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What changed in Open Lending Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Open Lending Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+136 added−148 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-31)

Top changes in Open Lending Corp's 2025 10-K

136 paragraphs added · 148 removed · 124 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe believe our insurance partners would require significant time and investment to build such a technology solution and lender network. No customer acquisition cost and limited operating expenses. LPP alleviates the need for our insurance partners to bear any marketing, software development or technology infrastructure costs to insure loans.
Biggest changeInsurance Partners Access to our proprietary technology and lenders. Over the past 25 years, we have built and refined our technology in an effort to deliver significant value to automotive lenders. We believe our insurance partners would require significant time and investment to build such a technology solution and lender network. No customer acquisition cost and limited operating expenses.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available through the investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish 8 it to, the Securities and Exchange Commission (“SEC”).
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available through the investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).
Automotive Lenders Our customers are credit unions, regional banks, finance companies and OEM captive finance companies that use LPP. Our customers rely on us to assist in insuring against loan defaults by pairing them with highly rated insurance companies that mitigate the added risk associated with lending to near-prime and non-prime borrowers.
Automotive Lenders Our customers are credit unions, regional banks, finance companies and OEM captive finance companies. Our LPP customers rely on us to assist in insuring against loan defaults by pairing them with highly rated insurance companies that mitigate the added risk associated with lending to near-prime and non-prime borrowers.
Some of these competitors offer a broader suite of products and services than we do, including retail banking solutions, credit and debit cards and loyalty programs. 6 Government Regulation We operate in a heavily regulated industry that is highly focused on consumer protection.
Some of these competitors offer a broader suite of products and services than we do, including retail banking solutions, credit and debit cards and loyalty programs. Government Regulation We operate in a heavily regulated industry that is highly focused on consumer protection.
The laws, regulations 7 and rules described above are subject to legislative, administrative and judicial interpretation, and some of these laws and regulations have been infrequently interpreted or only recently enacted.
The laws, regulations and rules described above are subject to legislative, administrative and judicial interpretation, and some of these laws and regulations have been infrequently interpreted or only recently enacted.
Borrowers Lower interest rates. Given the costs and financial goals of our automotive lenders and the specific risks posed by each loan, the goal of LPP is to find the lowest interest rate for borrowers. Increased approvals and higher loan amounts. We believe that automotive lenders using LPP are able to provide more loan approvals to near-prime and non-prime borrowers.
Given the costs and financial goals of our automotive lenders and the specific risks posed by each loan, the goal of LPP is to find the lowest interest rate for borrowers. Increased approvals and higher loan amounts. We believe that automotive lenders using LPP are able to provide more loan approvals to near-prime and non-prime borrowers.
LPP supports loans made to near-prime and non-prime borrowers and is designed to underwrite default insurance by linking automotive lenders to our insurance partners. The platform uses risk-based pricing models which enable automotive lenders to assess the credit risk of a potential borrower using data-driven analysis.
LPP supports loans made to near-prime and non-prime borrowers and is designed to underwrite default insurance by linking automotive lenders to our insurance partners. The platform uses risk-based pricing models that enable automotive lenders to assess the credit risk of a potential borrower using data-driven analysis.
Our Business Model We specialize in risk-based pricing and modeling and provide automated decision-technology for automotive lenders throughout the U.S. We target the financing needs of near-prime and non-prime borrowers, or borrowers with a credit bureau score generally between 560 and 699, who are underserved in the automotive finance industry.
Our Business Model We specialize in risk-based pricing and modeling and provide automated decision-technology for automotive lenders throughout the U.S. LPP targets the financing needs of near-prime and non-prime borrowers, or borrowers with a credit bureau score generally between 560 and 699, who are underserved in the automotive finance industry.
As of December 31, 2024, we had 205 employees, primarily located in the greater Austin, Texas area. We consider our relationship with our employees to be good and strive to maintain a mission-driven culture with a focus on employee input and well-being. Our core values are trustworthiness, commitment, respect, humility, teamwork, innovation, and quality.
As of December 31, 2025, we had 164 employees, primarily located in the greater Austin, Texas area. We consider our relationship with our employees to be good and strive to maintain a mission-driven culture with a focus on employee input and well-being. Our core values are trustworthiness, commitment, respect, humility, teamwork, innovation, and quality.
LPP program fees vary as a percentage of the loan amount, averaging $515 per loan in 2024, and are recognized upon receipt of the loan by the consumer. The program fee is typically paid either in one single payment in the month following loan certification or in equal monthly payments over the 12 months following loan certification.
LPP program fees vary as a percentage of the loan amount, averaging $558 per loan in 2025, and are recognized upon receipt of the loan by the consumer. The program fee is typically paid either in one single payment in the month following loan certification or in equal monthly payments over the 12 months following loan certification.
LPP is designed to provide a real-time experience for automotive lenders that is intuitive and easy to use. We have exclusivity agreements with insurance partners who provide default insurance to automotive lenders on individual automotive loans processed through LPP, which underwrites the risk on each loan application.
LPP is designed to provide a real-time experience for automotive lenders that is intuitive and easy to use. 3 Table of Contents We have exclusivity agreements with insurance partners who provide default insurance to automotive lenders on individual automotive loans processed through LPP, which underwrites the risk on each loan application.
Federal and state agencies also have broad enforcement powers over us, including powers to investigate our business practices and broad discretion to deem particular practices unfair, deceptive, abusive or otherwise not in accordance with the law. Our business requires compliance with several regulatory regimes, including consumer lending.
Federal and state agencies also have broad enforcement powers over us, including powers to investigate our business practices and broad discretion to deem particular practices unfair, deceptive, abusive or otherwise not in accordance with the law. 6 Table of Contents Our business requires compliance with several regulatory regimes, including consumer lending.
Insurance Partners As of December 31, 2024, we partner with three active insurance partners to provide auto loan default insurance policies for LPP certified loans. Our insurance partners are required to maintain not less than “A-” Financial Strength Rating by A.M. Best insurance rating company.
Insurance Partners As of December 31, 2025, we partner with three active insurance partners to provide auto loan default insurance policies for LPP certified loans. Our insurance partners are required to maintain not less than “A-” Financial Strength Rating by A.M.
The underwriting profit on each loan is earned upfront and received over its life, with the majority received in the first 12 months of the loan. In 2024, LPP generated, on average, $479 in profit share revenue per loan, which excludes the change in estimate associated with profit share reported on certified loans.
The underwriting profit on each loan is earned upfront and received over its life, with the majority received in the first 12 months of the loan. In 2025, LPP generated, on average, $298 in profit share revenue per loan, which excludes the change in estimate associated with profit share reported on certified loans.
Through electronic system integration, our software technology connects us to parties in our ecosystem. A key element of LPP is the unique database that drives risk decisioning using data accumulated for more than 20 years. When a loan is insured at origination, all attributes of the transaction are stored in our database.
Through electronic system integration, our software technology connects us to parties in our ecosystem. A key element of LPP is the unique database that drives risk decisioning using data accumulated for approximately 25 years. When a loan is insured at origination, all attributes of the transaction are stored in our database.
Our customers, collectively referred to herein as automotive lenders, make automotive consumer loans to underserved near-prime and non-prime borrowers by harnessing our risk-based interest rate pricing models, powered by our proprietary data and real-time underwriting of automotive loan default insurance coverage from insurers.
Through our flagship product, LPP, our customers, collectively referred to herein as automotive lenders or lenders, make automotive consumer loans to underserved near-prime and non-prime borrowers by harnessing our risk-based interest rate pricing models, powered by our proprietary data and real-time underwriting of automotive loan default insurance coverage from insurers.
Statutes, regulations and practices that have been in place for many years may be changed, including under the new U.S. administration, and new laws have been, and may continue to be, introduced to address real and perceived problems in the financial services industry in general and automotive lending in particular. These laws and how they are interpreted continue to evolve.
Statutes, regulations and practices that have been in place for many years may be changed, and new laws have been, and may continue to be, introduced to address real and perceived problems in the financial services industry in general and automotive lending in particular. These laws and how they are interpreted continue to evolve.
Lenders Protection, LLC is licensed as a property and casualty insurance agency and regulated by the insurance regulator in each state in which we operate. All sales personnel are individually licensed as property and casualty insurance agents in each state in which they operate.
Lenders Protection, LLC is licensed as a property and casualty insurance agency and regulated by the insurance 7 Table of Contents regulator in each state in which we operate. All sales personnel are individually licensed as property and casualty insurance agents in each state in which they operate.
Item 1. Business. Unless the context otherwise requires, “we,” “us,” “our,” “Open Lending,” and the “Company” refers to Open Lending Corporation, the combined company and its subsidiaries. Open Lending, LLC and Lenders Protection, LLC are wholly owned subsidiaries of Open Lending Corporation.
Item 1. Business. Unless the context otherwise requires, “we,” “us,” “our,” “Open Lending,” and the “Company” refer to Open Lending Corporation and its subsidiaries. Open Lending, LLC and Lenders Protection, LLC are wholly owned subsidiaries of Open Lending Corporation.
Our Ecosystem LPP enables the parties in our robust ecosystem to benefit from the ability to integrate with one another through our platform, which we believe improves the volume and quality of lending options made available to both lenders and borrowers in the automotive market.
Our Ecosystem Our products enable the parties in our robust ecosystem to benefit from the ability to integrate with one another through our platform, which we believe improves the volume and quality of lending options made available to both lenders and borrowers in the automotive marketplace.
Since our inception in 2000, we have facilitated over one million automotive loans representing over $25.1 billion in originations, accumulated more than 20 years of proprietary data and developed over two million unique risk profiles. We currently serve 441 active lenders. Lenders Protection Platform Our flagship product, LPP, is a cloud-based automotive lending enablement platform.
Since our inception in 2000, we have facilitated over one million automotive loans through LPP, representing over $27.9 billion in originations, and we have accumulated approximately 25 years of proprietary data and developed over two million unique risk profiles. We currently serve 450 active lenders. Lenders Protection Platform LPP is a cloud-based automotive lending enablement platform.
In 2024, we transitioned our customers who previously used Arch to our other insurance carriers. 4 See “ Item 1A—Risk Factors—Risks Related to Our Business—If we lose one of more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business .” Borrowers We address the financing needs of borrowers with a credit bureau score generally between 560 and 699, also referred to as consumers.
Best insurance rating company. 4 Table of Contents See “ Item 1A—Risk Factors—Risks Related to Our Business—If we lose one of more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business .” Borrowers Through LPP, we address the financing needs of borrowers with a credit bureau score generally between 560 and 699, also referred to herein as consumers.
If the automotive lender has a significant flow of direct to consumer auto loans, they also have the ability to sell these products and generate incremental fee income from higher after-market product sales. Increased profitability and higher risk-adjusted return on assets.
If the automotive lender has a significant flow of direct-to-consumer auto loans, they also have the ability to sell these products and generate incremental fee income from higher after-market product sales. Loss mitigation on near-prime and non-prime loans. Near-prime and non-prime auto loans carry more risk and higher losses than super prime and prime auto loans.
The default insurance coverage offered to our customers transfers the majority of the risk and increased losses to the insurers. Intuitive solution with seamless integration. With five-second decisioning, LPP is an intuitive, easy to use technology platform. LPP can be integrated into the existing loan origination system of financial institutions and automotive 5 lenders.
The default insurance coverage offered to our customers transfers the majority of the risk and increased losses to the insurers. Intuitive solution with seamless integration. LPP can be integrated into the existing loan origination system of financial institutions and automotive lenders. This streamlined workflow makes borrower point-of-sale financing available for automotive lenders of all sizes.
As a result, many near-prime and non-prime borrowers turn to sub-prime lenders, resulting in higher interest rate loan offerings than such borrower’s credit profile often merits or warrants. We seek to make this market more competitive, resulting in more attractive loan terms. We operate a business-to-business model. Our customers are automotive lenders.
Borrowers who must utilize the near-prime and non-prime automotive lending market have fewer lenders focused on loans with longer terms or higher advance rates. As a result, many near-prime and non-prime borrowers turn to sub-prime lenders, resulting in higher interest rate loan offerings than such borrower’s credit profile often merits or warrants.
LPP enables automotive lenders to expand their lending guidelines to offer loans to borrowers with lower credit bureau scores, potentially leading to increased loan originations and higher loan advance rates. LPP integrates directly with automotive lenders’ existing 3 loan origination systems, facilitating electronic delivery of all-inclusive loan rates in real-time to automotive lenders.
LPP integrates directly with automotive lenders’ existing loan origination systems, facilitating electronic delivery of all-inclusive loan rates in real-time to automotive lenders.
In addition, by providing claims administration services, we minimize the insurer carriers’ administrative burden in servicing insurance policies. Diversified risk with increased return on equity. Auto loan default coverage is a relatively unique line of insurance for insurers and, historically, the default insurance our insurance partners have provided through LPP has generated underwriting profits for our insurance partners.
Auto loan default coverage is a relatively unique line of insurance for insurers and, historically, the default insurance our insurance partners have provided through LPP has generated underwriting profits for our insurance partners. Borrowers Lower interest rates.
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Traditional lenders focus on prime borrowers, where an efficient market has developed with interest rate competition that benefits borrowers. Independent finance companies focus on sub-prime borrowers. Borrowers who must utilize the near-prime and non-prime automotive lending market have fewer lenders focused on loans with longer terms or higher interest rates.
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We seek to make this market more competitive, resulting in more attractive loan terms. We operate a business-to-business model. Our customers are automotive lenders. LPP enables automotive lenders to expand their lending guidelines to offer loans to borrowers with lower credit bureau scores, potentially leading to increased loan originations and higher loan advance rates.
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Approximately 80% of the expected revenue is collected in the first 12 months after loan origination, with the balance comprised of administration fees and underwriting profit share that are realized over the remaining life of the loan.
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ApexOne Auto On November 6, 2025, we announced the launch of ApexOne Auto, an advanced decisioning platform that supports loans made to prime borrowers.
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On November 13, 2024, we mutually agreed with Arch Insurance North America (“Arch”) to terminate our program management agreement with Arch, effective as of November 15, 2024. Arch will no longer provide auto loan default insurance policies for LPP certified loans.
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Like LPP, ApexOne Auto uses risk-based pricing models to arrive at an all-inclusive interest rate for a loan that is customized to each automotive lender, reflecting cost of capital, loan servicing and acquisition costs, expected recovery rates and target return on assets.
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However, Arch will continue to service and provide claim funding for any of its existing default insurance policies for the remaining life of the loans associated with such policies.
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Unlike with loans facilitated through LPP, default insurance is not provided in connection with loans facilitated through ApexOne Auto. As with LPP risk models, ApexOne Auto risk models use a proprietary score in assessing and pricing risk on automotive loan applications.
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In an effort to manage risk, most automotive lenders concentrate their loan portfolios in super prime and prime auto loans. Automotive lenders’ appetite for these loans results in an efficient market where competition is expressed through interest rates.
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This score combines credit bureau data and FCRA-compliant alternative consumer data to more effectively assess risk for any given loan application.
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For automotive lenders that do not have size and scale, the result is a compressed return on assets on their super prime and prime loan portfolios. The near-prime and non-prime segment is less efficient and consumer behavior is driven more by monthly loan payments than interest rates.
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LPP alleviates the need for our insurance partners to bear any marketing, software development or technology infrastructure costs to insure loans. In addition, by providing claims administration services, we minimize the insurer carriers’ administrative burden in servicing insurance policies. 5 Table of Contents Diversified risk with increased return on equity.
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We believe LPP enables automotive lenders to generate higher returns on assets and equity than traditional prime and super prime portfolios with a risk profile supported by credit default protection from highly rated insurers. Additionally, many of the loans generated using LPP have already been processed and denied through the automotive lender’s loan origination system.
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The automotive lenders already incur costs for processing such loans and LPP enables such lenders to convert the costs of a denied loan into an earning asset. Loss mitigation on near-prime and non-prime loans. Near-prime and non-prime auto loans carry more risk and higher losses than super prime and prime auto loans.
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This streamlined workflow makes borrower point-of-sale financing available for automotive lenders of all sizes. Insurance Partners Access to our proprietary technology and lenders. Over the past two decades, we have built and refined our technology in an effort to deliver significant value to automotive lenders.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeItem 1A. Risk Factors. A description of the material and other risks and uncertainties associated with our business and industry is set forth below. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, including our audited consolidated financial statements and notes thereto and
Biggest changeItem 1A. Risk Factors. A description of the material and other risks and uncertainties associated with our business and industry is set forth below. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, including our consolidated financial statements and notes thereto and

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee of our Board of Directors is primarily responsible for the oversight of risks from cybersecurity threats and is informed about cybersecurity risks through presentations from members of our management responsible for day-to-day management and mitigation of cybersecurity risks, as well as through its direct participation in our ERM process, which holistically addresses risks faced by us, including cybersecurity risk.
Biggest changeThe Audit Committee of our Board of Directors is primarily responsible for the oversight of risks from cybersecurity threats and is informed about cybersecurity risks through presentations from members of our management responsible for day-to-day management and mitigation of cybersecurity risks, as well as through its direct participation in our ERM process, which holistically addresses risks faced by us, including cybersecurity risk. 29 Table of Contents Our cybersecurity risk management processes are led by members of our management team, who are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through management of, and participation in, the cybersecurity risk management and strategic processes described above, including the operation of our Incident Response Plan.
We also conduct internal incident response tests, phishing test campaigns and other security-enhancing exercises throughout the year. In addition, we established measures to help mitigate the risk of exposure of 29 personally identifiable information (“PII”). We have also implemented phishing protection and data loss prevention tools designed to enhance our cybersecurity throughout our information technology systems.
We also conduct internal incident response tests, phishing test campaigns and other security-enhancing exercises throughout the year. In addition, we established measures to help mitigate the risk of exposure of personally identifiable information (“PII”). We have also implemented phishing protection and data loss prevention tools designed to enhance our cybersecurity throughout our information technology systems.
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Our cybersecurity risk management processes are led by members of our management team, who are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through management of, and participation in, the cybersecurity risk management and strategic processes described above, including the operation of our Incident Response Plan.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the future, we may become party to legal matters and claims arising in the ordinary course of business, the resolution of which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows. Item 4. Mine Safety Disclosures. None. 30 PART II
Biggest changeIn the future, we may become party to legal matters and claims arising in the ordinary course of business, the resolution of which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows. Item 4. Mine Safety Disclosures. None. 30 Tab le of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) 10/01/2024-10/31/2024 52,122 $ 5.71 — $ — 11/01/2024-11/30/2024 — $ — — $ — 12/01/2024-12/31/2024 — $ — — $ — Total 52,122 — (1) Includes shares purchased from employees to satisfy their payroll tax withholding obligations related to share-based awards that vested during those months.
Biggest changePeriod Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (1) October 1 - 31, 2025 — $ — — $ 21.0 November 1 - 30, 2025 563,977 $ 1.66 563,977 $ 20.1 December 1 - 31, 2025 — $ — — $ 20.1 Total 563,977 563,977 (1) On May 1, 2025, our Board of Directors authorized share repurchases under the Share Repurchase Program for up to $25.0 million, effective through May 1, 2026.
The actual number of stockholders is significantly greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividends We have no current plans to pay cash dividends on our common stock.
The actual number of stockholders is significantly greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by banks, brokers and other nominees. Dividends We have no current plans to pay cash dividends on our common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information with respect to our repurchases of shares of common stock during the three months ended December 31, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information with respect to our repurchases of shares of common stock during the three months ended December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq under the symbol “LPRO.” As of March 25, 2025, there were 23 registered stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq under the symbol “LPRO.” As of March 6, 2026, there were 22 stockholders of record.
Data for the S&P 500 Index and the Peer Group assumes reinvestment of dividends. Our common stock had a closing stock price of $13.75 on the Closing Date, and the stock price performance shown in the graph below is based on historical data and is not indicative of, nor intended to forecast, future stock price performance of our stock.
Data for the S&P 500 Index and the Peer Group assumes reinvestment of dividends. The stock price performance shown in the graph below is based on historical data and is not indicative of, nor intended to forecast, future stock price performance of our stock.
Equity Compensation Plan Information The information concerning our equity compensation plans is incorporated by reference herein to the section in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders (“2025 Proxy Statement”) entitled “ Equity Compensation Plan Information. ” 31 Performance Graph The graph below shows the cumulative total stockholder return of an investment of $100.00 at market close on the Closing Date of the Business Combination, in (i) our common stock, (ii) the S&P 500 Index, and (iii) common stock of a selected group of peer issuers (the “Peer Group”).
Equity Compensation Plan Information The information concerning our equity compensation plans is incorporated by reference herein to the section in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders (“2026 Proxy Statement”) entitled “ Equity Compensation Plan Information. ” 31 Table of Contents Performance Graph The graph below shows the cumulative total stockholder return of an investment of $100.00 for the five-year period between December 31, 2020 and December 31, 2025 in (i) our common stock, (ii) the S&P 500 Index, and (iii) common stock of a selected group of peer issuers (the “Peer Group”).
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Item 6. [Reserved] 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes appearing in

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe may not be able to manage expanding operations effectively, and any failure to do so could adversely affect the ability to generate revenue and control expenses. Privacy concerns or security breaches relating to LPP could result in economic loss, damage our reputation, deter users from using our products, and expose us to legal penalties and liability.
Biggest changePrivacy concerns or security breaches relating to our products could result in economic loss, damage our reputation, deter users from using our products, and expose us to legal penalties and liability. Through the use of our products, we gather and store personally identifiable information on consumers such as social security numbers, names and addresses.
Summary of Risk Factors Risks Related to Our Business • Our results of operations and continued growth depend on our ability to retain existing, and attract new, automotive lenders, and a significant percentage of our program fee revenue is concentrated with our top ten automotive lenders. • Our revenue is impacted, to a significant extent, by the economic, political, and market conditions as well as the financial performance of automotive lenders. • Our results depend, to a significant extent, on the active and effective adoption of LPP by automotive lenders. • If we lose one or more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business. • We use estimates in recognizing profit share revenue, and changes in these estimates have affected and may in the future adversely affect our revenues and future expected cash flows. • We rely extensively on models in managing many aspects of our business.
Summary of Risk Factors Risks Related to Our Business • Our results of operations and continued growth depend on our ability to retain existing, and attract new, automotive lenders, and a significant percentage of our program fee revenue is concentrated with our top ten automotive lenders. • Our revenue is impacted, to a significant extent, by economic, political, and market conditions as well as the financial performance of automotive lenders. • Our results depend, to a significant extent, on the active and effective adoption of LPP by automotive lenders. • If we lose one or more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business. • We use estimates in recognizing profit share revenue, and changes in these estimates have affected and may in the future adversely affect our revenues and future expected cash flows. • We rely extensively on models in managing many aspects of our business.
Negative public opinion can arise from many sources, including actual or alleged misconduct, errors or improper business practices by employees, automotive lenders, insurance partners, automobile dealers, outsourced service providers or other counterparties; litigation or regulatory actions; failure by us, automotive lenders, or automobile dealers to meet minimum standards of service and quality; inadequate protection of consumer information; failure of automotive lenders to adhere to the terms of their LPP agreements or other contractual arrangements or standards; failure of our insurance partners and our subsidiary, IAS, to satisfactorily administer claims; compliance failures; and media coverage, whether accurate or not.
Negative public opinion can arise from many sources, including actual or alleged misconduct, errors or improper business practices by employees, automotive lenders, insurance partners, automobile dealers, outsourced service providers or other counterparties; litigation or regulatory actions; failure by us, automotive lenders, or automobile dealers to meet minimum standards of service and quality; inadequate protection of consumer information; failure of automotive lenders to adhere to the terms of their agreements or other contractual arrangements or standards; failure of our insurance partners and our subsidiary, IAS, to satisfactorily administer claims; compliance failures; and media coverage, whether accurate or not.
The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding consumers, LPP customers or our proprietary information, software, methodologies and business secrets could interrupt our business or operations, result in significant legal and financial exposure, supervisory liability, damage to our reputation or a loss of confidence in the security, confidentiality and integrity of our systems, products and services, all of which could have a material adverse impact on our business, financial condition, and results of operations.
The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding consumers, our customers or our proprietary information, software, methodologies and business secrets could interrupt our business or operations, result in significant legal and financial exposure, supervisory liability, damage to our reputation or a loss of confidence in the security, confidentiality and integrity of our systems, products and services, all of which could have a material adverse impact on our business, financial condition, and results of operations.
As a result of our growth, we may face significant challenges in: • securing commitments from existing and new automotive lenders to provide loans to consumers; • maintaining existing and developing new relationships with additional automotive lenders; • maintaining existing and developing new relationships with additional insurance partners; • maintaining adequate financial, business and risk controls; • implementing and maintaining internal controls and the accuracy and timeliness of our financial reporting; • training, managing and appropriately sizing workforce and other components of business on a timely and cost-effective basis; • navigating complex and evolving regulatory and competitive environments; • increasing the number of borrowers in, and the volume of loans facilitated through, LPP; • entering into new markets and introducing new solutions; • continuing to revise proprietary credit decisioning and scoring models; • continuing to develop, maintain and scale our platform; • effectively using limited personnel and technology resources; • maintaining the security of our platform and the confidentiality of the information (including personally identifiable information) provided and utilized across our platform; and • attracting, integrating and retaining an appropriate number of qualified employees.
As a result of our growth, we may face significant challenges in: • securing commitments from existing and new automotive lenders to provide loans to consumers; • maintaining existing and developing new relationships with additional automotive lenders; • maintaining existing and developing new relationships with additional insurance partners; • maintaining adequate financial, business and risk controls; • implementing and maintaining internal controls and the accuracy and timeliness of our financial reporting; • training, managing and appropriately sizing workforce and other components of business on a timely and cost-effective basis; • navigating complex and evolving regulatory and competitive environments; • increasing the number of borrowers in, and the volume of loans facilitated through, our products; • entering into new markets and introducing new solutions; • continuing to revise proprietary credit decisioning and scoring models; • continuing to develop, maintain and scale our platform; • effectively using limited personnel and technology resources; • maintaining the security of our platform and the confidentiality of the information (including personally identifiable information) provided and utilized across our platform; and • attracting, integrating and retaining an appropriate number of qualified employees.
If any regulatory agency’s assessment of the quality of automotive lenders’ assets, operations, lending practices, 23 investment practices or other aspects of their business changes, or those with respect to our insurance partners, it may materially reduce automotive lenders’ or insurance partners’ earnings, capital ratios and share price in such a way that affects our business.
If any regulatory agency’s assessment of the quality of automotive lenders’ assets, operations, lending practices, investment practices or other aspects of their business changes, or those with respect to our insurance partners, it may materially reduce automotive lenders’ or insurance partners’ earnings, capital ratios and share price in such a way that affects our business.
The Credit Agreement also contains customary events of default (subject to thresholds and grace periods), including payment default, covenant default, cross default to other material indebtedness, and judgment defaults. 19 Our ability to comply with these covenants may be affected by events beyond our control, such as market fluctuations impacting net income.
The Credit Agreement also contains customary events of default (subject to thresholds and grace periods), including payment default, covenant default, cross default to other material indebtedness, and judgment defaults. Our ability to comply with these covenants may be affected by events beyond our control, such as market fluctuations impacting net income.
Our 21 management’s limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the business.
Our management’s limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the business.
In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including the following: • variations in our quarterly or annual results of operations; • additions or departures of key management personnel; • the loss of key automotive lenders or a reduction in the amount of certified loans generated by such lenders; • changes in our earnings estimates (if provided) or failure to meet analysts’ earnings estimates; • publication of research reports about our industry, litigation and government investigations; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • adverse market reaction to any indebtedness we may incur or securities we may issue in the future; • changes in market valuations of similar companies or speculation in the press or the investment community with respect to us or our industry; • adverse announcements by us or others and developments affecting us; • announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • actions by institutional stockholders; and • increases in market interest rates that may lead investors in our shares to demand a higher yield, and in response the market price of shares of our common stock could decrease significantly.
In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including the following: • variations in our quarterly or annual results of operations; • additions or departures of key management personnel; • the loss of key automotive lenders or a reduction in the amount of certified loans generated by such lenders; 25 Table of Contents • changes in our earnings estimates (if provided) or failure to meet analysts’ earnings estimates; • publication of research reports about our industry, litigation and government investigations; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • adverse market reaction to any indebtedness we may incur or securities we may issue in the future; • changes in market valuations of similar companies or speculation in the press or the investment community with respect to us or our industry; • adverse announcements by us or others and developments affecting us; • announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • actions by institutional stockholders; and • increases in market interest rates that may lead investors in our shares to demand a higher yield, and in response the market price of shares of our common stock could decrease significantly.
In addition, the terms of our existing financing arrangements restrict or limit our ability to pay cash dividends. Accordingly, we may not pay any dividends on our common stock in the foreseeable future. 27 Future offerings of debt or equity securities by us may adversely affect the market price of our common stock.
In addition, the terms of our existing financing arrangements restrict or limit our ability to pay cash dividends. Accordingly, we may not pay any dividends on our common stock in the foreseeable future. Future offerings of debt or equity securities by us may adversely affect the market price of our common stock.
Further, we may incur significant costs to resolve any such disruptions in service, which could adversely affect our business. 15 Litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and/or requirements resulting in increased expenses.
Further, we may incur significant costs to resolve any such disruptions in service, which could adversely affect our business. Litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and/or requirements resulting in increased expenses.
Any inaccuracies or errors in our models could have an adverse effect on our business. • We have in the past recorded, and may in the future record, significant valuation allowances on our deferred tax assets, which may have a material impact on our results of operations and cause fluctuations in such results. • Changes in market interest rates have had and could continue to have an adverse effect on our business. • Privacy concerns or security breaches relating to LPP could result in economic loss, damage our reputation, deter users from using our products and expose us to legal penalties and liability. • We rely in part on third-party resellers to acquire and retain lender customers, and our failure to develop and manage these relationships effectively could adversely affect our business, results of operations, and relationships with our customers. • Our vendor relationships subject us to a variety of risks, and the failure of third parties to comply with legal or regulatory requirements or to provide various services that are important to our operations could have an adverse effect on our business. • Fraudulent activity could negatively impact our business and could cause automotive lenders to be less willing to originate loans or insurance partners to be less willing to underwrite policies through the use of LPP. • Cyber-attacks and other security breaches could have a material adverse effect on our business. 9 • Disruptions in the operation of our computer systems and third-party data centers could have an adverse effect on our business. • If the underwriting models we use contain errors or are otherwise ineffective, our reputation and relationships with automotive lenders and insurance partners could be harmed. • We depend on the accuracy and completeness of information about consumers and any misrepresented information could adversely affect our business. • The consumer lending industry is highly competitive and is likely to become more competitive, and our inability to compete successfully or maintain or improve our market share and margins could adversely affect our business. • We may in the future expand to new industry verticals outside of the automotive industry, and failure to comply with applicable regulations, or accurately predict demand or growth, in those new industries, could have an adverse effect on our business. • The Credit Agreement (as defined hereinafter) that governs our Credit Facilities (as defined hereinafter) contains various covenants that could limit our ability to engage in activities that may be in our best long-term interests. • We may be unable to sufficiently protect our proprietary rights and may encounter disputes from time to time relating to our use of the intellectual property of third parties. • Our risk management processes and procedures may not be effective. • Some aspects of our platform include open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business. • Our management has limited experience in operating a public company.
Any inaccuracies or errors in our models could have an adverse effect on our business. • We have in the past recorded, and may in the future record, significant valuation allowances on our deferred tax assets, which may have a material impact on our results of operations and cause fluctuations in such results. • Increases in market interest rates have had and could continue to have an adverse effect on our business. • Privacy concerns or security breaches relating to our products could result in economic loss, damage our reputation, deter users from using our products and expose us to legal penalties and liability. • We rely in part on third-party resellers to acquire and retain lender customers, and our failure to develop and manage these relationships effectively could adversely affect our business, results of operations, and relationships with our customers. • Our vendor relationships subject us to a variety of risks, and the failure of third parties to comply with legal or regulatory requirements or to provide various services that are important to our operations could have an adverse effect on our business. • Fraudulent activity could negatively impact our business and could cause automotive lenders to be less willing to originate loans or insurance partners to be less willing to underwrite policies through the use of our products. • Cyber-attacks and other security breaches could have a material adverse effect on our business. • Disruptions in the operation of our computer systems and third-party data centers could have an adverse effect on our business. • If the underwriting models we use contain errors or are otherwise ineffective, our reputation and relationships with automotive lenders and insurance partners could be harmed. • We depend on the accuracy and completeness of information about consumers and any misrepresented or inaccurate information could adversely affect our business. • The consumer lending industry is highly competitive and is likely to become more competitive, and our inability to compete successfully or maintain or improve our market share and margins could adversely affect our business. • We may in the future expand to new industry verticals outside of the automotive industry, and failure to comply with applicable regulations, or accurately predict demand or growth, in those new industries, could have an adverse effect on our business. 9 Table of Contents • The Credit Agreement (as defined hereinafter) that governs our Credit Facilities (as defined hereinafter) contains various covenants that could limit our ability to engage in activities that may be in our best long-term interests. • We may be unable to sufficiently protect our proprietary rights and may encounter disputes from time to time relating to our use of the intellectual property of third parties. • Our risk management processes and procedures may not be effective. • Some aspects of our platform include open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business. • Our management has limited experience in operating a public company.
If an 14 actual or perceived breach of security occurs to our systems or a third party’s systems, we could also be required to expend significant resources to mitigate the breach of security and to address matters related to any such breach, including notifying users or regulators.
If an actual or perceived breach of security occurs to our systems or a third party’s systems, we could also be required to expend significant resources to mitigate the breach of security and to address matters related to any such breach, including notifying users or regulators.
In the event insurer losses cause one 11 of our insurance partners to cease providing insurance, it would have a material adverse effect on our operations and financial results. The severity of loss on consumer defaults impacts our profit share revenue.
In the event insurer losses cause one of our insurance partners to cease providing insurance, it would have a material adverse effect on our operations and financial results. The severity of loss on consumer defaults impacts our profit share revenue.
These events also could impair the ability of third parties to provide critical services to us. All of these adverse effects of 17 catastrophic events could result in a decrease in the use of our solution and payments to us, which could have a material adverse effect on our business.
These events also could impair the ability of third parties to provide critical services to us. All of these adverse effects of catastrophic events could result in a decrease in the use of our solution and payments to us, which could have a material adverse effect on our business.
If we are found to have failed to comply with applicable laws, including state insurance, insurance brokering, and insurance agency regulations, third-party administration company statutes and similar statutes in all U.S. jurisdictions, and with licensing and other requirements that we believe may be applicable to us, we could lose one or more licenses or authorizations or face other sanctions or penalties or be required to obtain a license in one or more such jurisdictions, which may have an adverse effect on our ability to make LPP available to borrowers in particular states and, thus, adversely impact our business.
If we are found to have failed to comply with applicable laws, including state insurance, insurance brokering, and insurance agency regulations, third-party administration company statutes and similar statutes in all U.S. jurisdictions, and with licensing and other requirements that we believe may be applicable to us, we could lose one or more licenses or authorizations or face other sanctions or penalties or be required to obtain a license in one or more such jurisdictions, which may have an adverse effect on our ability to make our products available to borrowers in particular states and, thus, adversely impact our business.
An inactive trading market may also impair 25 our ability to raise capital by selling shares of capital stock, attract and motivate employees through equity incentive awards, and acquire other companies, products, or technologies by using shares of capital stock as consideration.
An inactive trading market may also impair our ability to raise capital by selling shares of capital stock, attract and motivate employees through equity incentive awards, and acquire other companies, products, or technologies by using shares of capital stock as consideration.
Our forecasts are driven by our projections of prepayment rate, loan default rate and severity of loss on our remaining active loan portfolio as of the reporting date. These projections are derived from an analysis of the historical portfolio performance, prevailing 12 default and prepayment trends, and macroeconomic projections.
Our forecasts are driven by our projections of prepayment rate, loan default rate and severity of loss on our remaining active loan portfolio as of the reporting date. These projections are derived from an analysis of the historical portfolio performance, prevailing default and prepayment trends, and macroeconomic projections.
Among other things, these provisions: • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of our common stock; • prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders; • provide that the Board of Directors is expressly authorized to make, alter or repeal our bylaws; • establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • establish a classified Board of Directors, as a result of which our Board of Directors will be divided into three classes, with each class serving for staggered three-year terms, which prevents stockholders from electing an entirely new Board of Directors at an annual meeting.
Among other things, these provisions: • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of our common stock; • prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders; • provide that the Board of Directors is expressly authorized to make, alter or repeal our bylaws; 27 Table of Contents • establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • establish a classified Board of Directors, as a result of which our Board of Directors will be divided into three classes, with each class serving for staggered three-year terms, which prevents stockholders from electing an entirely new Board of Directors at an annual meeting.
In addition, significant increases in fraudulent activity could also lead to regulatory intervention, which could increase our costs and also negatively impact our business. 16 Cyber-attacks and other security breaches could have a material adverse effect on our business.
In addition, significant increases in fraudulent activity could also lead to regulatory intervention, which could increase our costs and also negatively impact our business. Cyber-attacks and other security breaches could have a material adverse effect on our business.
In connection with the consummation of the Business Combination, Open Lending, LLC, Open Lending Corporation, Nebula, certain persons and entities holding membership units of Open Lending and certain persons and entities holding Founder Shares (collectively, the “Holders”) entered into the Investor Rights Agreement.
In connection with the consummation of the Business Combination, Open Lending, LLC, Open Lending Corporation, Nebula, certain persons and entities holding membership units of Open Lending and certain persons and entities holding Founder Shares (collectively, the “Holders”) entered into an Investor Rights Agreement.
Recently, the credit markets have experienced instability, resulting in credit and liquidity concerns and increased loan default rates. Many lenders have subsequently reduced their willingness to make new loans and have tightened their credit requirements.
Recently, the credit markets have experienced instability, resulting in credit and liquidity concerns and increased loan delinquency and default rates. Many lenders have subsequently reduced their willingness to make new loans and have tightened their credit requirements.
Weakening economic conditions, in particular increases in unemployment, will lead to increased defaults and insurance claim payments, resulting in higher losses for our insurance partners. Increased claim payments may affect the willingness of our insurance partners to provide default insurance.
Weakening economic conditions, in particular increases in unemployment, may lead to increased defaults and insurance claim payments, resulting in higher losses for our insurance partners. Increased claim payments may affect the willingness of our insurance partners to provide default insurance.
District Court for the 28 Western District of Texas shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or the Federal Forum Provision.
District Court for the Western District of Texas shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or the Federal Forum Provision.
Automotive lenders are able to leverage the geographic diversity of the loans they can originate through LPP with the simplicity of our five-second, all-inclusive loan offer generation. Automotive lenders, however, have alternative sources for internal loan generation, and they could elect to originate loans through those alternatives rather than through LPP. There is significant competition for existing automotive lenders.
Automotive lenders are able to leverage the geographic diversity of the loans they can originate through LPP with the simplicity of our all-inclusive loan offer generation. Automotive lenders, however, have alternative sources for internal loan generation, and they could elect to originate loans through those alternatives rather than through LPP. There is significant competition for existing automotive lenders.
If we lose one or more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business. As of December 31, 2024, we relied on three active insurance partners to insure the loans generated by the automotive lenders using LPP.
If we lose one or more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business. As of December 31, 2025, we relied on three active insurance partners to insure the loans generated by the automotive lenders using LPP.
Fraudulent activity could negatively impact our business and could cause automotive lenders to be less willing to originate loans or insurance partners to be less willing to underwrite policies through the use of LPP. Fraud is prevalent in the financial services industry and is likely to increase as perpetrators become more sophisticated.
Fraudulent activity could negatively impact our business and could cause automotive lenders to be less willing to originate loans or insurance partners to be less willing to underwrite policies through the use of our products. Fraud is prevalent in the financial services industry and is likely to increase as perpetrators become more sophisticated.
Any significant increase in inaccuracies resulting in losses could adversely affect our business. The consumer lending industry is highly competitive and is likely to become more competitive, and our inability to compete successfully or maintain or improve our market share and margins could adversely affect our business. Our success depends on our ability to generate usage of LPP.
Any significant increase in inaccuracies resulting in losses could adversely affect our business. The consumer lending industry is highly competitive and is likely to become more competitive, and our inability to compete successfully or maintain or improve our market share and margins could adversely affect our business. Our success depends on our ability to generate usage of our products.
We are required to comply with numerous federal, state, and local laws and regulations that regulate, among other things, the manner in which we administer LPP, the terms of the loans that automotive lenders originate, the products of insurance partners, production of those products, insurance claims administration, and the fees that we may charge.
We are required to comply with numerous federal, state, and local laws and regulations that regulate, among other things, the manner in which we administer our products, the terms of the loans that automotive lenders originate, the products of insurance partners, production of those products, insurance claims administration, and the fees that we may charge.
A significant percentage of our program fee revenue is concentrated with our top ten automotive lenders, and the loss of one or more significant automotive lenders could have a negative impact on operating results. Our top ten automotive lenders (including certain groups of affiliated automotive lenders) accounted for a significant percentage of the total program fee revenue in 2024.
A significant percentage of our program fee revenue is concentrated with our top ten automotive lenders, and the loss of one or more significant automotive lenders could have a negative impact on operating results. Our top ten automotive lenders (including certain groups of affiliated automotive lenders) accounted for a significant percentage of the total program fee revenue in 2025.
Our ability to attract automotive lenders to LPP is significantly dependent on our ability to effectively evaluate a consumer’s credit profile and likelihood of default and potential loss in accordance with automotive lenders’ and insurance partners’ underwriting policies. Our business depends significantly on the accuracy and success of our underwriting model.
Our ability to attract automotive lenders to our products is significantly dependent on our ability to effectively evaluate a consumer’s credit profile and likelihood of default and potential loss in accordance with automotive lenders’ and insurance partners’ underwriting policies. Our business depends significantly on the accuracy and success of our underwriting model.
Strategic risk is the risk from changes in the business environment, improper implementation of decisions or inadequate responsiveness to changes in the business 20 environment.
Strategic risk is the risk from changes in the business environment, improper implementation of decisions or inadequate responsiveness to changes in the business environment.
Changing federal, state, and local laws, as well as changing regulatory enforcement policies and priorities, may negatively impact our business. In connection with our administration of LPP, we are subject to extensive regulation, supervision and examination under U.S. federal and state laws and regulations.
Changing federal, state, and local laws, as well as changing regulatory enforcement policies and priorities, may negatively impact our business. In connection with our administration of our products, we are subject to extensive regulation, supervision and examination under U.S. federal and state laws and regulations.
If we experience negative publicity, we may lose the confidence of automotive lenders and our insurance partners who use or partner with LPP and our business may suffer. Reputational risk, or the risk of negative publicity or to public opinion, is inherent to our business.
If we experience negative publicity, we may lose the confidence of automotive lenders and our insurance partners who use or partner with us, and our business may suffer. Reputational risk, or the risk of negative publicity or to public opinion, is inherent to our business.
The continued focus of regulators on the consumer financial services industry has resulted, and could continue to result, in new enforcement actions that could, directly or indirectly, affect the manner in which we conduct our business and increase the costs of defending and settling any such matters, which could negatively impact our business.
The continued focus of regulators on the consumer financial services industry has resulted, and could continue to result, in new enforcement actions that could, directly or indirectly, affect the manner in which we conduct our business and increase the costs of defending and settling any such matters, which could 23 Table of Contents negatively impact our business.
We also face risks related to cyber-attacks and other security breaches that typically involve the transmission of sensitive information regarding borrowers through various third parties, including automotive lenders, insurance carriers and data processors. Some of these parties have in the past been the target of security breaches and cyber-attacks.
We also face risks related to cyber-attacks and other security breaches that typically involve the transmission of sensitive information regarding borrowers through various third parties, including automotive lenders, insurance 16 Table of Contents carriers and data processors. Some of these parties have in the past been the target of security breaches and cyber-attacks.
These measures may not prevent misappropriation or infringement of our intellectual property or proprietary information and the resulting loss of competitive advantage, and we may be required to litigate to protect our intellectual property and proprietary information from misappropriation or infringement by others, which is expensive and could cause a diversion of resources and may not be successful.
These measures may not prevent misappropriation or infringement of our intellectual property or proprietary information and the resulting loss of competitive advantage, 19 Table of Contents and we may be required to litigate to protect our intellectual property and proprietary information from misappropriation or infringement by others, which is expensive and could cause a diversion of resources and may not be successful.
If one or more of these analysts cease coverage of the Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. Item 1B. Unresolved Staff Comments. None.
If one or more of these analysts cease coverage of the Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. 28 Table of Contents Item 1B. Unresolved Staff Comments. None.
New laws, regulations, policy or changes in enforcement of existing laws or regulations applicable to our business, or reexamination of current practices, could adversely impact our profitability, limit our ability to continue existing or pursue new business activities, require us to change certain of our business practices or alter our relationships with LPP customers, affect retention of key personnel, or expose us to additional costs (including increased compliance costs and/or customer remediation).
New laws, regulations, policy or changes in enforcement of existing laws or regulations applicable to our business, or reexamination of current practices, could adversely impact our profitability, limit our ability to continue existing or pursue new business activities, require us to change certain of our business practices or alter our relationships with our customers, affect retention of key personnel, or expose us to additional costs (including increased compliance 22 Table of Contents costs and/or customer remediation).
In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software because open source licensors generally do not provide warranties or controls on the origin of the software.
In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software because open source licensors generally do not provide warranties or controls on the 20 Table of Contents origin of the software.
Industries change rapidly, and we make no assurance that we will be able to accurately forecast demand (or the lack thereof) for a solution or that those industries will be receptive to our product offerings. Failure to predict demand or growth accurately in new industries could have a material adverse impact on our business.
Industries change rapidly, and we make no assurance that we will be able to accurately forecast demand (or the lack thereof) for a solution or that 18 Table of Contents those industries will be receptive to our product offerings. Failure to predict demand or growth accurately in new industries could have a material adverse impact on our business.
From time to time, in the normal course of our business, we may receive or be subject to, inquiries or investigations by state and federal regulatory agencies and bodies, such as the CFPB, state Attorneys General, state financial regulatory agencies, and other state or federal agencies or bodies regarding LPP, including the origination and servicing of consumer loans, practices by merchants or other third parties, production of insurance policies, administration of insurance claims and licensing, and registration requirements.
From time to time, in the normal course of our business, we may receive or be subject to, inquiries or investigations by state and federal regulatory agencies and bodies, such as the CFPB, state Attorneys General, state financial regulatory agencies, and other state or federal agencies or bodies regarding our products, including the origination 24 Table of Contents and servicing of consumer loans, practices by merchants or other third parties, production of insurance policies, administration of insurance claims and licensing, and registration requirements.
Higher interest rates have led to higher rates charged to the consumer, which have negatively impacted the ability of automotive lenders to generate volume and in turn, our ability to generate revenues on loans originated using LPP.
Higher interest rates have led to higher rates charged to the consumer, 13 Table of Contents which have negatively impacted the ability of automotive lenders to generate volume and in turn, our ability to generate revenues on loans originated using LPP.
Geopolitical conflicts, including Russia’s invasion of Ukraine and the conflict in the Middle East, have resulted in supply chain disruption, increased costs for transportation and energy, increased inflationary pressures, higher interest rates and volatility in global markets, which may adversely affect our business and our results of operations.
Geopolitical conflicts, including Russia’s invasion of Ukraine, have resulted in supply chain disruption, increased costs for transportation and energy, increased inflationary pressures, higher interest rates and volatility in global markets, which may adversely affect our business and our results of operations.
LPP is vulnerable to software bugs, computer viruses, internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks or similar disruptions, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access of data.
Our products are vulnerable to software bugs, computer viruses, internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks or similar disruptions, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access of data.
Additionally, our over 20 years of experience is in the automotive lending industry and therefore, industry participants in new industry verticals may not be receptive to our financing solutions and we may face competitors with more experience and resources.
Additionally, our approximately 25 years of experience is in the automotive lending industry and therefore, industry participants in new industry verticals may not be receptive to our financing solutions and we may face competitors with more experience and resources.
This could damage our reputation and relationships with automotive lenders and insurance partners, which could have a material adverse effect on our business. We depend on the accuracy and completeness of information about consumers, and any misrepresented information could adversely affect our business.
This could damage our reputation and relationships with automotive lenders and insurance partners, which could have a material adverse effect on our business. 17 Table of Contents We depend on the accuracy and completeness of information about consumers, and any misrepresented or inaccurate information could adversely affect our business.
For example, in connection 24 with our administration of LPP, we are subject to the GLBA and implementing regulations and guidance.
For example, in connection with our administration of our products, we are subject to the GLBA and implementing regulations and guidance.
We have limited control, if any, as to whether these strategic partners devote adequate resources to promoting, selling, and implementing our products as compared to our competitor’s products.
We have limited 14 Table of Contents control, if any, as to whether these strategic partners devote adequate resources to promoting, selling, and implementing our products as compared to our competitor’s products.
Risks Related to Ownership of Our Common Stock An active trading market for our common stock may not be sustained, which may make it difficult to sell the shares of our common stock purchased by our stockholders.
Risks Related to Ownership of Our Common Stock An active trading market for our common stock may not be sustained, which may make it difficult to sell shares of our common stock.
Risks Related to Ownership of Our Common Stock • An active trading market for our common stock may not be sustained, which may make it difficult to sell the shares of our common stock purchased by our stockholders. • The market price of our common stock has been and may continue to be volatile, which could cause the value of our stockholders’ investment to decline. • Because we have no current plans to pay cash dividends on our common stock, our stockholders may not receive any return on investment unless they sell our common stock for a price greater than the purchase price. • Certain provisions of our certificate of incorporation and bylaws could hinder, delay or prevent a change in control, which could adversely affect the price of our common stock. 10 Risks Related to Our Business Our results of operations and continued growth depend on our ability to retain existing, and attract new, automotive lenders.
Risks Related to Ownership of Our Common Stock • An active trading market for our common stock may not be sustained, which may make it difficult to sell shares of our common stock. • The market price of our common stock has been and may continue to be volatile, which could cause the value of our stockholders’ investment to decline. • Because we have no current plans to pay cash dividends on our common stock, our stockholders may not receive any return on investment unless they sell our common stock for a price greater than the purchase price. • Certain provisions of our certificate of incorporation and bylaws could hinder, delay or prevent a change in control, which could adversely affect the price of our common stock.
The contours of the Dodd-Frank UDAAP standard remain uncertain and there is a risk that certain features of our business could be deemed to be a UDAAP. • Potential legal, regulatory, and policy changes by the new U.S. administration may directly affect financial institutions and the global economy. • Our industry is highly regulated and is undergoing regulatory transformation, which results in inherent uncertainty. • Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities.
The contours of the Dodd-Frank UDAAP standard remain uncertain and there is a risk that certain features of our business could be deemed to be a UDAAP. • Our industry is highly regulated and is undergoing regulatory transformation, which results in inherent uncertainty. • Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities.
We have pursued and may in the future continue to pursue growth opportunities, which may result in significant demands on operations, marketing, compliance and accounting infrastructure, and has resulted in increased expenses, which we expect to continue as we grow.
These opportunities may result in significant demands on operations, marketing, compliance and accounting infrastructure and have resulted in increased expenses, which we expect to continue as we grow.
Our results depend, to a significant extent, on the active and effective adoption of LPP by automotive lenders. Our success depends on the active and effective adoption of LPP by automotive lenders in originating loans to near-prime and non-prime borrowers. We rely on automotive lenders to utilize LPP within their loan origination systems.
Our results depend, to a significant extent, on the active and effective adoption of LPP by automotive lenders. Our success depends on the active and effective adoption of LPP by automotive lenders in originating loans to near-prime and non-prime borrowers.
Changes in these projections or the underlying assumptions have resulted, and in the future may result, in negative changes in estimated profit share revenues, which in turn may have a material adverse effect on our revenues and future expected cash flows.
Changes in these projections or the underlying assumptions have resulted, and in the future may result, in negative changes in estimated profit share revenues, which in turn may have a material adverse effect on our revenues and future expected cash flows. We rely extensively on models in managing many aspects of our business.
Federal Reserve raised the federal funds rate in 2022 and 2023 to combat inflation. These increases in the market benchmark resulted in increases in the interest rates on new loans. Increased interest rates have impacted and may continue to adversely impact the spending levels of consumers and their ability and willingness to borrow money.
These increases in the market benchmark have resulted in increases in the interest rates on new loans. Increased interest rates have impacted and may continue to adversely impact the spending levels of consumers and their ability and willingness to borrow money.
New laws or regulations also require us to incur significant expenses to ensure compliance. As compared to our competitors, we could be subject to more stringent state or local regulations or could incur marginally greater compliance costs as a result of regulatory changes.
As compared to our competitors, we could be subject to more stringent state or local regulations or could incur marginally greater compliance costs as a result of regulatory changes.
In that event, the price of our common stock could decline, perhaps significantly. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operation.
In that 8 Table of Contents event, the price of our common stock could decline, and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operation.
Higher interest rates have also increased the payment obligations of consumers, which has reduced and may continue to reduce the ability of consumers to remain current on their obligations to automotive lenders and, therefore, has led and may continue to lead to increased delinquencies, defaults, consumer bankruptcies and charge-offs, and decreasing recoveries, all of which could have an adverse effect on our business. 13 We have pursued and may in the future continue to pursue growth opportunities, which may result in significant demands on operational, administrative and financial resources.
Higher interest rates have also increased the payment obligations of consumers, which have reduced and may continue to reduce the ability of consumers to remain current on their obligations to automotive lenders and, therefore, have led and may continue to lead to increased delinquencies, defaults, consumer bankruptcies and charge-offs, and decreasing recoveries, all of which could have an adverse effect on our business.
Economic factors such as interest rates, inflation, tariffs, uncertainty or changes in monetary and related policies, market volatility, consumer confidence and unemployment rates are among the most significant factors that impact consumer spending behavior.
Our business, the consumer financial services industry and automotive lenders’ businesses are sensitive to macroeconomic conditions. Economic factors such as interest rates, inflation, tariffs, uncertainty or changes in monetary and related policies, market volatility, consumer confidence and unemployment rates are among the most significant factors that impact consumer spending behavior.
Sales of a substantial amount of our common stock could cause the price of our securities to fall. As of December 31, 2024, a significant portion of the outstanding shares of our common stock is held by entities affiliated with us and our executive officers, directors, and founders.
As of December 31, 2025, a significant portion of the outstanding shares of our common stock is held by entities affiliated with us and our executive officers, directors, and founders.
Changes in market interest rates have had and could continue to have an adverse effect on our business. The fixed interest rates charged on the loans that automotive lenders originate are calculated based upon market benchmarks at the time of origination. Market benchmarks typically rise when the U.S. Federal Reserve raises the federal funds rate, and the U.S.
The fixed interest rates charged on the loans that automotive lenders originate are calculated based upon market benchmarks at the time of origination. Market benchmarks typically rise when the U.S. Federal Reserve raises the federal funds rate, and the U.S. Federal Reserve raised the federal funds rate in 2022 and 2023 to combat inflation.
We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our stock incentive plans. We may also raise capital through equity financings in the future.
Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholders. We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our stock incentive plans.
In assisting automotive lenders with the design of the products that are offered on LPP, we make assumptions about various matters, including repayment timing and default rates, and then utilize proprietary underwriting modeling to analyze and forecast the performance and profitability of the loans.
Any inaccuracies or errors in our models could have an adverse effect on our business . In assisting automotive lenders with the design of the products that we offer, we make assumptions about various matters, including repayment timing and default rates, and then utilize proprietary underwriting modeling to analyze and forecast the performance and profitability of the loans.
Our executive officers, directors and principal stockholders control us, and their interests may conflict with the interests of our other stockholders in the future. Our executive officers and directors and certain affiliated stockholders own a significant portion of the outstanding voting stock of the Company as of the date of this Annual Report.
Our executive officers and directors and certain affiliated stockholders own a significant portion of the outstanding voting stock of the Company as of the date of this Annual Report.
In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies.
In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
If a significant number of existing automotive lenders decide to stop using LPP or to use other competing platforms, thereby reducing their use of LPP, it would have a material adverse effect on our business and results of operations.
If a significant number of existing automotive lenders decide to stop using LPP or to use other competing platforms, thereby reducing their use of LPP, it would have a material adverse effect on our business and results of operations. 10 Table of Contents Our revenue is impacted, to a significant extent, by economic, political and market conditions as well as the financial performance of automotive lenders.
Any reduction in usage of LPP, or a reduction in the lifetime profitability of loans under LPP in an effort to attract or retain business, could reduce our revenues and earnings.
Any reduction in usage of our products, or a reduction in the lifetime profitability of loans under LPP in an effort to attract or retain business, could reduce our revenues and earnings. If we are unable to compete effectively for customer usage, our business could be materially and adversely affected.
If we are unable to compete effectively for customer usage, our business could be materially and adversely affected. 18 Because our business is heavily concentrated on consumer lending in the U.S. automobile industry, our results are more susceptible to fluctuations in that market than the results of a more diversified company would be.
Because our business is heavily concentrated on consumer lending in the U.S. automobile industry, our results are more susceptible to fluctuations in that market than the results of a more diversified company would be. Our business currently is concentrated on supporting consumer lending in the U.S. automobile industry.
Consumer finance and insurance regulation is constantly changing, and new laws or regulations, or new interpretations of existing laws or regulations, could have a material adverse impact on our ability to operate as currently intended. 22 These regulatory changes and uncertainties make our business planning more difficult and could result in changes to our business model and potentially adversely impact results of operations.
Consumer finance and insurance regulation is constantly changing, and new laws or regulations, or new interpretations of existing laws or regulations, could have a material adverse impact on our ability to operate as currently intended.
Such securities litigation could also give rise to perceived uncertainties as to our future, adversely affect our relationships with our partners and make it more difficult to attract and retain qualified personnel. Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties related to any securities litigation.
Such securities litigation could also give rise to perceived uncertainties as to our future, adversely affect our relationships with our partners and make it more difficult to attract and retain qualified personnel.
Risks Related to Our Regulatory Environment We are subject to federal and state consumer protection laws. In connection with administration of LPP, we must comply with various regulatory regimes, including those applicable to consumer credit transactions, various aspects of which are untested as applied to our business model.
Risks Related to Our Regulatory Environment We are subject to federal and state consumer protection laws. In connection with the administration of our products, we must comply with various regulatory regimes, including those applicable to consumer credit transactions. Insurance producing and claims administration services subject us to state regulation on a 50-state basis.
As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.
We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment.
While changes to statutes and promulgating new regulations may take a substantial amount of time, issuing regulatory guidance with the force of law in the form of opinions, bulletins, and notices can occur quickly. Also, consumer credit and insurance regulators often initiate inquiries into market participants, which can lead to investigations and, ultimately, enforcement actions.
The complex regulatory environment of the credit and insurance industries is subject to constant change and modification. While changes to statutes and promulgating new regulations may take a substantial amount of time, issuing regulatory guidance with the force of law in the form of opinions, bulletins, and notices can occur quickly.
Through the use of LPP, we gather and store personally identifiable information on consumers such as social security numbers, names and addresses. A cybersecurity breach where this information is stolen or made public would result in negative publicity and additional costs to mitigate the damage to customers.
A cybersecurity breach where this information is stolen or made public would result in negative publicity and additional costs to mitigate the damage to customers.
As a result, we are subject to a constantly evolving regulatory environment that is difficult to predict, which may affect our business. See “Part I, Item 1— Business—Government Regulation” in this Annual Report for a further discussion of the laws and regulations to which we are subject.
See “Part I, Item 1— Business—Government Regulation” in this Annual Report for a further discussion of the laws and regulations to which we are subject. We cannot assure that our compliance policies and procedures designed to assist in compliance with these laws and regulations will be effective.
If automotive lenders make fewer overall automotive loans or cease to use LPP to make such loans, we will fail to generate future revenues.
Risks Related to Our Business Our results of operations and continued growth depend on our ability to retain existing, and attract new, automotive lenders. If automotive lenders make fewer overall automotive loans or cease to use LPP to make such loans, we will fail to generate future revenues.
Although automotive lenders generally are under no obligation to use LPP in generating their loans, the integrated loan and insurance offering by LPP encourages the use of LPP by automotive lenders. Any adverse accounting determinations concerning loans generated by automotive lenders using LPP could negatively affect further adoption of LPP.
We rely on automotive lenders to utilize LPP within their loan origination systems. 11 Table of Contents Although automotive lenders generally are under no obligation to use LPP in generating their loans, the integrated loan and insurance offering by LPP encourages the use of LPP by automotive lenders.
As of December 31, 2024, the Company has assessed whether it is more likely than not that the Company’s deferred tax assets will be realized and, given the magnitude of the current year losses related to the Company’s profit share revenue change in estimate, recorded a full valuation allowance of $86.1 million.
As of December 31, 2025, we assessed whether it is more likely than not that our deferred tax assets will be realized and, given the magnitude of our cumulative pre-tax losses, we continue to maintain a full valuation 12 Table of Contents allowance of $84.4 million.
Failure to comply with these laws and with regulatory requirements applicable to our business could subject us to damages, revocation of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm our business. Potential legal, regulatory, and policy changes by the new U.S. administration may directly affect financial institutions and the global economy.
Failure to comply with these laws and with regulatory requirements applicable to our business could subject us to damages, revocation of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm our business. 21 Table of Contents Our industry is highly regulated and is undergoing regulatory transformation, which results in inherent uncertainty.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−1 removed7 unchanged
Biggest changeWe are also charged an unused commitment fee that ranges from 0.15% to 0.225% per annum on the average daily unused portion of the Revolving Credit Facility, which is paid quarterly in arrears and is based on our total net leverage ratio. Item 8. Financial Statements and Supplementary Data.
Biggest changeWe are also charged an unused commitment fee that ranges from 0.15% to 0.225% per annum on the average daily unused portion of the Revolving Credit Facility, which is paid quarterly in arrears and is based on our total net leverage ratio. 46 Table of Cont ents
See “Item 1A— Risk Factors—Risks Related to Our Business — If we lose one of more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business .” 44 Refer to Note 2 — Summary of Significant Accounting and Reporting Policies for the concentration of revenues from these customers.
See “Item 1A— Risk Factors—Risks Related to Our Business — If we lose one of more of our insurance partners and are unable to replace their commitments, it could have a material adverse effect on our business .” Refer to Note 2 — Summary of Significant Accounting and Reporting Policies for the concentration of revenues from these customers.
Interest Rate Risk Our earnings and cash flows are subject to fluctuations due to changes in interest rates on investment of available cash balances in money market funds and U.S. Treasury securities. Our Term Loan due 2027 also exposes us to changes in short-term interest rates since interest rates on the underlying obligations are variable.
Interest Rate Risk Our earnings and cash flows are subject to fluctuations due to changes in interest rates on investment of available cash balances in money market funds. Our Term Loan due 2027 also exposes us to changes in short-term interest rates since interest rates on the underlying obligations are variable.
As of December 31, 2024, we had $140.6 million outstanding under the Term Loan due 2027, which is scheduled to mature on September 9, 2027. There were no amounts outstanding under the Revolving Credit Facility as of December 31, 2024.
As of December 31, 2025, we had $85.1 million outstanding under the Term Loan due 2027, which is scheduled to mature on September 9, 2027. There were no amounts outstanding under the Revolving Credit Facility as of December 31, 2025.
Removed
Our consolidated financial statements and supplementary data are included in this Annual Report beginning on page F-1. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.

Other LPRO 10-K year-over-year comparisons