Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 09, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-39326 | |
Entity Registrant Name | OPEN LENDING CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3008583 | |
Entity Address, Address Line One | 1501 S. MoPac Expressway | |
Entity Address, Address Line Two | Suite 450 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78746 | |
City Area Code | 512 | |
Local Phone Number | 892-0400 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | LPRO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 128,198,185 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001806201 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 115,153 | $ 7,676 |
Restricted cash | 2,613 | 2,222 |
Accounts receivable | 3,392 | 3,767 |
Current contract assets | 27,814 | 29,782 |
Prepaid expenses | 2,975 | 479 |
Other current assets | 5,168 | 205 |
Deferred transaction costs | 0 | 1,081 |
Total current assets | 157,115 | 45,212 |
Property and equipment, net | 1,315 | 299 |
Operating lease right-of-use assets, net | 5,853 | 0 |
Non-current contract assets | 45,174 | 33,169 |
Deferred tax asset, net | 85,269 | 0 |
Other non-current assets | 181 | 506 |
Total assets | 294,907 | 79,186 |
Current liabilities | ||
Accounts payable | 2,283 | 1,337 |
Accrued expenses | 1,409 | 2,006 |
Income tax payable | 544 | 0 |
Current portion of notes payable | 4,675 | 2,484 |
Other current liabilities | 4,220 | 2,366 |
Total current liabilities | 13,131 | 8,193 |
Long-term notes payable, net of unamortized debt issuance costs | 154,139 | 829 |
Operating lease liabilities, net of current portion | 5,265 | 0 |
Other long-term liabilities | 88,090 | 0 |
Total liabilities | 260,625 | 9,022 |
Commitment and contingencies | ||
Redeemable convertible preferred Series C units, 0 and 14,278,603 units issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 0 | 304,943 |
Stockholders’ equity (deficit) | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized and 0 shares issued as of September 30, 2020 and December 31, 2019, respectively | 0 | 0 |
Common stock, $0.01 par value; 550,000,000 shares authorized and 126,919,572 issued and outstanding as of September 30, 2020; 110,000,000 shares authorized and 37,631,052 issued and outstanding as of December 31, 2019 | 1,269 | 376 |
Additional paid-in capital | 476,403 | 7,626 |
Accumulated deficit | (443,390) | (242,781) |
Total stockholders’ equity (deficit) | 34,282 | (234,779) |
Total liabilities and stockholders’ equity (deficit) | $ 294,907 | $ 79,186 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Stockholders’ equity (deficit) | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 550,000,000 | 110,000,000 |
Common stock, shares issued (in shares) | 126,919,572 | 37,631,052 |
Common stock, shares outstanding (in shares) | 126,919,572 | 37,631,052 |
Series C Redeemable Convertible Preferred Stock | ||
Liabilities and stockholders’ equity (deficit) | ||
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 14,278,603 |
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 21,906,852 |
Series C Redeemable Convertible Preferred Stock | Cumulative Effect, Period of Adoption, Adjusted Balance | ||
Liabilities and stockholders’ equity (deficit) | ||
Redeemable convertible preferred stock, shares outstanding (in shares) | 14,278,603 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Total revenue | $ 29,762,000 | $ 22,104,000 | $ 69,259,000 | $ 66,771,000 |
Cost of services | 2,496,000 | 1,923,000 | 6,818,000 | 5,517,000 |
Gross profit | 27,266,000 | 20,181,000 | 62,441,000 | 61,254,000 |
Operating expenses | ||||
General and administrative | 5,015,000 | 3,263,000 | 23,233,000 | 9,670,000 |
Selling and marketing | 2,118,000 | 1,810,000 | 5,491,000 | 5,455,000 |
Research and development | 579,000 | 291,000 | 1,286,000 | 869,000 |
Operating income | 19,554,000 | 14,817,000 | 32,431,000 | 45,260,000 |
Change in fair value of contingent consideration | (83,130,000) | 0 | (131,932,000) | 0 |
Interest expense | (3,572,000) | (70,000) | (7,980,000) | (238,000) |
Interest income | 36,000 | 7,000 | 97,000 | 15,000 |
Other income | 0 | 3,000 | 3,000 | 9,000 |
Income (loss) before income taxes | (67,112,000) | 14,757,000 | (107,381,000) | 45,046,000 |
Provision (benefit) for income taxes | 4,021,000 | 40,745 | 5,385,000 | (58,320) |
Net income (loss) and comprehensive income (loss) | $ (71,133,000) | $ 14,716,000 | $ (112,766,000) | $ 45,104,000 |
Net income (loss) and comprehensive income (loss) per common share | ||||
Basic and diluted net loss per share (in dollars per share) | $ (0.62) | $ (1.25) | $ (1.56) | $ (1.78) |
Weighted average basic and diluted shares of common stock outstanding (in shares) | 115,189,532 | 37,631,052 | 67,828,046 | 37,631,052 |
Program fees | ||||
Revenue | ||||
Total revenue | $ 10,087,000 | $ 8,950,000 | $ 31,592,000 | $ 26,407,000 |
Profit share | ||||
Revenue | ||||
Total revenue | 18,544,000 | 12,310,000 | 34,482,000 | 38,089,000 |
Claims administration service fees | ||||
Revenue | ||||
Total revenue | $ 1,131,000 | $ 844,000 | $ 3,185,000 | $ 2,275,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' (Equity) Deficit - USD ($) $ in Thousands | Total | Earn-Out Shares Contingent Consideration | Lock-Up Shares Contingent Consideration | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Common StockEarn-Out Shares Contingent Consideration | Common StockLock-Up Shares Contingent Consideration | Common StockCumulative Effect, Period of Adoption, Adjustment | Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-in Capital | Additional Paid-in CapitalEarn-Out Shares Contingent Consideration | Additional Paid-in CapitalLock-Up Shares Contingent Consideration | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjustment | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated DeficitCumulative Effect, Period of Adoption, Adjusted Balance | Redeemable Convertible Series C Preferred | Redeemable Convertible Series C PreferredCumulative Effect, Period of Adoption, Adjustment | Redeemable Convertible Series C PreferredCumulative Effect, Period of Adoption, Adjusted Balance | Common | CommonCumulative Effect, Period of Adoption, Adjustment | CommonCumulative Effect, Period of Adoption, Adjusted Balance | Series A and B PreferredPreferred Stock | Series A and B PreferredPreferred StockCumulative Effect, Period of Adoption, Adjustment | Series A and B PreferredPreferred StockCumulative Effect, Period of Adoption, Adjusted Balance |
Beginning balance, redeemable convertible (in units) at Dec. 31, 2018 | 21,906,852 | 7,628,249 | 14,278,603 | 23,885,352 | 23,885,352 | 0 | |||||||||||||||||||||
Beginning balance, redeemable convertible at Dec. 31, 2018 | $ 141,518 | $ 141,518 | $ 5,540 | $ (5,540) | $ 0 | ||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||
Fair value adjustment of redemption option in Open Lending, LLC convertible preferred stock | $ 104,825 | $ 104,825 | |||||||||||||||||||||||||
Ending balance, redeemable convertible (in units) at Sep. 30, 2019 | 14,278,603 | 0 | |||||||||||||||||||||||||
Ending balance, redeemable convertible at Sep. 30, 2019 | $ 246,343 | $ 0 | |||||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 37,631,052 | 37,631,052 | 29,058,266 | 29,058,266 | 0 | |||||||||||||||||||||
Beginning balance at Dec. 31, 2018 | (133,792) | $ 32,768 | $ (133,792) | $ 0 | $ 376 | $ 376 | $ 0 | $ 5,642 | $ 5,642 | $ (139,810) | $ 32,768 | $ (139,810) | $ 478 | $ (478) | $ 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Fair value adjustment of redemption option in Open Lending, LLC convertible preferred stock | (104,825) | (104,825) | |||||||||||||||||||||||||
Distribution to Open Lending, LLC unitholders | (22,824) | (22,824) | |||||||||||||||||||||||||
Vesting of Open Lending, LLC share-based compensation plan | 1,497 | 1,497 | |||||||||||||||||||||||||
Net income | 45,104 | 45,104 | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2019 | 37,631,052 | 0 | |||||||||||||||||||||||||
Ending balance at Sep. 30, 2019 | (182,072) | $ 376 | 7,139 | (189,587) | $ 0 | ||||||||||||||||||||||
Beginning balance, redeemable convertible (in units) at Jun. 30, 2019 | 21,906,852 | 7,628,249 | 14,278,603 | 23,885,352 | 23,885,352 | 0 | |||||||||||||||||||||
Beginning balance, redeemable convertible at Jun. 30, 2019 | $ 187,742 | $ 187,742 | $ 6,550 | $ 6,550 | $ 0 | ||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||
Fair value adjustment of redemption option in Open Lending, LLC convertible preferred stock | $ 58,601 | ||||||||||||||||||||||||||
Ending balance, redeemable convertible (in units) at Sep. 30, 2019 | 14,278,603 | 0 | |||||||||||||||||||||||||
Ending balance, redeemable convertible at Sep. 30, 2019 | $ 246,343 | $ 0 | |||||||||||||||||||||||||
Beginning balance (in shares) at Jun. 30, 2019 | 0 | 37,631,052 | 37,631,052 | 29,058,266 | 29,058,266 | 0 | |||||||||||||||||||||
Beginning balance at Jun. 30, 2019 | (128,479) | (128,479) | $ 0 | $ 376 | $ 376 | 0 | 6,652 | 6,652 | (135,507) | (135,507) | $ 478 | $ 478 | $ 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Fair value adjustment of redemption option in Open Lending, LLC convertible preferred stock | (58,601) | (58,601) | |||||||||||||||||||||||||
Distribution to Open Lending, LLC unitholders | (10,195) | (10,195) | |||||||||||||||||||||||||
Vesting of Open Lending, LLC share-based compensation plan | 487 | 487 | |||||||||||||||||||||||||
Net income | 14,716 | 14,716 | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2019 | 37,631,052 | 0 | |||||||||||||||||||||||||
Ending balance at Sep. 30, 2019 | (182,072) | $ 376 | 7,139 | (189,587) | $ 0 | ||||||||||||||||||||||
Beginning balance, redeemable convertible (in units) at Dec. 31, 2019 | 21,906,852 | 7,628,249 | 14,278,603 | 25,381,873 | 25,381,873 | 0 | |||||||||||||||||||||
Beginning balance, redeemable convertible at Dec. 31, 2019 | $ 304,943 | $ 304,943 | $ 7,524 | $ 7,524 | $ 0 | ||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||
Fair value adjustment of redemption option in Open Lending, LLC convertible preferred stock | (47,537) | $ (47,537) | |||||||||||||||||||||||||
Recapitalization transaction, net of transaction costs, redeemable convertible (in units) | (14,278,603) | ||||||||||||||||||||||||||
Recapitalization transaction, net of transaction costs | $ (257,406) | ||||||||||||||||||||||||||
Ending balance, redeemable convertible (in units) at Sep. 30, 2020 | 0 | 0 | |||||||||||||||||||||||||
Ending balance, redeemable convertible at Sep. 30, 2020 | $ 0 | $ 0 | |||||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 37,631,052 | 37,631,052 | 29,058,266 | 29,058,266 | 0 | |||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | (234,779) | $ (234,779) | $ 0 | $ 376 | $ 376 | 0 | $ 7,626 | $ 7,626 | (242,781) | $ (242,781) | $ 478 | $ 478 | $ 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Fair value adjustment of redemption option in Open Lending, LLC convertible preferred stock | 47,537 | 47,537 | |||||||||||||||||||||||||
Distribution to Open Lending, LLC unitholders | (135,380) | (135,380) | |||||||||||||||||||||||||
Recapitalization transaction, net of transaction costs (in shares) | 54,218,857 | ||||||||||||||||||||||||||
Recapitalization transaction, net of transaction costs | 242,543 | $ 542 | 242,001 | ||||||||||||||||||||||||
Deferred tax asset | 1,874 | 1,874 | |||||||||||||||||||||||||
Estimated fair value of contingent consideration at June 10, 2020 | (347,089) | (347,089) | |||||||||||||||||||||||||
Vesting of Open Lending, LLC share-based compensation plan | 2,676 | 2,676 | |||||||||||||||||||||||||
Stock warrant exercise (in shares) | 7,882,163 | ||||||||||||||||||||||||||
Stock warrant exercise | 90,645 | $ 79 | 90,566 | ||||||||||||||||||||||||
Stock issued during period, acquisitions (in shares) | 23,750,000 | 3,437,500 | |||||||||||||||||||||||||
Stock issued during period, acquisitions | $ 419,844 | $ 59,177 | $ 238 | $ 34 | $ 419,606 | $ 59,143 | |||||||||||||||||||||
Net income | (112,766) | (112,766) | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 126,919,572 | 0 | |||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | 34,282 | $ 1,269 | 476,403 | (443,390) | $ 0 | ||||||||||||||||||||||
Beginning balance, redeemable convertible (in units) at Jun. 30, 2020 | 0 | 0 | |||||||||||||||||||||||||
Beginning balance, redeemable convertible at Jun. 30, 2020 | $ 0 | $ 0 | |||||||||||||||||||||||||
Ending balance, redeemable convertible (in units) at Sep. 30, 2020 | 0 | 0 | |||||||||||||||||||||||||
Ending balance, redeemable convertible at Sep. 30, 2020 | $ 0 | $ 0 | |||||||||||||||||||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 91,849,909 | 0 | |||||||||||||||||||||||||
Beginning balance at Jun. 30, 2020 | (464,251) | $ 918 | (92,912) | (372,257) | $ 0 | ||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Stock warrant exercise (in shares) | 7,882,163 | ||||||||||||||||||||||||||
Stock warrant exercise | 90,645 | $ 79 | 90,566 | ||||||||||||||||||||||||
Stock issued during period, acquisitions (in shares) | 23,750,000 | 3,437,500 | |||||||||||||||||||||||||
Stock issued during period, acquisitions | $ 419,844 | $ 59,177 | $ 238 | $ 34 | $ 419,606 | ||||||||||||||||||||||
Net income | (71,133) | (71,133) | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 126,919,572 | 0 | |||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 34,282 | $ 1,269 | $ 476,403 | $ (443,390) | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ (112,766) | $ 45,104 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Share-based compensation | 2,676 | 1,497 |
Depreciation and amortization | 1,112 | 78 |
Change in fair value of contingent consideration | 131,932 | 0 |
Deferred income taxes | 4,683 | 0 |
Changes in assets & liabilities: | ||
Accounts receivable | 375 | (828) |
Contract assets | (10,037) | (16,871) |
Operating lease right-of-use assets | (523) | 0 |
Prepaid expenses | (1,415) | (293) |
Other current and non-current assets | (2,002) | (388) |
Accounts payable | 946 | (285) |
Accrued expenses | (597) | 829 |
Income tax payable | 544 | 0 |
Operating lease liabilities | (280) | 0 |
Other liabilities | 1,727 | 295 |
Net cash provided by operating activities | 16,375 | 29,138 |
Cash flows from investing activities | ||
Purchase of property and equipment | (1,097) | (66) |
Net cash used in investing activities | (1,097) | (66) |
Cash flows from financing activities | ||
Repayments of notes payable | (5,443) | (1,863) |
Proceeds from issuance of long-term debt, net of issuance costs | 160,233 | 0 |
Distributions to Open Lending, LLC unitholders | (135,380) | (30,361) |
Proceeds from stock warrant exercises | 88,042 | 0 |
Recapitalization transaction, net of transaction costs | (14,862) | 0 |
Net cash provided by (used in) financing activities | 92,590 | (32,224) |
Net change in cash and cash equivalents and restricted cash | 107,868 | (3,152) |
Cash and cash equivalents and restricted cash at the beginning of the period | 9,898 | 13,136 |
Cash and cash equivalents and restricted cash at the end of the period | 117,766 | 9,984 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 7,209 | 238 |
Income tax paid (refunded), net | 158 | (58) |
Right-of-use assets obtained in exchange for lease obligations | 5,375 | |
Change in fair value of Open Lending, LLC redeemable convertible preferred units | (47,537) | 104,825 |
Conversion of preferred stock to common stock | $ 257,406 | $ 0 |
Description of Business, Backgr
Description of Business, Background and Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business, Background and Nature of Operations | Description of Business, Background and Nature of Operations Open Lending Corporation, headquartered in Austin, Texas, provides loan analytics, risk-based loan pricing, risk modeling, and automated decision technology for automotive lenders throughout the United States of America which allows each lending institution to book incremental non-prime automotive loans out of their existing business flow. The Company also operates as a third-party administrator that adjudicates insurance claims and refunds on those automotive loans. Nebula Acquisition Corporation (“Nebula”), our predecessor, was originally incorporated in Delaware on October 2, 2017 as a special purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On June 10, 2020 (the “Closing Date”), Nebula consummated a business combination (the “Business Combination”) pursuant to that certain Business Combination Agreement, dated as of January 5, 2020 (as amended by that certain Amendment No. 1 and Waiver, dated as of March 18, 2020, that certain Amendment No. 2 and Consent, dated as of March 26, 2020, that certain Amendment No. 3, dated as of May 13, 2020, and that certain amendment No. 4, dated as of June 9, 2020, the “Business Combination Agreement”) by and among Nebula, Open Lending, LLC, a Texas limited liability company, BRP Hold 11, Inc., a Delaware corporation (“Blocker”), the Blocker’s sole stockholder, Nebula Parent Corp., a Delaware Corporation (“ParentCo”), NBLA Merger Sub LLC, a Texas limited liability company, NBLA Merger Sub Corp., a Delaware corporation, and Shareholder Representative Services LLC, a Colorado limited liability company, as the Securityholder Representative. Immediately upon the completion of the Business Combination and the other transactions contemplated by the Business Combination Agreement (the “Transactions”, and such completion, the “Closing”), Open Lending, LLC became a wholly-owned subsidiary of ParentCo, and, ParentCo changed its name to Open Lending Corporation. The Company is now listed on NASDAQ under the symbol “LPRO”. Unless the context otherwise requires, “we,” “us,” “our,” “Open Lending,” and the “Company” refers to Open Lending Corporation, the combined company and its subsidiaries following the Business Combination. “Open Lending, LLC” and “Nebula” refers to Open Lending, LLC and Nebula Acquisition Corporation prior to the Closing Date. Refer to Note 3 for further discussion on the Business Combination. The Company has evaluated how it is organized and managed and has identified only one operating segment. All of the Company’s operations and assets are in the United States, and all of its revenues are attributable to United States customers. |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies and Recent Developments | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting and Reporting Policies and Recent Developments | Summary of Significant Accounting and Reporting Policies and Recent Developments The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements. a) Unaudited interim financial statements The accompanying consolidated balance sheet as of September 30, 2020, consolidated statements of operations and comprehensive income (loss) and consolidated statements of stockholders’ equity (deficit) for the three and nine months ended September 30, 2020 and 2019, respectively and consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, respectively, are unaudited. These financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. However, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 30, 2020, and its results of operations, including its comprehensive income (loss), stockholders’ equity (deficit) for three and nine months ended September 30, 2020 and 2019, respectively, and its cash flows for the nine months ended September 30, 2020 and 2019, respectively. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2020. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on May 22, 2020. Certain prior year amounts, such as deferred transaction costs, have been reclassified to conform to the September 30, 2020 balance sheet presentation. b) Basis of presentation The Business Combination is accounted for as a reverse recapitalization as Open Lending, LLC was determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The determination is primarily based on the evaluation of the following facts and circumstances: • the pre-combination unitholders of Open Lending, LLC hold the majority of voting rights in the Company; • the pre-combination unitholders of Open Lending, LLC have the right to appoint the majority of the directors of the Company; • senior management of Open Lending, LLC became the senior management of the Company; and • operations of Open Lending, LLC comprise the ongoing operations of the Company. In connection with the Business Combination, all outstanding units of Open Lending, LLC were converted into common stock of the Company, par value $0.01 per share, representing a recapitalization, and the net assets of Nebula were acquired at historical cost, with no goodwill or intangible assets recorded. Open Lending, LLC was deemed to be the predecessor of the Company, and the consolidated assets and liabilities and results of operations prior to the Closing (for the year ended December 31, 2019 and the quarter ended March 31, 2020 and 2019) are those of Open Lending, LLC. The shares and corresponding capital amounts and net income (loss) per share available to common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement. The number of Series C preferred units in mezzanine equity was also retroactively restated in shares reflecting the exchange ratio, and the carrying amount of the Series C Preferred Units is based on the fair value of its redemption amount on each reporting date. All Series C Preferred Units were converted to the Company’s common stock on the closing date of the Business Combination. c) Principles of consolidation The accompanying financial statements include the accounts of the Company and all its subsidiaries that are directly or indirectly owned or controlled by the Company. Intercompany transactions and balances have been eliminated upon consolidation. d) Coronavirus outbreak The outbreak of the novel coronavirus (“COVID-19”) that was declared a pandemic by the World Health Organization on March 11, 2020 and declared a National Emergency by the President of the United States on March 13, 2020, has led to adverse impacts on the U.S. and global economies and created uncertainty regarding potential impacts on our operating results, financial condition and cash flows. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on certain developments, including the duration and continued spread of the disease, the impact on our revenues which are generated with automobile lenders and insurance company partners and driven by consumer demand for automobiles and automotive loans, extended closures of businesses, rising unemployment and the overall impact on our customer behavior, all of which are uncertain and cannot be predicted. We are diligently working to ensure that we can continue to operate with minimal disruption, mitigate the impact of the pandemic on our employees’ health and safety, and address potential business interruptions on ourselves and our customers. We believe that the COVID-19 pandemic, the mitigation efforts and the resulting economic impact have had, and may continue to have, an overall adverse effect on our business, results of operations and financial condition. Although we have experienced increased demand for our service offerings, we could have a reduction or a slowdown of growth in loan applications and certified loans and potential increased defaults in future periods, which will impact our revenues and subsequent recovery as the automotive finance industry and overall economy recover. We continue to closely monitor the current macro environment, particularly the impact of the recent COVID-19 pandemic on monetary and fiscal policies. e) Emerging growth company The Company is an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act (“JOBS Act”). As such, the Company is eligible for and intends to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. The Company will remain an emerging growth company until the earliest of (i) the Company is deemed to be a large accelerated filer, which occurs, among other things, on the last day of the fiscal year in which the market value of the shares of its common stock that are held by non-affiliates exceeds $700.0 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which it has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of its common stock in its initial public offering. f) Concentration of credit risk Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, restricted cash and accounts receivable to the extent of the amounts recorded on the balance sheets. Cash and cash equivalents are deposited in commercial analysis and savings accounts at two financial institutions, both with high credit standing. Restricted cash relates to funds held by the Company on behalf of the insurance carriers, delegated for the use of insurance claim payments. Restricted cash are deposited in commercial analysis accounts at one financial institution. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits of $250,000 per institution. The Company has not experienced any losses on its deposits of cash and cash equivalents and management believes the Company is not exposed to significant risks on such accounts. The Company’s accounts receivables are derived from revenue earned from customers. The Company performs credit evaluations of its customers’ financial condition. As of September 30, 2020 and December 31, 2019, there was no allowance for doubtful accounts. At September 30, 2020, the Company had no customers accounting for 10% or more of the Company’s accounts receivable. At December 31, 2019, the Company had one customer that represented 22% of the Company’s accounts receivable. g) Use of estimates and judgements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates, and those differences may be material. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. The most significant items subject to such estimates and assumptions include, but are not limited to, the recognition of the valuations of share-based compensation arrangements, valuation of contingent consideration, valuation of interest rate swaps, the useful lives of property and equipment, assessing the realizability of deferred tax assets, credit losses, profit share revenue recognition, and assumptions used in the recognition of contract asset. These estimates, although based on actual historical trend and modeling, may potentially show significant variances over time. In connection with profit share revenue recognition and the estimation of contract asset under Accounting Standards Update (“ASU”) 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), we use forecasts of loan-level earned premium and insurance claim payments. These forecasts are driven by the projection of loan defaults, prepayments and default severity rates. These assumptions are based on our observations of the historical behavior for loans with similar risk characteristics. The assumptions also take consideration of the forecast adjustments under various macroeconomic conditions, including the potential impact from the COVID-19 pandemic, and the current mix of the underlying portfolio of our insurance partners. As th e Company closely monitors the development of the pandemic and its ongoing impact on Open Lending's business, management has accordingly adjusted these assumptions during the first nine months of 2020 as a result of changes in facts and circumstances and general market conditions derived from the COVID-19 pandemic. h) Income taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured as the largest amount that is greater than 50% likely of being realized. The Company records potential interest and penalties related to an underpayment of income taxes as interest expense and penalties included within operating expenses in the consolidated statements of operations and comprehensive income. i) Recently adopted accounting pronouncements On January 1, 2020, we adopted ASU 2016-2, Leases (“Topic 842”) using the alternative modified retrospective transition method and elected practical expedients which allowed us to account for the lease and non-lease components as a single component. In addition, we elected not to reassess whether any expired or existing contracts contain leases, the corresponding lease classification and initial direct costs. The practical expedients were applied across our lease portfolios. We recognized operating lease right-of-use (“ROU”) asset and operating lease liabilities for operating leases with initial terms greater than 12 months. ROU assets represent our right to use an asset for the lease term, while lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. Refer to Note 4 Leases for the impact of Topic 842 on our consolidated financial statements. j) Recently issued accounting pronouncements not yet adopted In December 2019, the FASB released ASU 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company does not expect adoption of the new standard to have a material impact on its consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing after December 15, 2022. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination | Business Combination On June 10, 2020, Nebula consummated a business combination with Open Lending, LLC pursuant to the Business Combination Agreement. Pursuant to ASC 805, for financial accounting and reporting purposes, Open Lending, LLC was deemed the accounting acquirer and Nebula was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse recapitalization. Accordingly, the Business Combination was treated as the equivalent of Open Lending, LLC issuing equity for the net assets of Nebula, accompanied by a recapitalization. Under this method of accounting, the consolidated financial statements of Open Lending, LLC are the historical financial statements of Open Lending Corporation. The net assets of Nebula were stated at historical costs, with no goodwill or other intangible assets recorded in accordance with U.S. GAAP, and are consolidated with Open Lending, LLC’s financial statements on the Closing Date. The shares and net income (loss) per share available to holders of the Company’s common stock, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement. As a result of the Business Combination, Open Lending, LLC’s unitholders received aggregate consideration of approximately $1.0 billion, which consists of (i) $328.8 million in cash at the closing of the Business Combination, net of transaction expenses, (ii) $135.0 million in cash distribution from debt issued in March 2020, and (iii) 51,909,655 shares of common stock valued at $10.00 per share, totaling $519.1 million. In addition, Open Lending, LLC’s unitholders are entitled to receive additional contingent consideration of up to an aggregate of 22,500,000 shares if the price of the Company’s common stock trading on the NASDAQ meets certain thresholds following the Business Combination. All contingent consideration shares were issued or released during the three months ended September 30, 2020. See Note 7 Contingent Consideration for additional information. In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $55.5 million related to the equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. In addition, the Company incurred $9.1 million in transaction bonuses paid to key employees and directors and $2.2 million in non-cash share-based compensation expense due to the accelerated vesting of Open Lending, LLC’s legacy share-based compensation plan. The transaction bonuses and share-based compensation are included in general and administrative expense on our consolidated statement of operations and comprehensive income (loss) for nine months ended September 30, 2020. See Note 9 Share-Based Compensation for additional information. As part of the Business Combination, Open Lending, LLC unitholders and certain Nebula equity holders were entitled to additional consideration in form of shares of the Company’s common stock to be issued when the Company’s common stock price achieved certain market share price milestones within specified periods following the Closing. In addition, the Nebula sponsors were restricted to transfer a portion of their founder shares unless market share price targets were achieved within the specified period. Pursuant to the guidance under ASC 815, Derivatives and Hedging, the contingent consideration was classified as a Level 3 fair value measurement liability, and the increase or decrease in the fair value during the reporting period is recognized as expense or income accordingly. The fair value of the contingent consideration on the Closing Date and on June 30, 2020 were estimated using the Monte Carlo simulation of the stock prices based on historical and implied market volatility. The fair value of the contingent consideration on each vesting date (i.e. the date when each respective share price performance milestone was achieved) was based on the closing share price of the Company's publicly traded stock on the vesting date. Founders Shares Subject to Transfer Restrictions Immediately following the consummation of the Business Combination, 3,437,500 shares of common stock issued and outstanding held by Nebula Holdings, LLC and its affiliates were subject to transfer restrictions (the “Lock-up Shares”). The holder of the Lock-up Shares could not sell, transfer or otherwise dispose of their respective shares until the respective lock-up provisions were achieved as described further below. The Lock-up Shares had full ownership rights including the right to vote and receive dividends and other distribution thereon. The Lock-up Shares would be released from the transfer restrictions upon achieving certain market share price milestones as follows: 1) The 3,437,500 shares would be released from the lock-up restriction and no longer subject to forfeiture if the daily volume weighted average price (“VWAP”) of the Company’s common stock was greater than or equal to $12.00 for one-half of the Lock-up Shares and $14.00 per share for one-half of the Lock-up Shares, respectively, for 20 trading days over a 30-trading day period at any time within seven years after the Closing. 2) The Lock-up shares would be released from the lock-up restrictions on the date the Company underwent a change of control as defined in the Business Combination Agreement. Contingently Issuable Shares Pursuant to the Business Combination Agreement, Open Lending, LLC’s unitholders would be able to receive up to 22,500,000 shares of common stock (the “Contingency Consideration”) contingent upon achieving certain market share price milestones within a period of 42 months post Business Combination. The Company would issue 7,500,000 shares of common stock when each of the following conditions was met, respectively: 1) the VWAP was greater than or equal to $12.00 over any 20 trading days within any 30-trading day period prior to or as of the 24th month of the Closing; 2) the VWAP was greater than or equal to $14.00 over any 20 trading days within any 30-trading day period prior to or as of the 30th month of the Closing; and 3) the VWAP was greater than or equal to $16.00 over any 20 trading days within any 30-trading day period prior to or as of the 42nd month of the Closing; In connection with the Business Combination, certain Nebula’s equity holders would be able receive up to 1,250,000 earn-out shares of common stock (the “Earn-out Consideration”) contingent upon achieving certain market share price milestones within a period of 30 months post Business Combination. The Company would issue 625,000 shares of common stock when each of the following conditions is met, respectively: 1) the VWAP was greater than or equal to $12.00 over any 20 trading days within any 30-trading day period prior to or as of the 24th month of the Closing; and 2) the VWAP was greater than or equal to $14.00 over any 20 trading days within any 30-trading day period prior to or as of the 30th month of the Closing; The Contingency Consideration and the Earn-out Consideration shares would vest immediately in the event of a change of control as defined in the Business Combination Agreement. Settlement of Contingent Consideration On July 10, 2020, the daily VWAP of the Company’s common stock had been greater than $12.00 per share for 20 trading days within a 30-trading day period, which triggered the vesting of 7,500,000 Contingency Consideration shares and 625,000 Earn-out Consideration shares. On July 15, 2020, the daily VWAP of the Company’s common stock had been greater than $14.00 per share for 20 trading days within a 30-trading day period, which triggered the vesting of an additional 7,500,000 Contingency Consideration shares and 625,000 Earn-out Consideration shares. On August 11, 2020, the daily VWAP of the Company’s common stock had been greater than $16.00 per share for 20 trading days within a 30-trading day period, which triggered the vesting of an additional 7,500,000 Contingency Consideration shares. In addition, upon achievement of the daily VWAP milestones of both $12.00 per share and $14.00 per share discussed above, 3,437,500 Lock-up Shares were released from the lock-up restrictions and the holders of these shares were no longer restricted from selling and/or transferring the shares. In the three months ended September 30, 2020, 27,187,500 shares of common stock were issued or released. Immediately prior to each vesting, the carrying amount of the contingent consideration liability on the balance sheet was marked to market, and the change of fair value was recorded in the statements of operations and comprehensive income (loss). Upon vesting, the contingent consideration liability was reclassified to equity, the vested shares were issued and recorded as common stock at a par value of $0.01 per share, and the incremental fair value amount was recorded as additional paid-in capital. A reconciliation of changes in the liability related to contingent consideration during the three and nine months ended September 30, 2020 follows: (in thousands) Estimated fair value of contingent consideration at June 10, 2020 $ 347,089 Change in fair value in the second quarter of 2020 48,802 Estimated fair value of contingent consideration at June 30, 2020 395,891 Change in fair value in the third quarter of 2020 83,130 Reclassification of contingent consideration shares to equity (479,021) Estimated fair value of contingent consideration at September 30, 2020 $ — Upon inception, the initial estimated fair value of contingent consideration on June 10, 2020 of $347.1 million was recorded as a long-term liability in our consolidated balance sheet. The increase in contingent consideration fair value of $83.1 million and $131.9 million during the three and nine months ended September 30, 2020, respectively, was recorded as a change in fair value of contingent consideration in the statements of operations and comprehensive income (loss). With the vesting of the contingent consideration shares during the three months ended September 30, 2020, the contingent consideration liability was reclassified to equity, and accordingly $0.3 million was recorded to common stock and $478.7 million was recorded to additional paid-in capital. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement and evaluates whether the lease is an operating lease or a finance lease at the commencement date. The Company recognizes ROU assets and lease liabilities for operating and finance leases with initial terms greater than 12 months. ROU assets represent our right to use an asset for the lease term, while lease liabilities represent our obligation to make lease payments. The ROU assets for operating and finance leases and liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. Since the interest rate implicit in the Company's leases is not readily determinable, we use our incremental borrowing rate, which is estimated as the interest rate paid to borrow on a collateralized basis over a similar term, to determine the present value of our lease payments. Operating lease ROU assets are recognized net of any lease prepayments and incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. Open Lending executed a noncancellable operating lease agreement with G&I VII Barton Skyway, LP, a Delaware limited partnership (“Landlord”) to lease its current office space located at 1501 South MoPac Expressway, Suite 450, Austin, Texas 78746 for a period of 100 months starting on October 1, 2020. The Company moved into the new office space on September 1, 2020, which is considered as the lease commencement date under ASC 842. The Company does not have a lease payment due until four months after the stated commencement date per the agreement. The lease provides us with an extension option for a period of 60 months beyond the end of the initial term, subject to specific conditions outlined in the agreement. Prior to its move-in to the new office, the Company had an operating lease agreement for its office space at 901 S. MoPac Expressway, Bldg. 1, Suite 510, Austin, Texas 78746, which ended on September 30, 2020. The Company recorded $0.2 million and $0.6 million of operating lease expense for the three and nine months ended September 30, 2020 and $0.2 million and $0.5 million of operating lease expense during the three and nine months ended September 30, 2019. Additional information related to the operating leases follows: Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 (in thousands) Cash paid for operating leases included in operating cash flows $ 628 $ 803 Operating lease ROU assets obtained in exchange for new lease liabilities 5,375 5,375 Total $ 6,003 $ 6,178 Weighted-average remaining lease term – operating lease (in years) 8.42 8.42 Weighted-average discount rate – operating lease 7.72 % 7.72 % The balance of our operating lease ROU assets and liabilities as of September 30, 2020 is summarized below. The current and non-current lease liabilities are reflected in other current liabilities and operating lease liabilities, net of current portion, respectively, on our consolidated balance sheets: At September 30, 2020 (in thousands) Operating lease right-of-use asset $ 5,898 Accumulated amortization $ (45) Net operating lease right-of-use assets $ 5,853 Lease liability, current $ 144 Lease liability, non-current $ 5,265 Total operating lease liability $ 5,409 The maturities of lease liabilities are as follows: At September 30, 2020 (in thousands) 2020 (Remainder) $ — 2021 774 2022 869 2023 894 2024 920 Thereafter 4,018 Total undiscounted liabilities 7,475 Less: Interest 2,066 Present value of lease liabilities $ 5,409 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable The Company is the borrower under that certain Credit Agreement, dated as of March 11, 2020, among Open Lending, LLC, UBS AG, Stamford Branch, as administrative agent, the lenders from time to time party thereto and the other parties thereto, as amended, the Credit Agreement (the “Credit Agreement”). Pursuant to the Credit Agreement, the lenders thereto funded a term loan (“Term Loan”) in a principal amount of $170.0 million, which was used primarily to fund a non-liquidation distribution to its unitholders and provide cash reserves. The current maturity date for the Credit Agreement is March 2027. The term loan bears interest at a rate of LIBOR plus 6.50% (subject to a LIBOR floor of 1%) or the base rate plus 5.50%. For the three months ended September 30, 2020, the effective interest rate was 7.50%. The Credit Agreement contains a maximum total net leverage ratio financial covenant that is tested quarterly and is calculated based on the ratio of the Company’s Adjusted EBITDA (as defined in the Credit Agreement) to funded indebtedness. The maximum total net leverage ratio begins at 4.75 to 1.0 and then gradually decreases from year-to-year down to 2.5 to 1.0 on or after June 30, 2026. The Company’s outstanding Notes Payable consists of the following: September 30, December 31, (in thousands) Notes payable $ — $ 3,334 Term loan due 2027 167,875 — Less: debt issuance costs (9,061) (21) Less: current portion of notes payable (4,675) (2,484) Long-term notes payable, net of debt issuance costs $ 154,139 $ 829 As of September 30, 2020, the Company was in compliance with the debt covenants contained in the Credit Agreement. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders’ Equity (Deficit) On June 11, 2020, Open Lending Corporation’s common stock began trading on the NASDAQ under the symbol “LPRO”. Pursuant to the terms of the Amended and Restated Certificate of Incorporation, the Company is authorized and has available for issuance the following shares and classes of capital stock, each with a par value of $0.01 per share: (i) 550,000,000 shares of common stock; (ii) 10,000,000 shares of preferred stock. Immediately following the Business Combination, there were 91,849,909 shares of common stock with a par value of $0.01, and 9,166,659 warrants outstanding. As discussed in Note 3 Business Combination, the Company has retroactively adjusted the shares issued and outstanding prior to June 10, 2020 to give effect to the exchange ratio established in the Business Combination Agreement to determine the number of shares of common stock into which they were converted. In connection to the Business Combination, on July 1, 2020, the Company filed a Registration Statement on Form S-1 to register 52,916,659 shares of common stock for the issuance by the Company of (i) up to an aggregate of 23,750,000 shares of our common stock that may be issued as earn-out consideration upon certain triggering events and (ii) 9,166,659 shares of our common stock that may be issued upon exercise of warrants to purchase common stock at an exercise price of $11.50 per share of common stock, herein referenced as public warrants. Common stock In conjunction with the Business Combination, Nebula obtained commitments from certain investors (collectively, the “PIPE Investors”) to purchase shares of Nebula Class A common stock, which were converted into 20,000,000 Private Investment in Public Entity (“PIPE”) shares for a purchase price of $10.00 per share. Of the 20,000,000 PIPE shares, 11,500,000 shares are held by other institutional investors and 8,500,000 shares are held by Nebula Holdings, LLC and its affiliates. On the Closing Date, the Company had 91,849,909 shares of common stock outstanding, which excluded 3,437,500 shares issued and outstanding that were subject to certain lock-up and forfeiture arrangements pursuant to the Founder Support Agreement, dated as of January 5, 2020 (as amended by that certain Amendment No.1, dated March 18, 2020, and that certain Amendment No.2, dated May 13, 2020), by and among Nebula, ParentCo, Open Lending, LLC, Nebula Holdings, LLC, Adam H. Clammer, James H. Greene, Jr ., Rufina Adams, David Kerko, Frank Kern, James C. Hale and Ronald Lamb. During the three months ended September 30, 2020, the Company issued a total of 31,632,163 shares of common stock related to contingent consideration and exercised warrants, and released 3,437,500 shares of common stock from lock-up restrictions as further detailed below. The following summarizes the Company’s common stock outstanding on the Closing Date of the Business Combination as compared to September 30, 2020: At the Closing Date At September 30, 2020 Shares % Shares % Open Lending, LLC unitholders 51,909,655 56% 74,409,655 59% Public stockholders 16,502,754 18% 24,384,917 19% Nebula Holdings, LLC and its affiliates 11,937,500 13% 16,625,000 13% PIPE Investors 11,500,000 13% 11,500,000 9% Total 91,849,909 100% 126,919,572 100% Preferred Stock As of December 31, 2019, Open Lending, LLC had 29,058,266 shares of no par value Series A and Series B preferred units outstanding and 21,906,852 shares of redeemable convertible Series C preferred units, all of which were convertible on a 1:1 basis with Open Lending, LLC common units. Upon the Closing, the preferred units outstanding were converted into common stock of the Company at the exchange rate established in the Business Combination Agreement, par value $0.01 per share. Public Warrants Upon the Closing, there were 9,166,659 outstanding public warrants to purchase shares of the Company’s common stock that were issued by Nebula with other consideration prior to the Business Combination. The warrants were set to expire on June 10, 2025, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. Each whole warrant entitled the holder to purchase one whole share of the Company’s common stock at a price of $11.50 per share, subject to adjustments. The warrants were exercisable 30 days after the completion of the Business Combination. Once the public warrants became exercisable, the Company had the right to redeem the outstanding warrants in whole and not in part at a price of $0.01 per warrant (the "Redemption Price") upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s common stock matched or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sent the notice of redemption to the warrant holders ("Redemption Right"). On September 11, 2020, the Company provided notice of redemption that all public warrants may be exercised by the holders thereof until 5:00 p.m. New York City time on October 13, 2020 (the "Redemption Date"). Any public warrants that remained unexercised following 5:00 p.m. New York City time on October 13, 2020 would no longer be exercisable and would be redeemed by the Company at the Redemption Price. In the three months ended September 30, 2020, 7,882,163 public warrants were exercised from which the Company received $88.0 million in cash proceeds and recorded $2.6 million in other current assets related to funds received in October 2020. Subsequent to September 30, 2020 and prior to the Redemption Date, an additional 1,278,613 public warrants were exercised, from which the Company received an additional $14.7 million in cash proceeds. See Note 15 Subsequent Events for additional information. Dividend Any decision to declare and pay dividends in the future will be made at the sole discretion of Open Lending Corporation’s Board of Directors and will depend on, among other things, results of operations, cash requirements, financial condition, contractual restrictions and other factors that Open Lending Corporation’s Board of Directors may deem relevant. In addition, the Company’s ability to pay dividends will be limited by covenants in its existing indebtedness and may be limited by the agreements governing other indebtedness that it or its subsidiaries incur in the future. |
Contingent Consideration
Contingent Consideration | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Contingent Consideration | Business Combination On June 10, 2020, Nebula consummated a business combination with Open Lending, LLC pursuant to the Business Combination Agreement. Pursuant to ASC 805, for financial accounting and reporting purposes, Open Lending, LLC was deemed the accounting acquirer and Nebula was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse recapitalization. Accordingly, the Business Combination was treated as the equivalent of Open Lending, LLC issuing equity for the net assets of Nebula, accompanied by a recapitalization. Under this method of accounting, the consolidated financial statements of Open Lending, LLC are the historical financial statements of Open Lending Corporation. The net assets of Nebula were stated at historical costs, with no goodwill or other intangible assets recorded in accordance with U.S. GAAP, and are consolidated with Open Lending, LLC’s financial statements on the Closing Date. The shares and net income (loss) per share available to holders of the Company’s common stock, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement. As a result of the Business Combination, Open Lending, LLC’s unitholders received aggregate consideration of approximately $1.0 billion, which consists of (i) $328.8 million in cash at the closing of the Business Combination, net of transaction expenses, (ii) $135.0 million in cash distribution from debt issued in March 2020, and (iii) 51,909,655 shares of common stock valued at $10.00 per share, totaling $519.1 million. In addition, Open Lending, LLC’s unitholders are entitled to receive additional contingent consideration of up to an aggregate of 22,500,000 shares if the price of the Company’s common stock trading on the NASDAQ meets certain thresholds following the Business Combination. All contingent consideration shares were issued or released during the three months ended September 30, 2020. See Note 7 Contingent Consideration for additional information. In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $55.5 million related to the equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. In addition, the Company incurred $9.1 million in transaction bonuses paid to key employees and directors and $2.2 million in non-cash share-based compensation expense due to the accelerated vesting of Open Lending, LLC’s legacy share-based compensation plan. The transaction bonuses and share-based compensation are included in general and administrative expense on our consolidated statement of operations and comprehensive income (loss) for nine months ended September 30, 2020. See Note 9 Share-Based Compensation for additional information. As part of the Business Combination, Open Lending, LLC unitholders and certain Nebula equity holders were entitled to additional consideration in form of shares of the Company’s common stock to be issued when the Company’s common stock price achieved certain market share price milestones within specified periods following the Closing. In addition, the Nebula sponsors were restricted to transfer a portion of their founder shares unless market share price targets were achieved within the specified period. Pursuant to the guidance under ASC 815, Derivatives and Hedging, the contingent consideration was classified as a Level 3 fair value measurement liability, and the increase or decrease in the fair value during the reporting period is recognized as expense or income accordingly. The fair value of the contingent consideration on the Closing Date and on June 30, 2020 were estimated using the Monte Carlo simulation of the stock prices based on historical and implied market volatility. The fair value of the contingent consideration on each vesting date (i.e. the date when each respective share price performance milestone was achieved) was based on the closing share price of the Company's publicly traded stock on the vesting date. Founders Shares Subject to Transfer Restrictions Immediately following the consummation of the Business Combination, 3,437,500 shares of common stock issued and outstanding held by Nebula Holdings, LLC and its affiliates were subject to transfer restrictions (the “Lock-up Shares”). The holder of the Lock-up Shares could not sell, transfer or otherwise dispose of their respective shares until the respective lock-up provisions were achieved as described further below. The Lock-up Shares had full ownership rights including the right to vote and receive dividends and other distribution thereon. The Lock-up Shares would be released from the transfer restrictions upon achieving certain market share price milestones as follows: 1) The 3,437,500 shares would be released from the lock-up restriction and no longer subject to forfeiture if the daily volume weighted average price (“VWAP”) of the Company’s common stock was greater than or equal to $12.00 for one-half of the Lock-up Shares and $14.00 per share for one-half of the Lock-up Shares, respectively, for 20 trading days over a 30-trading day period at any time within seven years after the Closing. 2) The Lock-up shares would be released from the lock-up restrictions on the date the Company underwent a change of control as defined in the Business Combination Agreement. Contingently Issuable Shares Pursuant to the Business Combination Agreement, Open Lending, LLC’s unitholders would be able to receive up to 22,500,000 shares of common stock (the “Contingency Consideration”) contingent upon achieving certain market share price milestones within a period of 42 months post Business Combination. The Company would issue 7,500,000 shares of common stock when each of the following conditions was met, respectively: 1) the VWAP was greater than or equal to $12.00 over any 20 trading days within any 30-trading day period prior to or as of the 24th month of the Closing; 2) the VWAP was greater than or equal to $14.00 over any 20 trading days within any 30-trading day period prior to or as of the 30th month of the Closing; and 3) the VWAP was greater than or equal to $16.00 over any 20 trading days within any 30-trading day period prior to or as of the 42nd month of the Closing; In connection with the Business Combination, certain Nebula’s equity holders would be able receive up to 1,250,000 earn-out shares of common stock (the “Earn-out Consideration”) contingent upon achieving certain market share price milestones within a period of 30 months post Business Combination. The Company would issue 625,000 shares of common stock when each of the following conditions is met, respectively: 1) the VWAP was greater than or equal to $12.00 over any 20 trading days within any 30-trading day period prior to or as of the 24th month of the Closing; and 2) the VWAP was greater than or equal to $14.00 over any 20 trading days within any 30-trading day period prior to or as of the 30th month of the Closing; The Contingency Consideration and the Earn-out Consideration shares would vest immediately in the event of a change of control as defined in the Business Combination Agreement. Settlement of Contingent Consideration On July 10, 2020, the daily VWAP of the Company’s common stock had been greater than $12.00 per share for 20 trading days within a 30-trading day period, which triggered the vesting of 7,500,000 Contingency Consideration shares and 625,000 Earn-out Consideration shares. On July 15, 2020, the daily VWAP of the Company’s common stock had been greater than $14.00 per share for 20 trading days within a 30-trading day period, which triggered the vesting of an additional 7,500,000 Contingency Consideration shares and 625,000 Earn-out Consideration shares. On August 11, 2020, the daily VWAP of the Company’s common stock had been greater than $16.00 per share for 20 trading days within a 30-trading day period, which triggered the vesting of an additional 7,500,000 Contingency Consideration shares. In addition, upon achievement of the daily VWAP milestones of both $12.00 per share and $14.00 per share discussed above, 3,437,500 Lock-up Shares were released from the lock-up restrictions and the holders of these shares were no longer restricted from selling and/or transferring the shares. In the three months ended September 30, 2020, 27,187,500 shares of common stock were issued or released. Immediately prior to each vesting, the carrying amount of the contingent consideration liability on the balance sheet was marked to market, and the change of fair value was recorded in the statements of operations and comprehensive income (loss). Upon vesting, the contingent consideration liability was reclassified to equity, the vested shares were issued and recorded as common stock at a par value of $0.01 per share, and the incremental fair value amount was recorded as additional paid-in capital. A reconciliation of changes in the liability related to contingent consideration during the three and nine months ended September 30, 2020 follows: (in thousands) Estimated fair value of contingent consideration at June 10, 2020 $ 347,089 Change in fair value in the second quarter of 2020 48,802 Estimated fair value of contingent consideration at June 30, 2020 395,891 Change in fair value in the third quarter of 2020 83,130 Reclassification of contingent consideration shares to equity (479,021) Estimated fair value of contingent consideration at September 30, 2020 $ — Upon inception, the initial estimated fair value of contingent consideration on June 10, 2020 of $347.1 million was recorded as a long-term liability in our consolidated balance sheet. The increase in contingent consideration fair value of $83.1 million and $131.9 million during the three and nine months ended September 30, 2020, respectively, was recorded as a change in fair value of contingent consideration in the statements of operations and comprehensive income (loss). With the vesting of the contingent consideration shares during the three months ended September 30, 2020, the contingent consideration liability was reclassified to equity, and accordingly $0.3 million was recorded to common stock and $478.7 million was recorded to additional paid-in capital. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company accounts for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights and payment terms can be identified, the contract has commercial substance, and it is probable the Company will collect substantially all of the consideration it is entitled to. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer. Performance Obligations The Company generates revenue primarily by providing services to lending institutions and insurance carriers. The following is a description of the principle activities from which the Company generates revenue. 1) Revenue from contracts with lending institutions Program fees are derived from contracts with automotive lenders. Through our LPP, we enable automotive lenders to make loans that are insured against certain credit losses from defaults. The Company generates program fee revenue from our proprietary, cloud-based software platform that enables automotive lenders, OEM captive finance companies and other financial institutions to approve loans to traditionally underserved non-prime or near-prime borrowers. The Company receives program fees for providing loan decision-making analytics solutions and automated issuance of credit default insurance with third-party insurance providers. The Company’s performance obligation is complete when a loan is certified through the Company’s Lenders Protection program and is issued by the lending institution. Program fee contracts contain a single performance obligation, which consist of a series of distinct services that are substantially the same with the same pattern of transfer to customers. Program fees are based on a percentage of the initial principal amount of the loans processed by the Company. There are two types of payment arrangements: 1) a single pay program fee is due based on the volume of loans originated by the lending institution in a calendar month; or 2) a monthly pay program fee is due in equal monthly installments within 12 months of loan origination. We bill the customer for an amount calculated based on the actual number of loans processed in a calendar month, which corresponds directly with the value of service transferred to the customer in that month. 2) Revenue from customer with insurance carriers We have producer agreements with two insurance carriers, AmTrust Financial Services, Inc. (“AmTrust”) and CNA Financial Corporation (“CNA”), from which we earn profit-share revenue and claims administration service fees. In the profit share arrangement, the Company facilitates placement of credit default insurance policies with lending institutions on behalf of our insurance partners. Profit share revenue represents our participation in the underwriting profit of our third-party insurance partners who provide lenders with credit default insurance on loans the automotive lenders make using our LPP. We receive a percentage of the aggregate monthly insurance underwriting profit. Monthly insurance underwriting profit is calculated as the monthly earned premium less expenses and losses (including reserves for incurred but not reported losses), with losses accrued and carried forward for future profit share calculations. The Company fulfills its performance obligation upon placement of the insurance, at which point the Company is entitled to the profit share of all future net premiums earned by the insurance carrier on the policy. To determine the profit share revenue, we use forecasts of loan-level earned premium and insurance claim payments. These forecasts are driven by the projection of loan defaults, prepayments and severity rates. These assumptions are based on our observations of the historical behavior for loans with similar risk characteristics. The assumptions also take consideration of the forecast adjustments under various macroeconomic conditions and the current mix of the underlying portfolio of our insurance partners. To the extent these assumptions change, our profit share revenue will be adjusted. In accordance with ASC 606, Revenue from Contracts with Customers, at the time of the placement of a policy by an insurance company, we estimate the variable consideration based on undiscounted expected future profit share to be received from the insurance carriers, and we applied economic stress factors in our forecast to constraint our estimation of transaction price to an amount. Claims administration service fees are generated from us acting as a third-party administrator to process and adjudicate the credit default insurance claims on behalf of the insurance companies. In this arrangement, the performance obligation to provide claims administration services is generally satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. Contract Balances The Company has no contract liabilities. Contract asset balances for the periods indicated below are as follows: Contract Asset Profit Share TPA Fee Program Fee Total (in thousands) Ending balance as of December 31, 2019 $ 57,367 $ 575 $ 5,009 $ 62,951 Increase of contract asset due to new business generation 43,621 3,185 31,592 78,398 Adjustment of contract asset due to estimation of revenue from performance obligations satisfied in previous periods (9,139) — — (9,139) Receivables transferred from contract assets upon billing the lending institutions — — (31,160) (31,160) Payments received from insurance carriers (25,012) (3,050) — (28,062) Ending balance as of September 30, 2020 $ 66,837 $ 710 $ 5,441 $ 72,988 During the first six months of 2020, the Company recorded a $13.0 million reduction in its contract asset estimate due to lowered expectations on anticipated profit share revenue from loans certified in previous periods, primarily as a result of changes in facts and circumstances arising from the COVID-19 pandemic. Subsequently, during the three months ended September 30, 2020, the Company experienced improved business performance, and accordingly the expected future loan default rate, default severity and prepayment rate were adjusted to reflect management's best estimates based on the Company's better-than-anticipated performance, which yielded a $3.8 million increase in the Company's contract asset estimate. The net impact was a $9.1 million reduction in the Company's contract asset estimate as of September 30, 2020. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Class B Common Unit Incentive Plan Prior to the Business Combination, commencing in 2013, the Board of Managers of Open Lending, LLC approved the Class B Unit Incentive Plan (the “Class B Plan”), which was a form of long-term compensation that provided for the issuance of ownership shares to Service Providers for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of Open Lending, LLC. As a result of the Business Combination, the Board of Managers approved an acceleration of the awards granted in connection with the Class B Plan, to allow accelerated vesting of the units at the consummation of the Business Combination. On the date of the Closing, the accelerated vesting for 14,129,158 awards resulted in $2.2 million of non-cash share-based compensation expense recorded to general and administrative expense in the nine months ended September 30, 2020. 2020 Stock Option and Incentive Plan (“2020 Plan”) Prior to the closing of the Business Combination, on June 9, 2020, Nebula’s stockholders approved the 2020 Plan. The 2020 Plan provides for the grant of stock options, stock appreciation rights, restricted stock units and other stock or cash-based awards. The Company has initially reserved 9,693,750, approximately 10% of the number of shares of its common stock outstanding upon the closing, as the “Initial Limit” for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2021, by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31, or the “Annual Increase.” This limit is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. There were no grants issued under the 2020 Plan during the three and nine months ended September 30, 2020. |
Net Income (Loss) per Share
Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Net Income (Loss) per Share Pursuant to the Restated and Amended Certificate of Incorporation and as a result of the reverse recapitalization, the Company has retrospectively adjusted the weighted average shares outstanding prior to June 10, 2020 to give effect to the exchange ratio used to determine the number of shares of common stock into which they were converted. Basic net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. The following table sets forth the computation of basic net income (loss) per share attributable to common stockholders for the three and nine months ended September 30, 2020, and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except shares and per share data) Basic net income (loss) per share: Numerator Net income (loss) $ (71,133) $ 14,716 $ (112,766) $ 45,104 Preferred distribution to redeemable convertible preferred units — (3,252) (40,689) (7,435) Non-cash adjustment to redemption amount of the redeemable convertible preferred units — (58,601) 47,537 (104,825) Net loss attributable to common unitholders (71,133) (47,137) (105,918) (67,156) Denominator Basic weighted-average common shares 115,189,532 37,631,052 67,828,046 37,631,052 Basic net loss per share attributable to common stockholders $ (0.62) $ (1.25) $ (1.56) $ (1.78) The following weighted average shares of the potentially dilutive outstanding securities for the three and nine months ended September 30, 2020 and 2019 were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented. Therefore, the diluted net income (loss) per share for the three and nine months ended September 30, 2020 and 2019 are the same as the basic net income (loss) per share. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Redeemable public warrants 2,230,897 — 890,291 — Contingency consideration 5,803,329 — 4,032,276 — Retroactively restated redeemable convertible Series C preferred units — 14,278,603 8,389,982 14,278,603 Total 8,034,226 14,278,603 13,312,549 14,278,603 The Company’s pre-merger LLC membership structure included several different types of LLC interests including ownership interests and profits interests. The Company analyzed the calculation of earnings per unit by using the two-class method for the periods ended in 2019 and determined that it resulted in values that would not be comparable to the same periods in 2020 and therefore not meaningful to the users of these consolidated financial statements. As a result, the Open Lending, LLC’s net income (loss) per share information has not been presented for any period. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments on September 30, 2020 and December 31, 2019. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Quarter Ended September 30, 2020 Year Ended December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Financial assets Cash and cash equivalents $ 115,153 $ 115,153 $ 7,676 $ 7,676 Restricted cash 2,613 2,613 2,222 2,222 Accounts receivable 3,392 3,392 3,767 3,767 Interest Rate Swaps (Other non-current assets) — — 9 9 Total $ 121,158 $ 121,158 $ 13,674 $ 13,674 Financial liabilities Notes payable $ 158,814 $ 158,814 $ 3,313 $ 3,313 Accounts payable 2,283 2,283 1,337 1,337 Accrued expenses 1,409 1,409 2,006 2,006 Income tax payable 544 544 — — Total $ 163,050 $ 163,050 $ 6,656 $ 6,656 The fair value of the financial instruments shown in the table above as of September 30, 2020 and December 31, 2019 represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between the market participants at that date. Those fair value measurements maximize the use of observable and unobservable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable inputs. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: • Cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and income tax payable.The carrying amounts approximate fair value because of the short maturity of these instruments. • Restricted cash: Restricted cash relates to deposits held on behalf of insurance partners to settle insurance claims. The carrying amount of restricted cash approximates fair value because of the short maturity of this instrument. • Interest rate swaps: The fair value is calculated as the present value of the estimated future cash flows. Estimates of future floating-rate cash flows are based on quoted swap rates, futures prices and interbank borrowing rates. Estimated cash flows are discounted using a yield curve constructed using a yield curve constructed from similar sources and which reflects the relevant benchmark interbank rate used by market participants for this purpose when pricing interest rate swaps. The fair value estimate is subject to a credit risk adjustment that reflects the credit risk of the Company and of the counterparty; this is calculated based on credit spreads derived from current credit default swap or bond prices. The Company’s interest rate swap was settled in March of 2020. • Notes payable: the carrying amount of the Company’s debt approximates its fair value due to its variable interest rate that is tied to the current LIBOR rate plus an applicable spread and consistency in our credit ratings. Fair Value Hierarchy The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (including items that are required to be measured at fair value) at September 30, 2020 and December 31, 2019. Fair value measurements at September 30, Level 1 Level 2 Level 3 (in thousands) Liabilities: Notes payable $ 158,814 $ — $ 158,814 $ — Total $ 158,814 $ — $ 158,814 $ — Fair value measurements at December 31, Level 1 Level 2 Level 3 (in thousands) Assets: Interest rate swaps $ 9 $ — $ 9 $ — Total $ 9 $ — $ 9 $ — Liabilities: Notes payable $ 3,313 $ — $ 3,313 $ — Total $ 3,313 $ — $ 3,313 $ — The Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers into or out of any level for the periods ended September 30, 2020 and December 31, 2019. The Company does not have any long-lived asset which is being measured at fair value on a recurring basis. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three and nine months ended September 30, 2020, the Company recognized income tax expense of $4.0 million and $5.4 million, resulting in effective tax rates of (6.0)% and (5.0)%, respectively. During the three and nine months ended September 30, 2019, the Company recognized income tax expense of $40,745 and an income tax benefit of $58,320, resulting in effective tax rates of 0.3% and (0.1)%, respectively. The Company’s income tax expense for the three and nine months ended September 30, 2020 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% primarily due to the impact of the change in fair value of the carrying amount of the contingent consideration being recorded in the Company’s statements of operations and comprehensive income (loss). The Company’s income tax expense for the three and nine months ended September 30, 2019 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% primarily due to the flow-thru entity structure prior to the Business Combination. Net deferred tax assets totaling $89.9 million were recorded as of June 10, 2020 in relation to the Business Combination, of which $88.1 million was recorded to other long-term liabilities to reflect the Company’s estimated liability associated with the Tax Receivable Agreement, dated June 10, 2020, by and among Nebula, the Blocker, Blocker’s sole shareholder, and Open Lending, LLC and the excess amount of $1.9 million was recorded to additional paid-in-capital. As of September 30, 2020, the Company has assessed whether it is more likely than not that our deferred tax assets will be realized. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, the reversal of its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. The Company believes it is more-likely-than-not all deferred tax assets will be realized and has not recorded any valuation allowance as of September 30, 2020. On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), an economic stimulus package in response to the COVID-19 global pandemic. The CARES Act contains several corporate income tax provisions intended to provide relief to taxpayers, most substantial of which relate to temporary net operating loss (“NOL”) carryback periods, temporary reductions in the limitation of business interest expense deductions, employee retention tax credits, and payroll tax relief, among other changes. As of September 30, 2020, the Company does not anticipate a material impact related to the CARES Act provisions on its current year provision or the Company's consolidated financial statements. Management of the Company has evaluated the aggregate exposure for uncertain tax positions for all open tax years and concluded that the Company and its predecessor have no material uncertain tax positions as of September 30, 2020 or for any open tax years. Tax penalties and interest, if any, would be reflected in the consolidated statements of operations and comprehensive income (loss) in other expenses. The Company has not recorded any penalties or interest related to uncertain tax positions as of September 30, 2020 or for any open tax years. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsOn March 25, 2020, Ross Jessup, our COO, CFO and Secretary, borrowed $6,000,000 from Open Lending, LLC in accordance with the promissory note in place and the loan was paid in full by Mr. Jessup on March 30, 2020, with proceeds received as result of the non-liquidating distribution paid by Open Lending, LLC to its members. |
Tax Receivable Agreement
Tax Receivable Agreement | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Tax Receivable Agreement | Tax Receivable AgreementIn connection with the Business Combination, the Company entered into the Tax Receivable Agreement. The Tax Receivable Agreement generally provides for the payment by the Company to the Open Lending LLC unitholders and Blocker’s sole shareholder (the “TRA holders”), as applicable, of 85% of the net cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or are deemed to realize in certain circumstances) in periods after the Closing as a result of: (i) certain tax attributes of Blocker and/or Open Lending, LLC that existed prior to the Business Combination and were attributable to the Blocker; (ii) certain increases in the tax basis of Open Lending, LLC’s assets resulting from the Transactions; (iii) imputed interest deemed to be paid by the Company as a result of payments the Company makes under the Tax Receivable Agreement; and (iv) certain increases in tax basis resulting from payments the Company makes under the Tax Receivable Agreement. The Company will retain the benefit of the remaining 15% of these cash savings.The liability for the Tax Receivable Agreement was $88.1 million as of September 30, 2020, which is classified as other long-term liabilities on our consolidated balance sheet. The deferred tax asset for Tax Receivable Agreement was $101.6 million, which was recognized due to the increase in tax basis and certain tax benefits attributable to imputed interest. The Company expects to benefit from the remaining 15% of cash savings, if any, realized. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsAs of October 13, 2020, 9,160,776 public warrants were exercised by the warrant holders, generating a total of $105.3 million in cash proceeds, of which $17.3 million was received in October 2020. The remaining 5,883 unexercised public warrants on October 13, 2020 were redeemed by the Company for $0.01 per public warrant. |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies and Recent Developments (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | Unaudited interim financial statements The accompanying consolidated balance sheet as of September 30, 2020, consolidated statements of operations and comprehensive income (loss) and consolidated statements of stockholders’ equity (deficit) for the three and nine months ended September 30, 2020 and 2019, respectively and consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, respectively, are unaudited. These financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. However, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 30, 2020, and its results of operations, including its comprehensive income (loss), stockholders’ equity (deficit) for three and nine months ended September 30, 2020 and 2019, respectively, and its cash flows for the nine months ended September 30, 2020 and 2019, respectively. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2020. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on May 22, 2020. Certain prior year amounts, such as deferred transaction costs, have been reclassified to conform to the September 30, 2020 balance sheet presentation. |
Basis of presentation | Basis of presentation The Business Combination is accounted for as a reverse recapitalization as Open Lending, LLC was determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The determination is primarily based on the evaluation of the following facts and circumstances: • the pre-combination unitholders of Open Lending, LLC hold the majority of voting rights in the Company; • the pre-combination unitholders of Open Lending, LLC have the right to appoint the majority of the directors of the Company; • senior management of Open Lending, LLC became the senior management of the Company; and • operations of Open Lending, LLC comprise the ongoing operations of the Company. In connection with the Business Combination, all outstanding units of Open Lending, LLC were converted into common stock of the Company, par value $0.01 per share, representing a recapitalization, and the net assets of Nebula were acquired at historical cost, with no goodwill or intangible assets recorded. Open Lending, LLC was deemed to be the predecessor of the Company, and the consolidated assets and liabilities and results of operations prior to the Closing (for the year ended December 31, 2019 and the quarter ended March 31, 2020 and 2019) are those of Open Lending, LLC. The shares and corresponding capital amounts and net income (loss) per share available to common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement. The number of Series C preferred units in mezzanine equity was also retroactively restated in shares reflecting the exchange ratio, and the carrying amount of the Series C Preferred Units is based on the fair value of its redemption amount on each reporting date. All Series C Preferred Units were converted to the Company’s common stock on the closing date of the Business Combination. |
Principles of consolidation | Principles of consolidationThe accompanying financial statements include the accounts of the Company and all its subsidiaries that are directly or indirectly owned or controlled by the Company. Intercompany transactions and balances have been eliminated upon consolidation. |
Coronavirus outbreak | Coronavirus outbreakThe outbreak of the novel coronavirus (“COVID-19”) that was declared a pandemic by the World Health Organization on March 11, 2020 and declared a National Emergency by the President of the United States on March 13, 2020, has led to adverse impacts on the U.S. and global economies and created uncertainty regarding potential impacts on our operating results, financial condition and cash flows. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on certain developments, including the duration and continued spread of the disease, the impact on our revenues which are generated with automobile lenders and insurance company partners and driven by consumer demand for automobiles and automotive loans, extended closures of businesses, rising unemployment and the overall impact on our customer behavior, all of which are uncertain and cannot be predicted. We are diligently working to ensure that we can continue to operate with minimal disruption, mitigate the impact of the pandemic on our employees’ health and safety, and address potential business interruptions on ourselves and our customers. We believe that the COVID-19 pandemic, the mitigation efforts and the resulting economic impact have had, and may continue to have, an overall adverse effect on our business, results of operations and financial condition. Although we have experienced increased demand for our service offerings, we could have a reduction or a slowdown of growth in loan applications and certified loans and potential increased defaults in future periods, which will impact our revenues and subsequent recovery as the automotive finance industry and overall economy recover. We continue to closely monitor the current macro environment, particularly the impact of the recent COVID-19 pandemic on monetary and fiscal policies. |
Emerging growth company | Emerging growth company The Company is an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act (“JOBS Act”). As such, the Company is eligible for and intends to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. The Company will remain an emerging growth company until the earliest of (i) the Company is deemed to be a large accelerated filer, which occurs, among other things, on the last day of the fiscal year in which the market value of the shares of its common stock that are held by non-affiliates exceeds $700.0 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which it has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of its common stock in its initial public offering. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, restricted cash and accounts receivable to the extent of the amounts recorded on the balance sheets. Cash and cash equivalents are deposited in commercial analysis and savings accounts at two financial institutions, both with high credit standing. Restricted cash relates to funds held by the Company on behalf of the insurance carriers, delegated for the use of insurance claim payments. Restricted cash are deposited in commercial analysis accounts at one financial institution. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits of $250,000 per institution. The Company has not experienced any losses on its deposits of cash and cash equivalents and management believes the Company is not exposed to significant risks on such accounts. The Company’s accounts receivables are derived from revenue earned from customers. The Company performs credit evaluations of its customers’ financial condition. As of September 30, 2020 and December 31, 2019, there was no allowance for doubtful accounts. At September 30, 2020, the Company had no customers accounting for 10% or more of the Company’s accounts receivable. At December 31, 2019, the Company had one customer that represented 22% of the Company’s accounts receivable. |
Use of estimates and judgements | Use of estimates and judgements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates, and those differences may be material. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. The most significant items subject to such estimates and assumptions include, but are not limited to, the recognition of the valuations of share-based compensation arrangements, valuation of contingent consideration, valuation of interest rate swaps, the useful lives of property and equipment, assessing the realizability of deferred tax assets, credit losses, profit share revenue recognition, and assumptions used in the recognition of contract asset. These estimates, although based on actual historical trend and modeling, may potentially show significant variances over time. In connection with profit share revenue recognition and the estimation of contract asset under Accounting Standards Update (“ASU”) 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), we use forecasts of loan-level earned premium and insurance claim payments. These forecasts are driven by the projection of loan defaults, prepayments and default severity rates. These assumptions are based on our observations of the historical behavior for loans with similar risk characteristics. The assumptions also take consideration of the forecast adjustments under various macroeconomic conditions, including the potential impact from the COVID-19 pandemic, and the current mix of the underlying portfolio of our insurance partners. As th e Company closely monitors the development of the pandemic and its ongoing impact on Open Lending's business, management has accordingly adjusted these assumptions during the first nine months of 2020 as a result of changes in facts and circumstances and general market conditions derived from the COVID-19 pandemic. |
Income taxes | Income taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured as the largest amount that is greater than 50% likely of being realized. The Company records potential interest and penalties related to an underpayment of income taxes as interest expense and penalties included within operating expenses in the consolidated statements of operations and comprehensive income. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements On January 1, 2020, we adopted ASU 2016-2, Leases (“Topic 842”) using the alternative modified retrospective transition method and elected practical expedients which allowed us to account for the lease and non-lease components as a single component. In addition, we elected not to reassess whether any expired or existing contracts contain leases, the corresponding lease classification and initial direct costs. The practical expedients were applied across our lease portfolios. We recognized operating lease right-of-use (“ROU”) asset and operating lease liabilities for operating leases with initial terms greater than 12 months. ROU assets represent our right to use an asset for the lease term, while lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. Refer to Note 4 Leases for the impact of Topic 842 on our consolidated financial statements. In December 2019, the FASB released ASU 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company does not expect adoption of the new standard to have a material impact on its consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing after December 15, 2022. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures. |
Fair Value of Financial Instruments | The following methods and assumptions were used to estimate the fair value of each class of financial instruments: • Cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and income tax payable.The carrying amounts approximate fair value because of the short maturity of these instruments. • Restricted cash: Restricted cash relates to deposits held on behalf of insurance partners to settle insurance claims. The carrying amount of restricted cash approximates fair value because of the short maturity of this instrument. • Interest rate swaps: The fair value is calculated as the present value of the estimated future cash flows. Estimates of future floating-rate cash flows are based on quoted swap rates, futures prices and interbank borrowing rates. Estimated cash flows are discounted using a yield curve constructed using a yield curve constructed from similar sources and which reflects the relevant benchmark interbank rate used by market participants for this purpose when pricing interest rate swaps. The fair value estimate is subject to a credit risk adjustment that reflects the credit risk of the Company and of the counterparty; this is calculated based on credit spreads derived from current credit default swap or bond prices. The Company’s interest rate swap was settled in March of 2020. • Notes payable: the carrying amount of the Company’s debt approximates its fair value due to its variable interest rate that is tied to the current LIBOR rate plus an applicable spread and consistency in our credit ratings. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease, Cost | Additional information related to the operating leases follows: Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 (in thousands) Cash paid for operating leases included in operating cash flows $ 628 $ 803 Operating lease ROU assets obtained in exchange for new lease liabilities 5,375 5,375 Total $ 6,003 $ 6,178 Weighted-average remaining lease term – operating lease (in years) 8.42 8.42 Weighted-average discount rate – operating lease 7.72 % 7.72 % |
Assets and Liabilities, Lessee | The balance of our operating lease ROU assets and liabilities as of September 30, 2020 is summarized below. The current and non-current lease liabilities are reflected in other current liabilities and operating lease liabilities, net of current portion, respectively, on our consolidated balance sheets: At September 30, 2020 (in thousands) Operating lease right-of-use asset $ 5,898 Accumulated amortization $ (45) Net operating lease right-of-use assets $ 5,853 Lease liability, current $ 144 Lease liability, non-current $ 5,265 Total operating lease liability $ 5,409 |
Lessee, Operating Lease, Liability, Maturity | The maturities of lease liabilities are as follows: At September 30, 2020 (in thousands) 2020 (Remainder) $ — 2021 774 2022 869 2023 894 2024 920 Thereafter 4,018 Total undiscounted liabilities 7,475 Less: Interest 2,066 Present value of lease liabilities $ 5,409 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Notes Payable | The Company’s outstanding Notes Payable consists of the following: September 30, December 31, (in thousands) Notes payable $ — $ 3,334 Term loan due 2027 167,875 — Less: debt issuance costs (9,061) (21) Less: current portion of notes payable (4,675) (2,484) Long-term notes payable, net of debt issuance costs $ 154,139 $ 829 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Summary of Common Stock Outstanding Immediately after the Business Combination | The following summarizes the Company’s common stock outstanding on the Closing Date of the Business Combination as compared to September 30, 2020: At the Closing Date At September 30, 2020 Shares % Shares % Open Lending, LLC unitholders 51,909,655 56% 74,409,655 59% Public stockholders 16,502,754 18% 24,384,917 19% Nebula Holdings, LLC and its affiliates 11,937,500 13% 16,625,000 13% PIPE Investors 11,500,000 13% 11,500,000 9% Total 91,849,909 100% 126,919,572 100% |
Contingent Consideration (Table
Contingent Consideration (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | A reconciliation of changes in the liability related to contingent consideration during the three and nine months ended September 30, 2020 follows: (in thousands) Estimated fair value of contingent consideration at June 10, 2020 $ 347,089 Change in fair value in the second quarter of 2020 48,802 Estimated fair value of contingent consideration at June 30, 2020 395,891 Change in fair value in the third quarter of 2020 83,130 Reclassification of contingent consideration shares to equity (479,021) Estimated fair value of contingent consideration at September 30, 2020 $ — |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Assets | Contract asset balances for the periods indicated below are as follows: Contract Asset Profit Share TPA Fee Program Fee Total (in thousands) Ending balance as of December 31, 2019 $ 57,367 $ 575 $ 5,009 $ 62,951 Increase of contract asset due to new business generation 43,621 3,185 31,592 78,398 Adjustment of contract asset due to estimation of revenue from performance obligations satisfied in previous periods (9,139) — — (9,139) Receivables transferred from contract assets upon billing the lending institutions — — (31,160) (31,160) Payments received from insurance carriers (25,012) (3,050) — (28,062) Ending balance as of September 30, 2020 $ 66,837 $ 710 $ 5,441 $ 72,988 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share | The following table sets forth the computation of basic net income (loss) per share attributable to common stockholders for the three and nine months ended September 30, 2020, and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except shares and per share data) Basic net income (loss) per share: Numerator Net income (loss) $ (71,133) $ 14,716 $ (112,766) $ 45,104 Preferred distribution to redeemable convertible preferred units — (3,252) (40,689) (7,435) Non-cash adjustment to redemption amount of the redeemable convertible preferred units — (58,601) 47,537 (104,825) Net loss attributable to common unitholders (71,133) (47,137) (105,918) (67,156) Denominator Basic weighted-average common shares 115,189,532 37,631,052 67,828,046 37,631,052 Basic net loss per share attributable to common stockholders $ (0.62) $ (1.25) $ (1.56) $ (1.78) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted average shares of the potentially dilutive outstanding securities for the three and nine months ended September 30, 2020 and 2019 were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented. Therefore, the diluted net income (loss) per share for the three and nine months ended September 30, 2020 and 2019 are the same as the basic net income (loss) per share. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Redeemable public warrants 2,230,897 — 890,291 — Contingency consideration 5,803,329 — 4,032,276 — Retroactively restated redeemable convertible Series C preferred units — 14,278,603 8,389,982 14,278,603 Total 8,034,226 14,278,603 13,312,549 14,278,603 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Amounts and Estimated Fair Values of the Company's Financial Instruments | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments on September 30, 2020 and December 31, 2019. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Quarter Ended September 30, 2020 Year Ended December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Financial assets Cash and cash equivalents $ 115,153 $ 115,153 $ 7,676 $ 7,676 Restricted cash 2,613 2,613 2,222 2,222 Accounts receivable 3,392 3,392 3,767 3,767 Interest Rate Swaps (Other non-current assets) — — 9 9 Total $ 121,158 $ 121,158 $ 13,674 $ 13,674 Financial liabilities Notes payable $ 158,814 $ 158,814 $ 3,313 $ 3,313 Accounts payable 2,283 2,283 1,337 1,337 Accrued expenses 1,409 1,409 2,006 2,006 Income tax payable 544 544 — — Total $ 163,050 $ 163,050 $ 6,656 $ 6,656 |
Summary of Fair Value Assets and Liabilities Measured on Recurring Basis | The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (including items that are required to be measured at fair value) at September 30, 2020 and December 31, 2019. Fair value measurements at September 30, Level 1 Level 2 Level 3 (in thousands) Liabilities: Notes payable $ 158,814 $ — $ 158,814 $ — Total $ 158,814 $ — $ 158,814 $ — Fair value measurements at December 31, Level 1 Level 2 Level 3 (in thousands) Assets: Interest rate swaps $ 9 $ — $ 9 $ — Total $ 9 $ — $ 9 $ — Liabilities: Notes payable $ 3,313 $ — $ 3,313 $ — Total $ 3,313 $ — $ 3,313 $ — |
Description of Business, Back_2
Description of Business, Background and Nature of Operations - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies and Recent Developments - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Sep. 30, 2020 | Jun. 11, 2020 | |
Concentration Risk [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Emerging growth company, threshold on market value of shares | $ 700,000,000 | ||
Emerging growth company, threshold on annual gross revenue | 1,070,000,000 | ||
Emerging growth company, threshold on convertible debt issued | $ 1,000,000,000 | ||
One Customer | Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22.00% |
Business Combination - Addition
Business Combination - Additional Information (Detail) - Nebula Holdings LLC $ / shares in Units, $ in Millions | Jun. 10, 2020USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Aggregate consideration | $ 1,000 |
Cash payments to acquire businesses | 328.8 |
Business combination, consideration transferred, liabilities incurred | $ 135 |
Business combination, number of shares issued (in shares) | shares | 51,909,655 |
Business combination, share price (in dollars per share) | $ / shares | $ 10 |
Business combination, equity issued | $ 519.1 |
Direct and Incremental Costs | |
Business Acquisition [Line Items] | |
Business combination, acquisition related costs | 55.5 |
Share Based Compensation Expense | |
Business Acquisition [Line Items] | |
Business combination, acquisition related costs | 2.2 |
Bonus | |
Business Acquisition [Line Items] | |
Business combination, acquisition related costs | $ 9.1 |
Earnout Consideration | |
Business Acquisition [Line Items] | |
Business combination, number of shares issued (in shares) | shares | 22,500,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Lessee, operating lease, remaining lease term | 100 months | 100 months | ||
Lessee, operating lease, renewal term | 60 months | 60 months | ||
Operating lease, expense | $ 0.2 | $ 0.2 | $ 0.6 | $ 0.5 |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | |
Leases [Abstract] | ||
Cash paid for operating leases included in operating cash flows | $ 628 | $ 803 |
Operating lease ROU assets obtained in exchange for new lease liabilities | 5,375 | 5,375 |
Total | $ 6,003 | $ 6,178 |
Weighted-average remaining lease term – operating lease (in years) | 8 years 5 months 1 day | 8 years 5 months 1 day |
Weighted-average discount rate – operating lease | 7.72% | 7.72% |
Leases - Balance Sheet Classifi
Leases - Balance Sheet Classification of ROU Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use asset | $ 5,898 | |
Accumulated amortization | (45) | |
Net operating lease right-of-use assets | 5,853 | $ 0 |
Lease liability, current | 144 | |
Lease liability, non-current | 5,265 | $ 0 |
Present value of lease liabilities | $ 5,409 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
2020 (Remainder) | $ 0 |
2021 | 774 |
2022 | 869 |
2023 | 894 |
2024 | 920 |
Thereafter | 4,018 |
Total undiscounted liabilities | 7,475 |
Less: Interest | 2,066 |
Present value of lease liabilities | $ 5,409 |
Notes Payable - Additional Info
Notes Payable - Additional Information (Detail) - Term Loan | Mar. 11, 2020USD ($) |
Debt Instrument [Line Items] | |
Principal amount | $ 170,000,000 |
Debt instrument, LIBOR floor rate | 1.00% |
Debt instrument, effective interest rate | 7.50% |
Debt instrument, covenant, net leverage ratio, maximum | 4.75 |
Debt instrument, covenant, decrease net leverage ratio, minimum | 2.5 |
London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Debt instrument, basis spread on variable rate | 6.50% |
Base Rate | |
Debt Instrument [Line Items] | |
Debt instrument, basis spread on variable rate | 5.50% |
Notes Payable - Summary of Outs
Notes Payable - Summary of Outstanding Notes Payable (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Notes payable | $ 0 | $ 3,334 |
Term loan due 2027 | 167,875 | 0 |
Less: debt issuance costs | (9,061) | (21) |
Less: current portion of notes payable | (4,675) | (2,484) |
Long-term notes payable, net of unamortized debt issuance costs | $ 154,139 | $ 829 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Additional Information (Detail) $ / shares in Units, $ in Thousands | Oct. 12, 2020USD ($) | Jul. 01, 2020$ / sharesshares | Jun. 10, 2020$ / sharesshares | Oct. 31, 2020USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)dsegment$ / sharesshares | Sep. 30, 2019USD ($)shares | Oct. 13, 2020$ / sharesshares | Jun. 30, 2020shares | Jun. 11, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | Jun. 30, 2019shares | Dec. 31, 2018shares |
Class of Stock [Line Items] | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Common stock, shares authorized (in shares) | 550,000,000 | 550,000,000 | 550,000,000 | 110,000,000 | |||||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||
Common stock, shares outstanding (in shares) | 91,849,909 | 126,919,572 | 126,919,572 | 91,849,909 | 37,631,052 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Class of warrant or right, outstanding (in shares) | 9,166,659 | ||||||||||||
Common stock, shares issued (in shares) | 91,849,909 | 126,919,572 | 126,919,572 | 37,631,052 | |||||||||
Proceeds from stock warrant exercises | $ | $ 88,042 | $ 0 | |||||||||||
Other institutional investors | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock, shares outstanding (in shares) | 11,500,000 | ||||||||||||
Nebula Holdings LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Business combination, number of shares issued (in shares) | 51,909,655 | ||||||||||||
Nebula Holdings LLC | Earnout Consideration | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Business combination, number of shares issued (in shares) | 22,500,000 | ||||||||||||
Nebula Holdings LLC | Earnout Consideration | Maximum | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Business combination, number of shares issued (in shares) | 23,750,000 | ||||||||||||
Common Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 9,166,659 | ||||||||||||
Stock warrant exercise (in shares) | 7,882,163 | 7,882,163 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 18 | $ 18 | |||||||||||
Common Stock | Lock-Up Shares Contingent Consideration | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued during period, acquisitions (in shares) | 3,437,500 | 3,437,500 | 3,437,500 | ||||||||||
Common Stock | Nebula Holdings LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares registered for issuance (in shares) | 52,916,659 | ||||||||||||
Public Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, outstanding (in shares) | 9,166,659 | 9,166,659 | |||||||||||
Class of warrant or right exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | ||||||||||
Stock warrant exercise (in shares) | 31,632,163 | ||||||||||||
Class of warrant or right threshold trading days for exercise | 30 days | ||||||||||||
Class of warrant or right, redemption price (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||||
Class of warrant or right, minimum notice period for redemption | 30 days | ||||||||||||
Class of warrant or right, redemption, threshold trading days | segment | 30 | ||||||||||||
Class of warrant or right, exercised (in shares) | 7,882,163 | 7,882,163 | |||||||||||
Proceeds from stock warrant exercises | $ | $ 88,000 | ||||||||||||
Warrant exercise proceeds receivable | $ | $ 2,600 | ||||||||||||
Public Warrants | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, outstanding (in shares) | 5,883 | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 9,160,776 | ||||||||||||
Class of warrant or right, redemption price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||
Class of warrant or right, exercised (in shares) | 1,278,613 | ||||||||||||
Proceeds from stock warrant exercises | $ | $ 14,700 | $ 17,300 | |||||||||||
Public Warrants | Minimum | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, redemption, threshold consecutive trading days | d | 20 | ||||||||||||
PIPE Shares | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock, shares outstanding (in shares) | 20,000,000 | ||||||||||||
PIPE Shares | Nebula | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 10 | ||||||||||||
Commitment to issue shares (in shares) | 20,000,000 | ||||||||||||
PIPE Shares | Nebula | Nebula Holdings LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock, shares outstanding (in shares) | 8,500,000 | ||||||||||||
Series A and B Preferred | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares outstanding (in shares) | 29,058,266 | ||||||||||||
Series C Redeemable Convertible Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 | 14,278,603 | 0 | 21,906,852 | 21,906,852 | 21,906,852 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Summary Of Common Stock Outstanding Immediately After The Business Combination (Detail) - shares | Sep. 30, 2020 | Jun. 11, 2020 | Jun. 10, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 126,919,572 | 91,849,909 | 91,849,909 | 37,631,052 |
Percentage of common stock held by stockholders | 100.00% | 100.00% | ||
Open Lending, LLC unitholders | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 74,409,655 | 51,909,655 | ||
Percentage of common stock held by stockholders | 59.00% | 56.00% | ||
Public stockholders | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 24,384,917 | 16,502,754 | ||
Percentage of common stock held by stockholders | 19.00% | 18.00% | ||
Nebula Holdings, LLC and its affiliates | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 16,625,000 | 11,937,500 | ||
Percentage of common stock held by stockholders | 13.00% | 13.00% | ||
PIPE Investors | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 11,500,000 | 11,500,000 | ||
Percentage of common stock held by stockholders | 9.00% | 13.00% |
Contingent Consideration - Addi
Contingent Consideration - Additional Information (Detail) $ / shares in Units, $ in Thousands | Aug. 11, 2020d$ / sharesshares | Jul. 15, 2020d$ / sharesshares | Jul. 14, 2020$ / sharesshares | Jul. 10, 2020d$ / sharesshares | Jun. 10, 2020USD ($)d$ / sharesshares | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Jun. 11, 2020$ / shares | Dec. 31, 2019$ / shares |
Contingent Consideration [Line Items] | ||||||||||||
Common stock, shares issued or released (in shares) | shares | 27,187,500 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Business combination, contingent consideration, liability, noncurrent | $ | $ 347,100 | |||||||||||
Change in fair value of contingent consideration | $ | $ 48,802 | $ 83,130 | $ 0 | $ 131,932 | $ 0 | |||||||
Reclassification of contingent consideration shares to equity | $ | (479,021) | |||||||||||
Common Stock | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Reclassification of contingent consideration shares to equity | $ | 300 | |||||||||||
Additional Paid-in Capital | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Contingent consideration classified as equity, fair value disclosure | $ | $ 478,700 | $ 478,700 | ||||||||||
Nebula Holdings LLC | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Business combination, number of shares issued (in shares) | shares | 51,909,655 | |||||||||||
Nebula Holdings LLC | Contingency Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Number of shares issued in transaction (in shares) | shares | 7,500,000 | 7,500,000 | 7,500,000 | |||||||||
Business combination, number of shares issued (in shares) | shares | 22,500,000 | |||||||||||
Business combination, contingent consideration, milestone period | 42 months | |||||||||||
Nebula Holdings LLC | Earnout Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Number of shares issued in transaction (in shares) | shares | 7,500,000 | 625,000 | 625,000 | 625,000 | ||||||||
Business combination, number of shares issued (in shares) | shares | 22,500,000 | |||||||||||
Business combination, contingent consideration, milestone period | 30 months | |||||||||||
Contingency consideration shares (in shares) | shares | 1,250,000 | |||||||||||
Nebula Holdings LLC | Stock Triggering Price 1 | Contingency Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 12 | $ 12 | ||||||||||
Business combination, consecutive threshold trading days | 20 | 20 | ||||||||||
Business combination, threshold trading days | 30 | 30 | ||||||||||
Business combination, period after the closing date | 24 months | |||||||||||
Nebula Holdings LLC | Stock Triggering Price 1 | Earnout Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 12 | |||||||||||
Business combination, consecutive threshold trading days | 20 | |||||||||||
Business combination, threshold trading days | 30 | |||||||||||
Business combination, period after the closing date | 24 months | |||||||||||
Nebula Holdings LLC | Stock Triggering Price 2 | Contingency Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 14 | $ 14 | ||||||||||
Business combination, consecutive threshold trading days | 20 | 20 | ||||||||||
Business combination, threshold trading days | 30 | 30 | ||||||||||
Business combination, period after the closing date | 30 months | |||||||||||
Nebula Holdings LLC | Stock Triggering Price 2 | Earnout Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 14 | |||||||||||
Business combination, consecutive threshold trading days | 20 | |||||||||||
Business combination, threshold trading days | 30 | |||||||||||
Business combination, period after the closing date | 30 months | |||||||||||
Nebula Holdings LLC | Stock Triggering Price 3 | Contingency Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 16 | |||||||||||
Business combination, consecutive threshold trading days | 20 | |||||||||||
Business combination, threshold trading days | 30 | |||||||||||
Business combination, period after the closing date | 42 months | |||||||||||
Nebula Holdings LLC | Stock Triggering Price 3 | Earnout Consideration | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 16 | |||||||||||
Business combination, consecutive threshold trading days | 20 | |||||||||||
Business combination, threshold trading days | 30 | |||||||||||
Lock Up Shares | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Number of shares issued in transaction (in shares) | shares | 3,437,500 | 3,437,500 | ||||||||||
Business combination, consecutive threshold trading days | 20 | |||||||||||
Business combination, threshold trading days | 30 | |||||||||||
Business combination, period after the closing date | 7 years | |||||||||||
Lock Up Shares | Stock Triggering Price 1 | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 12 | $ 12 | ||||||||||
Lock Up Shares | Stock Triggering Price 2 | ||||||||||||
Contingent Consideration [Line Items] | ||||||||||||
Stock trading price (in dollars per share) | $ / shares | $ 14 | $ 14 |
Contingent Consideration - Reco
Contingent Consideration - Reconciliation of the Activity Driving Contingent Consideration Balance Changes (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Combination, Contingent Consideration [Roll Forward] | |||||
Beginning balance | $ 395,891 | ||||
Change in fair value of contingent consideration | $ 48,802 | 83,130 | $ 0 | $ 131,932 | $ 0 |
Reclassification of contingent consideration shares to equity | (479,021) | ||||
Ending balance | $ 395,891 | $ 0 | $ 0 |
Revenue - Summary Of Contract A
Revenue - Summary Of Contract Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Contract With Customer, Asset [Roll Forward] | ||||
Beginning balance | $ 62,951 | $ 62,951 | ||
Increase of contract asset due to new business generation | 78,398 | |||
Adjustment of contract asset due to estimation of revenue from performance obligations satisfied in previous periods | (9,139) | |||
Receivables transferred from contract assets upon billing the lending institutions | (31,160) | |||
Payments received from insurance carriers | (28,062) | |||
Ending balance | $ 72,988 | 72,988 | ||
Increase (decrease) in contract with customer, asset | 10,037 | $ 16,871 | ||
Profit Share | ||||
Contract With Customer, Asset [Roll Forward] | ||||
Beginning balance | 57,367 | 57,367 | ||
Increase of contract asset due to new business generation | 43,621 | |||
Adjustment of contract asset due to estimation of revenue from performance obligations satisfied in previous periods | (9,139) | |||
Receivables transferred from contract assets upon billing the lending institutions | 0 | |||
Payments received from insurance carriers | (25,012) | |||
Ending balance | 66,837 | 66,837 | ||
TPA Fee | ||||
Contract With Customer, Asset [Roll Forward] | ||||
Beginning balance | 575 | 575 | ||
Increase of contract asset due to new business generation | 3,185 | |||
Adjustment of contract asset due to estimation of revenue from performance obligations satisfied in previous periods | 0 | |||
Receivables transferred from contract assets upon billing the lending institutions | 0 | |||
Payments received from insurance carriers | (3,050) | |||
Ending balance | 710 | 710 | ||
Program Fee | ||||
Contract With Customer, Asset [Roll Forward] | ||||
Beginning balance | 5,009 | 5,009 | ||
Increase of contract asset due to new business generation | 31,592 | |||
Adjustment of contract asset due to estimation of revenue from performance obligations satisfied in previous periods | 0 | |||
Receivables transferred from contract assets upon billing the lending institutions | (31,160) | |||
Payments received from insurance carriers | 0 | |||
Ending balance | 5,441 | 5,441 | ||
COVID-19 | ||||
Contract With Customer, Asset [Roll Forward] | ||||
Increase (decrease) in contract with customer, asset | $ 3,800 | $ (13,000) | $ (9,100) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 2,676 | $ 1,497 | |
Class B Unit Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares vested (in shares) | 14,129,158 | ||
Share-based compensation | $ 2,200 | ||
2020 Stock Option and Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, capital shares reserved for future issuance (in shares) | 9,693,750 | 9,693,750 | |
Percent on number of shares outstanding | 10.00% | 10.00% | |
Percent of incremental shares on outstanding common stock | 4.00% | 4.00% | |
Grants in period (in shares) | 0 | 0 |
Net Income (Loss) per Share - S
Net Income (Loss) per Share - Summary of Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator | ||||
Net income | $ (71,133) | $ 14,716 | $ (112,766) | $ 45,104 |
Preferred distribution to redeemable convertible preferred units | 0 | (3,252) | (40,689) | (7,435) |
Non-cash adjustment to redemption amount of the redeemable convertible preferred units | 0 | (58,601) | 47,537 | (104,825) |
Net loss attributable to common unitholders | $ (71,133) | $ (47,137) | $ (105,918) | $ (67,156) |
Denominator | ||||
Basic weighted-average common shares (in shares) | 115,189,532,000 | 37,631,052,000 | 67,828,046,000 | 37,631,052,000 |
Basic net income (loss) per share attributable to common stockholders (in dollars per share) | $ (0.62) | $ (1.25) | $ (1.56) | $ (1.78) |
Net Income (Loss) per Share -_2
Net Income (Loss) per Share - Summary of Antidilutive Securities Excluded from Computation Of Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 8,034,226 | 14,278,603 | 13,312,549 | 14,278,603 |
Redeemable public warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,230,897 | 0 | 890,291 | 0 |
Contingency consideration | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,803,329 | 0 | 4,032,276 | 0 |
Retroactively restated redeemable convertible Series C preferred units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 14,278,603 | 8,389,982 | 14,278,603 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Carrying Amounts and Estimated Fair Values of the Company's Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financial assets, Carrying Amount | ||
Cash and cash equivalents | $ 115,153 | $ 7,676 |
Restricted cash | 2,613 | 2,222 |
Accounts receivable | 3,392 | 3,767 |
Interest Rate Swaps (Other non-current assets) | 0 | 9 |
Total | 121,158 | 13,674 |
Financial liabilities, Carrying Amount | ||
Notes payable | 158,814 | 3,313 |
Accounts payable | 2,283 | 1,337 |
Accrued expenses | 1,409 | 2,006 |
Income tax payable | 544 | 0 |
Total | 163,050 | 6,656 |
Financial assets, Fair Value | ||
Cash and cash equivalents | 115,153 | 7,676 |
Restricted cash | 2,613 | 2,222 |
Accounts receivable | 3,392 | 3,767 |
Interest Rate Swaps (Other non-current assets) | 0 | 9 |
Total | 121,158 | 13,674 |
Financial liabilities, Fair Value | ||
Notes payable | 158,814 | 3,313 |
Accounts payable | 2,283 | 1,337 |
Accrued expenses | 1,409 | 2,006 |
Income tax payable | 544 | 0 |
Total | $ 163,050 | $ 6,656 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Fair Value Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Interest rate swaps | $ 0 | $ 9 |
Total | 121,158 | 13,674 |
Liabilities: | ||
Notes payable | 158,814 | 3,313 |
Total | 163,050 | 6,656 |
Fair Value, Recurring | ||
Assets: | ||
Interest rate swaps | 9 | |
Total | 9 | |
Liabilities: | ||
Notes payable | 158,814 | 3,313 |
Total | 158,814 | 3,313 |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Interest rate swaps | 0 | |
Total | 0 | |
Liabilities: | ||
Notes payable | 0 | 0 |
Total | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Interest rate swaps | 9 | |
Total | 9 | |
Liabilities: | ||
Notes payable | 158,814 | 3,313 |
Total | 158,814 | 3,313 |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Interest rate swaps | 0 | |
Total | 0 | |
Liabilities: | ||
Notes payable | 0 | 0 |
Total | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Jun. 10, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Line Items] | |||||
Income tax expense (benefit) | $ 4,021,000 | $ 40,745 | $ 5,385,000 | $ (58,320) | |
Effective income tax rate reconciliation, percent | (6.00%) | 0.30% | (5.00%) | (0.10%) | |
Deferred tax assets, net | $ 89,900,000 | ||||
Additional Paid-in Capital | |||||
Income Tax Disclosure [Line Items] | |||||
Income tax effects allocated directly to equity, equity transactions | 1,900,000 | ||||
Other Noncurrent Liabilities | |||||
Income Tax Disclosure [Line Items] | |||||
Deferred tax assets, net | $ 88,100,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Thousands | Mar. 25, 2020USD ($) |
Related Party Transactions [Abstract] | |
Related party receivables | $ 6,000 |
Tax Receivable Agreement - Addi
Tax Receivable Agreement - Additional Information (Detail) - Tax Receivable Agreement $ in Millions | Sep. 30, 2020USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percent of net cash savings payable | 85.00% |
Percent of cash savings retain the benefit | 15.00% |
Deferred tax liabilities | $ 88.1 |
Deferred tax assets | $ 101.6 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 12, 2020 | Oct. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 13, 2020 | Jun. 11, 2020 |
Subsequent Event [Line Items] | ||||||||
Proceeds from stock warrant exercises | $ 88,042 | $ 0 | ||||||
Class of warrant or right, outstanding (in shares) | 9,166,659 | |||||||
Public Warrants | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from stock warrant exercises | $ 88,000 | |||||||
Class of warrant or right, outstanding (in shares) | 9,166,659 | 9,166,659 | ||||||
Class of warrant or right, redemption price (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Subsequent Event | Public Warrants | ||||||||
Subsequent Event [Line Items] | ||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 9,160,776 | |||||||
Proceeds from stock warrant exercises | $ 14,700 | $ 17,300 | ||||||
Class of warrant or right, outstanding (in shares) | 5,883 | |||||||
Class of warrant or right, redemption price (in dollars per share) | $ 0.01 | |||||||
Subsequent Event | Public Warrants | Forecast [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from stock warrant exercises | $ 105,300 |
Uncategorized Items - lpro-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201409Member |
Business Combination, Contingent Consideration, Liability | us-gaap_BusinessCombinationContingentConsiderationLiability | $ 347,089,000 |