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Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2022

Schedule I: Condensed Financial Information of Registrant

Schedule I: Condensed Financial Information of Registrant

Schedule I: Condensed Financial Information of Registrant

Porch Group, Inc.
Condensed Balance Sheets
(Parent Company Only)
(all numbers in thousands, except share amounts)


		December 31,
		2022			2021
Assets
Investment in subsidiary		$	497,535		$	661,619
Total assets		$	497,535		$	661,619

Liabilities and Stockholders’ Equity
Current liabilities
Accrued expenses and other current liabilities			939			930
Total current liabilities			939			930
Long-term debt			416,492			414,585
Earnout liability, at fair value¹			44			13,866
Private warrant liability, at fair value²			707			15,193
Total liabilities			418,182			444,574
Commitments and contingencies³
Stockholders’ equity
Common stock, $0.0001 par value:			10			10
Authorized shares – 400,000,000 and 400,000,000, respectively
Issued and outstanding shares – 98,455,838 and 97,961,597, respectively
Additional paid-in capital			670,537			641,406
Accumulated other comprehensive loss			(6,171)			(259)
Accumulated deficit			(585,023)			(424,112)
Total stockholders’ equity			79,353			217,045
Total liabilities and stockholders’ equity		$	497,535		$	661,619

¹ – See Note 4 (Fair Value) and Note 9 (Stock-Based Compensation) in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

² - See Note 4 (Fair Value) and Note 8 (Equity and Warrants) in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

³ - See Note 16 (Commitments and Contingencies) in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

See notes to condensed financial statements.

Porch Group, Inc.
Condensed Statements of Comprehensive Loss
(Parent Company Only)
(all numbers in thousands)


								For the period from
		Year ended December 31,						December 23, 2020
		2022			2021			to December 31, 2020
Operating expenses:
General and administrative		$	3,550		$	4,079		$	56
Operating loss			(3,550)			(4,079)			(56)
Other income (expense):
Interest expense			(5,412)			(1,573)			—
Change in fair value of earnout liability¹			13,822			(18,519)			—
Change in fair value of private warrant liability¹			14,486			(15,389)			2,427
Equity in net income (loss) of subsidiary			(175,905)			(67,046)			1,360
Total other income (expense)			(153,009)			(102,527)			3,787
Loss before income taxes			(156,559)			(106,606)			3,731
Income tax benefit (expense)			—			—			—
Net loss attributable to Porch Group, Inc.		$	(156,559)		$	(106,606)		$	3,731
Other comprehensive loss			(5,912)			(259)			—
Comprehensive loss attributable to Porch Group, Inc.		$	(162,471)		$	(106,865)		$	3,731

¹ – See Note 4 (Fair Value) to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

See notes to condensed financial statements.

Porch Group, Inc.
Condensed Statements of Cash Flows
(Parent Company Only)
(all numbers in thousands)


								For the period from
		Year ended December 31,						December 23, 2020
		2022			2021			to December 31, 2020
Cash flows from operating activities:
Net (loss) income		$	(156,559)		$	(106,606)		$	3,731
Adjustments to reconcile net loss to net cash used in operating activities
Equity in net loss of subsidiary			175,905			67,046			(1,360)
Loss (gain) on remeasurement of private warrant liability			(14,486)			15,389			(2,427)
Loss (gain) on remeasurement of earnout liability			(13,822)			18,519			—
Interest expense (non-cash)			2,225			643			—
Change in operating assets and liabilities, net of acquisitions and divestitures
Accrued expenses and other current liabilities			(9)			930			—
Net cash used in operating activities			(6,746)			(4,079)			(56)
Cash flows from investing activities:
Net (investment) return of capital in subsidiary			10,551			(458,697)			(269,425)
Net cash provided by (used in) investing activities			10,551			(458,697)			(269,425)
Cash flows from financing activities:
Proceeds from recapitalization and PIPE financing			—			—			305,133
Distribution to stockholders			—			—			(30,000)
Transaction costs - recapitalization			—			—			(5,652)
Proceeds from debt issuance, net of fees			—			413,537			—
Capped call transactions			—			(52,913)			—
Proceeds from exercises of warrants			—			126,741			—
Proceeds from exercises of stock options			1,116			4,288			—
Income tax withholdings paid upon vesting of restricted stock units			(3,108)			(28,877)			—
Repurchases of stock			(1,813)			—			—
Net cash provided by (used in) financing activities			(3,805)			462,776			269,481
Net change in cash, cash equivalents, and restricted cash		$	—		$	—		$	—
Cash, cash equivalents, and restricted cash, beginning of period		$	—		$	—		$	—
Cash, cash equivalents, and restricted cash end of period		$	—		$	—		$	—

See notes to condensed financial statements.

Porch Group, Inc.
Notes to Condensed Financial Statements
(Parent Company Only)

Basis of Presentation

The accompanying condensed financial statements of Porch Group, Inc. (referred to in this section as the “Parent Company”) should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. These condensed Parent Company only financial statements have been prepared using the same accounting principles and policies described in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report, with the only exception being that the Parent Company accounts for investments in its subsidiaries using the equity method.

Porch Group, Inc. became the Parent Company as a result of the Merger in December 2020. See Note 1 (Description of Business and Summary of Significant Accounting Policies) to the accompanying consolidated financial statements included in Item 8 of this Annual Report for additional information on the Merger included in the consolidated financial statements elsewhere in this Annual Report. As a result, these Parent Company only financial statements reflect the periods following this Merger event.

Long-term Debt

The information relating to long-term debt and interest expense relates to our convertible senior notes and is described in Note 7 – Debt in the notes to the accompanying consolidated financial statements. Accrued expenses and other current liabilities include accrued interest on our convertible senior notes.

Condensed Statements of Comprehensive Loss

On the condensed statements of comprehensive loss, other comprehensive loss represents activity of Porch.com, Inc. and includes net unrealized gains and losses on available-for-sale securities.

Condensed Statements of Cash Flows

The Parent Company does not hold any cash but has access to funds maintained in Porch.com, Inc. to meet its holding company obligation.

Commitments and contingencies

See Note 16 to the accompanying consolidated financial statements included in Item 8 of this Annual Report for information regarding pending and threatened litigation.

Income Taxes

The Parent Company’s financial statements recognize the current and deferred income tax consequences that result from its activities pursuant to the provisions of ASC 740 as if it were a separate taxpayer rather than a member of the Parent Company’s consolidated income tax group. No income tax benefit is recognized for its net operating loss and other deferred tax assets because realization of these future deductions does not meet the more likely than not standard such that they are subject to a full valuation allowance.