Print

[Investar]

Prosper's latest quarterly financial stats are available for review.
SEC Form 10-Q:
http://www.sec.gov/Archives/edgar/data/1416265/000141626509000098/0001416265-09-000098-index.htm

10-Q pg 29
Liquidity and Capital Resources (as of June 30, 2009)

Net cash used in operating activities was $5.1 million for the six months ended June 30, 2009 compared to $5.2 million for the six months ended June 30, 2008.  Net cash used in operating activities consisted mostly of headcount costs, and professional service providers to the Company. Non-cash charges that mostly offset our net loss were stock compensation expense of $193 thousand, depreciation & amortization of $297 thousand and the net negative effect of changes in operating assets and liabilities. As a result of our cessation of operations from October 16, 2008 to July 10, 2009, the company has taken several cost savings initiatives to conserve cash. The combination of our cost savings measures and the expected increase in origination revenue associated with the resumption of lending activities are expected to reduce our on-going cash requirements.

[Urbi_et_Orbi]

They were dead in the water for the first half of the year and they only managed to reduce year-to-year expenses by $100K?

[pioneer11]

Today, Prosper will make around $3000 in loan origination fees.  That doesn't sound good for them.

[Mtnchick]

They were dead in the water for the first half of the year and they only managed to reduce year-to-year expenses by $100K?

I guess they only got rid of one employee.

[Urbi_et_Orbi]

This doc should be required reading.

Here is an interesting tidbit:

Liquidity and Capital Resources


We have incurred operating losses since our inception and we anticipate that we will continue to incur net losses through 2010.  For the six months ended June 30, 2009 and 2008 we had negative cash flows from operations of $5.1 million and $5.2 million, respectively.  Additionally, since our inception through June 30, 2009, we have an accumulated deficit of $35.7 million.


To date, we have financed our operations with proceeds from the sale of equity securities. We are dependent upon raising additional capital or debt financing to fund our current operating plan.  Failure to obtain sufficient debt and equity financings and, ultimately, to achieve profitable operations and positive cash flows from operations could adversely affect our ability to achieve our business objectives and continue as a going concern.  Further, an unfavorable outcome of the class action lawsuit at the high end of the range could hinder Prosper’s ability to continue its operations, absent other extenuating circumstances. There can be no assurances as to the availability or terms upon which the required financing and capital might be available.


Net cash used in operating activities was $5.1 million for the six months ended June 30, 2009 compared to $5.2 million for the six months ended June 30, 2008.  Net cash used in operating activities consisted mostly of headcount costs, and professional service providers to the Company. Non-cash charges that mostly offset our net loss were stock compensation expense of $193 thousand, depreciation & amortization of $297 thousand and the net negative effect of changes in operating assets and liabilities. As a result of our cessation of operations from October 16, 2008 to July 10, 2009, the company has taken several cost savings initiatives to conserve cash. The combination of our cost savings measures and the expected increase in origination revenue associated with the resumption of lending activities are expected to reduce our on-going cash requirements.

[ira01]

They were dead in the water for the first half of the year and they only managed to reduce year-to-year expenses by $100K?

I guess lobying is expensive.     To say nothing of lawyers.   

[onthefence]

Today, Prosper will make around $3000 in loan origination fees.  That doesn't sound good for them.

Well they only need to increase loan volume by 17 times their current rate to stay solvent.

[onthefence]

This doc should be required reading.

Here is an interesting tidbit:

Liquidity and Capital Resources


We have incurred operating losses since our inception and we anticipate that we will continue to incur net losses through 2010.  For the six months ended June 30, 2009 and 2008 we had negative cash flows from operations of $5.1 million and $5.2 million, respectively.  Additionally, since our inception through June 30, 2009, we have an accumulated deficit of $35.7 million.


To date, we have financed our operations with proceeds from the sale of equity securities. We are dependent upon raising additional capital or debt financing to fund our current operating plan.

Someone help me out here.  What are "equity securities"?  Are they ownership in Prosper?  Or are these secured debts that take precedence over the currently produced loans?

[Urbi_et_Orbi]

I read that to refer to the VC infusions.

[onthefence]

Right now it looks like the only possible investment in Prosper that could potentially offer the returns sufficient for the risk would be to purchase issues of an additional issuance of stock.

If I were prosper, I would see about trying to offer stocks to Prosper lenders.  If they could raise another 40 million they just might last long enough to become financially solvent.  And it's the only way I would even consider risking money with Prosper.

[ira01]

This doc should be required reading.

Here is an interesting tidbit:

Liquidity and Capital Resources

We have incurred operating losses since our inception and we anticipate that we will continue to incur net losses through 2010.  For the six months ended June 30, 2009 and 2008 we had negative cash flows from operations of $5.1 million and $5.2 million, respectively.  Additionally, since our inception through June 30, 2009, we have an accumulated deficit of $35.7 million.

So Prosper has spent $35.7M of its $40M in VC as of June 30, 2009.  That means it had $4.3M left.  Since it is burning $5M+ in 6 months, Prosper only had about 5 months of funding left -- so it will be flat broke by around Thanksgiving, absent another infusion of cash. 

[ira01]

Right now it looks like the only possible investment in Prosper that could potentially offer the returns sufficient for the risk would be to purchase issues of an additional issuance of stock.

If I were prosper, I would see about trying to offer stocks to Prosper lenders.  If they could raise another 40 million they just might last long enough to become financially solvent.  And it's the only way I would even consider risking money with Prosper.

I can't see the SEC allowing that.  Prosper would need a whole new registration to offer stock to the public, which would take considerably longer than its cash will last.

[bamalucky]

Prosper only had about 5 months of funding left -- so it will be flat broke by around Thanksgiving, absent another infusion of cash.

They have all these new loans as collateral

[onthefence]

Prosper only had about 5 months of funding left -- so it will be flat broke by around Thanksgiving, absent another infusion of cash.

They have all these new loans as collateral

~3/4ths of a million dollars according to this chart


Image courtesy of http://www.ericscc.com/stats/prosper-loan-growth

That won't even get Prosper through half a month.

[Fred93]

To date, we have financed our operations with proceeds from the sale of equity securities. We are dependent upon raising additional capital or debt financing to fund our current operating plan.

Someone help me out here.  What are "equity securities"?  Are they ownership in Prosper?  Or are these secured debts that take precedence over the currently produced loans?

Yea.  In this context it means they sold some ownership of Prosper to the VCs in exchange for cash, which is the usual thing startups do to raise money.