidated Statement of Operations. The fair value of the swaption was not material at March 31, 2021. PWIIT Warehouse Line On March 28, 2019, through PWIIT, Prosper entered into a second Warehouse Agreement for a $300 million Warehouse Line with a national banking association different than that of PWIT. Under the PWIIT Warehouse Agreement, proceeds of loans made under the PWIIT Warehouse Line may be borrowed, repaid, and reborrowed until the earlier of March 28, 2021 and at the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over the 24-month period ending March 28, 2023, excluding the occurrence of any accelerated amortization event or event of default. On March 4, 2021, PMI extended its $300 million PWIIT Warehouse Line (“PWIIT Extension”). The PWIIT Extension consists of a $230 million Class A loan with the existing PWIIT Warehouse Line national banking association and a $70 million Class B loan with an asset manager. The advance rate on the PWIIT Extension is 90%. Under the PWIIT Extension, proceeds of loans made under the PWIIT Warehouse Line may be borrowed, repaid and reborrowed until the earlier of March 3, 2023 or the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over a 24-month period ending March 4, 2025, excluding the occurrence of any accelerated amortization event or event of default. Under the PWIIT Extension, the Class A loan bears interest at a rate of the national banking association's asset-backed commercial paper rate, plus a spread of 2.05%. The spread increases by 0.375% during the first 12 months immediately following the termination of the revolving period with an additional increase of 0.375% one year later. Additionally, the Class A loan bears a monthly unused commitment fee of 0.50% per annum on the undrawn portion available under the Class A loan. The Class B loan bears interest at a rate of one-month LIBOR, plus a spread of 8.75%. The spread increases by 0.375% during the first twelve months immediately following the termination of the revolving period with an additional increase of 0.375% one year later. Additionally, the Class B loan bears a monthly unused commitment fee of 0.50% or 1.00% per annum on the undrawn portion available under the Class B loan, depending on the Class B loan utilization percentage. As of March 31, 2021, Prosper had $112.0 million in debt and accrued interest outstanding under the PWIIT Warehouse Line. This debt is secured by an aggregate outstanding principal balance of $125.1 million included in Loans Held for Sale, at Fair Value on the Consolidated Balance Sheets. At March 31, 2021 the undrawn portion available under the PWIIT Warehouse Line was $188.0 million. PMI incurred $1.3 million of debt issuance costs for the extension in March 2021, which are included in Prepaids and Other Assets and will be amortized to interest expense over the term of the revolving arrangement. Phaseout of LIBOR A portion of the interest rate charged on our Warehouse Lines is currently based on LIBOR. LIBOR has been the subject of reform and was expected to phase out by the end of fiscal 2021; however, on November 30, 2020, the ICE Benchmark Administration Limited (“ICE”) announced plans to delay the phase out of LIBOR to June 30, 2023. The consequences of the discontinuation of LIBOR cannot be entirely predicted but could impact the interest expense incurred on these debt instruments. We have negotiated alternatives to LIBOR on the PWIIT Warehouse Line, which we may renegotiate before LIBOR ceases to be a widely available reference rate. Paycheck Protection Program Loan The Paycheck Protection Program (“PPP”), established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and sponsored by the U.S. Small Business Administration (“SBA”), provides small businesses – sole proprietors, independent contractors, and, with certain industry exceptions, businesses with fewer than 500 employees – the opportunity to apply for a loan of up to $10 million to cover up to 24 weeks (the “covered period”) of payroll costs, including benefits. Funds may also be used to cover interest on mortgage obligations, leases, and utilities incurred or in place before February 15, 2020. PPP loan payments are deferred as described below, and, based on SBA guidance, will be forgiven as long as (i) loan proceeds are used for covered expenses, (ii) full-time employee headcount is maintained during the eight-week period covered by the PPP loan and (iii) compensation for employees who earned less than $100,000 on an annualized basis in 2019 is not reduced by more than 25% during the covered period. For purposes of calculating maximum loan eligibility, payroll costs per employee are capped at $100,000 on an annualized basis. In April 2020, the Company obtained an $8.4 million loan under the PPP. The loan accrues interest at one percent per annum and has a two-year term through April 2022. Payments under the loan are deferred until the earlier of (a) August 2021 or (b) receipt of forgiveness of the loan from the lender and the SBA. The Company used the PPP Loan proceeds to cover payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act. As of March 31, 2021, principal and interest outstanding under the PPP loan totaled $8.5 million and is included in Other Liabilities on the accompanying condensed consolidated balance sheet. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | Net Income (Loss) Per Share PMI computes it net income (loss) per share in accordance with ASC Topic 260, Earnings Per Share (“ASC Topic 260”). Under ASC Topic 260, basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Net income (loss) per share is calculated using the two-class method in accordance with ASC Topic 260. The two-class method allocates earnings that otherwise would have been available to common shareholders to holders of participating securities. Management considers all series of our Convertible Preferred Stock to be participating securities due to their rights to participate in dividends with Common Stock. As such, earnings allocated to these participating securities, which include participation rights in undistributed earnings, are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders. All participating securities are excluded from basic weighted-average common shares outstanding. Prior to any conversion to common shares, each series of Prosper’s Convertible Preferred Stock is entitled to participate on an if-converted basis in distributions of earnings, when and if declared by the board of directors, that are made to common stockholders and consequently, these shares were considered participating securities. During the three months ended March 31, 2021 and March 31, 2020, certain shares issued as a result of the early exercise of stock options which are subject to a repurchase right by PMI were entitled to receive non-forfeitable dividends during the vesting period and consequently, are considered participating securities. The weighted average shares used in calculating basic and diluted net income (loss) per share excludes certain shares that are disclosed as outstanding shares in the condensed consolidated balance sheets because such shares are restricted as they were associated with options that were early exercised and continue to remain unvested. Basic and diluted income (loss) per share were calculated as follows for the periods presented (in thousands, except share and per share amounts): Three Months Ended March 31, 2021 2020 Numerator: Net (Loss) Income $ (44,889) $ 21,130 Less: Net Income Allocated to Participating Securities — (15,755) Net (Loss) Income Attributable to Common Stockholders $ (44,889) $ 5,375 Denominator: Weighted average shares used in computing basic net (loss) income per share 69,344,075 68,454,103 Effect of dilutive securities: Stock options — 236,928 Convertible preferred stock warrants — 213,264,845 Weighted average shares used in computing diluted Net Income (Loss) per Share 69,344,075 281,955,876 Net (Loss) Income Per Share – Basic $ (0.65) $ 0.08 Net (Loss) Income Per Share – Diluted $ (0.65) $ 0.02 The following common stock equivalents were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been anti-dilutive: Three Months Ended March 31, 2021 2020 (shares) (shares) Excluded securities: Convertible preferred stock issued and outstanding, excluding shares held by consolidated VIE 158,365,655 209,613,570 Stock options issued and outstanding 73,514,388 72,195,596 Warrants issued and outstanding 1,080,349 1,080,349 Series E-1 convertible preferred stock warrants 35,544,141 — Series F convertible preferred stock warrants 177,720,704 — Total common stock equivalents excluded from diluted net (loss) income per common share computation 446,225,237 282,889,515 |
CONVERTIBLE PREFERRED STOCK, CO
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK | Convertible Preferred Stock, Convertible Preferred Stock Warrant Liability and Common Stock Convertible Preferred Stock and Warrants Under PMI’s amended and restated certificate of incorporation, preferred stock is issuable in series, and the Board of Directors is authorized to determine the rights, preferences, and terms of each series. On July 13, 2020, the Company established Prosper Grantor Trust (“PGT”), a revocable grantor trust administered by an independent trustee, with the intention of contributing assets to PGT for the benefit of PMI employees in the event of a change in control through an Eligible Employee Retention Plan. PGT was determined to be a VIE and PMI was determined to be its primary beneficiary due to the fact that the Company, through its role as the grantor, has both (a) the power to direct the activities that most significantly affect the VIE’s economic performance, including its funding decisions and investment strategy, and (b) the obligation to absorb losses that could be potentially significant to the economic performance of the VIE by virtue of the Company’s requirement to fund PGT in the event that it is unable to meet its obligations to PMI’s employees. PMI also maintains a contingent call liability on PGT’s assets in the event of a bankruptcy. As a result, PGT is fully consolidated into PMI’s consolidated financial statements. On July 21, 2020, PGT entered into a Stock Transfer Agreement with a PMI investor to purchase 34,670,420 shares of Series A Convertible Preferred Stock and 16,577,495 shares of Series B Convertible Preferred Stock for nominal consideration. Upon execution of the Stock Transfer Agreement, these shares were purchased by a consolidated VIE of the Company, and thus the difference between the fair value of the repurchased stock and the purchase price is included in Convertible Preferred Stock Held by Consolidated VIE on PMI’s accompanying condensed consolidated balance sheet as of March 31, 2021. These shares remain outstanding for legal purposes and retain their voting rights, but are excluded from the earnings per share calculation. The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of convertible preferred stock as of March 31, 2021 are disclosed in the table below (amounts in thousands except share and par value amounts): Convertible Preferred Stock Par Value Authorized Shares Outstanding and Issued Shares Liquidation Preference, Outstanding Shares Series A $ 0.01 68,558,220 66,428,185 * $ 19,160 Series A-1 $ 0.01 24,760,915 22,515,315 45,031 Series B $ 0.01 35,775,880 35,127,160 * 21,190 Series C $ 0.01 24,404,770 24,404,770 70,075 Series D $ 0.01 23,888,640 23,888,640 165,000 Series E-1 $ 0.01 35,544,141 — — Series E-2 $ 0.01 16,858,078 — — Series F $ 0.01 177,720,707 3 — Series G $ 0.01 37,249,497 37,249,497 50,000 Total 444,760,848 209,613,570 $ 370,456 * Series A and Series B Convertible Preferred Stock totals are inclusive of 34,670,420 and 16,577,495 shares, respectively, held by PGT, a consolidated VIE. Dividends Dividends on shares of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F and Series G convertible preferred stock are payable only when, as, and if declared by the Board of Directors. No dividends will be paid with respect to the common stock until any declared dividends on the Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, and Series G convertible preferred stock have been paid or set aside for payment to the Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, and Series G convertible preferred stockholders. After payment of any such dividends, any additional dividends or distributions will be distributed among all holders of common stock and preferred stock in proportion to the number of shares of common stock that would be held by each such holder if all shares of preferred stock were converted to common stock at the then-effective conversion rate. The Series A-1 convertible preferred shares have no dividend rights. To date, no dividends have been declared on any of PMI’s preferred stock or common stock. Conversion Under the terms of PMI’s amended and restated certificate of incorporation, the holders of preferred stock have the right to convert such preferred stock into common stock at any time. In addition, all preferred stock automatically converts into common stock (i) immediately prior to the closing of an initial public offering that values Prosper at least at $2 billion and that results in aggregate proceeds to Prosper of at least $100 million or (ii) upon a written request from the holders of at least 60% of the voting power of the outstanding preferred stock (on an as-converted basis), provided that (i) the Series A-1 convertible preferred stock shall not be converted without at least 14% of the voting power of the outstanding Series A-1 convertible preferred stock; (ii) the Series D shall not be converted without at least 60% of the voting power of the outstanding Series D; (iii) the Series E-1 and Series E-2 shall not be converted without at least 60% of the voting power of the outstanding Series E-1 and Series E-2, voting together as a single class; (iv) the Series F shall not be converted without at least 60% of the voting power of the outstanding Series F, and (v) the shares of Series G Preferred Stock will not be automatically converted unless the holders of at least 60% of the outstanding shares of Series G Preferred Stock approve such conversion. In addition, if a holder of the Series A convertible preferred stock has converted any of the Series A convertible preferred stock, then all of such holder’s shares of Series A-1 convertible preferred stock also will be converted upon a liquidation event. In lieu of any fractional shares of common stock to which a holder would otherwise be entitled, PMI shall pay such holder cash in an amount equal to the fair market value of such fractional shares, as determined by its Board of Directors. At present, each of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, and Series F convertible preferred stock converts into PMI common stock at a 1:1 ratio. The Series A-1 convertible preferred stock converts into common stock at a 1,000,000:1 ratio and the Series G convertible preferred stock converts into common stock at a 1:1.36 ratio. The Series G convertible preferred stock conversion ratio reflects the Series G true-up that occurred at end of the vesting period for the Series E-2 and Series F Preferred Stock warrants. For the Series G true-up, the conversion price of the Series G Convertible Preferred Stock was reduced to a number equal to the Series G Preferred Stock original issuance price, divided by the quotient obtained by dividing the Series G true-up amount by the total number of Series G Preferred Stock issued as of the Series G closing date. The Series G true-up amount means the aggregate number of shares of Series G Preferred Stock that would have been issued to the purchasers of the Series G Preferred Stock on the Series G closing date, if warrants to purchase shares of Series E-2 Preferred Stock or Series F Preferred Stock that were exercisable or exercised as of the true-up time (end of vesting period) had been exercisable or exercised as of such Series G closing date. Liquidation Rights PMI’s convertible preferred stock has been classified as temporary equity on the condensed consolidated balance sheets. The preferred stock is not redeemable; however, in the event of a voluntary or involuntary liquidation, dissolution, change in control or winding up of PMI, holders of the convertible preferred stock may have the right to receive its liquidation preference under the terms of PMI’s certificate of incorporation. Each holder of Series E-1, Series E-2, and Series F convertible preferred stock is entitled to receive prior and in preference to any distribution of proceeds from a liquidation event to the holders of Series A, Series B, Series C, Series D, Series G and Series A-1 convertible preferred stock or common stock, an amount per share for (i) each share of Series E-1 convertible preferred stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, (ii) each share of Series E-2 convertible preferred stock equal to the sum of two-thirds the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (iii) each share of Series F convertible preferred stock equal to the sum of two-thirds of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series E-1, Series E-2, and Series F convertible preferred stock, each holder of Series A, Series B, Series C and Series D, Series E-2, Series F, and Series G convertible preferred stock is entitled to receive, on a pari passu basis, prior to and in preference to any distribution of proceeds from a liquidation event to the holders of Series A-1 convertible preferred stock or common stock, (i) an amount per share for each share of Series E-2 and Series F convertible preferred stock equal to the sum of one-third of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (ii) an amount per share for each share of Series A, Series B, Series C, Series D and Series G convertible preferred stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, and Series G convertible preferred stock, the holders of Series A-1 convertible preferred stock are entitled to receive, prior and in preference to any distribution of proceeds to the holders of common stock, an amount per share for each such share of Series A-1 convertible preferred stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, Series G, and Series A-1 convertible preferred stock, the entire remaining proceeds legally available for distribution will be distributed pro rata to the holders of Series A convertible preferred stock and common stock in proportion to the number of shares of common stock held by them assuming the Series A convertible preferred stock has been converted into shares of common stock at the then effective conversion rate, provided that the maximum aggregate amount per share of Series A convertible preferred stock which the holders of Series A convertible preferred stock shall be entitled to receive is three times the original issue price for the Series A convertible preferred stock. At present, the liquidation preferences are equal to $0.29 per share for the Series A convertible preferred stock, $2.00 per share for the Series A-1 convertible preferred stock, $0.60 per share for the Series B convertible preferred stock, $2.87 per share for the Series C convertible preferred stock, $6.91 per share for the Series D convertible preferred stock, $0.84 per share for the Series E-1 convertible preferred stock, $0.84 per share for the Series E-2 convertible preferred stock, $0.84 per share for the Series F convertible preferred stock and $1.34 per share for the Series G convertible preferred stock. Voting Each holder of shares of convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of convertible preferred stock could be converted and has voting rights and powers equal to the voting rights and powers of the common stock. The holders of convertible preferred stock and the holders of common stock vote together as a single class (except with respect to certain matters that require separate votes or as required by law), and are entitled to notice of any stockholders’ meeting in accordance with the Bylaws of PMI. Convertible Preferred Stock Warrant Liability Series E-1 Warrants In connection with the Settlement and Release Agreement dated November 17, 2016 among PMI, its wholly owned subsidiary Prosper Funding LLC (“PFL”) and Colchis, on December 16, 2016, PMI issued the First Series E-1 Warrant. The Second Series E-1 Warrant for an additional 15,277,006 shares of Series E-1 convertible preferred stock was granted on the signing of the Consortium Purchase Agreement (as defined in Note 15) on February 27, 2017. The warrants expire ten years from the dat e of issuance. For the three months ended March 31, 2021 and 2020, Prosper recognized $7.1 million of expense and $9.2 million of income, respectively, from the re-measurement of the fair value of the warrants. The income or expense resulted from the remeasurement of the fair value of the warrants is recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the condensed consolidated statements of operations. To determine the fair value of the Series E-1 Warrants, the Company first determined the value of a share of a Series E-1 Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derived the business enterprise value (“BEV”) of the Company using a variety of valuation methods, including discounted cash flow models and market based methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determined an estimated BEV, the option pricing method ("OPM") was used to allocate the BEV to the various classes of our equity, including our preferred stock. The concluded per share value for the Series E-1 Convertible Preferred Stock was utilized as an input to the Black-Scholes option pricing model. The Company determined the fair value of the outstanding Series E-1 Warrants utilizing the following assumptions as of the following dates: March 31, 2021 December 31, 2020 Volatility 61.0 % 60.0 % Risk-free interest rate 0.30 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % The above assumptions were determined as follows: Volatility: The volatility is derived from historical volatilities of several unrelated publicly listed peer companies over a period approximately equal to the term of the warrant as the Company has limited information on the volatility of its preferred stock since there is currently no trading history. When making the selections of industry peer companies to be used in the volatility calculation, the Company considered the size, operational, and economic similarities to the Company’s principal business operations. Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield in effect as of March 31, 2021, and for zero coupon U.S. Treasury notes with maturities approximately equal to the term of the warrant. Expected Term: The expected term is the period of time for which the warrants are expected to be outstanding. Dividend Yield: The expected dividend assumption is based on the Company’s current expectations about the Company’s anticipated dividend policy. Series F Warrants In connection with the Consortium Purchase Agreement (as described in Note 15), PMI issued warrants to purchase up to 177,720,706 shares of PMI's Series F convertible preferred stock at $0.01 per share. For the three months ended March 31, 2021 and 2020, Prosper recognized $37.3 million of expense and $46.2 million of income, respectively, from the re-measurement of the fair value of the warrants. The income or expense resulting from changes in the fair value of the warrant is recorded through Change in Fair Value of Convertible Preferred Stock Warrants on the condensed consolidated statements of operations . To determine the fair value of the Series F Warrants, the Company first determined the value of a share of a Series F Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derived the BEV using valuation methods, including a combination of methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determined an estimated BEV, the OPM was used to allocate the BEV to the various classes of Prosper's equity, including our preferred stock. The concluded per share value for the Series F Convertible Preferred Stock warrants utilized the Black-Scholes option pricing model. The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of the following dates: March 31, 2021 December 31, 2020 Volatility 61.0 % 60.0 % Risk-free interest rate 0.30 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % The above assumptions were determined using the same criteria described above for the Series E-1 Warrants. The combined activity of the Convertible Preferred Stock Warrant Liability for the three months ended March 31, 2021 and 2020 are as follows (in thousands): Warrant Activity Balance at January 1, 2021 $ 112,319 Change in fair value 44,431 Balance at March 31, 2021 $ 156,750 Warrant Activity Balance at January 1, 2020 $ 149,996 Change in fair value (55,449) Balance at March 31, 2020 $ 94,547 Common Stock PMI, through its Amended and Restated Certificate of Incorporation, is the sole issuer of common stock and related options, restricted stock units ("RSUs") and warrants. On February 16, 2016, PMI amended and restated its Certificate of Incorporation to, among other things, effect a 5-for-1 forward stock split. On September 20, 2017, PMI further amended its Amended and Restated Certificate of Incorporation to increase the number of shares of common stock authorized for issuance. The total number of shares of stock which PMI has the authority to issue is 1,069,760,848, consisting of 625,000,000 shares of common stock, $0.01 par value per share, and 444,760,848 shares of preferred stock, $0.01 par value per share. As of March 31, 2021, 71,699,768 shares of common stock were issued and 70,763,833 shares of common stock were outstanding. As of December 31, 2020, 70,075,307 shares of common stock were issued and 69,139,372 shares of common stock were outstanding. Each holder of common stock is entitled to one vote for each share of common stock held. Common Stock Issued upon Exercise of Stock Options |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | Stock-Based Compensation PMI grants equity awards primarily through its Amended and Restated 2005 Stock Option Plan (the “2005 Plan”), which was approved as amended and restated by its stockholders on December 1, 2010; and its 2015 Equity Incentive Plan, which was approved by its stockholders on April 7, 2015 and subsequently amended by an Amendment No. 1, Amendment No. 2 and Amendment No. 3, which were approved by PMI's stockholders effective as of February 15, 2016, May 31, 2016, and September 5, 2018 respectively (as amended, the “2015 Plan”). In March 2015, the 2005 Plan expired, except that any awards granted under the 2005 Plan prior to its expiration remain in effect pursuant to their terms. Stock Option Reprice On May 3, 2016 and March 17, 2017, the Compensation Committee of the Board of Directors of PMI approved two separate stock option repricing programs authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that had exercise prices above the current fair market value of PMI’s Common Stock on those respective dates. On August 11, 2020, the Compensation Committee of the Board of Directors of PMI approved a stock option repricing program (the “2020 Repricing” and together with the 2016 Repricing and the 2017 Repricing, the “Repricings”) authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that have exercise prices above the current fair market value of PMI’s common stock. The repricing was effected on August 11, 2020 for eligible directors and employees. PMI believes that the Repricings will encourage the continued service of valued employees and directors, and motivate such service providers to perform at high levels, both of which are critical to the Company’s continued success. PMI expects to incur additional stock based compensation charges as a result of the Repricings. The financial statement impact of the above Repricings was immaterial for the three months ended March 31, 2021. As of March 31, 2021, the unamortized Repricings expense (net of forfeitures) of $0.1 million will be recognized over the remaining weighted-average vesting period of 2.0 years. Stock Option Activity Stock option activity under the 2005 Plan and 2015 Plan is summarized for the three months ended March 31, 2021 below: Options Issued and Outstanding Weighted- Average Exercise Price Balance as of January 1, 2021 72,915,449 $ 0.02 Options issued 6,681,066 $ 0.06 Options exercised (1,624,461) $ 0.02 Options forfeited (2,940,087) $ 0.02 Options expired (14,595) $ 0.02 Balance as of March 31, 2021 75,017,372 $ 0.02 Options vested and expected to vest as of March 31, 2021 58,499,373 $ 0.02 Options vested and exercisable at March 31, 2021 53,581,437 $ 0.02 Other Information Regarding Stock Options The weighted-average remaining life for options outstanding as of March 31, 2021 was 7.03 years. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock-based compensation expense requires PMI to make assumptions and judgments about the variables used in the calculation, including the fair value of PMI’s common stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of PMI’s common stock, a risk-free interest rate, and expected dividends. Given the absence of a publicly traded market, the Company considered numerous objective and subjective factors to determine the fair value of PMI’s common stock at each grant date. These factors included, but were not limited to: (i) contemporaneous valuations of common stock performed by unrelated third-party specialists, (ii) the prices for PMI’s preferred stock sold to outside investors, (iii) the rights, preferences and privileges of PMI’s preferred stock relative to PMI’s common stock, (iv) the lack of marketability of PMI’s common stock, (v) developments in the business, (vi) secondary transactions of PMI’s common and preferred shares, and (vii) the likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of Prosper, given prevailing market conditions. As PMI’s stock is not publicly traded, volatility for stock options is based on an average of the historical volatilities of the common stock of several entities with characteristics similar to those of PMI. The expected term assumptions were determined based on the vesting terms, exercise terms and contractual lives of the options using the simplified method. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. PMI uses an expected dividend yield of zero as it does not anticipate paying any dividends in the foreseeable future. PMI also estimates forfeitures of unvested stock options. Expected forfeitures are based on the Company’s historical experience. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. The fair value of PMI’s stock option awards granted during the three months ended March 31, 2021 and 2020 was estimated at the date of grant using the Black-Scholes model with the following average assumptions: Three Months Ended March 31, 2021 2020 Volatility of common stock 62.93 % 47.41 % Risk-free interest rate 1.00 % 0.68 % Expected life 6.0 years 6.0 years Dividend yield — % — % Restricted Stock Unit Activity For the three months ended March 31, 2021, PMI did not grant any RSUs. In previous years, PMI granted RSUs to certain employees that are subject to three-year or four-year vesting terms and the occurrence of a liquidity event. The following table summarizes the number of PMI’s RSU activity for the three months ended March 31, 2021: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2021 4,661,141 $ 0.91 Forfeited (1,786,793) $ 0.54 Unvested at March 31, 2021 2,874,348 $ 1.14 Share Based Compensation The following table presents the amount of stock-based compensation related to stock-based awards granted to employees recognized in Prosper’s condensed consolidated statements of operations for the periods presented (in thousands): Three Months Ended March 31, 2021 2020 Origination and servicing $ 31 $ 38 Sales and marketing 16 11 General and administrative 272 456 Total stock-based compensation $ 319 $ 505 Prosper capitalized stock-based compensation as internal-use software and website development costs of an immaterial amount and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 , the unamortized stock-based compensation expense, adjusted for forfeiture estimates, related to unvested stock-based awards was approximately $1.4 million, which will be recognized over a remaining weighted-average vesting period of approximately 1.8 years. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
INCOME TAXES | Income Taxes For the three months ended March 31, 2021 and 2020, PMI reco gnized $21 thousand and $34 thousand of income tax expense, respectively. The income tax expense relates to state income tax expense and th e amortization of tax deductible goodwill which gives rise to an indefinite-lived deferred tax liability. No other income tax expense or benefit was recorded for the three month periods ended March 31, 2021 and 2020 due to a full valuation allowance recorded against the Company’s deferred tax assets . Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize our existing deferred tax assets. On the basis of this evaluation, it is not more likely than not that our deferred tax assets will be realized and therefore a full valuation allowance has been recorded. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
INCOME TAXES | Income TaxesPFL incurred no income tax provision for the three months ended March 31, 2021 and March 31, 2020. PFL is a U.S. disregarded entity and its income and loss are included in the income tax reporting of its parent, PMI. Since PMI is in a taxable loss position, is not currently subject to income taxes, and has fully reserved against its deferred tax asset, the net effective tax rate for PFL is 0%. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
LEASES | Leases Prosper has operating leases for corporate offices and datacenters. These leases have remaining lease terms of one year to six years. Some o f the lease agreem ents include options to extend the lease term for up to an additional five years. Rental expense under operating lease arrangements was $1.0 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively. Additionally, Prosper subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income from operating lease arrangements was $0.1 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. Operating Lease Right-of-Use (“ROU”) Assets The following table summarizes the operating lease right-of-use assets as of March 31, 2021, which are included in “Property and Equipment, Net” on the condensed consolidated balance sheets. March 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value ROU Assets - Office buildings $ 16,758 $ 6,849 $ 9,909 ROU Assets - Other 290 77 213 Total right-of-use assets subject to amortization $ 17,048 $ 6,926 $ 10,122 Lease Liabilities Future maturities of operating lease liabilities as of March 31, 2021 were as follows (in thousands). The present value of the future minimum lease payments represent our operating lease liabilities as of March 31, 2021 and are included in " Other Liabilities March 31, 2021 Remainder of 2021 $ 3,949 2022 5,593 2023 2,043 2024 1,360 2025 1,395 Thereafter 1,218 Total future minimum lease payments $ 15,558 Less imputed interest (1,374) Present value of future minimum lease payments $ 14,184 Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. Other information related to leases was as follows (dollars in thousands): March 31, 2021 Cash paid for operating leases year-to-date $ 1,287 ROU assets obtained in exchange for new operating lease obligations $ 1,281 Weighted average remaining lease term (in years) 3.58 years Weighted average discount rate 5.26 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies In the normal course of its operations, Prosper becomes involved in various legal actions. Prosper maintains provisions it considers to be adequate for such actions. Prosper does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on Prosper's financial condition, results of operations or cash flows. Operating Commitments Prosper entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made by WebBank under its bank charter. Pursuant to the agreement, the marketing fee that Prosper receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143,500, Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee for the remaining nine months of 2021 is $1.3 million . The minimum fees are $0.1 million for the year 2022. Additionally, under the agreement with WebBank, Prosper is required to maintain minimum net liquidity of $15.0 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash, Cash Equivalents and Available for Sale Investments. Violation of this covenan t can result in termination of the contract with WebBank. As of March 31, 2021, Prosper was in compliance with the covenant. Loan Purchase Commitments Prosper entered into an agreement with WebBank to purchase $14.6 million of Borrower Loans that WebBank originated during the last two business days of the quarter ended March 31, 2021. Prosper will purchase these Borrower Loans within the first three business days of the quarter ending June 30, 2021. Repurchase Obligation Under the terms of the loan purchase agreements between Prosper and investors that participate in the Whole Loan Channel, Prosper may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. Prosper recognizes a liability at fair value for the repurchase obligation when the Borrower Loans are sold. The fair value of the repurchase obligation is estimated based on historical experience. Repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase. The maximum potential amount of future payments associated with this obligation is the outstanding balances of the Borrower Loans issued through the Whole Loan Channel, which at March 31, 2021 is $2.7 billion . Pros per has accrued $0.3 million and $0.2 million as of March 31, 2021 and December 31, 2020, respectively, in regard to this obligation. Regulatory Contingencies Prosper accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, Prosper reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If Prosper determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, Prosper does not accrue for a potential litigation loss. If an unfavorable outcome is probable and Prosper can estimate a range of outcomes, an amount is recorded which management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then the low end of the range of the potential losses is recorded. West Virginia Matter In January 2018, the Attorney General of the State of West Virginia (the “Attorney General”) initiated discussions regarding certain acts and practices of PMI and PFL that the Attorney General asserts may have violated the West Virginia Consumer Credit and Protection Act (the “Consumer Act”), to which Prosper responded with such information as was requested by the Attorney General. Following a period of more than a year with limited to no communication, in February 2020, Prosper received a proposed Assurance of Discontinuance (an “AOD”) from the Attorney General requesting that, without in any way admitting that any of its prior practices were in violation of the Consumer Act, Prosper agree to certain terms and conditions regarding its past and potential future conduct of its business with respect to customers in West Virginia, including a release by the Attorney General of any claims it may have related to the matters identified in the AOD. Prosper is evaluating and intends to discuss the proposed terms in the AOD with the Attorney General. We cannot predict the outcome of the matter and any potential fines or penalties, if any, that may arise from the matter. Further, we are unable to estimate a range of outcomes and as a result no accrual has been made. No loans have been originated through the Prosper platform to West Virginians since June 2016. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies Operating Commitments PFL entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made by WebBank under its bank charter. Pursuant to the agreement, the marketing fee that PFL receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143,500, PFL is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee for the remaining nine months of 2021 is $1.3 million. The minimum fees are $0.1 million for the year 2022. Additionally, under the agreement with WebBank, Prosper is required to maintain minimum net liquidity of $15 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash, Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. As of March 31, 2021, we were in compliance with the covenant. Loan Purchase Commitments Under the terms of PFL’s agreement with WebBank, PFL is committed to purchase $14.6 million of Borrower Loans that WebBank originated during the last two business days of the quarter ended March 31, 2021. PFL will purchase these Borrower Loans within the first three business days of the quarter ending June 30, 2021. Repurchase Obligation Under the terms of the loan purchase agreements between PFL and investors that participate in the Whole Loan Channel, PFL may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols, or a violation of the applicable federal, state, or local lending laws. The fair value of the indemnification and repurchase obligation is estimated based on historical experience. PFL recognizes a liability for the repurchase and indemnification obligation when the Borrower Loans are issued. Indemnified or repurchased Borrower Loans associated with violations of federal, state, or local lending laws or verifiable identity theft are written off at the time of repurchase or at the time an indemnification payment is made. The maximum potential amount of future payments associated under this obligation is the outstanding balances of the Borrower Loans issued through the Whole Loan Channel, which as of March 31, 2021 is $2.7 billion . PFL has acc rued $0.3 million and $0.2 million as of March 31, 2021 and December 31, 2020, respectively, in regard to this obligation. Regulatory Contingencies PFL accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, PFL reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If PFL determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, PFL does not accrue for a potential litigation loss. If an unfavorable outcome is probable and PFL can estimate a range of outcomes, PFL record the amount management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then PFL records the low end of the range of those potential losses. West Virginia Matter In January 2018, the Attorney General of the State of West Virginia (the “Attorney General”) initiated discussions regarding certain acts and practices of PMI and PFL that the Attorney General asserts may have violated the West Virginia Consumer Credit and Protection Act (the “Consumer Act”), to which PMI responded with such information as was requested by the Attorney General. Following a period of more than a year with limited to no communication, in February 2020, PMI received a proposed Assurance of Discontinuance (an “AOD”) from the Attorney General requesting that, without in any way admitting that any of its prior practices were in violation of the Consumer Act, PMI agreed to certain terms and conditions regarding its past and potential future conduct of its business with respect to customers in West Virginia, including a release by the Attorney General of any claims it may have related to the matters identified in the AOD. PMI is evaluating and intends to discuss the proposed terms in the AOD with the Attorney General. We cannot predict the outcome of the matter and any potential fines or penalties, if any, that may arise from the matter. Further, we are unable to estimate a range of outcomes and as a result no accrual has been made. No loans have been originated through the PFL platform to West Virginians since June 2016. |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
RELATED PARTIES | Related Parties Since Prosper’s inception, it has engaged in various transactions with its directors, executive officers, and holders of more than 10% of its voting securities, and immediate family members and other affiliates of its directors, executive officers, and 10% stockholders. Prosper believes that all of the transactions described below were made on terms no less favorable to Prosper than could have been obtained from unaffiliated third parties. Prosper’s executive officers, directors who are not executive officers, and certain affiliates participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper for the three months ended March 31, 2021 and March 31, 2020, as well as the Notes outstanding as of March 31, 2021 and December 31, 2020 are summarized below (in thousands): Aggregate Amount of Interest Earned on Notes Related Party 2021 2020 2021 2020 Executive officers and management $ 8 $ 6 $ 2 $ 1 Directors (excluding executive officers and management) — 122 — 15 Total $ 8 $ 128 $ 2 $ 16 Notes Balance as of Related Party March 31, 2021 December 31, Executive officers and management $ 42 $ 41 Directors (excluding executive officers and management) — — Total $ 42 $ 41 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
RELATED PARTIES | Related Parties Since inception, PFL has engaged in various transactions with its directors, executive officers, PMI, and immediate family members and other affiliates of its directors, executive officers, and PMI. PFL believes that all of the transactions described below were made on terms no less favorable to PFL than could have been obtained from unaffiliated third parties. PFL’s executive officers and directors who are not executive officers participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be related parties of PFL for the three months ended March 31, 2021 and 2020 are summarized below (in thousands): Aggregate Amount of Notes Purchased Interest Earned on Notes Three Months Ended March 31, Three Months Ended March 31, Related Party 2021 2020 2021 2020 Executive officers and management $ 8 $ 6 $ 2 $ 1 Directors (excluding executive officers and management) — — — — Total $ 8 $ 6 $ 2 $ 1 The balance of Notes held by officers and directors who are not executive officers are as follows (in thousands): Notes Balance as of Related Party March 31, 2021 December 31, 2020 Executive officers and management $ 42 $ 41 Directors (excluding executive officers and management) — — Total $ 42 $ 41 |
SIGNIFICANT CONCENTRATIONS
SIGNIFICANT CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT CONCENTRATIONS | Significant Concentrations Prosper is dependent on third party funding sources such as banks, asset managers, investment funds and Warehouse Lines to provide the funds to allow WebBank to originate Borrower Loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the three months ended March 31, 2021, one individual party purchased 28.8% of such loans, and the Company’s Warehouse VIEs purchased 13.4% of such loans. For the three months ended March 31, 2020, two parties purchased 16.6% and 10.4% of all Borrower Loans originated, and the Company’s Warehouse VIEs purchased 9.6% of such loans. These purchases reflect that a significant portion of Prosper’s business is dependent on funding through the Whole Loan Channel, through which 89% and 91% of Borrower Loans were originated in the three months ended March 31, 2021 and March 31, 2020, respectively. Prosper receives all of its transaction fee revenue from WebBank. Prosper earns a transaction fee from WebBank for its services in facilitating originations of Borrower Loans issued by WebBank. The rate of the transaction fee for each individual Borrower Loan is based on the term and credit grade of the Borrower Loan. No individual borrower or investor accounted for 10% or more of consolidated net revenue for any of the periods presented . |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
Basis of Presentation | Basis of Presentation Prosper Marketplace, Inc. (“PMI”) was incorporated in the state of Delaware on March 22, 2005. Except as the context requires otherwise, as used in these notes to the condensed consolidated financial statements of PMI, “Prosper,” “we,” “us,” and “our” refer to PMI and its wholly-owned subsidiaries, on a consolidated basis. The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and disclosure requirements for interim financial information and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020. The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date. Management believes these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. The preparation of Prosper’s condensed consolidated financial statements and related disclosures in conformity with US GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in Prosper’s financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes 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, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions. The accompanying interim condensed consolidated financial statements include the accounts of PMI, its wholly-owned subsidiaries and consolidated variable interest entities (“VIEs”). All intercompany balances have been eliminated in consolidation. Securitization Notes are notes held by certain third party investors pursuant to Prosper’s securitization transactions, and are distinguishable from the borrower payment dependent Notes available to investors through our Note Channel. |
Fair Value Measurements | Fair Value Measurements Financial instruments measured at fair value consist principally of Borrower Loans, Loans Held for Sale, Servicing Assets, Loan Trailing Fee Liabilities (Note 9), Notes, Certificates Issued by Securitization Trust and Convertible Preferred Stock Warrant Liability. The estimated fair values of other financial instruments, including Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short-term nature. The estimated fair values of Paycheck Protection Program loan (Note 9 and 10), Notes Issued by Securitization Trust and Warehouse Lines do not approximate their carrying values due primarily to differences in the stated and market rates associated with these instruments. |
Restricted Cash | Restricted Cash Restricted Cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors have on our marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. |
Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust | Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank, then issues Notes and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s condensed consolidated balance sheets as assets and liabilities, respectively. In 2019, Prosper began refinancing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions, which issue senior notes, risk retention interests and residual certificates. Associated securitization trusts are deemed consolidated VIEs, and as a result the Borrower Loans held in the securitization trusts are included in “Borrower Loans, at Fair Value”. Senior notes sold to third party investors are included in “Notes Issued by Securitization Trust,” and the risk retention interest and residual certificates held by third party investors are included in “Certificates Issued by Securitization Trust, at Fair Value” on the accompanying condensed consolidated balance sheets. Refer to Note 6, Securitization for additional disclosures. Prosper uses Warehouse Lines to purchase Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. Loans Held for Sale are included in “Loans Held for Sale, at Fair Value” on the Consolidated Balance Sheets. See Note 10, Debt for more details on Warehouse Lines. Borrower Loans and Loans Held for Sale are purchased from WebBank. Prosper places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods. Prosper has elected the fair value option for Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans held in consolidated securitization trusts are partially offset by changes in fair value of the Certificates Issued by Securitization Trust. Changes in fair value of Loans Held for Sale are recorded through Proper's earnings and Prosper collects interest on Loans Held for Sale. Changes in the fair values of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. Prosper primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. The key assumptions used in the valuation include default rates and prepayment rates derived primarily from historical performance, and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. |
Leases | Leases Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not record ROU assets and lease liabilities. If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities The determination of whether to consolidate a VIE in which we have a variable interest requires a significant amount of analysis and judgment regarding whether we are the primary beneficiary of a VIE due to our holding a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support and (ii) whether a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity. Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate such VIE in the consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted by the Company in the Current Period In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries and the methodology for calculating income taxes in an interim period. The guidance also clarifies and simplifies other aspects of the accounting for income taxes, including a modification in the guidance for franchise taxes that are partially based on income and recognizing deferred taxes for a subsequent step-up in the tax basis of goodwill. The ASU is effective for the Company beginning in the first quarter of 2021. The Company has adopted ASU 2019-12 and concluded that the impact on its condensed consolidated financial statements was immaterial. Accounting Standards Issued, to be Adopted by the Company in Future Periods In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP on contract modifications and hedge accounting, in order to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative referenced rates, such as the Secured Overnight Financing Rate. This ASU can be adopted after its issuance date through December 31, 2022. The Company is currently evaluating the impact reference rate reform will have on its contracts that reference LIBOR in order to determine whether to adopt this guidance. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Basis of Presentation | Prosper Funding LLC (“PFL”) was formed in the state of Delaware in February 2012 as a limited liability company with Prosper Marketplace, Inc. (“PMI”) as its sole equity member. Except as the context otherwise requires, as used in these Notes to the condensed consolidated financial statements of Prosper Funding LLC, “PFL”, and the “Company” refers to Prosper Funding LLC and its wholly owned subsidiary, Prosper Depositor LLC, a Delaware limited liability company, on a consolidated basis. The unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and disclosure requirements for interim financial information and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020. The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date. Management believes these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. PFL did not have any items of other comprehensive income or loss for any of the periods presented in the condensed consolidated financial statements as of and for the three months ended March 31, 2021 and March 31, 2020. The preparation of PFL's condensed consolidated financial statements and related disclosures in conformity with US GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes 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, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. |
Fair Value Measurements | Fair Value Measurements Financial instruments consist principally of Cash and Cash Equivalents, Restricted Cash, Borrower Loans, Loans Held for Sale, Accounts Receivable, Accounts Payable and Accrued Liabilities, Payable to Investors and Notes. The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short term nature. |
Restricted Cash | Restricted Cash Restricted Cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors have on our marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. |
Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust | Borrower Loans, Loans Held for Sale and Notes With respect to the Note Channel, PFL purchases Borrower Loans from WebBank, then issues Notes and holds the Borrower Loans until maturity. The obligation to repay a series of Notes funded through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans and Notes funded through the Note Channel are carried on PFL’s condensed consolidated balance sheets as assets and liabilities, respectively. PFL places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, PFL stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, PFL charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods. Management has elected the fair value option for Borrower Loans, Loans Held for Sale, and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans, Loans Held for Sale and Notes are included in “Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net” on the condensed consolidated statements of operations. PFL primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale and Notes. The key assumptions used in the valuation include default rates and prepayment rates derived primarily from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted In The Current Period No accounting standards were adopted in the current period for PFL. Accounting Standards Issued, To Be Adopted By PFL In Future Periods No issued and pending accounting standards were identified that are expected to have an impact on PFL. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and Equipment consists of the following at the dates presented (in thousands): March 31, 2021 December 31, 2020 Operating lease right-of-use assets $ 17,048 $ 15,767 Computer equipment 14,219 13,841 Internal-use software and website development costs 35,286 33,176 Office equipment and furniture 2,872 2,872 Leasehold improvements 7,167 7,167 Assets not yet placed in service 4,982 5,035 Property and equipment 81,574 77,858 Less: Accumulated depreciation and amortization (51,849) (49,412) Total Property and Equipment, Net $ 29,725 $ 28,446 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and equipment consist of the following (in thousands): March 31, 2021 December 31, 2020 Internal-use software and web site development costs $ 28,967 $ 26,953 Less accumulated depreciation and amortization (21,116) (20,025) Total property and equipment, net $ 7,851 $ 6,928 |
BORROWER LOANS, LOANS HELD FO_2
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
Aggregate Principal Balances Outstanding and Fair Values of Borrower Loans, Notes and Loans Held for Sale | The aggregate principal balances outstanding and fair values of Borrower Loans, Loans Held for Sale, and Notes as of March 31, 2021 and December 31, 2020, are presented in the following table (in thousands): Borrower Loans Loans Held for Sale Notes March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Aggregate principal balance outstanding $ 360,013 $ 393,642 $ 243,682 $ 279,113 $ 224,261 $ 217,110 Fair value adjustments (8,912) (15,379) (3,303) (4,492) (5,767) (8,731) Fair value $ 351,101 $ 378,263 $ 240,379 $ 274,621 $ 218,494 $ 208,379 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Aggregate Principal Balances Outstanding and Fair Values of Borrower Loans, Notes and Loans Held for Sale | The aggregate principal balances outstanding and fair values of Borrower Loans and Notes as of March 31, 2021 and December 31, 2020, are presented in the following table (in thousands): Borrower Loans Notes March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Aggregate principal balance outstanding $ 222,006 $ 215,373 $ 224,261 $ 217,110 Fair value adjustments (2,994) (5,703) (5,767) (8,731) Fair value $ 219,012 $ 209,670 $ 218,494 $ 208,379 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): March 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 351,101 $ 351,101 Loans Held for Sale at Fair Value — — 240,379 240,379 Servicing Assets — — 9,248 9,248 Total Assets $ — $ — $ 600,728 $ 600,728 Liabilities: Notes, at Fair Value $ — $ — $ 218,494 $ 218,494 Certificates Issued by Securitization Trust, at Fair Value — — 19,726 19,726 Convertible Preferred Stock Warrant Liability — — 156,750 156,750 Loan Trailing Fee Liability — — 2,189 2,189 Total Liabilities $ — $ — $ 397,159 $ 397,159 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 378,263 $ 378,263 Loans Held for Sale at Fair Value — — 274,621 274,621 Servicing Assets — — 9,242 9,242 Total Assets $ — $ — $ 662,126 $ 662,126 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Certificates Issued by Securitization Trust, at Fair Value — — 22,917 22,917 Convertible Preferred Stock Warrant Liability — — 112,319 112,319 Loan Trailing Fee Liability — — 2,233 2,233 Total Liabilities $ — $ — $ 345,848 $ 345,848 |
Quantitative Information About Significant Unobservable Inputs | The following tables present quantitative information about the ranges of significant unobservable inputs used for the Company’s Level 3 fair value measurements at March 31, 2021 and December 31, 2020: Range Borrower Loans, Loans Held for Sale and Notes: March 31, 2021 December 31, 2020 Discount rate 4.7% - 17.2% 4.5% - 17.7% Default rate 1.7% - 17.6% 2.3% - 17.9% Range Certificates Issued by Securitization Trust: March 31, 2021 December 31, 2020 Discount rate 1.8% - 14.0% 3.3% - 16.0% Default rate 1.7% - 14.4% 3.2% - 15.3% Prepayment rate 5.6% - 35.3% 7.6% - 35.4% Range Servicing Assets: March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% Market servicing rate (1) (2) 0.625% - 0.818% 0.625% - 0.818% (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of March 31, 2021 were measured using a market servicing rate assumption of 81.8 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 62.5 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of March 31, 2021 and December 31, 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a total market servicing rate range of 68.5 - 87.8 basis points and a total market servicing rate of 69.5 - 88.8 basis points, respectively. Range Loan Trailing Fee Liability March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present additional information about Level 3 Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held For Sale Notes Certificates Issued by Securitization Trust Total Balance at January 1, 2021 $ 378,263 $ 274,621 $ (208,379) $ (22,918) $ 421,587 Purchase of Borrower Loans/Issuance of Notes 48,958 406,234 (49,861) — 405,331 Principal repayments (75,390) (34,871) 39,788 5,485 (64,988) Borrower Loans sold to third parties (1,009) (404,828) — — (405,837) Other changes (669) (135) 187 34 (583) Change in fair value 948 (642) (229) (2,327) (2,250) Balance at March 31, 2021 $ 351,101 $ 240,379 $ (218,494) $ (19,726) $ 353,260 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held for Sale Notes Certificates Issued by Securitization Trust Total Balance at January 1, 2020 $ 634,019 $ 142,026 $ (244,171) $ (52,168) $ 479,706 Purchase of Borrower Loans/Issuance of Notes 41,301 399,551 (40,575) — 400,277 Principal repayments (96,715) (18,560) 40,588 4,833 (69,854) Borrower Loans sold to third parties (2,263) (355,634) — — (357,897) Other changes (742) 105 138 38 (461) Change in fair value (53,196) (14,252) 18,529 11,981 (36,938) Balance at March 31, 2020 $ 522,404 $ 153,236 $ (225,491) $ (35,316) $ 414,833 |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following tables present additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the three month periods ending March 31, 2021 and 2020 (in thousands): Servicing Assets Fair Value at January 1, 2021 $ 9,242 Additions 2,019 Less: Changes in fair value (2,013) Fair Value at March 31, 2021 $ 9,248 Servicing Assets Fair Value at January 1, 2020 $ 12,602 Additions 1,974 Less: Changes in fair value (2,834) Fair Value at March 31, 2020 $ 11,742 The following tables present additional information about the Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the three month periods ending March 31, 2021 and 2020 (in thousands): Convertible Preferred Stock Balance as of January 1, 2021 $ 112,319 Change in fair value 44,431 Balance as of March 31, 2021 $ 156,750 Convertible Preferred Stock Balance as of January 1, 2020 $ 149,996 Change in fair value (55,449) Balance as of March 31, 2020 $ 94,547 |
Fair Value, Liabilities Measured on Recurring Basis | The following tables present additional information about the Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the three month periods ending March 31, 2021 and 2020 (in thousands): Loan Trailing Fee Liability Balance at January 1, 2021 $ 2,233 Issuances 410 Cash Payment of Loan Trailing Fee (544) Change in Fair Value 90 Balance at March 31, 2021 $ 2,189 Loan Trailing Fee Liability Balance at January 1, 2020 $ 2,997 Issuances 385 Cash Payment of Loan Trailing Fee (675) Change in Fair Value (61) Balance at March 31, 2020 $ 2,646 |
Fair Value Assumptions for Loans Held for Sale, Borrower Loans and Notes | Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Borrower Loans and Loans Held for Sale are presented in the following table (in thousands, except percentages). Borrower Loans and Loans Held for Sale March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 591,480 $ 652,884 Weighted-average discount rate 7.91 % 8.26 % Weighted-average default rate 11.13 % 11.58 % Fair value resulting from: 100 basis point increase in discount rate $ 586,021 $ 647,093 200 basis point increase in discount rate $ 580,693 $ 641,437 Fair value resulting from: 100 basis point decrease in discount rate $ 597,074 $ 658,817 200 basis point decrease in discount rate $ 602,809 $ 664,895 Fair value resulting from: 10 percent increase in default rate $ 585,825 $ 646,421 20 percent increase in default rate $ 580,203 $ 639,987 Fair value resulting from: 10 percent decrease in default rate $ 597,161 $ 659,377 20 percent decrease in default rate $ 602,871 $ 665,904 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Notes are presented in the following table (in thousands, except percentages). Notes March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 218,494 $ 208,379 Weighted-average discount rate 8.10 % 8.93 % Weighted-average default rate 11.55 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 216,475 $ 206,528 200 basis point increase in discount rate $ 214,504 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 220,563 $ 210,274 200 basis point decrease in discount rate $ 222,685 $ 212,217 Fair value resulting from: 10 percent increase in default rate $ 216,393 $ 206,304 20 percent increase in default rate $ 214,304 $ 204,238 Fair value resulting from: 10 percent decrease in default rate $ 220,605 $ 210,463 20 percent decrease in default rate $ 222,727 $ 212,558 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Certificates Issued by Securitization Trust are presented in the following table (in thousands, except percentages). Certificates Issued by Securitization Trust March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 19,726 $ 22,917 Weighted-average discount rate 9.64 % 11.12 % Weighted-average default rate 11.06 % 12.93 % Weighted-average prepayment rate 19.18 % 20.86 % Fair value resulting from: 100 basis point increase in discount rate $ 19,566 $ 22,729 200 basis point increase in discount rate $ 19,410 $ 22,545 Fair value resulting from: 100 basis point decrease in discount rate $ 19,890 $ 23,110 200 basis point decrease in discount rate $ 20,056 $ 23,308 Fair value resulting from: 10 percent increase in default rate $ 18,903 $ 21,798 20 percent increase in default rate $ 18,084 $ 20,690 Fair value resulting from: 10 percent decrease in default rate $ 20,544 $ 24,030 20 percent decrease in default rate $ 21,366 $ 25,150 Fair value resulting from: 10 percent increase in prepayment rate $ 19,734 $ 22,933 20 percent increase in prepayment rate $ 19,745 $ 22,958 Fair value resulting from: 10 percent decrease in prepayment rate $ 19,710 $ 22,891 20 percent decrease in prepayment rate $ 19,702 $ 22,872 |
Schedule of Prosper's and Prosper Funding's Estimated Fair Value of Servicing Assets and Liabilities | Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at March 31, 2021 and December 31, 2020 for Servicing Assets is presented in the following table (in thousands, except percentages). Servicing Assets March 31, 2021 December 31, 2020 Fair value, using the following assumptions $ 9,248 $ 9,242 Weighted-average market servicing rate 0.642 % 0.631 % Weighted-average prepayment rate 19.66 % 19.84 % Weighted-average default rate 12.72 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 8,694 $ 8,689 Market servicing rate decrease of 0.025% $ 9,802 $ 9,796 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 9,069 $ 9,064 Applying a 0.9 multiplier to prepayment rate $ 9,429 $ 9,423 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 9,119 $ 9,116 Applying a 0.9 multiplier to default rate $ 9,377 $ 9,369 |
Financial Instruments, Assets And Liabilities Not Recorded At Fair Value | The following table presents the fair value hierarchy for assets, and liabilities not recorded at fair value (in thousands): March 31, 2021 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value Assets: Cash and Cash Equivalents $ 53,129 $ 53,129 $ — $ — $ 53,129 Restricted Cash - Cash and Cash Equivalents 163,264 163,264 — — 163,264 Restricted Cash - Certificates of Deposit 4,877 — 4,877 — 4,877 Accounts Receivable 722 — 722 — 722 Total Assets $ 221,992 $ 216,393 $ 5,599 $ — $ 221,992 Liabilities: Accounts Payable and Accrued Liabilities $ 16,298 $ — $ 16,298 $ — $ 16,298 Payable to Investors 127,748 — 127,748 — 127,748 Notes Issued by Securitization Trust 124,564 — 126,895 — 126,895 Warehouse Lines 213,336 — 215,310 — 215,310 Paycheck Protection Program loan (Note 10) 8,526 — 8,540 — 8,540 Total Liabilities $ 490,472 $ — $ 494,791 $ — $ 486,251 December 31, 2020 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value Assets: Cash and Cash Equivalents $ 50,145 $ 50,145 $ — $ — $ 50,145 Restricted Cash - Cash and Cash Equivalents 158,846 158,846 — — 158,846 Restricted Cash - Certificates of Deposit 4,877 — 4,877 — 4,877 Accounts Receivable 605 — 605 — 605 Total Assets $ 214,473 $ 208,991 $ 5,482 $ — $ 214,473 Liabilities: Accounts Payable and Accrued Liabilities $ 17,876 $ — $ 17,876 $ — $ 17,876 Payable to Investors 124,094 — 124,094 — 124,094 Notes Issued by Securitization Trust 156,782 — 158,951 — 158,951 Warehouse Lines 242,479 — 242,261 — 242,261 Paycheck Protection Program loan (Note 10) 8,505 — 8,540 — 8,540 Total Liabilities $ 549,736 $ — $ 551,722 $ — $ 551,722 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): March 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 219,012 $ 219,012 Servicing Assets — — 10,770 10,770 Total Assets $ — $ — $ 229,782 $ 229,782 Liabilities: Notes, at Fair Value $ — $ — $ 218,494 $ 218,494 Loan Trailing Fee Liability — — 2,189 2,189 Total Liabilities $ — $ — $ 220,683 $ 220,683 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 209,670 $ 209,670 Servicing Assets — — 11,088 11,088 Total Assets $ — $ — $ 220,758 $ 220,758 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Loan Trailing Fee Liability — — 2,233 2,233 Total Liabilities $ — $ — $ 210,612 $ 210,612 |
Quantitative Information About Significant Unobservable Inputs | The following tables present quantitative information about the significant unobservable inputs used for PFL’s Level 3 fair value measurements at the dates presented: Range Borrower Loans and Notes March 31, 2021 December 31, 2020 Discount rate 4.8% - 14.7% 5.3% - 16.1% Default rate 2.4% - 15.6% 2.6% - 16.2% Range Servicing Assets March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% Market servicing rate (1) (2) 0.625% - 0.818% 0.625% - 0.818% (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of March 31, 2021 were measured using a market servicing rate assumption of 81.8 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 62.5 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of March 31, 2021 and December 31, 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a total market servicing rate range of 68.5 - 87.8 basis points and a total market servicing rate of 69.5 - 88.8 basis points, respectively. Range Loan Trailing Fee Liability March 31, 2021 December 31, 2020 Discount rate 15.0% - 25.0% 15.0% - 25.0% Default rate 1.9% - 17.3% 1.9% - 17.7% Prepayment rate 11.9% - 28.2% 12.4% - 28.9% |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present additional information about Level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis for three months ended March 31, 2021 and 2020 (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held for Sale Notes Total Balance at January 1, 2021 $ 209,670 $ — $ (208,379) $ 1,291 Originations 48,958 406,234 (49,861) 405,331 Principal repayments (39,075) — 39,788 713 Borrower Loans sold to third parties (443) (406,234) — (406,677) Other changes (99) — 187 88 Change in fair value 1 — (229) (228) Balance at March 31, 2021 $ 219,012 $ — $ (218,494) $ 518 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Loans Held for Sale Notes Total Balance at January 1, 2020 $ 245,137 $ — $ (244,171) $ 966 Originations 41,301 399,550 (40,575) 400,276 Principal repayments (39,340) — 40,588 1,248 Borrower Loans sold to third parties (882) (399,550) — (400,432) Other changes (91) — 138 47 Change in fair value (18,466) — 18,529 63 Balance at March 31, 2020 $ 227,659 $ — $ (225,491) $ 2,168 |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following tables present additional information about Level 3 Servicing Assets recorded at fair value (in thousands): Servicing Assets Fair Value at January 1, 2021 $ 11,088 Additions 2,354 Less: Changes in fair value (2,672) Fair Value at March 31, 2021 $ 10,770 Servicing Assets Fair Value at January 1, 2020 $ 14,888 Additions 2,196 Less: Changes in fair value (3,394) Fair Value at March 31, 2020 $ 13,690 Loan Trailing Fee Liability The fair value of the Loan Trailing Fee Liability represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below. The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Loan Trailing Fee Liability Fair Value at January 1, 2021 $ 2,233 Issuances 410 Cash payment of Loan Trailing Fee (544) Change in fair value 90 Fair Value at March 31, 2021 $ 2,189 Loan Trailing Fee Liability Fair Value at January 1, 2020 $ 2,997 Issuances 385 Cash payment of Loan Trailing Fee (675) Change in fair value (61) Fair Value at March 31, 2020 $ 2,646 |
Fair Value Assumptions for Loans Held for Sale, Borrower Loans and Notes | Key economic assumptions are used to compute the fair value of Borrower Loans. The sensitivity of the fair value to immediate changes in assumptions at March 31, 2021 and December 31, 2020 for Borrower Loans are presented in the following table (in thousands, except percentages). Borrower Loans: March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 219,012 $ 209,670 Weighted-average discount rate 8.10 % 8.93 % Weighted-average default rate 11.55 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 216,991 $ 207,810 200 basis point increase in discount rate $ 215,018 $ 205,994 Fair value resulting from: 100 basis point decrease in discount rate $ 221,084 $ 211,575 200 basis point decrease in discount rate $ 223,207 $ 213,527 Fair value resulting from: 10 percent increase in default rate $ 216,918 $ 207,594 20 percent increase in default rate $ 214,837 $ 205,528 Fair value resulting from: 10 percent decrease in default rate $ 221,116 $ 211,755 20 percent decrease in default rate $ 223,230 $ 213,851 Key economic assumptions are used to compute the fair value of Notes. The sensitivity of the fair value to immediate changes in assumptions at March 31, 2021 and December 31, 2020 for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages). Notes March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 218,494 $ 208,379 Weighted-average discount rate 8.10 % 8.93 % Weighted-average default rate 11.55 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 216,475 $ 206,528 200 basis point increase in discount rate $ 214,504 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 220,563 $ 210,274 200 basis point decrease in discount rate $ 222,685 $ 212,217 Fair value resulting from: 10 percent increase in default rate $ 216,393 $ 206,304 20 percent increase in default rate $ 214,304 $ 204,238 Fair value resulting from: 10 percent decrease in default rate $ 220,605 $ 210,463 20 percent decrease in default rate $ 222,727 $ 212,558 |
Schedule of Prosper's and Prosper Funding's Estimated Fair Value of Servicing Assets and Liabilities | Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at March 31, 2021 and December 31, 2020 for Servicing Assets are presented in the following table (in thousands, except percentages). Servicing Assets March 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 10,770 $ 11,088 Weighted-average market servicing rate 0.629 % 0.631 % Weighted-average prepayment rate 19.66 % 19.84 % Weighted-average default rate 12.72 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 10,124 $ 10,424 Market servicing rate decrease of 0.025% $ 11,415 $ 11,752 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 10,562 $ 10,874 Applying a 0.9 multiplier to prepayment rate $ 10,981 $ 11,304 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 10,620 $ 10,936 Applying a 0.9 multiplier to default rate $ 10,920 $ 11,239 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Other Intangible Assets for the Period Presented | The following table presents the detail of other intangible assets subject to amortization as of the following date (dollars in thousands): March 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,593) 457 4.1 Brand name 60 (60) — — Total Intangible Assets subject to amortization $ 8,170 $ (7,713) $ 457 |
Summary of Estimated Amortization of Purchased Intangible Assets | Estimated amortization of purchased intangible assets for future periods is as follows (in thousands): Year Ending December 31, 2021 (remainder thereof) $ 129 2022 136 2023 107 2024 85 Total $ 457 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other Liabilities consist of the following (in thousands): March 31, 2021 December 31, 2020 Operating lease liabilities $ 14,184 $ 13,342 Paycheck Protection Program loan (Note 10) 8,526 8,505 Loan trailing fee liability 2,189 2,233 Deferred income tax liability 510 489 Financing lease liabilities 155 — Deferred revenue 39 63 Other 287 425 Total Other Liabilities $ 25,890 $ 25,057 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income (Loss) per Share | Basic and diluted income (loss) per share were calculated as follows for the periods presented (in thousands, except share and per share amounts): Three Months Ended March 31, 2021 2020 Numerator: Net (Loss) Income $ (44,889) $ 21,130 Less: Net Income Allocated to Participating Securities — (15,755) Net (Loss) Income Attributable to Common Stockholders $ (44,889) $ 5,375 Denominator: Weighted average shares used in computing basic net (loss) income per share 69,344,075 68,454,103 Effect of dilutive securities: Stock options — 236,928 Convertible preferred stock warrants — 213,264,845 Weighted average shares used in computing diluted Net Income (Loss) per Share 69,344,075 281,955,876 Net (Loss) Income Per Share – Basic $ (0.65) $ 0.08 Net (Loss) Income Per Share – Diluted $ (0.65) $ 0.02 |
Common Stock Equivalents Excluded from Computation of Diluted Net Income (Loss) per Share | The following common stock equivalents were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been anti-dilutive: Three Months Ended March 31, 2021 2020 (shares) (shares) Excluded securities: Convertible preferred stock issued and outstanding, excluding shares held by consolidated VIE 158,365,655 209,613,570 Stock options issued and outstanding 73,514,388 72,195,596 Warrants issued and outstanding 1,080,349 1,080,349 Series E-1 convertible preferred stock warrants 35,544,141 — Series F convertible preferred stock warrants 177,720,704 — Total common stock equivalents excluded from diluted net (loss) income per common share computation 446,225,237 282,889,515 |
CONVERTIBLE PREFERRED STOCK, _2
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Summary of Shares Authorized, Issued, Outstanding, Par Value and Liquidation Preference of Convertible Preferred Stock | The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of convertible preferred stock as of March 31, 2021 are disclosed in the table below (amounts in thousands except share and par value amounts): Convertible Preferred Stock Par Value Authorized Shares Outstanding and Issued Shares Liquidation Preference, Outstanding Shares Series A $ 0.01 68,558,220 66,428,185 * $ 19,160 Series A-1 $ 0.01 24,760,915 22,515,315 45,031 Series B $ 0.01 35,775,880 35,127,160 * 21,190 Series C $ 0.01 24,404,770 24,404,770 70,075 Series D $ 0.01 23,888,640 23,888,640 165,000 Series E-1 $ 0.01 35,544,141 — — Series E-2 $ 0.01 16,858,078 — — Series F $ 0.01 177,720,707 3 — Series G $ 0.01 37,249,497 37,249,497 50,000 Total 444,760,848 209,613,570 $ 370,456 |
Schedule of Assumptions Used | The Company determined the fair value of the outstanding Series E-1 Warrants utilizing the following assumptions as of the following dates: March 31, 2021 December 31, 2020 Volatility 61.0 % 60.0 % Risk-free interest rate 0.30 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of the following dates: March 31, 2021 December 31, 2020 Volatility 61.0 % 60.0 % Risk-free interest rate 0.30 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % |
Schedule of Stockholders' Equity Note, Warrants or Rights | The combined activity of the Convertible Preferred Stock Warrant Liability for the three months ended March 31, 2021 and 2020 are as follows (in thousands): Warrant Activity Balance at January 1, 2021 $ 112,319 Change in fair value 44,431 Balance at March 31, 2021 $ 156,750 Warrant Activity Balance at January 1, 2020 $ 149,996 Change in fair value (55,449) Balance at March 31, 2020 $ 94,547 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summarized Option Activity under Option Plan | Stock option activity under the 2005 Plan and 2015 Plan is summarized for the three months ended March 31, 2021 below: Options Issued and Outstanding Weighted- Average Exercise Price Balance as of January 1, 2021 72,915,449 $ 0.02 Options issued 6,681,066 $ 0.06 Options exercised (1,624,461) $ 0.02 Options forfeited (2,940,087) $ 0.02 Options expired (14,595) $ 0.02 Balance as of March 31, 2021 75,017,372 $ 0.02 Options vested and expected to vest as of March 31, 2021 58,499,373 $ 0.02 Options vested and exercisable at March 31, 2021 53,581,437 $ 0.02 |
Fair Value of Stock Option Awards | The fair value of PMI’s stock option awards granted during the three months ended March 31, 2021 and 2020 was estimated at the date of grant using the Black-Scholes model with the following average assumptions: Three Months Ended March 31, 2021 2020 Volatility of common stock 62.93 % 47.41 % Risk-free interest rate 1.00 % 0.68 % Expected life 6.0 years 6.0 years Dividend yield — % — % |
Summarized Activities for RSU's | The following table summarizes the number of PMI’s RSU activity for the three months ended March 31, 2021: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2021 4,661,141 $ 0.91 Forfeited (1,786,793) $ 0.54 Unvested at March 31, 2021 2,874,348 $ 1.14 |
Stock Based Compensation Included in Consolidated Statements of Operations | The following table presents the amount of stock-based compensation related to stock-based awards granted to employees recognized in Prosper’s condensed consolidated statements of operations for the periods presented (in thousands): Three Months Ended March 31, 2021 2020 Origination and servicing $ 31 $ 38 Sales and marketing 16 11 General and administrative 272 456 Total stock-based compensation $ 319 $ 505 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Summary of Operating Lease Right-of-Use Assets | The following table summarizes the operating lease right-of-use assets as of March 31, 2021, which are included in “Property and Equipment, Net” on the condensed consolidated balance sheets. March 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value ROU Assets - Office buildings $ 16,758 $ 6,849 $ 9,909 ROU Assets - Other 290 77 213 Total right-of-use assets subject to amortization $ 17,048 $ 6,926 $ 10,122 |
Schedule of Future Minimum Lease Payments | Future maturities of operating lease liabilities as of March 31, 2021 were as follows (in thousands). The present value of the future minimum lease payments represent our operating lease liabilities as of March 31, 2021 and are included in " Other Liabilities March 31, 2021 Remainder of 2021 $ 3,949 2022 5,593 2023 2,043 2024 1,360 2025 1,395 Thereafter 1,218 Total future minimum lease payments $ 15,558 Less imputed interest (1,374) Present value of future minimum lease payments $ 14,184 |
Summary of Other Information Related to Leases | Other information related to leases was as follows (dollars in thousands): March 31, 2021 Cash paid for operating leases year-to-date $ 1,287 ROU assets obtained in exchange for new operating lease obligations $ 1,281 Weighted average remaining lease term (in years) 3.58 years Weighted average discount rate 5.26 % |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Entity Information [Line Items] | |
Aggregate Amount of Notes Purchased and the Income Earned | The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper for the three months ended March 31, 2021 and March 31, 2020, as well as the Notes outstanding as of March 31, 2021 and December 31, 2020 are summarized below (in thousands): Aggregate Amount of Interest Earned on Notes Related Party 2021 2020 2021 2020 Executive officers and management $ 8 $ 6 $ 2 $ 1 Directors (excluding executive officers and management) — 122 — 15 Total $ 8 $ 128 $ 2 $ 16 Notes Balance as of Related Party March 31, 2021 December 31, Executive officers and management $ 42 $ 41 Directors (excluding executive officers and management) — — Total $ 42 $ 41 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Aggregate Amount of Notes Purchased and the Income Earned | The aggregate amount of the Notes purchased and the income earned by parties deemed to be related parties of PFL for the three months ended March 31, 2021 and 2020 are summarized below (in thousands): Aggregate Amount of Notes Purchased Interest Earned on Notes Three Months Ended March 31, Three Months Ended March 31, Related Party 2021 2020 2021 2020 Executive officers and management $ 8 $ 6 $ 2 $ 1 Directors (excluding executive officers and management) — — — — Total $ 8 $ 6 $ 2 $ 1 The balance of Notes held by officers and directors who are not executive officers are as follows (in thousands): Notes Balance as of Related Party March 31, 2021 December 31, 2020 Executive officers and management $ 42 $ 41 Directors (excluding executive officers and management) — — Total $ 42 $ 41 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 81,574 | $ 77,858 |
Less: Accumulated depreciation and amortization | (51,849) | (49,412) |
Total Property and Equipment, Net | 29,725 | 28,446 |
Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation and amortization | (21,116) | (20,025) |
Total Property and Equipment, Net | 7,851 | 6,928 |
Operating lease right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease right-of-use assets | 17,048 | 15,767 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 14,219 | 13,841 |
Internal-use software and website development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 35,286 | 33,176 |
Internal-use software and website development costs | Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 28,967 | 26,953 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,872 | 2,872 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,167 | 7,167 |
Assets not yet placed in service | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 4,982 | $ 5,035 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and Amortization | $ 2,246 | $ 2,006 |
Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and Amortization | 1,092 | 1,025 |
Property Plant And Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and Amortization | 2,200 | 2,000 |
Internal-use software and website development costs | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized internal-use software and website development costs | $ 2,000 | $ 2,700 |
BORROWER LOANS, LOANS HELD FO_3
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE - Aggregate Principal Balances Outstanding and Fair Values of Borrower Loans, Notes and Loans Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower Loans, at Fair Value | [1] | $ 351,101 | $ 378,263 | |
Loans Held for Sale, at Fair Value | [1] | 240,379 | 274,621 | |
Notes, at Fair Value | 218,494 | 208,379 | ||
Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower Loans, at Fair Value | 219,012 | 209,670 | ||
Notes, at Fair Value | 218,494 | 208,379 | ||
Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 224,261 | 217,110 | ||
Fair value adjustments | (5,767) | (8,731) | ||
Notes, at Fair Value | 218,494 | 208,379 | ||
Notes | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 224,261 | 217,110 | ||
Fair value adjustments | (5,767) | (8,731) | ||
Notes, at Fair Value | 218,494 | 208,379 | ||
Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 360,013 | 393,642 | ||
Fair value adjustments | (8,912) | (15,379) | ||
Borrower Loans, at Fair Value | 351,101 | 378,263 | ||
Borrower Loans | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 222,006 | 215,373 | ||
Fair value adjustments | (2,994) | (5,703) | ||
Borrower Loans, at Fair Value | 219,012 | 209,670 | ||
Loans Held for Sale | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 243,682 | 279,113 | $ 279,113 | |
Fair value adjustments | (3,303) | (4,492) | ||
Loans Held for Sale, at Fair Value | $ 240,379 | $ 274,621 | ||
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
BORROWER LOANS, LOANS HELD FO_4
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | 13 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Non accrual status past due date | 120 days | ||||
Interest income | $ 8,973 | $ 10,961 | |||
COVID-19 Relief | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Percent of Loans in relief program, cumulative | 12.00% | ||||
Percent of Loans in relief program, active | 3.00% | 3.00% | |||
Borrower Loans | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fixed interest rate, minimum | 5.31% | 5.31% | |||
Fixed interest rate, maximum | 31.82% | 31.82% | |||
Minimum number of days for which loans originated were delinquent | 90 days | 90 days | |||
Aggregate principal amount of loans originated that are 90 days or more delinquent | $ 1,800 | $ 2,800 | $ 1,800 | ||
Fair value of loans originated that are 90 days or more delinquent | 200 | 300 | 200 | ||
Loans in non-accrual status | $ 200 | $ 400 | 200 | ||
Loans Held for Sale | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fixed interest rate, minimum | 5.31% | 5.31% | |||
Fixed interest rate, maximum | 31.82% | 31.82% | |||
Minimum number of days for which loans originated were delinquent | 90 days | ||||
Aggregate principal amount of loans originated that are 90 days or more delinquent | $ 700 | $ 800 | 700 | ||
Fair value of loans originated that are 90 days or more delinquent | 100 | 100 | 100 | ||
Loans in non-accrual status | 100 | $ 100 | $ 100 | ||
Interest income | 7,600 | 4,800 | |||
Prosper Funding LLC | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Interest income | $ 544 | $ 622 | |||
Prosper Funding LLC | COVID-19 Relief | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Percent of Loans in relief program, cumulative | 12.00% | ||||
Percent of Loans in relief program, active | 3.00% | 3.00% | |||
Prosper Funding LLC | Borrower Loans | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fixed interest rate, minimum | 5.31% | 5.31% | |||
Fixed interest rate, maximum | 31.82% | 31.82% | |||
Minimum number of days for which loans originated were delinquent | 90 days | 90 days | |||
Aggregate principal amount of loans originated that are 90 days or more delinquent | $ 800 | $ 1,400 | $ 800 | ||
Fair value of loans originated that are 90 days or more delinquent | $ 100 | 100 | 100 | ||
Non accrual status past due date | 120 days | ||||
Loans in non-accrual status | $ 100 | $ 200 | $ 100 | ||
Minimum | Borrower Loans | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Maturity, in months | 36 months | 36 months | |||
Minimum | Loans Held for Sale | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Maturity, in months | 36 months | 36 months | |||
Minimum | Prosper Funding LLC | Borrower Loans | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Maturity, in months | 36 months | 36 months | |||
Maximum | Borrower Loans | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Maturity, in months | 60 months | 60 months | |||
Maximum | Loans Held for Sale | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Maturity, in months | 60 months | 60 months | |||
Maximum | Prosper Funding LLC | Borrower Loans | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Maturity, in months | 60 months | 60 months |
SERVICING ASSETS (Details)
SERVICING ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain (loss) on sale of borrower loans | $ 1,623 | $ 1,744 | |
Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain (loss) on sale of borrower loans | 2,011 | 2,000 | |
Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Outstanding principle | $ 2,300,000 | $ 2,400,000 | |
Fixed interest rate, minimum | 5.31% | 5.31% | |
Fixed interest rate, maximum | 31.82% | 31.82% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 5,800 | 9,200 | |
Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Outstanding principle | $ 2,300,000 | $ 2,400,000 | |
Fixed interest rate, minimum | 5.31% | 5.31% | |
Fixed interest rate, maximum | 31.82% | 31.82% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 9,300 | $ 8,500 | |
Minimum | Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Maturity, in months | 36 months | 36 months | |
Minimum | Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Maturity, in months | 36 months | 36 months | |
Maximum | Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Maturity, in months | 60 months | 60 months | |
Maximum | Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Maturity, in months | 60 months | 60 months |
SECURITIZATIONS (Details)
SECURITIZATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | [1] | $ 124,564 | $ 156,782 |
Borrower Loans, at Fair Value | [1] | 351,101 | 378,263 |
Risk retention interest and residual certificates held by third party investors at fair value | [1] | 19,726 | 22,917 |
Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | [2] | 124,564 | 156,782 |
Borrower Loans, at Fair Value | [2] | 132,089 | 168,593 |
Risk retention interest and residual certificates held by third party investors at fair value | [2] | $ 19,726 | 22,917 |
PMIT 2019 Securitization Trusts | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Securitization amount | $ 573,000 | ||
PMIT 2019-1 | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage | 65.50% | ||
Debt issuance costs | $ 2,300 | ||
Unamortized debt issuance costs | 25,700 | ||
Borrower Loans, at Fair Value | 26,600 | ||
Risk retention interest and residual certificates held by third party investors at fair value | 2,800 | ||
2019-1, Class A Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | $ 127,300 | ||
Interest rate | 3.54% | ||
2019-1, Class B Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | $ 25,000 | ||
Interest rate | 4.03% | ||
2019-1, Class C Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | $ 19,300 | ||
Interest rate | 5.27% | ||
PMIT 2019-2 | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage | 16.40% | ||
Debt issuance costs | $ 1,900 | ||
Unamortized debt issuance costs | 46,400 | ||
Borrower Loans, at Fair Value | 49,800 | ||
Risk retention interest and residual certificates held by third party investors at fair value | 8,400 | ||
2019-2, Class A Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | $ 110,100 | ||
Interest rate | 3.20% | ||
2019-2, Class B Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | $ 31,400 | ||
Interest rate | 3.69% | ||
2019-2, Class C Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Notes Issued by Securitization Trust | $ 32,700 | ||
Interest rate | 5.05% | ||
PMIT 2019-4 | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage | 19.60% | ||
Debt issuance costs | $ 1,200 | ||
Unamortized debt issuance costs | 52,400 | ||
Borrower Loans, at Fair Value | 55,700 | ||
Risk retention interest and residual certificates held by third party investors at fair value | 8,500 | ||
2019-4, Class A Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Securitization amount | $ 102,600 | ||
Interest rate | 2.48% | ||
2019-4, Class B Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Securitization amount | $ 19,500 | ||
Interest rate | 3.20% | ||
2019-4, Class C Notes | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Securitization amount | $ 16,800 | ||
Interest rate | 4.95% | ||
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | ||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the condensed consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. See Note 6, Securitizations, and Note 10, Debt, to our Notes to Condensed Consolidated Financial Statements for add itional information. |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Assets: | |||
Borrower Loans, at Fair Value | [1] | $ 351,101 | $ 378,263 |
Loans Held for Sale at Fair Value | [1] | 240,379 | 274,621 |
Servicing Assets | 9,248 | 9,242 | |
Total Assets | 600,728 | 662,126 | |
Liabilities: | |||
Notes, at Fair Value | 218,494 | 208,379 | |
Certificates Issued by Securitization Trust, at Fair Value | [1] | 19,726 | 22,917 |
Convertible Preferred Stock Warrant Liability | 156,750 | 112,319 | |
Loan Trailing Fee Liability | 2,189 | 2,233 | |
Total Liabilities | 397,159 | 345,848 | |
Prosper Funding LLC | |||
Assets: | |||
Borrower Loans, at Fair Value | 219,012 | 209,670 | |
Servicing Assets | 10,770 | 11,088 | |
Total Assets | 229,782 | 220,758 | |
Liabilities: | |||
Notes, at Fair Value | 218,494 | 208,379 | |
Loan Trailing Fee Liability | 2,189 | 2,233 | |
Total Liabilities | 220,683 | 210,612 | |
Level 1 Inputs | |||
Assets: | |||
Borrower Loans, at Fair Value | 0 | 0 | |
Loans Held for Sale at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes, at Fair Value | 0 | 0 | |
Certificates Issued by Securitization Trust, at Fair Value | 0 | 0 | |
Convertible Preferred Stock Warrant Liability | 0 | 0 | |
Loan Trailing Fee Liability | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 1 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans, at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes, at Fair Value | 0 | 0 | |
Loan Trailing Fee Liability | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 2 Inputs | |||
Assets: | |||
Borrower Loans, at Fair Value | 0 | 0 | |
Loans Held for Sale at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes, at Fair Value | 0 | 0 | |
Certificates Issued by Securitization Trust, at Fair Value | 0 | 0 | |
Convertible Preferred Stock Warrant Liability | 0 | 0 | |
Loan Trailing Fee Liability | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 2 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans, at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes, at Fair Value | 0 | 0 | |
Loan Trailing Fee Liability | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 3 Inputs | |||
Assets: | |||
Borrower Loans, at Fair Value | 351,101 | 378,263 | |
Loans Held for Sale at Fair Value | 240,379 | 274,621 | |
Servicing Assets | 9,248 | 9,242 | |
Total Assets | 600,728 | 662,126 | |
Liabilities: | |||
Notes, at Fair Value | 218,494 | 208,379 | |
Certificates Issued by Securitization Trust, at Fair Value | 19,726 | 22,917 | |
Convertible Preferred Stock Warrant Liability | 156,750 | 112,319 | |
Loan Trailing Fee Liability | 2,189 | 2,233 | |
Total Liabilities | 397,159 | 345,848 | |
Level 3 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans, at Fair Value | 219,012 | 209,670 | |
Servicing Assets | 10,770 | 11,088 | |
Total Assets | 229,782 | 220,758 | |
Liabilities: | |||
Notes, at Fair Value | 218,494 | 208,379 | |
Loan Trailing Fee Liability | 2,189 | 2,233 | |
Total Liabilities | $ 220,683 | $ 210,612 | |
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Significant Unobservable Inputs - Borrower Loans, Loans Held For Sale and Notes (Details) | Mar. 31, 2021 | Dec. 31, 2020 |
Discount rate | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.0964 | 0.1112 |
Discount rate | Minimum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.047 | 0.045 |
Discount rate | Minimum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.048 | 0.053 |
Discount rate | Maximum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.172 | 0.177 |
Discount rate | Maximum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.147 | 0.161 |
Default rate | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.1106 | 0.1293 |
Default rate | Minimum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.017 | 0.023 |
Default rate | Minimum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.024 | 0.026 |
Default rate | Maximum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.176 | 0.179 |
Default rate | Maximum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Fair value measurement inputs | 0.156 | 0.162 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Significant Unobservable Inputs - Certificates Issued by Securitization Trust (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 1.80% | 3.30% |
Default rate | 1.70% | 3.20% |
Prepayment rate | 5.60% | 7.60% |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 14.00% | 16.00% |
Default rate | 14.40% | 15.30% |
Prepayment rate | 35.30% | 35.40% |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Significant Unobservable Inputs - Servicing Rights (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Servicing Rights at Fair Value [Line Items] | |||
Collection fee market rate | 0.06% | 0.07% | |
Prosper Funding LLC | |||
Servicing Rights at Fair Value [Line Items] | |||
Collection fee market rate | 0.06% | 0.07% | |
Minimum | |||
Servicing Rights at Fair Value [Line Items] | |||
Discount rate | 15.00% | 15.00% | |
Default rate | 1.90% | 1.90% | |
Prepayment rate | 11.90% | 12.40% | |
Market servicing rate | 0.625% | 0.625% | |
Weighted-average market servicing rate | 0.685% | 6950.00% | |
Minimum | Prosper Funding LLC | |||
Servicing Rights at Fair Value [Line Items] | |||
Discount rate | 15.00% | 15.00% | |
Default rate | 1.90% | 1.90% | |
Prepayment rate | 11.90% | 12.40% | |
Market servicing rate | 0.625% | 0.625% | |
Weighted-average market servicing rate | 0.685% | 6950.00% | |
Maximum | |||
Servicing Rights at Fair Value [Line Items] | |||
Discount rate | 25.00% | 25.00% | |
Default rate | 17.30% | 17.70% | |
Prepayment rate | 28.20% | 28.90% | |
Market servicing rate | 0.818% | 0.818% | |
Weighted-average market servicing rate | 0.878% | 8880.00% | |
Maximum | Prosper Funding LLC | |||
Servicing Rights at Fair Value [Line Items] | |||
Discount rate | 25.00% | 25.00% | |
Default rate | 17.30% | 17.70% | |
Prepayment rate | 28.20% | 28.90% | |
Market servicing rate | 0.818% | 0.818% | |
Weighted-average market servicing rate | 0.878% | 8880.00% |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Significant Unobservable Inputs - Loan Trailing Fee Liability (Details) | Mar. 31, 2021 | Dec. 31, 2020 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.0964 | 0.1112 |
Discount rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.047 | 0.045 |
Discount rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.172 | 0.177 |
Discount rate | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.048 | 0.053 |
Discount rate | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.147 | 0.161 |
Discount rate | Obligations | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.150 | 0.150 |
Discount rate | Obligations | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.250 | 0.250 |
Discount rate | Obligations | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.150 | 0.150 |
Discount rate | Obligations | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.250 | 0.250 |
Default rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.1106 | 0.1293 |
Default rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.017 | 0.023 |
Default rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.176 | 0.179 |
Default rate | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.024 | 0.026 |
Default rate | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.156 | 0.162 |
Default rate | Obligations | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.019 | 0.019 |
Default rate | Obligations | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.173 | 0.177 |
Default rate | Obligations | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.019 | 0.019 |
Default rate | Obligations | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.173 | 0.177 |
Prepayment rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.1918 | 0.2086 |
Prepayment rate | Obligations | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.119 | 0.124 |
Prepayment rate | Obligations | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.282 | 0.289 |
Prepayment rate | Obligations | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.119 | 0.124 |
Prepayment rate | Obligations | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement inputs | 0.282 | 0.289 |
FAIR VALUE OF ASSETS AND LIAB_8
FAIR VALUE OF ASSETS AND LIABILITIES - Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total | ||
Beginning balance, Total | $ 421,587 | $ 479,706 |
Purchase of Borrower Loans/Issuance of Notes | 405,331 | 400,277 |
Principal repayments | (64,988) | (69,854) |
Borrower Loans sold to third parties | (405,837) | (357,897) |
Other changes | (583) | (461) |
Change in fair value | (2,250) | (36,938) |
Ending balance, Total | 353,260 | 414,833 |
Prosper Funding LLC | ||
Total | ||
Beginning balance, Total | 1,291 | 966 |
Purchase of Borrower Loans/Issuance of Notes | 405,331 | 400,276 |
Principal repayments | (713) | (1,248) |
Borrower Loans sold to third parties | (406,677) | (400,432) |
Other changes | 88 | 47 |
Change in fair value | (228) | 63 |
Ending balance, Total | 518 | 2,168 |
Notes | ||
Liabilities | ||
Beginning balance, Liabilities | (208,379) | (244,171) |
Purchase of Borrower Loans/Issuance of Notes | (49,861) | (40,575) |
Principal repayments | 39,788 | 40,588 |
Borrower Loans sold to third parties | 0 | 0 |
Other changes | 187 | 138 |
Change in fair value | (229) | 18,529 |
Ending balance, Liabilities | (218,494) | (225,491) |
Notes | Prosper Funding LLC | ||
Liabilities | ||
Beginning balance, Liabilities | (208,379) | (244,171) |
Purchase of Borrower Loans/Issuance of Notes | (49,861) | (40,575) |
Principal repayments | 39,788 | 40,588 |
Borrower Loans sold to third parties | 0 | 0 |
Other changes | 187 | 138 |
Change in fair value | (229) | 18,529 |
Ending balance, Liabilities | (218,494) | (225,491) |
Certificates Issued by Securitization Trust | ||
Liabilities | ||
Beginning balance, Liabilities | (22,918) | (52,168) |
Purchase of Borrower Loans/Issuance of Notes | 0 | 0 |
Principal repayments | 5,485 | 4,833 |
Borrower Loans sold to third parties | 0 | 0 |
Other changes | 34 | 38 |
Change in fair value | (2,327) | 11,981 |
Ending balance, Liabilities | (19,726) | (35,316) |
Borrower Loans | ||
Assets | ||
Beginning balance, Assets | 378,263 | 634,019 |
Purchase of Borrower Loans/Issuance of Notes | 48,958 | 41,301 |
Principal repayments | (75,390) | (96,715) |
Borrower Loans sold to third parties | (1,009) | (2,263) |
Other changes | (669) | (742) |
Change in fair value | 948 | (53,196) |
Ending balance, Assets | 351,101 | 522,404 |
Borrower Loans | Prosper Funding LLC | ||
Assets | ||
Beginning balance, Assets | 209,670 | 245,137 |
Purchase of Borrower Loans/Issuance of Notes | 48,958 | 41,301 |
Principal repayments | (39,075) | (39,340) |
Borrower Loans sold to third parties | (443) | (882) |
Other changes | (99) | (91) |
Change in fair value | 1 | (18,466) |
Ending balance, Assets | 219,012 | 227,659 |
Loans Held for Sale | ||
Assets | ||
Beginning balance, Assets | 274,621 | 142,026 |
Purchase of Borrower Loans/Issuance of Notes | 406,234 | 399,551 |
Principal repayments | (34,871) | (18,560) |
Borrower Loans sold to third parties | (404,828) | (355,634) |
Other changes | (135) | 105 |
Change in fair value | (642) | (14,252) |
Ending balance, Assets | 240,379 | 153,236 |
Loans Held for Sale | Prosper Funding LLC | ||
Assets | ||
Beginning balance, Assets | 0 | 0 |
Purchase of Borrower Loans/Issuance of Notes | 406,234 | 399,550 |
Principal repayments | 0 | 0 |
Borrower Loans sold to third parties | (406,234) | (399,550) |
Other changes | 0 | 0 |
Change in fair value | 0 | 0 |
Ending balance, Assets | $ 0 | $ 0 |
FAIR VALUE OF ASSETS AND LIAB_9
FAIR VALUE OF ASSETS AND LIABILITIES - Summary of Additional Information for Level 3 Fair Value Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Servicing Assets | ||
Beginning balance | $ 9,242 | |
Ending balance | 9,248 | |
Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance | 11,088 | |
Ending balance | 10,770 | |
Servicing Assets | ||
Servicing Assets | ||
Beginning balance | 9,242 | |
Ending balance | 9,248 | |
Servicing Assets | Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance | 11,088 | |
Ending balance | 10,770 | |
Level 3 Inputs | ||
Servicing Assets | ||
Beginning balance | 9,242 | |
Ending balance | 9,248 | |
Level 3 Inputs | Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance | 11,088 | |
Ending balance | 10,770 | |
Level 3 Inputs | Servicing Assets | ||
Servicing Assets | ||
Beginning balance | 9,242 | $ 12,602 |
Additions | 2,019 | 1,974 |
Less: Changes in fair value | (2,013) | (2,834) |
Ending balance | 9,248 | 11,742 |
Level 3 Inputs | Servicing Assets | Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance | 11,088 | 14,888 |
Additions | 2,354 | 2,196 |
Less: Changes in fair value | (2,672) | (3,394) |
Ending balance | 10,770 | 13,690 |
Level 3 Inputs | Mandatorily Redeemable Preferred Stock | ||
Liabilities | ||
Beginning balance | 112,319 | 149,996 |
Change in fair value | 44,431 | (55,449) |
Ending balance | 156,750 | 94,547 |
Level 3 Inputs | Loan Trailing Fee Liability | ||
Liabilities | ||
Beginning balance | 2,233 | 2,997 |
Issuances | 410 | 385 |
Principal repayments | (544) | (675) |
Change in fair value | 90 | (61) |
Ending balance | 2,189 | 2,646 |
Level 3 Inputs | Loan Trailing Fee Liability | Prosper Funding LLC | ||
Liabilities | ||
Beginning balance | 2,233 | 2,997 |
Issuances | 410 | 385 |
Principal repayments | (544) | (675) |
Change in fair value | 90 | (61) |
Ending balance | $ 2,189 | $ 2,646 |
FAIR VALUE OF ASSETS AND LIA_10
FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value Assumptions for Borrower Loans, Loans Held for Sale and Notes (Details) $ in Thousands | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower Loans, at Fair Value | [1] | $ 351,101 | $ 378,263 |
Notes, at Fair Value | 218,494 | 208,379 | |
Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower Loans, at Fair Value | 219,012 | 209,670 | |
Notes, at Fair Value | 218,494 | 208,379 | |
Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes, at Fair Value | 218,494 | 208,379 | |
Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower Loans, at Fair Value | 209,670 | ||
Notes, at Fair Value | 218,494 | 208,379 | |
Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower Loans, at Fair Value | 591,480 | 652,884 | |
Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower Loans, at Fair Value | 219,012 | 209,670 | |
Discount rate assumption | 100 basis point increase | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 216,475 | 206,528 | |
Discount rate assumption | 100 basis point increase | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 207,810 | ||
Notes | 216,475 | 206,528 | |
Discount rate assumption | 100 basis point increase | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 586,021 | 647,093 | |
Discount rate assumption | 100 basis point increase | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 216,991 | 207,810 | |
Discount rate assumption | 200 basis point incease | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 214,504 | 204,720 | |
Discount rate assumption | 200 basis point incease | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 205,994 | ||
Notes | 214,504 | 204,720 | |
Discount rate assumption | 200 basis point incease | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 580,693 | 641,437 | |
Discount rate assumption | 200 basis point incease | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 215,018 | 205,994 | |
Discount rate assumption | 100 basis point decrease | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 220,563 | 210,274 | |
Discount rate assumption | 100 basis point decrease | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 211,575 | ||
Notes | 220,563 | 210,274 | |
Discount rate assumption | 100 basis point decrease | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 597,074 | 658,817 | |
Discount rate assumption | 100 basis point decrease | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 221,084 | 211,575 | |
Discount rate assumption | 200 basis point decrease | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 222,685 | 212,217 | |
Discount rate assumption | 200 basis point decrease | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 213,527 | ||
Notes | 222,685 | 212,217 | |
Discount rate assumption | 200 basis point decrease | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 602,809 | 664,895 | |
Discount rate assumption | 200 basis point decrease | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 223,207 | 213,527 | |
Default rate assumption | 10 percent increase | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 216,393 | 206,304 | |
Default rate assumption | 10 percent increase | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 207,594 | ||
Notes | 216,393 | 206,304 | |
Default rate assumption | 10 percent increase | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 585,825 | 646,421 | |
Default rate assumption | 10 percent increase | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 216,918 | 207,594 | |
Default rate assumption | 20 percent increase | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 214,304 | 204,238 | |
Default rate assumption | 20 percent increase | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 205,528 | ||
Notes | 214,304 | 204,238 | |
Default rate assumption | 20 percent increase | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 580,203 | 639,987 | |
Default rate assumption | 20 percent increase | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 214,837 | 205,528 | |
Default rate assumption | 10 percent decrease | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 220,605 | 210,463 | |
Default rate assumption | 10 percent decrease | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 211,755 | ||
Notes | 220,605 | 210,463 | |
Default rate assumption | 10 percent decrease | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 597,161 | 659,377 | |
Default rate assumption | 10 percent decrease | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 221,116 | 211,755 | |
Default rate assumption | 20 percent decrease | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Notes | 222,727 | 212,558 | |
Default rate assumption | 20 percent decrease | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 213,851 | ||
Notes | 222,727 | 212,558 | |
Default rate assumption | 20 percent decrease | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | 602,871 | 665,904 | |
Default rate assumption | 20 percent decrease | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Borrower loans | $ 223,230 | $ 213,851 | |
Discount rate | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.0964 | 0.1112 | |
Discount rate | Discount rate assumption | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.0810 | 0.0893 | |
Discount rate | Discount rate assumption | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.0810 | 0.0893 | |
Discount rate | Discount rate assumption | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.0791 | 0.0826 | |
Discount rate | Discount rate assumption | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.0810 | 0.0893 | |
Default rate | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.1106 | 0.1293 | |
Default rate | Default rate assumption | Notes | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.1155 | 0.1226 | |
Default rate | Default rate assumption | Notes | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.1155 | 0.1226 | |
Default rate | Default rate assumption | Borrower loans and loans held for sale | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.1113 | 0.1158 | |
Default rate | Default rate assumption | Borrower loans and loans held for sale | Prosper Funding LLC | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Fair value assumptions | 0.1155 | 0.1226 | |
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
FAIR VALUE OF ASSETS AND LIA_11
FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value Assumptions for Certificates Issued by Securitization Trust (Details) $ in Thousands | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Certificates Issued by Securitization Trust, at Fair Value | [1] | $ 19,726 | $ 22,917 |
Level 3 Inputs | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Certificates Issued by Securitization Trust, at Fair Value | 19,726 | 22,917 | |
Discount rate assumption | 100 basis point increase | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 19,566 | 22,729 | |
Discount rate assumption | 200 basis point incease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 19,410 | 22,545 | |
Discount rate assumption | 100 basis point decrease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 19,890 | 23,110 | |
Discount rate assumption | 200 basis point decrease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 20,056 | 23,308 | |
Default rate assumption | 10 percent increase | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 18,903 | 21,798 | |
Default rate assumption | 20 percent increase | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 18,084 | 20,690 | |
Default rate assumption | 10 percent decrease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 20,544 | 24,030 | |
Default rate assumption | 20 percent decrease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 21,366 | 25,150 | |
Prepayment rate assumption | 10 percent increase | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 19,734 | 22,933 | |
Prepayment rate assumption | 20 percent increase | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 19,745 | 22,958 | |
Prepayment rate assumption | 10 percent decrease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | 19,710 | 22,891 | |
Prepayment rate assumption | 20 percent decrease | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected fair value with change in assumptions | $ 19,702 | $ 22,872 | |
Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement inputs | 0.0964 | 0.1112 | |
Default rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement inputs | 0.1106 | 0.1293 | |
Prepayment rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement inputs | 0.1918 | 0.2086 | |
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
FAIR VALUE OF ASSETS AND LIA_12
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Prosper's and Prosper Funding's Estimated Fair Value of Servicing Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Servicing Assets | $ 9,248 | $ 9,242 |
Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Servicing Assets | 10,770 | 11,088 |
Servicing Assets | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Servicing Assets | 9,248 | 9,242 |
Servicing Assets | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Servicing Assets | 10,770 | 11,088 |
Market servicing rate | Servicing Assets | Market servicing rate increase of 0.025% | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 8,694 | 8,689 |
Market servicing rate | Servicing Assets | Market servicing rate increase of 0.025% | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 10,124 | 10,424 |
Market servicing rate | Servicing Assets | Market servicing rate decrease of 0.025% | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 9,802 | 9,796 |
Market servicing rate | Servicing Assets | Market servicing rate decrease of 0.025% | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 11,415 | 11,752 |
Prepayment rate assumption | Servicing Assets | Applying a 1.1 multiplier to prepayment rate | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 9,069 | 9,064 |
Prepayment rate assumption | Servicing Assets | Applying a 1.1 multiplier to prepayment rate | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 10,562 | 10,874 |
Prepayment rate assumption | Servicing Assets | Applying a 0.9 multiplier to prepayment rate | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 9,429 | 9,423 |
Prepayment rate assumption | Servicing Assets | Applying a 0.9 multiplier to prepayment rate | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 10,981 | 11,304 |
Default rate assumption | Servicing Assets | Applying a 1.1 multiplier to default rate | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 9,119 | 9,116 |
Default rate assumption | Servicing Assets | Applying a 1.1 multiplier to default rate | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 10,620 | 10,936 |
Default rate assumption | Servicing Assets | Applying a 0.9 multiplier to default rate | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | 9,377 | 9,369 |
Default rate assumption | Servicing Assets | Applying a 0.9 multiplier to default rate | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Expected fair value with change in assumptions | $ 10,920 | $ 11,239 |
Market servicing rate | Servicing Assets | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Valuation techniques | 0.642% | 0.631% |
Market servicing rate | Servicing Assets | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Valuation techniques | 0.629% | 0.631% |
Prepayment rate | Servicing Assets | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Valuation techniques | 19.66% | 19.84% |
Prepayment rate | Servicing Assets | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Valuation techniques | 19.66% | 19.84% |
Default rate | Servicing Assets | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Valuation techniques | 12.72% | 12.78% |
Default rate | Servicing Assets | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Valuation techniques | 12.72% | 12.78% |
FAIR VALUE OF ASSETS AND LIA_13
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Prosper's and Prosper Funding's Estimated Fair Value of Servicing Assets and Liabilities - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Servicing rate increase | 0.025% |
Servicing rate decrease | 0.025% |
Prepayment rate assumption | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Prepayment rate increase | 1.10% |
Prepayment rate decrease | 0.90% |
Default rate assumption | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Default rate increase | 1.10% |
Default rate decrease | 0.90% |
FAIR VALUE OF ASSETS AND LIA_14
FAIR VALUE OF ASSETS AND LIABILITIES - Financial Instruments, Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |||
Assets: | ||||||
Cash and Cash Equivalents | $ 53,129 | $ 50,145 | $ 52,829 | |||
Restricted Cash | 168,141 | [1] | 163,723 | [1] | $ 141,504 | |
Accounts Receivable | [1] | 722 | 605 | |||
Total Assets | 895,510 | 947,109 | ||||
Liabilities: | ||||||
Accounts Payable and Accrued Liabilities | 16,298 | 17,876 | ||||
Payable to Investors | 127,748 | 124,094 | ||||
Notes Issued by Securitization Trust | [1] | 124,564 | 156,782 | |||
Warehouse Lines | [1] | 213,336 | 242,479 | |||
Paycheck Protection Program loan (Note 10) | 8,526 | 8,505 | ||||
Total Liabilities | 902,806 | 909,903 | ||||
Carrying Amount | ||||||
Assets: | ||||||
Cash and Cash Equivalents | 53,129 | 50,145 | ||||
Accounts Receivable | 722 | 605 | ||||
Total Assets | 221,992 | 214,473 | ||||
Liabilities: | ||||||
Accounts Payable and Accrued Liabilities | 16,298 | 17,876 | ||||
Payable to Investors | 127,748 | 124,094 | ||||
Notes Issued by Securitization Trust | 124,564 | 156,782 | ||||
Warehouse Lines | 213,336 | 242,479 | ||||
Paycheck Protection Program loan (Note 10) | 8,526 | 8,505 | ||||
Total Liabilities | 490,472 | 549,736 | ||||
Carrying Amount | Cash and Cash Equivalents | ||||||
Assets: | ||||||
Restricted Cash | 163,264 | 158,846 | ||||
Carrying Amount | Certificates of Deposit | ||||||
Assets: | ||||||
Restricted Cash | 4,877 | 4,877 | ||||
Balance at Fair Value | ||||||
Assets: | ||||||
Cash and Cash Equivalents | 53,129 | 50,145 | ||||
Accounts Receivable | 722 | 605 | ||||
Total Assets | 221,992 | 214,473 | ||||
Liabilities: | ||||||
Accounts Payable and Accrued Liabilities | 16,298 | 17,876 | ||||
Payable to Investors | 127,748 | 124,094 | ||||
Notes Issued by Securitization Trust | 126,895 | 158,951 | ||||
Warehouse Lines | 215,310 | 242,261 | ||||
Paycheck Protection Program loan (Note 10) | 8,540 | 8,540 | ||||
Total Liabilities | 486,251 | 551,722 | ||||
Balance at Fair Value | Cash and Cash Equivalents | ||||||
Assets: | ||||||
Restricted Cash | 163,264 | 158,846 | ||||
Balance at Fair Value | Certificates of Deposit | ||||||
Assets: | ||||||
Restricted Cash | 4,877 | 4,877 | ||||
Level 1 Inputs | ||||||
Assets: | ||||||
Cash and Cash Equivalents | 53,129 | 50,145 | ||||
Accounts Receivable | 0 | 0 | ||||
Total Assets | 216,393 | 208,991 | ||||
Liabilities: | ||||||
Accounts Payable and Accrued Liabilities | 0 | 0 | ||||
Payable to Investors | 0 | 0 | ||||
Notes Issued by Securitization Trust | 0 | 0 | ||||
Warehouse Lines | 0 | 0 | ||||
Paycheck Protection Program loan (Note 10) | 0 | 0 | ||||
Total Liabilities | 0 | 0 | ||||
Level 1 Inputs | Cash and Cash Equivalents | ||||||
Assets: | ||||||
Restricted Cash | 163,264 | 158,846 | ||||
Level 1 Inputs | Certificates of Deposit | ||||||
Assets: | ||||||
Restricted Cash | 0 | 0 | ||||
Level 2 Inputs | ||||||
Assets: | ||||||
Cash and Cash Equivalents | 0 | 0 | ||||
Accounts Receivable | 722 | 605 | ||||
Total Assets | 5,599 | 5,482 | ||||
Liabilities: | ||||||
Accounts Payable and Accrued Liabilities | 16,298 | 17,876 | ||||
Payable to Investors | 127,748 | 124,094 | ||||
Notes Issued by Securitization Trust | 126,895 | 158,951 | ||||
Warehouse Lines | 215,310 | 242,261 | ||||
Paycheck Protection Program loan (Note 10) | 8,540 | 8,540 | ||||
Total Liabilities | 494,791 | 551,722 | ||||
Level 2 Inputs | Cash and Cash Equivalents | ||||||
Assets: | ||||||
Restricted Cash | 0 | 0 | ||||
Level 2 Inputs | Certificates of Deposit | ||||||
Assets: | ||||||
Restricted Cash | 4,877 | 4,877 | ||||
Level 3 Inputs | ||||||
Assets: | ||||||
Cash and Cash Equivalents | 0 | 0 | ||||
Accounts Receivable | 0 | 0 | ||||
Total Assets | 0 | 0 | ||||
Liabilities: | ||||||
Accounts Payable and Accrued Liabilities | 0 | 0 | ||||
Payable to Investors | 0 | 0 | ||||
Notes Issued by Securitization Trust | 0 | 0 | ||||
Warehouse Lines | 0 | 0 | ||||
Paycheck Protection Program loan (Note 10) | 0 | 0 | ||||
Total Liabilities | 0 | 0 | ||||
Level 3 Inputs | Cash and Cash Equivalents | ||||||
Assets: | ||||||
Restricted Cash | 0 | 0 | ||||
Level 3 Inputs | Certificates of Deposit | ||||||
Assets: | ||||||
Restricted Cash | $ 0 | $ 0 | ||||
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill And Other Intangible Assets [Line Items] | |||
Goodwill | $ 36,368,000 | $ 36,368,000 | |
Goodwill impairment | 0 | $ 0 | |
Intangible assets, net | 457,000 | $ 500,000 | |
Amortization of intangible assets | $ 100,000 | ||
User base and customer relationships | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets, net | $ 457,000 | ||
Intangible assets amortized period | 4 years 1 month 6 days | ||
User base and customer relationships | Minimum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 3 years | ||
User base and customer relationships | Maximum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 10 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 8,170 | |
Accumulated Amortization | (7,713) | |
Net Carrying Value | 457 | $ 500 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 3,060 | |
Accumulated Amortization | (3,060) | |
Net Carrying Value | 0 | |
User base and customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 5,050 | |
Accumulated Amortization | (4,593) | |
Net Carrying Value | $ 457 | |
Remaining Useful Life (In Years) | 4 years 1 month 6 days | |
Brand name | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 60 | |
Accumulated Amortization | (60) | |
Net Carrying Value | $ 0 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Summary of Estimated Amortization of Purchased Intangible Assets (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 (remainder thereof) | $ 129 |
2022 | 136 |
2023 | 107 |
2024 | 85 |
Total | $ 457 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Other Liabilities [Abstract] | ||
Operating lease liabilities | $ 14,184 | $ 13,342 |
Paycheck Protection Program loan (Note 10) | 8,526 | 8,505 |
Loan trailing fee liability | 2,189 | 2,233 |
Deferred income tax liability | 510 | 489 |
Financing lease liabilities | 155 | 0 |
Deferred revenue | 39 | 63 |
Other | 287 | 425 |
Total Other Liabilities | $ 25,890 | $ 25,057 |
Operating lease liability, location | Total Other Liabilities | Total Other Liabilities |
Finance lease liability, location | Total Other Liabilities | Total Other Liabilities |
DEBT (Details)
DEBT (Details) | Mar. 04, 2021USD ($) | Jun. 20, 2019 | Mar. 28, 2019USD ($) | Apr. 30, 2019 | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Jun. 12, 2018USD ($) | Jan. 19, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||||||||||
Warehouse Lines | [1] | $ 213,336,000 | $ 242,479,000 | |||||||
Loans Held for Sale at Fair Value | [1] | 240,379,000 | 274,621,000 | |||||||
Paycheck Protection Program loan (Note 10) | 8,526,000 | $ 8,505,000 | ||||||||
Warehouse Agreement | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum tangible net worth | 25,000,000 | |||||||||
Minimum net liquidity | $ 15,000,000 | |||||||||
Maximum leverage ratio | 5 | |||||||||
PWIT | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | $ 200,000,000 | $ 100,000,000 | ||||||||
Repayment period | 24 months | |||||||||
Advance rate | 89.00% | |||||||||
Commitment fee percent | 0.50% | |||||||||
Warehouse Lines | $ 101,300,000 | |||||||||
Loans Held for Sale at Fair Value | 116,500,000 | |||||||||
Undrawn portion | 98,700,000 | |||||||||
Capitalized debt issuance cost | 1,800,000 | |||||||||
PWIIT | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | $ 300,000,000 | |||||||||
Repayment period | 24 months | 24 months | ||||||||
Advance rate | 90.00% | |||||||||
Warehouse Lines | 112,000,000 | |||||||||
Loans Held for Sale at Fair Value | 125,100,000 | |||||||||
Undrawn portion | 188,000,000 | |||||||||
Capitalized debt issuance cost | 1,300,000 | |||||||||
PWIIT Class A | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | $ 230,000,000 | |||||||||
Commitment fee percent | 0.50% | |||||||||
PWIIT Class B | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | $ 70,000,000 | |||||||||
PWIIT Class B | Revolving Credit Facility | Minimum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Commitment fee percent | 0.50% | |||||||||
PWIIT Class B | Revolving Credit Facility | Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Commitment fee percent | 1.00% | |||||||||
PPP Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Loan at time of issuance | $ 8,400,000 | |||||||||
Stated interest rate | 1.00% | |||||||||
Remaining contractual term (in years) | 2 years | |||||||||
Paycheck Protection Program loan (Note 10) | $ 8,500,000 | |||||||||
LIBOR | PWIT | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 2.90% | |||||||||
LIBOR | PWIIT Class A | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 2.05% | |||||||||
Increase to basis spread | 0.375% | |||||||||
LIBOR | PWIIT Class B | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 8.75% | |||||||||
Increase to basis spread | 0.375% | |||||||||
[1] | Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
NET INCOME (LOSS) PER SHARE - B
NET INCOME (LOSS) PER SHARE - Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net (Loss) Income | $ (44,889) | $ 21,130 |
Less: Net Income Allocated to Participating Securities | 0 | (15,755) |
Net (Loss) Income Attributable to Common Stockholders, Basic | (44,889) | 5,375 |
Net (Loss) Income Attributable to Common Stockholders, Diluted | $ (44,889) | $ 5,375 |
Denominator: | ||
Weighted average shares used in computing basic net (loss) income per share | 69,344,075 | 68,454,103 |
Effect of dilutive securities: | ||
Stock options (in shares) | 0 | 236,928 |
Convertible preferred stock warrants (in shares) | 0 | 213,264,845 |
Weighted average shares used in computing diluted Net Income (Loss) per Share | 69,344,075 | 281,955,876 |
Net (Loss) Income Per Share - Basic (in dollars per share) | $ (0.65) | $ 0.08 |
Net (Loss) Income Per Share - Diluted (in dollars per share) | $ (0.65) | $ 0.02 |
NET INCOME (LOSS) PER SHARE - C
NET INCOME (LOSS) PER SHARE - Common Stock Equivalents Excluded from Computation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents excluded from diluted net (loss) income per common share computation (in shares) | 446,225,237 | 282,889,515 |
Convertible preferred stock issued and outstanding, excluding shares held by consolidated VIE | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents excluded from diluted net (loss) income per common share computation (in shares) | 158,365,655 | 209,613,570 |
Stock options issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents excluded from diluted net (loss) income per common share computation (in shares) | 73,514,388 | 72,195,596 |
Warrants issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents excluded from diluted net (loss) income per common share computation (in shares) | 1,080,349 | 1,080,349 |
Series E-1 convertible preferred stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents excluded from diluted net (loss) income per common share computation (in shares) | 35,544,141 | 0 |
Series F convertible preferred stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents excluded from diluted net (loss) income per common share computation (in shares) | 177,720,704 | 0 |
CONVERTIBLE PREFERRED STOCK, _3
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Additional Information (Details) | Jul. 21, 2020shares | Dec. 16, 2016 | Feb. 16, 2016 | Mar. 31, 2021USD ($)time$ / sharesshares | Mar. 31, 2020USD ($) | Dec. 31, 2020$ / sharesshares | Sep. 20, 2017$ / sharesshares | Feb. 27, 2017$ / sharesshares |
Class of Stock [Line Items] | ||||||||
Common and preferred stock, shares authorized (in shares) | 1,069,760,848 | |||||||
Common stock, authorized (in shares) | 625,000,000 | 625,000,000 | 625,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Preferred stock, shares authorized (in shares) | 444,760,848 | 444,760,848 | 444,760,848 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||
Common stock, issued (in shares) | 71,699,768 | 70,075,307 | ||||||
Common stock, outstanding (in shares) | 70,763,833 | 69,139,372 | ||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock split conversion ratio of 5-for-1 | 5 | |||||||
Exercise of stock options (in shares) | 1,624,461 | |||||||
Cash proceeds | $ | $ 34,000 | |||||||
Series A | ||||||||
Class of Stock [Line Items] | ||||||||
Conversion ratio | 1 | |||||||
Times the original issue | time | 3 | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 0.29 | |||||||
Preferred stock, shares authorized (in shares) | 68,558,220 | |||||||
Series A | Convertible Preferred Stock Held by Consolidated VIE | ||||||||
Class of Stock [Line Items] | ||||||||
Purchase of convertible preferred stock by consolidated VIE Prosper Grantor Trust (in shares) | 34,670,420 | |||||||
Series B | ||||||||
Class of Stock [Line Items] | ||||||||
IPO value (at least) | $ | $ 2,000,000,000 | |||||||
Aggregate proceeds (at least) | $ | $ 100,000,000 | |||||||
Voting power (at least) | 60.00% | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 0.60 | |||||||
Preferred stock, shares authorized (in shares) | 35,775,880 | |||||||
Series B | Convertible Preferred Stock Held by Consolidated VIE | ||||||||
Class of Stock [Line Items] | ||||||||
Purchase of convertible preferred stock by consolidated VIE Prosper Grantor Trust (in shares) | 16,577,495 | |||||||
Series A-1 | ||||||||
Class of Stock [Line Items] | ||||||||
Voting power (at least) | 14.00% | |||||||
Conversion ratio | 1,000,000 | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 2 | |||||||
Preferred stock, shares authorized (in shares) | 24,760,915 | |||||||
Series D | ||||||||
Class of Stock [Line Items] | ||||||||
Voting power (at least) | 60.00% | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 6.91 | |||||||
Series E1 and E2 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Voting power (at least) | 60.00% | |||||||
Series F | ||||||||
Class of Stock [Line Items] | ||||||||
Voting power (at least) | 60.00% | |||||||
Preferred stock, liquidation preference, conversion basis | 0.666666666666667 | |||||||
Preferred stock, liquidation preference, conversion basis, after payment | 0.333333333333333 | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 0.84 | |||||||
Warrant to purchase (in shares) | 177,720,706 | |||||||
Income (expense) amount | $ | $ (37,300,000) | $ 46,200,000 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 0.01 | |||||||
Preferred stock, shares authorized (in shares) | 177,720,707 | |||||||
Series G | ||||||||
Class of Stock [Line Items] | ||||||||
Voting power (at least) | 60.00% | |||||||
Conversion ratio | 1.36 | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 1.34 | |||||||
Preferred stock, shares authorized (in shares) | 37,249,497 | |||||||
Series C | ||||||||
Class of Stock [Line Items] | ||||||||
Liquidation preference (in dollars per share) | $ / shares | $ 2.87 | |||||||
Preferred stock, shares authorized (in shares) | 24,404,770 | |||||||
Series E-1 | ||||||||
Class of Stock [Line Items] | ||||||||
Liquidation preference (in dollars per share) | $ / shares | $ 0.84 | |||||||
Warrant to purchase (in shares) | 15,277,006 | |||||||
Warrant expiration period | 10 years | |||||||
Income (expense) amount | $ | $ (7,100,000) | $ 9,200,000 | ||||||
Preferred stock, shares authorized (in shares) | 35,544,141 | |||||||
Series E-2 | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, liquidation preference, conversion basis | 0.666666666666667 | |||||||
Preferred stock, liquidation preference, conversion basis, after payment | 0.333333333333333 | |||||||
Liquidation preference (in dollars per share) | $ / shares | $ 0.84 | |||||||
Preferred stock, shares authorized (in shares) | 16,858,078 |
CONVERTIBLE PREFERRED STOCK, _4
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Summary of Shares Authorized, Issued, Outstanding, Par Value and Liquidation Preference of Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 20, 2017 |
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 444,760,848 | 444,760,848 | 444,760,848 | ||
Convertible preferred stock, issued (in shares) | 209,613,570 | 209,613,570 | |||
Convertible preferred stock, outstanding (in shares) | 209,613,570 | 209,613,570 | |||
Liquidation Preference, Outstanding Shares | $ 370,456 | $ 370,456 | |||
Convertible Preferred Stock Held by Consolidated VIE | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, outstanding (in shares) | (51,247,915) | (51,247,915) | 0 | 0 | |
Series A | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 68,558,220 | ||||
Convertible preferred stock, issued (in shares) | 66,428,185 | ||||
Convertible preferred stock, outstanding (in shares) | 66,428,185 | ||||
Liquidation Preference, Outstanding Shares | $ 19,160 | ||||
Series A | Convertible Preferred Stock Held by Consolidated VIE | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, issued (in shares) | 34,670,420 | ||||
Convertible preferred stock, outstanding (in shares) | 34,670,420 | ||||
Series A-1 | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 24,760,915 | ||||
Convertible preferred stock, issued (in shares) | 22,515,315 | ||||
Convertible preferred stock, outstanding (in shares) | 22,515,315 | ||||
Liquidation Preference, Outstanding Shares | $ 45,031 | ||||
Series B | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 35,775,880 | ||||
Convertible preferred stock, issued (in shares) | 35,127,160 | ||||
Convertible preferred stock, outstanding (in shares) | 35,127,160 | ||||
Liquidation Preference, Outstanding Shares | $ 21,190 | ||||
Series B | Convertible Preferred Stock Held by Consolidated VIE | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, issued (in shares) | 16,577,495 | ||||
Convertible preferred stock, outstanding (in shares) | 16,577,495 | ||||
Series C | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 24,404,770 | ||||
Convertible preferred stock, issued (in shares) | 24,404,770 | ||||
Convertible preferred stock, outstanding (in shares) | 24,404,770 | ||||
Liquidation Preference, Outstanding Shares | $ 70,075 | ||||
Series D | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 23,888,640 | ||||
Convertible preferred stock, issued (in shares) | 23,888,640 | ||||
Convertible preferred stock, outstanding (in shares) | 23,888,640 | ||||
Liquidation Preference, Outstanding Shares | $ 165,000 | ||||
Series E-1 | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 35,544,141 | ||||
Convertible preferred stock, issued (in shares) | 0 | ||||
Convertible preferred stock, outstanding (in shares) | 0 | ||||
Liquidation Preference, Outstanding Shares | $ 0 | ||||
Series E-2 | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 16,858,078 | ||||
Convertible preferred stock, issued (in shares) | 0 | ||||
Convertible preferred stock, outstanding (in shares) | 0 | ||||
Liquidation Preference, Outstanding Shares | $ 0 | ||||
Series F | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 177,720,707 | ||||
Convertible preferred stock, issued (in shares) | 3 | ||||
Convertible preferred stock, outstanding (in shares) | 3 | ||||
Liquidation Preference, Outstanding Shares | $ 0 | ||||
Series G | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Convertible preferred stock, authorized (in shares) | 37,249,497 | ||||
Convertible preferred stock, issued (in shares) | 37,249,497 | ||||
Convertible preferred stock, outstanding (in shares) | 37,249,497 | ||||
Liquidation Preference, Outstanding Shares | $ 50,000 |
CONVERTIBLE PREFERRED STOCK, _5
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Schedule of Assumptions Used (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Volatility | Series E-1 | ||
Class of Stock [Line Items] | ||
Fair value assumptions | 0.610 | 0.600 |
Volatility | Series F | ||
Class of Stock [Line Items] | ||
Fair value assumptions | 0.610 | 0.600 |
Risk-free interest rate | Series E-1 | ||
Class of Stock [Line Items] | ||
Fair value assumptions | 0.0030 | 0.0020 |
Risk-free interest rate | Series F | ||
Class of Stock [Line Items] | ||
Fair value assumptions | 0.0030 | 0.0020 |
Expected term (in years) | Series E-1 | ||
Class of Stock [Line Items] | ||
Remaining contractual term (in years) | 2 years 9 months | 2 years 9 months |
Expected term (in years) | Series F | ||
Class of Stock [Line Items] | ||
Remaining contractual term (in years) | 2 years 9 months | 2 years 9 months |
Dividend yield | Series E-1 | ||
Class of Stock [Line Items] | ||
Fair value assumptions | 0 | 0 |
Dividend yield | Series F | ||
Class of Stock [Line Items] | ||
Fair value assumptions | 0 | 0 |
CONVERTIBLE PREFERRED STOCK, _6
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Warrant Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Warrants or Rights [Roll Forward] | ||
Change in fair value | $ 44,431 | $ (55,449) |
Convertible Preferred Stock Warrant | ||
Warrants or Rights [Roll Forward] | ||
Beginning balance | 112,319 | 149,996 |
Change in fair value | 44,431 | (55,449) |
Ending balance | $ 156,750 | $ 94,547 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Plan repricing, unamortized cost | $ 100,000 | |
Plan repricing, unamortized cost, vesting period | 2 years | |
Options outstanding, term | 7 years 10 days | |
Dividend yield | 0.00% | 0.00% |
Internal-use software and website development costs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation capitalized | $ 100,000 | |
Stock options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized cost of unvested share-based compensation awards. | $ 0 | |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unamortized expense related to unvested stock-based awards | $ 1,400,000 | |
Weighted average vesting period | 1 year 9 months 18 days | |
RSUs | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
RSUs | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 4 years |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summarized Option Activity under Option Plan (Details) - 2005 Stock Plan and 2015 Stock Option Plan | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Options Issued and Outstanding | |
Beginning Balance (in shares) | shares | 72,915,449 |
Options issued (in shares) | shares | 6,681,066 |
Options exercised (in shares) | shares | (1,624,461) |
Options forfeited (in shares) | shares | (2,940,087) |
Options expired (in shares) | shares | (14,595) |
Ending balance (in shares) | shares | 75,017,372 |
Options vested and expected to vest (in shares) | shares | 58,499,373 |
Options vested and exercisable (in shares) | shares | 53,581,437 |
Weighted- Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 0.02 |
Options issued (in dollars per share) | $ / shares | 0.06 |
Options exercised (in dollars per share) | $ / shares | 0.02 |
Options forfeited (in dollars per share) | $ / shares | 0.02 |
Options expired (in dollars per share) | $ / shares | 0.02 |
Ending balance (in dollars per share) | $ / shares | 0.02 |
Options vested and expected to vest (in dollars per share) | $ / shares | 0.02 |
Options vested and exercisable (in dollars per share) | $ / shares | $ 0.02 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Stock Option Awards (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair value of stock option awards [Abstract] | ||
Volatility of common stock | 62.93% | 47.41% |
Risk-free interest rate | 1.00% | 0.68% |
Expected life | 6 years | 6 years |
Dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summarized Activities for the Company's RSU's (Details) - RSUs | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Shares | |
Unvested, beginning balance (in shares) | shares | 4,661,141 |
Forfeited (in shares) | shares | (1,786,793) |
Unvested, ending balance (in shares) | shares | 2,874,348 |
Weighted-Average Grant Date Fair Value | |
Unvested, beginning balance (in dollars per share) | $ / shares | $ 0.91 |
Forfeited (in dollars per share) | $ / shares | 0.54 |
Unvested, ending balance (in dollars per share) | $ / shares | $ 1.14 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Based Compensation Included in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 319 | $ 505 |
Origination and servicing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 31 | 38 |
Sales and marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 16 | 11 |
General and administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 272 | $ 456 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Taxes [Line Items] | ||
Income tax expense | $ 21,000 | $ 34,000 |
Prosper Funding LLC | ||
Income Taxes [Line Items] | ||
Income tax expense | $ 0 | $ 0 |
Net effective tax rate | 0.00% |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Rental expense under operating lease arrangements | $ 1 | $ 1.5 | |
Sublease income | $ 0.1 | $ 0.2 | |
Operating lease liability, location | Other Liabilities | Other Liabilities | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease contract term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease contract term | 6 years |
LEASES - Operating Lease Right-
LEASES - Operating Lease Right-of-Use Assets (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | $ 17,048 |
Accumulated Amortization | 6,926 |
Net Carrying Value | 10,122 |
ROU Assets - Office buildings | |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | 16,758 |
Accumulated Amortization | 6,849 |
Net Carrying Value | 9,909 |
ROU Assets - Other | |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | 290 |
Accumulated Amortization | 77 |
Net Carrying Value | $ 213 |
LEASES - Schedule of Lease Matu
LEASES - Schedule of Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of Lease Maturity | ||
Remainder of 2021 | $ 3,949 | |
2022 | 5,593 | |
2023 | 2,043 | |
2024 | 1,360 | |
2025 | 1,395 | |
Thereafter | 1,218 | |
Total future minimum lease payments | 15,558 | |
Less imputed interest | (1,374) | |
Present value of future minimum lease payments | $ 14,184 | $ 13,342 |
LEASES - Other Information Rela
LEASES - Other Information Related to Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Cash paid for operating leases year-to-date | $ 1,287 |
ROU assets obtained in exchange for new operating lease obligations | $ 1,281 |
Weighted average remaining lease term (in years) | 3 years 6 months 29 days |
Weighted average discount rate | 5.26% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments And Contingencies [Line Items] | ||
Designated Amount for loans (less than) | $ 143,500 | |
Minimum fee, remaining in current year | 1,300,000 | |
Minimum fee, 2022 | 100,000 | |
Minimum liquidity covenant | 15,000,000 | |
Purchase of borrower loans | 14,600,000 | |
Maximum potential future payments | 2,700,000,000 | |
Accrued repurchase and indemnification obligation | 300,000 | $ 200,000 |
Prosper Funding LLC | ||
Commitments And Contingencies [Line Items] | ||
Designated Amount for loans (less than) | 143,500 | |
Minimum fee, remaining in current year | 1,300,000 | |
Minimum fee, 2022 | 100,000 | |
Minimum liquidity covenant | 15,000,000 | |
Purchase of borrower loans | 14,600,000 | |
Maximum potential future payments | 2,700,000,000 | |
Accrued repurchase and indemnification obligation | $ 300,000 | $ 200,000 |
RELATED PARTIES - Additional In
RELATED PARTIES - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Minimum percentage of voting securities considered for related parties | 10.00% |
Minimum percentage of stockholders considered for related parties | 10.00% |
RELATED PARTIES - Aggregate Amo
RELATED PARTIES - Aggregate Amount of Notes Purchased and the Income Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Aggregate Amount of Notes Purchased | $ 8 | $ 128 | |
Interest Earned on Notes and Borrower Loans | 2 | 16 | |
Notes Balance | 42 | $ 41 | |
Prosper Funding LLC | |||
Related Party Transaction [Line Items] | |||
Aggregate Amount of Notes Purchased | 8 | 6 | |
Interest Earned on Notes and Borrower Loans | 2 | 1 | |
Notes Balance | 42 | 41 | |
Executive officers and management | |||
Related Party Transaction [Line Items] | |||
Aggregate Amount of Notes Purchased | 8 | 6 | |
Interest Earned on Notes and Borrower Loans | 2 | 1 | |
Notes Balance | 42 | 41 | |
Executive officers and management | Prosper Funding LLC | |||
Related Party Transaction [Line Items] | |||
Aggregate Amount of Notes Purchased | 8 | 6 | |
Interest Earned on Notes and Borrower Loans | 2 | 1 | |
Notes Balance | 42 | 41 | |
Directors (excluding executive officers and management) | |||
Related Party Transaction [Line Items] | |||
Aggregate Amount of Notes Purchased | 0 | 122 | |
Interest Earned on Notes and Borrower Loans | 0 | 15 | |
Notes Balance | 0 | 0 | |
Directors (excluding executive officers and management) | Prosper Funding LLC | |||
Related Party Transaction [Line Items] | |||
Aggregate Amount of Notes Purchased | 0 | 0 | |
Interest Earned on Notes and Borrower Loans | 0 | $ 0 | |
Notes Balance | $ 0 | $ 0 |
SIGNIFICANT CONCENTRATIONS (Det
SIGNIFICANT CONCENTRATIONS (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Concentration Risk [Line Items] | ||
Percentage of funds originating in channel | 89.00% | 91.00% |
Party One | ||
Concentration Risk [Line Items] | ||
Percentage of loan purchased | 28.80% | 16.60% |
Party Two | ||
Concentration Risk [Line Items] | ||
Percentage of loan purchased | 10.40% | |
Warehouse VIE | ||
Concentration Risk [Line Items] | ||
Percentage of loan purchased | 13.40% | 9.60% |