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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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42-1709682
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.005 per share
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New York Stock Exchange
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 1.
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Business
|
•
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Solution
. We offer small businesses a suite of financing products with our term loans and lines of credit that can meet the needs of small businesses throughout their life cycle. We believe that small businesses prefer to work with providers with whom they can build long-term relationships. We believe our term loans, which are available from $5,000 up to $500,000, and lines of credit, which range from $6,000 to $100,000, are offered in a wider range of term lengths, pricing alternatives and repayment options than any other online small business lender making us an ideal lending partner to small businesses throughout their life cycle. We also report back to several business credit bureaus, which can help small businesses build their business credit.
|
•
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Simplicity
. Small businesses can submit an application on our website in as little as minutes. We are able to provide many loan applicants with an immediate approval decision and, if approved, transfer funds as fast as the same day. Because we require no in-person meetings, collect comprehensive information electronically and have an intuitive online application form, we have been able to significantly increase the convenience and efficiency of the application process without burdensome documentation requirements.
|
•
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Service
. Our U.S.-based internal salesforce and customer service representatives provide assistance throughout the application process and the life of the loan. Our representatives are available Monday through Saturday before, during and after regular business hours to accommodate the busy schedules of small business owners. We offer all of our customers credit education and consulting services and other value added services while our qualifying repeat customers are also offered pricing discounts through our loyalty program. Our commitment to provide a great customer experience has helped us consistently receive A+ ratings from the Better Business Bureau and, for our direct channel for the three months ended December 31, 2015 helped us earn a 76 Net Promoter Score, a widely used system of measuring customer loyalty. Furthermore, the OnDeck
Score
incorporates data from each customer’s history with us, ensuring that we deliver increasing efficiency to our customers in making repeat loan decisions.
|
•
|
Significant Scale
. Since we made our first loan in 2007, we have funded more than
$4 billion
of loans across more than 700 industries in all 50 U.S. states and Canada, and have recently begun lending in Australia. We maintain a proprietary database of more than 10 million small businesses. In
2015
and
2014
, we originated
$1.9 billion
and
$1.2 billion
, respectively, of loans, representing year-over-year growth of
62%
and
152%
, respectively, all while maintaining consistent credit quality. Our increasing scale offers significant benefits including lower customer acquisition costs, access to a broader dataset, better underwriting decisions and a lower cost of capital. Our platform, as discussed below, also offers
|
•
|
Proprietary Data and Analytics Engine
. We use data analytics and technology to optimize our business operations and the customer experience including sales and marketing, underwriting, servicing and risk management. Our proprietary data and analytics engine and the OnDeck
Score
provide us with significant visibility and predictability in assessing the creditworthiness of small businesses and allow us to better serve more customers across more industries. With each loan application, each funded loan and each daily or weekly payment, our data set expands and our OnDeck
Score
improves. In the latter part of 2014, we introduced the fifth generation, or v5, of the OnDeck
Score
which has enhanced our credit scoring capabilities, enabling us to improve offers to our customers while preserving the credit quality of our portfolio. Our analysis suggests that v5 has become 89% more accurate at identifying credit risk in small businesses across a range of credit risk profiles as compared to using only personal credit scores. We are therefore able to lend to more small businesses than if we relied on personal credit scores alone. We are also able to use our proprietary data and analytics engine to pre-qualify customers and market to those customers we believe are predisposed to take a loan and have a higher likelihood of approval.
|
•
|
End-to-End Integrated Technology Platform
. We built our integrated platform specifically to meet the financing needs of small businesses. Our platform touches every aspect of the customer life cycle, including customer acquisition, sales, scoring and underwriting, funding, and servicing and collections. This purpose-built infrastructure is enhanced by robust fraud protection, multiple layers of security and proprietary application programming interfaces. It enables us to deliver a superior customer experience, facilitates agile decision making and allows us to efficiently roll out new products and features in U.S. dollars as well as foreign currencies. We use our platform to underwrite, process and service all of our small business loans regardless of distribution channel.
|
•
|
Diversified Distribution Channels
. We are building our brand awareness and enhancing distribution capabilities through diversified distribution channels, including direct marketing, strategic partnerships and funding advisors. Our direct marketing includes direct mail, outbound calling, social media and other online marketing channels. Our strategic partners, including banks, payment processors and small business-focused service providers, offer us access to their base of small business customers, and data that can be used to enhance our targeting capabilities. We also have relationships with a large network of funding advisors, including businesses that provide loan brokerage services, which drive distribution and aid brand awareness. Our internal salesforce contacts potential customers, responds to inbound inquiries from potential customers, and is available to assist all customers throughout the application process.
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Year Ended December 31,
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|||||||
Percentage of Originations (Number of Loans)
|
2015
|
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2014
|
|
2013
|
|||
Direct and Strategic Partner
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79.5
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%
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69.8
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%
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54.4
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%
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Funding Advisor
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20.5
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%
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30.2
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%
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45.6
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%
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Year Ended December 31,
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|||||||
Percentage of Originations (Dollars)
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2015
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2014
|
|
2013
|
|||
Direct and Strategic Partner
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72.0
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%
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58.6
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%
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43.6
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%
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Funding Advisor
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28.0
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%
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41.4
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%
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56.4
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%
|
•
|
Singular Brand Focus and Visibility.
We believe that our singular brand focus on small business lending and our visibility differentiate us from our competitors and promote customer confidence. Since our initial public offering, or IPO, we have made significant investments to build our brand, including national television, radio and satellite advertising campaigns; an official partnership with Minor League Baseball; and a national sponsorship with SCORE, the nation's largest network of free, expert business mentors. Our partnerships with well-known companies such as JPMorgan Chase Bank, National Association, or JPM, Intuit Inc., BBVA Compass and others also help increase our visibility and validate our brand. As an NYSE listed company, we are required to meet high standards of transparency, financial reporting and other legal requirements. We believe the combination of these factors strengthens our position as we compete for customers.
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•
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High Customer Satisfaction and Repeat Customer Base
. Our strong value proposition has been validated by our customers. We had a Net Promoter Score of 76 in our direct channel for the three months ended December 31,
2015
based on our internal survey of customers. The Net Promoter Score is a widely used index ranging from negative 100 to 100 that measures customer loyalty. Our score places us at the upper end of customer satisfaction ratings and compares favorably to the average Net Promoter Score of 9 for national banks, 19 for regional banks and 46 for community banks. We have also consistently achieved an A+ rating from the Better Business Bureau. We believe that high customer satisfaction has played an important role in repeat borrowing by our customers. In
2015
,
2014
, and 2013,
57%
,
50%
and
44%
, respectively, of loan originations were by repeat customers, who either replaced their existing loan with a new, usually larger, loan or took out a new loan after paying off their existing OnDeck loan in full. Repeat customers generally comprise our highest quality loans, given many repeat customers require additional financing for growth or expansion. In general, our return customers demonstrate improvements in key metrics such as their revenue and bank balance when they return for an additional loan. From our
2013
customer cohort, customers who took at least three loans grew their revenue and bank balance, respectively, on average by
28%
and
47%
from their initial loan to their third loan. Similarly, from our 2014 customer cohort, customers who took at least three loans grew their revenue and bank balance, respectively, on average by
29%
and
54%
. Approximately
25%
percent of our origination volume from repeat customers in
2015
was due to unpaid principal balances rolled from existing loans directly into such repeat originations. Each repeat customer seeking another term loan must pass the following standards:
|
•
|
the business must be approximately 50% paid down on its existing loan;
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•
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the business must be current on its outstanding OnDeck loan with no material delinquency history; and
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•
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the business must be fully re-underwritten and determined to be of adequate credit quality.
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•
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Durable Business Model
. Since we began lending in 2007, we have successfully operated our business through both strong and weak economic environments. Our real-time data, short duration loans, automated daily and weekly collection, risk management capabilities and unit economics enable us to react rapidly to changing market conditions and generate attractive financial results. In addition, we believe the historical consistency and stability of the credit performance of our loan portfolio are appealing to our sources of funding and help validate our proprietary credit scoring model.
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•
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Differentiated Funding Platform
. We source capital through multiple channels, including debt facilities, securitization and the OnDeck
Marketplace
, our proprietary whole loan sale platform for institutional investors. This diversity provides us with a mix of scalable funding sources, long-term capital commitments and access to flexible funding for growth. In addition, because we contribute a portion of the capital for each loan we fund via our debt facilities and securitization, we are able to align interests with our investors.
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•
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100% Small Business-Focused
. We are passionate about small businesses. We have developed significant expertise since we began lending in 2007, remaining exclusively focused on assessing and delivering credit to small businesses. We believe this passion, focus and small business credit expertise provides us with significant competitive advantages.
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•
|
Continue to Acquire Customers Through Direct Marketing and Sales
. We plan to continue investing in direct marketing and sales to add new customers and increase our brand awareness. As our dataset expands, we will continue to pre-qualify and market to those customers we believe are predisposed to take a loan and have a higher likelihood of approval. We have seen success from this strategy with an increase in loan transactions attributable to direct marketing of
91%
and
227%
in 2015 and 2014, respectively.
|
•
|
Broaden Distribution Capabilities Through Partners
. We plan to expand our network of strategic partners, including banks, payment processors and small business-focused service providers, and leverage their relationships with small businesses to acquire new customers.
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•
|
Enhance Data and Analytics Capabilities
. We plan to continue making substantial investments in our data and analytics capabilities. Our data science team continually uncovers new insights about small businesses and their credit performance and considers new data sources for inclusion in our models, allowing us to evaluate and lend to more customers. As our dataset expands, our self-reinforcing scoring algorithm continues to improve through machine learning, enabling us to make better lending decisions.
|
•
|
Expand Offerings
. We will continue developing financing solutions that support small businesses from inception through maturity. We now offer a line of credit product with a credit limit up to $100,000 and a 36-month term loan product with principal amounts up to $500,000. Over time we plan to expand our offerings by introducing new credit-related solutions
|
•
|
Extend Customer Lifetime Value
. We believe we have an opportunity to increase revenue and loyalty from new and existing customers. We have the ability to accommodate our customers’ needs as they grow and as their funding needs increase and change. We have introduced and plan to continue adding new features to keep driving the increased use of our platform, including loyalty pricing and mobile functionality to increase customer engagement. We are focused on providing a positive customer experience and on continuing to drive customer loyalty.
|
•
|
Targeted International Expansion
. We believe small businesses around the world need capital to grow, and there is an opportunity to expand our small business lending in select countries outside of the United States. In the second quarter of 2014 we started providing loans in Canada and in the fourth quarter of 2015 we began providing loans in Australia. We continue to evaluate additional international market opportunities.
|
•
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OnDeck-as-a-Service
. We believe that an opportunity exists to leverage the decisioning strength of our platform and the OnDeck
Score
, as evidenced by our recent partnerships with JPM and Intuit, both of which are or will be using our platform to make loan decisions for their own customers. We are actively exploring these opportunities and seek to expand the availability of OnDeck-as-a-Service to appropriate partners.
|
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Q4 2015
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Q3 2015
|
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Q2 2015
|
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Q1 2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||
Weighted Average Term Loan “Cents on Dollar” Borrowed, per Month
|
|
1.82
|
¢
|
|
|
1.86
|
¢
|
|
|
2.04
|
¢
|
|
|
2.15
|
¢
|
|
|
2.32
|
¢
|
|
|
2.65
|
¢
|
|
|
2.87
|
¢
|
Weighted Average APR—Term Loans and Lines of Credit
|
41.4
|
%
|
|
42.7
|
%
|
|
46.5
|
%
|
|
49.3
|
%
|
|
54.4
|
%
|
|
63.4
|
%
|
|
69.0
|
%
|
•
|
manage the risks of the company, including developing and maintaining systems and internal controls to identify, approve, measure, monitor, report and prevent risks;
|
•
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manage reputational and counterparty risk;
|
•
|
foster a strong risk-centric mindset across the company; and
|
•
|
control and plan for credit risk-taking consistent with expectations.
|
•
|
ensuring our IT systems, security protocols, and business continuity plans are well established, reviewed and tested;
|
•
|
establishing and testing internal controls with respect to financial reporting; and
|
•
|
regularly reviewing the regulatory environment to ensure compliance with existing laws and anticipate future regulatory changes that may impact us.
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Ingenuity
|
|
We create new solutions to old problems. We imagine what’s possible and seek out innovation and technology to reinvent small business financing and delight our customers.
|
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Passion
|
|
We think big and act boldly. We care intensely about each other, our company, and the small businesses we serve.
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Openness
|
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We are collaborative and accessible. We know that the best outcomes come when we work together.
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Impact
|
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We focus on results. We are committed to making every day count and constantly strive to improve our business. We work to make a difference to small businesses, their customers and our employees.
|
•
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ease of process to apply for a loan;
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•
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brand recognition and trust;
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•
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loan features, including rate, term and pay-back method;
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•
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loan product fit for business purpose;
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•
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transparent description of key terms;
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•
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effectiveness of customer acquisition; and
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•
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customer experience.
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•
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FDIC,
Loans to Small Businesses and Farms, FDIC-Insured Institutions 1995-2015
, Q4 2015.
|
•
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Federal Reserve Bank of New York,
Small Business Credit Survey
Spring 2014
, August 2014.
|
•
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Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia
Joint Small Business Credit Survey
, January 2015
|
•
|
Oliver Wyman,
Financing Small Businesses
, 2013.
|
Item 1A.
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Risk Factors
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•
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increase the number and total volume of term loans and lines of credit we extend to our customers;
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•
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improve the terms on which we lend to our customers as our business becomes more efficient;
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•
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increase the effectiveness of our direct marketing, as well as our strategic partner and funding advisor program customer acquisition channels;
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•
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increase repeat borrowing by existing customers;
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•
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successfully develop and deploy new products;
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•
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successfully maintain our diversified funding strategy, including through the OnDeck
Marketplace
and future securitization transactions;
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•
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favorably compete with other companies that are currently in, or may in the future enter, the business of lending to small businesses;
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•
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successfully navigate economic conditions and fluctuations in the credit market;
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•
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effectively manage the growth of our business;
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•
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obtain debt or equity capital on attractive terms;
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•
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successfully expand internationally; and
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•
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anticipate changes to an evolving regulatory environment.
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•
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personnel, including expanding our technology and analytics team and significant increases to the total compensation we pay our employees as we grow our employee headcount;
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•
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marketing, including expenses relating to increased direct marketing efforts;
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•
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product development, including the continued development of our platform and OnDeck
Score
;
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•
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diversification of funding sources, including through OnDeck
Marketplace
;
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•
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expansion into new markets, including international geographies;
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•
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office space, as we increase the space we need for our growing employee base;
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•
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establishing and maintaining strategic partnerships; and
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•
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general administration, including legal, accounting and other compliance expenses related to being a public company.
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•
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adjusting our proprietary loan platform, and the OnDeck
Score
, to account for the country-specific differences in information available on potential small business borrowers;
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•
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conformity with applicable business customs, including translation into foreign languages and associated expenses;
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•
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changes to the way we do business as compared with our current operations;
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•
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the need to support and integrate with local third-party service providers;
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•
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competition with service providers that have greater experience in the local markets than we do or that have pre-existing relationships with potential borrowers and investors in those markets;
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•
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difficulties in staffing and managing foreign operations in an environment of diverse culture, laws and customs, and the increased travel, infrastructure and legal and compliance costs associated with international operations;
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•
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compliance with multiple, potentially conflicting and changing governmental laws and regulations, including banking, securities, employment, tax, privacy and data protection laws and regulations, such as the EU Data Privacy Directive;
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•
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compliance with U.S. and foreign anti-bribery laws, including the Foreign Corrupt Practices Act and the U.K. Anti-Bribery Act;
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•
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difficulties in collecting payments in foreign currencies and associated foreign currency exposure;
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•
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restrictions on repatriation of earnings;
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•
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compliance with potentially conflicting and changing laws of taxing jurisdictions where we conduct business and applicable U.S. tax laws as they relate to international operations, the complexity and adverse consequences of such tax laws and potentially adverse tax consequences due to changes in such tax laws; and
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•
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regional economic and political conditions.
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•
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diversion of management time and focus from operating our business to addressing acquisition integration challenges;
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•
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coordination of technology, product development and sales and marketing functions;
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•
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transition of the acquired company’s customers to our platform;
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•
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retention of employees from the acquired company;
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•
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cultural challenges associated with integrating employees from the acquired company into our organization;
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•
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integration of the acquired company’s accounting, management information, human resources and other administrative systems;
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•
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the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;
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•
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potential write-offs of loans or intangibles or other assets acquired in such transactions that may have an adverse effect our operating results in a given period;
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•
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liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and
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•
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litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties.
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•
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announcements of new products, services or technologies, relationships with strategic partners, acquisitions or other events by us or our competitors;
|
•
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changes in economic conditions;
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•
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changes in prevailing interest rates;
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•
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price and volume fluctuations in the overall stock market from time to time;
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•
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significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;
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•
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fluctuations in the trading volume of our shares or the size of our public float;
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•
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the impact of securities analysts’ reports or other publicity regarding our business or industry;
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•
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actual or anticipated changes in our operating results or fluctuations in our operating results;
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•
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quarterly fluctuations in demand for our loans;
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•
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whether our operating results meet the expectations of securities analysts or investors;
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•
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actual or anticipated changes in the expectations of investors or securities analysts;
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•
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regulatory developments in the United States, foreign countries or both;
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•
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major catastrophic events;
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•
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sales of large blocks of our stock; or
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•
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departures of key personnel.
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•
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a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
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the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
|
•
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the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
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a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
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the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, our president, our secretary or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
|
•
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the requirement for the affirmative vote of holders of at least 66
2
/
3
% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt;
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•
|
the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquiror to amend the bylaws to facilitate an unsolicited takeover attempt; and
|
•
|
advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
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Location
|
|
Purpose
|
|
Approximate
Square Feet
|
|
Lease
Expiration Date
|
New York, NY
|
|
Corporate Headquarters, technology and direct sales
|
|
81,800
|
|
2026
|
Denver, CO
|
|
Direct sales and operations
|
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71,900
|
|
2026
|
Denver, CO
|
|
Direct sales and operations
|
|
22,500
|
|
2016
|
Arlington, VA
|
|
Underwriting, loan origination and servicing
|
|
18,600
|
|
2022
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Sale Prices
|
||||||
|
High
|
|
Low
|
||||
2014
|
|
|
|
||||
Fourth Quarter (beginning December 17, 2014)
|
$
|
28.98
|
|
|
$
|
21.40
|
|
2015
|
|
|
|
||||
First Quarter
|
$
|
24.48
|
|
|
$
|
14.52
|
|
Second Quarter
|
$
|
21.79
|
|
|
$
|
11.38
|
|
Third Quarter
|
$
|
14.90
|
|
|
$
|
7.75
|
|
Fourth Quarter
|
$
|
12.85
|
|
|
$
|
8.76
|
|
Item 6.
|
Selected Consolidated Financial Data
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
195,048
|
|
|
$
|
145,275
|
|
|
$
|
62,941
|
|
|
$
|
25,273
|
|
Gross revenue
|
254,767
|
|
|
158,064
|
|
|
65,249
|
|
|
25,643
|
|
||||
Total cost of revenue
|
95,107
|
|
|
84,632
|
|
|
39,989
|
|
|
20,763
|
|
||||
Net revenue
|
159,660
|
|
|
73,432
|
|
|
25,260
|
|
|
4,880
|
|
||||
Net loss
|
(2,231
|
)
|
|
(18,708
|
)
|
|
(24,356
|
)
|
|
(16,844
|
)
|
||||
Net loss attributable to On Deck Capital, Inc. common stockholders
|
$
|
(1,273
|
)
|
|
$
|
(31,592
|
)
|
|
$
|
(37,080
|
)
|
|
$
|
(20,284
|
)
|
Net loss per share attributable to On Deck Capital, Inc. common shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(8.64
|
)
|
|
$
|
(4.27
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
69,545,238
|
|
|
52,556,998
|
|
|
4,292,026
|
|
|
4,750,440
|
|
||||
Balance sheet data:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
159,822
|
|
|
$
|
220,433
|
|
|
$
|
4,670
|
|
|
$
|
7,386
|
|
Loans held for investment
|
552,742
|
|
|
504,107
|
|
|
222,521
|
|
|
90,975
|
|
||||
Total assets
|
749,252
|
|
|
729,632
|
|
|
235,450
|
|
|
106,510
|
|
||||
Funding debt
|
380,112
|
|
|
387,928
|
|
|
188,297
|
|
|
96,297
|
|
||||
Total liabilities
|
419,830
|
|
|
419,027
|
|
|
216,587
|
|
|
110,443
|
|
||||
Redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
118,343
|
|
|
53,226
|
|
||||
Total On Deck Capital, Inc. stockholders' equity (deficit)
|
$
|
322,813
|
|
|
$
|
310,605
|
|
|
$
|
(99,480
|
)
|
|
$
|
(57,159
|
)
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
As of or for the Year Ended
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands)
|
||||||||||
Originations
|
$
|
1,874,438
|
|
|
$
|
1,157,751
|
|
|
$
|
458,917
|
|
Unpaid Principal Balance
|
$
|
543,790
|
|
|
$
|
490,563
|
|
|
$
|
215,966
|
|
Average Loans
|
$
|
527,916
|
|
|
$
|
359,652
|
|
|
$
|
147,398
|
|
Loans Under Management
|
$
|
890,351
|
|
|
$
|
571,759
|
|
|
$
|
233,324
|
|
Effective Interest Yield
|
36.9
|
%
|
|
40.4
|
%
|
|
42.7
|
%
|
|||
Marketplace
Gain on Sale Rate
|
8.6
|
%
|
|
6.1
|
%
|
|
4.2
|
%
|
|||
Average Funding Debt Outstanding
|
$
|
377,199
|
|
|
$
|
279,307
|
|
|
$
|
124,238
|
|
Cost of Funds Rate
|
5.4
|
%
|
|
6.2
|
%
|
|
10.8
|
%
|
|||
Provision Rate
|
5.8
|
%
|
|
6.6
|
%
|
|
6.0
|
%
|
|||
Reserve Ratio
|
9.8
|
%
|
|
10.2
|
%
|
|
9.0
|
%
|
|||
15+ Day Delinquency Ratio
|
6.6
|
%
|
|
7.3
|
%
|
|
7.6
|
%
|
|||
Adjusted EBITDA
|
$
|
16,165
|
|
|
$
|
(165
|
)
|
|
$
|
(16,258
|
)
|
Adjusted Net Loss
|
$
|
10,309
|
|
|
$
|
(4,634
|
)
|
|
$
|
(20,179
|
)
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;
|
•
|
Adjusted EBITDA does not reflect interest associated with debt used for corporate purposes or tax payments that may represent a reduction in cash available to us;
|
•
|
Adjusted EBITDA does not reflect the potential costs we would incur if certain of our warrants were settled in cash.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Adjusted EBITDA
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,231
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
Adjustments:
|
|
|
|
|
|
||||||
Corporate interest expense
|
306
|
|
|
398
|
|
|
1,276
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
6,508
|
|
|
4,071
|
|
|
2,645
|
|
|||
Stock-based compensation expense
|
11,582
|
|
|
2,842
|
|
|
438
|
|
|||
Warrant liability fair value adjustment
|
—
|
|
|
11,232
|
|
|
3,739
|
|
|||
Adjusted EBITDA
|
$
|
16,165
|
|
|
$
|
(165
|
)
|
|
$
|
(16,258
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Adjusted Net (Loss) Income
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,231
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
Adjustments:
|
|
|
|
|
|
||||||
Net loss attributable to noncontrolling interest
|
958
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
11,582
|
|
|
2,842
|
|
|
438
|
|
|||
Warrant liability fair value adjustment
|
—
|
|
|
11,232
|
|
|
3,739
|
|
|||
Adjusted Net (Loss) Income
|
$
|
10,309
|
|
|
$
|
(4,634
|
)
|
|
$
|
(20,179
|
)
|
|
Year Ended December 31,
|
|||||||
Percentage of Originations (Number of Loans)
|
2015
|
|
2014
|
|
2013
|
|||
Direct and Strategic Partner
|
79.5
|
%
|
|
69.8
|
%
|
|
54.4
|
%
|
Funding Advisor
|
20.5
|
%
|
|
30.2
|
%
|
|
45.6
|
%
|
|
Year Ended December 31,
|
|||||||
Percentage of Originations (Dollars)
|
2015
|
|
2014
|
|
2013
|
|||
Direct and Strategic Partner
|
72.0
|
%
|
|
58.6
|
%
|
|
43.6
|
%
|
Funding Advisor
|
28.0
|
%
|
|
41.4
|
%
|
|
56.4
|
%
|
•
|
the business must be approximately 50% paid down on its existing loan;
|
•
|
the business must be current on its outstanding OnDeck loan with no material delinquency history; and
|
•
|
the business must be fully re-underwritten and determined to be of adequate credit quality.
|
|
Year Ended December 31,
|
|||||||
Percentage of Originations (Dollars)
|
2015
|
|
2014
|
|
2013
|
|||
New
|
42.6
|
%
|
|
49.9
|
%
|
|
56.5
|
%
|
Repeat
|
57.4
|
%
|
|
50.1
|
%
|
|
43.5
|
%
|
|
Q4 2015
|
Q3 2015
|
Q2 2015
|
Q1 2015
|
2014
|
2013
|
2012
|
Weighted Average Term Loan "Cents on Dollar" Borrowed, per Month
|
1.82¢
|
1.86¢
|
2.04¢
|
2.15¢
|
2.32¢
|
2.65¢
|
2.87¢
|
Weighted Average APR - Term Loans and Lines of Credit
|
41.4%
|
42.7%
|
46.5%
|
49.3%
|
54.4%
|
63.4%
|
69.0%
|
•
|
Channel Mix
- In general, loans originated from the direct and strategic partner channels have lower EIYs than loans from the funding advisor channel primarily due to their lower rates, lower acquisition costs and lower loss rates. The direct and strategic partner channels have, in the aggregate, made up
72%
,
59%
and
44%
of total originations during the years ended December 31, 2015, 2014 and 2013, respectively. We expect the direct and strategic partner channels to continue to grow as a percentage of the overall channel mix as we continue to focus on growing these historically higher-quality originations.
|
•
|
Term Mix
- In general, term loans with longer durations have lower annualized interest rates. Despite lower EIYs, total revenues from customers with longer loan durations are typically higher than the revenue of customers with shorter-term, higher EIY loans because total payback is typically higher compared to a shorter length term for the same principal loan amount. Since the introduction of our 24-month and 36-month term loan products, the average length of new term loan originations has increased to
11.8
from
10.8
and
10.0
months for the years ended December 31, 2015, 2014 and 2013, respectively.
|
•
|
Customer Type Mix
- In general, loans originated from repeat customers have lower EIYs than loans from new customers. This is primarily due to the fact that repeat customers typically have a higher OnDeck
Score
and are therefore deemed to be lower risk. In addition, repeat customers are more likely to be approved for longer terms than new customers given their established payment history and lower risk profiles. Finally, origination fees are generally reduced or waived and rates are lower for repeat customers due to our loyalty program, contributing to lower EIYs.
|
•
|
Product Mix
- In general, loans originated from line of credit customers have lower EIYs than loans from term loan customers. This is primarily due to the fact that lines of credit are expected to have longer lifetime usage than term loans, enabling more time to recoup upfront acquisition costs. For the year ended 2015, the average line of credit APR was
33.8%
, compared to the average term loan APR which was
45.0%
. Further, draws from line of credit customers have increased to
9.1%
from
4.9%
of total originations in 2015 and 2014, respectively. As we expand the availability and market awareness of our 24-month and 36-month term loan products, we expect the product mix to result in a further
|
•
|
Competition
- As new online and alternative lenders have entered the market, there has been an increased volume of direct marketing to potential borrowers and increased competition for responses to those direct marketing efforts. Competitors may attempt to obtain new customers by pricing term loans and lines of credit below prevailing market rates. This could cause downward pricing pressure as these new entrants attempt to win new customers even at the cost of pricing loans below market rates, or even at rates resulting in net losses to them. While we recognize that there has been increased competition in the market of small business loans, we believe only a small portion of our period over period EIY decline is a result of increased competition.
|
•
|
OnDeck
Marketplace
Loan Sales
- Since its inception in October 2013 through the first quarter of 2015, OnDeck
Marketplace
sales had a negligible effect on EIY due to the fact that loans were typically sold within several days of origination resulting in immaterial increases to interest income. During 2015, EIY began to be more significantly impacted by OnDeck
Marketplace
loan sales, in particular because we sold seasoned loans in addition to newly originated loans we typically sell through OnDeck
Marketplace
. Sales of seasoned loans typically result in an increase to EIY because we earn interest income on those loans for a longer period of time as compared to loans typically sold through OnDeck
Marketplace
(increasing the numerator of the EIY formula ), and removed the loans from our balance sheet, reducing Average Loans (decreasing the denominator of the EIY formula). Our EIY was also positively impacted by OnDeck
Marketplace
loan sales in 2015 due to the increase in time between loan origination and sale of our loans held for sale as compared to loans previously sold through OnDeck
Marketplace
. We earn interest income during the period we hold loans prior to sale. During 2015, we held those loans for a longer period of time than loans previously sold through OnDeck
Marketplace
(increasing the numerator of the EIY formula). During 2015, we sold
$617.7 million
of loans through OnDeck
Marketplace
representing a
325%
increase over 2014.
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Originations of loans held for sale
|
445,968
|
|
|
140,578
|
|
|
18,834
|
|
Originations of loans held for investment, modified
|
138,968
|
|
|
—
|
|
|
—
|
|
Marketplace
originations
|
584,936
|
|
|
140,578
|
|
|
18,834
|
|
•
|
Average number of loans per customer during the measurement period:
2.4
|
•
|
Average initial loan size:
$33,096
|
•
|
Average repeat loan size:
$51,529
|
•
|
Total borrowings:
$824 million
|
•
|
Average number of loans per customer during the measurement period:
2.0
|
•
|
Average initial loan size:
$40,713
|
•
|
Average repeat loan size:
$56,408
|
•
|
Total borrowings:
$1.26 billion
|
|
2012
|
2013
|
2014
|
Q1 2015
|
Q2 2015
|
Q3 2015
|
Q4 2015
|
Principal Outstanding as of December 31, 2015
|
—%
|
0.1%
|
1.8%
|
11.5%
|
26.1%
|
56.8%
|
88.2%
|
Originations
|
2012
|
|
2013
|
|
2014
|
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
||||||||||||||
New term loans (in thousands)
|
$
|
97,367
|
|
|
$
|
256,344
|
|
|
$
|
521,355
|
|
|
$
|
167,321
|
|
|
$
|
134,878
|
|
|
$
|
154,847
|
|
|
$
|
170,448
|
|
Weighted average term (months)
|
9.1
|
|
|
10.0
|
|
|
10.8
|
|
|
11.5
|
|
|
11.2
|
|
|
11.7
|
|
|
12.5
|
|
Originations
|
2012
|
|
2013
|
|
2014
|
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
||||||||||||||
Repeat term loans (in thousands)
|
$
|
75,880
|
|
|
$
|
199,587
|
|
|
$
|
579,602
|
|
|
$
|
217,382
|
|
|
$
|
246,611
|
|
|
$
|
283,170
|
|
|
$
|
328,959
|
|
Weighted average term (months)
|
9.3
|
|
|
10.0
|
|
|
11.6
|
|
|
12.2
|
|
|
12.2
|
|
|
12.6
|
|
|
13.5
|
|
Originations
|
2012
|
|
2013
|
|
2014
|
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
||||||||||||||
All term loans (in thousands)
|
$
|
173,246
|
|
|
$
|
455,931
|
|
|
$
|
1,100,957
|
|
|
$
|
384,703
|
|
|
$
|
381,490
|
|
|
$
|
438,017
|
|
|
$
|
499,407
|
|
Weighted average term (months)
|
9.2
|
|
|
10.0
|
|
|
11.2
|
|
|
11.9
|
|
|
11.9
|
|
|
12.3
|
|
|
13.2
|
|
•
|
Demand for Our Products
. In a strong economic climate, demand for our products may increase as consumer spending increases and small businesses seek to expand. In addition, more potential customers may meet our underwriting requirements to qualify for a loan. At the same time, small businesses may experience improved cash flow and liquidity resulting in fewer customers requiring loans to manage their cash flows. In that climate, traditional lenders may also approve loans for a higher percentage of our potential customers. In a weakening economic climate or recession, the opposite may occur.
|
•
|
Credit Performance
. In a strong economic climate, our customers may experience improved cash flow and liquidity, which may result in lower loan losses. In a weakening economic climate or recession, the opposite may occur. We factor economic conditions into our loan underwriting analysis and reserves for loan losses, but changes in economic conditions, particularly sudden changes, may affect our actual loan losses. These effects may be partially mitigated by the short-term nature and repayment structure of our loans, which should allow us to react more quickly than if the terms of our loans were longer.
|
•
|
Loan Losses
. Our underwriting process is designed to limit our loan losses to levels compatible with our business strategy and financial model. Our aggregate loan loss rates from 2012 through
2015
have been consistent with our financial targets. Our overall loan losses are affected by a variety of factors, including external factors such as prevailing economic conditions, general small business sentiment and unusual events such as natural disasters, as well as internal factors such as the accuracy of the OnDeck
Score
, the effectiveness of our underwriting process and the introduction of new products, such as our line of credit, with which we have less experience to draw upon when forecasting their loss rates. Our loan loss rates may vary in the future.
|
•
|
Funding Costs.
Changes in macroeconomic conditions may affect generally prevailing interest rates, and such effects may be amplified or reduced by other factors such as fiscal and monetary policies, economic conditions in other markets and other factors. Interest rates may also change for reasons unrelated to economic conditions. To the extent that interest rates rise, our funding costs will increase and the spread between our Effective Interest Yield and our Cost of Funds Rate may narrow to the extent we cannot correspondingly increase the payback rates we charge our customers. As we have grown, we have been able to lower our Cost of Funds Rate by negotiating more favorable interest rates on our debt and accessing new sources of funding, such as the OnDeck
Marketplace
and the securitization markets. If we are successful in continuing to lower our Cost of Funds Rate, we do not expect that it will continue to decline as significantly as it has since 2012.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands)
|
||||||||||
Revenue:
|
|
|
|
|
|
||||||
Interest income
|
$
|
195,048
|
|
|
$
|
145,275
|
|
|
$
|
62,941
|
|
Gain on sales of loans
|
53,354
|
|
|
8,823
|
|
|
788
|
|
|||
Other revenue
|
6,365
|
|
|
3,966
|
|
|
1,520
|
|
|||
Gross revenue
|
254,767
|
|
|
158,064
|
|
|
65,249
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Provision for loan losses
|
74,863
|
|
|
67,432
|
|
|
26,570
|
|
|||
Funding costs
|
20,244
|
|
|
17,200
|
|
|
13,419
|
|
|||
Total cost of revenue
|
95,107
|
|
|
84,632
|
|
|
39,989
|
|
|||
Net revenue
|
159,660
|
|
|
73,432
|
|
|
25,260
|
|
|||
Operating expense:
|
|
|
|
|
|
||||||
Sales and marketing
|
60,575
|
|
|
33,201
|
|
|
18,095
|
|
|||
Technology and analytics
|
42,653
|
|
|
17,399
|
|
|
8,760
|
|
|||
Processing and servicing
|
13,053
|
|
|
8,230
|
|
|
5,577
|
|
|||
General and administrative
|
45,304
|
|
|
21,680
|
|
|
12,169
|
|
|||
Total operating expense
|
161,585
|
|
|
80,510
|
|
|
44,601
|
|
|||
Loss from operations
|
(1,925
|
)
|
|
(7,078
|
)
|
|
(19,341
|
)
|
|||
Other expense:
|
|
|
|
|
|
||||||
Interest expense
|
(306
|
)
|
|
(398
|
)
|
|
(1,276
|
)
|
|||
Warrant liability fair value adjustment
|
—
|
|
|
(11,232
|
)
|
|
(3,739
|
)
|
|||
Total other expense
|
(306
|
)
|
|
(11,630
|
)
|
|
(5,015
|
)
|
|||
Loss before provision for income taxes
|
(2,231
|
)
|
|
(18,708
|
)
|
|
(24,356
|
)
|
|||
Provision for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss
|
$
|
(2,231
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income
|
$
|
195,048
|
|
|
76.6
|
%
|
|
$
|
145,275
|
|
|
91.9
|
%
|
|
$
|
49,773
|
|
|
34.3
|
%
|
Gain on sales of loans
|
53,354
|
|
|
20.9
|
|
|
8,823
|
|
|
5.6
|
|
|
44,531
|
|
|
504.7
|
|
|||
Other revenue
|
6,365
|
|
|
2.5
|
|
|
3,966
|
|
|
2.5
|
|
|
2,399
|
|
|
60.5
|
|
|||
Gross revenue
|
254,767
|
|
|
100.0
|
|
|
158,064
|
|
|
100.0
|
|
|
96,703
|
|
|
61.2
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Provision for loan losses
|
74,863
|
|
|
29.4
|
|
|
67,432
|
|
|
42.7
|
|
|
7,431
|
|
|
11.0
|
|
|||
Funding costs
|
20,244
|
|
|
7.9
|
|
|
17,200
|
|
|
10.9
|
|
|
3,044
|
|
|
17.7
|
|
|||
Total cost of revenue
|
95,107
|
|
|
37.3
|
|
|
84,632
|
|
|
53.5
|
|
|
10,475
|
|
|
12.4
|
|
|||
Net revenue
|
159,660
|
|
|
62.7
|
|
|
73,432
|
|
|
46.5
|
|
|
86,228
|
|
|
117.4
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
60,575
|
|
|
23.8
|
|
|
33,201
|
|
|
21.0
|
|
|
27,374
|
|
|
82.4
|
|
|||
Technology and analytics
|
42,653
|
|
|
16.7
|
|
|
17,399
|
|
|
11.0
|
|
|
25,254
|
|
|
145.1
|
|
|||
Processing and servicing
|
13,053
|
|
|
5.1
|
|
|
8,230
|
|
|
5.2
|
|
|
4,823
|
|
|
58.6
|
|
|||
General and administrative
|
45,304
|
|
|
17.8
|
|
|
21,680
|
|
|
13.7
|
|
|
23,624
|
|
|
109.0
|
|
|||
Total operating expenses
|
161,585
|
|
|
63.4
|
|
|
80,510
|
|
|
50.9
|
|
|
81,075
|
|
|
100.7
|
|
|||
Loss from operations
|
(1,925
|
)
|
|
(0.8
|
)
|
|
(7,078
|
)
|
|
(4.5
|
)
|
|
5,153
|
|
|
72.8
|
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
(306
|
)
|
|
(0.1
|
)
|
|
(398
|
)
|
|
(0.3
|
)
|
|
92
|
|
|
(23.1
|
)
|
|||
Warrant liability fair value adjustment
|
—
|
|
|
—
|
|
|
(11,232
|
)
|
|
(7.1
|
)
|
|
11,232
|
|
|
(100.0
|
)
|
|||
Total other (expense) income:
|
(306
|
)
|
|
(0.1
|
)
|
|
(11,630
|
)
|
|
(7.4
|
)
|
|
11,324
|
|
|
(97.4
|
)
|
|||
Loss before provision for income taxes
|
(2,231
|
)
|
|
(0.9
|
)
|
|
(18,708
|
)
|
|
(11.8
|
)
|
|
16,477
|
|
|
(88.1
|
)
|
|||
Provision for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss
|
$
|
(2,231
|
)
|
|
(0.9
|
)%
|
|
$
|
(18,708
|
)
|
|
(11.8
|
)%
|
|
$
|
16,477
|
|
|
(88.1
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|||||||||||||||||||
Interest income
|
$
|
195,048
|
|
|
76.6
|
%
|
|
$
|
145,275
|
|
|
91.9
|
%
|
|
$
|
49,773
|
|
|
34.3
|
%
|
Gain on sales of loans
|
53,354
|
|
|
20.9
|
|
|
8,823
|
|
|
5.6
|
|
|
44,531
|
|
|
504.7
|
|
|||
Other revenue
|
6,365
|
|
|
2.5
|
|
|
3,966
|
|
|
2.5
|
|
|
2,399
|
|
|
60.5
|
|
|||
Gross revenue
|
$
|
254,767
|
|
|
100.0
|
%
|
|
$
|
158,064
|
|
|
100.0
|
%
|
|
$
|
96,703
|
|
|
61.2
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Provision for loan losses
|
$
|
74,863
|
|
|
29.4
|
%
|
|
$
|
67,432
|
|
|
42.7
|
%
|
|
$
|
7,431
|
|
|
11.0
|
%
|
Funding costs
|
20,244
|
|
|
7.9
|
|
|
17,200
|
|
|
10.9
|
|
|
3,044
|
|
|
17.7
|
|
|||
Total cost of revenue
|
$
|
95,107
|
|
|
37.3
|
%
|
|
$
|
84,632
|
|
|
53.5
|
%
|
|
$
|
10,475
|
|
|
12.4
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Sales and marketing
|
$
|
60,575
|
|
|
23.8
|
%
|
|
$
|
33,201
|
|
|
21.0
|
%
|
|
$
|
27,374
|
|
|
82.4
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Period-to-Period
|
|||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
|
|||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Technology and analytics
|
$
|
42,653
|
|
|
16.7
|
%
|
|
$
|
17,399
|
|
|
11.0
|
%
|
|
$
|
25,254
|
|
|
145.1
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Period-to-Period
|
|||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
|
|||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Processing and servicing
|
$
|
13,053
|
|
|
5.1
|
%
|
|
$
|
8,230
|
|
|
5.2
|
%
|
|
$
|
4,823
|
|
|
58.6
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Period-to-Period
|
|||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
|
|||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
General and administrative
|
$
|
45,304
|
|
|
17.8
|
%
|
|
$
|
21,680
|
|
|
13.7
|
%
|
|
$
|
23,624
|
|
|
109.0
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income
|
$
|
145,275
|
|
|
91.9
|
%
|
|
$
|
62,941
|
|
|
96.5
|
%
|
|
$
|
82,334
|
|
|
130.8
|
%
|
Gain on sales of loans
|
8,823
|
|
|
5.6
|
|
|
788
|
|
|
1.2
|
|
|
8,035
|
|
|
1,019.7
|
|
|||
Other revenue
|
3,966
|
|
|
2.5
|
|
|
1,520
|
|
|
2.3
|
|
|
2,446
|
|
|
160.9
|
|
|||
Gross revenue
|
158,064
|
|
|
100.0
|
|
|
65,249
|
|
|
100.0
|
|
|
92,815
|
|
|
142.2
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Provision for loan losses
|
67,432
|
|
|
42.7
|
|
|
26,570
|
|
|
40.7
|
|
|
40,862
|
|
|
153.8
|
|
|||
Funding costs
|
17,200
|
|
|
10.9
|
|
|
13,419
|
|
|
20.6
|
|
|
3,781
|
|
|
28.2
|
|
|||
Total cost of revenue
|
84,632
|
|
|
53.5
|
|
|
39,989
|
|
|
61.3
|
|
|
44,643
|
|
|
111.6
|
|
|||
Net revenue
|
73,432
|
|
|
46.5
|
|
|
25,260
|
|
|
38.7
|
|
|
48,172
|
|
|
190.7
|
|
|||
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
33,201
|
|
|
21.0
|
|
|
18,095
|
|
|
27.7
|
|
|
15,106
|
|
|
83.5
|
|
|||
Technology and analytics
|
17,399
|
|
|
11.0
|
|
|
8,760
|
|
|
13.4
|
|
|
8,639
|
|
|
98.6
|
|
|||
Processing and servicing
|
8,230
|
|
|
5.2
|
|
|
5,577
|
|
|
8.5
|
|
|
2,653
|
|
|
47.6
|
|
|||
General and administrative
|
21,680
|
|
|
13.7
|
|
|
12,169
|
|
|
18.7
|
|
|
9,511
|
|
|
78.2
|
|
|||
Total operating expense
|
80,510
|
|
|
50.9
|
|
|
44,601
|
|
|
68.4
|
|
|
35,909
|
|
|
80.5
|
|
|||
Loss from operations
|
(7,078
|
)
|
|
(4.5
|
)
|
|
(19,341
|
)
|
|
(29.6
|
)
|
|
12,263
|
|
|
(63.4
|
)
|
|||
Other expense:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
(398
|
)
|
|
(0.3
|
)
|
|
(1,276
|
)
|
|
(2.0
|
)
|
|
878
|
|
|
(68.8
|
)
|
|||
Warrant liability fair value adjustment
|
(11,232
|
)
|
|
(7.1
|
)
|
|
(3,739
|
)
|
|
(5.7
|
)
|
|
(7,493
|
)
|
|
200.4
|
|
|||
Total other expense
|
(11,630
|
)
|
|
(7.4
|
)%
|
|
(5,015
|
)
|
|
(7.7
|
)%
|
|
(6,615
|
)
|
|
131.9
|
%
|
|||
Loss before provision for income taxes
|
(18,708
|
)
|
|
(11.8
|
)
|
|
(24,356
|
)
|
|
(37.3
|
)
|
|
5,648
|
|
|
(23.2
|
)
|
|||
Provision for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|||
Net loss
|
$
|
(18,708
|
)
|
|
(11.8
|
)%
|
|
$
|
(24,356
|
)
|
|
(37.3
|
)%
|
|
$
|
5,648
|
|
|
(23.2
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|
|
|||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income
|
$
|
145,275
|
|
|
91.9
|
%
|
|
$
|
62,941
|
|
|
96.5
|
%
|
|
$
|
82,334
|
|
|
130.8
|
%
|
Gain on sales of loans
|
8,823
|
|
|
5.6
|
|
|
788
|
|
|
1.2
|
|
|
8,035
|
|
|
1,019.7
|
|
|||
Other revenue
|
3,966
|
|
|
2.5
|
|
|
1,520
|
|
|
2.3
|
|
|
2,446
|
|
|
160.9
|
|
|||
Gross revenue
|
$
|
158,064
|
|
|
100.0
|
%
|
|
$
|
65,249
|
|
|
100.0
|
%
|
|
$
|
92,815
|
|
|
142.2
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Provision for loan losses
|
$
|
67,432
|
|
|
42.7
|
%
|
|
$
|
26,570
|
|
|
40.7
|
%
|
|
$
|
40,862
|
|
|
153.8
|
%
|
Funding costs
|
17,200
|
|
|
10.9
|
|
|
13,419
|
|
|
20.6
|
|
|
3,781
|
|
|
28.2
|
|
|||
Total cost of revenue
|
$
|
84,632
|
|
|
53.5
|
%
|
|
$
|
39,989
|
|
|
61.3
|
%
|
|
$
|
44,643
|
|
|
111.6
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Technology and analytics
|
$
|
17,399
|
|
|
11.0
|
%
|
|
$
|
8,760
|
|
|
13.4
|
%
|
|
$
|
8,639
|
|
|
98.6
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
(dollars in thousands)
|
|
|
|||||||||||||||
Processing and servicing
|
$
|
8,230
|
|
|
5.2
|
%
|
|
$
|
5,577
|
|
|
8.5
|
%
|
|
$
|
2,653
|
|
|
47.6
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Period-to-Period
|
|||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage of
Gross Revenue |
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
(dollars in thousands)
|
|
|
|||||||||||||||
General and administrative
|
$
|
21,680
|
|
|
13.7
|
%
|
|
$
|
12,169
|
|
|
18.7
|
%
|
|
$
|
9,511
|
|
|
78.2
|
%
|
Description
|
Maturity
Date |
|
Weighted
Average Interest Rate |
|
Borrowing
Capacity |
|
Principal
Outstanding |
|||||
|
|
|
|
|
(in millions)
|
|||||||
Funding debt:
|
|
|
|
|
|
|||||||
OnDeck Asset Securitization Trust LLC
|
May 2018
(1)
|
|
3.4
|
%
|
|
$
|
175.0
|
|
|
$
|
175.0
|
|
Prime OnDeck Receivable Trust, LLC
|
June 2017
|
|
2.7
|
%
|
|
100.0
|
|
|
59.4
|
|
||
Receivable Assets of OnDeck, LLC
|
May 2017
|
|
3.3
|
%
|
|
50.0
|
|
(2)
|
47.5
|
|
||
OnDeck Account Receivables Trust 2013-1 LLC
|
September 2017
|
|
2.6
|
%
|
|
150.0
|
|
|
42.1
|
|
||
On Deck Asset Company, LLC
|
May 2017
|
|
8.6
|
%
|
|
50.0
|
|
|
27.7
|
|
||
Small Business Asset Fund 2009 LLC
|
Various
(3)
|
|
6.9
|
%
|
|
12.8
|
|
|
12.8
|
|
||
On Deck Asset Pool, LLC
|
August 2017
(4)
|
|
5.0
|
%
|
|
100.0
|
|
|
8.7
|
|
||
Partner Synthetic Participations
|
Various
(5)
|
|
Various
|
|
6.9
|
|
|
6.9
|
|
|||
Total funding debt
|
|
|
|
|
$
|
644.7
|
|
|
$
|
380.1
|
|
|
Corporate debt:
|
|
|
|
|
|
|
|
|||||
On Deck Capital, Inc.
|
October 2016
|
|
4.5
|
%
|
|
$
|
20.0
|
|
|
$
|
2.7
|
|
(1)
|
The period during which remaining cash flow can be used to purchase additional loans expires April 30, 2016
|
(2)
|
On February 26, 2016 this agreement was amended to increase the borrowing capacity from $50 million to $100 million
|
(3)
|
Maturity dates range from January 2016 through August 2017
|
(4)
|
The period during which new borrowings may be made under this facility expires in August 2016
|
(5)
|
Maturity dates range from January 2016 through October 2017
|
•
|
Eligibility Criteria
. In order for our loans to be eligible for purchase by the applicable subsidiary, they must meet all applicable eligibility criteria.
|
•
|
Concentration Limits
. The subsidiary collateral pools are subject to certain concentration limits that, if exceeded, would require the applicable subsidiary borrower to add additional collateral.
|
•
|
Covenants and Other Requirements
. The subsidiary facilities contain several financial covenants, portfolio performance covenants and other covenants or requirements that, if not complied with, may result in events of default, the accelerated repayment of amounts owed, often referred to as an early amortization event, and/or the termination of the facility.
|
|
As of and for the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
|
|
||||||||
Cash and cash equivalents
|
$
|
159,822
|
|
|
$
|
220,433
|
|
|
$
|
4,670
|
|
Restricted cash
|
$
|
38,463
|
|
|
$
|
29,448
|
|
|
$
|
14,842
|
|
Loans held for investment, net
|
$
|
499,431
|
|
|
$
|
454,303
|
|
|
$
|
203,078
|
|
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
118,947
|
|
|
$
|
103,196
|
|
|
$
|
31,385
|
|
Investing activities
|
$
|
(168,415
|
)
|
|
$
|
(371,570
|
)
|
|
$
|
(176,729
|
)
|
Financing activities
|
$
|
(10,468
|
)
|
|
$
|
484,137
|
|
|
$
|
142,628
|
|
|
Payment Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year |
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years |
||||||||||
|
(in thousands)
|
||||||||||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Funding debt
|
$
|
380,131
|
|
|
$
|
66,365
|
|
|
$
|
313,766
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt
|
2,700
|
|
|
2,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments(1)
|
26,808
|
|
|
15,681
|
|
|
11,127
|
|
|
—
|
|
|
—
|
|
|||||
Capital leases, including interest
|
197
|
|
|
197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
90,526
|
|
|
5,465
|
|
|
24,700
|
|
|
18,179
|
|
|
42,182
|
|
|||||
Purchase obligations
|
7,159
|
|
|
4,564
|
|
|
2,595
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
507,521
|
|
|
$
|
94,972
|
|
|
$
|
352,188
|
|
|
$
|
18,179
|
|
|
$
|
42,182
|
|
(1)
|
Interest payments on our debt facilities with variable interest rates are calculated using the interest rate as of
December 31, 2015
.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Consolidated Financial Statements and Supplementary Data
|
|
Page
|
Index to Consolidated Financial Statements:
|
|
Financial Statement Schedules:
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
159,822
|
|
|
$
|
220,433
|
|
Restricted cash
|
38,463
|
|
|
29,448
|
|
||
Loans held for investment
|
552,742
|
|
|
504,107
|
|
||
Less: Allowance for loan losses
|
(53,311
|
)
|
|
(49,804
|
)
|
||
Loans held for investment, net
|
499,431
|
|
|
454,303
|
|
||
Loans held for sale
|
706
|
|
|
1,523
|
|
||
Deferred debt issuance costs
|
4,227
|
|
|
5,374
|
|
||
Property, equipment and software, net
|
26,187
|
|
|
13,929
|
|
||
Other assets
|
20,416
|
|
|
4,622
|
|
||
Total assets
|
$
|
749,252
|
|
|
$
|
729,632
|
|
Liabilities and equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,701
|
|
|
$
|
4,065
|
|
Interest payable
|
757
|
|
|
819
|
|
||
Funding debt
|
380,112
|
|
|
387,928
|
|
||
Corporate debt
|
2,700
|
|
|
12,000
|
|
||
Accrued expenses and other liabilities
|
33,560
|
|
|
14,215
|
|
||
Total liabilities
|
419,830
|
|
|
419,027
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Stockholders’ equity (deficit):
|
|
|
|
||||
Common stock—$0.005 par value, 1,000,000,000 shares authorized and 73,107,848 and 72,069,768 shares issued and 70,060,208 and 69,031,719 outstanding at December 31, 2015 and 2014, respectively
|
366
|
|
|
360
|
|
||
Treasury stock—at cost
|
(5,843
|
)
|
|
(5,656
|
)
|
||
Additional paid-in capital
|
457,003
|
|
|
442,969
|
|
||
Accumulated deficit
|
(128,341
|
)
|
|
(127,068
|
)
|
||
Accumulated other comprehensive loss
|
(372
|
)
|
|
—
|
|
||
Total On Deck Capital, Inc. stockholders' equity
|
322,813
|
|
|
310,605
|
|
||
Noncontrolling interest
|
6,609
|
|
|
—
|
|
||
Total equity
|
329,422
|
|
|
310,605
|
|
||
Total liabilities and equity
|
$
|
749,252
|
|
|
$
|
729,632
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Interest income
|
$
|
195,048
|
|
|
$
|
145,275
|
|
|
$
|
62,941
|
|
Gain on sales of loans
|
53,354
|
|
|
8,823
|
|
|
788
|
|
|||
Other revenue
|
6,365
|
|
|
3,966
|
|
|
1,520
|
|
|||
Gross revenue
|
254,767
|
|
|
158,064
|
|
|
65,249
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Provision for loan losses
|
74,863
|
|
|
67,432
|
|
|
26,570
|
|
|||
Funding costs
|
20,244
|
|
|
17,200
|
|
|
13,419
|
|
|||
Total cost of revenue
|
95,107
|
|
|
84,632
|
|
|
39,989
|
|
|||
Net revenue
|
159,660
|
|
|
73,432
|
|
|
25,260
|
|
|||
Operating expense:
|
|
|
|
|
|
||||||
Sales and marketing
|
60,575
|
|
|
33,201
|
|
|
18,095
|
|
|||
Technology and analytics
|
42,653
|
|
|
17,399
|
|
|
8,760
|
|
|||
Processing and servicing
|
13,053
|
|
|
8,230
|
|
|
5,577
|
|
|||
General and administrative
|
45,304
|
|
|
21,680
|
|
|
12,169
|
|
|||
Total operating expense
|
161,585
|
|
|
80,510
|
|
|
44,601
|
|
|||
Loss from operations
|
(1,925
|
)
|
|
(7,078
|
)
|
|
(19,341
|
)
|
|||
Other expense:
|
|
|
|
|
|
||||||
Interest expense
|
(306
|
)
|
|
(398
|
)
|
|
(1,276
|
)
|
|||
Warrant liability fair value adjustment
|
—
|
|
|
(11,232
|
)
|
|
(3,739
|
)
|
|||
Total other expense
|
(306
|
)
|
|
(11,630
|
)
|
|
(5,015
|
)
|
|||
Loss before provision for income taxes
|
(2,231
|
)
|
|
(18,708
|
)
|
|
(24,356
|
)
|
|||
Provision for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss
|
(2,231
|
)
|
|
(18,708
|
)
|
|
(24,356
|
)
|
|||
Series A and Series B preferred stock redemptions
|
—
|
|
|
—
|
|
|
(5,254
|
)
|
|||
Accretion of dividends on redeemable convertible preferred stock
|
—
|
|
|
(12,884
|
)
|
|
(7,470
|
)
|
|||
Net loss attributable to noncontrolling interest
|
958
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to On Deck Capital, Inc. common stockholders
|
$
|
(1,273
|
)
|
|
$
|
(31,592
|
)
|
|
$
|
(37,080
|
)
|
Net loss per share attributable to On Deck Capital, Inc. common shareholders:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(8.64
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
69,545,238
|
|
|
52,556,998
|
|
|
4,292,026
|
|
|||
Comprehensive loss:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,231
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(678
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive loss
|
(2,909
|
)
|
|
(18,708
|
)
|
|
(24,356
|
)
|
|||
Comprehensive loss attributable to noncontrolling interests
|
306
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to noncontrolling interest
|
958
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive loss attributable to On Deck Capital, Inc. common stockholders
|
$
|
(1,645
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
|
On Deck Capital, Inc.'s stockholders' equity
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Treasury
Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
|
Noncontrolling interest
|
|
Total
Equity
(Deficit)
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||
Balance—January 1, 2013
|
4,765,504
|
|
|
$
|
31
|
|
|
$
|
739
|
|
|
$
|
(57,446
|
)
|
|
$
|
(483
|
)
|
|
$
|
—
|
|
|
$
|
(57,159
|
)
|
|
$
|
—
|
|
|
$
|
(57,159
|
)
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
448
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
448
|
|
|
—
|
|
|
448
|
|
||||||||
Redemption of preferred stock—Series A and B
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,254
|
)
|
|
—
|
|
|
—
|
|
|
(5,254
|
)
|
|
—
|
|
|
(5,254
|
)
|
||||||||
Issuance of common stock warrant
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
45
|
|
||||||||
Redemption of warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
(950
|
)
|
|
—
|
|
|
—
|
|
|
(950
|
)
|
|
—
|
|
|
(950
|
)
|
||||||||
Exercise of stock options
|
1,227,206
|
|
|
7
|
|
|
382
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
389
|
|
|
|
|
389
|
|
|||||||||
Redemption of common stock
|
(1,525,096
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,173
|
)
|
|
—
|
|
|
(5,173
|
)
|
|
—
|
|
|
(5,173
|
)
|
||||||||
Accretion of dividends on redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,470
|
)
|
|
—
|
|
|
—
|
|
|
(7,470
|
)
|
|
—
|
|
|
(7,470
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,356
|
)
|
|
—
|
|
|
—
|
|
|
(24,356
|
)
|
|
—
|
|
|
(24,356
|
)
|
||||||||
Balance—December 31, 2013
|
4,467,614
|
|
|
$
|
38
|
|
|
$
|
1,614
|
|
|
$
|
(95,476
|
)
|
|
$
|
(5,656
|
)
|
|
$
|
—
|
|
|
$
|
(99,480
|
)
|
|
$
|
—
|
|
|
$
|
(99,480
|
)
|
Issuance of common stock in connection with IPO, net of underwriting discounts
|
11,500,000
|
|
|
57
|
|
|
209,933
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209,990
|
|
|
—
|
|
|
209,990
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,095
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,095
|
|
|
—
|
|
|
3,095
|
|
||||||||
Conversion of preferred stock warrants to common stock warrants upon IPO
|
—
|
|
|
—
|
|
|
4,912
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,912
|
|
|
—
|
|
|
4,912
|
|
||||||||
Conversion of preferred stock to common stock
|
47,457,356
|
|
|
237
|
|
|
221,267
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221,504
|
|
|
—
|
|
|
221,504
|
|
||||||||
Vesting of restricted stock units
|
11,667
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
|
6
|
|
|||||||||
Issuance of common stock warrant
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||||||
Exercise of stock options and warrants
|
5,596,181
|
|
|
28
|
|
|
2,078
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,106
|
|
|
—
|
|
|
2,106
|
|
||||||||
Accretion of dividends on redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,884
|
)
|
|
—
|
|
|
—
|
|
|
(12,884
|
)
|
|
—
|
|
|
(12,884
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,708
|
)
|
|
—
|
|
|
—
|
|
|
(18,708
|
)
|
|
—
|
|
|
(18,708
|
)
|
||||||||
Balance—December 31, 2014
|
69,032,818
|
|
|
$
|
360
|
|
|
$
|
442,969
|
|
|
$
|
(127,068
|
)
|
|
$
|
(5,656
|
)
|
|
$
|
—
|
|
|
$
|
310,605
|
|
|
$
|
—
|
|
|
$
|
310,605
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
10,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,750
|
|
|
—
|
|
|
10,750
|
|
||||||||
Investments by noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,873
|
|
|
7,873
|
|
||||||||
Vesting of restricted stock units
|
88,124
|
|
|
1
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||||||
Exercise of stock options
|
747,224
|
|
|
4
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
214
|
|
||||||||
Employee stock purchase plan
|
202,732
|
|
|
1
|
|
|
3,243
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,244
|
|
|
—
|
|
|
3,244
|
|
Repurchases of common stock
|
(10,690
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
(187
|
)
|
||||||||
Other comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(372
|
)
|
|
(372
|
)
|
|
(306
|
)
|
|
(678
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
(209
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,273
|
)
|
|
—
|
|
|
—
|
|
|
(1,273
|
)
|
|
(958
|
)
|
|
(2,231
|
)
|
||||||||
Balance—December 31, 2015
|
70,060,208
|
|
|
$
|
366
|
|
|
$
|
457,003
|
|
|
$
|
(128,341
|
)
|
|
$
|
(5,843
|
)
|
|
$
|
(372
|
)
|
|
$
|
322,813
|
|
|
$
|
6,609
|
|
|
$
|
329,422
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(2,231
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for loan losses
|
74,863
|
|
|
67,432
|
|
|
26,570
|
|
|||
Depreciation and amortization
|
6,508
|
|
|
4,071
|
|
|
2,645
|
|
|||
Amortization of debt issuance costs
|
2,837
|
|
|
2,676
|
|
|
2,184
|
|
|||
Stock-based compensation
|
11,582
|
|
|
2,842
|
|
|
438
|
|
|||
Loss on disposal
|
—
|
|
|
516
|
|
|
—
|
|
|||
Debt discount
|
—
|
|
|
—
|
|
|
959
|
|
|||
Preferred stock warrant issuance and warrant liability fair value adjustment
|
—
|
|
|
11,232
|
|
|
3,739
|
|
|||
Amortization of net deferred origination costs
|
32,939
|
|
|
27,267
|
|
|
17,322
|
|
|||
Changes in servicing rights, at fair value
|
1,270
|
|
|
—
|
|
|
—
|
|
|||
Gain on sales of loans
|
(53,354
|
)
|
|
(8,823
|
)
|
|
(788
|
)
|
|||
Unfunded loan commitment reserve
|
2,922
|
|
|
1,253
|
|
|
—
|
|
|||
Common stock warrant issuance
|
—
|
|
|
64
|
|
|
45
|
|
|||
Gain on extinguishment of debt
|
(421
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Other assets
|
(12,269
|
)
|
|
(2,681
|
)
|
|
(143
|
)
|
|||
Accounts payable
|
236
|
|
|
1,599
|
|
|
(570
|
)
|
|||
Interest payable
|
(62
|
)
|
|
(301
|
)
|
|
(53
|
)
|
|||
Accrued expenses and other liabilities
|
16,034
|
|
|
6,034
|
|
|
4,028
|
|
|||
Originations of loans held for sale
|
(445,968
|
)
|
|
(140,578
|
)
|
|
(18,835
|
)
|
|||
Payments of net deferred origination costs of loans held for sale
|
(17,601
|
)
|
|
(6,116
|
)
|
|
(1,310
|
)
|
|||
Proceeds from sale of loans held for sale
|
489,364
|
|
|
154,070
|
|
|
19,510
|
|
|||
Principal repayments of loans held for sale
|
12,298
|
|
|
1,347
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
118,947
|
|
|
103,196
|
|
|
31,385
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Change in restricted cash
|
(9,015
|
)
|
|
(14,606
|
)
|
|
(5,647
|
)
|
|||
Purchases of property, equipment and software
|
(13,692
|
)
|
|
(7,576
|
)
|
|
(3,705
|
)
|
|||
Capitalized internal-use software
|
(4,197
|
)
|
|
(3,467
|
)
|
|
(2,093
|
)
|
|||
Originations of term loans and lines of credit, excluding rollovers into new originations
|
(1,162,537
|
)
|
|
(858,297
|
)
|
|
(380,357
|
)
|
|||
Proceeds from sale of loans held for investment
|
177,014
|
|
|
—
|
|
|
—
|
|
|||
Payments of net deferred origination costs
|
(28,353
|
)
|
|
(34,253
|
)
|
|
(23,180
|
)
|
|||
Principal repayments of term loans and lines of credit
|
872,551
|
|
|
546,629
|
|
|
238,253
|
|
|||
Other
|
(186
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(168,415
|
)
|
|
(371,570
|
)
|
|
(176,729
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Investments by noncontrolling interests
|
7,873
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options and warrants
|
251
|
|
|
4,625
|
|
|
389
|
|
|||
Proceeds from public offering, net of underwriting discount
|
—
|
|
|
213,843
|
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Payments of initial public offering costs
|
(1,845
|
)
|
|
(2,239
|
)
|
|
—
|
|
|||
Redemption of common stock and warrants
|
(187
|
)
|
|
—
|
|
|
(6,123
|
)
|
|||
Issuance of common stock under employee stock purchase plan
|
1,825
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from the issuance of redeemable convertible preferred stock
|
—
|
|
|
77,000
|
|
|
49,717
|
|
|||
Redemption of preferred stock
|
—
|
|
|
—
|
|
|
(6,282
|
)
|
|||
Proceeds from the issuance of funding debt
|
212,562
|
|
|
472,242
|
|
|
201,860
|
|
|||
Proceeds from the issuance of corporate debt
|
2,700
|
|
|
9,000
|
|
|
15,000
|
|
|||
Payments of debt issuance costs
|
(1,690
|
)
|
|
(5,723
|
)
|
|
(2,071
|
)
|
|||
Repayments of funding debt principal
|
(219,957
|
)
|
|
(272,611
|
)
|
|
(109,862
|
)
|
|||
Repayments of corporate debt principal
|
(12,000
|
)
|
|
(12,000
|
)
|
|
—
|
|
|||
Net cash provided by financing activities
|
(10,468
|
)
|
|
484,137
|
|
|
142,628
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(675
|
)
|
|
—
|
|
|
—
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(60,611
|
)
|
|
215,763
|
|
|
(2,716
|
)
|
|||
Cash and cash equivalents at beginning of year
|
220,433
|
|
|
4,670
|
|
|
7,386
|
|
|||
Cash and cash equivalents at end of year
|
$
|
159,822
|
|
|
$
|
220,433
|
|
|
$
|
4,670
|
|
Supplemental disclosure of other cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
15,394
|
|
|
$
|
14,968
|
|
|
$
|
10,616
|
|
Supplemental disclosures of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Loans transferred from loans held for sale to loans held for investment
|
$
|
1,348
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Conversion of redeemable convertible preferred stock to common stock
|
$
|
—
|
|
|
$
|
221,504
|
|
|
$
|
—
|
|
Unpaid offering expenses charged to equity
|
$
|
—
|
|
|
$
|
1,670
|
|
|
$
|
—
|
|
Stock-based compensation included in capitalized internal-use software
|
$
|
877
|
|
|
$
|
253
|
|
|
$
|
10
|
|
Unpaid principal balance of term loans rolled into new originations
|
$
|
265,933
|
|
|
$
|
158,876
|
|
|
$
|
59,623
|
|
Conversion of debt to redeemable convertible preferred stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,959
|
|
Accretion of dividends on redeemable convertible preferred stock
|
$
|
—
|
|
|
$
|
12,884
|
|
|
$
|
7,470
|
|
•
|
Adequate compensation: We estimate adequate compensation as the rate a willing market participant would require to service loans with similar characteristics as those in the serviced portfolio. In the event of a lack of transparency and
|
•
|
Discount rate: For servicing rights on loans, the discount rate reflects the time value of money and a risk premium intended to reflect the amount of compensation market participants would require.
|
•
|
Renewal rate: We estimate the timing and probability that a borrower may renew their loan in advance of scheduled repayment, thus reducing the projected unpaid principal balance and expected term of the loan, which are used to project future servicing revenues.
|
•
|
Default rate: We estimate the timing and probability of loan defaults and write-offs, thus reducing the projected unpaid principal balance and expected term of the loan, which are used to project future servicing revenues.
|
1.
|
The financial assets are isolated from the transferor and its consolidated affiliates as well as its creditors.
|
2.
|
The transferee or beneficial interest holders have the right to pledge or exchange the transferred financial assets.
|
3.
|
The transferor does not maintain effective control of the transferred assets.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,231
|
)
|
|
$
|
(18,708
|
)
|
|
$
|
(24,356
|
)
|
Less: Series A and B preferred stock redemptions
|
—
|
|
|
—
|
|
|
(5,254
|
)
|
|||
Less: Accretion of dividends on the redeemable convertible preferred stock
|
—
|
|
|
(12,884
|
)
|
|
(7,470
|
)
|
|||
Less: net loss attributable to noncontrolling interest
|
958
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to On Deck Capital, Inc. common stockholders
|
$
|
(1,273
|
)
|
|
$
|
(31,592
|
)
|
|
$
|
(37,080
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding, basic and diluted
|
69,545,238
|
|
|
52,556,998
|
|
|
4,292,026
|
|
|||
Net loss per common share, basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(8.64
|
)
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Anti-Dilutive Common Share Equivalents
|
|
|
|
|
|
|||
Redeemable convertible preferred stock:
|
|
|
|
|
|
|||
Series A
|
—
|
|
|
—
|
|
|
4,438,662
|
|
Series B
|
—
|
|
|
—
|
|
|
10,755,262
|
|
Series C
|
—
|
|
|
—
|
|
|
9,735,538
|
|
Series C-1
|
—
|
|
|
—
|
|
|
1,701,112
|
|
Series D
|
—
|
|
|
—
|
|
|
14,467,756
|
|
Series E
|
—
|
|
|
—
|
|
|
—
|
|
Warrants to purchase redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
1,393,768
|
|
Warrants to purchase common stock
|
309,792
|
|
|
309,792
|
|
|
4,057,066
|
|
Restricted stock units
|
1,853,452
|
|
|
88,418
|
|
|
—
|
|
Stock options
|
10,711,321
|
|
|
10,371,469
|
|
|
7,814,970
|
|
Total anti-dilutive common share equivalents
|
12,874,565
|
|
|
10,769,679
|
|
|
54,364,134
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Interest on unpaid principal balance
|
$
|
227,579
|
|
|
$
|
172,472
|
|
|
$
|
51,699
|
|
Interest on deposits
|
408
|
|
|
70
|
|
|
7
|
|
|||
Amortization of net deferred origination costs
|
(32,939
|
)
|
|
(27,267
|
)
|
|
11,235
|
|
|||
Total interest income
|
$
|
195,048
|
|
|
$
|
145,275
|
|
|
$
|
62,941
|
|
|
2015
|
|
2014
|
||||
Term loans
|
$
|
482,596
|
|
|
$
|
466,386
|
|
Lines of credit
|
61,194
|
|
|
24,177
|
|
||
Total unpaid principal balance
|
543,790
|
|
|
490,563
|
|
||
Net deferred origination costs
|
8,952
|
|
|
13,544
|
|
||
Total loans held for investment
|
$
|
552,742
|
|
|
$
|
504,107
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at January 1
|
$
|
49,804
|
|
|
$
|
19,443
|
|
|
$
|
9,288
|
|
Provision for loan losses
|
74,863
|
|
|
67,432
|
|
|
26,570
|
|
|||
Loans charged off
|
(78,485
|
)
|
|
(39,638
|
)
|
|
(17,651
|
)
|
|||
Recoveries of loans previously charged off
|
7,129
|
|
|
2,567
|
|
|
1,236
|
|
|||
Allowance for loan losses at December 31
|
$
|
53,311
|
|
|
$
|
49,804
|
|
|
$
|
19,443
|
|
|
2015
|
|
2014
|
||||
Non-delinquent loans
|
$
|
486,729
|
|
|
$
|
430,689
|
|
Delinquent: paying (accrual status)
|
28,192
|
|
|
40,049
|
|
||
Delinquent: non-paying (non-accrual status)
|
28,869
|
|
|
19,825
|
|
||
Total
|
$
|
543,790
|
|
|
$
|
490,563
|
|
|
2015
|
|
2014
|
||||
By delinquency status:
|
|
|
|
||||
Non-delinquent loans
|
$
|
486,729
|
|
|
$
|
430,689
|
|
1-14 calendar days past due
|
21,360
|
|
|
23,954
|
|
||
15-29 calendar days past due
|
8,703
|
|
|
9,462
|
|
||
30-59 calendar days past due
|
10,347
|
|
|
10,707
|
|
||
60-89 calendar days past due
|
7,443
|
|
|
7,724
|
|
||
90 + calendar days past due
|
9,208
|
|
|
8,027
|
|
||
Total unpaid principal balance
|
$
|
543,790
|
|
|
$
|
490,563
|
|
|
2015
|
|
2014
|
||||
Loans held for sale
|
$
|
696
|
|
|
$
|
1,483
|
|
Net deferred origination costs
|
10
|
|
|
40
|
|
||
Loans held for sale, net
|
$
|
706
|
|
|
$
|
1,523
|
|
|
|
2015
|
||
Fair value at the beginning of period
|
|
$
|
—
|
|
Addition:
|
|
|
||
Servicing resulting from transfers of financial assets
|
|
3,708
|
|
|
Changes in fair value:
|
|
|
||
Change in inputs or assumptions used in the valuation model
|
|
1,051
|
|
|
Other changes in fair value
(1)
|
|
(1,270
|
)
|
|
Fair value at the end of period (Level 3)
|
|
$
|
3,489
|
|
|
Estimated
Useful Life
|
|
2015
|
|
2014
|
||||
Computer/office equipment
|
12 – 36 months
|
|
$
|
11,866
|
|
|
$
|
7,249
|
|
Capitalized internal-use software
|
36 months
|
|
15,674
|
|
|
10,599
|
|
||
Leasehold improvements
|
Life of lease
|
|
15,417
|
|
|
6,343
|
|
||
Total property, equipment and software, at cost
|
|
|
42,957
|
|
|
24,191
|
|
||
Less accumulated depreciation and amortization
|
|
|
(16,770
|
)
|
|
(10,262
|
)
|
||
Property, equipment and software, net
|
|
|
$
|
26,187
|
|
|
$
|
13,929
|
|
Description
|
Type
|
|
Maturity Date
|
|
Weighted Average Interest
Rate at December 31, 2015 |
|
December 31, 2015
|
|
December 31, 2014
|
||||
Funding Debt:
|
|
|
|
|
|
|
|
||||||
ODAST Agreement
|
Securitization Facility
|
|
May 2018
(1)
|
|
3.4%
|
|
$
|
174,980
|
|
|
$
|
174,972
|
|
PORT Agreement
|
Revolving
|
|
June 2017
|
|
2.7%
|
|
59,415
|
|
|
—
|
|
||
RAOD Agreement
|
Revolving
|
|
May 2017
|
|
3.3%
|
|
47,465
|
|
|
—
|
|
||
ODART Agreement
|
Revolving
|
|
September 2017
|
|
2.6%
|
|
42,090
|
|
|
105,598
|
|
||
ODAC Agreement
|
Revolving
|
|
May 2017
|
|
8.6%
|
|
27,699
|
|
|
32,733
|
|
||
SBAF Agreement
|
Revolving
|
|
Various
(2)
|
|
6.9%
|
|
12,783
|
|
|
16,740
|
|
||
ODAP Agreement
|
Revolving
|
|
August 2017
(3)
|
|
5.0%
|
|
8,819
|
|
|
56,686
|
|
||
Partner Synthetic Participations
|
Term
|
|
Various
(4)
|
|
Various
|
|
6,861
|
|
|
1,199
|
|
||
|
|
|
|
|
|
|
380,112
|
|
|
387,928
|
|
||
Corporate Debt:
|
|
|
|
|
|
|
|
|
|
||||
Square 1 Agreement
|
Revolving
|
|
October 2016
|
|
4.5%
|
|
2,700
|
|
|
12,000
|
|
||
|
|
|
|
|
|
|
$
|
382,812
|
|
|
$
|
399,928
|
|
(1)
|
The period during which remaining cash flow can be used to purchase additional loans expires April 30, 2016
|
(2)
|
Maturity dates range from January 2016 through August 2017
|
(3)
|
The period during which new borrowings may be made under this facility expires in August 2016
|
(4)
|
Maturity dates range from January 2016 through October 2017
|
•
|
the increase of the total facility size from
$111.8 million
to
$167.6 million
. with the Class A commitments increased from
$100 million
to
$150 million
and the Class B commitments increased from
$11.8 million
to
$17.6 million
;
|
•
|
the extension of the commitment termination date of the ODART Agreement by approximately one year to September 15, 2017;
|
•
|
the extension of the date on or prior to which early termination fees may be payable in the event of a termination or other permanent reduction of the revolving commitments by approximately one year to May 15, 2017, and the ability to make certain partial commitment terminations without early termination fees;
|
•
|
the termination of the Class B revolving lending commitment, the effect of which is to reduce the total facility capacity to
$150 million
; the termination was made at ODART's request and consented to by the Class B Revolving Lender. The ODART Second A&R Credit Agreement also contemplates the reintroduction, at ODART's election and administrative agent's consent, of one or more Class B Revolving Lending resulting in Class B commitments up to
$17.6 million
, thereby potentially restoring the facility size to up to
$167.6 million
. The borrowing base advance rate for reintroduced Class B revolving loans is
95%
and the interest rate will be LIBOR plus
7.00%
.
|
2016
|
$
|
69,046
|
|
2017
|
277,308
|
|
|
2018
|
36,458
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
382,812
|
|
|
|
Series A
|
|
Series B
|
|
Series C
|
|
Series C-1
|
|
Series D
|
|
Series E
|
|
Total
Amount
|
||||||||||||||
Balance, January 1, 2013
|
|
3,250
|
|
|
21,838
|
|
|
23,113
|
|
|
5,025
|
|
|
—
|
|
|
—
|
|
|
53,226
|
|
|||||||
Redemption of preferred stock
(1)
|
|
(835
|
)
|
|
(193
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,028
|
)
|
|||||||
Issuance of preferred stock
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,675
|
|
|
—
|
|
|
58,675
|
|
|||||||
Accretion of dividends on preferred stock
|
|
144
|
|
|
1,273
|
|
|
1,636
|
|
|
376
|
|
|
4,041
|
|
|
—
|
|
|
7,470
|
|
|||||||
Balance, December 31, 2013
|
|
$
|
2,559
|
|
|
$
|
22,918
|
|
|
$
|
24,749
|
|
|
$
|
5,401
|
|
|
$
|
62,716
|
|
|
$
|
—
|
|
|
$
|
118,343
|
|
Issuance of preferred stock
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,985
|
|
|
76,985
|
|
|||||||
Exercise of preferred stock warrants
|
|
—
|
|
|
5,982
|
|
|
—
|
|
|
7,225
|
|
|
—
|
|
|
85
|
|
|
13,292
|
|
|||||||
Accretion of dividends on preferred stock
|
|
124
|
|
|
1,240
|
|
|
1,570
|
|
|
413
|
|
|
4,619
|
|
|
4,918
|
|
|
12,884
|
|
|||||||
Conversion of preferred stock to common stock in connection with initial public offering
|
|
(2,683
|
)
|
|
(30,140
|
)
|
|
(26,319
|
)
|
|
(13,039
|
)
|
|
(67,335
|
)
|
|
(81,988
|
)
|
|
(221,504
|
)
|
|||||||
Balance, December 31, 2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
During 2013, we redeemed
1,514,698
shares of Series A and
91,460
shares of Series B stock held by investors. The differential between the redemption price and the carrying value of the shares of
$5.3 million
was charged to accumulated deficit in accordance with accounting for distinguishing liabilities from equity.
|
(2)
|
Includes the conversion of a convertible note.
|
|
2015
|
|
2014
|
||||
Deferred tax assets relating to:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
19,183
|
|
|
$
|
12,271
|
|
Loan loss reserve
|
20,231
|
|
|
18,989
|
|
||
Imputed interest income
|
729
|
|
|
444
|
|
||
Loss on sublease
|
(20
|
)
|
|
145
|
|
||
Deferred rent
|
1,613
|
|
|
664
|
|
||
Miscellaneous items
|
5
|
|
|
4
|
|
||
Total gross deferred tax assets
|
41,741
|
|
|
32,517
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Internally developed software
|
1,756
|
|
|
1,049
|
|
||
Property, equipment and software
|
4,613
|
|
|
214
|
|
||
Origination costs
|
3,394
|
|
|
5,164
|
|
||
Total gross deferred tax liabilities
|
9,763
|
|
|
6,427
|
|
||
Deferred assets less liabilities
|
31,978
|
|
|
26,090
|
|
||
Less: valuation allowance
|
(31,978
|
)
|
|
(26,090
|
)
|
||
Net deferred tax asset
|
$
|
—
|
|
|
$
|
—
|
|
|
2015
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
:
|
|
|
|
|
|
|
|
||||||||
Servicing assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,489
|
|
|
$
|
3,489
|
|
Total assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,489
|
|
|
$
|
3,489
|
|
|
Servicing Assets
|
||
Default rate assumption:
|
|
||
Default rate increase of 25%
|
$
|
(145
|
)
|
Default rate increase of 50%
|
$
|
(282
|
)
|
Cost to service assumption:
|
|
||
Cost to service increase by 25%
|
$
|
(79
|
)
|
Cost to service increase by 50%
|
$
|
(159
|
)
|
|
2014
|
||
Warrant liability balance at January 1
|
$
|
4,446
|
|
Exercise of warrants
|
(10,766
|
)
|
|
Change in fair value
|
11,232
|
|
|
Conversion of preferred stock warrants to common stock warrants upon IPO
|
(4,912
|
)
|
|
Warrant liability balance at December 31
|
$
|
—
|
|
|
December 31, 2015
|
||||||||||||||||||
Description
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for investment
|
$
|
499,431
|
|
|
$
|
545,740
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
545,740
|
|
Loans held for sale
|
706
|
|
|
763
|
|
|
—
|
|
|
—
|
|
|
763
|
|
|||||
Total assets
|
$
|
500,137
|
|
|
$
|
546,503
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
546,503
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Description
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-rate debt
|
$
|
194,624
|
|
|
$
|
190,411
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
190,411
|
|
Total fixed-rate debt
|
$
|
194,624
|
|
|
$
|
190,411
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
190,411
|
|
•
|
7,200,000
shares of our common stock;
|
•
|
4%
of the outstanding shares of our common stock as of the last day of our immediately preceding fiscal year, which is referred to as the threshold percentage;
|
•
|
a percentage equal to the threshold percentage, plus the difference between the threshold percentage and the percentage added to the 2014 Plan for each prior fiscal year; or
|
•
|
such other amount as our board of directors may determine.
|
•
|
1%
of the outstanding shares of our common stock on the first day of such fiscal year;
|
•
|
1,800,000
shares of our common stock; or
|
•
|
such other amount as may be determined by our board of directors.
|
|
2015
|
|
2014
|
|
2013
|
Risk-free interest rate
|
1.65-2.13%
|
|
1.02-2.08%
|
|
0.88-2.29%
|
Expected term (years)
|
5.5 - 6.0
|
|
3.2 - 6.1
|
|
5.8 - 8.5
|
Expected volatility
|
41 - 47%
|
|
35 - 59%
|
|
54 - 60%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Weighted-average grant date fair value per share
|
$5.70
|
|
$5.57
|
|
$0.65
|
|
Number of
Options |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term (in years) |
|
Aggregate
Intrinsic Value (in thousands) |
||||||
Outstanding at January 1, 2015
|
10,371,469
|
|
|
$
|
4.59
|
|
|
—
|
|
|
—
|
|
|
Granted
|
1,611,617
|
|
|
$
|
13.84
|
|
|
—
|
|
|
—
|
|
|
Exercised
|
(804,857
|
)
|
|
$
|
1.24
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
(430,878
|
)
|
|
$
|
7.42
|
|
|
—
|
|
|
—
|
|
|
Expired
|
(36,030
|
)
|
|
$
|
6.19
|
|
|
—
|
|
|
—
|
|
|
Outstanding at December 31, 2015
|
10,711,321
|
|
|
$
|
6.16
|
|
|
7.8
|
|
|
$
|
53,012
|
|
Exerciseable at December 31, 2015
|
5,146,604
|
|
|
$
|
3.18
|
|
|
7.1
|
|
|
$
|
37,857
|
|
Vested or expected to vest as of December 31, 2015
|
10,393,562
|
|
|
$
|
6.00
|
|
|
7.8
|
|
|
$
|
52,643
|
|
|
Number of RSUs
|
|
Weighted-Average Grant Date Fair Value
|
|||
Unvested at December 31, 2014
|
—
|
|
|
—
|
|
|
RSUs granted
|
1,939,462
|
|
|
$
|
12.99
|
|
RSUs vested
|
—
|
|
|
—
|
|
|
RSUs forfeited/expired
|
(86,010
|
)
|
|
$
|
16.06
|
|
Unvested at December 31, 2015
|
1,853,452
|
|
|
$
|
12.85
|
|
Expected to vest after December 31, 2015
|
1,384,650
|
|
|
$
|
12.98
|
|
|
2015
|
|
2014
|
||||
Sales and marketing
|
$
|
3,081
|
|
|
$
|
686
|
|
Technology and analytics
|
2,351
|
|
|
539
|
|
||
Processing and servicing
|
775
|
|
|
219
|
|
||
General and administrative
|
5,375
|
|
|
1,398
|
|
||
Total
|
$
|
11,582
|
|
|
$
|
2,842
|
|
|
December 31, 2015
|
|
September 30, 2015
|
|
June 30, 2015
|
|
March 31, 2015
|
|
December 31, 2014
|
|
September 30, 2014
|
|
June 30, 2014
|
|
March 31, 2014
|
||||||||
Gross revenues
|
67,599
|
|
|
67,398
|
|
|
63,312
|
|
|
56,458
|
|
|
50,491
|
|
|
43,509
|
|
|
35,502
|
|
|
28,562
|
|
Net revenue
|
42,299
|
|
|
46,033
|
|
|
43,015
|
|
|
28,312
|
|
|
25,401
|
|
|
22,060
|
|
|
18,628
|
|
|
7,343
|
|
Net income (loss)
|
(5,144
|
)
|
|
3,507
|
|
|
4,748
|
|
|
(5,342
|
)
|
|
(4,291
|
)
|
|
354
|
|
|
(1,054
|
)
|
|
(13,717
|
)
|
Net loss attributable to common stockholders
|
(4,644
|
)
|
|
3,733
|
|
|
4,980
|
|
|
(5,342
|
)
|
|
(7,348
|
)
|
|
(3,273
|
)
|
|
(4,650
|
)
|
|
(16,321
|
)
|
Basic
|
(0.07
|
)
|
|
0.05
|
|
|
0.07
|
|
|
(0.08
|
)
|
|
(0.13
|
)
|
|
(0.51
|
)
|
|
(0.88
|
)
|
|
(3.47
|
)
|
Diluted
|
(0.07
|
)
|
|
0.05
|
|
|
0.07
|
|
|
(0.08
|
)
|
|
(0.13
|
)
|
|
(0.51
|
)
|
|
(0.88
|
)
|
|
(3.47
|
)
|
Description
|
Balance at
Beginning
of Period
|
|
Charged
to Cost
and
Expenses
|
|
Charged
to Other
Accounts
|
|
Deductions—
Write offs
|
|
Balance
at End of
Period
|
|||||
|
(in thousands)
|
|||||||||||||
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
|||||
2015
|
49,804
|
|
|
74,863
|
|
|
7,129
|
|
|
(78,485
|
)
|
|
53,311
|
|
2014
|
19,443
|
|
|
67,432
|
|
|
2,567
|
|
|
(39,638
|
)
|
|
49,804
|
|
2013
|
9,288
|
|
|
26,570
|
|
|
1,236
|
|
|
(17,651
|
)
|
|
19,443
|
|
Deferred tax asset valuation allowance:
|
|
|
|
|
|
|
|
|
|
|||||
2015
|
26,090
|
|
|
(2,514
|
)
|
|
8,402
|
|
|
—
|
|
|
31,978
|
|
2014
|
26,199
|
|
|
(5,826
|
)
|
|
5,717
|
|
|
—
|
|
|
26,090
|
|
2013
|
17,266
|
|
|
—
|
|
|
8,933
|
|
|
—
|
|
|
26,199
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
On Deck Capital, Inc.
|
|
|
|
/s/ Howard Katzenberg
|
|
Howard Katzenberg
Chief Financial Officer
(Principal Financial Officer)
|
Date: March 3, 2016
|
|
|
|
|
/s/ Nicholas Sinigaglia
|
|
Nicholas Sinigaglia
Senior Vice President ( Principal Accounting Officer ) |
Date: March 3, 2016
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Noah Breslow
|
|
Chief Executive Officer and
Director (Principal Executive
Officer)
|
|
March 3, 2016
|
Noah Breslow
|
|
|
|
|
|
|
|
|
|
/s/ Howard Katzenberg
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
March 3, 2016
|
Howard Katzenberg
|
|
|
|
|
|
|
|
|
|
/s/ Nicholas Sinigaglia
|
|
Senior Vice President
(Principal Accounting Officer)
|
|
March 3, 2016
|
Nicholas Sinigaglia
|
|
|
|
|
|
|
|
|
|
/s/ David Hartwig
|
|
Director
|
|
March 3, 2016
|
David Hartwig
|
|
|
|
|
|
|
|
|
|
/s/ J. Sanford Miller
|
|
Director
|
|
March 3, 2016
|
J. Sanford Miller
|
|
|
|
|
|
|
|
|
|
/s/ Bruce P. Nolop
|
|
Director
|
|
March 3, 2016
|
Bruce P. Nolop
|
|
|
|
|
|
|
|
|
|
/s/ James D. Robinson
|
|
Director
|
|
March 3, 2016
|
James D. Robinson III
|
|
|
|
|
|
|
|
|
|
/s/ Jane J. Thompson
|
|
Director
|
|
March 3, 2016
|
Jane J. Thompson
|
|
|
|
|
|
|
|
|
|
/s/ Ronald F. Verni
|
|
Director
|
|
March 3, 2016
|
Ronald F. Verni
|
|
|
|
|
|
|
|
|
|
/s/ Neil E. Wolfson
|
|
Director
|
|
March 3, 2016
|
Neil E. Wolfson
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Filed / Furnished /
Incorporated by
Reference from
Form *
|
|
Incorporated
by Reference
from Exhibit
Number
|
|
Date Filed
|
3.1
|
|
Amended and Restated Certificate of Incorporation
|
|
8-K
|
|
3.1
|
|
12/22/2014
|
3.2
|
|
Second Amended and Restated Bylaws
|
|
8-K
|
|
3.1
|
|
5/1/2015
|
4.1
|
|
Form of common stock certificate.
|
|
S-1
|
|
4.1
|
|
11/10/2014
|
4.2
|
|
Ninth Amended and Restated Investors’ Rights Agreement, dated March 13, 2014, by and among the Registrant and certain of its stockholders.
|
|
S-1
|
|
4.2
|
|
11/10/2014
|
4.3
|
|
Form of warrant to purchase Series E preferred stock.
|
|
S-1
|
|
4.5
|
|
11/10/2014
|
4.4
|
|
Form of warrant to purchase common stock.
|
|
S-1
|
|
4.6
|
|
11/10/2014
|
10.1+
|
|
Form of Indemnification Agreement between the Registrant and each of its directors and executive officers.
|
|
S-1
|
|
10.1
|
|
11/10/2014
|
10.2+
|
|
Amended and Restated 2007 Stock Incentive Plan and forms of agreements thereunder.
|
|
S-1
|
|
10.2
|
|
11/10/2014
|
10.3+
|
|
2014 Equity Incentive Plan and forms of agreements thereunder.
|
|
S-1/A
|
|
10.3
|
|
12/4/2014
|
10.4+
|
|
2014 Employee Stock Purchase Plan and form of agreement thereunder.
|
|
S-1/A
|
|
10.4
|
|
12/4/2014
|
10.5+
|
|
Employee Bonus Plan.
|
|
S-1
|
|
10.5
|
|
11/10/2014
|
10.6+
|
|
Outside Director Compensation Policy as amended through March 25, 2015.
|
|
Filed herewith.
|
|
|
|
|
10.7+
|
|
Confirmatory Employment Offer Letter between the Registrant and Noah Breslow dated October 30, 2014.
|
|
S-1
|
|
10.7
|
|
11/10/2014
|
10.8+
|
|
Confirmatory Employment Offer Letter between the Registrant and James Hobson dated November 7, 2014.
|
|
S-1
|
|
10.8
|
|
11/10/2014
|
10.9+
|
|
Confirmatory Employment Offer Letter between the Registrant and Howard Katzenberg dated November 3, 2014.
|
|
S-1
|
|
10.9
|
|
11/10/2014
|
10.10+
|
|
Form of Change in Control and Severance Agreement between the Registrant and Noah Breslow.
|
|
S-1
|
|
10.10
|
|
11/10/2014
|
10.11+
|
|
Form of Change in Control and Severance Agreement between the Registrant and other executive officers.
|
|
S-1
|
|
10.11
|
|
11/10/2014
|
10.12
|
|
Lease, dated September 25, 2012, by and between the Registrant and 1400 Broadway Associates L.L.C.
|
|
S-1
|
|
10.12
|
|
11/10/2014
|
10.12.1
|
|
Lease Modification Agreement, dated March 3, 2015, by and between Registrant and ESRT 1400 Broadway, L.P.
|
|
10-K
|
|
10.21
|
|
3/10/2015
|
10.13
|
|
Second Amended and Restated Credit Agreement, dated as of October 7, 2015, by and among OnDeck Account Receivables Trust 2013-1 LLC, as Borrower, the Lenders party thereto from time to time, Deutsche Bank AG, New York Branch, as Administrative Agent for the Class A Revolving Lenders and as Collateral Agent for the Secured Parties, Deutsche Bank Trust Company Americas, as Paying Agent for the Lenders, and Deutsche Bank Securities Inc., as Lead Arranger, Syndication Agent and Documentation Agent.
|
|
10-Q
|
|
10.1
|
|
11/10/2015
|
10.14
|
|
Second Amended and Restated Loan and Security Agreement, dated March 21, 2011, by and among Small Business Asset Fund 2009 LLC, each Lender party thereto from time to time and Deutsche Bank Trust Company Americas, as amended January 10, 2014.
|
|
S-1
|
|
10.15
|
|
11/10/2014
|
10.15
|
|
Second Amended and Restated Credit Agreement, dated December 19, 2014, by and among On Deck Asset Company, LLC, each Lender party thereto from time to time, WS 2014-1, LLC, and Deutsche Bank Trust Company Americas.
|
|
10-K
|
|
10.16
|
|
3/10/2015
|
10.16
|
|
Base Indenture, dated May 8, 2014, by and between OnDeck Asset Securitization Trust LLC and Deutsche Bank Trust Company Americas.
|
|
S-1
|
|
10.17
|
|
11/10/2014
|
10.17
|
|
Series 2014-1 Supplement, dated May 8, 2014, by and between OnDeck Asset Securitization Trust LLC and Deutsche Bank Trust Company Americas.
|
|
S-1
|
|
10.18
|
|
11/10/2014
|
10.18
|
|
Note Issuance and Purchase Agreement, dated as of November 25, 2015, by and among OnDeck Asset Pool, LLC, in its capacity as Issuer, the Purchasers party thereto from time to time, Jefferies Funding LLC, as Administrative Agent for the Purchasers, and Deutsche Bank Trust Company Americas, as Paying Agent and as Collateral Agent for the Secured Parties
|
|
Filed herewith.
|
|
|
|
|
10.19
|
|
Form of Managed Applicant Commission Agreement between the Registrant and its funding advisors.
|
|
S-1
|
|
10.20
|
|
11/10/2014
|
10.20
|
|
Credit Agreement, dated as of May 22, 2015, by and among Receivable Assets of OnDeck, LLC, as Borrower, the Lenders party thereto from time to time, SunTrust Bank, as Administrative Agent for the Class A Revolving Lenders, and Wells Fargo Bank, N.A., as Paying Agent and as Collateral Agent for the Secured Parties.
|
|
10-Q
|
|
10.2
|
|
8/11/2015
|
10.21
|
|
Credit Agreement, dated as of June 12, 2015, by and among Prime OnDeck Receivable Trust, LLC, as Borrower, the Lenders party thereto from time to time, Bank of America, N.A., as Administrative Agent for the Class A Revolving Lenders and Wells Fargo Bank, N.A., as Paying Agent and as Collateral Agent for the Secured Parties.
|
|
10-Q
|
|
10.3
|
|
8/11/2015
|
10.22
|
|
First Amendment to Amended and Restated Loan Agreement, dated October 2, 2015, between Square 1 Bank, as Lender, and the Registrant.
|
|
10-Q
|
|
10.2
|
|
11/10/2015
|
21.1
|
|
List of subsidiaries of the Registrant.
|
|
Filed herewith.
|
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
|
Filed herewith.
|
|
|
|
|
31.1
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by President and Chief Executive Officer.
|
|
Filed herewith.
|
|
|
|
|
31.2
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by President and Chief Financial Officer.
|
|
Filed herewith.
|
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by President and Chief Executive Officer.
|
|
Filed herewith.
|
|
|
|
|
32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by President and Chief Financial Officer.
|
|
Filed herewith.
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith.
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith.
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
*
|
All exhibits incorporated by reference to the Registrant's Form S-1 or S-1/A registration statements relate to Registration No. 333-200043
|
+
|
Indicates a management contract or compensatory plan.
|
1.
|
CASH RETAINERS
|
2.
|
EQUITY COMPENSATION
|
3.
|
TRAVEL EXPENSES
|
4.
|
ADDITIONAL PROVISIONS
|
5.
|
REVISIONS
|
|
|
|
Page
|
|
|
|
|
|
|
SECTION 1.
|
|
DEFINITIONS AND INTERPRETATION
|
2
|
|
1.1
|
|
Definitions
|
2
|
|
1.2
|
|
Accounting Terms
|
30
|
|
1.3
|
|
Interpretation, etc.
|
31
|
|
|
|
|
|
|
SECTION 2.
|
|
PURCHASES OF NOTES
|
31
|
|
2.1
|
|
Discretionary Notes
|
31
|
|
2.2
|
|
Pro Rata Shares
|
33
|
|
2.3
|
|
Use of Proceeds
|
33
|
|
2.4
|
|
Physical Notes
|
33
|
|
2.5
|
|
Interest on Notes
|
34
|
|
2.6
|
|
Default Interest
|
34
|
|
2.7
|
|
The Notes
|
34
|
|
2.8
|
|
Amortization Period End Date
|
38
|
|
2.9
|
|
Voluntary Commitment Reductions
|
38
|
|
2.10
|
|
Commitment Base Deficiency
|
39
|
|
2.11
|
|
Controlled Accounts
|
39
|
|
2.12
|
|
Application of Proceeds
|
43
|
|
2.13
|
|
General Provisions Regarding Payments
|
44
|
|
2.14
|
|
Ratable Sharing
|
45
|
|
2.15
|
|
Increased Costs; Capital Adequacy
|
46
|
|
2.16
|
|
Taxes; Withholding, etc.
|
48
|
|
2.17
|
|
Obligation to Mitigate
|
50
|
|
2.18
|
|
[Reserved]
|
51
|
|
2.19
|
|
[Reserved]
|
51
|
|
2.20
|
|
The Paying Agent
|
51
|
|
2.21
|
|
Duties of Paying Agent
|
55
|
|
2.22
|
|
Collateral Agent
|
57
|
|
2.23
|
|
Intention of Parties
|
58
|
|
|
|
|
|
|
SECTION 3.
|
|
CONDITIONS PRECEDENT
|
59
|
|
3.1
|
|
Closing Date
|
59
|
|
3.2
|
|
Conditions to Each Note Funding
|
62
|
|
|
|
|
|
|
SECTION 4.
|
|
REPRESENTATIONS AND WARRANTIES
|
63
|
|
4.1
|
|
Organization; Requisite Power and Authority; Qualification; Other Names
|
63
|
|
4.2
|
|
Capital Stock and Ownership
|
64
|
|
4.3
|
|
Due Authorization
|
64
|
|
4.4
|
|
No Conflict
|
64
|
|
4.5
|
|
Governmental Consents
|
64
|
|
4.6
|
|
Binding Obligation
|
64
|
|
4.7
|
|
Eligible Receivables
|
65
|
|
4.8
|
|
Historical Financial Statements
|
65
|
|
4.9
|
|
No Material Adverse Effect
|
65
|
|
4.10
|
|
Adverse Proceedings, etc.
|
65
|
|
4.11
|
|
Payment of Taxes
|
65
|
|
4.12
|
|
Title to Assets
|
66
|
|
4.13
|
|
No Indebtedness
|
66
|
|
4.14
|
|
No Defaults
|
66
|
|
4.15
|
|
Material Contracts
|
66
|
|
4.16
|
|
Government Contracts
|
66
|
|
4.17
|
|
Governmental Regulation
|
66
|
|
4.18
|
|
Margin Stock
|
66
|
|
4.19
|
|
Employee Benefit Plans
|
67
|
|
4.20
|
|
Certain Fees
|
67
|
|
4.21
|
|
Solvency; Fraudulent Conveyance
|
67
|
|
4.22
|
|
Compliance with Statutes, etc.
|
67
|
|
4.23
|
|
Matters Pertaining to Related Agreements
|
67
|
|
4.24
|
|
Disclosure
|
68
|
|
4.25
|
|
Patriot Act
|
68
|
|
4.26
|
|
Remittance of Collections
|
68
|
|
4.27
|
|
Tax Status
|
69
|
|
|
|
|
|
|
SECTION 5.
|
|
AFFIRMATIVE COVENANTS
|
69
|
|
5.1
|
|
Financial Statements and Other Reports
|
69
|
|
5.2
|
|
Existence
|
72
|
|
5.3
|
|
Payment of Taxes and Claims
|
72
|
|
5.4
|
|
Insurance
|
72
|
|
5.5
|
|
Inspections; Compliance Audits
|
73
|
|
5.6
|
|
Compliance with Laws
|
73
|
|
5.7
|
|
Separateness
|
74
|
|
5.8
|
|
Further Assurances
|
74
|
|
5.9
|
|
Communication with Accountants
|
74
|
|
5.10
|
|
Acquisition of Receivables from Holdings
|
75
|
|
|
|
|
|
|
SECTION 6.
|
|
NEGATIVE COVENANTS
|
75
|
|
6.1
|
|
Indebtedness
|
75
|
|
6.2
|
|
Liens
|
75
|
|
6.3
|
|
Equitable Lien
|
76
|
|
6.4
|
|
No Further Negative Pledges
|
76
|
|
6.5
|
|
Restricted Junior Payments
|
76
|
|
6.6
|
|
Subsidiaries
|
76
|
|
6.7
|
|
Investments
|
76
|
|
6.8
|
|
Fundamental Changes; Disposition of Assets; Acquisitions
|
76
|
|
6.9
|
|
Sales and Lease-Backs
|
77
|
|
6.10
|
|
Transactions with Shareholders and Affiliates
|
77
|
|
6.11
|
|
Conduct of Business
|
77
|
|
6.12
|
|
Fiscal Year
|
77
|
|
6.13
|
|
Servicer; Backup Servicer; Custodian
|
77
|
|
6.14
|
|
Acquisitions of Receivables
|
78
|
|
6.15
|
|
Independent Manager
|
78
|
|
6.16
|
|
Organizational Agreements
|
79
|
|
6.17
|
|
Changes in Underwriting or Other Policies
|
80
|
|
6.18
|
|
Receivable Program Agreements
|
80
|
|
|
|
|
|
|
SECTION 7.
|
|
EVENTS OF DEFAULT
|
80
|
|
7.1
|
|
Events of Default
|
80
|
|
|
|
|
|
|
SECTION 8.
|
|
AGENTS
|
84
|
|
8.1
|
|
Appointment of Agents
|
84
|
|
8.2
|
|
Powers and Duties
|
85
|
|
8.3
|
|
General Immunity
|
85
|
|
8.4
|
|
Agents Entitled to Act as Purchaser
|
86
|
|
8.5
|
|
Purchasers' Representations, Warranties and Acknowledgment
|
86
|
|
8.6
|
|
Right to Indemnity
|
87
|
|
8.7
|
|
Successor Administrative Agent and Collateral Agent
|
87
|
|
8.8
|
|
Collateral Documents
|
89
|
|
|
|
|
|
|
SECTION 9.
|
|
MISCELLANEOUS
|
89
|
|
9.1
|
|
Notices
|
89
|
|
9.2
|
|
Expenses
|
90
|
|
9.3
|
|
Indemnity
|
91
|
|
9.4
|
|
[Reserved]
|
91
|
|
9.5
|
|
Amendments and Waivers
|
91
|
|
9.6
|
|
Successors and Assigns; Participations
|
93
|
|
9.7
|
|
Independence of Covenants
|
97
|
|
9.8
|
|
Survival of Representations, Warranties and Agreements
|
97
|
|
9.9
|
|
No Waiver; Remedies Cumulative
|
97
|
|
9.10
|
|
Marshalling; Payments Set Aside
|
98
|
|
9.11
|
|
Severability
|
98
|
|
9.12
|
|
Obligations Several; Actions in Concert
|
98
|
|
9.13
|
|
Headings
|
98
|
|
9.14
|
|
APPLICABLE LAW
|
99
|
|
9.15
|
|
CONSENT TO JURISDICTION
|
99
|
|
9.16
|
|
WAIVER OF JURY TRIAL
|
100
|
|
9.17
|
|
Confidentiality
|
100
|
|
9.18
|
|
Usury Savings Clause
|
101
|
|
9.19
|
|
Counterparts
|
102
|
|
9.20
|
|
Effectiveness
|
102
|
|
9.21
|
|
Patriot Act
|
102
|
|
Name
|
|
Jurisdiction
|
Lancelot QBFOD LLC
|
|
Delaware
|
ODCS, LLC
|
|
Delaware
|
On Deck Asset Company, LLC
|
|
Delaware
|
On Deck Capital Australia PTY LTD
|
|
Australia
|
OnDeck Account Receivables Trust 2013-1 LLC
|
|
Delaware
|
OnDeck Asset Pool, LLC
|
|
Delaware
|
OnDeck Asset Securitization Trust LLC
|
|
Delaware
|
OnDeck Capital Canada, Inc. (f/k/a On Deck Capital, Inc.)
|
|
British Columbia
|
Prime OnDeck Receivable Trust, LLC
|
|
Delaware
|
Receivable Assets of OnDeck, LLC
|
|
Delaware
|
SBLP II LLC
|
|
Delaware
|
Small Business Asset Fund 2009 LLC
|
|
Delaware
|
Small Business Funding Trust
|
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K of On Deck Capital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Noah Breslow
|
|
Noah Breslow
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of On Deck Capital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Howard Katzenberg
|
|
Howard Katzenberg
Chief Financial Officer
|
|
/s/ Noah Breslow
|
|
Noah Breslow
Chief Executive Officer
|
|
/s/ Howard Katzenberg
|
|
Howard Katzenberg
Chief Financial Officer
|