Green Dot 2011 Annual Report Download - page 81

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Note 11—Borrowing Agreements
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We have a line of credit used to fund timing differences between funds remitted by our retail distributors to the
banks that issue our cards and funds utilized by our cardholders. For the periods presented below, our line of credit
had the following terms:
Line of Credit Interest Rate
Cash Collateral
Requirements
(in millions, except interest rates)
March 2009 - March 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15.0 LIBOR + 1.50% $ 15.0
March 2010 - March 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.0 LIBOR + 3.50% $ 5.0
March 2011 - March 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.0 LIBOR + 2.00% $ 10.0
We present our cash collateral requirements on our consolidated balance sheets as restricted cash. There were
no outstanding borrowings at December 31, 2011 or 2010.
Note 12—Concentrations of Credit Risk
Financial instruments that subject us to concentration of credit risk consist primarily of unrestricted cash and cash
equivalents, restricted cash, investment securities, accounts receivable, loans and settlement assets. We deposit our
unrestricted cash and cash equivalents and our restricted cash with regional and national banking institutions, including
certain of our card issuing banks, that we periodically monitor and evaluate for creditworthiness. Credit risk for our
investment securities is mitigated by the types of investment securities in our portfolio, which must comply with strict
investment guidelines that we believe appropriately ensures the preservation of invested capital. Credit risk for our
accounts receivable is concentrated with card issuing banks and our customers, and this risk is mitigated by the
relatively short collection period and our large customer base. We do not require or maintain collateral for accounts
receivable. We maintain reserves for uncollectible overdrawn accounts and uncollectible trade receivables.
Approximately 92% of our borrowers reside in the state of Utah and approximately 50% in the city of Provo.
Consequently, we are susceptible to any adverse market or environmental conditions that may impact this specific
geographic region. Credit risk for our settlement assets is concentrated with our retail distributors, which we periodically
monitor.
Note 13—Stockholders’ Equity
In March 2010, our board of directors amended our Certificate of Incorporation to adopt a dual class structure for
our common stock. The two classes of common stock are Class A common stock and Class B common stock. Upon
adoption, all of our common stock outstanding converted to Class B common stock. In July 2010, we filed a restated
Certificate of Incorporation that increased the number of authorized Class A and Class B common stock from
75,000,000 shares each to 100,000,000 shares each and reduced the number of authorized shares of preferred stock
from 25,553,267 to 5,000,000. In December 2011, we filed a restated Certificate of Incorporation that authorized 10,085
shares of Series A Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock, or Series A Preferred
Stock.
Convertible Preferred Stock
On December 8, 2011, we entered into and completed a share exchange with a significant shareholder, whereby
6,859,000 shares of our Class B common stock were exchanged for 6,859 shares of our newly created series of
preferred stock, Series A Junior Preferred Stock. We had no shares of convertible preferred stock outstanding as of
December 31, 2010. Our Certificate of Incorporation specified the following rights, preferences, and privileges for our
Series A preferred stockholders.
Voting
Series A Preferred Stock is non-voting, subject to limited exceptions.
Dividends
Holders of shares of the Series A Preferred Stock are entitled to receive ratable dividends (on an as-converted
basis, taking into account the conversion rate applicable to the Series A Preferred Stock at the time) only as, if and
when any dividends are paid in respect of our Class A Common Stock.