So the available cash should be net of this $10M liability.
That is not correct.
In the "Condensed Consolidated Balance Sheets" (p. 1), Prosper lists their "Cash and Cash Equivalents" as an "Asset" and they separately list the "Class Action Settlement Liability" as a separate line item under "Liabilities". See the below adapted from the 10-Q:
Assets |
| Cash and Cash Equivalents | $10,515,000 |
| ... |
Liabilities |
| Class Action Settlement Liability | $10,000,000 |
Therefore, Prosper has (as of end of June 2013) ~$10.5million in available "Cash and Cash Equivalents"
before any payments made to the Class Action Lawsuit Settlement.
The $1M net income I referred to before was from "Condensed Statements of Operations" (p. 20). This is actually a good news, since Prosper is now operationally profitable.
The information you are quoting is solely for Prosper Funding LLC (mostly just a shell corporation to hold the notes after origination) and not for the combined operations of both Prosper Funding LLC and Prosper Marketplace Inc.
According to the "Condensed Consolidated Statements of Operations" (p. 2), Prosper as a whole had a "Loss Before Other Income and Expenses" of ~$16,175,000 (including the $10million settlement, so ~$6.175million in actual operating loss before other income/expenses).