Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.

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 near-prime and non-prime automotive loans out of their existing business flow. The Company also operates as a third-party administrator that adjudicates insurance claims and premium adjustments 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 the NASDAQNasdaq Stock Market ("NASDAQ"(“Nasdaq”) under the symbol “LPRO”.

We are a leading provider of lending enablement and risk analytics to credit unions, regional banks, non-bank auto finance companies and the captive finance companies of Original Equipment Manufacturers ("(“OEM Captives"Captives”). Open Lending'sOur clients, collectively referred to herein as automotive lenders or lenders, make automotive consumer loans to underserved non-primenear-prime and near-primenon-prime borrowers by harnessing our risk-based pricing models, powered by Open Lending'sour proprietary data and real-time underwriting of automotive loan default insurance coverage from insurers. Since Open Lending'sour inception in 2000, we have facilitated over $9.2$13.5 billion in automotive loans, accumulating over 20 years of proprietary data and developingdeveloped over two million unique risk profiles. We currently cater to approximately 355396 active automotive lenders.

LPP, our flagship product, is an automotive lenders throughout the United States. We believe that we address the financing needs oflending program designed to underwrite default insurance on loans made to near-prime and non-prime borrowers, or borrowers withborrowers. The program uses risk-based pricing models and links automotive lenders and insurance companies. LPP enables lenders to assess the credit risk of a credit score between 560 and 699, who are underserved inpotential borrower within five seconds using data driven analysis, enabling the automotive finance industry. Traditional lenders focus on prime borrowers, wherelender to generate an efficient market has developed withall-inclusive interest rate competition that benefits borrowers. Independent finance companies focus on sub-prime borrowers. Borrowers that utilizefor a loan for the near-prime and non-prime automotive lending market have fewer lenders focused on loans with longer terms or higher advance rates. As a result, near-prime and non-prime borrowers often turn to sub-prime lenders, resulting in higher interest rate loan offerings than the consumers’ credit profile often merits or warrants. Open Lending seeks to make this market more competitive, resulting in more attractive loan terms.borrower.

LPP is powered by technology that delivers speed, scalability and decision-making support for automotive lenders. It supports the fiscal year 2020, LPP generated, on average, approximately $1,155full transaction lifecycle, including credit application, underwriting, real-time insurance approval, settlement, servicing, invoicing of insurance premiums and fees and advance data analytics of automotive lender’s portfolio under the program. Through electronic system integration, our software technology connects us to all parties in revenue perour ecosystem.

A key element of our product is the unique database that drives risk decisioning using data accumulated over the last 20 years. At origination when a loan inclusiveis insured, all attributes of the program fee, administrative feetransaction are stored in our database. Through the claims management process, we ultimately get loan life performance data on each insured loan. Having granular origination and profit share.performance data allows our data scientists and actuaries to constantly evolve and refine risk models, based on actual experience and third-party information sources.

Our business model is a Business to Business to Consumer (“B2B2C”) model. Our customers for its LPP are automotive lenders, who rely on Open Lending to help them make more loans, by assessingserve millions of borrowers, who in turn are the riskcustomers of the loan. Open Lending’s customers also rely on Open Lending to assist in insuring against the default of these loans by helping pair these customers with highly-rated insurance companies that mitigate the added risk associated with lending to near-prime and non-prime borrowers. Theautomotive lenders. LPP enables lenders to expand their lending guidelines to offer loans to borrowers with lower credit scores, potentially leading to higher loan advance rates and increased loan volumes. LPP is designed to provide a seamless, real-time experience for automotive lenders that is intuitive and easy to use. LPP integrates directly with lenders’ existing loan origination systems (“LOS”), while also allowing the dealers and automotive lenders to electronically receive all-inclusive loan rates in real-time with no manual intervention.real-time.

Open Lending’s business model is a B2B2C model. Open Lending’s customers are automotive lenders, who serve millions of borrowers, whoWe have one-way exclusivity agreements in turn are the customers of the automotive lenders. Open Lending gets access to loan application information from the automotive lenders. Open Lending supports loans originated through a number of channels, including direct loans where the customer interfaces directly with the lender, indirect loans through networks of auto dealers who work with Open Lending’s automotive lenders, and in targeted refinance programs implemented by Open Lending’s automotive lenders.

The insurance carriers contract with Open Lending’s indirectour wholly-owned subsidiary, Insurance Administrative Services LLC (“IAS”), to perform claims administration and in turn pay Open Lendingus administrative fees representing a portion of the insurance premiums paid by the automotive lenders. As Open Lending’s subsidiary, IAS provides continuity of customer service and allows for a seamless experience between LPP and the automotive lenders. Open Lending has one-way exclusivity agreements

LPP is powered by its proprietary technology that delivers speed, scalability and decision-making support forprogram fees vary as a percentage of the automotive lenders. It supports the full transaction lifecycle, including credit application, underwriting, real-time insurance approval, settlement, servicing, invoicing of insurance premiums and fees, and advance data analytics of automotive lender’s portfolio under the program. Through data derived at loan origination and the data collected by IAS, Open Lending has loan life performance data on eachamount, averaging approximately $440 per loan in its portfolio insured to date.

We believe the issuance of credit default insurance in connection with loans closed through the LPP. The AmTrust Agreement currently terminates on December 31, 2023, and thereafter automatically renews for two-year terms unless either party provides the other with written notice of termination at least 180 days prior to expiration. The AmTrust Agreement contains a non-competition provision in favor of Lenders Protection.

opportunity from an annual $250.0 billion underlying near-prime and non-prime auto loan market in the U.S. Open Lending isWe are currently engaged with less than 1%2% of this market. Open Lending presents a compelling value proposition to the national network of OEM Captives, credit unions, banks and other automotive lenders by expanding the range of credit scores and loan-to-values where lenders can safely and profitably lend. Through the use of LPP, Open Lending believes it allows automotive lenders to increase application flow from near-prime and non-prime borrowers and help them broaden credit appetite with limited incremental risk. The insurance protection against default of these loans increases the ability for the automotive lenders to enter into these lending transactions with minimal additional risk. Additionally, Open Lending has solidified its channel partner relationships with fintech online lending partners, who source auto loan applications off the internet and offer refinance opportunities to near-prime and non-prime borrowers who have been mispriced by sub-prime auto lenders. Presently, Open Lending also has relationships with two OEM Captives, as described below.

Open Lending hasWe have built a robust ecosystem of automotive lenders insurers and borrowers.dealers, insurance carriers and sales lead partners that meet the needs of our near prime and non-prime borrower market. LPP enables automotive lenders directly and borrowers indirectly to benefit from enhanced access to each other and to Open Lending’sthrough our technology, resulting in increased loan generation and access to the automotive market for a larger population.

We partner with three insurance carriers to provide auto loan default insurance policies for LPP automotive lenders can serve more borrowers and meet a broader range of their financing needs.certified loans. Our carrier partners are required to maintain not less than “A-” Financial Strength Rating by A.M. Best insurance rating company.

Competition for Open Lending occurs at two levels: (1)We experience competition to sign and maintain automotive lenders;lenders and (2) competition to fundfacilitate funding of near-prime and non-prime auto loans.

We compete with LOS provide forproviders that perform custom underwriting rules and loan underwriting, whileas well as third-party lending-as-a-service companies that provide turn-key LOS. Most automotive lenders have some minority portion of their auto loan portfolios in near-prime and non-prime loans, however, these near-prime and non-prime loans are generally at lower loan advance rates, shorter loan terms, limited to newer model years of vehicles and lower mileage maximums. A very limited number of national banks and sub-prime lenders underwrite and originate near-prime and non-prime loans with the characteristics of the LPP portfolio.LOS systems.

Open Lending operatesWe operate in a heavily regulated industry that is highly focused on consumer protection. Statutes, regulations and practices that have been in place for many years may be changed, and new laws have been, and may continue to be, introduced to address real and perceived problems in the financial services industry in general and automotive lending in particular. These laws and how they are interpreted continue to evolve.

Open Lending’sOur business requires compliance with several regulatory regimes, including some applicable to consumer lending. In particular, the laws which Open Lendingwe may be subject to directly or indirectly include:

We are subject to state insurance, insurance brokering, insurance agency regulations, third-party administration company statutes and similar statutes.

The number and complexity of these laws, and vagaries in their interpretations, present compliance and litigation risks from inadvertent error and omissions which Open Lendingwe may not be able to eliminate from itsour operation or activities. The laws, regulations and rules described above are subject to legislative, administrative and judicial interpretation, and some of these laws and regulations have been infrequently interpreted or only recently enacted. Infrequent interpretations of these laws and regulations or an insignificant number of interpretations of recently-enacted laws and regulations can result in ambiguity with respect to permitted conduct under these laws and regulations. Any ambiguity under the laws and regulations to which Open Lending iswe are subject may lead to regulatory investigations or enforcement actions and private causes of action, such as class-action lawsuits, with respect to Open Lending’sour compliance with applicable laws and regulations.

Our website address is www.openlending.com. Our annual report on Form 10-K,Annual Report, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through the investor relations page of our website free of charge as soon as reasonably

A description of the material and other risks and uncertainties associated with our business and industry is set forth below. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, on Form 10-K, including our audited consolidated financial statements and notes thereto and the “Management’s discussionDiscussion and analysisAnalysis of financial conditionFinancial Condition and resultsResults of operations”Operations” section of this Annual Report on Form 10-K before deciding whether to purchase shares of our common stock. If any of the following risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, perhaps

significantly. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operation.

A substantial majority of Open Lending’s total revenue is generated from the transaction fees that it receives from its automotive lenders and the profit share that it receives from its insurance company partners in connection with loans made by automotive lenders to the owners or purchasers of used and new automobiles (the “Consumers”) using the LPP. Approximately 5% of the average loan balance on each loan originated is collected by Open Lending as revenue in transaction fees, profit-sharing with insurance companies and administrative fees for claims administration services provided to the insurance companies. If automotive lenders cease to use LPP to make loans, Open Lendingwe will fail to generate future revenues. To attract and retain automotive lenders, Open Lending marketswe market LPP to automotive lenders on the basis of a number of factors, including loan analytics, risk-based pricing, risk modeling and automated decision-technology, as well as integration, customer service, brand and reputation. Automotive lenders are able to leverage the geographic diversity of the loans they can originate through LPP with the simplicity of Open Lending’sour five-second, all-inclusive loan offer generation. Automotive lenders, however, have alternative sources for internal loan generation, and they could elect to originate loans through those alternatives rather than through LPP. There is significant competition for

existing automotive lenders. If Open Lending failswe fail to retain any automotive lenders, and doesdo not enroll new automotive lenders of similar size and profitability, it will have a material adverse effect on Open Lending’sour business and future growth. There has been some turnover in automotive lenders, as well as varying activation rates and volatility in usage of the Open Lendingour platform by automotive lenders, and this may continue or even increase in the future. Agreements with automotive lenders are cancellable on thirty days’ notice and do not require any minimum monthly level of application submissions. If a significant number of existing automotive lenders were to use other competing platforms, thereby reducing their use of LPP, it would have a material adverse effect on Open Lending’sour business and results of operations.

Open Lending’sOur top ten automotive lenders (including certain groups of affiliated automotive lenders) accounted for 30%a significant percentage of the total program fee revenue over the past three years. Open Lending expectsin 2021. We expect to have significant concentration in Open Lending’sour largest automotive lender relationships for the foreseeable future. In the event that one or more of Open Lending’sour significant automotive lenders, or groups of automotive lenders terminate their relationships with Open Lending,us, the number of loans originated through LPP would decline, which would materially and adversely affect Open Lending’sour business and, in turn, Open Lending’sour revenue.

Open Lending’sOur success depends on the active and effective adoption of the LPP by automotive lenders in originating loans to near-prime and non-prime borrowers. Open Lending reliesWe rely on automotive lenders to utilize LPP within their loan origination

Open Lending reliesWe rely on AmTrust and CNAthree insurance carriers to insure the loans generated by the automotive lenders using LPP. Open Lending hasWe have entered into separate producer and claims service agreements with each of these carriers. The producer and claims service agreements with boththese insurance carriers generally contain customary termination provisions that allow them to terminate the agreement upon written notice after the occurrence of certain events including, among other things, breach of the producer agreement; changes in regulatory requirements making the agreement unenforceable; or for convenience. If eitherone or more of these insurance carriers were to terminate their agreements with Open Lendingus and Open Lending iswe are unable to replace the commitments of the terminating insurance carriers, it would have a material adverse effect on Open Lending’sour business, operations and financial condition.

The COVID-19 pandemic has continued to spread, and the related adverse public health developments, including orders to shelter-in-place, travel restrictions, and mandated business closures, have adversely affected workforces, organizations, customers, economies and financial markets globally. In light of the uncertain and rapidly evolving situationuncertainty relating to the spread of COVID-19 pandemic and its variants, we have taken precautionary measures, including imposing travel restrictions for ouroffering many employees mandating a global work from home policy, and shifting customer events to virtual-only experiences.option. Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance become available, precautionary measures that have been adopted could negatively affect our customer success efforts, customer retention, sales and marketing efforts, delay and lengthen our sales cycles, affect our revenue growth rate, or create operational or other challenges, any of which could harm our business and results of operations.

Additionally, the impact of the COVID-19 pandemic has caused and is likely to continue to cause substantial changes in consumer behavior and has caused restrictions on business and individual activities, which have led to and are likely to continue to lead to reduced economic activity. Extraordinary actions taken by international, federal, state, and local public health and governmental authorities in response to contain and combat the outbreak and spread of COVID-19 pandemic in regions throughout the world, including travel bans, quarantines, “stay-at-home” orders, and similar mandates for many individuals and businesses to substantially restrict daily activities could continue to have an adverse effect on Open Lending’sour financial condition and results of operations.

Moreover, as a result of the restrictions described above and consumers’ reaction to the COVID-19 pandemic, in general, showroom traffic at car dealers has dropped significantly and many dealers have temporarily ceased operations, thereby reducing the demand for Open Lending’sour products and leading dealers to purchase fewer vehicles. InTo the event there are extended closures of businesses, furloughs or the suspension of employees from businesses or otherextent that COVID-19 related developments that reduce the earnings of workers, these developmentssuch reduction in earnings may negatively impact the ability of consumers to pay their automotive loans, which may lead to higher loan defaults and increased losses for Open Lending’sour insurance company partners. Increased losses would result in lower profit share earnings on Open Lending’sour existing insured loan portfolio.

The extent and duration of the economic slowdown attributable toimpact of the COVID-19 pandemic on the global economy remains uncertain at this time. AAny continued significant economic slowdownimpact could have a substantial adverse effect on our financial condition, liquidity, and results of operations. If these conditions persist for an extended term, ita prolonged period, they could have a material adverse effect on Open Lending’sour future revenue and net income.

Open Lending’sOur revenue growth has caused significant demands on its operational,operations, marketing, compliance and accounting infrastructure, and has resulted in increased expenses, which Open Lending expectswe expect to continue as it grows.we grow. In addition, Open

As a result of Open Lending’sour growth, we face significant challenges in:

Open LendingWe may not be able to manage expanding operations effectively, and any failure to do so could adversely affect the ability to generate revenue and control expenses.

Reputational risk, or the risk toof negative publicity or to public opinion, is inherent to Open Lending’sour business. Recently, consumer financial services companies have experienced increased reputational harm as consumers and regulators take issue with certain of their practices and judgments, including, for example, fair lending, credit reporting accuracy, lending to members of the military, state licensing (for lenders, servicers and money transmitters) and debt collection. Given that Open Lending’sour primary clients are automotive lenders in the customer financial services space, any reputational risk associated with our clients is in turn attributable to Open Lending.us. Maintaining a positive reputation is critical to Open Lending’sour ability to attract and retain existing and new automotive lenders, insurance

carriers, investors and employees. Negative public opinion can arise from many sources, including actual or alleged misconduct, errors or improper business practices by employees, automotive lenders, insurance carriers, automobile dealers, outsourced service providers or other counterparties; litigation or regulatory actions; failure by Open Lending,us, automotive lenders, or automobile dealers to meet minimum standards of service and quality; inadequate protection of consumer information; failure of automotive lenders to adhere to the terms of their LPP agreements or other contractual arrangements or standards; failure of insurance carriers and Open Lending’sour subsidiary, Insurance Administrative Services LLC,IAS, to satisfactorily administer claims; compliance failures; and media coverage, whether accurate or not. Negative public opinion can diminish the value of the Open Lendingour brand and adversely affect Open Lending’sour ability to attract and retain automotive lenders and insurance carriers as a result of which Open Lending’s results ofour operations may be materially harmed and itwe could be exposed to litigation and regulatory action.

Through the use of LPP, Open Lending gatherswe gather and storesstore personally identifiable information on Consumersconsumers such as social security numbers, names and addresses. A cybersecurity breach where this information wasis stolen or made public would result in negative publicity and additional costs to mitigate the damage to customers. While Open Lending haswe have taken reasonable steps to protect such data, techniques used to gain unauthorized access to data and systems, disable or degrade service, or sabotage systems, are constantly evolving, and Open Lendingwe may be unable to anticipate such techniques or implement adequate preventative measures to avoid unauthorized access or other adverse impacts to such data or Open Lendingour systems.

The fixed interest rates charged on the loans that automotive lenders originate are calculated based upon market benchmarks at the time of origination. IncreasesMarket benchmarks typically rise when the U.S. Federal Reserve raises the federal funds rate, and the U.S. Federal Reserve is widely expected to raise the federal funds rate in 2022 to combat inflation. Any such increases in the market benchmark would result in increases in the interest rates on new loans. Increased interest rates may adversely impact the spending levels of Consumersconsumers and their ability and willingness to borrow money. Higher interest rates often lead to higher rates charged to the Consumer,consumer, which could negatively impact the ability of automotive lenders to generate volume and in turn, Open Lending’sour ability to generate revenues on loans originated using the LPP. Higher interest rates may also increase the payment obligations of Consumers,consumers, which may reduce the ability of Consumersconsumers to remain current on their obligations to automotive lenders and, therefore, lead to increased delinquencies, defaults, Consumerconsumer bankruptcies and charge-offs, and decreasing recoveries, all of which could have an adverse effect on Open Lending’sour business.

Open Lending operatesWe operate in a rapidly changing and competitive industry, and Open Lending’sour projections will be subject to the risks and assumptions made by management with respect to itsour industry. Operating results are difficult to forecast because they generally depend on a number of factors, including the competition Open Lending faces, itswe face, our ability to attract and retain automotive lenders, the active and effective adoption of the LPP by automotive lenders in originating loans to near-prime and non-prime borrowers, Open Lending’sour profit share assumptions and general industry trends. Additionally, as described herein, Open Lending’sour revenue is impacted, to a significant extent, by the general economy and the financial performance of automotive lenders. Open Lending’sOur business may be affected by reductions in consumer spending from time to time as a result of a number of factors which may be difficult to predict. This may result in decreased revenue levels, and Open Lendingwe may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income. This inability could cause Open Lending’sour operating results in a given quarter to be higher or lower than expected. If

actual results differ from Open Lending’sour estimates, analysts may negatively react and our stock price could be materially and adversely impacted.

Open Lending hasWe have significant vendors that, among other things, provide Open Lendingus with financial, technology, insurance and other services to support itsour loan protection services, including access to credit reports and information. Under various legal theories and contractual requirements, companies may be held responsible for the actions of their subcontractors. Accordingly, Open Lendingwe could be adversely impacted to the extent that Open Lending’sour vendors fail to comply with the legal requirements applicable to the particular products or services being offered.

In some cases, third-party vendors, including resellers and aggregators, are the sole source, or one of a limited number of sources, of the services they provide to Open Lending.us. Certain of Open Lending’sour vendor agreements are terminable on little or no notice, and if current vendors were to stop providing services to Open Lendingus on acceptable terms, Open Lendingwe may be

Open Lending’sOur business is subject to increased risks of litigation and regulatory actions as a result of a number of factors and from various sources, including as a result of the highly regulated nature of the financial services industry, insurance carriers and the focus of state and federal enforcement agencies on the financial services industry and insurance carriers.

From time to time, Open Lending iswe are also involved in, or the subject of, reviews, requests for information, investigations and proceedings (both formal and informal) by state and federal governmental agencies, including insurance regulators and the Department of Insurance of many states, regarding Open Lending’sour business activities and Open Lending’sour qualifications to conduct its business in certain jurisdictions, which could subject Open Lendingus to significant fines, penalties, obligations to change its business practices and other requirements resulting in increased expenses and diminished earnings. Open Lending’sOur involvement in any such matter could also cause significant harm to itsour reputation and divert management attention from the operation of its business operations, even if the matters are ultimately determined in Open Lending’sour favor. Moreover, any settlement, or any consent order or adverse judgment in connection with any formal or informal proceeding or investigation by a government agency, may prompt litigation or additional investigations or proceedings as other litigants or other government agencies begin independent reviews of the same activities.

In addition, a number of participants in the consumer finance industry have been the subject of putativepunitive class action lawsuits; state attorney general actions and other state regulatory actions; federal regulatory enforcement actions, including actions relating to alleged unfair, deceptive or abusive acts or practices; violations of state licensing and lending laws, including state usury laws; actions alleging discrimination on the basis of race, ethnicity, gender or other prohibited bases; and allegations of noncompliance with various state and federal laws and regulations relating to originating and servicing consumer finance loans. The current regulatory environment, increased regulatory compliance efforts and enhanced regulatory enforcement have resulted in significant operational and compliance costs and may prevent Open Lendingus from providing certain products and services. There is no assurance that these regulatory matters or other factors will not, in the future, affect how Open Lending conducts itswe conduct business and, in turn, have a material adverse effect on itsour business. In particular, legal proceedings brought under state consumer protection statutes or under several of the various federal consumer financial services statutes may result in a separate fine for each violation of the statute, which, particularly in the case of class action lawsuits, could result in damages substantially in excess of the amounts Open Lendingwe earned from the underlying activities. Similar risks exist for insurance producing and claims administration services, which are highly regulated.

In addition, from time to time, through Open Lending’sour operational and compliance controls, Open Lending identifieswe identify compliance issues that require itus to make operational changes and, depending on the nature of the issue, result in financial remediation to impacted customers. These self-identified issues and voluntary remediation payments could be significant, depending on the issue and the number of customers impacted, and also could generate litigation or regulatory investigations that subject Open Lendingus to additional risk.

Fraud is prevalent in the financial services industry and is likely to increase as perpetrators become more sophisticated. Open Lending isWe are subject to the risk of fraudulent activity with respect to the underwriting policies of insurance carriers, automotive lenders, their customers and third parties handling customer information. Open Lending’sOur resources, technologies and fraud prevention tools may be insufficient to accurately detect and prevent fraud. The level of Open Lending’sour fraud charge-offs could increase and results of operations could be materially and adversely affected if fraudulent activity were to significantly increase. High profile fraudulent activity could also could negatively impact the Open Lendingour brand and reputation, which could negatively impact the use of Open Lending’sour services and products. In addition, significant increases in fraudulent activity could also lead to regulatory intervention, which could increase Open Lending’sour costs and also negatively impact itsour business.

In the normal course of Open Lending’sour business, Open Lending collects, processeswe collect, process and retainsretain sensitive and confidential information regarding automotive lenders, insurance carriers and Consumers. Open Lendingconsumers. We also hashave arrangements in place with certain third-party service providers that require Open Lendingus to share Consumerconsumer information. Although Open Lending devoteswe devote significant resources and management focus to ensuring the integrity of itsour systems through information security and business continuity programs, the Open Lendingour facilities and systems, and those of automotive lenders, insurance carriers and third-party service providers, are vulnerable to external or internal security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, and other similar events. Open Lending,We, automotive lenders, insurance carriers and third-party service providers have experienced all of these events in the past and expect to continue to experience them in the future. Open LendingWe also facesface security threats from malicious third parties that could obtain unauthorized access to Open Lendingour systems and networks, whichand we anticipate these threats it anticipates will continue to grow in scope and complexity over time. These events could interrupt the Open Lendingour business or operations, result in significant legal and financial exposure, supervisory liability, damage to itsour reputation and a loss of confidence in the security of Open Lending’sour systems, products and services. Although the impact to date from these events has not had a material adverse effect on Open Lending,us, no assurance is given that this will be the case in the future.

Information security risks in the financial services industry have increased recently, in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks and other security breaches involving the theft of sensitive and confidential information, hackers recently have engaged in attacks that are designed to disrupt key business services, such as consumer-facing websites. Open LendingWe and automotive lenders may not be able to anticipate or implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently and because attacks can originate from a wide variety of sources. Open Lending employsWe employ detection and response mechanisms designed to contain and mitigate security incidents. Nonetheless, early detection efforts may be thwarted by sophisticated attacks and malware designed to avoid detection. Open LendingWe also may fail to detect the existence of a security breach related to the information of automotive lenders, insurance carriers and Consumersconsumers that Open Lending retainswe retain as part of itsour business and may be unable to prevent unauthorized access to that information.

Open LendingWe also facesface risks related to cyber-attacks and other security breaches that typically involve the transmission of sensitive information regarding borrowers through various third parties, including automotive lenders, insurance carriers and data processors. Some of these parties have in the past been the target of security breaches and cyber-attacks. Because Open Lending doeswe do not control these third parties or oversee the security of their systems, future security breaches or cyber-attacks affecting any of these third parties could impact Open Lendingus through no fault of itsour own, and in some cases Open Lendingwe may have exposure and suffer losses for breaches or attacks relating to them. While Open Lendingwe regularly conductsconduct security assessments of significant third-party service providers, no assurance is given that Open Lending’sour third-party information security protocols are sufficient to withstand a cyber-attack or other security breach.

The access by unauthorized persons to, or the improper disclosure by Open Lendingus of, confidential information regarding consumers, LPP customers or Open Lending’sour proprietary information, software, methodologies and business secrets could interrupt the Open Lendingour business or operations, result in significant legal and financial exposure, supervisory liability, damage to itsour reputation or a loss of confidence in the security of Open Lending’sour systems, products and services, all of which could have a material adverse impact on Open Lending’sour business. In addition, there recently have been a number of well-publicized attacks or breaches affecting companies in the financial services industry that have heightened concern by consumers, which could also intensify regulatory focus, cause users to lose trust in the security of the industry in general and result in reduced use of Open Lendingour services and increased costs, all of which could also have a material adverse effect on the Open Lendingour business.

Open Lending’sOur ability to deliver products and services to automotive lenders, service loans made by automotive lenders and otherwise operate Open Lending’sour business and comply with applicable laws depends on the efficient and uninterrupted operation of the Open Lendingour computer systems and third-party data centers, as well as those of automotive lenders and third-party service providers.

These computer systems and third-party data centers may encounter service interruptions at any time due to system or software failure, natural disasters, severe weather conditions, health pandemics, terrorist attacks, cyber-attacks or other events. Any such catastrophes could have a negative effect on the Open Lendingour business and technology infrastructure (including itsour computer network systems), on automotive lenders and insurance carriers and on Consumers.consumers. Catastrophic events could also could prevent or make it more difficult for Consumersconsumers to travel to automobile dealers’ locations to shop, thereby negatively impacting Consumer

In addition, the implementation of technology changes and upgrades to maintain current and integrate new systems may cause service interruptions, transaction processing errors or system conversion delays and may cause Open Lendingus to fail to comply with applicable laws, all of which could have a material adverse effect on the Open Lendingour business. Open Lending expectsWe expect that new technologies and business processes applicable to the consumer financial services industry will continue to emerge and that these new technologies and business processes may be better than those Open Lendingwe currently uses.use. There is no assurance that Open Lendingwe will be able to successfully adopt new technology as critical systems and applications become obsolete and better ones become available. A failure to maintain and/or improve current technology and business processes could cause disruptions in Open Lending’sour operations or cause itsour solution to be less competitive, all of which could have a material adverse effect on itsour business.

Open Lending’sOur ability to attract automotive lenders to LPP is significantly dependent on Open Lending’sour ability to effectively evaluate a Consumer’sconsumer’s credit profile and likelihood of default and potential loss in accordance with automotive lenders’ and insurance carriers’ underwriting policies. Open Lending’sOur business depends significantly on the accuracy and success of itsour underwriting model. To conduct this evaluation, Open Lending useswe use proprietary credit decisioning and scoring models. If any of the credit decisioning and scoring models Open Lending uses containswe use contain programming or other errors, is ineffective or the data provided by Consumersconsumers or third parties is incorrect or stale, or if Open Lending iswe are unable to obtain accurate data from Consumersconsumers or third parties (such as credit reporting agencies), the Open Lendingour loan pricing and approval process could be negatively affected, resulting in mispriced or misclassified loans, or incorrect approvals or denials of loans. This could damage Open Lending’sour reputation and relationships with automotive lenders and insurance carriers, which could have a material adverse effect on the Open Lendingour business.

In evaluating loan applicants, Open Lending relieswe rely on information furnished to Open Lendingus by or on behalf of Consumers,consumers, including credit, identification, employment and other relevant information. Some of the information regarding Consumersconsumers provided to Open Lendingus is used in itsour proprietary credit decisioning and scoring models, which Open Lending useswe use to determine whether an application meets the applicable underwriting criteria. Open Lending reliesWe rely on the accuracy and completeness of that information.

Not all Consumerconsumer information is independently verified. As a result, Open Lending relieswe rely on the accuracy and completeness of the information provided by Consumersconsumers or indirectly by automotive lenders. If any of the information that is considered in the loan review process is inaccurate, whether intentional or not, and such inaccuracy is not detected prior to loan funding, the loan may have a greater risk of default than expected. Additionally, there is a risk that, following the date of the credit report that Open Lending obtainswe obtain and reviews,review, a Consumerconsumer may have defaulted on, or become delinquent in the payment of, a pre-existing debt obligation, taken on additional debt, lost his or her job or other sources of income, or experienced other adverse financial events. Any significant increase in inaccuracies or resulting increases in losses wouldcould adversely affect Open Lending’sour business.

In assisting automotive lenders with the design of the products that are offered on LPP, Open Lending makeswe make assumptions about various matters, including repayment timing and default rates, and then utilizesutilize proprietary underwriting modeling to analyze and forecast the performance and profitability of the loans. Open Lending’sOur assumptions may be inaccurate and models may not be as predictive as expected for many reasons, including that they often involve matters that are inherently difficult to predict and beyond Open Lending’sour control (e.g., macroeconomic conditions) and that they often involve complex interactions between a number of dependent and independent variables and factors. Any significant inaccuracies or errors in assumptions could impact the profitability of the products to automotive lenders, as well as the profitability of Open Lending’sour business, and could result in Open Lending’sour underestimating potential losses and overstating potential automotive lender returns.

Open Lending’sOur success depends on Open Lending’sour ability to generate usage of LPP. The consumer lending industry is highly competitive and increasingly dynamic as emerging technologies continue to enter the marketplace. Technological advances and heightened e-commerce activities have increased consumers’ accessibility to products and services, which has intensified the desirability of offering loans to consumers through digital-based solutions. Open Lending facesWe face competition in areas such as compliance capabilities, financing terms, promotional offerings, fees, approval rates, speed and simplicity of loan origination, ease-of-use, marketing expertise, service levels, products and services, technological capabilities and integration, customer service, brand and reputation. Open Lending’sOur existing and potential competitors may decide to modify their pricing and business models to compete more directly with Open Lending’sour model. Any reduction in usage of LPP, or a reduction in the lifetime profitability of loans under LPP in an effort to attract or retain business, could reduce Open Lending’sour revenues and earnings. If Open Lending iswe are unable to compete effectively for customer usage, itsour business could be materially and adversely affected.

Open Lending’sOur business, the consumer financial services industry and automotive lenders’ businesses, are sensitive to macroeconomic conditions. Economic factors such as interest rates, changes in monetary and related policies, market volatility, consumer confidence and unemployment rates are among the most significant factors that impact consumer spending behavior. Weak economic conditions or a significant deterioration in economic conditions reduce the amount of disposable income consumers have, which in turn reduces consumer spending and the willingness of qualified borrowers to take out loans. Such conditions are also likely to affect the ability and willingness of borrowers to pay amounts owed to automotive lenders, each of which would have a material adverse effect on itsour business.

General economic conditions and the willingness of lenders to deploy capital impacts Open Lending’sour performance. The generation of new loans through LPP, as well as the transaction fees and other fee income to Open Lending associated with such loans, is dependent upon sales of automobiles by dealers. Dealers’ sales may decrease or fail to increase as a result of factors outside of their control, such as the macroeconomic conditions referenced above, or business conditions affecting a particular automobile dealer, industry vertical or region. Weak economic conditions also could extend the length of dealers’ sales cycle and cause customers to delay making (or not make) purchases of automobiles. The decline of sales by dealers for any reason will generally result in lower credit sales and, therefore, lower loan volume and associated fee income for automotive lenders, and therefore, for us. This risk is particularly acute with respect to the largest automobile dealers associated with automotive lenders that account for a significant amount of Open Lendingour platform revenue.

In addition, if an automobile dealer or automotive lender closes some or all of its locations or becomes subject to a voluntary or involuntary bankruptcy proceeding (or if there is a perception that it may become subject to a bankruptcy proceeding), LPP borrowers may have less incentive to pay their outstanding balances to automotive lenders, which could result in higher charge-off rates than anticipated.

Weakening economic conditions, in particular increases in unemployment, will lead to increased defaults and insurance claim payments, resulting in higher losses for insurance carriers. Increased claim payments may affect the willingness of insurance carriers to provide default insurance. In the event insurer losses cause one of our insurance carriers to cease providing insurance, it would have a material adverse effect on Open Lendingour operations and financial results.

Open Lending’sOur business currently is concentrated on supporting consumer lending in the U.S. automobile industry. As a result, Open Lending iswe are more susceptible to fluctuations and risks particular to U.S. consumer credit than a more diversified company

Open Lending recently expanded into and is penetrating the OEM Captive space. Open Lending believesWe believe that all automobile manufacturers have an OEM Captive or related party finance company relationship.relationship, and we are attempting to further penetrate the OEM Captive space. One of the primary goals of an OEM Captive is to support automobile sales of the dealers, particularly with respect to new vehicle sales. Open Lending believes that the OEM Captive is generally the preferred lender of the OEM dealer network. Relative to traditional credit union and bank automotive lenders, OEM Captives represent a larger loan volume and therefore, larger revenue opportunity for Open Lending. Open Lending makesWe make no assurance that itwe will achieve similar levels of success, if any, with OEM Captives as with other credit unions and regional automotive lenders, and may face unanticipated challenges in itsour ability to offer LPP to OEM Captives. In addition, the OEM Captive space is highly regulated and Open Lending,we, OEM Captives and other automotive lenders, as applicable, are subject to substantial regulatory requirements, including privacy laws. Open Lending has limited experience in managing these risks and the compliance requirements attendant to such regulatory requirements. The costs of compliance and any failure by Open Lending,us, OEM Captives or other automotive lenders, as applicable, to comply with such regulatory requirements could have a material adverse effect on Open Lending’sour business. Any failure by Open Lendingus to grow itsour relationships with these new lending partners could have a materially adverse impact on itsour business.

Open LendingWe may in the future further expand into other industry verticals. There is no assurance that Open Lendingwe will be able to successfully develop consumer financing products and services for these new industries. Open Lending’sOur investment of resources to develop consumer financing products and services for the new industries it enterswe enter may either be insufficient or result in expenses that are excessive in light of loans actually originated by lenders in those industries. Additionally, Open Lending’s nearlyour over 20 years of experience is in the automotive lending industry and therefore, industry participants in new industry verticals may not be receptive to itsour financing solutions and Open Lendingwe may face competitors with more experience and resources. The borrower profile of Consumersconsumers in new verticals may not be as attractive, in terms of average FICO scores or other attributes, as in current verticals, which may lead to higher levels of delinquencies or defaults than Open Lending haswe have historically experienced. Industries change rapidly, and Open Lending makeswe make no assurance that itwe will be able to accurately forecast demand (or the lack thereof) for a solution or that those industries will be receptive to Open Lending’sour product offerings. Failure to predict demand or growth accurately in new industries could have a materially adverse impact on Open Lending’sour business.

Open Lending’sOur future success will depend on itsour ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of itsour organization, particularly information technology and sales. Trained and experienced personnel are in high demand and may beare in short supply. Many of the companies with which Open Lending competeswe compete for experienced employees have greater resources than Open Lendingus and may be able to offer more attractive terms of employment. In addition, Open Lending investswe invest significant time and expense in training employees, which increases their value to competitors that may seek to recruit them. Open LendingWe may not be able to attract, develop and maintain the skilled workforce necessary to operate itsour business, and labor expenses may increase as a result of a shortage in the supply of qualified personnel, which will negatively impact Open Lending’sour business.

Open Lending hasOur New Credit Agreement (as defined hereinafter) provides for credit facilities (“Credit Facilities”) consisting of a senior secured term loan outstanding infacility of up to $125.0 million along with a senior secured revolving loan facility of up to $50.0 million at any time outstanding. Borrowings under the original principal amount of $170,000,000 (the “Term Loan”) that was incurred under that certainNew Credit Agreement dated as of March 11, 2020, among Open Lending, 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”). A portion of the proceeds of the Term Loan were used to, among other things, finance a distribution to its equity investors prior to the consummation of the Business Combination. The Term Loan bearsbear interest at a variable rate of LIBOR plus 6.50% (subject to a LIBOR floor of 1%) orbased on the base rate plus 5.50%. Thenet secured leverage ratio. Our obligations of Open Lending under the New Credit Agreement are guaranteed by all of itsour subsidiaries and secured by

substantially all of theour assets and substantially all of Open Lending and its subsidiaries,our subsidiaries’ assets, in each case, subject to certain customary exceptions. The Term Loan has a maturity date ofCredit Facilities mature on March 11, 2027.

The New Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, customary limitations onwill limit or restrict the incurrenceability of the loan parties, subject to negotiated exceptions, to incur additional indebtedness and liens; certain intercompany transactions; and other investments, dispositionsadditional liens on their assets, engage in mergers or acquisitions or dispose of assets, issuances and redemptions of certain units, repayment ofpay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and paymentchange the nature of dividends. their businesses.

The Credit Agreement also contains a maximum total net leverage ratio financial covenant that is tested quarterly and calculated based on the ratio of Open Lending’s adjusted EBITDA to funded indebtedness. The maximum total net leverage ratio begins at 4.75 to 1 and then gradually decreases from year-to-year down to 2.5 to 1.0 on or after June 30, 2026. TheNew Credit Agreement also contains customary events of default (subject to thresholds and grace periods), including payment default, covenant default, cross default to other material indebtedness, and judgment defaults.

Open Lending’sOur ability to comply with these covenants may be affected by events beyond itsour control, such as market fluctuations impacting net income. Breaches of these covenants will result in a default under the New Credit Agreement, subject to any applicable cure rights, in which case the administrative agent may accelerate the outstanding Term Loan.term loan.

If such acceleration under the New Credit Agreement occurs, Open Lending’sour ability to fund its operations could be seriously harmed.

Open Lending reliesWe rely on a combination of trademarks, service marks, copyrights, trade secrets, domain names and agreements with employees and third parties to protect itsour proprietary rights. Open Lending hasWe have service mark registrations in the United States. Open LendingWe also ownsown the domain name rights for Openlending.com, Openlending.net, Openlending.us, Dev-openlending.com, Lendersprotection.org, Lendersprotection.us, Len-pro.org,Lend-pro.org, Lend-pro.us, Lend-pro.net, Lendpro.net, Lendpro.org, Lendpro.us, Lend-pro.com, Lendersprotection.com, Sayyestomoreloans.com, Sayyestomoreloans.net, as well as other words and phrases important to the Open Lendingour business. Nonetheless, third parties may challenge, invalidate or circumvent Open Lending’sour intellectual property, and Open Lending’sour intellectual property may not be sufficient to provide itus with a competitive advantage.

Despite Open Lending’sour efforts to protect these rights, unauthorized third parties may attempt to duplicate or copy the proprietary aspects of itsour technology and processes. Open Lending’sOur competitors and other third parties independently may design around or develop similar technology or otherwise duplicate Open Lending’sour services or products such that Open Lendingwe could not assert itsour intellectual property rights against them. In addition, Open Lending’sour contractual arrangements may not effectively prevent disclosure of itsour intellectual property and confidential and proprietary information or provide an adequate remedy in the event of an unauthorized disclosure. Measures in place may not prevent misappropriation or infringement of Open Lending’sour intellectual property or proprietary information and the resulting loss of competitive advantage, and Open Lendingwe may be required to litigate to protect itsour intellectual property and proprietary information from misappropriation or infringement by others, which is expensive and could cause a diversion of resources and may not be successful.

Open LendingWe also may encounter disputes from time to time concerning intellectual property rights of others, and itwe may not prevail in these disputes. Third parties may raise claims against Open Lendingus alleging that Open Lending, orwe, our consultants or other third parties retained or indemnified by Open Lending, infringeus, infringed on their intellectual property rights. Some third-party intellectual property rights may be extremely broad, and it may not be possible for Open Lendingus to conduct its operations in such a way as to avoid all alleged violations of such intellectual property rights. Given the complex, rapidly changing and competitive technological and business environment in which Open Lending operates,we operate, and the potential risks and uncertainties of intellectual property-related litigation, an assertion of an infringement claim against Open Lendingus may cause Open Lendingus to spend significant amounts to defend the claim (even if Open Lendingwe ultimately prevails)prevail), pay significant monetary damages, lose significant revenues, be prohibited from using the relevant systems, processes, technologies or other intellectual property (temporarily or permanently), cease offering certain products or services, or incur significant license, royalty or technology development expenses.

Moreover, it has become common in recent years for individuals and groups to purchase intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies such as Open Lending’s.ours. Even in instances where Open Lending believeswe believe that claims and allegations of intellectual property infringement against itus are without merit, defending against such claims is time consuming and expensive and could result in the diversion of time and attention of Open Lending’sour management and employees. In addition, although in some cases a third party may have agreed to indemnify Open Lendingus for such costs, such indemnifying party may refuse or be unable to uphold itsour contractual obligations. In other

Open Lending’sOur risk management processes and procedures seek to appropriately balance risk and return and mitigate risks. Open Lending hasWe have established processes and procedures intended to identify, measure, monitor and control the types of risk to which Open Lendingwe and automotive lenders are subject, including credit risk, market risk, liquidity risk, strategic risk and operational risk. Credit risk is the risk of loss that arises when an obligor fails to meet the terms of an obligation. Market risk is the risk of loss due to changes in external market factors such as interest rates. Liquidity risk is the risk that financial conditions or overall safety and soundness are adversely affected by an inability, or perceived inability, to meet obligations and support business growth.

Strategic risk is the risk from changes in the business environment, improper implementation of decisions or inadequate responsiveness to changes in the business environment. Operational risk is the risk of loss arising from inadequate or failed processes, people or systems, external events (e.g., natural disasters), compliance, reputational or legal matters and includes those risks as they relate directly to Open Lendingus as well as to third parties with whom Open Lending contractswe contract or otherwise doesdo business.

Management of Open Lendingour risks depends, in part, upon the use of analytical and forecasting models. If these models are ineffective at predicting future losses or are otherwise inadequate, Open Lendingwe may incur unexpected losses or otherwise be adversely affected. In addition, the information Open Lending useswe use in managing its credit and other risks may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and avoid. There also may be risks that exist, or that develop in the future, that Open Lending haswe have not appropriately anticipated, identified or mitigated, including when processes are changed or new products and services are introduced. If Open Lending’sour risk management framework does not effectively identify and control its risks, Open Lendingwe could suffer unexpected losses or be adversely affected, which could have a material adverse effect on itsour business.

Aspects of Open Lending’sour platform include software covered by open source licenses. The terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on Open Lending’sour platform. If portions of Open Lending’sour proprietary software are determined to be subject to an open source license, Open Lendingwe could be required to publicly release the affected portions of itsour source code, re-engineer all or a portion of itsour technologies or otherwise be limited in the licensing of technologies, each of which could reduce or eliminate the value of Open Lending’sour technologies and loan products. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software because open source licensors generally do not provide warranties or controls on the origin of the software. Many of the risks associated with the use of open source software cannot be eliminated and could adversely affect the Open Lendingour business.

Open LendingWe may in the future seek to grow itsour business by exploring potential acquisitions or other strategic investments or alliances. Open LendingWe may not be successful in identifying businesses or opportunities that meet itsour acquisition or expansion criteria. In addition, even if a potential acquisition target or other strategic investment is identified, Open Lendingwe may not be successful in completing such acquisition or integrating such new business or other investment. Open LendingWe may face significant competition for acquisition and other strategic investment opportunities from other well-capitalized companies, many of which have greater financial resources and greater access to debt and equity capital to secure and complete acquisitions or other strategic investments, than Open Lending.us. As a result of such competition, Open Lendingwe may be unable to acquire certain assets or businesses, or take advantage of other strategic investment opportunities that Open Lending deemswe deem attractive; the purchase price for a given strategic opportunity may be significantly elevated; or certain other terms or circumstances may be substantially more onerous. Any delay or failure on Open Lending’sour part to identify, negotiate, finance on favorable terms, consummate and integrate any such acquisition, or other strategic investment opportunity could impede Open Lending’sour growth.

There is no assurance that Open Lendingwe will be able to manage its expanding operations, including from acquisitions, investments or alliances, effectively or that itwe will be able to continue to grow, and any failure to do so could adversely affect itsour ability to generate revenue and control itsour expenses. Furthermore, Open Lendingwe may be responsible for any legacy liabilities of businesses it acquireswe acquire or be subject to additional liability in connection with other strategic investments. The existence or

As of December 31, 2021, borrowings under our New Credit Agreement bear interest based upon various reference rates, including LIBOR. On July 27, 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. ICE Benchmark Administration (“IBA”), the administrator of LIBOR, has announced plans to cease the publication of certain U.S. dollar LIBOR rates on December 31, 2021 and other U.S. dollar LIBOR rates on June 30, 2023. The U.S. Federal Reserve also concurrently issued a statement advising banks to stop new U.S. dollar LIBOR issuances by the end of 2021. In light of these recent announcements, a transition from the widespread use of LIBOR to alternative benchmark rates is likely to occur over the next few years. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, announced replacement of U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by U.S. Treasury securities called the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question. As a result, it is not possible to predict the effect of any changes, establishment of alternative references rates or other reforms to LIBOR that may be enacted in the U.K. or elsewhere. The elimination of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, and other financial accounting standards may significantly change Open Lending’s reportedobligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.

New vehicle production has declined substantially in 2021 as compared to prior years, due in large part to the Financial Accounting Standards Board ("FASB"), the Public Company Accounting Oversight Board ("PCAOB"), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on Open Lending’s reported financial results and could affect the reporting of transactions completed before the announcement of a change.

All of these factors, in addition to any other chip shortage-related risks to our business that are relevantmay develop over time, may affect our ability to its business, including revenue recognition, finance charge reversals,generate certified loans through LPP, and share-based compensation, are highly complextherefore pose and involve subjective assumptions, estimatesmay continue to pose material risks to our operating results, financial condition and judgments by Open Lending. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by Open Lending could require Open Lending to make changes to its accounting systems that could increase its operating costs and significantly change its reported or expected financial performance.cash flows, particularly since the duration of the current chip shortage is unknown.

In connection with administration of LPP, Open Lendingwe must comply with various regulatory regimes, including those applicable to consumer credit transactions, various aspects of which are untested as applied to Open Lending’sour business model. Insurance producing and claims administration services subject Open Lendingus to state regulation on a 50-state basis. The complex regulatory environment of the credit and insurance industries are subject to constant change and modification. While changes to statutes and promulgating new regulations may take a substantial amount of time, issuing regulatory guidance with the force of law in the form of opinions, bulletins, and notices can occur quickly. Also, consumer credit and insurance regulators often initiate inquiries into market participants, which can lead to investigations and, ultimately, enforcement actions. As a result, Open Lending iswe are subject to a constantly evolving regulatory environment that is difficult to predict, which may affect Open Lending’sour business. The laws to which Open Lending directly or its services by contractwe are or may be subject to directly or indirectly include:

While Open Lending haswe have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance is given that itsour compliance policies and procedures will be effective. Failure to comply with these laws and with regulatory requirements applicable to Open Lending’sour business could subject itus to damages, revocation of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm Open Lending’sour business.

In connection with Open Lending’sour administration of LPP, Open Lending iswe are subject to extensive regulation, supervision and examination under United States federal and state laws and regulations. Open Lending isWe are required to comply with numerous federal, state, and local laws and regulations that regulate, among other things, the manner in which Open Lending administerswe administer LPP, the terms of the loans that automotive lenders originate, the products of insurance carriers, production of those products, insurance claims administration, and the fees that Open Lendingwe may charge. Any failure to comply with any of these laws or regulations could subject Open Lendingus to lawsuits or governmental actions and/or damage Open Lending’sour reputation, which could materially and adversely affect Open Lending’sour business. Regulators have broad discretion with respect to the interpretation, implementation, and enforcement of these laws and regulations, including through enforcement actions that could subject Open Lendingus to civil money penalties, customer remediations,remediation, increased compliance costs, and limits or prohibitions on Open Lending’sour ability to offer certain products or services or to engage in certain activities. In addition, to the extent that Open Lending undertakeswe undertake actions requiring regulatory approval or non-objection, regulators may make their approval or non-objection subject to conditions or restrictions that could have a material adverse effect on itsour business. Moreover, any competitors subject to different, or in some cases less restrictive, legislative or regulatory regimes may have or obtain a competitive advantage over Open Lending.us.

Additionally, federal, state, and local governments and regulatory agencies have proposed or enacted numerous new laws, regulations, and rules related to loans. Federal and state consumer credit and insurance regulators are also enforcing existing

laws, regulations, and rules more aggressively and enhancing their supervisory expectations regarding the management of legal and regulatory compliance risks. Consumer finance and insurance regulation is constantly changing, and new laws or regulations, or new interpretations of existing laws or regulations, could have a materially adverse impact on Open Lending’sour ability to operate as currently intended.

These regulatory changes and uncertainties make Open Lending’sour business planning more difficult and could result in changes to itsour business model and potentially adversely impact its results of operations. New laws or regulations also require Open Lendingus to incur significant expenses to ensure compliance. As compared to Open Lending’sour competitors, Open Lendingwe could be subject to more stringent state or local regulations or could incur marginally greater compliance costs as a result of regulatory changes. In addition, Open Lending’sour failure to comply (or to ensure that itsour agents and third-party service providers comply) with these laws or regulations may result in costly litigation or enforcement actions, the penalties for which could include: revocation of licenses; fines and other monetary penalties; civil and criminal liability; substantially reduced payments by borrowers; modification of the original terms of loans, permanent forgiveness of debt, or inability to, directly or indirectly, collect all or a part of the principal of or interest on loans; and increased purchases of receivables underlying loans originated by automotive lenders and indemnification claims.

With respect to state regulation, although Open Lending seekswe seek to comply with applicable state insurance, insurance brokering, insurance agency regulations, third-party administration company statutes and similar statutes in all U.S. jurisdictions, and with licensing and other requirements that Open Lending believeswe believe may be applicable to it,us, if Open Lending iswe are found to not have complied with applicable laws, Open Lendingwe could lose one or more of its licenses or authorizations or face other sanctions or penalties or be required to obtain a license in one or more such jurisdictions, which may have an adverse effect on Open Lending’sour ability to make the LPP available to borrowers in particular states and, thus, adversely impact Open Lending’sour business.

Open Lending isWe are also subject to potential enforcement and other actions that may be brought by state attorneys general or other state enforcement authorities and other governmental agencies. Any such actions could subject Open Lendingus to civil money penalties and fines, customer remediations,remediation, and increased compliance costs, damage itsour reputation and brand and limit or prohibit Open Lending’sour ability to offer certain products and services or engage in certain business practices.

New laws, regulations, policy or changes in enforcement of existing laws or regulations applicable to Open Lending’sour business, or reexamination of current practices, could adversely impact Open Lending’sour profitability, limit itsour ability to continue existing or pursue new business activities, require itus to change certain of itsour business practices or alter itsour relationships with LPP customers, affect retention of key personnel, or expose Open Lendingus to additional costs (including increased compliance costs and/or customer remediation). These changes also may require Open Lendingus to invest significant resources, and devote significant management attention, to make any necessary changes and could adversely affect itsour business.

Automotive lenders and insurance carriers are subject to federal and/or state supervision and regulation. Federal regulation of the banking or insurance industries, along with tax and accounting laws, regulations, rules, and standards, may limit their operations significantly and control the methods by which they conduct business. In addition, compliance with laws and regulations can be difficult and costly, and changes to laws and regulations can impose additional compliance requirements. For example, the Dodd-Frank Act imposes significant regulatory and compliance obligations on financial institutions. Regulatory requirements affect automotive lenders’ lending and investment practices and insurance carriers’ offerings, among other aspects of their businesses, and restrict transactions between Open Lendingus and its automotive lenders and insurance carriers. These requirements may constrain the operations of automotive lenders and insurance carriers, and the adoption of new laws and changes to, or repeal of, existing laws may have a further impact on Open Lending’sour business.

In choosing whether and how to conduct business with Open Lending,us, current and prospective automotive lenders and insurance carriers can be expected to take into account the legal, regulatory, and supervisory regimes that apply to them, including potential changes in the application or interpretation of regulatory standards, licensing requirements, or supervisory expectations. Regulators may elect to alter standards or the interpretation of the standards used to measure regulatory compliance or to determine the adequacy of liquidity, certain risk management or other operational practices for financial services companies in a manner that impacts automotive lenders or insurance carriers. Furthermore, the regulatory agencies have extremely broad discretion in their interpretation of the regulations and laws and their interpretation of the quality of automotive lenders’ loan

portfolios and other assets. If any regulatory agency’s assessment of the quality of automotive lenders’ assets, operations, lending practices, investment practices or other aspects of their business changes, or those with respect to insurance carriers, it may materially reduce automotive lenders’ or insurance carriers’ earnings, capital ratios and share price in such a way that affects Open Lending’sour business.

Bank holding companies, credit unions, financial institutions, automobile lenders, and insurance carriers and producers are extensively regulated and currently face an uncertain regulatory environment. Applicable state and federal laws, regulations and interpretations, including licensing laws and regulations, and enforcement policies and accounting principles have been subject to significant changes in recent years, and may be subject to significant future changes. Open LendingWe cannot predict with any degree of certainty the substance or effect of pending or future legislation or regulation or the application of laws and regulations to automotive lenders and insurance carriers. Future changes may have a material adverse effect on automotive lenders or insurance carriers and, therefore, on Open Lending.us.

Federal and state agencies have broad enforcement powers over Open Lending,us, including powers to investigate Open Lending'sour business practices and broad discretion to deem particular practices unfair, deceptive, abusive or otherwise not in accordance with the law. The continued focus of regulators on the consumer financial services industry has resulted, and could continue to result, in new enforcement actions that could, directly or indirectly, affect the manner in which Open Lending conducts itswe conduct our business and increase the costs of defending and settling any such matters, which could negatively impact itsour business. In some cases, regardless of fault, it may be less time-consuming or costly to settle these matters, which may require Open Lendingus to implement certain changes to itsour business practices, provide remediation to certain individuals or make a settlement payment to a given party or regulatory body. There is no assurance that any future settlements will not have a material adverse effect on Open Lending’sour business.

In addition, the laws and regulations applicable to Open Lendingus are subject to administrative or judicial interpretation. Some of these laws and regulations have been enacted only recently and may not yet have been interpreted or may be interpreted infrequently. As a result of infrequent or sparse interpretations, ambiguities in these laws and regulations may create uncertainty with respect to what type of conduct is permitted or restricted under such laws and regulations. Any ambiguity under a law or regulation to which Open Lending iswe are subject may lead to regulatory investigations, governmental enforcement actions and private causes of action, such as class action lawsuits, with respect to Open Lending’sour compliance with such laws or regulations.

The Dodd-Frank Act prohibits UDAAP and authorizes the Consumer Financial Protection Bureau (“CFPB”) to enforce that prohibition. The CFPB has filed a large number of UDAAP enforcement actions against consumer lenders for practices that do not appear to violate other consumer finance statutes. There is a risk that the CFPB could determine that certain features of automotive lender loans are unfair, deceptive or abusive, which could have a material adverse effect on Open Lending’sour business.

Open Lending isWe are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and itour business could be negatively impacted by them. For example, in connection with Open Lending’sour administration of LPP, Open Lending iswe are subject to the GLBA and implementing regulations and guidance. Among other things, the GLBA (i) imposes certain limitations on the ability to share consumers’ nonpublic personal information with nonaffiliated third parties and (ii) requires certain disclosures to consumers about their information collection, sharing and security practices and their right to “opt out” of the institution’s disclosure of their personal financial information to nonaffiliated third parties (with certain exceptions).

Furthermore, legislators and/or regulators are increasingly adopting or revising privacy, information security and data protection laws that potentially could have a significant impact on Open Lending’sour current and planned privacy, data protection and information security-related practices; Open Lending’sour collection, use, sharing, retention and safeguarding of consumer and/or employee information; and some of Open Lending’sour current or planned business activities. This also could increase Open Lending’sour costs of compliance and business operations and could reduce income from certain business initiatives.

Compliance with current or future privacy, information security and data protection laws (including those regarding security breach notification) affecting customer and/or employee data to which Open Lending iswe are subject could result in higher compliance and technology costs and could restrict Open Lending’sour ability to provide certain products and services (such as products or services that involve

sharing information with third parties or storing sensitive credit card information), which could materially and adversely affect Open Lending’sour profitability. Additionally, there is always a danger that regulators cancould attempt to assert authority over the Open Lendingour business in the area of privacy, information security and data protection. If Open Lending’sour vendors also become subject to laws and regulations in the more stringent and expansive jurisdictions, this could result in increasing costs on Open Lending’sour business.

Privacy requirements, including notice and opt-out requirements, under the GLBA and FCRA are enforced by the Federal Trade Commission and by the CFPB through UDAAP and are a standard component of CFPB examinations. State entities also may initiate actions for alleged violations of privacy or security requirements under state law. Open Lending’sOur failure to comply with privacy, information security and data protection laws could result in potentially significant regulatory investigations and government actions, litigation, fines or sanctions; consumer, automotive lender or merchant actions; and damage to Open Lending’sour reputation and brand, all of which could have a material adverse effect on Open Lending’sour business.

Certain states have adopted laws regulating and requiring licensing by parties that engage in certain activity regarding consumer finance and insurance transactions, including facilitating and assisting such transactions in certain circumstances. Furthermore, certain states and localities have also adopted laws requiring licensing for consumer debt collection or servicing. While Open Lending believes it haswe believe we have obtained all necessary licenses, the application of some consumer finance or insurance producer and claims administration licensing laws to LPP is unclear. If Open Lending waswe were found to be in violation of applicable state licensing requirements by a court or a state, federal, or local enforcement agency, itwe could be subject to fines, damages, injunctive relief (including required modification or discontinuation of Open Lending’sour business in certain areas), criminal penalties and other penalties or consequences, and the loans originated through LPP could be rendered void or unenforceable in whole or in part, any of which could have a material adverse effect on Open Lending’sour business.

From time to time, in the normal course of itsour business, Open Lendingwe may receive or be subject to, inquiries or investigations by state and federal regulatory agencies and bodies, such as the CFPB, state Attorneys General, state financial regulatory agencies, and other state or federal agencies or bodies regarding LPP, including the origination and servicing of consumer loans, practices by merchants or other third parties, production of insurance policies, administration of insurance claims and licensing, and registration requirements. For example, in the future, Open Lendingwe may enter into regulatory agreements with state agencies regarding issues including automotive lender conduct and oversight and loan pricing. Open LendingWe also may receive inquiries from state regulatory agencies regarding requirements to obtain licenses from or register with those states, including in states where Open Lending haswe have determined that it iswe are not required to obtain such a license or be registered with the state. Any such inquiries or investigations could involve substantial time and expense to analyze and respond to, could divert management’s attention and other resources from running Open Lending’sour business, and could lead to public enforcement actions or lawsuits and fines, penalties, injunctive relief, and the need to obtain additional licenses that it doeswe do not currently possess. Open Lending’sOur involvement in any such matters, whether tangential or otherwise, even if the matters are ultimately determined in Open Lending’sour favor, could also cause significant harm to itsour reputation, lead to additional investigations and enforcement actions from other agencies or litigants, and further divert management attention and resources from the operation of Open Lending’sour business. As a result, the outcome of legal and regulatory actions arising out of any state or federal inquiries Open Lending receiveswe receive could be material to itsour business, results of operations, financial condition and cash flows and could have a material adverse effect on itsour business, financial condition or results of operations.

Open Lending’sOur executive officers and directors have limited experience in the management of a publicly traded company. Open Lending’sOur management team may not successfully or effectively manage the ongoing transition to a public company requirements, and the Company is and will continue to be subject to significant regulatory oversight and reporting obligations under federal securities laws. TheirOur management’s limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of Open Lending. It is possible that Open Lending will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase our operating costs in future periods.the business.

As a public company, we will continue to face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require us to carry out activities we have not done previously. In addition, additional expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons to serve on the boardBoard of directorsDirectors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will

We qualifyEffective December 31, 2021, we lost our status as an “emerging growth company” as defined in Section 2(a)(19)the Jumpstart Our Business Startups Act of the Securities Act, as modified by the JOBS Act.2012. As such,a result, we are eligible for and intendno longer able to take advantage of certain exemptions from various reporting requirements. We are now subject to certain public company requirements applicablethat did not previously apply to other public companies that are not emerging growth companies forus, due to our previous status 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. We will remain an emerging growth company until the earliest of (i) the Company is deemed to be a "large accelerated filer," as defined by the Securities Exchange Act of 1934, as amended, or the Exchange Act, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which we have 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 our common stock in our initial public offering. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delayThese requirements include:

Failure to comply with these requirements could subject us to enforcement actions by the SEC, divert management’s attention, damage our common stock less attractive because we will rely on these exemptions, which mayreputation, and adversely affect our business, results of operations, or financial condition. In particular, if our independent registered public accounting firm is not able to render the required attestation, it could result in a less active trading market forloss of investor confidence in the accuracy, reliability, and completeness of our common stockfinancial reports. We expect that the loss of “emerging growth company” status and its stock pricecompliance with these additional requirements will require management to expend additional time while also condensing the time frame available to comply with certain requirements, which may be more volatile.further increase our legal and financial compliance costs.

We may from time to time become subject to litigation claims in the operation of our business, including, but not limited to, with respect to employee matters and contract matters. From time to time, we may also face intellectual property infringement, misappropriation, or invalidity/non-infringement claims from third parties, and some of these claims may lead to litigation. We may initiate claims to assert or defend our intellectual property against third parties. Any litigation may be expensive and time-consuming and could divert management’s attention from our business and negatively affect itsour operating results or financial condition. The outcome of any litigation cannot be guaranteed, and adverse outcomes can affect us negatively.

Our executive officers and directors and significantcertain affiliated stockholders own nearly 30%a significant portion of the outstanding voting stock of the Company as of the date of this report. Each share of our common stock initially entitles its holders to one vote on all matters presented to stockholders generally. Accordingly, those owners, if voting in the same manner, will be able to controlcould materially influence the election and removal of our directors and thereby determine corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendments of the certificate of incorporation and bylaws and other significant corporate transactions for so long as they retain significant ownership. This concentration of ownership may delay or deter possible changes in control of Open Lending, which may reduce the value of an investment in our common stock. So long as they continue to own a significant amount of the combined voting power, even if such amount is less than 50%, they will continue to be able to strongly influence or effectively control decisions of the Company.

Pursuant to our amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claim for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any director, officer or other employee of ours to us or our stockholders; (3) any action asserting a claim pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws; or (4) any action asserting a claim governed by the internal affairs doctrine, or the Delaware Forum Provision. The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. Our amended and restated bylaws further provide that unless we consent in writing to the selection of an alternative forum, the United States District Court for the Western District of Texas shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or the Federal Forum Provision. In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

We recognize that the Delaware Forum Provision and the Federal Forum Provision in our amended and restated bylaws may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware or the State of Texas. Additionally, the forum selection clauses in our amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court were “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the United States District Court for the Western District of Texas may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

An active trading market for our common stock may not be sustained, which would make it difficult for youstockholders to sell yourtheir shares of our common stock at an attractive price (or at all). The market price of our common stock may decline below yourour stockholders’ purchase price, and you may not be able to sell your shares of our common stock at or above the price you paid for such shares (or at all).price.

If NASDAQNasdaq delists our shares of common stock from trading on its exchange for failure to meet Nasdaq’s listing standards, we and our stockholders could face significant material adverse consequences including:

Even if a trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market and political conditions, could reduce the market price of shares of our common stock in spite of our operating performance. In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly or annual results of operations, additions or departures of key management personnel, the loss of key automotive lenders, changes in our earnings estimates (if provided) or failure to meet analysts’ earnings estimates, publication of research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or the investment community with respect to us or our industry, adverse announcements by us or others and developments affecting us, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, actions by institutional stockholders, and increases in market interest rates that may lead investors in our shares to demand a higher yield, and in response the market price of shares of our common stock could decrease significantly.

These broad market and industry factors may decrease the market price of our common stock, regardless of our actual operating performance. The stock market in general has, from time to time, experienced extreme price and volume fluctuations. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our stock incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.

Following the recently completed underwritten public offering, nearly 30%As of December 31, 2021, a significant portion of the outstanding shares of our common stock is held by entities affiliated with us and our executive officers and directors. Sales of substantial amounts of our common stock in the public market, or the perception that such sales will occur, could adversely affect the market price of our common stock and make it difficult for us to raise funds through securities offerings in the future. In addition, in connection with the underwritten public offering that closed on December 14, 2020, all of our directors, our executive officers and the selling stockholders each agreed, subject to certain exceptions, to be subject to a 90-day lock-up restriction in connection with this offering. The market price of our common stock may decline when this lock-up restriction lapses.

In connection with the consummation of the Business Combination, Open Lending, LLC, Open Lending Corporation, Nebula, certain persons and entities holding membership units of Open Lending and certain persons and entities holding Founder Shares (collectively, the “Holders”) entered into the Investor Rights Agreement. Pursuant to the terms of the Investor Rights Agreement, we are obligated to file a registration statement to register the resale of certain of our securities held by the Holders. In addition, pursuant to the terms of the Investor Rights Agreement and subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, the Holders may demand at any time

or from time to time, that we file a registration statement on Form S-1, or any similar long-form registration statement, or if available, on Form S-3 to register the shares of our common stock held by such Holders. The Investor Rights Agreement also provides the Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions. The Investor Rights Agreement further provides for our shares of common stock held by the Holders to be locked-up for 180 days after the closing of the Business Combination. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our common stock.

We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends will be at the sole discretion of our boardBoard of directors.Directors. Our boardBoard of directorsDirectors may take into account general and

In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock or offering debt or other equity securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock. Future acquisitions could require substantial additional capital in excess of cash from operations. We would expect to obtain the capital required for acquisitions through a combination of additional issuances of equity, corporate indebtedness and/or cash from operations.

Issuing additional shares of our common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our common stock or both. Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings.

Certain provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire us without the consent of our Board of Directors. Among other things, these provisions:

In addition, these provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management or our boardBoard of directors.Directors. Stockholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to them. These anti-takeover provisions could substantially impede yourstockholders’ ability to benefit from a change in control or change our

management and board of directors and, as a result, may adversely affect the market price of our common stock and yourstockholders’ ability to realize any potential change of control premium.

The trading market for our common stock will depend, in part, on the research and reports that securities and industry analysts publish about us and our business. Securities and industry analysts do not currently, and may never, cover the Company. If securities and industry analysts do not commence coverage of the Company, the trading price of our stock would likely be negatively impacted. If one or more of the securities or industry analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of the Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

As of the date of this Annual Report, on Form 10-K, we were not a party to any material legal proceedings. In the future, we may become party to legal matters and claims arising in the ordinary course of business, the resolution of which we do not anticipate would have a material adverse impact on itsour financial position, results of operations or cash flows.

Our common stock is traded on the NASDAQNasdaq under the symbol "LPRO".“LPRO.” As of March 12, 2021 the closing price of our common stock on the NASDAQ was $40.04, andFebruary 24, 2022, there were approximately 4428 registered shareholdersstockholders of record.

We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends will be at the sole discretion of our boardBoard of directors.Directors. Our boardBoard of directorsDirectors may take into account general and economic conditions, our financial condition and operating results, our available cash, current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications on the payment of dividends by us to our stockholders or by our subsidiary to us and such other factors as our boardBoard of directorsDirectors may deem relevant. In addition, the terms of our existing financing arrangements restrict or limit our ability to pay cash dividends.dividends is limited by covenants in our existing indebtedness and may be limited by the agreements governing other indebtedness that we incur in the future. Accordingly, we may not pay any dividends on our common stock in the foreseeable future.

The information concerning our equity compensation plans is incorporated by reference herein to the section in our definitive Proxy Statement for the 20212022 Annual Meeting of Stockholders (“20212022 Proxy Statement”) entitled “Equity Compensation Plan Information.”

The stock performance graph below shows the cumulative total stockholder return of an investment of $100 at the market close on June 10, 2020, which was the Closing Date of the Business Combination, in (i) our common stock, (ii) the S&P 500 Index, and (iii) common stock of a selected group of peer issuers (the "Peer Group"“Peer Group”). The peer group has changed from the prior year to replace PayPal Holdings, Inc., and Square, Inc with other more comparable peer companies in the same industry. The current Peer Group tracks the weighted average stock price performance of equity securities of nine companies in our industry, including PayPal Holdings, Inc., Verisk Analytics, Inc., Equifax Inc., FleetCor Technologies, Inc., Jack Henry & Associates, Inc., Q2 Holdings, Inc., Repay Holdings Corporation, Square,Upstart Holdings, Inc., TransUnion, Verisk Analytics, Inc. and WEX Inc..Inc. Data for the S&P 500 Index and the Peer Group assumes reinvestment of dividends. Our common stock had a closing stock price of $13.75 on June 10, 2020, and the stock price performance shown in the graph below is based on historical data and is not indicative of, nor intended to forecast, future stock price performance of our stock.

We are a leading provider of lending enablement and risk analytics to credit unions, regional banks, non-bank auto finance companies and OEM Captives. Our clients, collectively referred to herein as automotive lenders or lenders, make automotive consumer loans to underserved near-prime and non-prime borrowers by harnessing our risk-based pricing models, powered by our proprietary data and real-time underwriting of automotive loan default insurance coverage from insurers. Since our inception in 2000, we have facilitated over $9.2$13.5 billion in automotive loans, accumulating over 20 years of proprietary data and developingdeveloped over two million unique risk profiles. We currently cater to approximately 355396 active automotive lenders.

We specialize in risk-based pricing and modeling and provide automated decision-technology for automotive lenders throughout the United States. We believe that we address the financing needs of near-prime and non-prime borrowers, or borrowers with a credit bureau score between 560 and 699, who are underserved in the automotive finance industry. Traditional lenders focus on prime borrowers, where an efficient market has developed with interest rate competition that benefits borrowers. Independent finance companies focus on sub-prime borrowers. Borrowers that utilize the near-prime and non-prime automotive lending market have fewer lenders focused on loans with longer terms or higher advance rates. As a result, many near-prime and non-prime borrowers turn to sub-prime lenders, resulting in higher interest rate loan offerings than such borrower's credit profile often merits or warrants. We seek to make this market more competitive, resulting in more attractive loan terms.

Our flagship product, LPP, enables automotive lenders to make loans that are largely insured against losses from defaults. We have been developing and advancing the proprietary underwriting models used by LPP for approximatelyover 20 years. We believe LPP provides significant benefits to our growing ecosystem of automotive lenders, automobile dealers, borrowers and insurers.

A key element of LPP is the ability to facilitate risk-based interest rates that are appropriate for each loan and lender and electronically submitted to our automotive lenders within approximately five seconds after we receive a loan application. Our interest rate pricing is customized to each automotive lender, reflecting the cost of capital, loan servicing costs, loan acquisition costs, expected recovery rates and target return on assets of each automotive lender. Using our risk models, we project monthly loan performance results, including expected losses and prepayments for automotive lenders that use LPP. The product of this process is a risk-based interest rate, inclusive of elements to recover all projected costs, program fees and insurance premiums, given the risk of the loan, to return a targeted return on asset goal.

We believe that our market opportunity is significant. The near-prime and non-prime automotive loan market is $250 billion annually, resulting in an approximately $14.4$12.4 billion annual revenue opportunity. We are currently serving less than 1%2% of this market, providing a significant growth opportunity.

We facilitate certified loans, as described below, and have achieved financial success by increasing our penetration of the near-prime and non-prime automotive loan market while diversifying our customer base and refining our data analysis capabilities.

DuringWe facilitated 171,697 and 94,226 certified loans during the yearyears ended December 31, 2021 and 2020, we facilitated 94,226 certified loans, representing an increase of 20.1% from 78,434 in the year ended December 31, 2019, which in turn increased by 38.3% from 56,705 in the year ended December 31, 2018.respectively.

Total revenue was $215.7 million and $108.9 million for the yearyears ended December 31, 2021 and 2020, representing an increase of 17.3% from $92.8 million in the year ended December 31, 2019, which in turn increased by 77.9% from $52.2 million in the year ended December 31, 2018. Revenue increased by $19.2 million as a result of the adoption of ASC 606 for the year ended December 31, 2019. Prior period annual results have not been restated so this lack of comparability should be considered in reviewing this discussion and analysis.respectively.

Operating income was $150.3 million and $56.7 million for the yearyears ended December 31, 2021 and 2020, representing a decline of 9.4% from $62.6 million in the year ended December 31, 2019, which in turn increased by 119.9% from $28.5 million in the year ended December 31, 2018.respectively.

Net lossincome (loss) was $146.1 million and $(97.6) million for the yearyears ended December 31, 2021 and 2020, representing a decrease of (256.0)% from net income of $62.5 million in the year ended December 31, 2019, which in turn increased by 121.2% from $28.3 million in the year ended December 31, 2018.respectively.

The table below summarizes the total dollar-value of insured loans we facilitated, the number of new contracts we signed with automotive lenders and the number of OEM Captive relationships we entered into for the years ended December 31, 2020, 20192021 and 2018:2020:

We review several key performance measures, discussed below, to evaluate business and results, measure performance, identify trends, formulate plans and make strategic decisions. We believe that the presentation of such metrics is useful to our investors and counterparties because theysuch metrics are used to measure and model the performance of companies such as Open Lending,us, with recurring revenue streams.

We refer to “automotive“certified loans” as the number of loans facilitated through LPP during a given period. Additionally, we refer to loans with a one-time upfront program fee payment as “single-pay” loans. For certain loans, and thosethe program fee is paid to us over twelve months in12 monthly installments and we refer to these loans as “monthly-pay” loans.

We define “average program fee” as the total program fee billedrevenue recognized for a period divided by the number of certified loans in that period.

We define “insurers’ aggregate underwriting profit” as the total underwriting profit expected to be received by insurers over the expected life of the insured loans.

We define “insurers’ annual earned premium” as the total insurance premium earned by insurers in a given period.

On December 14, 2020,April 6, 2021, we completed an underwritten public offering of 9,500,0009,000,000 shares of our common stock at a public offering price of $28.00$34.00 per share. All shares were sold by existing stockholders, including Nebula Holdings, LLC and its affiliates, Bregal Sagemount and certain of our executive officers of the Company.officers. The selling stockholders also granted the underwriters a 30-day option to

Pursuant to a Stock Repurchase Agreement, dated as of December 7, 2020,March 29, 2021, between Open Lendingus and the selling stockholders, we repurchased from the selling stockholders on April 6, 2021 an aggregate number of 1,395,089612,745 shares of our common stock totaling $37.5$20.0 million at the same per share price paid by the underwriters to the selling stockholders in the offering. The $20.0 million stock repurchase was recorded in treasury stock at cost.

In connection with one or more businesses. Nebula consummated the Business Combination, on June 10, 2020.

We entered into Amendment No. 1 (the “Amendment”) to the termsTRA effective April 9, 2021. The Amendment provides that in lieu of early termination payments, the TRA Holders will instead be entitled to payments equal to 40% of all Tax Benefit Payments (all definitions used here in and conditionsotherwise not defined here in shall have the meanings set forth in the Credit Agreement, we mayAmendment) other than any Actual Interest Amounts that would be required to makebe paid by the us under the TRA, using certain mandatory prepayments priorvaluation. The Amendment provides us with the right to maturity. Voluntary prepaymentsterminate and certain mandatory prepayments may be subjectsettle all present and future obligations under the TRA with a single payment by us to certain prepayment premiumsthe TRA Holders of $36.9 million (the “Early Termination Right”). Absent the Amendment and the exercise of the Early Termination Right, we anticipated making TRA payments totaling $92.4 million, undiscounted, over the life of the TRA.

On April 12, 2021, an independent committee of disinterested members of the Board of Directors approved our decision to exercise the Early Termination Right. During the year ended December 31, 2021, we paid $36.9 million to terminate and settle the TRA liability and recognized a gain of $55.4 million, which is included in the first year after the date thereof.gain on extinguishment of tax receivable agreement on our consolidated statements of operations and comprehensive income (loss).

The Credit Agreement contains affirmative and negative covenants customarily applicableCOVID-19 pandemic continues to senior secured credit facilities, including, among other things, customary limitations on the incurrence of indebtedness and liens, certain intercompany transactions and other investments, dispositions of assets, issuance of certain units, repayment of other indebtedness, redemptions of units and payment of dividends. The Credit Agreement also contains a maximum total net leverage ratio financial covenant that is tested quarterly and calculated based on the ratio of our 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 Credit Agreement also contains customary events of default, at times subject to thresholds and grace periods (among others), including payment default, covenant default, cross default to other material indebtedness, and judgment defaults.

Our future operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including the growth in the number of financial institutions and transaction volume, competition, profit share assumptions and industry trends and general economic conditions.

The growth trend in active automotive lenders using LPP is a critical variable directly affecting revenue and financial results. It influences the number of loans funded on LPP and, therefore, the fees that we earn and the cost of the services that we provide. Growth in our active automotive lender relationships will depend on our ability to retain existing automotive lenders, add new automotive lenders and expand to new goods and services specific to our industry verticals.(“verticals”).

We face competition to enrollacquire and maintain automotive lenders as customers, as well as competition to fundfacilitate the funding of near-prime and non-prime auto loans. For LPP, which combines lending enablement, risk analytics, near-prime and non-prime auto loan performance data, real-time loan decisioning, risk-based pricing and auto loan default insurance, we do not believe there are any direct competitors. The emergence of direct competitors, providing risk, analytics and loss mitigation, which are core elements of our business, could materially impact our ability to signacquire and maintain automotive lenders'lenders customers. The near-prime and non-prime lending market is highly fragmented and competitive. We face competition from a diverse landscape of consumer lenders, including traditional banks and credit unions, as well as alternative technology-enabled lenders. The emergence of other insurers, in competition with our insurers, could materially impact our business. Increased competition for loans, which reduce the ability of our automotive lenders to source loan application flow and or capture loans, could materially adversely impact our business.

Our results of operations have in the past been fairly resilient to economic downturns but in the future may be impacted by the relative strength of the overall economy and its effect on unemployment, consumer spending and consumer demand for automotive products. As general economic conditions improve or deteriorate, the amount of disposable income consumers have tends to fluctuate, which in turn impacts consumer spending levels and the willingness of consumers to take out loans to finance purchases. Specific economic factors such as interest rate levels, changes in monetary and related policies, market volatility, supply chain disruptions, consumer confidence, the impact of the pandemic crisis and, particularly, the unemployment rate also influence consumer spending and borrowing patterns. At the end of first quarter 2020, changes in facts and circumstances and general market conditions from the COVID-19 pandemic resulted in lower expectations of future operating results, and in response, we lowered our initial anticipated revenue and profit share on historic business. In the following quarters of 2020, we have adopted a more favorable near-term outlook as a result of better than anticipated performance through the year-end.

Total Revenues

original principal balance and are recognized as revenue by us upfront upon receipt of the loan by the consumer. The fee percentage rate varies by type of loan. For loans with a one-time upfront payment, there is a sliding scale of rates representing volume discounts to the lender with fees generally capped at $600 per loan. This cap may vary for certain large volume lenders. For loans with 12 monthly equal installments,pay loans, the fee paid by the lender is a flat 3.0%3% of the total amount of the loan and is not capped.

Comparison of Year Ended December 31, 2021 and 2020 Compared to the Year Ended December 31, 2019

Program feeProfit share revenue increased by $7.3$72.8 million, or 20.0%121%, for the year ended December 31, 2020 when2021 as compared to the year ended December 31, 2019. Despite the impact2020. During 2021, we recorded $102.3 million in anticipated profit share, associated with 171,697 new certified loans, for an average of the COVID-19 pandemic,$596 per new certified loan, volume was up by 20.1%as compared to $62.0 million in anticipated profit share, associated with 94,226 new certified loans, for an average of $658 per new certified loan during the year ended December 31, 2020,2020. In addition, during 2021, we recorded $30.9 million in estimated future profit share on business written in historic periods, as compared to the prior year.a decrease of $1.6 million in estimated future profit share on historical vintages, during 2020.

Profit shareProgram fees revenue increased by $7.4$31.6 million, or 13.9%72%, for the year ended December 31, 2020 when2021 as compared to the year ended December 31, 2019. This2020. The increase was driven by an 82% increase in profit share revenue was driven primarily by a $13.9 million increase in anticipated profit share from new originations during the current yearcertified loan volumes as compared to 2019. Despite this increase in new business, our year to date results were negatively impacted by a $(1.6) million reduction in estimated future underwriting profit share for claims and premiums associated with business written in historic periods, primarily as a result of the economic slowdown attributable to the COVID-19 pandemic. This reduction in future profit share is a change in estimated variable consideration in accordance with ASC 606.prior year.

Revenue from claims administration and other service fees which primarily represents 3.0%3% of our insurance partners’ annual earned premium, increased by $1.4$2.3 million, or 43.4%51%, for the year ended December 31, 20202021 as compared to 20192020 due to a 44.2%50% increase in total earned premium.premiums and a 82% increase in new loan certifications.