Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 21, 2022 | Jun. 30, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity Registrant Name | PROSPER MARKETPLACE, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 73-1733867 | ||
Entity File Number | 333-225797-01 | ||
Entity Address, Address Line One | 221 Main Street | ||
Entity Address, Address Line Two | 3rd Floor | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94105 | ||
City Area Code | 415 | ||
Local Phone Number | 593-5400 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 72,398,859 | ||
Entity Public Float | $ 0 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001416265 | ||
Prosper Funding LLC | |||
Entity Information [Line Items] | |||
Current Fiscal Year End Date | --12-31 | ||
Entity Registrant Name | PROSPER FUNDING LLC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-4526070 | ||
Entity File Number | 333-225797 | ||
Entity Address, Address Line One | 221 Main Street | ||
Entity Address, Address Line Two | 3rd Floor | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94105 | ||
City Area Code | 415 | ||
Local Phone Number | 593-5400 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 0 | ||
Entity Central Index Key | 0001542574 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Location | San Francisco, CA |
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Assets: | |||
Cash and Cash Equivalents | $ 67,700 | $ 50,145 | |
Restricted Cash | [1] | 167,925 | 163,723 |
Accounts Receivable | [1] | 1,054 | 605 |
Loans Held for Sale, at Fair Value | [1] | 243,170 | 274,621 |
Borrower Loans | [1] | 267,626 | 378,263 |
Property and Equipment, Net | 29,714 | 28,446 | |
Prepaid and Other Assets | [1] | 6,238 | 5,196 |
Servicing Assets | 8,761 | 9,242 | |
Goodwill | 36,368 | 36,368 | |
Intangible Assets, Net | 328 | 500 | |
Total Assets | 828,884 | 947,109 | |
Liabilities, Convertible Preferred Stock and Stockholders' Deficit: | |||
Accounts Payable and Accrued Liabilities | 25,790 | 17,876 | |
Payable to Investors | 152,794 | 124,094 | |
Notes, at Fair Value | 265,985 | 208,379 | |
Notes issued by securitization trust | [1] | 0 | 156,782 |
Certificates Issued by Securitization Trust, at Fair value | [1] | 0 | 22,917 |
Warehouse Lines | [1] | 209,275 | 242,479 |
Other Liabilities | 23,900 | 25,057 | |
Convertible Preferred Stock Warrant Liability | 250,941 | 112,319 | |
Total Liabilities | 928,685 | 909,903 | |
Commitments and Contingencies (see Note 17) | |||
Convertible preferred stock | (322,748) | (322,748) | |
Stockholders' Deficit: | |||
Common Stock – $0.01 par value; 625,000,000 shares authorized; 73,089,929 shares issued and 72,153,994 shares outstanding as of December 31, 2021; 70,075,307 shares issued and 69,139,372 shares outstanding as of December 31, 2020 | 245 | 215 | |
Additional Paid-In Capital | 157,256 | 155,952 | |
Less: Treasury Stock | (23,417) | (23,417) | |
Accumulated Deficit | (554,252) | (415,911) | |
Total Stockholders' Deficit | (420,168) | (283,161) | |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | $ 828,884 | $ 947,109 | |
Convertible preferred stock, outstanding (in shares) | 209,613,570 | 209,613,570 | |
Convertible preferred stock, issued (in shares) | 209,613,570 | 209,613,570 | |
VIE, Primary Beneficiary | |||
Assets: | |||
Restricted Cash | [2] | $ 5,128 | $ 25,203 |
Loans Held for Sale, at Fair Value | [2] | 243,170 | 274,621 |
Borrower Loans | [2] | 0 | 168,593 |
Prepaid and Other Assets | [2] | 2,846 | 2,043 |
Total Assets | [2] | 251,144 | 470,460 |
Liabilities, Convertible Preferred Stock and Stockholders' Deficit: | |||
Notes issued by securitization trust | [2] | 0 | 156,782 |
Certificates Issued by Securitization Trust, at Fair value | [2] | 0 | 22,917 |
Warehouse Lines | [2] | 209,275 | 242,479 |
Total Liabilities | [2] | 209,275 | 422,178 |
Convertible preferred stock | $ (2,381) | $ (2,381) | |
Stockholders' Deficit: | |||
Convertible preferred stock, outstanding (in shares) | 51,247,915 | 51,247,915 | |
Convertible preferred stock, issued (in shares) | 51,247,915 | 51,247,915 | |
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | ||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. On September 27, 2021, assets and liabilities held by the securitization trusts consolidated by PMI as VIEs were removed from the balance sheet as part of the deconsolidation of those entities. See N ote 6 - Securitizations and Note 10 - Debt in the Notes to Consolidated Financial Statements for add itional information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible preferred stock, authorized (in shares) | 444,760,848 | 444,760,848 |
Convertible preferred stock, issued (in shares) | 209,613,570 | 209,613,570 |
Convertible preferred stock, outstanding (in shares) | 209,613,570 | 209,613,570 |
Convertible preferred stock, aggregate liquidation preference | $ 370,456 | $ 370,456 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 625,000,000 | 625,000,000 |
Common stock, issued (in shares) | 73,089,929 | 70,075,307 |
Common stock, outstanding (in shares) | 72,153,994 | 69,139,372 |
VIE, Primary Beneficiary | ||
Convertible preferred stock, issued (in shares) | 51,247,915 | 51,247,915 |
Convertible preferred stock, outstanding (in shares) | 51,247,915 | 51,247,915 |
Consolidated Balance Sheets - P
Consolidated Balance Sheets - Prosper Funding LLC - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Assets: | |||
Cash and Cash Equivalents | $ 67,700 | $ 50,145 | |
Restricted Cash | [1] | 167,925 | 163,723 |
Borrower loans | [1] | 267,626 | 378,263 |
Servicing Assets | 8,761 | 9,242 | |
Total Assets | 828,884 | 947,109 | |
Liabilities and Member's Equity: | |||
Accounts Payable and Accrued Liabilities | 25,790 | 17,876 | |
Payable to Investors | 152,794 | 124,094 | |
Notes, at Fair Value | 265,985 | 208,379 | |
Other Liabilities | 23,900 | 25,057 | |
Total Liabilities | 928,685 | 909,903 | |
Stockholders' Deficit: | |||
Accumulated Deficit | (554,252) | (415,911) | |
Total Stockholders' Deficit | (420,168) | (283,161) | |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 828,884 | 947,109 | |
Borrower Loans / Loans Held for Sale | |||
Liabilities and Member's Equity: | |||
Notes, at Fair Value | 510,796 | 652,884 | |
Prosper Funding LLC | |||
Assets: | |||
Cash and Cash Equivalents | 10,765 | 8,592 | |
Restricted Cash | 157,111 | 132,332 | |
Borrower loans | 267,626 | 209,670 | |
Property and Equipment, Net | 7,907 | 6,928 | |
Servicing Assets | 9,796 | 11,088 | |
Other Assets | 317 | 217 | |
Total Assets | 453,522 | 368,827 | |
Liabilities and Member's Equity: | |||
Accounts Payable and Accrued Liabilities | 1,818 | 2,361 | |
Payable to Related Party | 1,306 | 4,120 | |
Payable to Investors | 153,681 | 126,266 | |
Notes, at Fair Value | 265,985 | 208,379 | |
Other Liabilities | 2,434 | 2,613 | |
Total Liabilities | 425,224 | 343,739 | |
Stockholders' Deficit: | |||
Member's Equity | 11,404 | 11,404 | |
Accumulated Deficit | 16,894 | 13,684 | |
Total Stockholders' Deficit | 28,298 | 25,088 | |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 453,522 | 368,827 | |
Prosper Funding LLC | Borrower Loans / Loans Held for Sale | |||
Liabilities and Member's Equity: | |||
Notes, at Fair Value | $ 265,985 | $ 209,670 | |
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Revenues: | |||
Gain on Sale of Borrower Loans | $ 7,196 | $ 4,816 | $ 10,946 |
Fair Value of Warrants Vested on Sale of Borrower Loans | 0 | 0 | (17,553) |
Total Operating Revenues | 115,576 | 93,379 | 142,034 |
Interest Income (Expense): | |||
Interest Income on Borrower Loans and Loans Held for Sale | 83,107 | 104,150 | 100,786 |
Interest Expense on Financial Instruments | (50,816) | (60,127) | (63,736) |
Total Interest Income, Net | 32,291 | 44,023 | 37,050 |
Change in Fair Value of Financial Instruments, Net | (3,241) | (34,166) | (25,514) |
Total Net Revenue | 144,626 | 103,236 | 153,570 |
Expenses: | |||
Origination and Servicing | 35,056 | 29,897 | 34,915 |
Sales and Marketing | 35,065 | 29,259 | 73,824 |
General and Administrative | 73,122 | 63,384 | 71,588 |
Impairment Expenses | 0 | 445 | 0 |
Restructuring Charges, Net | 0 | 0 | 34 |
Change in Fair Value of Convertible Preferred Stock Warrants | 138,622 | (37,677) | (11,235) |
Loss on Deconsolidation of VIEs | 1,494 | 0 | 0 |
Other Income, Net | (463) | (639) | (1,945) |
Total Expenses | 282,896 | 84,669 | 167,181 |
Net (Loss) Income Before Income Taxes | (138,270) | 18,567 | (13,611) |
Income Tax Expense | (71) | (16) | (100) |
Net (Loss) Income | (138,341) | 18,551 | (13,711) |
Plus: Return on Share Purchase | 0 | 2,381 | 1,066 |
Less: Net Income Allocated to Participating Securities | 0 | (15,172) | 0 |
Net Income (Loss) Available to Common Stockholders, Basic | (138,341) | 5,760 | (12,645) |
Net Income (Loss) Available to Common Stockholders, Diluted | $ (138,341) | $ 5,760 | $ (12,645) |
Net Income (Loss) Per Share – Basic (in dollars per share) | $ (1.95) | $ 0.08 | $ (0.18) |
Net Income (Loss) Per Share – Diluted (in dollars per share) | $ (1.95) | $ 0.02 | $ (0.18) |
Weighted-Average Shares – Basic (in shares) | 70,767,275 | 68,592,557 | 70,511,605 |
Weighted-Average Shares – Diluted (in shares) | 70,767,275 | 306,673,586 | 70,511,605 |
Transaction Fees, Net | |||
Operating Revenues: | |||
Revenues | $ 89,364 | $ 67,335 | $ 119,282 |
Servicing Fees, Net | |||
Operating Revenues: | |||
Revenues | 15,024 | 18,517 | 23,406 |
Other Revenues | |||
Operating Revenues: | |||
Revenues | $ 3,992 | $ 2,711 | $ 5,953 |
Consolidated Statements of Op_2
Consolidated Statements of Operations - Prosper Funding LLC - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Revenues: | |||
Gain on Sale of Borrower Loans | $ 7,196 | $ 4,816 | $ 10,946 |
Total Operating Revenues | 115,576 | 93,379 | 142,034 |
Interest Income (Expense): | |||
Interest Income on Borrower Loans and Loans Held for Sale | 83,107 | 104,150 | 100,786 |
Interest Expense on Financial Instruments | (50,816) | (60,127) | (63,736) |
Net interest income | 32,291 | 44,023 | 37,050 |
Change in Fair Value of Financial Instruments, Net | (3,241) | (34,166) | (25,514) |
Total Net Revenue | 144,626 | 103,236 | 153,570 |
Expenses: | |||
General and Administrative | 73,122 | 63,384 | 71,588 |
Total Expenses | 282,896 | 84,669 | 167,181 |
Net (Loss) Income | (138,341) | 18,551 | (13,711) |
Prosper Funding LLC | |||
Operating Revenues: | |||
Gain on Sale of Borrower Loans | 8,450 | 6,430 | (5,058) |
Total Operating Revenues | 59,549 | 49,391 | 71,283 |
Interest Income (Expense): | |||
Interest Income on Borrower Loans and Loans Held for Sale | 36,952 | 36,765 | 41,146 |
Interest Expense on Financial Instruments | (34,514) | (34,457) | (38,492) |
Net interest income | 2,438 | 2,308 | 2,654 |
Change in Fair Value of Financial Instruments, Net | 770 | 454 | (375) |
Total Net Revenue | 62,757 | 52,153 | 73,562 |
Expenses: | |||
Administration Fee – Related Party | 52,641 | 45,472 | 62,575 |
Servicing | 6,409 | 4,900 | 5,012 |
General and Administrative | 497 | 380 | 33 |
Total Expenses | 59,547 | 50,752 | 67,620 |
Net (Loss) Income | 3,210 | 1,401 | 5,942 |
Administration Fee Revenue – Related Party | Prosper Funding LLC | |||
Operating Revenues: | |||
Revenues | 34,017 | 21,618 | 49,818 |
Servicing Fees, Net | |||
Operating Revenues: | |||
Revenues | 15,024 | 18,517 | 23,406 |
Servicing Fees, Net | Prosper Funding LLC | |||
Operating Revenues: | |||
Revenues | 15,770 | 20,791 | 26,368 |
Other Revenues | |||
Operating Revenues: | |||
Revenues | 3,992 | 2,711 | 5,953 |
Other Revenues | Prosper Funding LLC | |||
Operating Revenues: | |||
Revenues | $ 1,312 | $ 552 | $ 155 |
Consolidated Statements of Othe
Consolidated Statements of Other Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net (Loss) Income | $ (138,341) | $ 18,551 | $ (13,711) |
Other Comprehensive Income, Before Tax: | |||
Change in Net Unrealized (Loss) Gain on Available for Sale Investments, at Fair Value | 0 | 0 | 13 |
Other Comprehensive Income, Before Tax | 0 | 0 | 13 |
Income Tax Effect | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 0 | 0 | 13 |
Comprehensive (Loss) Income, Net of Tax | $ (138,341) | $ 18,551 | $ (13,698) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Convertible Preferred Stock, Stockholders’ Deficit and Members' Equity - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Convertible Preferred Stock Held by Consolidated VIE | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 214,637,925 | 0 | ||||||
Beginning balance at Dec. 31, 2018 | $ 323,793 | $ 0 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Repurchase of Convertible Preferred Stock (in shares) | 5,024,355 | |||||||
Repurchase of Convertible Preferred Stock | $ (1,045) | |||||||
Ending balance (in shares) at Dec. 31, 2019 | 209,613,570 | 0 | ||||||
Ending balance at Dec. 31, 2019 | $ 322,748 | $ 0 | ||||||
Beginning balance (in shares) at Dec. 31, 2018 | 75,652,445 | (5,177,235) | ||||||
Beginning balance at Dec. 31, 2018 | $ (298,466) | $ 229 | $ (23,417) | $ 145,486 | $ (13) | $ (420,751) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of Common Stock (in shares) | (2,196,665) | |||||||
Repurchase of Common Stock | $ 0 | $ (22) | 22 | |||||
Repurchase of Convertible Preferred Stock | 1,045 | 1,045 | ||||||
Exercise of vested stock options (in shares) | 173,356 | |||||||
Exercise of vested stock options | 25 | $ 1 | 24 | |||||
Stock-based compensation expense | 4,839 | 4,839 | ||||||
Change in net unrealized loss on Available for Sale Investments, at Fair Value | 13 | 13 | ||||||
Net (Loss) Income | (13,711) | (13,711) | ||||||
Ending balance (in shares) at Dec. 31, 2019 | 73,629,136 | (5,177,235) | ||||||
Ending balance at Dec. 31, 2019 | $ (306,255) | $ 208 | $ (23,417) | 151,416 | 0 | (434,462) | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Purchase of convertible preferred stock by consolidated VIE Prosper Grantor Trust (in shares) | (51,247,915) | |||||||
Purchase of convertible preferred stock by consolidated VIE Prosper Grantor Trust | $ (2,381) | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 209,613,570 | 209,613,570 | (51,247,915) | |||||
Ending balance at Dec. 31, 2020 | $ 322,748 | $ 322,748 | $ (2,381) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of Convertible Preferred Stock | 2,381 | 2,381 | ||||||
Exercise of vested stock options (in shares) | 687,471 | |||||||
Exercise of vested stock options | 15 | $ 7 | 8 | |||||
Stock-based compensation expense | 2,147 | 2,147 | ||||||
Net (Loss) Income | 18,551 | 18,551 | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 74,316,607 | (5,177,235) | ||||||
Ending balance at Dec. 31, 2020 | $ (283,161) | $ 215 | $ (23,417) | 155,952 | 0 | (415,911) | ||
Ending balance (in shares) at Dec. 31, 2021 | 209,613,570 | 209,613,570 | (51,247,915) | |||||
Ending balance at Dec. 31, 2021 | $ 322,748 | $ 322,748 | $ (2,381) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Exercise of vested stock options (in shares) | 3,014,622 | |||||||
Exercise of vested stock options | 61 | $ 30 | 31 | |||||
Stock-based compensation expense | 1,273 | 1,273 | ||||||
Net (Loss) Income | (138,341) | (138,341) | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 77,331,229 | (5,177,235) | ||||||
Ending balance at Dec. 31, 2021 | $ (420,168) | $ 245 | $ (23,417) | $ 157,256 | $ 0 | $ (554,252) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Convertible Preferred Stock, Stockholders’ Deficit and Members' Equity - Prosper Funding LLC - USD ($) $ in Thousands | Total | Accumulated Deficit | Prosper Funding LLC | Prosper Funding LLCAccumulated Deficit | Prosper Funding LLCMember’s Equity |
Beginning balance at Dec. 31, 2018 | $ (298,466) | $ (420,751) | $ 31,245 | $ 6,341 | $ 24,904 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions to Parent | (9,000) | (9,000) | |||
Net (Loss) Income | (13,711) | (13,711) | 5,942 | 5,942 | |
Ending balance at Dec. 31, 2019 | (306,255) | (434,462) | 28,187 | 12,283 | 15,904 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions to Parent | (4,500) | (4,500) | |||
Net (Loss) Income | 18,551 | 18,551 | 1,401 | 1,401 | |
Ending balance at Dec. 31, 2020 | (283,161) | (415,911) | 25,088 | 13,684 | 11,404 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (Loss) Income | (138,341) | (138,341) | 3,210 | 3,210 | |
Ending balance at Dec. 31, 2021 | $ (420,168) | $ (554,252) | $ 28,298 | $ 16,894 | $ 11,404 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Cash Flows from Operating Activities: | |||||
Net (Loss) Income | $ (138,341,000) | $ 18,551,000 | $ (13,711,000) | ||
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by (Used in) Operating Activities: | |||||
Change in Fair Value of Financial Instruments, Net | 3,241,000 | 34,160,000 | 27,306,000 | ||
Depreciation and Amortization | 9,839,000 | 8,349,000 | 7,676,000 | ||
Amortization of Operating Lease Right-of-Use Asset | 3,774,000 | 3,487,000 | 3,494,000 | ||
Impairment of Operating Lease Right-of-Use Asset | 0 | 445,000 | 0 | ||
Gain on Sale of Borrower Loans | (7,973,000) | (5,830,000) | (11,924,000) | ||
Change in Fair Value of Servicing Rights | 8,454,000 | 9,189,000 | 12,476,000 | ||
Stock-based Compensation Expense | 1,136,000 | 1,913,000 | 4,529,000 | ||
Fair Value of Warrants Vested on Sale of Borrower Loans | 0 | 0 | 17,552,000 | ||
Loss on Deconsolidation of VIEs | 1,494,000 | 0 | 0 | ||
Change in Fair Value of Convertible Preferred Stock Warrants | 138,622,000 | (37,677,000) | (11,235,000) | ||
Other, Net | 2,027,000 | 1,675,000 | 1,118,000 | ||
Changes in Operating Assets and Liabilities: | |||||
Purchase of Loans Held for Sale at Fair Value | (1,712,705,000) | (1,338,082,000) | (2,320,560,000) | ||
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 1,770,822,000 | 1,254,474,000 | 2,241,569,000 | ||
Accounts Receivable | (449,000) | 1,090,000 | 3,424,000 | ||
Prepaid and Other Assets | 639,000 | 498,000 | 1,350,000 | ||
Accounts Payable and Accrued Liabilities | 7,776,000 | (2,187,000) | (106,000) | ||
Payable to Investors | 28,700,000 | 23,002,000 | (26,446,000) | ||
Other Liabilities | (3,493,000) | (5,391,000) | (4,590,000) | ||
Net Cash Provided by (Used in) Operating Activities | 113,563,000 | (32,334,000) | (68,078,000) | ||
Cash Flows from Investing Activities: | |||||
Purchase of Borrower Loans Held at Fair Value | (231,998,000) | (133,644,000) | (170,328,000) | ||
Proceeds from Sales and Principal Payments of Borrower Loans Held at Fair Value | 236,861,000 | 279,658,000 | 254,845,000 | ||
Purchases of Property and Equipment | (12,041,000) | (8,359,000) | (10,312,000) | ||
Purchases of Available for Sale Investments, at Fair Value | 0 | 0 | (1,488,000) | ||
Maturities of Available for Sale Securities | 0 | 0 | 23,763,000 | ||
Net Cash (Used in) Provided by Investing Activities | (7,178,000) | 137,655,000 | 96,480,000 | ||
Cash Flows from Financing Activities: | |||||
Proceeds from Issuance of Notes Held at Fair Value | 231,933,000 | 133,228,000 | 171,138,000 | ||
Payments of Notes Held at Fair Value | (172,250,000) | (149,409,000) | (167,419,000) | ||
Principal Payments on Notes Issued by Securitization Trust | (87,700,000) | (192,771,000) | (134,250,000) | ||
Principal Payments on Certificates Issued by Securitization Trust | (14,935,000) | (22,136,000) | (13,770,000) | ||
Proceeds from Securitization Issuance | 0 | 0 | 8,962,000 | ||
Net cash and restricted cash outflows from Deconsolidation of VIEs (Note 6) | (6,821,000) | 0 | 0 | ||
Proceeds from Warehouse Lines | 68,800,000 | 126,149,000 | 186,010,000 | ||
Principal payments on Warehouse Lines | (101,900,000) | (15,300,000) | (57,899,000) | ||
Principal payments on financing lease | (76,000) | (84,000) | 0 | ||
Proceeds from Paycheck Protection Program Loan | 0 | 8,447,000 | 0 | ||
Payment for Debt Issuance Costs | (1,740,000) | 0 | (7,850,000) | ||
Proceeds from Exercise of Stock Options | 61,000 | 15,000 | 25,000 | ||
Net Cash Used in Financing Activities | (84,628,000) | (111,861,000) | (15,053,000) | ||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 21,757,000 | (6,540,000) | 13,349,000 | ||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 213,868,000 | 220,408,000 | 207,059,000 | ||
Cash, Cash Equivalents and Restricted Cash at End of the Period | 235,625,000 | 213,868,000 | 220,408,000 | ||
Supplemental Disclosure of Cash Flow Information: | |||||
Cash Paid for Interest | 49,923,000 | 57,697,000 | 60,642,000 | ||
Non-Cash Investing Activity - Accrual for Property and Equipment, Net | 971,000 | 833,000 | 707,000 | ||
Non-Cash Investing Activity - Deconsolidation of Borrower Loans, at Fair Value | 78,361,000 | 0 | 0 | ||
Non-Cash Financing Activity - Deconsolidation of Notes Issued by Securitization Trust | 69,709,000 | 0 | 0 | ||
Non-Cash Financing Activity - Deconsolidation of Certificates Issued by Securitization Trust, at Fair Value | 13,979,000 | 0 | 0 | ||
Right-of-use assets obtained in exchange for new financing lease obligation | 0 | 239,000 | 0 | ||
Non-Cash Investing Activity - Consolidation of Borrower Loans, at Fair Value | 0 | 0 | (391,383,000) | ||
Non-Cash Financing Activity- Issuance of Securitization Notes and Certificates | 0 | 0 | 554,892,000 | ||
Non-Cash Financing Activity- Derecognition of Warehouse Line Debt | 0 | 0 | (158,857,000) | ||
Reconciliation to Amounts on Consolidated Balance Sheets | |||||
Cash and Cash Equivalents | 67,700,000 | 50,145,000 | 64,635,000 | ||
Restricted Cash | 167,925,000 | [1] | 163,723,000 | [1] | 155,773,000 |
Total Cash, Cash Equivalents and Restricted Cash | $ 235,625,000 | $ 213,868,000 | $ 220,408,000 | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows - Prosper Funding LLC - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Cash Flows from Operating Activities: | |||||
Net (Loss) Income | $ (138,341) | $ 18,551 | $ (13,711) | ||
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by (Used in) Operating Activities: | |||||
Change in Fair Value of Financial Instruments, Net | 3,241 | 34,160 | 27,306 | ||
Gain on Sale of Borrower Loans | (7,973) | (5,830) | (11,924) | ||
Change in Fair Value of Servicing Rights | 8,454 | 9,189 | 12,476 | ||
Depreciation and Amortization | 9,839 | 8,349 | 7,676 | ||
Changes in Operating Assets and Liabilities: | |||||
Purchase of Loans Held for Sale at Fair Value | (1,712,705) | (1,338,082) | (2,320,560) | ||
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 1,770,822 | 1,254,474 | 2,241,569 | ||
Accounts Payable and Accrued Liabilities | 7,776 | (2,187) | (106) | ||
Payable to Investors | 28,700 | 23,002 | (26,446) | ||
Other Liabilities | (3,493) | (5,391) | (4,590) | ||
Net Cash Provided by (Used in) Operating Activities | 113,563 | (32,334) | (68,078) | ||
Cash Flows from Investing Activities: | |||||
Purchase of Borrower Loans Held at Fair Value | (231,998) | (133,644) | (170,328) | ||
Proceeds from Sales and Principal Payments of Borrower Loans Held at Fair Value | 236,861 | 279,658 | 254,845 | ||
Purchases of Property and Equipment | (12,041) | (8,359) | (10,312) | ||
Net Cash (Used in) Provided by Investing Activities | (7,178) | 137,655 | 96,480 | ||
Cash Flows from Financing Activities: | |||||
Proceeds from Issuance of Notes Held at Fair Value | 231,933 | 133,228 | 171,138 | ||
Payments of Notes Held at Fair Value | (172,250) | (149,409) | (167,419) | ||
Net Cash Used in Financing Activities | (84,628) | (111,861) | (15,053) | ||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 21,757 | (6,540) | 13,349 | ||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 213,868 | 220,408 | 207,059 | ||
Cash, Cash Equivalents and Restricted Cash at End of the Period | 235,625 | 213,868 | 220,408 | ||
Supplemental Disclosure of Cash Flow Information: | |||||
Cash Paid for Interest | 49,923 | 57,697 | 60,642 | ||
Non-Cash Investing Activity - Accrual for Property and Equipment, Net | 971 | 833 | 707 | ||
Reconciliation to Amounts on Consolidated Balance Sheets | |||||
Cash and Cash Equivalents | 67,700 | 50,145 | 64,635 | ||
Restricted Cash | 167,925 | [1] | 163,723 | [1] | 155,773 |
Total Cash, Cash Equivalents and Restricted Cash | 235,625 | 213,868 | 220,408 | ||
Prosper Funding LLC | |||||
Cash Flows from Operating Activities: | |||||
Net (Loss) Income | 3,210 | 1,401 | 5,942 | ||
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by (Used in) Operating Activities: | |||||
Change in Fair Value of Financial Instruments, Net | (770) | (454) | 374 | ||
Other Non-Cash Changes in Borrower Loans, Loans Held for Sale and Notes | 26 | 46 | (694) | ||
Gain on Sale of Borrower Loans | (9,020) | (7,203) | (13,033) | ||
Change in Fair Value of Servicing Rights | 10,312 | 11,003 | 13,682 | ||
Depreciation and Amortization | 4,878 | 4,149 | 4,397 | ||
Changes in Operating Assets and Liabilities: | |||||
Purchase of Loans Held for Sale at Fair Value | (1,712,705) | (1,338,082) | (2,320,560) | ||
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 1,712,705 | 1,338,082 | 2,320,560 | ||
Other Assets | (100) | 532 | (426) | ||
Accounts Payable and Accrued Liabilities | (543) | 228 | (2,557) | ||
Payable to Investors | 27,415 | 20,979 | (21,966) | ||
Net Related Party Receivable/Payable | (2,544) | 1,183 | 2,251 | ||
Other Liabilities | (179) | (1,114) | (789) | ||
Net Cash Provided by (Used in) Operating Activities | 32,685 | 30,750 | (12,819) | ||
Cash Flows from Investing Activities: | |||||
Purchase of Borrower Loans Held at Fair Value | (231,998) | (133,644) | (170,326) | ||
Proceeds from Sales and Principal Payments of Borrower Loans Held at Fair Value | 172,709 | 149,908 | 165,481 | ||
Purchases of Property and Equipment | (6,127) | (3,270) | (6,374) | ||
Net Cash (Used in) Provided by Investing Activities | (65,416) | 12,994 | (11,219) | ||
Cash Flows from Financing Activities: | |||||
Proceeds from Issuance of Notes Held at Fair Value | 231,933 | 133,228 | 171,138 | ||
Payments of Notes Held at Fair Value | (172,250) | (149,409) | (167,420) | ||
Cash Distributions to Parent | 0 | (4,500) | (9,000) | ||
Net Cash Used in Financing Activities | 59,683 | (20,681) | (5,282) | ||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 26,952 | 23,063 | (29,320) | ||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 140,924 | 117,861 | 147,181 | ||
Cash, Cash Equivalents and Restricted Cash at End of the Period | 167,876 | 140,924 | 117,861 | ||
Supplemental Disclosure of Cash Flow Information: | |||||
Cash Paid for Interest | 34,682 | 34,410 | 39,229 | ||
Non-Cash Investing Activity - Accrual for Property and Equipment, Net | 234 | 504 | 246 | ||
Reconciliation to Amounts on Consolidated Balance Sheets | |||||
Cash and Cash Equivalents | 10,765 | 8,592 | 7,462 | ||
Restricted Cash | 157,111 | 132,332 | 110,399 | ||
Total Cash, Cash Equivalents and Restricted Cash | $ 167,876 | $ 140,924 | $ 117,861 | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Prosper Marketplace, Inc. was incorporated in the state of Delaware on March 22, 2005. Except as the context requires otherwise, as used in these notes to consolidated financial statements of Prosper Marketplace, Inc., “Prosper”, “PMI”, and the "Company" refer to Prosper Marketplace, Inc. and its wholly-owned subsidiaries on a consolidated basis. PMI developed a peer-to-peer online credit marketplace (the “marketplace”), and in February 2013, transferred ownership of the marketplace to Prosper Funding LLC (“PFL”), its wholly-owned subsidiary. All of the borrower payment dependent notes (“Notes”) issued and sold through the marketplace today are issued and sold by PFL. PFL also operates the marketplace and facilitates the origination of unsecured, personal loans by WebBank (“Borrower Loans”), an FDIC-insured, Utah-chartered industrial bank, through the marketplace. Pursuant to a Loan Account Program Agreement between PMI and WebBank, PMI manages the operation of the marketplace as agent of WebBank in connection with the submission of loan applications by potential borrowers. PMI also manages the origination of related loans by WebBank and the funding of such Borrower Loans by WebBank. On February 1, 2013, PFL entered into an Administration Agreement with PMI in its capacity as licensee, corporate administrator, loan marketplace administrator and loan and Note servicer, pursuant to which PMI provides certain back office support, loan platform administration and loan servicing to PFL. A borrower who wishes to obtain a Borrower Loan through the marketplace must post a loan listing on the marketplace. Listings are allocated to one of two investor funding channels: (i) the “Note Channel,” which allows investors to commit to purchase Notes from PFL, the payments of which are dependent on PFL’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows investors to commit to purchase 100% of a Borrower Loan directly from Prosper. As of December 31, 2021, the marketplace is open to investors in 30 states and the District of Columbia. Additionally, as of December 31, 2021, the marketplace is open to borrowers in 48 states and the District of Columbia. Currently our marketplace does not operate internationally. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Prosper Funding LLC was formed in the state of Delaware in February 2012 as a limited liability company with Prosper Marketplace, Inc. (“PMI”) as its sole equity member. Except as the context otherwise requires, as used in these Notes to consolidated financial statements of Prosper Funding LLC, “PFL” and the “Company” refer to Prosper Funding LLC and its wholly owned subsidiary, Prosper Depositor LLC, a Delaware limited liability company, on a consolidated basis. PFL did not have any items of other comprehensive income (loss) during any of the periods presented in the consolidated financial statements as of and for the years ended December 31, 2021, 2020 and 2019. PFL was formed by PMI to hold Borrower Loans and issue Notes through the marketplace. Although PFL is consolidated with PMI for accounting and tax purposes, PFL has been organized and is operated in a manner that is intended to minimize the likelihood that it would be substantively consolidated with PMI in a bankruptcy proceeding. PFL’s intention is to minimize the likelihood that its assets would be subject to claims by PMI’s creditors if PMI were to file for bankruptcy, as well as to minimize the likelihood that PFL will become subject to bankruptcy proceedings directly. PFL seeks to achieve this by placing certain restrictions on its activities and implementing certain formal procedures designed to expressly reinforce its status as a distinct entity from PMI. Since February 1, 2013, all Notes issued and sold through the marketplace are issued, sold and serviced by PFL. Pursuant to a Loan Account Program Agreement between PMI and WebBank, PMI manages the operation of the marketplace, as agent of WebBank, in connection with the submission of Borrower Loan applications by potential borrowers, the origination of related Borrower Loans by WebBank and the funding of such Borrower Loans by WebBank. Pursuant to an Administration Agreement between PFL and PMI, PMI manages all other aspects of the marketplace on behalf of PFL. As a result PFL earns significant revenues and incurs significant expenses with a related party, its direct parent company, PMI. A borrower who wishes to obtain a loan through the marketplace must post a loan listing on the marketplace. PFL allocates listings to one of two investor funding channels: (i) the “Note Channel,” which allows investors to commit to purchase Notes from PFL, the payments of which are dependent on PFL’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows investors to commit to purchase 100% of a Borrower Loan directly from PFL. All loans requested and obtained through the marketplace are unsecured obligations of individual borrowers with a fixed interest rate and loan terms set at three As of December 31, 2021, PFL’s marketplace was open to investors in 30 states and the District of Columbia. Additionally, as of December 31, 2021, PFL’s marketplace was open to borrowers in 48 states and the District of Columbia. Currently, the marketplace does not operate internationally. |
SUMMARY OF SIGNIFICANT ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | SUMMARY OF SIGNIFICANT ACCOUNT POLICIES Basis of Presentation The accompanying consolidated financial statements include the accounts of PMI and its wholly owned subsidiaries including PFL, Prosper Healthcare Lending LLC (“PHL”), BillGuard, Inc. (“BillGuard”), and its consolidated VIEs including Prosper Warehouse I Trust (“PWIT”), Prosper Warehouse II Trust (“PWIIT”), Prosper Marketplace Issuance Trust, Series 2019-1 (“PMIT 2019-1,” deconsolidated on September 27, 2021), Prosper Marketplace Issuance Trust, Series 2019-2 (“PMIT 2019-2,” deconsolidated on September 27, 2021), Prosper Marketplace Issuance Trust, Series 2019-4 (“PMIT 2019-4,” deconsolidated on September 27, 2021) and Prosper Grantor Trust (“PGT”). All intercompany balances and transactions between PMI and its subsidiaries have been eliminated in consolidation. PMI and PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures, including contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include but are not limited to the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, Certificates Issued by Securitization Trust (Note 6), valuation of servicing rights and loan trailing fee liability, valuation allowance on deferred tax assets, stock-based compensation expense, Intangible Assets, Goodwill, Convertible Preferred Stock Warrant Liability, Repurchase Obligations and contingent liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions. Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Prosper’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Prosper consolidates a VIE when it is deemed to be the primary beneficiary. Prosper assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Transfers of Financial Assets Prosper accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from Prosper, the transferee has the right to pledge or exchange the assets without any significant constraints, and Prosper has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, Prosper considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. Prosper measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale include the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments measured at fair value consist principally of Borrower Loans, Loans Held for Sale, Servicing Assets, Loan Trailing Fee Liabilities (Note 9), Notes, Certificates Issued by Securitization Trust (Note 6) and Convertible Preferred Stock Warrant Liability. The estimated fair values of other financial instruments, including Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable, Accrued Liabilities and Payable to Investors approximate their carrying values because of their short-term nature. The estimated fair values of the Paycheck Protection Program loan (Note 9 and 10), Notes Issued by Securitization Trust (Note 6) and Warehouse Lines do not approximate their carrying values due primarily to differences in the stated and market rates associated with these instruments. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, Prosper maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments Prosper must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets are considered level 3 financial instruments. Prosper primarily uses a discounted cash flow model to estimate their fair value, and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. The effective interest rate associated with a group of Notes is less than the interest rate earned on the corresponding Borrower Loan due to the 1.0% servicing fee. Refer to Note 7 for additional fair value disclosures. Cash and Cash Equivalents Cash includes various unrestricted deposits with investment-grade rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. At times, our cash balances may exceed federally insured amounts and potentially subject the Company to a concentration of credit risk. The Company believes that no significant concentration of credit risk exists with respect to these balances based on its assessment of the creditworthiness of these financial institutions. Restricted Cash Restricted cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors or Prosper have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank then issues Notes to investors and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s Consolidated Balance Sheets as assets and liabilities, respectively. In 2019, Prosper began refinancing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions, which issued senior notes, risk retention interests, and residual certificates. Associated securitization trusts were deemed consolidated VIEs until September 2021, when the Company sold its share of the residual certificates issued by these securitization trusts and deconsolidated the VIEs. Prior to their deconsolidation, the Borrower Loans held in the securitization trusts were included in “Borrower Loans, at Fair Value”, senior notes sold to third party investors were included in “Notes Issued by Securitization Trust”, and the risk retention interest and residual certificates held by third party investors were included in “Certificates Issued by Securitization Trust, at Fair Value” on the Consolidated Balance Sheets. Refer to Note 6 - Securitization for additional disclosures and details on the deconsolidation of these securitization trust VIEs. Prosper uses Warehouse Lines to purchase Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. Loans Held for Sale are included in “Loans Held for Sale, at Fair Value” in the Consolidated Balance Sheets. See Note 10 - Debt for more details on Warehouse Lines. Borrower Loans and Loans Held for Sale are purchased from WebBank. Prosper places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods. Prosper has elected the fair value option for Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in the fair value of Borrower Loans held in consolidated securitization trusts were partially offset by changes in fair value of the Certificates Issued by Securitization Trust, prior to the deconsolidation of these securitization trusts in September 2021. Changes in fair value of Loans Held for Sale are recorded through Proper's earnings and Prosper collects interest on Loans Held for Sale. Changes in fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. Prosper primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. The key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. Servicing Assets Prosper records Servicing Assets at their estimated fair values for servicing rights retained when Prosper sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets is recognized in Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market servicing rate is recorded in Servicing Assets on the Consolidated Balance Sheets. Prosper uses a discounted cash flow model to estimate the fair value of the loan Servicing Assets which considers the contractual projected servicing fee revenue that Prosper earns on the Borrower Loans, the estimated market servicing rates to service such loans, the prepayment rates, the default rates and the current principal balances of the Borrower Loans. Property and Equipment Property and Equipment consists of computer equipment, office furniture and equipment, leasehold improvements, software purchased or developed for internal use and web site development costs. Property and Equipment is stated at cost, less accumulated depreciation and amortization, and is computed using the straight-line method based upon estimated useful lives of the assets. Estimated useful lives of the assets are as follows: Furniture and fixtures 7 years Office equipment 5 years Computers and equipment 3 years Leasehold improvements 5 - 8 years Software and website development costs 1 - 5 years The costs to develop software for the website and other internal uses are capitalized when management has authorized and committed project funding, when preliminary development efforts are successfully completed, and when it is probable that the project will be completed and the software will be used as intended. Capitalized software and website development costs primarily include software licenses acquired, fees paid to outside consultants and salaries and payroll-related costs for employees directly involved in the development efforts. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. Capitalized costs are included in Property and Equipment and amortized to expense using the straight-line method over their expected lives. Software and website development assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software and website development assets to be held and used is measured by a comparison of the carrying amount of the asset group to the future net undiscounted cash flows expected to be generated by the asset group. If such software and website development assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software and website development asset group. Leases Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not recognize ROU assets and lease liabilities. If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment. Goodwill and Intangibles Goodwill associated with business combinations is computed by recognizing the portion of the purchase price that is not tied to individually identifiable and separately recognizable assets. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Annual impairment testing occurs on October 1. Impairment exists whenever the carrying value of Goodwill exceeds its implied fair value. Adverse changes in impairment indicators such as loss of key personnel, increased regulatory oversight or unplanned changes in operations could result in impairment. PMI did not recognize any Goodwill impairments during the years ended December 31, 2021, 2020 and 2019. Costs of internally developing any intangibles is expensed as incurred. Intangible Assets identified through the acquisitions of American Healthcare Lending and BillGuard include customer relationships, technology and a brand name. The user base and customer relationship Intangible Assets are being amortized on an accelerated basis over a three three Payable to Investors Payable to Investors primarily represents the obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. Warehouse Lines and Notes Issued by Securitization Trust Warehouse Lines and Notes Issued by Securitization Trust (prior to deconsolidation in September 2021) are carried at amortized cost. Prosper defers specific incremental costs directly related to entering into the Warehouse Lines and issuing Notes Issued by Securitization Trust and subsequently amortizes them into interest expense over the life of the arrangements. Convertible Preferred Stock Warrant Liability Prosper has entered into varying arrangements with investors to issue preferred stock warrants in exchange for their participation as a purchaser of Borrower Loans. In all cases, these warrants are free standing financial instruments due to their status as legally detached and separately exercisable warrants without conditions requiring Prosper to repurchase those warrants or the underlying preferred shares. These freestanding warrants are accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Under ASC 480, vested freestanding warrants to purchase the Company’s convertible redeemable preferred stock are classified as a liability on the Consolidated Balance Sheets and carried at fair value because the warrants may conditionally obligate the Company to transfer assets at some point in the future. The Company records the warrants at fair value on issuance. The warrants are subject to remeasurement to fair value at each balance sheet date, and any change in their fair value is recognized as “Change in Fair Value of Convertible Preferred Stock Warrants” in the Consolidated Statements of Operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event or the conversion of convertible redeemable preferred stock into Common Stock. Loan Trailing Fee Liability On July 1, 2016, Prosper signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to Prosper. These agreements became effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by Prosper, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, Prosper is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to Prosper is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. Revenue Recognition Revenue primarily results from transaction and Servicing Fees and net interest income earned. Fees include Transaction Fees for our services performed on behalf of WebBank to originate a loan. PMI also has other smaller sources of revenue reported as Other Revenues, including referral fees, and securitization fees. Transaction Fees Prosper has a customer contract with WebBank to facilitate the origination of all Borrower Loans through Prosper’s marketplace. In exchange for these services, Prosper earns a transaction fee from WebBank that is recognized when performance is complete and upon the successful origination of a Borrower Loan. The transaction fee Prosper earns is determined by the term and credit grade of the Borrower Loan that is facilitated on Prosper’s marketplace, and ranges from 1.0% to 5.0% of the original principal amount of each Borrower Loan that WebBank originates. Prosper records the transaction fee net of any fees paid to WebBank because Prosper does not receive an identifiable benefit from WebBank other than the borrower loan that has been recognized at fair value. Servicing Fees Investors who purchase Borrower Loans from Prosper typically pay Prosper a servicing fee which is generally set at 1.075% per annum of the outstanding principal balance of the borrower loan prior to applying the current payment. The servicing fee compensates Prosper for the costs incurred in servicing the borrower loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received. Gain on Sale of Borrower Loans Prosper recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Prosper measures gain or loss on sale of Borrower Loans as the net proceeds received on a sale less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Loans Held for Sale and Interest Expense on Financial Instruments Prosper recognizes interest income on Borrower Loans and Loans Held for Sale using the accrual method based on the stated interest rate to the extent we believe it to be collectible. We record interest expense on the corresponding Notes, at Fair Value, Notes Issued by Securitization Trust, Certificates Issued by Securitization Trust, and Warehouse Lines based on the contractual interest rates. Other Revenues Other Revenues consist primarily of securitization fees and credit referral fees. Credit referral fees are where partner companies pay us an agreed upon amount for successful referrals of customers from our marketplace. The transaction price is a fixed amount per referral and is recognized by the Company upon a successful referral. Securitization fees represent fees Prosper earns to facilitate securitizations for purchasers of Borrower Loans and is recognized as “Other Revenues” when the securitization is completed. As of December 31, 2021, Prosper had no contract assets, contract liabilities or deferred contract costs. As of December 31, 2021, Prosper had no unsatisfied performance obligations related to Transaction Fees or Other Revenues. Advertising Costs Advertising costs are expensed when incurred and are included in “Sales and Marketing” expense in the accompanying Consolidated Statements of Operations. Prosper incurred advertising costs of $6.1 million , $6.8 million and $32.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Stock-Based Compensation Management determines the fair value of the Company's stock options issued to employees on the date of grant using the Black-Scholes option pricing model, which is impacted by the fair value of Common Stock as well as by changes in assumptions that include, but are not limited to, the expected Common Stock price volatility over the term of the option awards, the expected term of the awards, risk-free interest rates and the expected dividend yield. PMI recognizes compensation expense for stock-based awards on a straight-line basis over the period during which an employee is required to provide services in exchange for the award (the vesting period of the award). Stock-based compensation expense is recognized only for those awards expected to vest. PMI estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from estimates. Stock-based awards issued to non-employees are marked-to-market up until the point that the awards measurement period has been achieved. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the vesting period of the award. Income Taxes The asset and liability method is used to account for income taxes. Under this method, deferred income tax assets and liabilities are based on the differences between the financial statement carrying values and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Prosper’s policy is to include interest and penalties related to gross unrecognized tax benefits within its provision for income taxes. U.S. Federal, California and other state income tax returns are filed. Prosper is not currently undergoing any income tax examinations. Due to the cumulative net operating loss, generally all tax years remain open. Prosper recognizes benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Other Income, Net Other Income, Net includes interest income from Available for Sale Investments, sublease income, SEC settlement costs and contract termination costs that are expected to be non-recurring and not part of restructuring activities. Restructuring Charges Restructuring Charges consist of severance costs and contract termination-related costs and impairment charges associated with the severance actions. A liability for severance costs is typically recognized when the plan of termination has been communicated to the affected employees and is measured at its fair value at the communication date. Contract termination costs consist primarily of costs that will continue to be incurred under operating leases for their remaining terms without economic benefit to the Company. A liability for contract termination costs is recognized at the date the Company ceases using the rights conveyed by the lease contract and is recorded at fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. Comprehensive Income Marketable debt securities are generally considered available-for-sale and are carried at fair value, based on quoted market prices or other readily available market information. Gains and losses are recognized when realized using the specific identification method and included in “Other Income, Net” in the Consolidated Statements of Operations. Unrealized gains and losses, net of taxes, are included in Accumulated Other Comprehensive Income, which is reflected as a separate component of Stockholders’ Deficit in Prosper's Consolidated Balance Sheets. If management has determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to an identified loss is recognized in earnings. Prosper monitors its investment portfolio for potential impairment on a quarterly basis. Recent Accounting Pronouncements Accounting Standards Adopted In The Current Year In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries and the methodology for calculating income taxes in an interim period. The guidance also clarifies and simplifies other aspects of the accounting for income taxes, including a modification in the guidance for franchise taxes that are partially based on income and recognizing deferred taxes for a subsequent step-up in the tax basis of goodwill. The ASU was effective for the Company beginning in the first quarter of 2021. The Company has adopted ASU 2019-12 and concluded that the impact on its consolidated financial statements was immaterial. Accounting Standards Issued, to be Adopted by the Company in Future Periods |
Prosper Funding LLC | |
Entity Information [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | SUMMARY OF SIGNIFICANT ACCOUNT POLICIES Basis of Presentation PFL’s consolidated financial statements include the accounts of PFL and its wholly-owned subsidiary, Prosper Depositor LLC. All intercompany balances and transactions between PFL and Prosper Depositor LLC have been eliminated in consolidation. PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of PFL’s consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include, but are not limited to, the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, valuation of servicing rights, valuation of loan trailing fee liability, repurchase obligations, and contingent liabilities. PFL bases its estimates on historical experience from all Borrower Loans and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. PFL’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. PFL consolidates a VIE when it is deemed to be the primary beneficiary. PFL assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Transfers of Financial Assets PFL accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from PFL, the transferee has the right to pledge or exchange the assets without any significant constraints, and PFL has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, PFL considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. PFL measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments consist principally of Cash and Cash Equivalents, Restricted Cash, Borrower Loans, Loans Held for Sale, Servicing Assets, Loan Trailing Fee Liability, Accounts Receivable, Accounts Payable and Accrued Liabilities, Payable to Investors and Notes. The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short term nature. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, PFL maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments PFL must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, and Servicing Assets, or for similar assets and liabilities, PFL believes the Borrower Loans, Loans Held for Sale, Notes, and Servicing Assets should be considered level 3 financial instruments. PFL primarily uses a discounted cash flow model to estimate their fair value and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is generally 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. Any unrealized gains or losses on the Borrower Loans and Notes for which the fair value option has been elected is recorded as a separate line item in the statement of operations. The effective interest rate associated with a group of Notes is less than the interest rate earned on the corresponding Borrower Loan due to the 1.0% servicing fee. Refer to Note 7 for addition al fair value disclosures. Cash and Cash Equivalents Cash includes various unrestricted deposits with highly rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, U.S. treasury securities and U.S. agency securities. Cash equivalents are recorded at cost, which approximates fair value. Restricted Cash Restricted Cash consists primarily of cash deposits and short term certificates of deposit accounts for loan funding and servicing activities, and cash that investors or PFL have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. Borrower Loans, Loans Held for Sale and Notes With respect to the Note Channel, PFL purchases Borrower Loans from WebBank then issues notes, and holds the Borrower Loans as a receivable until maturity. The obligation to repay a series of notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower loans funded and notes issued through the Note Channel are carried on PFL’s Consolidated Balance Sheets as assets and liabilities, respectively. PFL places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, PFL stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, PFL charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods. Management has elected the fair value option for Borrower Loans, Loans Held for Sale, and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans, Loans Held for Sale and Notes are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. PFL primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale and Notes. The key assumptions used in valuation include default and prepayment rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. Servicing Assets PFL records Servicing Assets at their estimated fair values for servicing rights retained when PFL sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets is recognized in revenue as Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain (Loss) on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market loan servicing rate, is recorded in Servicing Assets on the Consolidated Balance Sheets. PFL uses a discounted cash flow model to estimate the fair value of Servicing Assets which considers the contractual projected servicing fee revenue that PFL earns on the Borrower Loans, estimated market servicing fees to service such loans, prepayment rates, default rates and the current principal balances of the Borrower Loans. Software and Website Development Software and website development represents the software and website development costs that PMI transferred to PFL. PFL does not develop any of its own software or its website. Software and website development are included in Property and Equipment, Net and amortized to expense using the straight-line method over their expected lives which is generally one Payable to Investors Payable to Investors primarily represents the Company's obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. Loan Trailing Fee Liability On July 1, 2016, PMI signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to PMI. These agreements were effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by PMI, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by PMI to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, PMI is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to PMI is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. Revenue Recognition Revenue primarily results from fees, net interest earned and gains on the sale of Borrower Loans. Fees consist of related party administrative fees and Servicing Fees paid by investors. The Company also has other smaller sources of revenue reported as Other Revenues including fees charged in relation to securitizations by outside investors. Administration Agreement License Fees PFL primarily generates revenues through license fees it earns through an Administration Agreement with PMI. The Administration Agreement contains a license granted by PFL to PMI that entitles PMI to use the platform for and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement relating to corporate administration, loan platform services, loan and Note servicing and marketing, and (ii) PMI’s performance of its duties and obligations to WebBank in relation to loan origination and funding. The license fees are based on the number of listings that are posted to the platform. Service Fees Investors who purchase Borrower Loans from PFL through the Whole Loan Channel typically pay PFL a servicing fee which is currently set at 1.075% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment. The servicing fee compensates PFL for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. PFL records Servicing Fees from investors as a component of operating revenue when received. Gain (Loss) on Sale of Borrower Loans PFL recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. PFL measures gain or loss on sale of Borrower Loans as the net proceeds received on the sale less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Interest Expense on Notes PFL recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent PFL believes it to be collectable. Administration Fee Expense - Related Party Pursuant to the Administration Agreement between PFL and PMI, PMI manages the marketplace on behalf of PFL. Accordingly each month, PFL is required to pay PMI an administration fee that is based on PMI’s (a) finance and legal personnel costs, (b) number of Borrower Loans originated through the Marketplace, (c) Servicing Fees collected by or on behalf of PFL, and (d) nonsufficient funds fees collected by or on behalf of PFL. Recent Accounting Pronouncements Accounting Standards Adopted in the Current Period No accounting standards were adopted in the current period for PFL. Accounting Standards Issued, to be Adopted in Future Periods No issued and pending accounting standards were identified that are expected to have an impact on PFL. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and Equipment, Net consists of the following at the dates presented (in thousands): December 31, 2021 2020 Operating lease right-of-use assets $ 17,485 $ 15,767 Computer equipment 15,090 13,841 Internal-use software and website development costs 41,816 33,176 Office equipment and furniture 2,961 2,872 Leasehold improvements 7,167 7,167 Assets not yet placed in service 5,224 5,035 Property and equipment 89,743 77,858 Less: Accumulated depreciation and amortization (60,029) (49,412) Total Property and Equipment, Net $ 29,714 $ 28,446 Depreciation and amortization expense for Property and Equipment for the years ended December 31, 2021, 2020 and 2019 was $9.7 million , $8.1 million and $7.4 million, respectively. These expenses are included in "General and Administrative" expenses on the Con solidated Statements of Operations. Prosper capitalized internal-use software and website development costs in the amount of $9.8 million, $8.3 million and $9.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. We recognized impairment of $0.4 million on our operating lease right-of-use assets related to vacant sublease space and the expected timing of finding new subtenants for the year ended December 31, 2020. Impairment was not material for years ended December 31, 2021 and 2019. Additionally, disclosures around the operating lease right-of-use assets are included in Note 16 . |
Prosper Funding LLC | |
Entity Information [Line Items] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and Equipment consist of the following as of the dates presented (in thousands): December 31, 2021 2020 Internal-use software and web site development costs $ 31,979 $ 26,953 Less: Accumulated depreciation and amortization (24,072) (20,025) Total Property and Equipment, Net $ 7,907 $ 6,928 |
BORROWER LOANS, LOANS HELD FOR
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE | BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUEThe fair value of the Borrower Loans originated and Notes issued through the Note Channel is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such Borrower Loans and Notes include default rates, prepayment rates and recoveries derived from historical performance, market conditions and discount rates applied to each credit grade based on the perceived credit risk of each credit grade. The obligation to pay principal and interest on any series of notes is equal to the payments, if any, received on the corresponding borrower loan, net of the servicing fee. As such, the fair value of the Notes is approximately equal to the fair value of the Borrower Loans originated through the Note Channel, adjusted for the servicing fee and the timing of borrower payments subsequently disbursed to the note holders. The effective interest rate associated with any series of notes will be less than the interest rate earned on the corresponding borrower loan due to the servicing fee. In 2019, Prosper began refinancing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions. Associated securitization trusts were deemed consolidated VIEs until September 2021, when the Company sold its share of the residual certificates issued by these securitization trusts and deconsolidated the VIEs. Prior to their deconsolidation, the Borrower Loans held in the securitization trusts were included in “Borrower Loans, at Fair Value” in the Consolidated Balance Sheets. See Note 6 - Securitization for additional disclosure and details on the deconsolidation of these securitization trust VIEs. The fair value of Borrower Loans is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such borrower loans include default and prepayment rates derived from historical performance and discount rates based on the rates of return that investors would require when investing in financial instruments with similar characteristics. Prosper Warehouse I Trust (“PWIT”) and Prosper Warehouse II Trust (“PWIIT”), consolidated VIEs, purchase Loans Held for Sale (collectively “Warehouse Loans”) from the Company through warehouse arrangements with national banking associations and an asset manager. See Note 10 - Debt for more details. Prosper utilizes Warehouse Lines to finance Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. The fair value of the Loans Held for Sale is estimated using the same methodology as the one utilized for Borrower Loans valuation. As of December 31, 2021 and 2020, Borrower Loans, Loans Held for Sale and Notes were as follows (in thousands): Borrower Loans Loans Held for Sale Notes 2021 2020 2021 2020 2021 2020 Aggregate principal balance outstanding $ 265,232 $ 393,642 $ 242,278 $ 279,113 $ 267,415 $ 217,110 Fair value adjustments 2,394 (15,379) 892 (4,492) (1,430) (8,731) Fair value $ 267,626 $ 378,263 $ 243,170 $ 274,621 $ 265,985 $ 208,379 PMI has offered assistance to qualified borrowers who are facing financial hardship as a result of the COVID-19 pandemic. These relief options include, among other things, the ability to delay up to four monthly loan payments, the ability to reduce minimum monthly payments for up to 12 months and extend the term of the loan by up to 11 months, and waived late and non-sufficient funds fees. Since COVID-19 relief was first offered in March 2020, and through December 31, 2021, approximately 9.1% of our current outstanding loan balances on a cumulative basis have enrolled in at least one of these COVID-19 relief programs. Approximately 1.2% of our outstanding loan balances are actively enrolled in at least one relief program as of December 31, 2021. Borrower Loans On September 27, 2021, Borrower Loans held by the securitization trusts consolidated by PMI as VIEs were removed from the balance sheet as part of the deconsolidation of those entities. Refer to Note 6 for additional details on this deconsolidation. As of December 31, 2021, outstanding Borrower Loans had original maturities of either 36 months or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through December 2026. At December 31, 2020, outstanding Borrower Loans had original terms between 36 months and 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through December 2025. As of December 31, 2021, the Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $0.9 million and a fair value of $0.1 million. As of December 31, 2020, the Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.8 million and a fair value of $0.3 million. We place loans on non-accrual status when they are over 120 days past due. As of December 31, 2021 and 2020, Borrower Loans in non-accrual status had a fair value of $0.1 million and $0.4 million, respectively. Loans Held for Sale As of December 31, 2021, outstanding Loans Held for Sale had original maturities between 36 months and 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through December 2026. At December 31, 2020, outstanding Loans Held for Sale had original maturities between 36 months and 60 months had monthly payments with fixed interest rates rangin g from 5.31% to 31.82% and had various original maturity dates through December 2025. Interest income earned on Loans Held for Sale by the Company was $32.6 million and $27.6 million during 2021 and 2020, respectively. As of December 31, 2021, Loans Held for S ale that were 90 days or more delinquent, had an aggregate principal amo unt of $0.8 million and a fair value of $0.1 million. As of December 31, 2020, Loans Held for S ale that were 90 days or more delinquent, had an aggregate principal amount of $0.8 million and a fair value of $0.1 million . PMI places loans on non-accrual status when they are over 120 days past due. As of December 31, 2021 and December 31, 2020, Loans Held for Sale in non-accrual status had a fair value of $0.1 million (for both periods). |
Prosper Funding LLC | |
Entity Information [Line Items] | |
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE | BORROWER LOANS AND NOTES, AT FAIR VALUE The fair value of Borrower Loans and Notes issued through the Note Channel is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such Borrower Loans and Notes include default and prepayment rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the payments, if any, received on the corresponding borrower loan, net of the servicing fee. As such, the fair value of Notes is approximately equal to the fair value of Borrower Loans originated through the Note Channel, adjusted for the servicing fee and the timing of borrower payments subsequently disbursed to the note holders. The effective interest rate associated with a series of notes will be less than the interest rate earned on the corresponding borrower loan due to the servicing fee. The aggregate principal balances outstanding and fair values of Borrower Loans and Notes as of December 31, 2021 and 2020, are presented in the following table (in thousands): Borrower Loans Notes December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Aggregate principal balance outstanding $ 265,232 $ 215,373 $ 267,415 $ 217,110 Fair value adjustments 2,394 (5,703) (1,430) (8,731) Fair value $ 267,626 $ 209,670 $ 265,985 $ 208,379 At December 31, 2021, Borrower Loans had original maturities of either 36 or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through December 2026. At December 31, 2020, Borrower Loans had original maturities of either 36 or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.82% and had various original maturity dates through December 2025. Since COVID-19 relief was first offered in March 2020 and through December 31, 2021, approximately 9.1% of our current outstanding loan balances on a cumulative basis have enrolled in at least one of these COVID-19 relief programs. Approximately 1.2% of our outstanding loan balances are actively enrolled in at least one relief program as of December 31, 2021. As of December 31, 2021, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $0.9 million and a fair value of $0.1 million. As of December 31, 2020, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $1.4 million and a fair value of $0.1 million. PFL places loans on non-accrual status when they are over 120 days past due. As of December 31, 2021 and 2020, Borrower Loans in non-accrual status had a fair value of $0.1 million and $0.2 million, respectively. |
SERVICING ASSETS
SERVICING ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
SERVICING ASSETS | SERVICING ASSETS Prosper accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees. The initial asset or liability is recognized when Prosper sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets are measured at fair value throughout the servicing period. The total gains and losses recognized on the sale of such Borrower Loans for the year ended December 31, 2021 was a gain of $7.2 million recognized in Gain on Sale of Borrower Loans on the Consolidated Statement of Operations. The total gains and losses recognized on the sale of such Borrower Loans for the year ended December 31, 2020 was a gain of $4.8 million recognized in Gain on Sale of Borrower Loans on the Consolidated Statement of Operations. The total gains and losses recognized on the sale of such Borrower Loans for the year ended December 31, 2019 were a gain of $10.9 million recognized in Gain on Sale of Borrower Loans and a loss of $17.6 million recognized in Fair Value of Warrants Vested on Sale of Borrower Loans on the Consolidated Statement of Operations. As of December 31, 2021, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $2.3 billion, original terms of either 36 months or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82%, and various original maturity dates through December 2026. As of December 31, 2020, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $2.4 billion, original terms of either 36 months or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82%, and various original maturity dates through December 2025. Contractually-specified servicing fees and ancillary fees totaling $24.8 million, $28.9 million and $38.4 million are included on the Consolidated Statements of Operations in Servicing Fees, Net for the years ended December 31, 2021, 2020 and 2019, respectively. Fair Value Valuation Method Prosper uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounts those cash flows at a rate of return that results in the fair value amount. Significant unobservable inputs presented in the table within Note 7 below are those that Prosper considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate Management estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. With the assistance of a valuation specialist, management estimates market servicing rates based on observable market rates for other loan types in the industry and on observing bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper sells and services, and from information from backup service providers. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management uses a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with Prosper’s Servicing Assets. Default Rate The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e. risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e. risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which Prosper expects to collect fees on the Borrower Loans, which is used to project future servicing revenues. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
SERVICING ASSETS | SERVICING ASSETS PFL accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the Consolidated Statements of Operations. The initial asset is recognized when PFL sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The total recognized gains and losses on the sale of such Borrower Loans were a $8.5 million gain, a $6.4 million gain and a $5.1 million loss for the years ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $2.5 billion, original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82% and various original maturity dates through December 2026. At December 31, 2020, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $2.4 billion, original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.82% and various original maturity dates through December 2025. Contractually-specified servicing fees and ancillary fees totaled $29.2 million, $34.8 million and $43.4 million for the years ended December 31, 2021, 2020, and 2019, respectively, and are included in Servicing Fees, Net on the Statement of Operations. Fair Value Valuation Method PFL uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount. Significant unobservable inputs presented in the table within Note 7 are those that PFL considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate PFL estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. With the assistance of a valuation specialist, PFL estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that PFL sells and services and information from backup service providers. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management used a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with PFL’s Servicing Assets. Default Rate The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 7 is an annualized, average estimate considering all borrower loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which PFL expects to collect fees on the Borrower Loans, which is used to project future servicing revenues. |
SECURITIZATIONS
SECURITIZATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Transfers and Servicing [Abstract] | |
SECURITIZATIONS | SECURITIZATIONS Prosper did not co-sponsor any securitizations in 2020 or 2021. During 2019, Prosper co-sponsored securitizations of unsecured personal whole loans facilitated through our marketplace with outstanding principal balance of $573.0 million through three securitization trusts (PMIT 2019-1, PMIT 2019-2, and PMIT 2019-4) and retained a portion of the residual certificates in each securitization. Each securitization trust issued senior notes, a risk retention interest and residual certificates to finance the purchase of Borrower Loans. The risk retention interest represents the right to receive 5.0% of all amounts collected on the Borrower Loans held by the securitization trusts. The resulting senior notes were sold to third party investors. Prosper retained 65.5%, 16.4%, and 19.6% of the residual certificates issued by PMIT 2019-1, PMIT 2019-2, and PMIT 2019-4, respectively. The remaining residual certificates and all the risk retention interests were held by third-party investors. In addition to the retained residual certificates, Prosper's continued involvement includes loan servicing responsibilities over the life of the underlying loans. PMIT 2019-1, 2019-2 and 2019-4 were deemed VIEs. Prosper consolidated the VIEs as the primary beneficiary because Prosper, through its role as the servicer, had both the power to direct the activities that most significantly affect the VIEs' economic performance and a variable interest that could potentially be significant to the VIEs through holding the retained residual certificates. In evaluating whether Prosper was the primary beneficiary, management considered both qualitative and quantitative factors regarding the nature, size and form of the Company’s involvement with the VIEs. For these VIEs, the creditors have no recourse to the general credit of Prosper and the liabilities of the VIEs can only be settled by the respective VIEs' assets. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs. Because Prosper consolidated the securitization trusts, the loans held in the securitization trusts were included in “Borrower Loans, at Fair Value”, the notes sold to third party investors recorded in “Notes Issued by Securitization Trust”, and the risk retention interests and residual certificates held by third party investors in Certificates Issued by Securitization Trust, at Fair Value in the Consolidated Balance Sheets. Management assesses whether Prosper is the primary beneficiary of its VIEs on an ongoing basis. On September 27, 2021, PMI sold its retained residual certificates issued by PMIT 2019-1, 2019-2 and 2019-4 to an unrelated third party for $4.1 million in cash. As a result of this sale, management determined that the Company was no longer the primary beneficiary of these entities as it no longer held a variable interest that could potentially be significant to the VIEs. Accordingly, the net assets of PMIT 2019-1, 2019-2 and 2019-4 were deconsolidated from Prosper’s balance sheet on September 27, 2021, resulting in a loss on deconsolidation of $1.5 million, consisting of the following (in thousands): PMIT 2019-1 PMIT 2019-2 PMIT 2019-4 Total Consideration received for residual certificates: Cash $ 2,259 $ 836 $ 981 $ 4,076 Net assets deconsolidated: Restricted Cash $ 2,485 $ 4,324 $ 4,088 $ 10,897 Borrower Loans (1) 15,133 29,989 33,239 78,361 Notes Issued by Securitization Trust (13,022) (26,712) (29,975) (69,709) Certificates Issued by Securitization Trust, at Fair Value (1) (2,057) (5,990) (5,932) (13,979) Total net assets deconsolidated $ 2,539 $ 1,611 $ 1,420 $ 5,570 Total loss on deconsolidation $ (280) $ (775) $ (439) $ (1,494) (1) Because Borrower Loans and Certificates Issued by Securitization Trust were measured at fair value on the Company’s consolidated balance sheets, the balances above reflect the fair values of these financial instruments as of September 27, 2021, the deconsolidation date. This loss on deconsolidation is presented on the accompanying consolidated statement of operations as “Loss on Deconsolidation of VIEs.” Prosper will continue to service the underlying borrower loans, but otherwise will have no continuing involvement with PMIT 2019-1, 2019-2 and 2019-4. In conjunction with the deconsolidation of the VIEs, the Company recognized Servicing Assets totaling $0.2 million, the impact of which is included in Servicing Fees, Net on the accompanying consolidated statement of operations. Consideration received from the sale of the residual certificates, net of Restricted Cash of $10.9 million retained by PMIT 2019-1, 2019-2 and 2019-4, is presented as a financing activity on the Company’s consolidated statement of cash flows, while the loss on deconsolidation is presented as an operating activity. |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
FAIR VALUE OF ASSETS AND LIABILITIES | FAIR VALUE OF ASSETS AND LIABILITIES For a description of the fair value hierarchy and Prosper’s fair value methodologies, see Note 2 - Summary of Significant Accounting Policies. Prosper did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2021 or 2020. Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust, servicing rights and loan trailing fee liability are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used in the discounted cash flow model include default and prepayment rates derived from historical performance and discount rates applied to each credit grade based on the perceived credit risk of each credit grade. When utilizing market data and bid-ask spreads, Prosper uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, Prosper uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. Prosper's primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information, such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar securities. The Company compares the prices obtained from its primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. The Company does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in a material difference in the recorded amounts. The Convertible Preferred Stock Warrant Liability is valued using a Black-Scholes option pricing model. Refer to Note 12 for additional information. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): Balance at December 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 267,626 $ 267,626 Loans Held for Sale, at Fair Value — — 243,170 243,170 Servicing Assets — — 8,761 8,761 Total Assets $ — $ — $ 519,557 $ 519,557 Liabilities: Notes, at Fair Value $ — $ — $ 265,985 $ 265,985 Convertible Preferred Stock Warrant Liability — — 250,941 250,941 Loan Trailing Fee Liability (Note 9) — — 2,161 2,161 Total Liabilities $ — $ — $ 519,087 $ 519,087 Balance at December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 378,263 $ 378,263 Loans Held for Sale, at Fair Value — — 274,621 274,621 Servicing Assets — — 9,242 9,242 Total Assets $ — $ — $ 662,126 $ 662,126 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Certificates Issued by Securitization Trust, at Fair Value — — 22,917 22,917 Convertible Preferred Stock Warrant Liability — — 112,319 112,319 Loan Trailing Fee Liability (Note 9) — — 2,233 2,233 Total Liabilities $ — $ — $ 345,848 $ 345,848 As PMI’s Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust, Convertible Preferred Stock Warrant Liability, servicing assets and loan servicing rights do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Prosper did not transfer any assets or liabilities in or out of Level 3 for the year ended December 31, 2021 and 2020. Significant Unobservable Inputs The following tables present quantitative information about the ranges of significant unobservable inputs used for the Company’s Level 3 fair value measurements at December 31, 2021 and 2020: December 31, 2021 2020 Borrower Loans, Loans Held for Sale, and Notes: Discount rate 4.2 % — 14.3 % 4.5 % — 17.7 % Default rate 2.0 % — 14.1 % 2.3 % — 17.9 % Certificates Issued by Securitization Trust: December 31, 2020 Discount rate 3.3 % — 16.0 % Default rate 3.2 % — 15.3 % Prepayment rate 7.6 % — 35.4 % Borrower Loans held in consolidated securitization trusts and the associated Certificates Issued by Securitization Trust were deconsolidated from the Company’s balance sheet as of September 27, 2021 (Note 6), and as a result the tables above exclude these financial instruments. Refer to the section below for information about the inputs used to measure the fair value of these Borrower Loans and Certificates Issued by Securitization Trust. December 31, 2021 2020 Servicing Assets: Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % Market servicing rate (1) (2) 0.648 % — 0.842 % 0.625 % — 0.818 % (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of December 31, 2021 were measured using a market servicing rate assumption of 84.2 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 64.8 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2021 and 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a weighted-average total market servicing rate of 70.8 basis points to 90.2 basis points and 69.5 basis points to 88.8 basis points, respectively. December 31, 2021 2020 Loan Trailing Fee Liability: Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % At December 31, 2021 and 2020, the discounted cash flow methodology used to estimate the Note fair values used the same projected cash flows as the related Borrower Loans. Deconsolidated Assets and Liabilities As discussed in Note 6, the Company deconsolidated its Borrower Loans held in securitization trusts and Certificates Issued by Securitization Trust on September 27, 2021. The amounts deconsolidated for these financial instruments represent their estimated fair value on that date. Borrower Loan fair value measurements were determined using significant unobservable inputs, as described in the previous section. Key assumptions for the valuation of Borrower Loans are presented in the following table (in thousands, except percentages): Borrower Loans September 27, 2021 Fair value, using the following assumptions: $ 78,361 Weighted-average discount rate 9.26 % Weighted-average default rate 8.13 % Because the residual certificates held by the Company were sold in a market transaction to an unrelated third party, it was determined that the sales price was a fair representation of their fair value. Market assumptions were derived from the sale and utilized to estimate the fair value of the risk retention interests as well. Key assumptions for the valuation of Certificates Issued by Securitization Trust are presented in the following table (in thousands, except percentages): Certificates Issued by Securitization Trust September 27, 2021 Fair value, using the following assumptions: $ 13,979 Weighted-average discount rate 7.99 % Weighted-average default rate 7.68 % Weighted-average prepayment rate 17.94 % Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, Notes and Certificates Issued by Securitization Trust measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Assets Liabilities Borrower Loans Held Notes Certificates Issued by Securitization Trust Total Fair Value at January 1, 2020 $ 634,019 $ 142,026 $ (244,171) $ (52,168) $ 479,706 Purchase of Borrower Loans/Issuance of Notes 133,644 1,338,082 (133,228) — 1,338,498 Principal repayments (332,629) (104,798) 149,409 22,136 (265,882) Borrower Loans sold to third parties (6,731) (1,089,974) — — (1,096,705) Other changes (1,420) 1,168 (53) 436 131 Change in fair value (48,620) (11,883) 19,664 6,679 (34,160) Fair Value at December 31, 2020 378,263 274,621 (208,379) (22,917) 421,588 Purchase of Borrower Loans/Issuance of Notes 232,000 1,712,705 (231,933) — 1,712,772 Principal repayments (260,689) (164,165) 172,250 14,934 (237,670) Borrower Loans sold to third parties (2,664) (1,580,164) — — (1,582,828) Other changes (1,518) (249) 167 113 (1,487) Change in fair value 595 422 1,910 (6,110) (3,183) Deconsolidation of VIEs (Note 6) (78,361) — — 13,980 (64,381) Fair Value at December 31, 2021 $ 267,626 $ 243,170 $ (265,985) $ — $ 244,811 The following table presents additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Servicing Assets Fair Value at January 1, 2020 $ 12,602 Additions 5,829 Less: Changes in fair value (9,189) Fair Value at December 31, 2020 $ 9,242 Additions 7,973 Recognition of Servicing Assets upon deconsolidation of VIEs (Note 6) 215 Less: Change in fair value (8,669) Fair Value at December 31, 2021 $ 8,761 The following tables present additional information about Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Convertible Preferred Stock Warrant Liability Fair Value at January 1, 2020 $ 149,996 Change in fair value (37,677) Fair Value at December 31, 2020 $ 112,319 Change in fair value 138,622 Fair Value at December 31, 2021 $ 250,941 Loan Trailing Fee The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below. The following table presents additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Loan Trailing Fee Liability Balance at January 1, 2020 $ 2,997 Issuances 1,349 Cash payment of Loan Trailing Fee (2,421) Change in fair value 308 Balance at December 31, 2020 $ 2,233 Issuances 1,775 Cash payment of Loan Trailing Fee (2,100) Change in fair value 253 Balance at December 31, 2021 $ 2,161 Significant Recurring Level 3 Fair Value Input Sensitivity Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2021 and 2020 for Borrower Loans and Loans Held for Sale are presented in the following table (in thousands, except percentages). Borrower Loans and Loans Held for Sale: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 510,796 $ 652,884 Weighted-average discount rate 5.64 % 8.26 % Weighted-average default rate 10.08 % 11.58 % Fair value resulting from: 100 basis point increase in discount rate $ 505,732 $ 647,093 200 basis point increase in discount rate $ 500,763 $ 641,437 Fair value resulting from: 100 basis point decrease in discount rate $ 516,064 $ 658,817 200 basis point decrease in discount rate $ 521,437 $ 664,895 Fair value resulting from: 100 basis point increase in default rate $ 506,362 $ 646,421 200 basis point increase in default rate $ 501,921 $ 639,987 Fair value resulting from: 100 basis point decrease in default rate $ 515,326 $ 659,377 200 basis point decrease in default rate $ 519,851 $ 665,904 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2021 and 2020 for Notes are presented in the following table (in thousands, except percentages). Notes: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 265,985 $ 208,379 Weighted-average discount rate 5.76 % 8.93 % Weighted-average default rate 10.70 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 263,326 $ 206,528 200 basis point increase in discount rate $ 260,735 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 268,714 $ 210,274 200 basis point decrease in discount rate $ 271,516 $ 212,217 Fair value resulting from: 100 basis point increase in default rate $ 263,644 $ 206,304 200 basis point increase in default rate $ 261,318 $ 204,238 Fair value resulting from: 100 basis point decrease in default rate $ 268,340 $ 210,463 200 basis point decrease in default rate $ 270,711 $ 212,558 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2021 and 2020 for Servicing Assets is presented in the following table (in thousands, except percentages). Servicing Assets: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 8,761 $ 9,242 Weighted-average market servicing rate 0.650 % 0.631 % Weighted-average prepayment rate 20.82 % 19.84 % Weighted-average default rate 12.54 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 8,203 $ 8,689 Market servicing rate decrease of 0.025% $ 9,320 $ 9,796 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 8,568 $ 9,064 Applying a 0.9 multiplier to prepayment rate $ 8,957 $ 9,423 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 8,646 $ 9,116 Applying a 0.9 multiplier to default rate $ 8,878 $ 9,369 These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Assets and Liabilities Not Recorded at Fair Value The following tables present the fair value hierarchy for assets and liabilities not recorded at fair value (in thousands): Balance at December 31, 2021 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets: Cash and Cash Equivalents $ 67,700 $ 67,700 $ — $ — $ 67,700 Restricted Cash - Cash and Cash Equivalents 163,047 163,047 — — 163,047 Restricted Cash - Certificates of Deposit 4,878 — 4,878 — 4,878 Accounts Receivable 1,054 — 1,054 — 1,054 Total Assets $ 236,679 $ 230,747 $ 5,932 $ — $ 236,679 Liabilities: Accounts Payable and Accrued Liabilities $ 25,790 $ — $ 25,790 $ — $ 25,790 Payable to Investors 152,794 — 152,794 — 152,794 Warehouse Lines 209,275 — 211,177 — 211,177 Paycheck Protection Program loan (Note 9) 8,590 — 8,556 — 8,556 Total Liabilities $ 396,449 $ — $ 398,317 $ — $ 398,317 Balance at December 31, 2020 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets: Cash and Cash Equivalents $ 50,145 $ 50,145 $ — $ — $ 50,145 Restricted Cash - Cash and Cash Equivalents 158,846 158,846 — — 158,846 Restricted Cash - Certificates of Deposit 4,877 — 4,877 — 4,877 Accounts Receivable 605 — 605 — 605 Total Assets $ 214,473 $ 208,991 $ 5,482 $ — $ 214,473 Liabilities: Accounts Payable and Accrued Liabilities $ 17,876 $ — $ 17,876 $ — $ 17,876 Payable to Investors 124,094 — 124,094 — 124,094 Notes Issued by Securitization Trust 156,782 — 158,951 — 158,951 Warehouse Lines 242,479 — 242,261 — 242,261 Paycheck Protection Program loan (Note 9) 8,505 — 8,540 — 8,540 Total Liabilities $ 549,736 $ — $ 551,722 $ — $ 551,722 The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities and Payable to Investors approximate their carrying values because of their short-term nature. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
FAIR VALUE OF ASSETS AND LIABILITIES | FAIR VALUE OF ASSETS AND LIABILITIES PFL has elected to record certain financial instruments at fair value on the balance sheet. PFL classifies Borrower Loans, Loans Held for Sale and Notes as financial instruments and assesses their fair value on a quarterly basis for financial statement presentation purposes. Gains and losses on these financial instruments are shown separately on the Consolidated Statements of Operations. As of December 31, 2021 and 2020, the discounted cash flow methodology used to estimate the Note fair values used the same projected cash flows as the related Borrower Loans. As demonstrated in the following table, the fair value adjustments for Borrower Loans were largely offset by the fair value adjustments of the Notes due to the borrower payment dependent design of the Notes and because the principal balances of the Borrower Loans approximated the principal balances of the Notes. For a description of the fair value hierarchy and PFL’s fair value methodologies, see Note 2 - Summary of Significant Accounting Policies. PFL did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2021 and 2020. Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans and Notes are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary cash flow assumptions used to value such Borrower Loans and Notes include default and prepayment rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 267,626 $ 267,626 Servicing Assets — — 9,796 9,796 Total Assets $ — $ — $ 277,422 $ 277,422 Liabilities: Notes, at Fair Value $ — $ — $ 265,985 $ 265,985 Loan Trailing Fee Liability* — — 2,161 2,161 Total Liabilities $ — $ — $ 268,146 $ 268,146 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 209,670 $ 209,670 Servicing Assets — — 11,088 11,088 Total Assets $ — $ — $ 220,758 $ 220,758 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Loan Trailing Fee Liability* — — 2,233 2,233 Total Liabilities $ — $ — $ 210,612 $ 210,612 *Included in Other Liabilities on the Consolidated Balance Sheets. As PFL’s Borrower Loans, Notes, Servicing Assets and loan trailing fee liability do not trade in an active market with readily observable prices, PFL uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Significant Unobservable Inputs The following tables present quantitative information about the significant unobservable inputs used for PFL’s Level 3 fair value measurements at the dates presented: Range Borrower Loans and Notes: December 31, 2021 December 31, 2020 Discount rate 4.3 % — 13.9 % 5.3 % — 16.1 % Default rate 2.0 % — 13.5 % 2.6 % — 16.2 % Range Servicing Assets: December 31, 2021 December 31, 2020 Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % Market servicing rate (1) (2) 0.648 % — 0.842 % 0.625 % — 0.818 % (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of December 31, 2021 were measured using a market servicing rate assumption of 84.2 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 64.8 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2021 and 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a weighted-average total market servicing rate of 70.8 basis points to 90.2 basis points and 69.5 basis points to 88.8 basis points, respectively. Range Loan Trailing Fee Liability: December 31, 2021 December 31, 2020 Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, and Notes measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Held Notes Total Fair value at January 1, 2020 $ 245,137 $ — $ (244,171) $ 966 Originations 133,644 1,338,082 (133,228) 1,338,498 Principal repayments (147,361) — 149,409 2,048 Borrower Loans sold to third parties (2,547) (1,338,082) — (1,340,629) Other changes 7 — (53) (46) Change in fair value (19,210) — 19,664 454 Fair value at December 31, 2020 $ 209,670 $ — $ (208,379) $ 1,291 Originations 232,000 1,712,705 (231,933) 1,712,772 Principal repayments (171,286) — 172,250 964 Borrower Loans sold to third parties (1,422) (1,712,705) — (1,714,127) Other changes (195) — 166 (29) Change in fair value (1,141) — 1,911 770 Fair value at December 31, 2021 $ 267,626 $ — $ (265,985) $ 1,641 The following table presents additional information about Level 3 Servicing Assets recorded at fair value (in thousands): Servicing Assets Fair value at January 1, 2020 $ 14,888 Additions 7,203 Change in fair value (11,003) Fair value at December 31, 2020 $ 11,088 Additions 9,020 Change in fair value (10,312) Fair value at December 31, 2021 $ 9,796 Loan Trailing Fee Liability The fair value of the Loan Trailing Fee Liability represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The assumptions used are the same as those used for the valuation of Servicing Assets, as described below. The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Loan Trailing Fee Liability Fair Value at January 1, 2020 $ 2,997 Issuances 1,349 Cash payment of Loan Trailing Fee (2,421) Change in fair value 308 Fair Value at December 31, 2020 $ 2,233 Issuances 1,775 Cash payment of Loan Trailing Fee (2,100) Change in fair value 253 Fair Value at December 31, 2021 $ 2,161 Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity Key economic assumptions are used to compute the fair value of Borrower Loans and Notes. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2021 and 2020 for Borrower Loans are presented in the following table (in thousands, except percentages): Borrower Loans: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 267,626 $ 209,670 Weighted-average discount rate 5.76 % 8.93 % Weighted-average default rate 10.70 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 265,104 $ 207,810 200 basis point increase in discount rate $ 262,499 $ 205,994 Fair value resulting from: 100 basis point decrease in discount rate $ 270,520 $ 211,575 200 basis point decrease in discount rate $ 273,337 $ 213,527 Fair value resulting from: 100 basis point increase in default rate $ 265,435 $ 207,594 200 basis point increase in default rate $ 263,107 $ 205,528 Fair value resulting from: 100 basis point decrease in default rate $ 270,133 $ 211,755 200 basis point decrease in default rate $ 272,505 $ 213,851 Key economic assumptions are used to compute the fair value of Notes. The sensitivity of the fair value to immediate changes in assumptions at December 31, 2021 and 2020 for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages): Notes: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 265,985 $ 208,379 Weighted-average discount rate 5.76 % 8.93 % Weighted-average default rate 10.70 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 263,326 $ 206,528 200 basis point increase in discount rate $ 260,735 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 268,714 $ 210,274 200 basis point decrease in discount rate $ 271,516 $ 212,217 Fair value resulting from: 100 basis point increase in default rate $ 263,644 $ 206,304 200 basis point increase in default rate $ 261,318 $ 204,238 Fair value resulting from: 100 basis point decrease in default rate $ 268,340 $ 210,463 200 basis point decrease in default rate $ 270,711 $ 212,558 Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2021 and 2020 for Servicing Assets are presented in the following table (in thousands, except percentages): Servicing Assets: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 9,796 $ 11,088 Weighted-average market servicing rate 0.650 % 0.631 % Weighted-average prepayment rate 20.82 % 19.84 % Weighted-average default rate 12.24 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 9,171 $ 10,424 Market servicing rate decrease of 0.025% $ 10,421 $ 11,752 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 9,580 $ 10,874 Applying a 0.9 multiplier to prepayment rate $ 10,015 $ 11,304 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 9,667 $ 10,936 Applying a 0.9 multiplier to default rate $ 9,926 $ 11,239 These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill Prosper’s Goodwill balance of $36.4 million at December 31, 2021 did not change during the year ended December 31, 2021. The Company recorded no Goodwill impairment for the years ended December 31, 2021, 2020 and 2019. Other Intangible Assets, Net The following table presents the detail of other Intangible Assets subject to amortization as of the following dates (dollars in thousands): December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,722) 328 3.3 Brand name 60 (60) — — Total Intangible Assets subject to amortization $ 8,170 $ (7,842) $ 328 December 31, 2020 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,550) 500 4.3 Brand name 60 (60) — — Total Intangible Assets subject to amortization $ 8,170 $ (7,670) $ 500 The Company recorded no additional intangibles for the year ended December 31, 2021 or 2020. For the years ended December 31, 2021, 2020 and 2019, the Company recorded no intangible asset impairment. Amortization expense for the years ended December 31, 2021, 2020 and 2019 was $0.2 million, $0.2 million and $0.3 million, respectively. Estimated amortization of purchased Intangible Assets for future periods is as follows (in thousands): Amounts Years Ending December 31, 2022 $ 136 2023 107 2024 85 Thereafter — Total Amortization Expenses $ 328 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | OTHER LIABILITIES Other Liabilities consists of the following (in thousands): December 31, 2021 2020 Operating lease liabilities $ 11,026 $ 13,342 Paycheck Protection Program loan (Note 10) 8,590 8,505 Loan trailing fee liability 2,161 2,233 Deferred revenue 1,196 63 Deferred income tax liability 560 489 Financing lease liabilities 78 — Other 289 425 Total Other Liabilities $ 23,900 $ 25,057 Additionally, disclosures around the operating lease liabilities are included in Note 16. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Prosper Warehouse Trust Agreements Prosper’s consolidated VIEs, PWIT and PWIIT (together, “Warehouse VIEs”), each entered into an agreement (together, “Warehouse Agreements”) with certain lenders for committed revolving lines of credit (“Warehouse Lines”) during 2018 and 2019, respectively. In connection with the Warehouse Agreements, the Warehouse VIEs each entered into a security agreement with a bank as administrative agent and a national banking association as collateral trustee and paying agent. Proceeds under the Warehouse Lines may only be used to purchase certain unsecured personal loans and related rights and documents from Prosper and to pay fees and expenses related to the Warehouse Lines. Both Warehouse VIEs are consolidated because Prosper is the primary beneficiary of the VIEs. The assets of the VIEs can be used only to settle obligations of the VIEs. Additionally, the creditors of the Warehouse Lines have no recourse to the general credit of Prosper. The loans held in the Warehouse VIEs are included in “Loans Held for Sale, at Fair Value” and Warehouse Lines are in “Warehouse Lines” in the consolidated balance sheets. Both Warehouse Agreements contain the same certain covenants including restrictions on each Warehouse VIE's ability to incur indebtedness, pledge assets, merge or consolidate and enter into certain affiliate transactions. Each Warehouse Agreement also requires Prosper to maintain a minimum tangible net worth of $25 million, minimum net liquidity of $15 million and a maximum leverage ratio of 5:1. Tangible net worth is defined as the sum of (i) (A) Convertible Preferred Stock, (B) total Stockholders’ Deficit and (C) Convertible Preferred Stock Warrant Liability, less the sum of (ii) (A) goodwill and (B) intangible assets. Net liquidity is defined as the sum of cash, cash equivalents and Available for Sale Investments. The leverage ratio is defined as the ratio of total consolidated indebtedness other than non-recourse securitization indebtedness, non-recourse or limited recourse warehouse indebtedness and borrower dependent notes, to tangible net worth. As of December 31, 2021, Prosper was in compliance with the covenants under each Warehouse Agreement. PWIT Warehouse Line On January 19, 2018, through PWIT, Prosper entered into a Warehouse Agreement for a Warehouse Line. Effective June 12, 2018, the Warehouse Agreement was amended. The amendments included increasing the committed line of credit from $100 million to $200 million, extending the term of the PWIT Warehouse Line (including the final maturity date), amending the monthly unused commitment fee and reducing the rate at which the PWIT Warehouse Line bears interest. Subsequently the Warehouse Agreement was amended on June 20, 2019 to extend the facility, to reduce the interest rate and unused commitment fee and to expand the eligibility criteria for unsecured personal loans that can be financed through the PWIT Warehouse Line. The Warehouse Agreement was amended again on May 19, 2021 to extend the facility, to reduce the interest and advance rates and to include provisions for an alternative benchmark rate in light of the ongoing phaseout of LIBOR. Under the amended agreement, proceeds of loans made under the PWIT Warehouse Line may be borrowed, repaid and reborrowed until the earlier of June 20, 2023 or the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over the 24 month period ending June 20, 2025, excluding the occurrence of any accelerated amortization event or event of default. Under the amended agreement, the PWIT Warehouse Line bears interest at a rate of an established benchmark rate (currently LIBOR) plus 2.75% and has an advance rate of 87%. Additionally, the PWIT Warehouse Line bears a monthly unused commitment fee of 0.50% per annum on the undrawn portion available under the PWIT Warehouse Line. As of December 31, 2021, Prosper had $96.6 million in debt and accrued interest outstanding under the PWIT Warehouse Line. This debt is secured by an aggregate outstanding principal balance of $113.6 million included in Loans Held for Sale, at Fair Value on the Consolidated Balance Sheets. As of December 31, 2021 the undrawn portion available under the Warehouse Line was $103.4 million. Prosper incurred $0.3 million of deferred debt issuance costs for the amendment signed on May 19, 2021, which are included in Prepaids and Other Assets on the Consolidated Balance Sheets and will be amortized to interest expense over the term of the revolving arrangement. Prosper purchased a swaption to limit the Company's exposure to increases in LIBOR. The swaptions are recorded on the consolidated balance sheet at fair value in Prepaids and Other Assets. Any changes in the fair value are recorded in the Change in Fair Value of Financial Instruments, Net on the Consolidated Statement of Operations. The fair value of the swaption was not material as of December 31, 2021. PWIIT Warehouse Line On March 28, 2019, through PWIIT, Prosper entered into a second Warehouse Agreement for a $300 million Warehouse Line with a national banking association different than that of PWIT. On March 4, 2021, PMI extended its $300 million PWIIT Warehouse Line (“PWIIT Extension”). The PWIIT Extension consists of a $230 million Class A loan with the existing PWIIT Warehouse Line national banking association and a $70 million Class B loan with an asset manager. The advance rate on the PWIIT Extension is 90%. Under the PWIIT Extension, proceeds of loans made under the PWIIT Warehouse Line may be borrowed, repaid and reborrowed until the earlier of March 3, 2023 or the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over a 24-month period ending March 4, 2025, excluding the occurrence of any accelerated amortization event or event of default. Under the PWIIT Extension, the Class A loan bears interest at a rate of the national banking association's asset-backed commercial paper rate, plus a spread of 2.05%. The spread increases by 0.375% during the first 12 months immediately following the termination of the revolving period with an additional increase of 0.75% thereafter. Additionally, the Class A loan bears a monthly unused commitment fee of 0.50% per annum on the undrawn portion available under the Class A loan. The Class B loan bears interest at a rate of one-month LIBOR, plus a spread of 8.75%. The spread increases by 0.375% during the first twelve months immediately following the termination of the revolving period with an additional increase of 0.75% thereafter. Additionally, the Class B loan bears a monthly unused commitment fee of 0.50% or 1.00% per annum on the undrawn portion available under the Class B loan, depending on the Class B loan utilization percentage. As of December 31, 2021, Prosper had $112.7 million in debt and accrued interest outstanding under the PWIIT Warehouse Line. This debt is secured by an aggregate outstanding principal balance of $126.8 million included in Loans Held for Sale, at Fair Value on the Consolidated Balance Sheets. At December 31, 2021 the undrawn portion available under the PWIIT Warehouse Line was $187.3 million. Pros per incurred $1.3 million of deferred debt issuance costs for the extension in March 2021, which are included in “Prepaids and Other Assets” and will be amortized to interest expense over the term of the revolving arrangement. Phaseout of LIBOR A portion of the interest rate charged on our Warehouse Lines is currently based on LIBOR. LIBOR has been the subject of reform and was expected to phase out by the end of fiscal 2021; however, on November 30, 2020, the ICE Benchmark Administration Limited (“ICE”) announced plans to delay the phase out of LIBOR to June 30, 2023. The consequences of the discontinuation of LIBOR cannot be entirely predicted but could impact the interest expense incurred on these debt instruments. We have negotiated alternatives to LIBOR on the PWIT and PWIIT Warehouse Lines, which we may renegotiate before LIBOR ceases to be a widely available reference rate. Paycheck Protection Program Loan The Paycheck Protection Program (“PPP”), established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and sponsored by the U.S. Small Business Administration (“SBA”), provides small businesses – sole proprietors, independent contractors, and, with certain industry exceptions, businesses with fewer than 500 employees – the opportunity to apply for a loan of up to $10 million to cover up to 24 weeks (the “covered period”) of payroll costs, including benefits. Funds may also be used to cover interest on mortgage obligations, leases, and utilities incurred or in place before February 15, 2020. PPP loan payments are deferred, and based on SBA guidance, will be forgiven as long as (i) loan proceeds |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE PMI computes its net income (loss) per share in accordance with ASC Topic 260, Earnings Per Share (“ASC Topic 260”). Under ASC Topic 260, basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. PMI’s net income (loss) per share is calculated using the two-class method in accordance with ASC Topic 260. The two-class method allocates earnings that otherwise would have been available to common shareholders to holders of participating securities. Management considers all series of our Convertible Preferred Stock to be participating securities due to their rights to participate in dividends with Common Stock. As such, earnings allocated to these participating securities, which include participation rights in undistributed earnings, are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders. All participating securities are excluded from basic weighted-average common shares outstanding. Prior to any conversion to common shares, each series of Prosper’s Convertible Preferred Stock is entitled to participate on an if-converted basis in distributions of earnings, when and if declared by the board of directors, that are made to common stockholders and consequently, these shares were considered participating securities. During the year ended December 31, 2021, 2020 and 2019, certain shares issued as a result of the early exercise of stock options which are subject to a repurchase right by PMI were entitled to receive non-forfeitable dividends during the vesting period and consequently, are considered participating securities. The weighted average shares used in calculating basic and diluted net income (loss) per share excludes certain shares that are disclosed as outstanding shares in the Consolidated Balance Sheets because such shares are restricted as they were associated with options that were early exercised and continue to remain unvested. Basic and diluted net income (loss) per share were calculated as follows for the periods presented (in thousands, except share and per share amounts): December 31, 2021 2020 2019 Numerator: Net (Loss) Income $ (138,341) $ 18,551 $ (13,711) Plus: Return on Share Purchase — 2,381 1,066 Less: Net Income Allocated to Participating Securities — (15,172) — Net (Loss) Income Attributable to Common Stockholders $ (138,341) $ 5,760 $ (12,645) Denominator: Weighted average shares used in computing basic and diluted Net Income (Loss) Per Share 70,767,275 68,592,557 70,511,605 Effect of dilutive securities: Stock options — 24,816,184 — Convertible preferred stock warrants — 213,264,845 — Weighted average shares used in computing diluted net income (loss) per share - diluted 70,767,275 306,673,586 70,511,605 Net (Loss) Income Per Share – Basic $ (1.95) $ 0.08 $ (0.18) Net (Loss) Income Per Share – Diluted $ (1.95) $ 0.02 $ (0.18) The following common stock equivalents were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been anti-dilutive (number of shares): December 31, 2021 2020 2019 Excluded Securities: Convertible Preferred Stock issued and outstanding 158,365,655 158,365,655 209,613,570 Stock options issued and outstanding 72,756,708 48,265,056 73,851,862 Warrants issued and outstanding 1,080,349 1,080,349 1,080,349 Series E-1 Convertible Preferred Stock warrants 35,544,141 — 35,544,141 Series F Convertible Preferred Stock warrants 177,720,704 — 177,720,704 Total Excluded Securities 445,467,557 207,711,060 497,810,626 |
CONVERTIBLE PREFERRED STOCK, CO
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK | CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK Convertible Preferred Stock Under PMI’s amended and restated certificate of incorporation, preferred stock is issuable in series and the Board of Directors is authorized to determine the rights, preferences, and terms of each series. In January 2013, PMI issued and sold 69,340,760 shares of Series A Convertible Preferred Stock in a private placement at a purchase price of $0.29 per share for $19.8 million, net of issuance costs. In connection with that sale, PMI issued 25,585,910 shares at par value $0.01 per share of Series A-1 Convertible Preferred Stock to the holders of shares of PMI’s Convertible Preferred Stock that was outstanding immediately prior to the sale (“Old Preferred Shares”) in consideration for such stockholders participating in the sale. In connection with the Series A sale, Old Preferred Shares were converted into shares of Common Stock at a ratio of 1:1 if the holder of the Old Preferred Shares participated in the Series A sale or at a 10:1 ratio if the holder of the Old Preferred Shares did not so participate. In addition, each such participating holder received a share of Series A-1 Convertible Preferred Stock for every dollar of liquidation preference associated with an Old Preferred Share held by such holder. Each share of Series A-1 preferred stock has a liquidation preference of $2.00 and converts into Common Stock at a ratio of 1,000,000:1. The Series A and Series A-1 Convertible Preferred Stock were sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. In September 2013, PMI issued and sold 41,443,670 shares of Series B Convertible Preferred Stock in a private placement at a purchase price of $0.60 per share for approximately $24.9 million, net of issuance costs. The Series B Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. In May 2014, PMI issued and sold 24,404,770 shares of Series C Convertible Preferred Stock in a private placement at a purchase price of $2.87 per share for approximately $69.9 million, net of issuance costs. The Series C Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. The purpose of the Series C private placement was to raise funds for general corporate needs and for the tender offer discussed below. On June 18, 2014, PMI issued a Tender Offer Statement to purchase up to 6,963,785 shares, in the aggregate, of its Series A Convertible Preferred Stock and Series B Convertible Preferred Stock at a price equal to $2.87 per share. Upon closure of the tender offer on July 16, 2014, 782,540 shares of Series A Convertible Preferred Stock and 5,667,790 shares of Series B Convertible Preferred Stock were purchased for an aggregate price of $18.5 million. In April 2015, PMI issued and sold 23,888,640 shares of Series D Convertible Preferred Stock in a private placement at a purchase price of $6.91 per share for proceeds of approximately $164.8 million, net of issuance costs. The Series D Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. The purpose of the Series D private placement was to raise funds for general corporate needs and for the share repurchase discussed below. In December 2016, PMI authorized 40,000,000 shares of Series E Convertible Preferred Stock. These shares are reserved for the Convertible Preferred Stock warrants that were also issued in December 2016 On December 16, 2016, PMI issued a warrant to purchase 20,267,135 shares of Series E-1 Convertible Preferred Stock of PMI at an exercise price of $0.01 per share (the “First Series E-1 Warrant”) to Pinecone Investments LLC (“Pinecone”), an affiliate of Colchis Capital Management, L.P. (“Colchis”). On February 27, 2017, PMI issued to Pinecone Investments LLC a second warrant (the “Second Series E-1 Warrant,” and together with the First Series E-1 Warrant, the “Series E-1 Warrants”) to purchase 15,277,006 shares of Series E-1 Convertible Preferred Stock at an exercise price of $0.01 per share. The Series E-1 Warrants are immediately exercisable, in whole or in part, by paying in cash the full purchase price payable in respect of the number of shares purchased. The Series E-1 Warrants were issued pursuant to the Warrant Agreement dated December 16, 2016 between PMI and Colchis, as previously described in PMI’s Current Report on Form 8-K as filed with the SEC on December 22, 2016. In connection with the Consortium Purchase Agreement (as define d in Note 15 ) entered into with affiliates of the Consortium (as defin ed in Note 15 , such affiliates, “Warrant Holders”) a warrant agreement was signed (the “Series F Warrant Agreement”). Pursuant to the Series F Warrant Agreement, PMI issued to the Consortium three warrants (together, the “Series F Warrant”) to purchase up to an aggregate 177,720,706 shares of PMI’s Series F Convertible Preferred Stock at an exercise price of $0.01 per share (the “Series F Warrant Shares”). The Warrant Holders' right to exercise the Series F Warrant was subject to monthly vesting during the term of the Consortium Purchase Agreement based upon the volume of loans the Consortium elected to purchase (if any) in each month, subject to certain cure rights such as offering additional loans for sale in subsequent periods. Under the terms of the Series F Warrant Agreement, the Series F Warrant Shares may also vest in full upon a change of control of PMI, insolvency of PMI or PFL, certain breaches of contract by PMI or PFL that are not cured within a defined cure period and upon the occurrence of certain events set forth in the Warrant Agreement. The Series F Warrant will be exercisable with respect to vested Series F Warrant Shares, in whole or in part, at any time prior to the tenth anniversary of its date of issuance. The number of shares underlying the Series F Warrant may be adjusted following certain events such as stock splits, dividends, reclassifications and certain other issuances by PMI. On September 20, 2017, Prosper issued and sold 37,249,497 shares of Series G Convertible Preferred Stock in a private placement at a purchase price of $1.34 per share for proceeds of approximately $47.9 million, net of issuance costs. The Series G Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(a)(2) of the Securities Act regarding sales by an issuer not involving a public offering. The purpose of the Series G private placement was to raise funds for general corporate purposes. On December 23, 2019, Prosper entered into a Stock Repurchase Agreement with an investor to repurchase 7,221,020 shares, in the aggregate, of Series A, Series A-1, and Series B Convertible Preferred Stock and Common Stock for nominal consideration. Upon execution of the Agreement, 2,130,035 shares of Series A Convertible Preferred Stock, 2,245,600 shares of Series A-1 Convertible Preferred Stock, 648,720 shares of Series B Convertible Preferred Stock and 2,196,665 shares of Common Stock were repurchased. Upon repurchase of Convertible Preferred Stock, the difference between repurchase price and the carrying amount of the Convertible Preferred Stock was recognized in Additional Paid-In Capital. Additionally, the difference between the repurchase price and par value of the Common Stock was recorded through Additional Paid-In Capital. On July 13, 2020, the Company established Prosper Grantor Trust (“PGT”), a revocable grantor trust administered by an independent trustee, with the intention of contributing assets to PGT for the benefit of PMI employees in the event of a change in control through an Eligible Employee Retention Plan. PGT was determined to be a VIE and PMI was determined to be its primary beneficiary due to the fact that the Company, through its role as the grantor, has both (a) the power to direct the activities that most significantly affect the VIE’s economic performance, including its funding decisions and investment strategy, and (b) the obligation to absorb losses that could be potentially significant to the economic performance of the VIE by virtue of the Company’s requirement to fund PGT in the event that it is unable to meet its obligations to PMI’s employees. PMI also maintains a contingent call liability on PGT’s assets in the event of a bankruptcy. As a result, PGT is fully consolidated into PMI’s consolidated financial statements. On July 21, 2020, PGT entered into a Stock Transfer Agreement with a PMI investor to purchase 34,670,420 shares of Series A Convertible Preferred Stock and 16,577,495 shares of Series B Convertible Preferred Stock for nominal consideration. Upon execution of the Stock Transfer Agreement, these shares were purchased by a consolidated VIE of the Company, and thus the difference between the fair value of the repurchased stock and the purchase price is included in Convertible Preferred Stock Held by Consolidated VIE on PMI’s accompanying consolidated balance sheet as of December 31, 2021. These shares remain outstanding for legal purposes and retain their voting rights, but are excluded from the earnings per share calculation. The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of Convertible Preferred Stock as of December 31, 2021 are disclosed in the table below (amounts in thousands, except share and per value amounts): Par Value Authorized Shares Outstanding and Issued Shares Liquidation Preference, Outstanding Shares Series A $ 0.01 68,558,220 66,428,185 * $ 19,160 Series A-1 $ 0.01 24,760,915 22,515,315 45,031 Series B $ 0.01 35,775,880 35,127,160 * 21,190 Series C $ 0.01 24,404,770 24,404,770 70,075 Series D $ 0.01 23,888,640 23,888,640 165,000 Series E-1 $ 0.01 35,544,141 — — Series E-2 $ 0.01 16,858,078 — — Series F $ 0.01 177,720,707 3 — Series G $ 0.01 37,249,497 37,249,497 50,000 Total 444,760,848 209,613,570 $ 370,456 * Series A and Series B Convertible Preferred Stock totals are inclusive of 34,670,420 and 16,577,495 shares, respectively, held by PGT, a consolidated VIE. Dividends Dividends on shares of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, and Series G Convertible Preferred Stock are payable only when, as, and if declared by the Board of Directors. No dividends will be paid with respect to the Common Stock until any declared dividends on the Convertible Preferred Stock have been paid or set aside for payment to the preferred stockholders. After payment of any such dividends, any additional dividends or distributions will be distributed among all holders of Common Stock and preferred stock in proportion to the number of shares of Common Stock that would be held by each such holder if all shares of preferred stock were converted to Common Stock at the then effective conversion rate. The Series A-1 convertible preferred shares have no dividend rights. To date, no dividends have been declared on any of the PMI’s preferred stock or Common Stock. Conversion Under the terms of PMI’s amended and restated certificate of incorporation, the holders of preferred stock have the right to convert such preferred stock into Common Stock at any time. In addition, all preferred stock automatically converts into Common Stock (x) immediately prior to the closing of an Initial Public Offering (“IPO”) that values Prosper at least at $2 billion and that results in aggregate proceeds to Prosper of at least $100 million or (y) upon a written request from the holders of at least 60% of the voting power of the outstanding preferred stock (on an as-converted basis, provided that: (i) the Series A-1 Convertible Preferred Stock shall not be converted without at least 14% of the voting power of the outstanding Series A-1 Convertible Preferred Stock; (ii) the Series D shall not be converted without at least 60% of the voting power of the outstanding Series D; (iii) the Series E-1 and Series E-2 shall not be converted without at least 60% of the voting power of the outstanding Series E-1 and Series E-2, voting together as a single class; (iv) the Series F shall not be converted without at least 60% of the voting power of the outstanding Series F, and (v) the shares of Series G Preferred Stock will not be automatically converted unless the holders of at least 60% of the outstanding shares of Series G Preferred Stock approve such conversion). In addition, if a holder of the Series A Convertible Preferred Stock has converted any of the Series A Convertible Preferred Stock, then all of such holder’s shares of Series A-1 Convertible Preferred Stock also will be converted upon a liquidation event. In lieu of any fractional shares of Common Stock to which a holder would otherwise be entitled, PMI shall pay such holder cash in an amount equal to the fair market value of such fractional shares, as determined by its Board of Directors. At present, each of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, and Series F Convertible Preferred Stock converts into PMI Common Stock at a 1:1 ratio. Meanwhile, the Series A-1 Convertible Preferred Stock converts into Common Stock at a 1,000,000:1 ratio and the Series G Convertible Preferred Stock converts into Common Stock at a 1:1.36 ratio. The Series G Convertible Preferred Stock conversion ratio reflects the Series G true-up that occurred at end of the vesting period for the Series E-2 and Series F Preferred Stock warrants. For the Series G true-up, the conversion price of the Series G Convertible Preferred Stock was reduced to a number equal to the Series G Preferred Stock original issuance price, divided by the quotient obtained by dividing the Series G true-up amount by the total number of Series G Preferred Stock issued as of the Series G closing date. The Series G true-up amount means the aggregate number of shares of Series G Preferred Stock that would have been issued to the purchasers of the Series G Preferred Stock on the Series G closing date, if warrants to purchase shares of Series E-2 Preferred Stock or Series F Preferred Stock that were exercisable or exercised as of the true-up time (end of vesting period) had been exercisable or exercised as of such Series G closing date. Liquidation Rights PMI’s Convertible Preferred Stock has been classified as temporary equity on the consolidated balance sheet. The preferred stock is not redeemable at the option of holders of the Convertible Preferred Stock; however, in the event of a voluntary or involuntary liquidation, dissolution, change in control or winding up of PMI, holders may have the right to receive its liquidation preference under the terms of PMI’s certificate of incorporation. Each holder of Series E-1, Series E-2 and Series F Convertible Preferred Stock is entitled to receive prior and in preference to any distribution of proceeds from a liquidation event to the holders of Series A, Series B, Series C, Series D, Series G and Series A-1 Convertible Preferred Stock or Common Stock, an amount per share for (i) each share of Series E-1 Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, (ii) each share of Series E-2 Convertible Preferred Stock equal to the sum of two-thirds the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (iii) each share of Series F Convertible Preferred Stock equal to the sum of two-thirds of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series E-1, Series E-2, and Series F Convertible Preferred Stock each holder of Series A, Series B, Series C and Series D, Series E-2, Series F and Series G Convertible Preferred Stock is entitled to receive, on a pari passu basis, prior to and in preference to any distribution of proceeds from a liquidation event to the holders of Series A-1 Convertible Preferred Stock or Common Stock, (i) an amount per share for each share of Series E-2 and Series F Convertible Preferred Stock equal to the sum of one-third of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (ii) an amount per share for each share of Series A, Series B, Series C, Series D and Series G Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F and Series G Convertible Preferred Stock, the holders of Series A-1 Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution of proceeds to the holders of Common Stock, an amount per share for each such share of Series A-1 Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, Series G and Series A-1 Convertible Preferred Stock, the entire remaining proceeds legally available for distribution will be distributed pro-rata to the holders of Series A Convertible Preferred Stock and Common Stock in proportion to the number of shares of Common Stock held by them assuming the Series A Convertible Preferred Stock has been converted into shares of Common Stock at the then effective conversion rate, provided that the maximum aggregate amount per share of Series A Convertible Preferred Stock which the holders of Series A Convertible Preferred Stock shall be entitled to receive is three times the original issue price for the Series A Convertible Preferred Stock. At present, the liquidation preferences are equal to $0.29 per share for the Series A Convertible Preferred Stock, $2.00 per share for the Series A-1 Convertible Preferred Stock, $0.60 per share for the Series B Convertible Preferred Stock, $2.87 per share for the Series C Convertible Preferred Stock, $6.91 per share for the Series D Convertible Preferred Stock, $0.84 per share for the Series E-1 Convertible Preferred Stock, $0.84 per share for the Series E-2 Convertible Preferred Stock, $0.84 per share for the Series F Convertible Preferred Stock and $1.34 per share for the Series G Convertible Preferred Stock. Voting Each holder of shares of Convertible Preferred Stock is entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Convertible Preferred Stock could be converted and each has voting rights and powers equal to the voting rights and powers of the Common Stock. The holders of Convertible Preferred Stock and the holders of Common Stock vote together as a single class (except with respect to certain matters that require separate votes or as required by law), and are entitled to notice of any stockholders’ meeting in accordance with the bylaws of PMI. Convertible Preferred Stock Warrant Liability Series E-1 Warrants In connection with the Settlement and Release Agreement dated November 17, 2016 among PMI, its wholly owned subsidiary Prosper Funding LLC (“PFL”) and Colchis, on December 16, 2016, PMI issued the First Series E-1 Warrant. A Second Series E-1 Warrant for an additional 15,277,006 shares of Series E-1 Convertible Preferred Stock was granted on the signing of the Consortium Purchase Agreement (as defined in Note 15 ) on February 27, 2017. The warrants expire ten years from the date of issuance. Prosp er recognized $21.3 million of expense and $5.7 million of income from the change in the fair value of the warrants for the years ended December 31, 2021 and 2020, respectively. The income or expense resulted from changes in the fair value of the warrant is recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the Consolidated Statements of Operations. To determine the fair value of the Series E-1 Warrants, the Company first determined the value of a share of a Series E-1 Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derived the business enterprise value (“BEV”) of the Company using a variety of valuation methods, including recent transactions in the Company's stock, discounted cash flow models and market based methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determined an estimated BEV, the option pricing method (“OPM”) was used to allocate the BEV to the various classes of our equity, including our preferred stock. The concluded per share value for the Series E-1 Convertible Preferred Stock was utilized as an input to the Black-Scholes option pricing model. The Company determined the fair value of the outstanding convertible Series E-1 preferred stock warrants utilizing the following assumptions as of December 31, 2021 and 2020: December 31, 2021 2020 Volatility 63.0 % 60.0 % Risk-free interest rate 0.90 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % Volatility: The volatility is derived from historical volatilities of several unrelated publicly listed peer companies over a period approximately equal to the term of the warrant as the Company has limited information on the volatility of its preferred stock since there is currently no trading history. When making the selections of industry peer companies to be used in the volatility calculation, the Company considered the size, operational, and economic similarities to the Company’s principal business operations. Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield in effect as of December 31, 2021, and for zero coupon U.S. Treasury notes with maturities approximately equal to the term of the warrant. Expected Term: The expected term is the period of time for which the warrants are expected to be outstanding. Dividend Yield: The expected dividend assumption is based on the Company’s current expectations about the Company’s anticipated dividend policy. Series F Warrants In connection with the Consortium Purchase Agreement (as described in Note 15 ) on February 27, 2017 , PMI issued warrants to purchase 177,720,706 of PMI's Series F Convertible Preferred Stock at $0.01 per share. The warrants expire ten years from the date of issuance. Prosper recognized $117.3 million of expense and $32.0 million of income from the re-measurement of the fair value of the warrants for the years ended December 31, 2021 and 2020, respectively. The income or expense resulting from changes in the fair value of the warrant is recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the Consolidated Statements of Operations. To determine the fair value of the Series F Warrants, the Company first determined the value of a share of a Series F Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derived the BEV using valuation methods, including a combination of methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determined an estimated BEV, the OPM was used to allocate the BEV to the various classes of Prosper's equity, including our preferred stock. The concluded per share value for the Series F Convertible Preferred Stock warrants utilized the Black-Scholes option pricing model. The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of December 31, 2021 and 2020: December 31, 2021 2020 Volatility 63.00 % 60.0 % Risk-free interest rate 0.90 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % The above assumptions were determined using the same criteria described above for the Series E-1 Warrants. The combined activity of the Convertible Preferred Stock Warrant Liability for the years ended December 31, 2021 and 2020 is as follows (in thousands): Balance at January 1, 2020 149,996 Change in fair value (37,677) Balance at December 31, 2020 $ 112,319 Change in fair value 138,622 Balance at December 31, 2021 $ 250,941 Common Stock PMI, through its Amended and Restated Certificate of Incorporation, is the sole issuer of Common Stock and related options, RSUs and warrants. On February 16, 2016, PMI amended and restated its Certificate of Incorporation to, among other things, effect a 5-for-1 forward stock split. On September 20, 2017, PMI further amended its Amended and Restated Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance. The total number of shares of stock which PMI has the authority to issue is 1,069,760,848, consisting of 625,000,000 shares of Common Stock, $0.01 par value per share, and 444,760,848 shares of preferred stock, $0.01 par value per share. As described above, the Company repurchased 2,196,665 shares of Common Stock on December 23, 2019. As of December 31, 2021, 73,089,929 shares of Common Stock were issued and 72,153,994 shares of Common Stock were outstanding. As of December 31, 2020, 70,075,307 shares of Common Stock were issued and 69,139,372 shares of Common Stock were outstanding. Each holder of common stock is entitled to one vote for each share of common stock held. Common Stock Issued upon Exercise of Stock Options During the year ended December 31, 2021 and 2020, PMI issued 3,014,622 and 687,471 shares of Common Stock , respectively, upon the exercise of vested options for cash proceeds of $61 thousand and $15 thousand, respectively. Common Stock Issued upon Exercise of Warrants For the year ended December 31, 2021 and 2020 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION PMI grants equity awards primarily through its Amended and Restated 2005 Stock Option Plan (the “2005 Plan”), which was approved as amended and restated by its stockholders on December 1, 2010; and its 2015 Equity Incentive Plan, which was approved by its stockholders on April 7, 2015 and subsequently amended by an Amendment No. 1, Amendment No. 2 and Amendment No. 3, which were approved by PMI's stockholders effective as of February 15, 2016, May 31, 2016, and September 5, 2018 respectively (as amended, the “2015 Plan”). In March 2015, the 2005 Plan expired, except that any awards granted under the 2005 Plan prior to its expiration remain in effect pursuant to their terms. As of December 31, 2021, under the 2015 Plan, options to purchase up to 96,855,913 shares of PMI's Common Stock are reserved and may be granted to employees, directors, and consultants by PMI’s Board of Directors and stockholders to promote the success of Prosper’s business. Options generally vest 25% one year from the vesting commencement date and 1/48t h per month thereafter or vest 50% two years from the vesting commencement date and 1/48 per month thereafter or vest 1/36th per month from the vesting commencement date. In no event are options exercisable more than ten years after the date of grant. Stock Option Reprice On May 3, 2016 and March 17, 2017, the Compensation Committee of the Board of Directors of PMI approved two separate stock option repricing programs authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that had exercise prices above the current fair market value of PMI’s Common Stock on those respective dates. On August 11, 2020, the Compensation Committee of the Board of Directors of PMI approved a stock option repricing program (the “2020 Repricing” and together with the 2016 Repricing and the 2017 Repricing, the “Repricings”) authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that have exercise prices above the current fair market value of PMI’s common stock. The repricing was effected on August 11, 2020 for eligible directors and employees. PMI believes that the Repricings encourage the continued service of valued employees and directors and motivate them to perform at high levels, both of which are critical to the Company’s continued success. PMI has incurred and expects to incur additional share based compensation charges as a result of the Repricings. The financial statement impact of the above Repricings was not material for the year ended December 31, 2021, and $0.4 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2021, the unamortized Repricings expense (net of forfeitures) will be immaterial and recognized over the remaining weighted average vesting period of 1.6 years . Stock Option Activity Stock option activity under the Stock Plans is summarized for the year ended December 31, 2021 as follows: Options Issued and Outstanding Weighted- Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate intrinsic value 1 (in thousands) Balance as of January 1, 2021 72,915,449 $ 0.02 7.02 $ 2,915 Options granted 17,554,859 $ 0.22 Options exercised (3,014,622) $ 0.02 Options forfeited (15,239,345) $ 0.03 Option expirations (30,190) $ 0.02 Balance as of December 31, 2021 72,186,151 $ 0.07 6.72 $ 46,458 Options vested and expected to vest as of December 31, 2021 65,003,920 $ 0.07 6.72 $ 42,518 Options vested and exercisable at December 31, 2021 48,561,623 $ 0.02 5.62 $ 33,499 1. Aggregate intrinsic value represents the excess of the fair value of our Common Stock as of December 31, 2021 over the exercise price of the outstanding in-the-money options. Additional information pertaining to PMI's Common Stock option activities is as follows: Year ended December 31, 2021 2020 2019 Weighted-average grant date fair value of options granted (per share) $ 0.13 $ 0.04 $ 0.11 Other Information Regarding Stock Options The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for share based compensation expense requires PMI to make assumptions and judgments about the variables used in the calculation, including the fair value of PMI’s Common Stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of PMI’s Common Stock, a risk-free interest rate, and expected dividends. Given the absence of a publicly traded market, the Company considered numerous objective and subjective factors to determine the fair value of PMI’s Common Stock at each grant date. These factors included, but were not limited to: (i) contemporaneous valuations of Common Stock performed by unrelated third-party specialists, (ii) the prices for PMI’s preferred stock sold to outside investors, (iii) the rights, preferences and privileges of PMI’s preferred stock relative to PMI’s Common Stock; (iv) the lack of marketability of PMI’s Common Stock, (v) developments in the business, (vi) secondary transactions of PMI’s common and preferred shares, and (vii) the likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of Prosper, given prevailing market conditions. As PMI’s stock is not publicly traded volatility for stock options is based on an average of the historical volatilities of the Common Stock of several entities with characteristics similar to those of PMI. The expected term assumptions were determined based on the vesting terms, exercise terms and contractual lives of the options using the simplified method. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. PMI uses an expected dividend yield of zero as it does not anticipate paying any dividends in the foreseeable future. PMI also estimates forfeitures of unvested stock options. Expected forfeitures are based on the Company’s historical experience. To the extent actual forfeitures differ from estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. The fair value of PMI’s stock option awards granted during the years ended December 31, 2021, 2020 and 2019 was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: December 31, 2021 2020 2019 Volatility of common stock 64.22 % 52.62 % 46.70 % Risk-free interest rate 1.02 % 0.51 % 1.95 % Expected life 6.0 years 6.0 years 6.0 years Dividend yield — % — % — % PMI did not grant any performance-based options in 2021, 2020, or 2019. Restricted Stock Units For the years ended December 31, 2021, 2020 and 2019, PMI did not grant any restricted stock units (“RSUs”). The following table summarizes the number of PMI’s RSU activity for the year ended December 31, 2021: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2021 4,661,141 $ 0.91 Forfeited (1,786,793) $ 0.54 Unvested at December 31, 2021 2,874,348 $ 1.14 Stock Based Compensation The following table presents the amount of stock-based compensation related to awards granted to employees recognized in the Company’s Consolidated Statements of Operations for the periods presented (in thousands): Years Ended December 31, 2021 2020 2019 Origination and Servicing $ 123 $ 35 $ 417 Sales and Marketing 62 69 243 General and Administrative 951 1,809 3,868 Total Stock-Based Compensation $ 1,136 $ 1,913 $ 4,528 For the years ended December 31, 2021, 2020 and 2019, Prosper capi talized $137 thousand , $234 thousand and $310 thousand, respectively, of stock-based compensation as internal use software and website de velopment costs. As of December 31, 2021, the unamortized share-based compensation expense adjusted for forfeiture estimates related to Prosper's employees’ unvested share-based awards was approximately $1.6 million, which will be recognized over a remaining weighted-average vesting period of approximately 2.8 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
INCOME TAXES | INCOME TAXES The components of the Company’s Income Tax Expense are as follows for the periods presented (in thousands): Years Ended December 31, 2021 2020 2019 Current: Federal $ — $ — $ — State — — — Foreign — — — Total Current Income Tax Expense (Benefit) — — — Deferred: Federal 47 47 47 State 24 38 52 Foreign — (69) 1 Total Deferred Income Tax Expense 71 16 100 Total Income Tax Expense $ 71 $ 16 $ 100 Income Tax Expense differed from the amount computed by applying the U.S. federal income tax rate of 21% to pretax loss as a result of the following for the periods presented: Years Ended December 31, 2021 2020 2019 Federal tax at statutory rate 21 % 21 % 21 % State tax at statutory rate (net of federal benefit) 8 % 8 % 9 % Incentive Stock Options (5) % 2 % (4) % Preferred Stock Warrants (29) % (64) % 8 % Change in valuation allowance 6 % 37 % (33) % Other (1) % (4) % (1) % Income Tax Expense — % — % — % Temporary items that give rise to significant portions of deferred tax assets and liabilities are as follows for the periods presented (in thousands): December 31, 2021 2020 Net operating loss carry forwards $ 91,793 $ 92,814 Research and other credits 307 532 Stock compensation 4,272 10,510 Accrued liabilities 4,357 2,986 Lease liabilities 3,266 3,934 Total deferred tax assets 103,995 110,776 Net servicing rights (1,898) (2,067) Property and equipment (1,873) (287) Intangible assets (1,770) (1,415) Right-of-use assets (2,264) (2,676) Total deferred tax liabilities (7,805) (6,445) Total net deferred tax asset 96,190 104,331 Less: Valuation allowance (96,750) (104,820) Net deferred tax liability $ (560) $ (489) Under ASC 740, Accounting for Income Taxes , a valuation allowance must be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The amount of valuation allowance is based upon management’s best estimate of Prosper’s ability to realize the net deferred tax assets. A valuation allowance can subsequently be reduced when management believes that the assets are realizable on a more-likely-than-not basis. As of December 31, 2021, the Company continues to record a valuation allowance against its net deferred tax asset. The valuation allowance as of December 31, 2021, decreased by $8.1 million to $96.8 million from the prior year. The Internal Revenue Code imposes substantial restrictions on the utilization of net operating losses and tax credits in the event of an “ownership change” of a corporation. Accordingly, Prosper’s ability to utilize net operating losses and credit carryforwards may be limited in the future as the result of such an “ownership change.” Prosper files federal and various state income tax returns, and has net operating loss carryforwards available to reduce future taxable income, if any, for both federal and state income tax purposes of approximately $345.3 million and $366.2 million, respectively, as of December 31, 2021. The state net operating loss carryforwards are primarily related to California. The federal and state net operating loss carryforwards will begin to expire in 2025 and 2022, respectively. All net operating loss carryforwards are subject to a full valuation allowance. Prosper has federal and California research and development tax credits of approximately $428 thousand and $501 thousand, respectively. The federal research credits will begin to expire in 2034 and the California research credits have no expiration date. Prosper also has California enterprise zone credits of approximately $0.2 million that will begin to expire in 2022. The following table summarizes Prosper’s activity related to its unrecognized tax benefits (in thousands): Balance at January 1, 2020 $ 112 Change related to 2020 tax year position — Balance at December 31, 2020 $ 112 Change related to 2021 tax year position — Balance at December 31, 2021 $ 112 None of the unrecognized tax benefits would affect Prosper’s effective tax rate if these amounts are recognized due to the full valuation allowance. Prosper’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of Income Tax Expense. As of December 31, 2021, Prosper has not incurred any significant interest or penalties. All tax returns will remain open for examination by federal and most state taxing authorities for three |
Prosper Funding LLC | |
Entity Information [Line Items] | |
INCOME TAXES | INCOME TAXES PFL incurred no income tax provision for the year ended December 31, 2021 and 2020. PFL is a U.S. disregarded entity and its income and loss are included in the income tax reporting of its parent, PMI. Since PMI is in a taxable loss position, is not currently subject to income taxes, and has fully reserved against its deferred tax asset, the net effective tax rate for PFL is 0%. |
CONSORTIUM PURCHASE AGREEMENT
CONSORTIUM PURCHASE AGREEMENT | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONSORTIUM PURCHASE AGREEMENT | CONSORTIUM PURCHASE AGREEMENT On February 27, 2017, Prosper entered into a series of agreements (the “Consortium Purchase Agreement”) with a consortium of investors (the “Consortium”), pursuant to which the Consortium agreed to purchase Borrower Loans in an aggregate principal amount of up to $5.0 billion (including certain loans purchased by one of the investors prior to the date of the Consortium Purchase Agreement). PFL was obligated to offer for purchase minimum monthly volumes of eligible loans to the Consortium, for the Consortium to elect to purchase. The Consortium Purchase Agreement ended in May 2019. In connection with the Consortium Purchase Agreement, PMI issued to the Consortium three warrant certificates to purchase an aggregate 177,720,706 shares of PMI’s Series F Preferred Stock at an exercise price of $0.01 per share (the “Warrant Shares”). The Consortium’s right to exercise the Series F Warrant was subject to monthly vesting during the term of the Consortium Purchase Agreement based upon the volume of loans the Consortium elected to purchase (if any) in each month, subject to certain cure rights such as offering additional loans for sale in subsequent periods. Pursuant to these cure rights, if the Consortium failed to respond to offers for allocation, purchase or funding, the Consortium could take advantage of a designated period of time to cure such failure. There were no such failures by the Consortium during the term of the Consortium Purchase Agreement. Under the terms of the Series F Warrant Agreement, the Warrant Shares may also vest in full upon a change of control of PMI, insolvency of PMI or PFL, certain breaches of contract by PMI or PFL that are not cured within a defined cure period and upon the occurrence of certain other events set forth in the Series F Warrant Agreement. On vesting of the Series F Warrants, Prosper recorded a liability as Convertible Preferred Stock Warrant Liability on the Consolidated Balance Sheets at fair value and a corresponding amount as Fair Value of Warrants Vested on Sale of Borrower Loans on the Consolidated Statements of Operations. Subsequent changes in the fair value of the vested warrants are recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the Consolidated Statements of Operations. Additionally, in connection with the execution of the Consortium Purchase Agreement, certain previously issued rebates were settled by an issuance of vested Series F Convertible Preferred Stock Warrants. The difference in fair value of these warrants over the cash settlement price was recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the Consolidated Statements of Operations. Through its expiration in May 2019, $3.3 billion in loans were acquired and 177.7 million warrants vested under the Consortium Purchase Agreement. In addition to the $3.3 billion of loans acquired above, warrants vested on signing of the Consortium Purchase Agreement were issued to settle certain rebates on $0.3 billion of whole loan purchases by members of the Consortium prior to the signing of the Consortium Purchase Agreement. This $0.3 billion also reduced the up to $5.0 billion aggregate amount under the Consortium Purchase Agreement. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES Prosper has operating leases for corporate offices and datacenters. These leases have remaining lease terms of 1 year to 6 years. Some of the lease agreements include options to extend the lease term for up to an additional 5 years. Rental expense under operating lease arrangements was $4.5 million , $4.5 million and $4.5 million for the year ended December 31, 2021, 2020 and 2019, respectively. Additionally, Prosper subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease revenue from operating lease arrangements was $0.3 million , $0.4 million and $0.8 million for the year ended December 31, 2021, 2020 and 2019, respectively. Operating Lease Right-of-Use (“ROU”) Assets The following table summarizes the operating lease right-of-use (“ROU”) assets as of December 31, 2021 , which are included in Property and Equipment, Net Consolidated Balance Sheets . December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value ROU assets - office buildings $ 16,709 $ 9,444 $ 7,265 ROU assets - other 776 344 432 Total operating lease ROU assets $ 17,485 $ 9,788 $ 7,697 The Company identified certain impairment triggers related to its ROU assets in 2020, primarily due to the non-renewal of certain sublease agreements and the time expected to find new subtenants. As a result of impairment testing performed on these ROU assets, the Company recorded an impairment charge of $0.4 million for the year ended December 31, 2020. No impairment charge was identified for the years ended December 31, 2021 or December 31, 2019. Lease Liabilities Prosper has entered into various non-cancelable operating leases for certain offices with contractual lease periods expiring between 2021 and 2026. Future maturities of operating lease liabilities as of December 31, 2021 were as follows (in thousands). The present value of the future minimum lease payments represents our operating lease liabilities as of December 31, 2021 and are included in " Other Liabilities December 31, 2021 2022 $ 5,833 2023 2,124 2024 1,360 2025 1,395 2026 1,218 Thereafter — Total future minimum lease payments 11,930 Less: Imputed interest (904) Present value of future minimum lease payments $ 11,026 Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. Values used to determine present value of leases is as follows (dollars in thousands): December 31, 2021 Cash paid for operating leases year-to-date $ 5,381 ROU assets obtained in exchange for new operating lease obligations year-to-date $ 1,773 Weighted average remaining lease term (in years) 3.12 years Weighted average discount rate 5.19 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In the normal course of its operations, Prosper becomes involved in various legal actions. Prosper maintains provisions it considers to be adequate for such actions. Prosper does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on Prosper's financial condition, results of operations or cash flows. Operating Commitments Prosper has entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made by WebBank under its bank charter. On June 25, 2021, PMI, along with its wholly-owned subsidiary Prosper Funding LLC, and WebBank entered into: (i) a Fifth Amendment (the “Sale Agreement Amendment”) to the Asset Sale Agreement, dated July 1, 2016, between Prosper Funding LLC and WebBank (the “Sale Agreement”); (ii) a Sixth Amendment (the “Marketing Agreement Amendment”) to the Marketing Agreement, dated July 1, 2016, between PMI and WebBank (the “Marketing Agreement”); and (iii) a Third Amendment (the “Purchase Agreement Amendment”) to the Stand By Purchase Agreement, dated July 1, 2016, between PMI and WebBank (the “Purchase Agreement” and, collectively with the Sale Agreement and the Marketing Agreement, the “Origination and Sale Agreements”). The Sale Agreement Amendment, among other things, extends the term of the Sale Agreement to February 1, 2025 and amends certain collateral requirements under the Sale Agreement. The Marketing Agreement Amendment, among other things, extends the term of the Marketing Agreement to February 1, 2025 and sets forth the amended terms and conditions of certain fees owed by the Registrants to WebBank under the Marketing Agreement. The Purchase Agreement Amendment amends certain collateral requirements of PMI under the Purchase Agreement. Pursuant to the Marketing Agreement Amendment, the marketing fee that Prosper receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143,500 through February 1, 2022, and $100,000 thereafter through February 1, 2025, Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, t he minimum fee is $1.2 million for each year from 2022 through 2024, and $0.1 million in 2025. Additionally, under the agreement with WebBank, Prosper is required to maintain minimum net liquidity of $15 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash and Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. At December 31, 2021, Prosper was in compliance with the covenant. Loan Purchase Commitments Prosper entered into an agreement with WebBank to purchase $13.8 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2021. Prosper will purchase these Borrower Loans within the first two business days of the year ending December 31, 2022. Repurchase Obligation Under the terms of the loan purchase agreements between Prosper and investors that participate in the Whole Loan Channel, Prosper may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. Prosper recognizes a liability at fair value for the repurchase obligation when the Borrower Loans are sold. The fair value of the repurchase obligation is estimated based on historical experience. Repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase. The maximum potential amount of future payments associated under the repurchase obligation is the outstanding balances of the Borrower Loans sold through the Whole Loan channels, which at December 31, 2021 is $2.5 billion. Prosper has accrued $0.3 million and $0.2 million as of December 31, 2021 and 2020, respectively, related to this obligation. Regulatory Contingencies Prosper accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, Prosper reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If Prosper determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, Prosper does not accrue for a potential litigation loss. If an unfavorable outcome is probable and Prosper can estimate a range of outcomes, an amount is recorded which management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then the low end of the range of the potential losses is recorded. SEC Inquiry In April 2017, we became aware of an error in the annualized net return and seasoned annualized net return numbers displayed to Note investors. Prosper was advised by the SEC that it was investigating whether violations of federal securities laws had occurred in connection with the error. On April 19, 2019, the SEC accepted an offer of settlement from PFL to resolve the matter. Under the settlement, the SEC alleged a violation of Section 17(a)(2) of the Securities Act and ordered PFL to cease and desist from any future violations of that provision. PFL neither admitted nor denied any wrongdoing, and agreed to pay a civil monetary penalty of $3.0 million. The penalty of $3.0 million was paid in full in April 2019. West Virginia Matter In January 2018, the Attorney General of the State of West Virginia (the “Attorney General”) initiated discussions regarding certain acts and practices of PMI and PFL that the Attorney General asserts may have violated the West Virginia Consumer Credit and Protection Act (the “Consumer Act”), to which Prosper responded with such information as was requested by the Attorney General. Following a period of more than a year with limited to no communication, in February 2020, Prosper received a proposed Assurance of Discontinuance (an “AOD”) from the Attorney General requesting that, without in any way admitting that any of its prior practices were in violation of the Consumer Act, Prosper agree to certain terms and conditions regarding its past and potential future conduct of its business with respect to customers in West Virginia, including a release by the Attorney General of any claims it may have related to the matters identified in the AOD. Prosper is evaluating and intends to discuss the proposed terms in the AOD with the Attorney General. We cannot predict the outcome of the matter and any potential fines or penalties, if any, that may arise from the matter. Further, we are unable to estimate a range of outcomes and as a result no accrual has been made. No loans have been originated through the Prosper platform to West Virginians since June 2016. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In the normal course of its operations, PFL becomes involved in various legal actions. PFL maintains provisions it considers to be adequate for such actions. The Company does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on financial condition, results of operations or cash flows. Operating Commitments PFL has entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made under WebBank's bank charter. On June 25, 2021, PMI, along with PFL, and WebBank entered into: (i) a Fifth Amendment (the “Sale Agreement Amendment”) to the Asset Sale Agreement, dated July 1, 2016, between PFL and WebBank (the “Sale Agreement”); (ii) a Sixth Amendment (the “Marketing Agreement Amendment”) to the Marketing Agreement, dated July 1, 2016, between PMI and WebBank (the “Marketing Agreement”); and (iii) a Third Amendment (the “Purchase Agreement Amendment”) to the Stand By Purchase Agreement, dated July 1, 2016, between PMI and WebBank (the “Purchase Agreement” and, collectively with the Sale Agreement and the Marketing Agreement, the “Origination and Sale Agreements”). The Sale Agreement Amendment, among other things, extends the term of the Sale Agreement to February 1, 2025 and amends certain collateral requirements under the Sale Agreement. The Marketing Agreement Amendment, among other things, extends the term of the Marketing Agreement to February 1, 2025 and sets forth the amended terms and conditions of certain fees owed by the Registrants to WebBank under the Marketing Agreement. The Purchase Agreement Amendment amends certain collateral requirements of Prosper under the Purchase Agreement. Pursuant to the Marketing Agreement Amendment, the marketing fee that PFL receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143.5 thousand through February 1, 2022, and $100,000 thereafter through February 1, 2025, PFL is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee is $1.2 million for each year from 2022 through 2024, and $0.1 million in 2025. Additionally, under the agreement with WebBank, PFL is required to maintain minimum net liquidity of $15 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash, Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. As of December 31, 2021 the Company was in compliance with the covenant. Loan Purchase Commitments Under the terms of PFL's agreement with WebBank, PFL is committed to purchase $13.8 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2021. PFL will purchase these Borrower Loans within the first two business days of the year ending December 31, 2022. Repurchase Obligation Under the terms of the loan purchase agreements between PFL and investors that participate in the Whole Loan Channel, PFL may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. PFL recognizes a liability at fair value for the repurchase obligation when the Borrower Loans are sold. The fair value of the repurchase obligation is estimated based on historical experience. Repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase. The maximum potential amount of future payments associated under the repurchase obligation is the outstanding balances of the Borrower Loans sold through the Whole Loan channel, which at December 31, 2021 was $2.5 billion. PFL had accrued $0.3 million and $0.2 million as of December 31, 2021 and 2020 respectively in regard to this obligation. Regulatory Contingencies PFL accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, PFL reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If PFL determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, PFL does not accrue for a potential litigation loss. If an unfavorable outcome is probable and PFL can estimate a range of outcomes, PFL records the amount management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then PFL records the low end of the range of those potential losses. SEC Inquiry In April 2017, we became aware of an error in the annualized net return and seasoned annualized net return numbers displayed to Note investors. PMI was advised by the SEC that it was investigating whether violations of federal securities laws had occurred in connection with the error. On April 19, 2019, the SEC accepted an offer of settlement from PFL to resolve the matter. Under the settlement, the SEC alleged a violation of Section 17(a)(2) of the Securities Act and ordered PFL to cease and desist from any future violations of that provision. PFL neither admitted nor denied any wrongdoing, and agreed to pay a civil monetary penalty of $3.0 million. The penalty of $3.0 million was paid in full in April 2019. West Virginia Matter In January 2018, the Attorney General of the State of West Virginia (the “Attorney General”) initiated discussions regarding certain acts and practices of PMI and PFL that the Attorney General asserts may have violated the West Virginia Consumer Credit and Protection Act (the “Consumer Act”), to which PMI responded with such information as was requested by the Attorney General. Following a period of more than a year with limited to no communication, in February 2020, PMI received a proposed Assurance of Discontinuance (an “AOD”) from the Attorney General requesting that, without in any way admitting that any of its prior practices were in violation of the Consumer Act, PMI agree to certain terms and conditions regarding its past and potential future conduct of its business with respect to customers in West Virginia, including a release by the Attorney General of any claims it may have related to the matters identified in the AOD. PMI is evaluating and intends to discuss the proposed terms in the AOD with the Attorney General. We cannot predict the outcome of the matter and any potential fines or penalties, if any, that may arise from the matter. Further, we are unable to estimate a range of outcomes and as a result no accrual has been made. No loans have been originated through the PFL platform to West Virginians since June 2016. |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
RELATED PARTIES | RELATED PARTIES Since Prosper’s inception, it has engaged in various transactions with its directors, executive officers and holders of more than 10% of its voting securities, and with immediate family members and other affiliates of its directors, executive officers and 10% stockholders. Prosper believes that all of the transactions described below were made on terms no less favorable to Prosper than could have been obtained from unaffiliated third parties. Prosper’s executive officers, directors who are not executive officers, and certain affiliates participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper for the year ended December 31, 2021 and 2020, as well as the Notes outstanding as of December 31, 2021 and 2020 are summarized below (in thousands): Aggregate Amount of Notes Purchased for the Year Ended December 31, Interest Earned on Notes for the Year Ended December 31, 2021 2020 2021 2020 Executive officers and management $ 35 $ 28 $ 7 $ 6 Directors (excluding executive officers and management) 24 272 1 43 Total $ 59 $ 300 $ 8 $ 49 Notes Balance as of December 31, 2021 December 31, 2020 Executive officers and management $ 41 $ 41 Directors (excluding executive officers and management) 15 — Total $ 56 $ 41 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
RELATED PARTIES | RELATED PARTIES Since inception, PFL has engaged in various transactions with its directors, executive officers, PMI, and immediate family members and other affiliates of its directors, executive officers and PMI. PFL believes that all of the transactions described below were made on terms no less favorable to PFL than could have been obtained from unaffiliated third parties. PFL’s executive officers and directors who are not executive officers participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be related parties of PFL for the years ended December 31, 2021 and 2020 are summarized below (in thousands): Aggregate Amount of Notes Purchased for the Year Ended December 31, Interest Earned on Notes for the Year Ended December 31, 2021 2020 2021 2020 Executive officers and management $ 35 $ 28 $ 7 $ 6 Directors (excluding executive officers and management) — — — — Total $ 35 $ 28 $ 7 $ 6 The balance of Notes held by officers and directors who are not executive officers are as follows (in thousands): Notes Balance as of December 31, 2021 December 31, 2020 Executive officers and management $ 41 $ 41 Directors (excluding executive officers and management) — — Total $ 41 $ 41 |
POSTRETIREMENT BENEFIT PLANS
POSTRETIREMENT BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
POSTRETIREMENT BENEFIT PLANS | POSTRETIREMENT BENEFIT PLANSProsper has a 401(k) plan that covers all employees meeting certain eligibility requirements. The 401(k) plan is designed to provide tax-deferred retirement benefits in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Eligible employees may defer up to 90% of eligible compensation up to the annual maximum as determined by the Internal Revenue Service. Prosper’s contributions to the plan are discretionary. During the years ended December 31, 2021, 2020 and 2019, Prosper contributed $2.0 million, $1.2 million and $2.3 million, respectively, to the 401(k) plan. |
SIGNIFICANT CONCENTRATIONS
SIGNIFICANT CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
SIGNIFICANT CONCENTRATIONS | SIGNIFICANT CONCENTRATIONS Prosper is dependent on third party funding sources such as banks, asset managers, and investment funds to provide the funds to allow WebBank to originate Borrower Loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the year ended December 31, 2021, one individual party purchased 26.7% of such loans, and the Company’s Warehouse VIEs purchased 12.6% of such loans. For the year ended December 31, 2020, two individual parties purchased 21.4% and 14.3% of such loans, respectively, and the Company’s Warehouse VIEs purchased 18.2% of such loans. These purchases reflect that a significant portion of Prosper’s business is dependent on funding through the Whole Loan Channel, through which 88% and 91% of Borrower Loans were originated in the years ended December 31, 2021 and 2020, respectively.Prosper receives all of its transaction fee revenue related to personal loans from WebBank. Prosper earns a transaction fee from WebBank for our services in facilitating originations of Borrower Loans issued by WebBank. The rate of the transaction fee for each individual Borrower Loan is based on the term and credit grade of the Borrower Loan. No individual borrower or investor accounted for 10% or more of consolidated net revenue for any of the periods presented. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
SIGNIFICANT CONCENTRATIONS | SIGNIFICANT CONCENTRATIONS PFL is dependent on third party funding sources such as banks, asset managers, and investment funds to provide the funds to allow WebBank to originate Borrower Loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the year ended December 31, 2021, one individual party purchased 26.7% of such loans, and PMI’s Warehouse VIEs purchased 12.6% of such loans. For the year ended December 31, 2020, two individual parties purchased 21.4% and 14.3% of such loans, respectively, and PMI’s Warehouse VIEs purchased 18.2% of such loans. These purchases reflect that a significant portion of PFL’s business is dependent on funding through the Whole Loan Channel, through which 88% and 91% of Borrower Loans were originated in the years ended December 31, 2021 and 2020, respectively. |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTSOur chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company has a single reporting and operating segment. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSManagement has evaluated subsequent events or transactions occurring through the date the consolidated financial statements were issued and determined that no events or transactions, other than any items disclosed within the consolidated financial statements and related notes, are required to be disclosed herein. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of PMI and its wholly owned subsidiaries including PFL, Prosper Healthcare Lending LLC (“PHL”), BillGuard, Inc. (“BillGuard”), and its consolidated VIEs including Prosper Warehouse I Trust (“PWIT”), Prosper Warehouse II Trust (“PWIIT”), Prosper Marketplace Issuance Trust, Series 2019-1 (“PMIT 2019-1,” deconsolidated on September 27, 2021), Prosper Marketplace Issuance Trust, Series 2019-2 (“PMIT 2019-2,” deconsolidated on September 27, 2021), Prosper Marketplace Issuance Trust, Series 2019-4 (“PMIT 2019-4,” deconsolidated on September 27, 2021) and Prosper Grantor Trust (“PGT”). All intercompany balances and transactions between PMI and its subsidiaries have been eliminated in consolidation. PMI and PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of EstimatesThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures, including contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include but are not limited to the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, Certificates Issued by Securitization Trust (Note 6), valuation of servicing rights and loan trailing fee liability, valuation allowance on deferred tax assets, stock-based compensation expense, Intangible Assets, Goodwill, Convertible Preferred Stock Warrant Liability, Repurchase Obligations and contingent liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Prosper’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is |
Transfers of Financial Assets | Transfers of Financial Assets Prosper accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from Prosper, the transferee has the right to pledge or exchange the assets without any significant constraints, and Prosper has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, Prosper considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. Prosper measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale include the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. |
Fair Value Measurement | Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments measured at fair value consist principally of Borrower Loans, Loans Held for Sale, Servicing Assets, Loan Trailing Fee Liabilities (Note 9), Notes, Certificates Issued by Securitization Trust (Note 6) and Convertible Preferred Stock Warrant Liability. The estimated fair values of other financial instruments, including Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable, Accrued Liabilities and Payable to Investors approximate their carrying values because of their short-term nature. The estimated fair values of the Paycheck Protection Program loan (Note 9 and 10), Notes Issued by Securitization Trust (Note 6) and Warehouse Lines do not approximate their carrying values due primarily to differences in the stated and market rates associated with these instruments. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, Prosper maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments Prosper must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets are considered level 3 financial instruments. Prosper primarily uses a discounted cash flow model to estimate their fair value, and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash includes various unrestricted deposits with investment-grade rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. At times, our cash balances may exceed federally insured amounts and potentially subject the Company to a concentration of credit risk. The Company believes that no significant concentration of credit risk exists with respect to these balances based on its assessment of the creditworthiness of these financial institutions. |
Restricted Cash | Restricted Cash Restricted cash consists primarily of cash deposits, money market funds and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors or Prosper have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. |
Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust | Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank then issues Notes to investors and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s Consolidated Balance Sheets as assets and liabilities, respectively. In 2019, Prosper began refinancing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions, which issued senior notes, risk retention interests, and residual certificates. Associated securitization trusts were deemed consolidated VIEs until September 2021, when the Company sold its share of the residual certificates issued by these securitization trusts and deconsolidated the VIEs. Prior to their deconsolidation, the Borrower Loans held in the securitization trusts were included in “Borrower Loans, at Fair Value”, senior notes sold to third party investors were included in “Notes Issued by Securitization Trust”, and the risk retention interest and residual certificates held by third party investors were included in “Certificates Issued by Securitization Trust, at Fair Value” on the Consolidated Balance Sheets. Refer to Note 6 - Securitization for additional disclosures and details on the deconsolidation of these securitization trust VIEs. Prosper uses Warehouse Lines to purchase Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. Loans Held for Sale are included in “Loans Held for Sale, at Fair Value” in the Consolidated Balance Sheets. See Note 10 - Debt for more details on Warehouse Lines. Borrower Loans and Loans Held for Sale are purchased from WebBank. Prosper places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods. Prosper has elected the fair value option for Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in the fair value of Borrower Loans held in consolidated securitization trusts were partially offset by changes in fair value of the Certificates Issued by Securitization Trust, prior to the deconsolidation of these securitization trusts in September 2021. Changes in fair value of Loans Held for Sale are recorded through Proper's earnings and Prosper collects interest on Loans Held for Sale. Changes in fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. |
Servicing Assets | Servicing Assets Prosper records Servicing Assets at their estimated fair values for servicing rights retained when Prosper sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets is recognized in Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market servicing rate is recorded in Servicing Assets on the Consolidated Balance Sheets. Prosper uses a discounted cash flow model to estimate the fair value of the loan Servicing Assets which considers the contractual projected servicing fee revenue that Prosper earns on the Borrower Loans, the estimated market servicing rates to service such loans, the prepayment rates, the default rates and the current principal balances of the Borrower Loans. |
Property and Equipment | Property and Equipment Property and Equipment consists of computer equipment, office furniture and equipment, leasehold improvements, software purchased or developed for internal use and web site development costs. Property and Equipment is stated at cost, less accumulated depreciation and amortization, and is computed using the straight-line method based upon estimated useful lives of the assets. Estimated useful lives of the assets are as follows: Furniture and fixtures 7 years Office equipment 5 years Computers and equipment 3 years Leasehold improvements 5 - 8 years Software and website development costs 1 - 5 years The costs to develop software for the website and other internal uses are capitalized when management has authorized and committed project funding, when preliminary development efforts are successfully completed, and when it is probable that the project will be completed and the software will be used as intended. Capitalized software and website development costs primarily include software licenses acquired, fees paid to outside consultants and salaries and payroll-related costs for employees directly involved in the development efforts. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. Capitalized costs are included in Property and Equipment and amortized to expense using the straight-line method over their expected lives. Software and website development assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software and website development assets to be held and used is measured by a comparison of the carrying amount of the asset group to the future net undiscounted cash flows expected to be generated by the asset group. If such software and website development assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software and website development asset group. |
Leases | Leases Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not recognize ROU assets and lease liabilities. If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill associated with business combinations is computed by recognizing the portion of the purchase price that is not tied to individually identifiable and separately recognizable assets. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Annual impairment testing occurs on October 1. Impairment exists whenever the carrying value of Goodwill exceeds its implied fair value. Adverse changes in impairment indicators such as loss of key personnel, increased regulatory oversight or unplanned changes in operations could result in impairment. PMI did not recognize any Goodwill impairments during the years ended December 31, 2021, 2020 and 2019. Costs of internally developing any intangibles is expensed as incurred. Intangible Assets identified through the acquisitions of American Healthcare Lending and BillGuard include customer relationships, technology and a brand name. The user base and customer relationship Intangible Assets are being amortized on an accelerated basis over a three three |
Payable to Investors | Payable to Investors Payable to Investors primarily represents the obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. |
Warehouse Lines and Notes Issued by Securitization Trust | Warehouse Lines and Notes Issued by Securitization Trust Warehouse Lines and Notes Issued by Securitization Trust (prior to deconsolidation in September 2021) are carried at amortized cost. Prosper defers specific incremental costs directly related to entering into the Warehouse Lines and issuing Notes Issued by Securitization Trust and subsequently amortizes them into interest expense over the life of the arrangements. |
Convertible Redeemable Preferred Stock Warrant Liability | Convertible Preferred Stock Warrant Liability Prosper has entered into varying arrangements with investors to issue preferred stock warrants in exchange for their participation as a purchaser of Borrower Loans. In all cases, these warrants are free standing financial instruments due to their status as legally detached and separately exercisable warrants without conditions requiring Prosper to repurchase those warrants or the underlying preferred shares. These freestanding warrants are accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Under ASC 480, vested freestanding warrants to purchase the Company’s convertible redeemable preferred stock are classified as a liability on the Consolidated Balance Sheets and carried at fair value because the warrants may conditionally obligate the Company to transfer assets at some point in the future. The Company records the warrants at fair value on issuance. The warrants are subject to remeasurement to fair value at each balance sheet date, and any change in their fair value is recognized as “Change in Fair Value of Convertible Preferred Stock Warrants” in the Consolidated Statements of Operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event or the conversion of convertible redeemable preferred stock into Common Stock. |
Loan Trailing Fee Liability | Loan Trailing Fee Liability On July 1, 2016, Prosper signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to Prosper. These agreements became effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by Prosper, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, Prosper is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to Prosper is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. |
Revenue Recognition | Revenue Recognition Revenue primarily results from transaction and Servicing Fees and net interest income earned. Fees include Transaction Fees for our services performed on behalf of WebBank to originate a loan. PMI also has other smaller sources of revenue reported as Other Revenues, including referral fees, and securitization fees. Transaction Fees Prosper has a customer contract with WebBank to facilitate the origination of all Borrower Loans through Prosper’s marketplace. In exchange for these services, Prosper earns a transaction fee from WebBank that is recognized when performance is complete and upon the successful origination of a Borrower Loan. The transaction fee Prosper earns is determined by the term and credit grade of the Borrower Loan that is facilitated on Prosper’s marketplace, and ranges from 1.0% to 5.0% of the original principal amount of each Borrower Loan that WebBank originates. Prosper records the transaction fee net of any fees paid to WebBank because Prosper does not receive an identifiable benefit from WebBank other than the borrower loan that has been recognized at fair value. Servicing Fees Investors who purchase Borrower Loans from Prosper typically pay Prosper a servicing fee which is generally set at 1.075% per annum of the outstanding principal balance of the borrower loan prior to applying the current payment. The servicing fee compensates Prosper for the costs incurred in servicing the borrower loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received. Gain on Sale of Borrower Loans Prosper recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Prosper measures gain or loss on sale of Borrower Loans as the net proceeds received on a sale less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Loans Held for Sale and Interest Expense on Financial Instruments Prosper recognizes interest income on Borrower Loans and Loans Held for Sale using the accrual method based on the stated interest rate to the extent we believe it to be collectible. We record interest expense on the corresponding Notes, at Fair Value, Notes Issued by Securitization Trust, Certificates Issued by Securitization Trust, and Warehouse Lines based on the contractual interest rates. Other Revenues |
Advertising Costs | Advertising CostsAdvertising costs are expensed when incurred and are included in “Sales and Marketing” expense in the accompanying Consolidated Statements of Operations. |
Stock-Based Compensation | Stock-Based Compensation Management determines the fair value of the Company's stock options issued to employees on the date of grant using the Black-Scholes option pricing model, which is impacted by the fair value of Common Stock as well as by changes in assumptions that include, but are not limited to, the expected Common Stock price volatility over the term of the option awards, the expected term of the awards, risk-free interest rates and the expected dividend yield. PMI recognizes compensation expense for stock-based awards on a straight-line basis over the period during which an employee is required to provide services in exchange for the award (the vesting period of the award). Stock-based compensation expense is recognized only for those awards expected to vest. PMI estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from estimates. Stock-based awards issued to non-employees are marked-to-market up until the point that the awards measurement period has been achieved. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the vesting period of the award. |
Income Taxes | Income Taxes The asset and liability method is used to account for income taxes. Under this method, deferred income tax assets and liabilities are based on the differences between the financial statement carrying values and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Prosper’s policy is to include interest and penalties related to gross unrecognized tax benefits within its provision for income taxes. U.S. Federal, California and other state income tax returns are filed. Prosper is not currently undergoing any income tax examinations. Due to the cumulative net operating loss, generally all tax years remain open. Prosper recognizes benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. |
Other Income, Net | Other Income, NetOther Income, Net includes interest income from Available for Sale Investments, sublease income, SEC settlement costs and contract termination costs that are expected to be non-recurring and not part of restructuring activities. |
Restructuring Charges | Restructuring Charges Restructuring Charges consist of severance costs and contract termination-related costs and impairment charges associated with the severance actions. A liability for severance costs is typically recognized when the plan of termination has been communicated to the affected employees and is measured at its fair value at the communication date. Contract termination costs consist primarily of costs that will continue to be incurred under operating leases for their remaining terms without economic benefit to the Company. A liability for contract termination costs is recognized at the date the Company ceases using the rights conveyed by the lease contract and is recorded at fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. |
Comprehensive Income | Comprehensive Income Marketable debt securities are generally considered available-for-sale and are carried at fair value, based on quoted market prices or other readily available market information. Gains and losses are recognized when realized using the specific identification method and included in “Other Income, Net” in the Consolidated Statements of Operations. Unrealized gains and losses, net of taxes, are included in Accumulated Other Comprehensive Income, which is reflected as a separate component of Stockholders’ Deficit in Prosper's Consolidated Balance Sheets. If management has determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to an identified loss is recognized in earnings. Prosper monitors its investment portfolio for potential impairment on a quarterly basis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted In The Current Year In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries and the methodology for calculating income taxes in an interim period. The guidance also clarifies and simplifies other aspects of the accounting for income taxes, including a modification in the guidance for franchise taxes that are partially based on income and recognizing deferred taxes for a subsequent step-up in the tax basis of goodwill. The ASU was effective for the Company beginning in the first quarter of 2021. The Company has adopted ASU 2019-12 and concluded that the impact on its consolidated financial statements was immaterial. Accounting Standards Issued, to be Adopted by the Company in Future Periods |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Basis of Presentation | Basis of Presentation PFL’s consolidated financial statements include the accounts of PFL and its wholly-owned subsidiary, Prosper Depositor LLC. All intercompany balances and transactions between PFL and Prosper Depositor LLC have been eliminated in consolidation. PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of PFL’s consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include, but are not limited to, the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, valuation of servicing rights, valuation of loan trailing fee liability, repurchase obligations, and contingent liabilities. PFL bases its estimates on historical experience from all Borrower Loans and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from estimates. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. PFL’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. PFL consolidates a VIE when it is deemed to be the primary beneficiary. PFL assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. |
Transfers of Financial Assets | Transfers of Financial Assets PFL accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from PFL, the transferee has the right to pledge or exchange the assets without any significant constraints, and PFL has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, PFL considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. PFL measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. |
Fair Value Measurement | Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments consist principally of Cash and Cash Equivalents, Restricted Cash, Borrower Loans, Loans Held for Sale, Servicing Assets, Loan Trailing Fee Liability, Accounts Receivable, Accounts Payable and Accrued Liabilities, Payable to Investors and Notes. The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short term nature. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, PFL maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments PFL must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, and Servicing Assets, or for similar assets and liabilities, PFL believes the Borrower Loans, Loans Held for Sale, Notes, and Servicing Assets should be considered level 3 financial instruments. PFL primarily uses a discounted cash flow model to estimate their fair value and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash includes various unrestricted deposits with highly rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, U.S. treasury securities and U.S. agency securities. Cash equivalents are recorded at cost, which approximates fair value. |
Restricted Cash | Restricted Cash Restricted Cash consists primarily of cash deposits and short term certificates of deposit accounts for loan funding and servicing activities, and cash that investors or PFL have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. |
Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust | Borrower Loans, Loans Held for Sale and Notes With respect to the Note Channel, PFL purchases Borrower Loans from WebBank then issues notes, and holds the Borrower Loans as a receivable until maturity. The obligation to repay a series of notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower loans funded and notes issued through the Note Channel are carried on PFL’s Consolidated Balance Sheets as assets and liabilities, respectively. PFL places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, PFL stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, PFL charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods. Management has elected the fair value option for Borrower Loans, Loans Held for Sale, and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans, Loans Held for Sale and Notes are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. |
Servicing Assets | Servicing Assets PFL records Servicing Assets at their estimated fair values for servicing rights retained when PFL sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets is recognized in revenue as Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain (Loss) on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market loan servicing rate, is recorded in Servicing Assets on the Consolidated Balance Sheets. |
Software and Website Development | Software and Website Development Software and website development represents the software and website development costs that PMI transferred to PFL. PFL does not develop any of its own software or its website. Software and website development are included in Property and Equipment, Net and amortized to expense using the straight-line method over their expected lives which is generally one |
Payable to Investors | Payable to Investors Payable to Investors primarily represents the Company's obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. |
Loan Trailing Fee Liability | Loan Trailing Fee Liability On July 1, 2016, PMI signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to PMI. These agreements were effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by PMI, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by PMI to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, PMI is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to PMI is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. |
Revenue Recognition | Revenue Recognition Revenue primarily results from fees, net interest earned and gains on the sale of Borrower Loans. Fees consist of related party administrative fees and Servicing Fees paid by investors. The Company also has other smaller sources of revenue reported as Other Revenues including fees charged in relation to securitizations by outside investors. Administration Agreement License Fees PFL primarily generates revenues through license fees it earns through an Administration Agreement with PMI. The Administration Agreement contains a license granted by PFL to PMI that entitles PMI to use the platform for and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement relating to corporate administration, loan platform services, loan and Note servicing and marketing, and (ii) PMI’s performance of its duties and obligations to WebBank in relation to loan origination and funding. The license fees are based on the number of listings that are posted to the platform. Service Fees Investors who purchase Borrower Loans from PFL through the Whole Loan Channel typically pay PFL a servicing fee which is currently set at 1.075% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment. The servicing fee compensates PFL for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. PFL records Servicing Fees from investors as a component of operating revenue when received. Gain (Loss) on Sale of Borrower Loans PFL recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. PFL measures gain or loss on sale of Borrower Loans as the net proceeds received on the sale less the fair value of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Interest Expense on Notes PFL recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent PFL believes it to be collectable. |
Administration Fee Expense - Related Party | Administration Fee Expense - Related PartyPursuant to the Administration Agreement between PFL and PMI, PMI manages the marketplace on behalf of PFL. Accordingly each month, PFL is required to pay PMI an administration fee that is based on PMI’s (a) finance and legal personnel costs, (b) number of Borrower Loans originated through the Marketplace, (c) Servicing Fees collected by or on behalf of PFL, and (d) nonsufficient funds fees collected by or on behalf of PFL. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted in the Current Period No accounting standards were adopted in the current period for PFL. Accounting Standards Issued, to be Adopted in Future Periods No issued and pending accounting standards were identified that are expected to have an impact on PFL. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Estimated useful lives of the assets are as follows: Furniture and fixtures 7 years Office equipment 5 years Computers and equipment 3 years Leasehold improvements 5 - 8 years Software and website development costs 1 - 5 years |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
Schedule of Property and Equipment | Property and Equipment, Net consists of the following at the dates presented (in thousands): December 31, 2021 2020 Operating lease right-of-use assets $ 17,485 $ 15,767 Computer equipment 15,090 13,841 Internal-use software and website development costs 41,816 33,176 Office equipment and furniture 2,961 2,872 Leasehold improvements 7,167 7,167 Assets not yet placed in service 5,224 5,035 Property and equipment 89,743 77,858 Less: Accumulated depreciation and amortization (60,029) (49,412) Total Property and Equipment, Net $ 29,714 $ 28,446 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Schedule of Property and Equipment | Property and Equipment consist of the following as of the dates presented (in thousands): December 31, 2021 2020 Internal-use software and web site development costs $ 31,979 $ 26,953 Less: Accumulated depreciation and amortization (24,072) (20,025) Total Property and Equipment, Net $ 7,907 $ 6,928 |
BORROWER LOANS, LOANS HELD FO_2
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
Borrower Loans, Notes and Loans Held for Sale | As of December 31, 2021 and 2020, Borrower Loans, Loans Held for Sale and Notes were as follows (in thousands): Borrower Loans Loans Held for Sale Notes 2021 2020 2021 2020 2021 2020 Aggregate principal balance outstanding $ 265,232 $ 393,642 $ 242,278 $ 279,113 $ 267,415 $ 217,110 Fair value adjustments 2,394 (15,379) 892 (4,492) (1,430) (8,731) Fair value $ 267,626 $ 378,263 $ 243,170 $ 274,621 $ 265,985 $ 208,379 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Borrower Loans, Notes and Loans Held for Sale | The aggregate principal balances outstanding and fair values of Borrower Loans and Notes as of December 31, 2021 and 2020, are presented in the following table (in thousands): Borrower Loans Notes December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Aggregate principal balance outstanding $ 265,232 $ 215,373 $ 267,415 $ 217,110 Fair value adjustments 2,394 (5,703) (1,430) (8,731) Fair value $ 267,626 $ 209,670 $ 265,985 $ 208,379 |
SECURITIZATIONS (Tables)
SECURITIZATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Transfers and Servicing [Abstract] | |
Schedule of Variable Interest Entities | Accordingly, the net assets of PMIT 2019-1, 2019-2 and 2019-4 were deconsolidated from Prosper’s balance sheet on September 27, 2021, resulting in a loss on deconsolidation of $1.5 million, consisting of the following (in thousands): PMIT 2019-1 PMIT 2019-2 PMIT 2019-4 Total Consideration received for residual certificates: Cash $ 2,259 $ 836 $ 981 $ 4,076 Net assets deconsolidated: Restricted Cash $ 2,485 $ 4,324 $ 4,088 $ 10,897 Borrower Loans (1) 15,133 29,989 33,239 78,361 Notes Issued by Securitization Trust (13,022) (26,712) (29,975) (69,709) Certificates Issued by Securitization Trust, at Fair Value (1) (2,057) (5,990) (5,932) (13,979) Total net assets deconsolidated $ 2,539 $ 1,611 $ 1,420 $ 5,570 Total loss on deconsolidation $ (280) $ (775) $ (439) $ (1,494) (1) Because Borrower Loans and Certificates Issued by Securitization Trust were measured at fair value on the Company’s consolidated balance sheets, the balances above reflect the fair values of these financial instruments as of September 27, 2021, the deconsolidation date. |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): Balance at December 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 267,626 $ 267,626 Loans Held for Sale, at Fair Value — — 243,170 243,170 Servicing Assets — — 8,761 8,761 Total Assets $ — $ — $ 519,557 $ 519,557 Liabilities: Notes, at Fair Value $ — $ — $ 265,985 $ 265,985 Convertible Preferred Stock Warrant Liability — — 250,941 250,941 Loan Trailing Fee Liability (Note 9) — — 2,161 2,161 Total Liabilities $ — $ — $ 519,087 $ 519,087 Balance at December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 378,263 $ 378,263 Loans Held for Sale, at Fair Value — — 274,621 274,621 Servicing Assets — — 9,242 9,242 Total Assets $ — $ — $ 662,126 $ 662,126 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Certificates Issued by Securitization Trust, at Fair Value — — 22,917 22,917 Convertible Preferred Stock Warrant Liability — — 112,319 112,319 Loan Trailing Fee Liability (Note 9) — — 2,233 2,233 Total Liabilities $ — $ — $ 345,848 $ 345,848 |
Quantitative Information About Significant Unobservable Inputs | The following tables present quantitative information about the ranges of significant unobservable inputs used for the Company’s Level 3 fair value measurements at December 31, 2021 and 2020: December 31, 2021 2020 Borrower Loans, Loans Held for Sale, and Notes: Discount rate 4.2 % — 14.3 % 4.5 % — 17.7 % Default rate 2.0 % — 14.1 % 2.3 % — 17.9 % Certificates Issued by Securitization Trust: December 31, 2020 Discount rate 3.3 % — 16.0 % Default rate 3.2 % — 15.3 % Prepayment rate 7.6 % — 35.4 % Borrower Loans held in consolidated securitization trusts and the associated Certificates Issued by Securitization Trust were deconsolidated from the Company’s balance sheet as of September 27, 2021 (Note 6), and as a result the tables above exclude these financial instruments. Refer to the section below for information about the inputs used to measure the fair value of these Borrower Loans and Certificates Issued by Securitization Trust. December 31, 2021 2020 Servicing Assets: Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % Market servicing rate (1) (2) 0.648 % — 0.842 % 0.625 % — 0.818 % (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of December 31, 2021 were measured using a market servicing rate assumption of 84.2 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 64.8 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2021 and 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a weighted-average total market servicing rate of 70.8 basis points to 90.2 basis points and 69.5 basis points to 88.8 basis points, respectively. December 31, 2021 2020 Loan Trailing Fee Liability: Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % |
Fair Value Measurement Inputs and Valuation Techniques | Key assumptions for the valuation of Borrower Loans are presented in the following table (in thousands, except percentages): Borrower Loans September 27, 2021 Fair value, using the following assumptions: $ 78,361 Weighted-average discount rate 9.26 % Weighted-average default rate 8.13 % Certificates Issued by Securitization Trust September 27, 2021 Fair value, using the following assumptions: $ 13,979 Weighted-average discount rate 7.99 % Weighted-average default rate 7.68 % Weighted-average prepayment rate 17.94 % |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, Notes and Certificates Issued by Securitization Trust measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Assets Liabilities Borrower Loans Held Notes Certificates Issued by Securitization Trust Total Fair Value at January 1, 2020 $ 634,019 $ 142,026 $ (244,171) $ (52,168) $ 479,706 Purchase of Borrower Loans/Issuance of Notes 133,644 1,338,082 (133,228) — 1,338,498 Principal repayments (332,629) (104,798) 149,409 22,136 (265,882) Borrower Loans sold to third parties (6,731) (1,089,974) — — (1,096,705) Other changes (1,420) 1,168 (53) 436 131 Change in fair value (48,620) (11,883) 19,664 6,679 (34,160) Fair Value at December 31, 2020 378,263 274,621 (208,379) (22,917) 421,588 Purchase of Borrower Loans/Issuance of Notes 232,000 1,712,705 (231,933) — 1,712,772 Principal repayments (260,689) (164,165) 172,250 14,934 (237,670) Borrower Loans sold to third parties (2,664) (1,580,164) — — (1,582,828) Other changes (1,518) (249) 167 113 (1,487) Change in fair value 595 422 1,910 (6,110) (3,183) Deconsolidation of VIEs (Note 6) (78,361) — — 13,980 (64,381) Fair Value at December 31, 2021 $ 267,626 $ 243,170 $ (265,985) $ — $ 244,811 |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following table presents additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Servicing Assets Fair Value at January 1, 2020 $ 12,602 Additions 5,829 Less: Changes in fair value (9,189) Fair Value at December 31, 2020 $ 9,242 Additions 7,973 Recognition of Servicing Assets upon deconsolidation of VIEs (Note 6) 215 Less: Change in fair value (8,669) Fair Value at December 31, 2021 $ 8,761 |
Level 3 Liabilities Measured on Recurring Basis | The following tables present additional information about Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Convertible Preferred Stock Warrant Liability Fair Value at January 1, 2020 $ 149,996 Change in fair value (37,677) Fair Value at December 31, 2020 $ 112,319 Change in fair value 138,622 Fair Value at December 31, 2021 $ 250,941 The following table presents additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Loan Trailing Fee Liability Balance at January 1, 2020 $ 2,997 Issuances 1,349 Cash payment of Loan Trailing Fee (2,421) Change in fair value 308 Balance at December 31, 2020 $ 2,233 Issuances 1,775 Cash payment of Loan Trailing Fee (2,100) Change in fair value 253 Balance at December 31, 2021 $ 2,161 |
Fair Value Assumptions | Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2021 and 2020 for Borrower Loans and Loans Held for Sale are presented in the following table (in thousands, except percentages). Borrower Loans and Loans Held for Sale: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 510,796 $ 652,884 Weighted-average discount rate 5.64 % 8.26 % Weighted-average default rate 10.08 % 11.58 % Fair value resulting from: 100 basis point increase in discount rate $ 505,732 $ 647,093 200 basis point increase in discount rate $ 500,763 $ 641,437 Fair value resulting from: 100 basis point decrease in discount rate $ 516,064 $ 658,817 200 basis point decrease in discount rate $ 521,437 $ 664,895 Fair value resulting from: 100 basis point increase in default rate $ 506,362 $ 646,421 200 basis point increase in default rate $ 501,921 $ 639,987 Fair value resulting from: 100 basis point decrease in default rate $ 515,326 $ 659,377 200 basis point decrease in default rate $ 519,851 $ 665,904 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2021 and 2020 for Notes are presented in the following table (in thousands, except percentages). Notes: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 265,985 $ 208,379 Weighted-average discount rate 5.76 % 8.93 % Weighted-average default rate 10.70 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 263,326 $ 206,528 200 basis point increase in discount rate $ 260,735 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 268,714 $ 210,274 200 basis point decrease in discount rate $ 271,516 $ 212,217 Fair value resulting from: 100 basis point increase in default rate $ 263,644 $ 206,304 200 basis point increase in default rate $ 261,318 $ 204,238 Fair value resulting from: 100 basis point decrease in default rate $ 268,340 $ 210,463 200 basis point decrease in default rate $ 270,711 $ 212,558 Key economic assumptions and the sensitivity of the fair value to immediate changes in those assumptions at December 31, 2021 and 2020 for Servicing Assets is presented in the following table (in thousands, except percentages). Servicing Assets: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 8,761 $ 9,242 Weighted-average market servicing rate 0.650 % 0.631 % Weighted-average prepayment rate 20.82 % 19.84 % Weighted-average default rate 12.54 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 8,203 $ 8,689 Market servicing rate decrease of 0.025% $ 9,320 $ 9,796 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 8,568 $ 9,064 Applying a 0.9 multiplier to prepayment rate $ 8,957 $ 9,423 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 8,646 $ 9,116 Applying a 0.9 multiplier to default rate $ 8,878 $ 9,369 |
Financial Instruments, Assets And Liabilities Not Recorded at Fair Value | The following tables present the fair value hierarchy for assets and liabilities not recorded at fair value (in thousands): Balance at December 31, 2021 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets: Cash and Cash Equivalents $ 67,700 $ 67,700 $ — $ — $ 67,700 Restricted Cash - Cash and Cash Equivalents 163,047 163,047 — — 163,047 Restricted Cash - Certificates of Deposit 4,878 — 4,878 — 4,878 Accounts Receivable 1,054 — 1,054 — 1,054 Total Assets $ 236,679 $ 230,747 $ 5,932 $ — $ 236,679 Liabilities: Accounts Payable and Accrued Liabilities $ 25,790 $ — $ 25,790 $ — $ 25,790 Payable to Investors 152,794 — 152,794 — 152,794 Warehouse Lines 209,275 — 211,177 — 211,177 Paycheck Protection Program loan (Note 9) 8,590 — 8,556 — 8,556 Total Liabilities $ 396,449 $ — $ 398,317 $ — $ 398,317 Balance at December 31, 2020 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets: Cash and Cash Equivalents $ 50,145 $ 50,145 $ — $ — $ 50,145 Restricted Cash - Cash and Cash Equivalents 158,846 158,846 — — 158,846 Restricted Cash - Certificates of Deposit 4,877 — 4,877 — 4,877 Accounts Receivable 605 — 605 — 605 Total Assets $ 214,473 $ 208,991 $ 5,482 $ — $ 214,473 Liabilities: Accounts Payable and Accrued Liabilities $ 17,876 $ — $ 17,876 $ — $ 17,876 Payable to Investors 124,094 — 124,094 — 124,094 Notes Issued by Securitization Trust 156,782 — 158,951 — 158,951 Warehouse Lines 242,479 — 242,261 — 242,261 Paycheck Protection Program loan (Note 9) 8,505 — 8,540 — 8,540 Total Liabilities $ 549,736 $ — $ 551,722 $ — $ 551,722 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 267,626 $ 267,626 Servicing Assets — — 9,796 9,796 Total Assets $ — $ — $ 277,422 $ 277,422 Liabilities: Notes, at Fair Value $ — $ — $ 265,985 $ 265,985 Loan Trailing Fee Liability* — — 2,161 2,161 Total Liabilities $ — $ — $ 268,146 $ 268,146 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans, at Fair Value $ — $ — $ 209,670 $ 209,670 Servicing Assets — — 11,088 11,088 Total Assets $ — $ — $ 220,758 $ 220,758 Liabilities: Notes, at Fair Value $ — $ — $ 208,379 $ 208,379 Loan Trailing Fee Liability* — — 2,233 2,233 Total Liabilities $ — $ — $ 210,612 $ 210,612 *Included in Other Liabilities on the Consolidated Balance Sheets. |
Quantitative Information About Significant Unobservable Inputs | The following tables present quantitative information about the significant unobservable inputs used for PFL’s Level 3 fair value measurements at the dates presented: Range Borrower Loans and Notes: December 31, 2021 December 31, 2020 Discount rate 4.3 % — 13.9 % 5.3 % — 16.1 % Default rate 2.0 % — 13.5 % 2.6 % — 16.2 % Range Servicing Assets: December 31, 2021 December 31, 2020 Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % Market servicing rate (1) (2) 0.648 % — 0.842 % 0.625 % — 0.818 % (1) Servicing assets associated with loans enrolled in a relief program offered by the Company in response to the COVID-19 pandemic as of December 31, 2021 were measured using a market servicing rate assumption of 84.2 basis points. This rate was estimated using a multiplier consistent with observable market rates for other loan types, applied to the base market servicing rate assumption of 64.8 basis points. (2) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2021 and 2020, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 7 basis points, respectively, for a weighted-average total market servicing rate of 70.8 basis points to 90.2 basis points and 69.5 basis points to 88.8 basis points, respectively. Range Loan Trailing Fee Liability: December 31, 2021 December 31, 2020 Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.5 % — 14.1 % 1.9 % — 17.7 % Prepayment rate 10.2 % — 32.3 % 12.4 % — 28.9 % |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, and Notes measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020 (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Assets Liabilities Borrower Loans Held Notes Total Fair value at January 1, 2020 $ 245,137 $ — $ (244,171) $ 966 Originations 133,644 1,338,082 (133,228) 1,338,498 Principal repayments (147,361) — 149,409 2,048 Borrower Loans sold to third parties (2,547) (1,338,082) — (1,340,629) Other changes 7 — (53) (46) Change in fair value (19,210) — 19,664 454 Fair value at December 31, 2020 $ 209,670 $ — $ (208,379) $ 1,291 Originations 232,000 1,712,705 (231,933) 1,712,772 Principal repayments (171,286) — 172,250 964 Borrower Loans sold to third parties (1,422) (1,712,705) — (1,714,127) Other changes (195) — 166 (29) Change in fair value (1,141) — 1,911 770 Fair value at December 31, 2021 $ 267,626 $ — $ (265,985) $ 1,641 |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following table presents additional information about Level 3 Servicing Assets recorded at fair value (in thousands): Servicing Assets Fair value at January 1, 2020 $ 14,888 Additions 7,203 Change in fair value (11,003) Fair value at December 31, 2020 $ 11,088 Additions 9,020 Change in fair value (10,312) Fair value at December 31, 2021 $ 9,796 |
Level 3 Liabilities Measured on Recurring Basis | The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Loan Trailing Fee Liability Fair Value at January 1, 2020 $ 2,997 Issuances 1,349 Cash payment of Loan Trailing Fee (2,421) Change in fair value 308 Fair Value at December 31, 2020 $ 2,233 Issuances 1,775 Cash payment of Loan Trailing Fee (2,100) Change in fair value 253 Fair Value at December 31, 2021 $ 2,161 |
Fair Value Assumptions | Key economic assumptions are used to compute the fair value of Borrower Loans and Notes. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2021 and 2020 for Borrower Loans are presented in the following table (in thousands, except percentages): Borrower Loans: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 267,626 $ 209,670 Weighted-average discount rate 5.76 % 8.93 % Weighted-average default rate 10.70 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 265,104 $ 207,810 200 basis point increase in discount rate $ 262,499 $ 205,994 Fair value resulting from: 100 basis point decrease in discount rate $ 270,520 $ 211,575 200 basis point decrease in discount rate $ 273,337 $ 213,527 Fair value resulting from: 100 basis point increase in default rate $ 265,435 $ 207,594 200 basis point increase in default rate $ 263,107 $ 205,528 Fair value resulting from: 100 basis point decrease in default rate $ 270,133 $ 211,755 200 basis point decrease in default rate $ 272,505 $ 213,851 Key economic assumptions are used to compute the fair value of Notes. The sensitivity of the fair value to immediate changes in assumptions at December 31, 2021 and 2020 for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages): Notes: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 265,985 $ 208,379 Weighted-average discount rate 5.76 % 8.93 % Weighted-average default rate 10.70 % 12.26 % Fair value resulting from: 100 basis point increase in discount rate $ 263,326 $ 206,528 200 basis point increase in discount rate $ 260,735 $ 204,720 Fair value resulting from: 100 basis point decrease in discount rate $ 268,714 $ 210,274 200 basis point decrease in discount rate $ 271,516 $ 212,217 Fair value resulting from: 100 basis point increase in default rate $ 263,644 $ 206,304 200 basis point increase in default rate $ 261,318 $ 204,238 Fair value resulting from: 100 basis point decrease in default rate $ 268,340 $ 210,463 200 basis point decrease in default rate $ 270,711 $ 212,558 Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2021 and 2020 for Servicing Assets are presented in the following table (in thousands, except percentages): Servicing Assets: December 31, 2021 December 31, 2020 Fair value, using the following assumptions: $ 9,796 $ 11,088 Weighted-average market servicing rate 0.650 % 0.631 % Weighted-average prepayment rate 20.82 % 19.84 % Weighted-average default rate 12.24 % 12.78 % Fair value resulting from: Market servicing rate increase of 0.025% $ 9,171 $ 10,424 Market servicing rate decrease of 0.025% $ 10,421 $ 11,752 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 9,580 $ 10,874 Applying a 0.9 multiplier to prepayment rate $ 10,015 $ 11,304 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 9,667 $ 10,936 Applying a 0.9 multiplier to default rate $ 9,926 $ 11,239 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Other Intangible Assets for the Periods Presented | The following table presents the detail of other Intangible Assets subject to amortization as of the following dates (dollars in thousands): December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,722) 328 3.3 Brand name 60 (60) — — Total Intangible Assets subject to amortization $ 8,170 $ (7,842) $ 328 December 31, 2020 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,550) 500 4.3 Brand name 60 (60) — — Total Intangible Assets subject to amortization $ 8,170 $ (7,670) $ 500 |
Summary of Estimated Amortization of Purchased Intangible Assets | Estimated amortization of purchased Intangible Assets for future periods is as follows (in thousands): Amounts Years Ending December 31, 2022 $ 136 2023 107 2024 85 Thereafter — Total Amortization Expenses $ 328 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other Liabilities consists of the following (in thousands): December 31, 2021 2020 Operating lease liabilities $ 11,026 $ 13,342 Paycheck Protection Program loan (Note 10) 8,590 8,505 Loan trailing fee liability 2,161 2,233 Deferred revenue 1,196 63 Deferred income tax liability 560 489 Financing lease liabilities 78 — Other 289 425 Total Other Liabilities $ 23,900 $ 25,057 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income (Loss) Per Share | Basic and diluted net income (loss) per share were calculated as follows for the periods presented (in thousands, except share and per share amounts): December 31, 2021 2020 2019 Numerator: Net (Loss) Income $ (138,341) $ 18,551 $ (13,711) Plus: Return on Share Purchase — 2,381 1,066 Less: Net Income Allocated to Participating Securities — (15,172) — Net (Loss) Income Attributable to Common Stockholders $ (138,341) $ 5,760 $ (12,645) Denominator: Weighted average shares used in computing basic and diluted Net Income (Loss) Per Share 70,767,275 68,592,557 70,511,605 Effect of dilutive securities: Stock options — 24,816,184 — Convertible preferred stock warrants — 213,264,845 — Weighted average shares used in computing diluted net income (loss) per share - diluted 70,767,275 306,673,586 70,511,605 Net (Loss) Income Per Share – Basic $ (1.95) $ 0.08 $ (0.18) Net (Loss) Income Per Share – Diluted $ (1.95) $ 0.02 $ (0.18) |
Dilutive Shares Excluded from the Diluted Net Income (Loss) Per Share Calculation | The following common stock equivalents were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been anti-dilutive (number of shares): December 31, 2021 2020 2019 Excluded Securities: Convertible Preferred Stock issued and outstanding 158,365,655 158,365,655 209,613,570 Stock options issued and outstanding 72,756,708 48,265,056 73,851,862 Warrants issued and outstanding 1,080,349 1,080,349 1,080,349 Series E-1 Convertible Preferred Stock warrants 35,544,141 — 35,544,141 Series F Convertible Preferred Stock warrants 177,720,704 — 177,720,704 Total Excluded Securities 445,467,557 207,711,060 497,810,626 |
CONVERTIBLE PREFERRED STOCK, _2
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Summary of Shares Authorized, Issued, Outstanding, Par Value and Liquidation Preference of Convertible Preferred Stock | The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of Convertible Preferred Stock as of December 31, 2021 are disclosed in the table below (amounts in thousands, except share and per value amounts): Par Value Authorized Shares Outstanding and Issued Shares Liquidation Preference, Outstanding Shares Series A $ 0.01 68,558,220 66,428,185 * $ 19,160 Series A-1 $ 0.01 24,760,915 22,515,315 45,031 Series B $ 0.01 35,775,880 35,127,160 * 21,190 Series C $ 0.01 24,404,770 24,404,770 70,075 Series D $ 0.01 23,888,640 23,888,640 165,000 Series E-1 $ 0.01 35,544,141 — — Series E-2 $ 0.01 16,858,078 — — Series F $ 0.01 177,720,707 3 — Series G $ 0.01 37,249,497 37,249,497 50,000 Total 444,760,848 209,613,570 $ 370,456 * Series A and Series B Convertible Preferred Stock totals are inclusive of 34,670,420 and 16,577,495 shares, respectively, held by PGT, a consolidated VIE. |
Schedule of Assumptions Used | The Company determined the fair value of the outstanding convertible Series E-1 preferred stock warrants utilizing the following assumptions as of December 31, 2021 and 2020: December 31, 2021 2020 Volatility 63.0 % 60.0 % Risk-free interest rate 0.90 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of December 31, 2021 and 2020: December 31, 2021 2020 Volatility 63.00 % 60.0 % Risk-free interest rate 0.90 % 0.20 % Expected term (in years) 2.75 2.75 Dividend yield — % — % |
Schedule of Stockholders' Equity Note, Warrants or Rights | The combined activity of the Convertible Preferred Stock Warrant Liability for the years ended December 31, 2021 and 2020 is as follows (in thousands): Balance at January 1, 2020 149,996 Change in fair value (37,677) Balance at December 31, 2020 $ 112,319 Change in fair value 138,622 Balance at December 31, 2021 $ 250,941 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summarized Option Activity under Option Plan | Stock option activity under the Stock Plans is summarized for the year ended December 31, 2021 as follows: Options Issued and Outstanding Weighted- Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate intrinsic value 1 (in thousands) Balance as of January 1, 2021 72,915,449 $ 0.02 7.02 $ 2,915 Options granted 17,554,859 $ 0.22 Options exercised (3,014,622) $ 0.02 Options forfeited (15,239,345) $ 0.03 Option expirations (30,190) $ 0.02 Balance as of December 31, 2021 72,186,151 $ 0.07 6.72 $ 46,458 Options vested and expected to vest as of December 31, 2021 65,003,920 $ 0.07 6.72 $ 42,518 Options vested and exercisable at December 31, 2021 48,561,623 $ 0.02 5.62 $ 33,499 1. Aggregate intrinsic value represents the excess of the fair value of our Common Stock as of December 31, 2021 over the exercise price of the outstanding in-the-money options. |
Weighted Average Grant Date Fair Value of Options Granted | Additional information pertaining to PMI's Common Stock option activities is as follows: Year ended December 31, 2021 2020 2019 Weighted-average grant date fair value of options granted (per share) $ 0.13 $ 0.04 $ 0.11 |
Fair Value of Stock Option Awards | The fair value of PMI’s stock option awards granted during the years ended December 31, 2021, 2020 and 2019 was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: December 31, 2021 2020 2019 Volatility of common stock 64.22 % 52.62 % 46.70 % Risk-free interest rate 1.02 % 0.51 % 1.95 % Expected life 6.0 years 6.0 years 6.0 years Dividend yield — % — % — % |
Summarized Activities for RSU's | The following table summarizes the number of PMI’s RSU activity for the year ended December 31, 2021: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2021 4,661,141 $ 0.91 Forfeited (1,786,793) $ 0.54 Unvested at December 31, 2021 2,874,348 $ 1.14 |
Stock Based Compensation Included in Consolidated Statements of Operations | The following table presents the amount of stock-based compensation related to awards granted to employees recognized in the Company’s Consolidated Statements of Operations for the periods presented (in thousands): Years Ended December 31, 2021 2020 2019 Origination and Servicing $ 123 $ 35 $ 417 Sales and Marketing 62 69 243 General and Administrative 951 1,809 3,868 Total Stock-Based Compensation $ 1,136 $ 1,913 $ 4,528 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax | The components of the Company’s Income Tax Expense are as follows for the periods presented (in thousands): Years Ended December 31, 2021 2020 2019 Current: Federal $ — $ — $ — State — — — Foreign — — — Total Current Income Tax Expense (Benefit) — — — Deferred: Federal 47 47 47 State 24 38 52 Foreign — (69) 1 Total Deferred Income Tax Expense 71 16 100 Total Income Tax Expense $ 71 $ 16 $ 100 |
Effective Income Tax Reconciliation | Income Tax Expense differed from the amount computed by applying the U.S. federal income tax rate of 21% to pretax loss as a result of the following for the periods presented: Years Ended December 31, 2021 2020 2019 Federal tax at statutory rate 21 % 21 % 21 % State tax at statutory rate (net of federal benefit) 8 % 8 % 9 % Incentive Stock Options (5) % 2 % (4) % Preferred Stock Warrants (29) % (64) % 8 % Change in valuation allowance 6 % 37 % (33) % Other (1) % (4) % (1) % Income Tax Expense — % — % — % |
Deferred Tax Assets and Liabilities | Temporary items that give rise to significant portions of deferred tax assets and liabilities are as follows for the periods presented (in thousands): December 31, 2021 2020 Net operating loss carry forwards $ 91,793 $ 92,814 Research and other credits 307 532 Stock compensation 4,272 10,510 Accrued liabilities 4,357 2,986 Lease liabilities 3,266 3,934 Total deferred tax assets 103,995 110,776 Net servicing rights (1,898) (2,067) Property and equipment (1,873) (287) Intangible assets (1,770) (1,415) Right-of-use assets (2,264) (2,676) Total deferred tax liabilities (7,805) (6,445) Total net deferred tax asset 96,190 104,331 Less: Valuation allowance (96,750) (104,820) Net deferred tax liability $ (560) $ (489) |
Unrecognized Tax Benefits | The following table summarizes Prosper’s activity related to its unrecognized tax benefits (in thousands): Balance at January 1, 2020 $ 112 Change related to 2020 tax year position — Balance at December 31, 2020 $ 112 Change related to 2021 tax year position — Balance at December 31, 2021 $ 112 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Right-of-use Assets | The following table summarizes the operating lease right-of-use (“ROU”) assets as of December 31, 2021 , which are included in Property and Equipment, Net Consolidated Balance Sheets . December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value ROU assets - office buildings $ 16,709 $ 9,444 $ 7,265 ROU assets - other 776 344 432 Total operating lease ROU assets $ 17,485 $ 9,788 $ 7,697 |
Maturity of Lease Liabilities | Future maturities of operating lease liabilities as of December 31, 2021 were as follows (in thousands). The present value of the future minimum lease payments represents our operating lease liabilities as of December 31, 2021 and are included in " Other Liabilities December 31, 2021 2022 $ 5,833 2023 2,124 2024 1,360 2025 1,395 2026 1,218 Thereafter — Total future minimum lease payments 11,930 Less: Imputed interest (904) Present value of future minimum lease payments $ 11,026 |
Value Used In Determining Present Value of Leases | Values used to determine present value of leases is as follows (dollars in thousands): December 31, 2021 Cash paid for operating leases year-to-date $ 5,381 ROU assets obtained in exchange for new operating lease obligations year-to-date $ 1,773 Weighted average remaining lease term (in years) 3.12 years Weighted average discount rate 5.19 % |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Entity Information [Line Items] | |
Aggregate Amount of Notes Purchased and the Income Earned | The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper for the year ended December 31, 2021 and 2020, as well as the Notes outstanding as of December 31, 2021 and 2020 are summarized below (in thousands): Aggregate Amount of Notes Purchased for the Year Ended December 31, Interest Earned on Notes for the Year Ended December 31, 2021 2020 2021 2020 Executive officers and management $ 35 $ 28 $ 7 $ 6 Directors (excluding executive officers and management) 24 272 1 43 Total $ 59 $ 300 $ 8 $ 49 Notes Balance as of December 31, 2021 December 31, 2020 Executive officers and management $ 41 $ 41 Directors (excluding executive officers and management) 15 — Total $ 56 $ 41 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Aggregate Amount of Notes Purchased and the Income Earned | The aggregate amount of the Notes purchased and the income earned by parties deemed to be related parties of PFL for the years ended December 31, 2021 and 2020 are summarized below (in thousands): Aggregate Amount of Notes Purchased for the Year Ended December 31, Interest Earned on Notes for the Year Ended December 31, 2021 2020 2021 2020 Executive officers and management $ 35 $ 28 $ 7 $ 6 Directors (excluding executive officers and management) — — — — Total $ 35 $ 28 $ 7 $ 6 The balance of Notes held by officers and directors who are not executive officers are as follows (in thousands): Notes Balance as of December 31, 2021 December 31, 2020 Executive officers and management $ 41 $ 41 Directors (excluding executive officers and management) — — Total $ 41 $ 41 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2021state | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Percentage of notes allowed for investors to purchase | 100.00% |
Number of states and district marketplace is open to investors | 30 |
Additional number of states and district marketplace is open to borrowers | 48 |
Prosper Funding LLC | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Percentage of notes allowed for investors to purchase | 100.00% |
Number of states and district marketplace is open to investors | 30 |
Additional number of states and district marketplace is open to borrowers | 48 |
Minimum | Prosper Funding LLC | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Term | 3 years |
Maximum | Prosper Funding LLC | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Term | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Entity Information [Line Items] | |||
Servicing fee, percent | 1.00% | ||
Goodwill impairment expense | $ 0 | $ 0 | $ 0 |
Advertising costs | $ 6,100,000 | $ 6,800,000 | $ 32,800,000 |
Prosper Funding LLC | |||
Entity Information [Line Items] | |||
Servicing fee, percent | 1.00% | ||
Minimum | |||
Entity Information [Line Items] | |||
Transaction fee percentage | 1.00% | ||
Maximum | |||
Entity Information [Line Items] | |||
Transaction fee percentage | 5.00% | ||
User base and customer relationships | Minimum | |||
Entity Information [Line Items] | |||
Intangible assets amortized period | 3 years | ||
User base and customer relationships | Maximum | |||
Entity Information [Line Items] | |||
Intangible assets amortized period | 10 years | ||
Developed technology | Minimum | |||
Entity Information [Line Items] | |||
Intangible assets amortized period | 3 years | ||
Developed technology | Maximum | |||
Entity Information [Line Items] | |||
Intangible assets amortized period | 5 years | ||
Brand name | |||
Entity Information [Line Items] | |||
Intangible assets amortized period | 1 year | ||
Borrower Loans | |||
Entity Information [Line Items] | |||
Servicing fee, percent | 1.075% | ||
Borrower Loans | Prosper Funding LLC | |||
Entity Information [Line Items] | |||
Servicing fee, percent | 1.075% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES - Estimated Useful Lives of Assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 7 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Computers and equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 8 years |
Internal-use software and website development costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 1 year |
Internal-use software and website development costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Prosper Funding LLC | Internal-use software and website development costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 1 year |
Prosper Funding LLC | Internal-use software and website development costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 89,743 | $ 77,858 |
Less: Accumulated depreciation and amortization | (60,029) | (49,412) |
Total Property and Equipment, Net | 29,714 | 28,446 |
Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation and amortization | (24,072) | (20,025) |
Total Property and Equipment, Net | 7,907 | 6,928 |
Operating lease right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease right-of-use assets | 17,485 | 15,767 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 15,090 | 13,841 |
Internal-use software and website development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 41,816 | 33,176 |
Internal-use software and website development costs | Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 31,979 | 26,953 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,961 | 2,872 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,167 | 7,167 |
Assets not yet placed in service | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 5,224 | $ 5,035 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | $ 9,839,000 | $ 8,349,000 | $ 7,676,000 |
Impairment of Operating Lease Right-of-Use Asset | 0 | 445,000 | 0 |
Prosper Funding LLC | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | 4,878,000 | 4,149,000 | 4,397,000 |
Property and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | 9,700,000 | 8,100,000 | 7,400,000 |
Internal-use software and website development costs | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal-use software and website development costs | 9,800,000 | 8,300,000 | 9,300,000 |
Internal-use software and website development costs | Prosper Funding LLC | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal-use software and website development costs | $ 5,900,000 | $ 3,500,000 | $ 5,500,000 |
BORROWER LOANS, LOANS HELD FO_3
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower loans | [1] | $ 267,626 | $ 378,263 | |
Net interest income | $ 32,291 | 44,023 | $ 37,050 | |
COVID-19 Relief | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Percent of Loans in relief program, cumulative | 9.10% | |||
Percent of Loans in relief program, active | 1.20% | |||
Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower loans | $ 267,626 | $ 378,263 | ||
Fixed interest rate, Minimum | 5.31% | 5.31% | ||
Fixed interest rate, Maximum | 31.82% | 31.82% | ||
Minimum number of days for which loans originated were delinquent | 90 days | 90 days | ||
Fair value of loans originated | $ 100 | $ 300 | ||
Non accrual status past due date | 120 days | |||
Borrower Loans receivable | $ 100 | $ 400 | ||
Loans Held for Sale | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Fixed interest rate, Minimum | 5.31% | 5.31% | ||
Fixed interest rate, Maximum | 31.82% | 31.82% | ||
Aggregate principal amount of loans originated | $ 800 | $ 800 | ||
Fair value of loans originated | $ 100 | 100 | ||
Non accrual status past due date | 120 days | |||
Borrower Loans receivable | $ 100 | 100 | ||
Net interest income | $ 32,600 | $ 27,600 | ||
Minimum number of days for which loans held for sale were delinquent | 90 days | 90 days | ||
Financing Receivables, Equal to Greater than 90 Days Past Due | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal amount of loans originated | $ 900 | $ 2,800 | ||
Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower loans | 267,626 | 209,670 | ||
Net interest income | 2,438 | 2,308 | $ 2,654 | |
Prosper Funding LLC | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower loans | $ 267,626 | $ 209,670 | ||
Fixed interest rate, Minimum | 5.31% | 5.31% | ||
Fixed interest rate, Maximum | 31.82% | 31.82% | ||
Minimum number of days for which loans originated were delinquent | 90 days | 90 days | ||
Fair value of loans originated | $ 100 | $ 100 | ||
Borrower Loans receivable | $ 100 | $ 200 | ||
Percent of Loans in relief program, active | 1.20% | |||
Prosper Funding LLC | Borrower Loans | COVID-19 Relief | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Percent of Loans in relief program, cumulative | 9.10% | |||
Prosper Funding LLC | Loans Held for Sale | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Non accrual status past due date | 120 days | |||
Prosper Funding LLC | Financing Receivables, Equal to Greater than 90 Days Past Due | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal amount of loans originated | $ 900 | $ 1,400 | ||
Minimum | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 36 months | 36 months | ||
Minimum | Loans Held for Sale | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 36 months | 36 months | ||
Minimum | Prosper Funding LLC | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 36 months | 36 months | ||
Maximum | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 60 months | 60 months | ||
Maximum | Loans Held for Sale | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 60 months | 60 months | ||
Maximum | Prosper Funding LLC | Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 60 months | 60 months | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
BORROWER LOANS, LOANS HELD FO_4
BORROWER LOANS, LOANS HELD FOR SALE AND NOTES, AT FAIR VALUE - Fair Value of Borrower Loans and Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Borrower loans | [1] | $ 267,626 | $ 378,263 |
Loans Held for Sale, at Fair Value | [1] | 243,170 | 274,621 |
Notes, at Fair Value | 265,985 | 208,379 | |
Prosper Funding LLC | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Borrower loans | 267,626 | 209,670 | |
Notes, at Fair Value | 265,985 | 208,379 | |
Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Aggregate principal balance outstanding, Notes | 267,415 | 217,110 | |
Fair value adjustments, Notes | (1,430) | (8,731) | |
Notes, at Fair Value | 265,985 | 208,379 | |
Notes | Prosper Funding LLC | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Aggregate principal balance outstanding, Notes | 267,415 | 217,110 | |
Fair value adjustments, Notes | (1,430) | (8,731) | |
Notes, at Fair Value | 265,985 | 208,379 | |
Borrower Loans | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Aggregate principal balance outstanding | 265,232 | 393,642 | |
Fair value adjustments | 2,394 | (15,379) | |
Borrower loans | 267,626 | 378,263 | |
Borrower Loans | Prosper Funding LLC | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Aggregate principal balance outstanding | 265,232 | 215,373 | |
Fair value adjustments | 2,394 | (5,703) | |
Borrower loans | 267,626 | 209,670 | |
Loans Held for Sale | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Aggregate principal balance outstanding | 242,278 | 279,113 | |
Fair value adjustments | 892 | (4,492) | |
Loans Held for Sale, at Fair Value | $ 243,170 | $ 274,621 | |
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
SERVICING ASSETS (Details)
SERVICING ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain (loss) on sale of borrower loans | $ 7,196 | $ 4,816 | $ 10,946 |
Loss from fair value warrants | 0 | 0 | 17,553 |
Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain (loss) on sale of borrower loans | 8,450 | 6,430 | (5,058) |
Borrower Loans | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Outstanding principal | $ 2,300,000 | $ 2,400,000 | |
Fixed interest rate, Minimum | 5.31% | 5.31% | |
Fixed interest rate, Maximum | 31.82% | 31.82% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 24,800 | $ 28,900 | 38,400 |
Borrower Loans | Minimum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 36 months | 36 months | |
Borrower Loans | Maximum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 60 months | 60 months | |
Borrower Loans | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain (loss) on sale of borrower loans | $ 8,500 | $ 6,400 | (5,100) |
Outstanding principal | $ 2,500,000 | $ 2,400,000 | |
Fixed interest rate, Minimum | 5.31% | 5.31% | |
Fixed interest rate, Maximum | 31.82% | 31.82% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 29,200 | $ 34,800 | $ 43,400 |
Borrower Loans | Prosper Funding LLC | Minimum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 36 months | 36 months | |
Borrower Loans | Prosper Funding LLC | Maximum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 60 months | 60 months |
SECURITIZATIONS (Narrative) (De
SECURITIZATIONS (Narrative) (Detail) - USD ($) $ in Thousands | Sep. 27, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Variable Interest Entity [Line Items] | ||||||
Proceeds from sale of certificate issued by securitization trust | $ 4,100 | |||||
Loss on Deconsolidation of VIEs | $ 1,494 | $ 0 | $ 0 | |||
Servicing Asset | 200 | |||||
Restricted Cash | 167,925 | [1] | 163,723 | [1] | $ 155,773 | |
VIE, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Risk retention interest percentage | 5.00% | |||||
Loss on Deconsolidation of VIEs | 1,494 | |||||
Restricted Cash | 10,897 | $ 5,128 | [2] | $ 25,203 | [2] | |
PMIT 2019 Securitization Trusts | VIE, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Principal balance of securitization | 573,000 | |||||
PMIT 2019-1 | VIE, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Percent of residual certificates issued by securitization trusts retained | 65.50% | |||||
Loss on Deconsolidation of VIEs | 280 | |||||
Restricted Cash | 2,485 | |||||
PMIT 2019-2 | VIE, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Percent of residual certificates issued by securitization trusts retained | 16.40% | |||||
Loss on Deconsolidation of VIEs | 775 | |||||
Restricted Cash | 4,324 | |||||
PMIT 2019-4 | VIE, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Percent of residual certificates issued by securitization trusts retained | 19.60% | |||||
Loss on Deconsolidation of VIEs | 439 | |||||
Restricted Cash | $ 4,088 | |||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | |||||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. On September 27, 2021, assets and liabilities held by the securitization trusts consolidated by PMI as VIEs were removed from the balance sheet as part of the deconsolidation of those entities. See N ote 6 - Securitizations and Note 10 - Debt in the Notes to Consolidated Financial Statements for add itional information. |
SECURITIZATIONS (Summary of Dec
SECURITIZATIONS (Summary of Deconsolidation) (Detail) - USD ($) $ in Thousands | Sep. 27, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Variable Interest Entity [Line Items] | |||||||
Restricted Cash | $ 167,925 | [1] | $ 163,723 | [1] | $ 155,773 | ||
Borrower Loans | [1] | 267,626 | 378,263 | ||||
Notes Issued by Securitization Trust | [1] | 0 | (156,782) | ||||
Certificates Issued by Securitization Trust, at Fair Value (1) | [1] | 0 | (22,917) | ||||
Loss on Deconsolidation of VIEs (Note 6) | (1,494) | 0 | $ 0 | ||||
VIE, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Cash | $ 4,076 | ||||||
Restricted Cash | 10,897 | 5,128 | [2] | 25,203 | [2] | ||
Borrower Loans | 78,361 | 0 | [2] | 168,593 | [2] | ||
Notes Issued by Securitization Trust | (69,709) | 0 | [2] | (156,782) | [2] | ||
Certificates Issued by Securitization Trust, at Fair Value (1) | (13,979) | $ 0 | [2] | $ (22,917) | [2] | ||
Total net assets deconsolidated | 5,570 | ||||||
Loss on Deconsolidation of VIEs (Note 6) | (1,494) | ||||||
2019-1 Notes | VIE, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Cash | 2,259 | ||||||
Restricted Cash | 2,485 | ||||||
Borrower Loans | 15,133 | ||||||
Notes Issued by Securitization Trust | (13,022) | ||||||
Certificates Issued by Securitization Trust, at Fair Value (1) | (2,057) | ||||||
Total net assets deconsolidated | 2,539 | ||||||
Loss on Deconsolidation of VIEs (Note 6) | (280) | ||||||
2019-2 Notes | VIE, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Cash | 836 | ||||||
Restricted Cash | 4,324 | ||||||
Borrower Loans | 29,989 | ||||||
Notes Issued by Securitization Trust | (26,712) | ||||||
Certificates Issued by Securitization Trust, at Fair Value (1) | (5,990) | ||||||
Total net assets deconsolidated | 1,611 | ||||||
Loss on Deconsolidation of VIEs (Note 6) | (775) | ||||||
2019-4 Notes | VIE, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Cash | 981 | ||||||
Restricted Cash | 4,088 | ||||||
Borrower Loans | 33,239 | ||||||
Notes Issued by Securitization Trust | (29,975) | ||||||
Certificates Issued by Securitization Trust, at Fair Value (1) | (5,932) | ||||||
Total net assets deconsolidated | 1,420 | ||||||
Loss on Deconsolidation of VIEs (Note 6) | $ (439) | ||||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | ||||||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. On September 27, 2021, assets and liabilities held by the securitization trusts consolidated by PMI as VIEs were removed from the balance sheet as part of the deconsolidation of those entities. See N ote 6 - Securitizations and Note 10 - Debt in the Notes to Consolidated Financial Statements for add itional information. |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Assets: | |||
Borrower Loans | [1] | $ 267,626 | $ 378,263 |
Loans Held for Sale, at Fair Value | [1] | 243,170 | 274,621 |
Servicing Assets | 8,761 | 9,242 | |
Total Assets | 519,557 | 662,126 | |
Liabilities: | |||
Notes | 265,985 | 208,379 | |
Certificates Issued by Securitization Trust, at Fair value | [1] | 0 | 22,917 |
Convertible Preferred Stock Warrant Liability | 250,941 | 112,319 | |
Loan Trailing Fee Liability (Note 9) | 2,161 | 2,233 | |
Total Liabilities | 519,087 | 345,848 | |
Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 267,626 | 209,670 | |
Servicing Assets | 9,796 | 11,088 | |
Total Assets | 277,422 | 220,758 | |
Liabilities: | |||
Notes | 265,985 | 208,379 | |
Loan Trailing Fee Liability (Note 9) | 2,161 | 2,233 | |
Total Liabilities | 268,146 | 210,612 | |
Level 1 Inputs | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Loans Held for Sale, at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Certificates Issued by Securitization Trust, at Fair value | 0 | ||
Convertible Preferred Stock Warrant Liability | 0 | 0 | |
Loan Trailing Fee Liability (Note 9) | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 1 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Loan Trailing Fee Liability (Note 9) | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 2 Inputs | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Loans Held for Sale, at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Certificates Issued by Securitization Trust, at Fair value | 0 | ||
Convertible Preferred Stock Warrant Liability | 0 | 0 | |
Loan Trailing Fee Liability (Note 9) | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 2 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Loan Trailing Fee Liability (Note 9) | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Level 3 Inputs | |||
Assets: | |||
Borrower Loans | 267,626 | 378,263 | |
Loans Held for Sale, at Fair Value | 243,170 | 274,621 | |
Servicing Assets | 8,761 | 9,242 | |
Total Assets | 519,557 | 662,126 | |
Liabilities: | |||
Notes | 265,985 | 208,379 | |
Certificates Issued by Securitization Trust, at Fair value | 22,917 | ||
Convertible Preferred Stock Warrant Liability | 250,941 | 112,319 | |
Loan Trailing Fee Liability (Note 9) | 2,161 | 2,233 | |
Total Liabilities | 519,087 | 345,848 | |
Level 3 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 267,626 | 209,670 | |
Servicing Assets | 11,088 | ||
Total Assets | 277,422 | 220,758 | |
Liabilities: | |||
Notes | 265,985 | 208,379 | |
Loan Trailing Fee Liability (Note 9) | 2,161 | 2,233 | |
Total Liabilities | $ 268,146 | $ 210,612 | |
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Quantitative Information About Significant Unobservable Inputs (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Assets: | ||
Market servicing rate | 0.625% | |
Market rate for collection fee | 0.06% | 0.07% |
Weighted average market servicing rate | 0.695% | |
Prosper Funding LLC | ||
Servicing Assets: | ||
Market servicing rate | 0.625% | |
Market rate for collection fee | 0.06% | 0.07% |
Weighted average market servicing rate | 0.695% | |
Minimum | ||
Certificates Issued by Securitization Trust: | ||
Discount rate | 3.30% | |
Default rate | 3.20% | |
Prepayment rate | 7.60% | |
Servicing Assets: | ||
Discount rate | 15.00% | 15.00% |
Default rate | 1.50% | 1.90% |
Prepayment rate | 10.20% | 12.40% |
Market servicing rate | 0.648% | |
Weighted average market servicing rate | 0.708% | |
Minimum | Prosper Funding LLC | ||
Servicing Assets: | ||
Discount rate | 15.00% | 15.00% |
Default rate | 1.50% | 1.90% |
Prepayment rate | 10.20% | 12.40% |
Market servicing rate | 0.648% | |
Maximum | ||
Certificates Issued by Securitization Trust: | ||
Discount rate | 16.00% | |
Default rate | 15.30% | |
Prepayment rate | 35.40% | |
Servicing Assets: | ||
Discount rate | 25.00% | 25.00% |
Default rate | 14.10% | 17.70% |
Prepayment rate | 32.30% | 28.90% |
Market servicing rate | 0.842% | 0.818% |
Weighted average market servicing rate | 0.902% | 0.888% |
Maximum | Prosper Funding LLC | ||
Servicing Assets: | ||
Discount rate | 25.00% | 25.00% |
Default rate | 14.10% | 17.70% |
Prepayment rate | 32.30% | 28.90% |
Market servicing rate | 0.842% | 0.818% |
Weighted average market servicing rate | 0.888% | |
Discount rate | Minimum | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.042 | 0.045 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.042 | 0.045 |
Discount rate | Minimum | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.150 | 0.150 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.150 | 0.150 |
Discount rate | Minimum | Prosper Funding LLC | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.043 | 0.053 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.043 | 0.053 |
Discount rate | Minimum | Prosper Funding LLC | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.150 | 0.150 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.150 | 0.150 |
Discount rate | Maximum | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.143 | 0.177 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.143 | 0.177 |
Discount rate | Maximum | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.250 | 0.250 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.250 | 0.250 |
Discount rate | Maximum | Prosper Funding LLC | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.139 | 0.161 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.139 | 0.161 |
Discount rate | Maximum | Prosper Funding LLC | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.250 | 0.250 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.250 | 0.250 |
Default rate | Minimum | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.020 | 0.023 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.020 | 0.023 |
Default rate | Minimum | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.015 | 0.019 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.015 | 0.019 |
Default rate | Minimum | Prosper Funding LLC | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.020 | 0.026 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.020 | 0.026 |
Default rate | Minimum | Prosper Funding LLC | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.015 | 0.019 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.015 | 0.019 |
Default rate | Maximum | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.141 | 0.179 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.141 | 0.179 |
Default rate | Maximum | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.141 | 0.177 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.141 | 0.177 |
Default rate | Maximum | Prosper Funding LLC | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.135 | 0.162 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.135 | 0.162 |
Default rate | Maximum | Prosper Funding LLC | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.141 | 0.177 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.141 | 0.177 |
Prepayment rate | Minimum | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.102 | 0.124 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.102 | 0.124 |
Prepayment rate | Minimum | Prosper Funding LLC | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.102 | 0.124 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.102 | 0.124 |
Prepayment rate | Maximum | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.323 | 0.289 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.323 | 0.289 |
Prepayment rate | Maximum | Prosper Funding LLC | Loan trailing fee liability | ||
Borrower Loans, Loans Held for Sale, and Notes: | ||
Measurement input | 0.323 | 0.289 |
Loan Trailing Fee Liability [Abstract] | ||
Measurement input | 0.323 | 0.289 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Deconsolidated Assets and Liabilities- Borrower Loans (Details) $ in Thousands | Dec. 31, 2021USD ($) | Sep. 27, 2021USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Borrower loans | [1] | $ 267,626 | $ 378,263 | |
Borrower Loans | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Borrower loans | $ 78,361 | |||
Discount rate | Weighted Average | Borrower Loans | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Borrower loans, measurement input | 0.0926 | |||
Default rate | Weighted Average | Borrower Loans | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Borrower loans, measurement input | 0.0813 | |||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Deconsolidated Assets and Liabilities- Certificates issued by Securitization Trust (Details) $ in Thousands | Dec. 31, 2021USD ($) | Sep. 27, 2021USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Certificates issued by Securitization Trust, fair value | [1] | $ 0 | $ 22,917 | |
Certificates Issued by Securitization Trust | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Certificates issued by Securitization Trust, fair value | $ 13,979 | |||
Discount rate | Weighted Average | Certificates Issued by Securitization Trust | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Certificates issued by Securitization Trust, measurement input | 0.0799 | |||
Default rate | Weighted Average | Certificates Issued by Securitization Trust | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Certificates issued by Securitization Trust, measurement input | 0.0768 | |||
Prepayment rate | Weighted Average | Certificates Issued by Securitization Trust | ||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||
Certificates issued by Securitization Trust, measurement input | 0.1794 | |||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Summary of Changes in Level 3 Fair Value Assets and Liabilities (Details) - Recurring - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total | ||
Beginning balance | $ 421,588 | $ 479,706 |
Purchase of Borrower Loans/Issuance of Notes | 1,712,772 | 1,338,498 |
Principal repayments | (237,670) | (265,882) |
Borrower Loans sold to third parties | (1,582,828) | (1,096,705) |
Other changes | (1,487) | 131 |
Change in fair value | (3,183) | (34,160) |
Deconsolidation of VIEs (Note 6) | (64,381) | |
Ending balance | 244,811 | 421,588 |
Prosper Funding LLC | ||
Total | ||
Beginning balance | 1,291 | 966 |
Purchase of Borrower Loans/Issuance of Notes | 1,712,772 | 1,338,498 |
Principal repayments | 964 | 2,048 |
Borrower Loans sold to third parties | (1,714,127) | (1,340,629) |
Other changes | (29) | (46) |
Change in fair value | 770 | 454 |
Ending balance | 1,641 | 1,291 |
Notes | ||
Liabilities | ||
Beginning balance | (208,379) | (244,171) |
Purchase of Borrower Loans/Issuance of Notes | (231,933) | (133,228) |
Principal repayments | 172,250 | 149,409 |
Borrower Loans sold to third parties | 0 | 0 |
Other changes | 167 | (53) |
Change in fair value | 1,910 | 19,664 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Deconsolidation of VIEs | 0 | |
Ending balance | (265,985) | (208,379) |
Notes | Prosper Funding LLC | ||
Liabilities | ||
Beginning balance | (208,379) | (244,171) |
Purchase of Borrower Loans/Issuance of Notes | (231,933) | (133,228) |
Principal repayments | 172,250 | 149,409 |
Borrower Loans sold to third parties | 0 | 0 |
Other changes | 166 | (53) |
Change in fair value | 1,911 | 19,664 |
Ending balance | (265,985) | (208,379) |
Certificates Issued by Securitization Trust | ||
Liabilities | ||
Beginning balance | (22,917) | (52,168) |
Purchase of Borrower Loans/Issuance of Notes | 0 | 0 |
Principal repayments | 14,934 | 22,136 |
Borrower Loans sold to third parties | 0 | 0 |
Other changes | 113 | 436 |
Change in fair value | (6,110) | 6,679 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Deconsolidation of VIEs | 13,980 | |
Ending balance | 0 | (22,917) |
Borrower Loans | ||
Assets | ||
Beginning balance | 378,263 | 634,019 |
Purchase of Borrower Loans/Issuance of Notes | 232,000 | 133,644 |
Principal repayments | (260,689) | (332,629) |
Borrower Loans sold to third parties | (2,664) | (6,731) |
Other changes | (1,518) | (1,420) |
Change in fair value | 595 | (48,620) |
Deconsolidation of VIEs (Note 6) | (78,361) | |
Ending balance | 267,626 | 378,263 |
Borrower Loans | Prosper Funding LLC | ||
Assets | ||
Beginning balance | 209,670 | 245,137 |
Purchase of Borrower Loans/Issuance of Notes | 232,000 | 133,644 |
Principal repayments | (171,286) | (147,361) |
Borrower Loans sold to third parties | (1,422) | (2,547) |
Other changes | (195) | 7 |
Change in fair value | (1,141) | (19,210) |
Ending balance | 267,626 | 209,670 |
Loans Held for Sale | ||
Assets | ||
Beginning balance | 274,621 | 142,026 |
Purchase of Borrower Loans/Issuance of Notes | 1,712,705 | 1,338,082 |
Principal repayments | (164,165) | (104,798) |
Borrower Loans sold to third parties | (1,580,164) | (1,089,974) |
Other changes | (249) | 1,168 |
Change in fair value | 422 | (11,883) |
Deconsolidation of VIEs (Note 6) | 0 | |
Ending balance | 243,170 | 274,621 |
Loans Held for Sale | Prosper Funding LLC | ||
Assets | ||
Beginning balance | 0 | 0 |
Purchase of Borrower Loans/Issuance of Notes | 1,712,705 | 1,338,082 |
Principal repayments | 0 | 0 |
Borrower Loans sold to third parties | (1,712,705) | (1,338,082) |
Other changes | 0 | 0 |
Change in fair value | 0 | 0 |
Ending balance | $ 0 | $ 0 |
FAIR VALUE OF ASSETS AND LIAB_8
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Assets | ||
Beginning balance, fair value | $ 9,242 | |
Ending balance, fair value | 8,761 | $ 9,242 |
Level 3 Inputs | ||
Servicing Assets | ||
Beginning balance, fair value | 9,242 | |
Ending balance, fair value | 8,761 | 9,242 |
Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance, fair value | 11,088 | |
Ending balance, fair value | 9,796 | 11,088 |
Prosper Funding LLC | Level 3 Inputs | ||
Servicing Assets | ||
Beginning balance, fair value | 11,088 | |
Ending balance, fair value | 11,088 | |
Servicing Assets | ||
Servicing Assets | ||
Beginning balance, fair value | 9,242 | |
Ending balance, fair value | 8,761 | 9,242 |
Servicing Assets | Level 3 Inputs | ||
Servicing Assets | ||
Beginning balance, fair value | 9,242 | 12,602 |
Additions | 7,973 | 5,829 |
Recognition of Servicing Assets upon deconsolidation of VIEs (Note 6) | 215 | |
Less: Change in fair value | (8,669) | (9,189) |
Ending balance, fair value | 8,761 | 9,242 |
Servicing Assets | Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance, fair value | 11,088 | 14,888 |
Additions | 9,020 | 7,203 |
Less: Change in fair value | (10,312) | (11,003) |
Ending balance, fair value | $ 9,796 | $ 11,088 |
FAIR VALUE OF ASSETS AND LIAB_9
FAIR VALUE OF ASSETS AND LIABILITIES - Preferred Stock Warrant and Trailing Fee (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Mandatorily Redeemable Preferred Stock | ||
Liabilities | ||
Beginning balance, fair value | $ 112,319 | $ 149,996 |
Change in fair value | 138,622 | (37,677) |
Ending balance, fair value | 250,941 | 112,319 |
Trailing Fee | ||
Liabilities | ||
Beginning balance, fair value | 2,233 | 2,997 |
Issuances | 1,775 | 1,349 |
Cash payment of Loan Trailing Fee | (2,100) | (2,421) |
Change in fair value | 253 | 308 |
Ending balance, fair value | 2,161 | 2,233 |
Prosper Funding LLC | Trailing Fee | ||
Liabilities | ||
Beginning balance, fair value | 2,233 | 2,997 |
Issuances | 1,775 | 1,349 |
Cash payment of Loan Trailing Fee | (2,100) | (2,421) |
Change in fair value | 253 | 308 |
Ending balance, fair value | $ 2,161 | $ 2,233 |
FAIR VALUE OF ASSETS AND LIA_10
FAIR VALUE OF ASSETS AND LIABILITIES - Assumptions for Borrower Loans, Loans Held for Sale and Notes (Details) $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | $ 265,985 | $ 208,379 |
Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 265,985 | 208,379 |
Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 265,985 | 208,379 |
Prosper Funding LLC | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 265,985 | 208,379 |
Notes | Discount rate assumption | 100 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 263,326 | 206,528 |
Notes | Discount rate assumption | 100 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 263,326 | 206,528 |
Notes | Discount rate assumption | 200 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 260,735 | 204,720 |
Notes | Discount rate assumption | 200 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 260,735 | 204,720 |
Notes | Discount rate assumption | 100 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 268,714 | 210,274 |
Notes | Discount rate assumption | 100 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 268,714 | 210,274 |
Notes | Discount rate assumption | 200 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 271,516 | 212,217 |
Notes | Discount rate assumption | 200 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 271,516 | 212,217 |
Notes | Default rate assumption | 100 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 263,644 | 206,304 |
Notes | Default rate assumption | 100 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 263,644 | 206,304 |
Notes | Default rate assumption | 200 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 261,318 | 204,238 |
Notes | Default rate assumption | 200 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 261,318 | 204,238 |
Notes | Default rate assumption | 100 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 268,340 | 210,463 |
Notes | Default rate assumption | 100 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 268,340 | 210,463 |
Notes | Default rate assumption | 200 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 270,711 | 212,558 |
Notes | Default rate assumption | 200 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 270,711 | 212,558 |
Borrower Loans / Loans Held for Sale | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 510,796 | 652,884 |
Borrower Loans / Loans Held for Sale | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 265,985 | 209,670 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 505,732 | 647,093 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 265,104 | 207,810 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 500,763 | 641,437 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 262,499 | 205,994 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 516,064 | 658,817 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 270,520 | 211,575 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 521,437 | 664,895 |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 273,337 | 213,527 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 506,362 | 646,421 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 265,435 | 207,594 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 501,921 | 639,987 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 263,107 | 205,528 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 515,326 | 659,377 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 270,133 | 211,755 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 519,851 | 665,904 |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | $ 272,505 | $ 213,851 |
Discount rate | Notes | Discount rate assumption | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0576 | 0.0893 |
Discount rate | Notes | Discount rate assumption | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0576 | 0.0893 |
Discount rate | Borrower Loans / Loans Held for Sale | Discount rate assumption | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0564 | 0.0826 |
Discount rate | Borrower Loans / Loans Held for Sale | Discount rate assumption | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0576 | 0.0893 |
Default rate | Notes | Default rate assumption | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1070 | 0.1226 |
Default rate | Notes | Default rate assumption | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1070 | 0.1226 |
Default rate | Borrower Loans / Loans Held for Sale | Default rate assumption | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1008 | 0.1158 |
Default rate | Borrower Loans / Loans Held for Sale | Default rate assumption | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1070 | 0.1226 |
FAIR VALUE OF ASSETS AND LIA_11
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Estimated Fair Value of Servicing Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing rate increase | 0.025% | ||
Servicing rate decrease | 0.025% | ||
Prepayment rate increase | 110.00% | ||
Prepayment rate decrease | 90.00% | ||
Default rate increase | 110.00% | ||
Default rate decrease | 90.00% | ||
Servicing Assets | $ 8,761 | $ 9,242 | |
Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing rate increase | 0.025% | ||
Servicing rate decrease | 0.025% | ||
Prepayment rate increase | 1.10% | ||
Prepayment rate decrease | 0.90% | ||
Default rate increase | 1.10% | ||
Default rate decrease | 0.90% | ||
Servicing Assets | $ 9,796 | 11,088 | |
Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing Assets | 8,761 | 9,242 | |
Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing Assets | 9,796 | 11,088 | $ 14,888 |
Market servicing rate | Servicing Assets | Market servicing rate increase | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 8,203 | 8,689 | |
Market servicing rate | Servicing Assets | Market servicing rate increase | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 9,171 | 10,424 | |
Market servicing rate | Servicing Assets | Market servicing rate decrease | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 9,320 | 9,796 | |
Market servicing rate | Servicing Assets | Market servicing rate decrease | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 10,421 | 11,752 | |
Prepayment rate assumption | Servicing Assets | Applying a 1.1 multiplier to prepayment rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 8,568 | 9,064 | |
Prepayment rate assumption | Servicing Assets | Applying a 1.1 multiplier to prepayment rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 9,580 | 10,874 | |
Prepayment rate assumption | Servicing Assets | Applying a 0.9 multiplier to prepayment rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 8,957 | 9,423 | |
Prepayment rate assumption | Servicing Assets | Applying a 0.9 multiplier to prepayment rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 10,015 | 11,304 | |
Default rate assumption | Servicing Assets | Applying a 1.1 multiplier to default rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 8,646 | 9,116 | |
Default rate assumption | Servicing Assets | Applying a 1.1 multiplier to default rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 9,667 | 10,936 | |
Default rate assumption | Servicing Assets | Applying a 0.9 multiplier to default rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 8,878 | 9,369 | |
Default rate assumption | Servicing Assets | Applying a 0.9 multiplier to default rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | $ 9,926 | $ 11,239 | |
Market servicing rate | Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 0.65% | 0.631% | |
Market servicing rate | Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 0.65% | 0.631% | |
Prepayment rate | Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 20.82% | 19.84% | |
Prepayment rate | Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 20.82% | 19.84% | |
Default rate | Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 12.54% | 12.78% | |
Default rate | Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 12.24% | 12.78% |
FAIR VALUE OF ASSETS AND LIA_12
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Assets and Liabilities Not Recorded at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | $ 67,700 | $ 50,145 | $ 64,635 | |||
Restricted Cash | 167,925 | [1] | 163,723 | [1] | $ 155,773 | |
Accounts Receivable | [1] | 1,054 | 605 | |||
Total Assets | 828,884 | 947,109 | ||||
Accounts Payable and Accrued Liabilities | 25,790 | 17,876 | ||||
Payable to Investors | 152,794 | 124,094 | ||||
Notes Issued by Securitization Trust | [1] | 0 | 156,782 | |||
Warehouse Lines | [1] | 209,275 | 242,479 | |||
Loans Payable | 8,590 | 8,505 | ||||
Total Liabilities | 928,685 | 909,903 | ||||
Carrying Amount | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 67,700 | 50,145 | ||||
Accounts Receivable | 1,054 | 605 | ||||
Total Assets | 236,679 | 214,473 | ||||
Accounts Payable and Accrued Liabilities | 25,790 | 17,876 | ||||
Payable to Investors | 152,794 | 124,094 | ||||
Notes Issued by Securitization Trust | 156,782 | |||||
Warehouse Lines | 209,275 | 242,479 | ||||
Loans Payable | 8,590 | 8,505 | ||||
Total Liabilities | 396,449 | 549,736 | ||||
Carrying Amount | Cash and Cash Equivalents | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 163,047 | 158,846 | ||||
Carrying Amount | Certificates of Deposit | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 4,878 | 4,877 | ||||
Fair Value | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 67,700 | 50,145 | ||||
Accounts Receivable | 1,054 | 605 | ||||
Total Assets | 236,679 | 214,473 | ||||
Accounts Payable and Accrued Liabilities | 25,790 | 17,876 | ||||
Payable to Investors | 152,794 | 124,094 | ||||
Notes Issued by Securitization Trust | 158,951 | |||||
Warehouse Lines | 211,177 | 242,261 | ||||
Loans Payable | 8,556 | 8,540 | ||||
Total Liabilities | 398,317 | 551,722 | ||||
Fair Value | Cash and Cash Equivalents | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 163,047 | 158,846 | ||||
Fair Value | Certificates of Deposit | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 4,878 | 4,877 | ||||
Level 1 Inputs | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 67,700 | 50,145 | ||||
Accounts Receivable | 0 | 0 | ||||
Total Assets | 230,747 | 208,991 | ||||
Accounts Payable and Accrued Liabilities | 0 | 0 | ||||
Payable to Investors | 0 | 0 | ||||
Notes Issued by Securitization Trust | 0 | |||||
Warehouse Lines | 0 | 0 | ||||
Loans Payable | 0 | 0 | ||||
Total Liabilities | 0 | 0 | ||||
Level 1 Inputs | Cash and Cash Equivalents | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 163,047 | 158,846 | ||||
Level 1 Inputs | Certificates of Deposit | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 0 | 0 | ||||
Level 2 Inputs | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 0 | 0 | ||||
Accounts Receivable | 1,054 | 605 | ||||
Total Assets | 5,932 | 5,482 | ||||
Accounts Payable and Accrued Liabilities | 25,790 | 17,876 | ||||
Payable to Investors | 152,794 | 124,094 | ||||
Notes Issued by Securitization Trust | 158,951 | |||||
Warehouse Lines | 211,177 | 242,261 | ||||
Loans Payable | 8,556 | 8,540 | ||||
Total Liabilities | 398,317 | 551,722 | ||||
Level 2 Inputs | Cash and Cash Equivalents | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 0 | 0 | ||||
Level 2 Inputs | Certificates of Deposit | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 4,878 | 4,877 | ||||
Level 3 Inputs | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 0 | 0 | ||||
Accounts Receivable | 0 | 0 | ||||
Total Assets | 0 | 0 | ||||
Accounts Payable and Accrued Liabilities | 0 | 0 | ||||
Payable to Investors | 0 | 0 | ||||
Notes Issued by Securitization Trust | 0 | |||||
Warehouse Lines | 0 | 0 | ||||
Loans Payable | 0 | 0 | ||||
Total Liabilities | 0 | 0 | ||||
Level 3 Inputs | Cash and Cash Equivalents | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | 0 | 0 | ||||
Level 3 Inputs | Certificates of Deposit | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash | $ 0 | $ 0 | ||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | |||
Goodwill | $ 36,368,000 | $ 36,368,000 | |
Goodwill impairment expense | 0 | 0 | $ 0 |
Intangible additions | 0 | 0 | |
Impairment of intangible assets | 0 | 0 | 0 |
Amortization of intangible assets | $ 200,000 | $ 200,000 | $ 300,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 8,170 | $ 8,170 |
Accumulated Amortization | (7,842) | (7,670) |
Net Carrying Value | 328 | 500 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 3,060 | 3,060 |
Accumulated Amortization | (3,060) | (3,060) |
Net Carrying Value | 0 | 0 |
User base and customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 5,050 | 5,050 |
Accumulated Amortization | (4,722) | (4,550) |
Net Carrying Value | $ 328 | $ 500 |
Remaining Useful Life (In Years) | 3 years 3 months 18 days | 4 years 3 months 18 days |
Brand name | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 60 | $ 60 |
Accumulated Amortization | (60) | (60) |
Net Carrying Value | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Estimated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2022 | $ 136 | |
2023 | 107 | |
2024 | 85 | |
Thereafter | 0 | |
Net Carrying Value | $ 328 | $ 500 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities [Abstract] | ||
Operating lease liabilities | $ 11,026 | $ 13,342 |
Loans Payable | 8,590 | 8,505 |
Loan trailing fee liability | 2,161 | 2,233 |
Deferred revenue | 1,196 | 63 |
Deferred income tax liability | 560 | 489 |
Financing lease liabilities | 78 | 0 |
Other | 289 | 425 |
Total Other Liabilities | $ 23,900 | $ 25,057 |
Operating lease liability, location | Total Other Liabilities | Total Other Liabilities |
Finance lease liability, location |
DEBT (Details)
DEBT (Details) | May 19, 2021 | Mar. 04, 2021USD ($) | Apr. 30, 2019 | Dec. 31, 2021USD ($) | Mar. 15, 2022USD ($) | Dec. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Mar. 28, 2019USD ($) | Jun. 12, 2018USD ($) | Jan. 19, 2018USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Loans held for sale | [1] | $ 243,170,000 | $ 274,621,000 | ||||||||
PPP loans payable | 8,590,000 | $ 8,505,000 | |||||||||
PPP Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount | $ 8,400,000 | ||||||||||
Interest rate | 1.00% | ||||||||||
Term | 2 years | ||||||||||
PPP loans payable | 8,600,000 | ||||||||||
PPP Loan | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
PPP loans payable | $ 8,600,000 | ||||||||||
Revolving Credit Facility | Warehouse Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Minimum tangible net worth | 25,000,000 | ||||||||||
Minimum net liquidity | $ 15,000,000 | ||||||||||
Maximum leverage ratio | 5 | ||||||||||
Line of credit | $ 96,600,000 | $ 200,000,000 | $ 100,000,000 | ||||||||
Advance rate | 87.00% | ||||||||||
Loans held for sale | 113,600,000 | ||||||||||
Remaining borrowing capacity | 103,400,000 | ||||||||||
Debt issuance costs | 300,000 | ||||||||||
Revolving Credit Facility | Warehouse Agreement | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.50% | ||||||||||
Revolving Credit Facility | PWIT Warehouse Line | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment period | 24 months | ||||||||||
Revolving Credit Facility | PWIT Warehouse Line | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.75% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit | $ 300,000,000 | $ 300,000,000 | |||||||||
Repayment period | 24 months | ||||||||||
Advance rate | 90.00% | ||||||||||
Loans held for sale | 126,800,000 | ||||||||||
Remaining borrowing capacity | 187,300,000 | ||||||||||
Debt issuance costs | 1,300,000 | ||||||||||
Debt and accrued interest outstanding | $ 112,700,000 | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class A | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit | $ 230,000,000 | ||||||||||
Commitment fee percentage | 0.50% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class A | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.05% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class A | Minimum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual increase in basis spread on variable rate | 0.375% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class A | Maximum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual increase in basis spread on variable rate | 0.75% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class B | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit | $ 70,000,000 | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class B | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 8.75% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class B | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.50% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class B | Minimum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual increase in basis spread on variable rate | 0.375% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class B | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 1.00% | ||||||||||
Revolving Credit Facility | PWIIT Warehouse Line, Class B | Maximum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual increase in basis spread on variable rate | 0.75% | ||||||||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
NET INCOME (LOSS) PER SHARE - B
NET INCOME (LOSS) PER SHARE - Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net (Loss) Income | $ (138,341) | $ 18,551 | $ (13,711) |
Plus: Return on Share Purchase | 0 | 2,381 | 1,066 |
Less: Net Income Allocated to Participating Securities | 0 | (15,172) | 0 |
Net Income (Loss) Available to Common Stockholders, Basic | (138,341) | 5,760 | (12,645) |
Net Income (Loss) Available to Common Stockholders, Diluted | $ (138,341) | $ 5,760 | $ (12,645) |
Denominator: | |||
Weighted-Average Shares – Basic (in shares) | 70,767,275 | 68,592,557 | 70,511,605 |
Effect of dilutive securities: | |||
Stock options (in shares) | 0 | 24,816,184 | 0 |
Convertible preferred stock warrants (in shares) | 0 | 213,264,845 | 0 |
Weighted average shares used in computing diluted net income (loss) per share - diluted (in shares) | 70,767,275 | 306,673,586 | 70,511,605 |
Net Income (Loss) Per Share – Basic (in dollars per share) | $ (1.95) | $ 0.08 | $ (0.18) |
Net Income (Loss) Per Share – Diluted (in dollars per share) | $ (1.95) | $ 0.02 | $ (0.18) |
NET INCOME (LOSS) PER SHARE - D
NET INCOME (LOSS) PER SHARE - Dilutive Shares Excluded from Calculation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total excluded securities (in shares) | 445,467,557 | 207,711,060 | 497,810,626 |
Convertible Preferred Stock issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total excluded securities (in shares) | 158,365,655 | 158,365,655 | 209,613,570 |
Stock options issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total excluded securities (in shares) | 72,756,708 | 48,265,056 | 73,851,862 |
Warrants issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total excluded securities (in shares) | 1,080,349 | 1,080,349 | 1,080,349 |
Series E-1 Convertible Preferred Stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total excluded securities (in shares) | 35,544,141 | 0 | 35,544,141 |
Series F Convertible Preferred Stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total excluded securities (in shares) | 177,720,704 | 0 | 177,720,704 |
CONVERTIBLE PREFERRED STOCK, _3
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Additional Information (Details) | Jul. 21, 2020shares | Dec. 23, 2019shares | Sep. 20, 2017USD ($)$ / sharesshares | Feb. 27, 2017$ / sharesshares | Dec. 16, 2016$ / sharesshares | Feb. 16, 2016 | Jul. 16, 2014USD ($)shares | Jun. 18, 2014$ / sharesshares | Apr. 30, 2015USD ($)$ / sharesshares | May 31, 2014USD ($)$ / sharesshares | Sep. 30, 2013USD ($)$ / sharesshares | Jan. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019shares | Dec. 31, 2016shares |
Class of Stock [Line Items] | ||||||||||||||||
Stock split conversion ratio | 1 | |||||||||||||||
Common stock convertible ratio if preferred stock did not participate (in shares) | 10 | |||||||||||||||
Repurchase of stock (in shares) | 2,196,665 | |||||||||||||||
Preferred stock, shares authorized (in shares) | 444,760,848 | 444,760,848 | ||||||||||||||
Shares authorized to be repurchased (in shares) | 7,221,020 | |||||||||||||||
Dividends | $ | $ 0 | |||||||||||||||
Conversion ratio of preferred stock into prosper common stock (in shares) | 1 | |||||||||||||||
Common and preferred stock, shares authorized (in shares) | 1,069,760,848 | |||||||||||||||
Common stock, authorized (in shares) | 625,000,000 | 625,000,000 | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||
Common stock, issued (in shares) | 73,089,929 | 70,075,307 | ||||||||||||||
Common stock, outstanding (in shares) | 72,153,994 | 69,139,372 | ||||||||||||||
Common Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Stock split conversion ratio | 5 | |||||||||||||||
Exercise of stock options (in shares) | 3,014,622 | 687,471 | ||||||||||||||
Cash proceeds | $ | $ 61,000 | $ 15,000 | ||||||||||||||
Warrants issued and outstanding | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 0 | 0 | ||||||||||||||
Series A | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 69,340,760 | |||||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 0.29 | |||||||||||||||
Purchase price for shares | $ | $ 19,800,000 | |||||||||||||||
Repurchase of stock (in shares) | 2,130,035 | 782,540 | ||||||||||||||
Preferred stock, shares authorized (in shares) | 68,558,220 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.29 | |||||||||||||||
Series A | Convertible Preferred Stock Held by Consolidated VIE | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Repurchase of Convertible Preferred Stock (in shares) | 34,670,420 | |||||||||||||||
Series A-1 | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 25,585,910 | |||||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||
Stock split conversion ratio | 1,000,000 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2 | |||||||||||||||
Repurchase of stock (in shares) | 2,245,600 | |||||||||||||||
Preferred stock, shares authorized (in shares) | 24,760,915 | |||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 14.00% | |||||||||||||||
Conversion ratio of preferred stock into prosper common stock (in shares) | 1,000,000 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2 | |||||||||||||||
Series B | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 41,443,670 | |||||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 0.60 | |||||||||||||||
Purchase price for shares | $ | $ 24,900,000 | |||||||||||||||
Repurchase of stock (in shares) | 648,720 | 5,667,790 | ||||||||||||||
Preferred stock, shares authorized (in shares) | 35,775,880 | |||||||||||||||
Value prior to closing of underwritten initial public offering (at least) | $ | $ 2,000,000,000 | |||||||||||||||
Aggregate proceeds to the entity before deducting underwriters commissions and expenses (at least) | $ | $ 100,000,000 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.60 | |||||||||||||||
Series B | Convertible Preferred Stock Held by Consolidated VIE | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Repurchase of Convertible Preferred Stock (in shares) | 16,577,495 | |||||||||||||||
Common Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Repurchase of stock (in shares) | 2,196,665 | |||||||||||||||
Series C | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 24,404,770 | |||||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 2.87 | |||||||||||||||
Purchase price for shares | $ | $ 69,900,000 | |||||||||||||||
Preferred stock, shares authorized (in shares) | 24,404,770 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2.87 | |||||||||||||||
Series A and Series B Convertible Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 6,963,785 | |||||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 2.87 | |||||||||||||||
Repurchase of preferred stock | $ | $ 18,500,000 | |||||||||||||||
Series D | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 23,888,640 | |||||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 6.91 | |||||||||||||||
Purchase price for shares | $ | $ 164,800,000 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 6.91 | |||||||||||||||
Series E | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 40,000,000 | |||||||||||||||
Series E-1 Convertible Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 35,544,141 | |||||||||||||||
Warrant to purchase shares (in shares) | 15,277,006 | 20,267,135 | ||||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||||||
Warrant expiration period | 10 years | |||||||||||||||
Warrants recognized in income (expense) | $ | $ 21,300,000 | $ (5,700,000) | ||||||||||||||
Series E-1 Warrants | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrant to purchase shares (in shares) | 15,277,006 | |||||||||||||||
Series F | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 177,720,707 | |||||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||||||
Warrants recognized in income (expense) | $ | $ 117,300,000 | $ (32,000,000) | ||||||||||||||
Series G | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued (in shares) | 37,249,497 | |||||||||||||||
Preferred stock, shares authorized (in shares) | 37,249,497 | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.34 | |||||||||||||||
Proceeds net issuance cost | $ | $ 47,900,000 | |||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||||
Conversion ratio of preferred stock into prosper common stock (in shares) | 1.36 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1.34 | |||||||||||||||
Convertible preferred stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||||
Series D | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 23,888,640 | |||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||||
Series E-1 And Series E-2 Convertible Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||||
Series E-2 | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 16,858,078 | |||||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||||||
Consortium Purchase Agreement | Series F Warrant | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrant to purchase shares (in shares) | 177,720,706 | |||||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||
Warrants expiration period | 10 years | |||||||||||||||
Number of warrants issued to the Consortium (in shares) | 3 |
CONVERTIBLE PREFERRED STOCK, _4
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Summary of Shares Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Convertible preferred stock, authorized (in shares) | 444,760,848 | 444,760,848 | ||
Convertible preferred stock, outstanding (in shares) | 209,613,570 | 209,613,570 | ||
Convertible preferred stock, issued (in shares) | 209,613,570 | 209,613,570 | ||
Convertible preferred stock, aggregate liquidation preference | $ 370,456 | $ 370,456 | ||
Convertible Preferred Stock Held by Consolidated VIE | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, outstanding (in shares) | (51,247,915) | (51,247,915) | 0 | 0 |
Series A | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 68,558,220 | |||
Convertible preferred stock, outstanding (in shares) | 66,428,185 | |||
Convertible preferred stock, issued (in shares) | 66,428,185 | |||
Convertible preferred stock, aggregate liquidation preference | $ 19,160 | |||
Series A | Convertible Preferred Stock Held by Consolidated VIE | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, outstanding (in shares) | 34,670,420 | |||
Convertible preferred stock, issued (in shares) | 34,670,420 | |||
Series A-1 | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 24,760,915 | |||
Convertible preferred stock, outstanding (in shares) | 22,515,315 | |||
Convertible preferred stock, issued (in shares) | 22,515,315 | |||
Convertible preferred stock, aggregate liquidation preference | $ 45,031 | |||
Series B | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 35,775,880 | |||
Convertible preferred stock, outstanding (in shares) | 35,127,160 | |||
Convertible preferred stock, issued (in shares) | 35,127,160 | |||
Convertible preferred stock, aggregate liquidation preference | $ 21,190 | |||
Series B | Convertible Preferred Stock Held by Consolidated VIE | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, outstanding (in shares) | 16,577,495 | |||
Convertible preferred stock, issued (in shares) | 16,577,495 | |||
Series C | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 24,404,770 | |||
Convertible preferred stock, outstanding (in shares) | 24,404,770 | |||
Convertible preferred stock, issued (in shares) | 24,404,770 | |||
Convertible preferred stock, aggregate liquidation preference | $ 70,075 | |||
Series D | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 23,888,640 | |||
Convertible preferred stock, outstanding (in shares) | 23,888,640 | |||
Convertible preferred stock, issued (in shares) | 23,888,640 | |||
Convertible preferred stock, aggregate liquidation preference | $ 165,000 | |||
Series E-1 | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 35,544,141 | |||
Convertible preferred stock, outstanding (in shares) | 0 | |||
Convertible preferred stock, issued (in shares) | 0 | |||
Convertible preferred stock, aggregate liquidation preference | $ 0 | |||
Series E-2 | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 16,858,078 | |||
Convertible preferred stock, outstanding (in shares) | 0 | |||
Convertible preferred stock, issued (in shares) | 0 | |||
Convertible preferred stock, aggregate liquidation preference | $ 0 | |||
Series F | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 177,720,707 | |||
Convertible preferred stock, outstanding (in shares) | 3 | |||
Convertible preferred stock, issued (in shares) | 3 | |||
Convertible preferred stock, aggregate liquidation preference | $ 0 | |||
Series G | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |||
Convertible preferred stock, authorized (in shares) | 37,249,497 | |||
Convertible preferred stock, outstanding (in shares) | 37,249,497 | |||
Convertible preferred stock, issued (in shares) | 37,249,497 | |||
Convertible preferred stock, aggregate liquidation preference | $ 50,000 |
CONVERTIBLE PREFERRED STOCK, _5
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Valuation Techniques (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Volatility | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.630 | 0.600 |
Volatility | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.6300 | 0.600 |
Risk-free interest rate | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.0090 | 0.0020 |
Risk-free interest rate | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.0090 | 0.0020 |
Expected term (in years) | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term | 2 years 9 months | 2 years 9 months |
Expected term (in years) | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term | 2 years 9 months | 2 years 9 months |
Dividend yield | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0 | 0 |
Dividend yield | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0 | 0 |
CONVERTIBLE PREFERRED STOCK, _6
CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK WARRANT LIABILITY AND COMMON STOCK - Preferred Stock Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Warrants or Rights [Roll Forward] | |||
Change in fair value | $ 138,622 | $ (37,677) | $ (11,235) |
Convertible Preferred Stock Warrant | |||
Warrants or Rights [Roll Forward] | |||
Beginning balance | 112,319 | 149,996 | |
Change in fair value | 138,622 | (37,677) | |
Ending balance | $ 250,941 | $ 112,319 | $ 149,996 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options exercisable, maximum period | 10 years | ||
Financial statement impact | $ 1,136,000 | $ 1,913,000 | $ 4,529,000 |
Unamortized cost, period for recognition | 1 year 7 months 6 days | ||
Unrecognized cost of unvested share-based compensation awards. | $ 0 | ||
Unamortized expense related to unvested stock-based awards | $ 1,600,000 | ||
Remaining weighted average vesting period | 2 years 9 months 18 days | ||
Internal-use software and website development costs | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Capitalized amount | $ 137,000 | 234,000 | 310,000 |
Stock Option Repricing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Financial statement impact | $ 0 | $ 400,000 | $ 300,000 |
2015 Stock Option Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of options made available in pool, up to (in shares) | 96,855,913 | ||
Tranche three | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting percent | 25.00% | ||
Vesting period of the options | 1 year | ||
Tranche two | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting percent | 50.00% | ||
Vesting period of the options | 2 years |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summarized Stock Option Activity (Details) - 2005 Stock Plan and 2015 Stock Option Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Options Issued and Outstanding | ||
Options Issued and Outstanding, Beginning Balance (in shares) | 72,915,449 | |
Options Issued and Outstanding, Options granted (in shares) | 17,554,859 | |
Options Issued and Outstanding, Options exercised - vested (in shares) | (3,014,622) | |
Options Issued and Outstanding, Options forfeited (in shares) | (15,239,345) | |
Options Issued and Outstanding, Options expirations (in shares) | (30,190) | |
Options Issued and Outstanding, Ending balance (in shares) | 72,186,151 | 72,915,449 |
Options Issued and Outstanding, Options vested and expected to vest (in shares) | 65,003,920 | |
Options Issued and Outstanding, Options vested and exercisable (in shares) | 48,561,623 | |
Weighted- Average Exercise Price | ||
Weighted-Average Exercise Price, Beginning balance (in dollars per share) | $ 0.02 | |
Weighted-Average Exercise Price, Options granted (in dollars per share) | 0.22 | |
Weighted-Average Exercise Price, Options exercised - vested (in dollars per share) | 0.02 | |
Weighted-Average Exercise Price, Options forfeited (in dollars per share) | 0.03 | |
Weighted-Average Exercise Price, Options expirations (in dollars per share) | 0.02 | |
Weighted-Average Exercise Price, Ending balance (in dollars per share) | 0.07 | $ 0.02 |
Options expected to vest (in dollars per share) | 0.07 | |
Weighted-Average Exercise Price, Options vested and exercisable (in dollars per share) | $ 0.02 | |
Weighted-Average Contractual Term (in years) | ||
Weighted average contractual term | 6 years 8 months 19 days | 7 years 7 days |
Weighted average contractual term, Options expected to vest | 6 years 8 months 19 days | |
Weighted Average Contractual Term, Options vested and exercisable | 5 years 7 months 13 days | |
Aggregate intrinsic value | ||
Options outstanding, aggregate intrinsic value | $ 46,458 | $ 2,915 |
Options vested and expected to vest, aggregate intrinsic value | 42,518 | |
Options vested and exercisable, aggregate intrinsic value | $ 33,499 |
STOCK-BASED COMPENSATION - Ad_2
STOCK-BASED COMPENSATION - Additional Information Regarding Common Stock Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant fair value (in dollars per share) | $ 0.13 | $ 0.04 | $ 0.11 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Stock Option Awards (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value of stock option awards [Abstract] | |||
Volatility of common stock | 64.22% | 52.62% | 46.70% |
Risk-free interest rate | 1.02% | 0.51% | 1.95% |
Expected life | 6 years | 6 years | 6 years |
Dividend yield | 0.00% | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summarized Activities for RSU's (Details) - Restricted Stock Unit (RSUs) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of Shares | |
Unvested beginning balance (in shares) | shares | 4,661,141 |
Forfeited (in shares) | shares | (1,786,793) |
Unvested ending balance (in shares) | shares | 2,874,348 |
Weighted-Average Grant Date Fair Value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 0.91 |
Forfeited (in dollars per share) | $ / shares | 0.54 |
Unvested ending balance (in dollars per share) | $ / shares | $ 1.14 |
STOCK-BASED COMPENSATION - Allo
STOCK-BASED COMPENSATION - Allocated Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | $ 1,136 | $ 1,913 | $ 4,528 |
Origination and Servicing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 123 | 35 | 417 |
Sales and Marketing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 62 | 69 | 243 |
General and Administrative | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | $ 951 | $ 1,809 | $ 3,868 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 0 | 0 | 0 |
Foreign | 0 | 0 | 0 |
Total Current Income Tax Expense (Benefit) | 0 | 0 | 0 |
Deferred: | |||
Federal | 47 | 47 | 47 |
State | 24 | 38 | 52 |
Foreign | 0 | (69) | 1 |
Total Deferred Income Tax Expense | 71 | 16 | 100 |
Total Income Tax Expense | $ 71 | $ 16 | $ 100 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Reconciliation (Details) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rate reconciliation [Abstract] | ||||
Federal tax at statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
State tax at statutory rate (net of federal benefit) | 8.00% | 8.00% | 9.00% | |
Incentive Stock Options | (5.00%) | 2.00% | (4.00%) | |
Preferred Stock Warrants | (29.00%) | (64.00%) | 8.00% | |
Change in valuation allowance | 6.00% | 37.00% | (33.00%) | |
Other | (1.00%) | (4.00%) | (1.00%) | |
Income Tax Expense | 0.00% | 0.00% | 0.00% |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets and liabilities [Abstract] | ||
Net operating loss carry forwards | $ 91,793 | $ 92,814 |
Research and other credits | 307 | 532 |
Stock compensation | 4,272 | 10,510 |
Accrued liabilities | 4,357 | 2,986 |
Lease liabilities | 3,266 | 3,934 |
Total deferred tax assets | 103,995 | 110,776 |
Net servicing rights | (1,898) | (2,067) |
Property and equipment | (1,873) | (287) |
Intangible assets | (1,770) | (1,415) |
Right-of-use assets | (2,264) | (2,676) |
Total deferred tax liabilities | (7,805) | (6,445) |
Total net deferred tax asset | 96,190 | 104,331 |
Less: Valuation allowance | (96,750) | (104,820) |
Net deferred tax liability | $ (560) | $ (489) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Tax Credit Carryforward [Line Items] | |||
Deferred tax assets valuation, increase amount | $ (8,100,000) | ||
Valuation allowance | 96,750,000 | $ 104,820,000 | |
Unrecognized tax benefits that would affect effective tax rate | 0 | ||
Interest and penalties related to uncertain tax positions | 0 | ||
Income tax expense | $ 71,000 | $ 16,000 | $ 100,000 |
Effective tax rate | 0.00% | 0.00% | 0.00% |
Prosper Funding LLC | |||
Tax Credit Carryforward [Line Items] | |||
Income tax expense | $ 0 | $ 0 | |
Effective tax rate | 0.00% | ||
Federal | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 345,300,000 | ||
Federal | Research and Development | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | 428,000 | ||
State | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 366,200,000 | ||
Tax period subject to examination | 4 years | ||
California | Research and Development | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | $ 501,000 | ||
California | Enterprise Zone Credit | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | $ 200,000 | ||
Internal Revenue Service (IRS) | |||
Tax Credit Carryforward [Line Items] | |||
Tax period subject to examination | 3 years |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized tax benefits [Roll Forward] | ||
Balance at January 1, | $ 112 | $ 112 |
Decrease related to current year tax position | 0 | 0 |
Balance at December 31, | $ 112 | $ 112 |
CONSORTIUM PURCHASE AGREEMENT (
CONSORTIUM PURCHASE AGREEMENT (Details) - Consortium Purchase Agreement - USD ($) $ / shares in Units, $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | May 31, 2019 | Feb. 27, 2017 | |
Other Commitments [Line Items] | |||
Aggregate loan purchases | $ 5 | ||
Loans Acquired | $ 3.3 | ||
Warrants Vested (in shares) | 177,700,000 | ||
Value of warrants issued to settle rebates on loan purchases | $ 0.3 | ||
Series F Warrant | |||
Other Commitments [Line Items] | |||
Number of warrants (in shares) | 3 | ||
Maximum warrant for purchase shares (in shares) | 177,720,706 | ||
Exercise of common stock warrants (in dollars per share) | $ 0.01 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Operating lease expense | $ 4,500,000 | $ 4,500,000 | $ 4,500,000 |
Sublease income | 300,000 | 400,000 | 800,000 |
Impairment of Operating Lease Right-of-Use Asset | $ 0 | $ 445,000 | $ 0 |
Operating lease liability, location | Other Liabilities | Other Liabilities | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 6 years |
LEASES - Operating Lease Right-
LEASES - Operating Lease Right-of-Use Assets (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | $ 17,485 |
Accumulated Amortization | 9,788 |
Net Carrying Value | $ 7,697 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and Equipment, Net |
ROU assets - office buildings | |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | $ 16,709 |
Accumulated Amortization | 9,444 |
Net Carrying Value | 7,265 |
ROU assets - other | |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | 776 |
Accumulated Amortization | 344 |
Net Carrying Value | $ 432 |
LEASES - Schedule of Lease Matu
LEASES - Schedule of Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2022 | $ 5,833 | |
2023 | 2,124 | |
2024 | 1,360 | |
2025 | 1,395 | |
2026 | 1,218 | |
Thereafter | 0 | |
Total future minimum lease payments | 11,930 | |
Less: Imputed interest | (904) | |
Present value of future minimum lease payments | $ 11,026 | $ 13,342 |
LEASES - Other Information Rela
LEASES - Other Information Related to Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Leases [Abstract] | |
Cash paid for operating leases year-to-date | $ 5,381 |
ROU assets obtained in exchange for new operating lease obligations year-to-date | $ 1,773 |
Weighted average remaining lease term (in years) | 3 years 1 month 13 days |
Weighted average discount rate | 5.19% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | |
Entity Information [Line Items] | ||||
Designated Amount for loans (less than), through February 2022 | $ 143,500 | |||
Designated Amount for loans (less than), through February 2025 | 100,000 | |||
Minimum fee, 2022 | 1,200,000 | |||
Minimum fee, 2023 | 1,200,000 | |||
Minimum fee, 2024 | 1,200,000 | |||
Minimum fee, 2025 | 100,000 | |||
Minimum net liquidity | 15,000,000 | |||
Purchase commitment of borrower loans | 13,800,000 | |||
Maximum potential future payments | 2,500,000,000 | |||
Accrued repurchase and indemnification obligation | 300,000 | $ 200,000 | ||
Civil monetary penalty agreed upon | $ 3,000,000 | |||
Penalty paid | $ 3,000,000 | |||
Prosper Funding LLC | ||||
Entity Information [Line Items] | ||||
Designated Amount for loans (less than), through February 2022 | 143,500 | |||
Designated Amount for loans (less than), through February 2025 | 100,000 | |||
Minimum fee, 2025 | 100,000 | |||
Minimum net liquidity | 15,000,000 | |||
Purchase commitment of borrower loans | 13,800,000 | |||
Maximum potential future payments | 2,500,000,000 | |||
Accrued repurchase and indemnification obligation | $ 300,000 | $ 200,000 | ||
Civil monetary penalty agreed upon | $ 3,000,000 | |||
Penalty paid | $ 3,000,000 |
RELATED PARTIES - Additional In
RELATED PARTIES - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Minimum percentage of voting securities considered for related parties (more than) | 10.00% |
Minimum percentage of stock holders considered for related parties | 10.00% |
RELATED PARTIES - Aggregate Amo
RELATED PARTIES - Aggregate Amount of Notes Purchased and the Income Earned (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | $ 59 | $ 300 |
Interest Earned on Notes and Borrower Loans | 8 | 49 |
Notes balance | 56 | 41 |
Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 35 | 28 |
Interest Earned on Notes and Borrower Loans | 7 | 6 |
Notes balance | 41 | 41 |
Executive officers and management | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 35 | 28 |
Interest Earned on Notes and Borrower Loans | 7 | 6 |
Notes balance | 41 | 41 |
Executive officers and management | Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 35 | 28 |
Interest Earned on Notes and Borrower Loans | 7 | 6 |
Notes balance | 41 | 41 |
Directors (excluding executive officers and management) | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 24 | 272 |
Interest Earned on Notes and Borrower Loans | 1 | 43 |
Notes balance | 15 | 0 |
Directors (excluding executive officers and management) | Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 0 | 0 |
Interest Earned on Notes and Borrower Loans | 0 | 0 |
Notes balance | $ 0 | $ 0 |
POSTRETIREMENT BENEFIT PLANS (D
POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Deferred compensation arrangement with eligible employees, percentage (up to) | 90.00% | ||
Employer contribution during the period | $ 2 | $ 1.2 | $ 2.3 |
SIGNIFICANT CONCENTRATIONS (Det
SIGNIFICANT CONCENTRATIONS (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
Percentage of fund from whole loan channel | 88.00% | 91.00% |
Prosper Funding LLC | ||
Concentration Risk [Line Items] | ||
Percentage of fund from whole loan channel | 88.00% | 91.00% |
Party One | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 26.70% | 21.40% |
Party One | Prosper Funding LLC | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 26.70% | 21.40% |
Party Two | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 14.30% | |
Party Two | Prosper Funding LLC | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 14.30% | |
Warehouse VIE | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 12.60% | 18.20% |
SEGMENTS (Details)
SEGMENTS (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 1 |
Number of operating segments | 1 |