UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
EXCHANGE ACT OF 1934
For the quarterly period ended
or
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading symbol | Name of Exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||
☒ | Smaller reporting company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of outstanding shares of the Registrant’s Common Stock as of November 8, 2021 was
Table of Contents
2
PART I —FINANCIAL INFORMATION
Item 1. Financial Statements
PORCH GROUP, INC.
Condensed Consolidated Balance Sheets
(all numbers in thousands, except share amounts)
| September 30, 2021 |
| December 31, 2020 | |||
Assets |
| (unaudited) |
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Current assets |
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Cash and cash equivalents | $ | | $ | | ||
Accounts receivable, net |
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Short-term investments | | — | ||||
Reinsurance balance due | | — | ||||
Prepaid expenses and other current assets |
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Restricted cash | | | ||||
Total current assets |
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Property, equipment, and software, net |
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Goodwill |
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Long-term investments | | — | ||||
Intangible assets, net |
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Restricted cash, non-current |
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Long-term insurance commissions receivable | | | ||||
Other assets |
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Total assets | $ | | $ | | ||
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable | $ | | $ | | ||
Accrued expenses and other current liabilities |
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Deferred revenue |
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Refundable customer deposit |
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Current portion of long-term debt |
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Losses and loss adjustment expense reserves | | — | ||||
Other insurance liabilities, current | | — | ||||
Total current liabilities |
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Long-term debt |
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Refundable customer deposit, non-current |
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Earnout liability, at fair value | | | ||||
Private warrant liability, at fair value | | | ||||
Other liabilities (includes $ |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Stockholders’ equity |
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Common stock, $ |
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Authorized shares – |
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and shares – | ||||||
Additional paid-in capital |
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Accumulated other comprehensive income | | — | ||||
Accumulated deficit |
| ( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
PORCH GROUP, INC.
Condensed Consolidated Statements of Operations
(all numbers in thousands, except share amounts, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||
Revenue | $ | | $ | | $ | | $ | | ||||
Operating expenses(1): |
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Cost of revenue |
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Selling and marketing |
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Product and technology |
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General and administrative |
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Gain on divestiture of businesses |
| — |
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Total operating expenses |
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Operating loss |
| ( |
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Other income (expense): |
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Interest expense |
| ( |
| ( |
| ( |
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Change in fair value of earnout liability | | — | ( | — | ||||||||
Change in fair value of private warrant liability | | — | ( | — | ||||||||
Gain (loss) on extinguishment of debt | ( | ( | | | ||||||||
Investment income and realized gains, net of investment expenses | | — | | — | ||||||||
Other income (expense), net |
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Total other income (expense) |
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| ( |
| ( |
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Loss before income taxes |
| ( |
| ( |
| ( |
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Income tax benefit (expense) |
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| ( |
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Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Loss per share - basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Loss per share - diluted (Note 13) | $ | ( | $ | ( | $ | ( | $ | ( | ||||
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Shares used in computing basic loss per share |
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Shares used in computing diluted loss per share |
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(1) | Amounts include stock-based compensation expense, as follows: |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||||
Cost of revenue |
| $ | — |
| $ | | $ | | $ | | |||
Selling and marketing |
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Product and technology |
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General and administrative |
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$ | | $ | | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
PORCH GROUP, INC.
Condensed Consolidated Statements of Comprehensive Loss
(all numbers in thousands, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Other comprehensive income (loss): |
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Current period change in net unrealized gain (loss), net of tax | ( |
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Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
5
PORCH GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(all numbers in thousands, except share amounts, unaudited)
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock |
| Paid-in |
| Accumulated |
| Comprehensive |
| Stockholders’ | |||||||||
Shares | Amount |
| Capital | Deficit | Income |
| Equity (Deficit) | ||||||||||
Balances as of December 31, 2020 |
| | $ | | $ | | $ | ( | $ | — | $ | | |||||
Net loss |
| — |
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| — |
| ( |
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| ( | |||||
Other comprehensive income | — |
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| — | — | — | ||||||||||
Stock-based compensation |
| — |
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Stock-based compensation - earnout | — |
| — | | — | — | | ||||||||||
Issuance of common stock for acquisitions |
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Reclassification of earnout liability upon vesting |
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Vesting of restricted stock units | | — | — | — | — | — | |||||||||||
Exercise of stock warrants | | | | — | — | | |||||||||||
Exercise of stock options |
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Income tax withholdings |
| ( |
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| ( | — |
| — |
| ( | ||||||
Transaction costs | — | — | ( | — | — | ( | |||||||||||
Balances as of March 31, 2021 | | $ | | $ | | $ | ( | $ | — | $ | | ||||||
Net loss | — | — | — | ( | — | ( | |||||||||||
Other comprehensive income | — | — | — | — | | | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Stock-based compensation - earnout | — | — | | — | — | | |||||||||||
Issuance of common stock for acquisitions | | — | | — | — | | |||||||||||
Contingent consideration for acquisitions | — | — | | — | — | | |||||||||||
Reclassification of private warrant liability upon exercise | — | — | | — | — | | |||||||||||
Vesting of restricted stock units | | — | — | — | — | — | |||||||||||
Exercise of stock warrants | | | | — | — | | |||||||||||
Exercise of stock options | | — | | — | — | | |||||||||||
Income tax withholdings | ( | — | ( | — | — | ( | |||||||||||
Transaction costs | — | — | | — | — | | |||||||||||
Balances as of June 30, 2021 | | $ | | $ | | $ | ( | $ | | $ | | ||||||
Net loss | — | — | — | ( | — | ( | |||||||||||
Other comprehensive income | — | — | — | — | ( | ( | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Stock-based compensation - earnout | — | — | | — | — | | |||||||||||
Issuance of common stock for acquisitions | | — | | — | — | | |||||||||||
Reclassification of private warrant liability upon exercise | — | — | | — | — | | |||||||||||
Vesting of restricted stock units | | — | — | — | — | — | |||||||||||
Exercise of stock warrants | | — | — | — | — | — | |||||||||||
Exercise of stock options | | — | | — | — | | |||||||||||
Income tax withholdings | ( | — | ( | — | — | ( | |||||||||||
Capped call transactions | — | — | ( | — | — | ( | |||||||||||
Balances as of September 30, 2021 |
| | $ | | $ | | $ | ( | $ | | $ | |
6
PORCH GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) - Continued
(all numbers in thousands, except share amounts, unaudited)
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock |
| Paid-in |
| Accumulated |
| Comprehensive |
| Stockholders’ | |||||||||
| Shares | Amount |
| Capital | Deficit | Income |
| Equity (Deficit) | |||||||||
Balances as of December 31, 2019(1) |
| | $ | | $ | | $ | ( | $ | — | $ | ( | |||||
Net loss |
| — |
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| ( |
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Other comprehensive income | — |
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Stock-based compensation |
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Issuance of Series C redeemable convertible preferred stock(1) |
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Conversion of convertible notes to Series C redeemable convertible preferred stock(1) |
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Vesting of restricted stock awards issued for acquisitions |
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Issuance of common stock warrants | — | — | | — | — | | |||||||||||
Exercise of stock options |
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Balances as of March 31, 2020 | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||
Net loss | — | — | — | ( | — | ( | |||||||||||
Other comprehensive income | — | — | — | — | ( | ( | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Issuance of common stock for acquisitions | | — | | — | — | | |||||||||||
Exercise of stock options | | — | — | — | — | — | |||||||||||
Balances as of June 30, 2020 | | $ | | $ | | $ | ( | $ | — | $ | ( | ||||||
Net loss | — | — | — | ( | ( | ||||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Issuance of Series C redeemable convertible preferred stock(1) | | — | | — | — | | |||||||||||
Repurchase of redeemable convertible stock(1) | ( | — | ( | — | — | ( | |||||||||||
Issuance of common stock for acquisitions | | — | | — | — | | |||||||||||
Shareholder contribution | — | — | | — | — | | |||||||||||
Exercise of stock options | |