Net Income (Loss) per Share

9 Months Ended

Sep. 30, 2020

Pursuant to the Restated and Amended Certificate of Incorporation and as a result of the reverse recapitalization, the Company has retrospectively adjusted the weighted average shares outstanding prior to June 10, 2020 to give effect to the exchange ratio used to determine the number of shares of common stock into which they were converted.

Basic net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.

The following table sets forth the computation of basic net income (loss) per share attributable to common stockholders for the three and nine months ended September 30, 2020, and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands, except shares and per share data)
Basic net income (loss) per share:
Numerator
Net income (loss)	$	(71,133)	$	14,716	$	(112,766)	$	45,104
Preferred distribution to redeemable convertible preferred units	—		(3,252)		(40,689)		(7,435)
Non-cash adjustment to redemption amount of the redeemable convertible preferred units	—		(58,601)		47,537		(104,825)
Net loss attributable to common unitholders	(71,133)		(47,137)		(105,918)		(67,156)
Denominator
Basic weighted-average common shares	115,189,532		37,631,052		67,828,046		37,631,052
Basic net loss per share attributable to common stockholders	$	(0.62)	$	(1.25)	$	(1.56)	$	(1.78)

The following weighted average shares of the potentially dilutive outstanding securities for the three and nine months ended September 30, 2020 and 2019 were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented. Therefore, the diluted net income (loss) per share for the three and nine months ended September 30, 2020 and 2019 are the same as the basic net income (loss) per share.


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Redeemable public warrants	2,230,897	—	890,291	—
Contingency consideration	5,803,329	—	4,032,276	—
Retroactively restated redeemable convertible Series C preferred units	—	14,278,603	8,389,982	14,278,603
Total	8,034,226	14,278,603	13,312,549	14,278,603

The Company’s pre-merger LLC membership structure included several different types of LLC interests including ownership interests and profits interests. The Company analyzed the calculation of earnings per unit by using the two-class method for the periods ended in 2019 and determined that it resulted in values that would not be comparable to the same periods in 2020 and therefore not meaningful to the users of these consolidated financial statements. As a result, the Open Lending, LLC’s net income (loss) per share information has not been presented for any period.