Home Point Capital Inc.: restructuring charge — Home Point Capital completes sale of origination assets to The Loan Store; expects $30M pre-tax charges

Home Point Capital Inc.

Sold third-party mortgage loan origination business assets to The Loan Store, Inc. effective May 1, 2023.
Consideration was 9.99% equity stake in Buyer instead of previously planned warrants.
Company exits originations after nine years; will focus exclusively on mortgage servicing rights.
Expects pre-tax charges of approx. $30M, including $10M cash; charges in first half of 2023.
Charges include $10M severance, $15M vendor contract terminations, and $5M fixed asset impairment.

Key facts

Extracted from this filing and checked against the source text.

M&A Transactions SEC 8-K Item 2.01/5.01 confidence 0.9

Home Point Capital Inc. completed a disposition involving The Loan Store, Inc. for issued shares of Buyer Common Stock at the closing of the transaction, representing 9.99% of the issued and outstanding equity of Buyer (closed 2023-05-01).

Action: disposition
Counterparty: The Loan Store, Inc.
Consideration: issued shares of Buyer Common Stock at the closing of the transaction, representing 9.99% of the issued and outstanding equity of Buyer
Closing: 2023-05-01

Exact text from the filing

Amendment, in lieu of issuing HPF warrants to purchase shares of Buyer Common Stock, Buyer issued shares of Buyer Common Stock at the closing of the transaction, representing 9.99% of the issued and outstanding equity of Buyer, on a fully-diluted, as-converted basis measured as of May 1, 2023. The foregoing description of the First Amendment does not

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.95

Home Point Capital Inc. amended First Amendment to the Asset Purchase Agreement with The Loan Store, Inc. valued at Issuance of shares of Buyer Common Stock representing 9.99% of outstanding equity (effective 2023-05-01).

Action: amendment
Agreement: asset purchase
Counterparty: The Loan Store, Inc.
Value: Issuance of shares of Buyer Common Stock representing 9.99% of outstanding equity
Effective: 2023-05-01

Exact text from the filing

HPF and the Buyer entered into a First Amendment to the Purchase Agreement (the “ First Amendment ”) to, among other things, update disclosure schedules listing the Purchased Assets, correct scriveners errors and to change the form of purchase consideration.

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Restructurings & Charges SEC 8-K Item 2.05/2.06 confidence 0.9

Home Point Capital Inc. announced a restructuring with charges of approximately $30 million affecting direct participation in the originations market.

Type: restructuring
Charge: approximately $30 million
Affected area: direct participation in the originations market

Exact text from the filing

the Company currently expects to incur pre-tax charges of approximately $30 million, of which the Company expects that approximately $10 million will be cash expenditures. Of the aggregate pre-tax charges, the Company estimates approximately $10 million will consist of employee severance, retention and related benefits; approximately $15 million will consist of vendor contract terminations and other costs; and approximately $5 million will consist of non-cash charges for the impairment of fixed assets.

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Source: SEC EDGAR

accession 0001140361-23-022503

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