[Sean Cash]

Filed with the SEC publicly today: http://www.sec.gov/Archives/edgar/da...d772825ds1.htm

[Lenders.Marketing]

Nice find.

I can't wait to hear what the initial price will be and how they do on opening day.

Go OnDeck!

Filed with the SEC publicly today: http://www.sec.gov/cgi-bin/browse-ed...ion=getcompany

[isaacdstern]

http://www.sec.gov/Archives/edgar/da...d772825ds1.htm

[Sean Cash]

OnDeck's stated risks:

Risks Affecting Us

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” beginning on page 14. These risks include, but are not limited to, the following:


• We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

• Our recent, rapid growth may not be indicative of our future growth and, if we continue to grow rapidly, we may not be able to manage our growth effectively.

• We have a history of losses and may not achieve consistent profitability in the future.

• Worsening economic conditions may result in decreased demand for our loans, cause our customers’ default rates to increase and harm our operating results.

• Our business may be adversely affected by disruptions in the credit markets, including reduced access to credit.

• If the information provided by customers to us is incorrect or fraudulent, we may misjudge a customer’s qualifications to receive a loan and our operating results may be harmed.

• Our current level of interest rate spread may decline in the future. Any material reduction in our interest rate spread could reduce our profitability.

• An increase in customer default rates may reduce our overall profitability and could also affect our ability to attract institutional funding. Further, historical default rates may not be indicative of future results.

• Our risk management efforts may not be effective.

• We rely on our proprietary credit-scoring model in the forecasting of loss rates. If we are unable to effectively forecast loss rates, it may negatively impact our operating results.

• Our allowance for loan losses is determined based upon both objective and subjective factors and may not be adequate to absorb loan losses.

• We face increasing competition and, if we do not compete effectively, our operating results could be harmed.

• The lending industry is highly regulated. Changes in regulations or in the way regulations are applied to our business could adversely affect our business.

[Sean Cash]

OnDeck Profit & Loss:

[isaacdstern]

my favorite line

• We have a history of losses and may not achieve consistent profitability in the future.

[Lenders.Marketing]

FYI. The attachment 597 said it was invalid.

OnDeck Profit & Loss:
Attachment 597

[Sean Cash]

FYI. The attachment 597 said it was invalid.

I deleted it because it was converted to a thumbnail. It's back

[Sean Cash]

Regarding usury and interest rates:

If the choice of law provisions in our loan agreements are found to be unenforceable, we may be found to be in violation of state interest rate limit laws.

Although the federal government does not currently regulate the maximum interest rates that may be charged on private loan transactions, many states have enacted interest rate limit laws specifying the maximum legal interest rate at which loans can be made in the state. We apply Virginia law to the underlying agreement for loans that we originate because our loans are underwritten and entered into in the state of Virginia, where our underwriting, servicing, operations and collections teams are headquartered.

Virginia does not have an interest rate limit law applicable to loans extended to corporations or certain other entities. Assuming a court were to recognize this choice of law provision, Virginia law would be applied to a dispute between the customer and us regardless of where the customer is located. We intend for Virginia law to control over state interest rate limit laws that would otherwise be applicable to these loans. We are not aware of any broad-based legal challenges to date to the applicability of Virginia law to these loans or the loans of other companies. However, many laws to which we are subject were adopted prior to the advent of the internet and related technologies and, as a result, do not expressly contemplate or address the unique issues of the internet such as the applicability of laws to online transactions, including in our case, the origination of loans. In addition, many laws that do reference the internet are being interpreted by the courts, but their applicability and scope remain uncertain. As a result, we cannot predict whether a court may seek to apply a different choice of law to our loans or to otherwise invalidate the applicability of Virginia law to our loans. If the applicability of Virginia law to these loans were challenged, and these loans were found to be governed by the laws of another state, and such other state has an interest rate limit law that prohibits the interest rate in effect with respect to such loans, the obligations of our customers to pay all or a portion of the interest on these loans could be found unenforceable or recoverable by such customer. A judgment that the choice of law provisions in our loan agreements is unenforceable could result in costly and time-consuming litigation, damage our reputation, trigger repurchase obligations, negatively impact the terms of our future loans and harm our operating results. Likewise, a judgment that the choice of law provision in other commercial loan agreements is unenforceable could result in challenges to our choice of law provision and that could result in costly and time-consuming litigation. In addition, it could cause us to incur substantial additional expense to comply with the laws of various states, including either our registration as a lender in the various states, or requiring us to place more loans through our issuing bank partners.

Issuing bank partners with whom we have agreements lend to customers in certain states. If our relationships with issuing bank partners were to end, then we may have to comply with additional restrictions, and certain states may require us to obtain a lending license.

In most states, we make loans directly to customers pursuant to Virginia law, which is the governing law we require in the underlying loan agreements with our customers. However, 11 states and jurisdictions, namely Alaska, California, Kentucky, Maryland, Nebraska, Nevada, North Dakota, Rhode Island, South Dakota, Vermont, and Washington, D.C., may not honor a Virginia choice of law. They assert either that their own laws and requirements should generally apply to commercial loans made by nonbanks or apply to commercial loans made by nonbanks if certain principal amounts are outside a range of interest rates. In such states and jurisdictions and in some other circumstances, loans are made by an issuing bank partner, primarily BofI Federal Bank (a federally chartered bank), and may be sold to us. For the years ended December 31, 2012 and 2013 and for the nine months ended September 30, 2013 and 2014, loans made by issuing bank partners constituted 21.1%,

[Sean Cash]

OnDeck's Balance Sheet:

[Sean Cash]

OnDeck ISO commissions note:

We also have relationships with a large network of funding advisors, including businesses that provide loan brokerage services, which drive distribution and aid brand awareness. Our strategic partners and funding advisors received average commissions of 2.1% and 7.0% of loan principal, respectively, for the three months ended September 30, 2014, 2.5% and 7.4%, respectively, for the nine months ended September 30, 2014, and 2.5% and 7.5%, respectively, for the year ended December 31, 2013.

[Sean Cash]

ISO vs. Direct breakdown

[Chambo]

"We apply Virginia law to the underlying agreement for loans that we originate because our loans are underwritten and entered into in the state of Virginia, where our underwriting, servicing, operations and collections teams are headquartered."

This sounds like a VERY, VERY fine line to type-rope along and if adversely ruled, would and could collapse the entire house of cards.

[Chambo]

OnDeck ISO commissions note:

We also have relationships with a large network of funding advisors, including businesses that provide loan brokerage services, which drive distribution and aid brand awareness. Our strategic partners and funding advisors received average commissions of 2.1% and 7.0% of loan principal, respectively, for the three months ended September 30, 2014, 2.5% and 7.4%, respectively, for the nine months ended September 30, 2014, and 2.5% and 7.5%, respectively, for the year ended December 31, 2013.

is this essentially stating that they have knocked down their commissions to a max of 7%?

[Sean Cash]

is this essentially stating that they have knocked down their commissions to a max of 7%?

I think it means the average they paid out across the board. Maybe some guys are getting 5, some 10, some higher and lower but the average was 7.5%

[J.Celifarco]

let the underwriting begin.. Here is whatI want to know. If ondeck submitted these financials to your bank would you fund them????

[Sean Cash]

Likely ticker symbol as reported in BusinessWeek: ONDK

[Chambo]

30 days....just wait out the 30 days

[isaacdstern]

http://www.foxbusiness.com/markets/2014/11/10/small-business-lending-platform-on-deck-files-for-ipo-valued-at-up-to-150/

[channin19]

Can't believe how many times they mentioned international expansion of the platform. Also from the filing it seems inside sales is funding Canada deals.

[Sean Cash]

Can't believe how many times they mentioned international expansion of the platform. Also from the filing it seems inside sales is funding Canada deals.

I didn't even notice that!

On another note, here's a short breakdown from Businessweek: http://www.businessweek.com/articles...ng-any-cheaper

[isaacdstern]

This kind of says it all

What does the company’s filing tell us?
OnDeck isn’t profitable. The company brought in $108 million in revenue during the first nine months of this year but reported a net loss of $14.4 million, according to the filing.

The company is not profitable now and never will be

[Guy In The Know]

They were profitable in q3 of this year.

Don't let facts get in the way of a good rant.

[bizloanbroker]

Cant wait to short this bad boy

The model is never going to be profitable and their losses are unsustainable

As they fund more and more deals they lose more and more money

[Guy In The Know]

Cant wait to short this bad boy

The model is never going to be profitable and their losses are unsustainable

As they fund more and more deals they lose more and more money

With your statement is that it is wrong. They were profitable last quarter. Did anyone besides sean actually read the document?