☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 87-4730333 | |||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
3700 West Juneau Avenue | (650) 447-8424 | |||||||||||||
Milwaukee, Wisconsin 53208 (Address of principal executive office) | ( |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
Common | LVWR | |||||||||
Warrants to purchase common stock | LVWR WS |
Large accelerated filer | ☐ | Accelerated filer | ☐ | Emerging growth company | ☒ | |||||||||||||||||||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||||||||||||||||||||||||||||
Part I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Revenue, net | $ | 7,762 | $ | 10,401 | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of goods sold | 6,498 | 10,348 | |||||||||||||||||||||
Selling, administrative and engineering expense | 26,171 | 15,752 | |||||||||||||||||||||
Total costs and expenses | 32,669 | 26,100 | |||||||||||||||||||||
Operating loss | (24,907) | (15,699) | |||||||||||||||||||||
Other income, net | — | 69 | |||||||||||||||||||||
Interest expense related party | — | (277) | |||||||||||||||||||||
Interest income (expense) | 2,692 | (4) | |||||||||||||||||||||
Change in fair value of warrant liabilities | 1,068 | — | |||||||||||||||||||||
Loss before income taxes | (21,147) | (15,911) | |||||||||||||||||||||
Income tax provision | — | 68 | |||||||||||||||||||||
Net loss | (21,147) | (15,979) | |||||||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustments | — | (100) | |||||||||||||||||||||
Comprehensive loss | $ | (21,147) | $ | (16,079) | |||||||||||||||||||
Net loss per share, basic and diluted | $ | (0.10) | $ | (0.10) |
(Unaudited) | |||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 236,042 | $ | 265,240 | |||||||
Accounts receivable, net | 930 | 2,325 | |||||||||
Accounts receivable from related party | 841 | 525 | |||||||||
Inventories, net | 31,102 | 29,215 | |||||||||
Other current assets | 3,895 | 4,625 | |||||||||
Total current assets | 272,810 | 301,930 | |||||||||
Property, plant and equipment, net | 33,220 | 31,567 | |||||||||
Goodwill | 8,327 | 8,327 | |||||||||
Lease assets | 2,878 | 3,128 | |||||||||
Intangible assets, net | 1,694 | 1,809 | |||||||||
Other long-term assets | 6,829 | 5,044 | |||||||||
Total assets | $ | 325,758 | $ | 351,805 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 4,759 | $ | 7,055 | |||||||
Accounts payable to related party | 7,625 | 5,733 | |||||||||
Accrued liabilities | 15,302 | 20,343 | |||||||||
Current portion of lease liabilities | 1,392 | 1,312 | |||||||||
Total current liabilities | 29,078 | 34,443 | |||||||||
Long-term portion of lease liabilities | 1,580 | 1,913 | |||||||||
Deferred tax liabilities | 15 | 15 | |||||||||
Warrant liabilities | 7,320 | 8,388 | |||||||||
Other long-term liabilities | 288 | 246 | |||||||||
Total liabilities | 38,281 | 45,005 | |||||||||
Commitments and contingencies (Note 10) | |||||||||||
Shareholders' equity: | |||||||||||
Preferred Stock, $0.0001 par value; 20,000 shares authorized; no shares issued and outstanding as of both March 31, 2023 and December 31, 2022 | — | — | |||||||||
Common Stock, $0.0001 par value; 800,000 shares authorized; 202,409 and 202,403 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 20 | 20 | |||||||||
Additional paid-in-capital | 331,042 | 329,218 | |||||||||
Accumulated deficit | (43,585) | (22,438) | |||||||||
Total shareholders' equity | 287,477 | 306,800 | |||||||||
Total liabilities and shareholders' equity | $ | 325,758 | $ | 351,805 |
Three months ended | |||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (21,147) | $ | (15,979) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
Depreciation and amortization | 667 | 1,456 | |||||||||
Change in fair value of warrant liabilities | (1,068) | — | |||||||||
Stock compensation expense | 1,824 | (171) | |||||||||
Provision (benefit) for doubtful accounts | 39 | (1) | |||||||||
Deferred income taxes | — | (17) | |||||||||
Inventory write-downs | 673 | 299 | |||||||||
Cloud computing arrangements development costs | (967) | — | |||||||||
Other, net | (779) | 365 | |||||||||
Changes in current assets and liabilities: | |||||||||||
Accounts receivable, net | 1,356 | (1,748) | |||||||||
Accounts receivable from related party | (317) | (286) | |||||||||
Inventories | (2,560) | (1,845) | |||||||||
Other current assets | 731 | 557 | |||||||||
Accounts payable and accrued liabilities | (4,894) | (1,658) | |||||||||
Accounts payable to related party | 1,892 | — | |||||||||
Net cash used by operating activities | (24,550) | (19,028) | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (4,648) | (2,492) | |||||||||
Net cash used by investing activities | (4,648) | (2,492) | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings on notes payable to related party (Note 11) | — | 12,000 | |||||||||
Transfers from H-D (Note 11) | — | 18,723 | |||||||||
Net cash provided by financing activities | — | 30,723 | |||||||||
Net (decrease) increase in cash and cash equivalents | $ | (29,198) | $ | 9,203 | |||||||
Cash and cash equivalents: | |||||||||||
Cash and cash equivalents—beginning of period | $ | 265,240 | $ | 2,668 | |||||||
Net (decrease) increase in cash and cash equivalents | (29,198) | 9,203 | |||||||||
Cash and cash equivalents—end of period | $ | 236,042 | $ | 11,871 |
Common Stock | Additional paid-in capital | Accumulated Deficit | Accumulated other comprehensive income (loss) | Net Parent company investment | Total | ||||||||||||||||||||||||||||||||||||
Issued shares | Balance | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | 202,403 | $ | 20 | $ | 329,218 | $ | (22,438) | $ | — | $ | — | $ | 306,800 | ||||||||||||||||||||||||||||
Net loss | — | — | — | (21,147) | — | — | (21,147) | ||||||||||||||||||||||||||||||||||
Share-based compensation expense | 6 | — | 1,824 | — | — | — | 1,824 | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | 202,409 | $ | 20 | $ | 331,042 | $ | (43,585) | $ | — | $ | — | $ | 287,477 |
Common Stock | Additional paid-in capital | Accumulated Deficit | Accumulated other comprehensive income (loss) | Net Parent company investment | Total | ||||||||||||||||||||||||||||||||||||
Issued shares | Balance | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | — | $ | — | $ | — | $ | — | $ | 145 | $ | 19,780 | $ | 19,925 | ||||||||||||||||||||||||||||
Net loss prior to Business Combination | — | — | — | — | — | (15,979) | (15,979) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (100) | — | (100) | ||||||||||||||||||||||||||||||||||
Net contribution from H-D | — | — | — | — | — | 19,051 | 19,051 | ||||||||||||||||||||||||||||||||||
Balance, March 27, 2022 | — | $ | — | $ | — | $ | — | $ | 45 | $ | 22,852 | $ | 22,897 |
EXPLANATORY NOTE
LiveWire Group, Inc., a Delaware corporation, and its consolidated subsidiaries are referred to in these Consolidated financial statements and notes as the “we,” “our,” “us,” the “Company,” or “LiveWire.” The Company designs and sells electric motorcycles and electric balance bikes with related electric motorcycle parts, accessories, and apparel. The Company operates in two segments: Electric Motorcycles and STACYC.
Unless stated otherwise,company in the Merger, with each share of common stock of Domesticated ABIC being converted into the right of the holder thereof to receive one share of common stock, par value $0.0001 (“Common Stock”); (d) immediately following the Merger, H-D caused all of the membership interests of Legacy LiveWire (“Legacy LiveWire Equity”
Except as otherwise expressly provided herein,SPAC entity prior to consummation of the information in this Quarterly Report does not reflectBusiness Combination. Operating results for the periods presented prior to the consummation of the Business Combination represent those of Legacy LiveWire.
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Electric Motorcycles | |||||||||||||||||||||||
Electric motorcycles | $ | 1,411 | $ | 2,108 | |||||||||||||||||||
Parts, accessories and apparel | 71 | 208 | |||||||||||||||||||||
$ | 1,482 | $ | 2,316 | ||||||||||||||||||||
STACYC | |||||||||||||||||||||||
Electric balance bikes | $ | 5,508 | $ | 7,322 | |||||||||||||||||||
Parts, accessories and apparel | 772 | 763 | |||||||||||||||||||||
$ | 6,280 | $ | 8,085 | ||||||||||||||||||||
Total Revenue, net | $ | 7,762 | $ | 10,401 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Net loss | $ | (21,147) | $ | (15,979) | |||||||||||||||||||
Basic weighted-average shares outstanding | 202,404 | 161,000 | |||||||||||||||||||||
Effect of dilutive securities – Warrants | — | — | |||||||||||||||||||||
Effect of dilutive securities – employee stock compensation awards | — | — | |||||||||||||||||||||
Diluted weighted-average shares outstanding | 202,404 | 161,000 | |||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | (0.10) | $ | (0.10) | |||||||||||||||||||
Diluted | $ | (0.10) | $ | (0.10) |
March 31, 2023 | December 31, 2022 | ||||||||||
Raw materials and work in process | $ | 1,530 | $ | 48 | |||||||
Electric motorcycles and electric balance bikes | 26,189 | 25,291 | |||||||||
Parts and accessories and apparel | 3,383 | 3,876 | |||||||||
Inventories, net | $ | 31,102 | $ | 29,215 |
March 31, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 232,000 | $ | — | $ | — | $ | 232,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Public Warrants | $ | 4,800 | $ | — | $ | — | $ | 4,800 | |||||||||||||||
Private Placement Warrants | — | 2,520 | — | 2,520 | |||||||||||||||||||
Share-based awards settled in cash | 576 | — | — | 576 | |||||||||||||||||||
$ | 5,376 | $ | 2,520 | $ | — | $ | 7,896 | ||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 257,000 | $ | — | $ | — | $ | 257,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Public Warrants | $ | 5,500 | $ | — | $ | — | $ | 5,500 | |||||||||||||||
Private Placement Warrants | — | 2,888 | — | 2,888 | |||||||||||||||||||
Share-based awards settled in cash | 1,618 | — | — | 1,618 | |||||||||||||||||||
$ | 7,118 | $ | 2,888 | $ | — | $ | 10,006 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Balance, beginning of period | $ | 566 | $ | 1,095 | |||||||||||||||||||
Warranties issued during the period | 69 | 31 | |||||||||||||||||||||
Settlements made during the period | (32) | (138) | |||||||||||||||||||||
Currency Translation Adjustments | — | (16) | |||||||||||||||||||||
Recalls and changes to pre-existing warranty liabilities | (3) | 108 | |||||||||||||||||||||
Balance, end of period | $ | 600 | $ | 1,080 |
LIVEWIRE GROUP, INC.
(successorBusiness Combination are considered related party transactions. Agreements that the Company entered into in connection with the Separation that resulted in related party transactions include the Transition Services Agreement, Master Services Agreement, Contract Manufacturing Agreement, Joint Development Agreement, and Tax Matters Agreement. Refer to AEA-BridgesNote 16, Related Party Transactions, of the Consolidated financial statements in the Company’s 2022 Form 10-K for additional details on the agreements entered into by the Company as part of the Separation. Impact Corp.)
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 25, 2022
TABLE OF CONTENTS
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Electric Motorcycles | |||||||||||||||||||||||
Revenue, net | $ | 1,482 | $ | 2,316 | |||||||||||||||||||
Cost of goods sold | 2,440 | 5,073 | |||||||||||||||||||||
Selling, administrative and engineering expense | 23,811 | 13,926 | |||||||||||||||||||||
Operating loss | (24,769) | (16,683) | |||||||||||||||||||||
STACYC | |||||||||||||||||||||||
Revenue, net | 6,280 | 8,085 | |||||||||||||||||||||
Cost of goods sold | 4,058 | 5,275 | |||||||||||||||||||||
Selling, administrative and engineering expense | 2,360 | 1,826 | |||||||||||||||||||||
Operating income (loss) | (138) | 984 | |||||||||||||||||||||
Operating loss | $ | (24,907) | $ | (15,699) |
September 25, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash | $ | 240,329 | $ | 1,027,517 | ||||
Cash — restricted | 402,367,209 | — | ||||||
Prepaid expenses | 22,917 | 249,167 | ||||||
Investments held in Trust Account | — | 400,249,491 | ||||||
TOTAL ASSETS | $ | 402,630,455 | $ | 401,526,175 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY /SHAREHOLDERS’ DEFICIT | ||||||||
Accounts payable and a ccrued liabilities | $ | 11,244,872 | $ | 6,850,353 | ||||
Derivative warrant liabilities | 13,420,000 | 34,617,500 | ||||||
Mandatorily redeemable Class A ordinary shares | 368,136,945 | — | ||||||
Deferred underwriting fee payable | 9,376,639 | 13,125,000 | ||||||
Total Liabilities | 402,178,456 | 54,592,853 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value, zero as of September 25, 2022 and 40,000,000 shares issued and outstanding at $10.00 per share redemption value December 31, 2021 | — | 400,000,000 | ||||||
Stockholders’ Equity (Deficit)/Shareholders’ Deficit | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued or outstanding as of December 31, 2021 | — | — | ||||||
Class A ordinary shares , $0.0001 par value; 500,000,000 shares authorized; zero shares issued andDecember 31, 2021 (excluding 40,000,000 shares subject to | — | — | ||||||
Class B ordinary shares , $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding asof December 31, 2021 | — | 1,000 | ||||||
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued or outstanding as of September 25, 2022 | — | — | ||||||
Common Stock, $0.0001 par value; 800,000,000 shares authorized; 11,402,888 shares issues and outstanding as of September 25, 2022 | 1,140 | — | ||||||
Additional paid-in capital | 30,906,382 | — | ||||||
Accumulated deficit | (30,455,523 | ) | (53,067,678 | ) | ||||
Total Stockholders’ Equity /Shareholders’ Deficit | 451,999 | (53,066,678 | ) | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY /SHAREHOLDERS’ DEFICIT | $ | 402,630,455 | $ | 401,526,175 | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 25, 2022 | September 26, 2021 | September 25, 2022 | September 26, 2021 | |||||||||||||
Formation and operating costs | $ | 3,367,356 | $ | 3,117,068 | $ | 5,632,797 | $ | 3,838,489 | ||||||||
Loss from operations | (3,367,356 | ) | (3,117,068 | ) | (5,632,797 | ) | (3,838,489 | ) | ||||||||
Other income: | ||||||||||||||||
Interest earned on investments held in Trust Account | 1,792,628 | 28,889 | 2,117,718 | 129,415 | ||||||||||||
Forgiveness of deferred underwriting fee payable | 3,748,361 | — | 3,748,361 | — | ||||||||||||
Interest on mandatorily redeemable Class A ordinary shares | 3,323,742 | — | 3,323,742 | — | ||||||||||||
Change in fair value of derivative warrant liabilities | (1,830,000 | ) | 8,540,000 | 21,197,500 | 26,230,000 | |||||||||||
Other income and expense, net | 224,840 | — | 224,840 | — | ||||||||||||
Total other income, net | 7,259,571 | 8,568,889 | 30,612,161 | 26,359,415 | ||||||||||||
Net income | $ | 3,892,215 | $ | 5,451,821 | $ | 24,979,364 | $ | 22,520,926 | ||||||||
Weighted average shares outstanding of Class A ordinary shares | — | 40,000,000 | — | 40,000,000 | ||||||||||||
Basic and diluted net income per share, Class A ordinary shares | $ | — | $ | 0.11 | $ | — | $ | 0.45 | ||||||||
Weighted average shares outstanding of Class B ordinary shares | — | 10,000,000 | — | 10,000,000 | ||||||||||||
Basic and diluted net income per share, Class B ordinary shares | $ | — | $ | 0.11 | $ | — | $ | 0.45 | ||||||||
Weighted average shares outstanding of common stock (see Note 2) | 45,912,405 | — | 48,612,048 | — | ||||||||||||
Basic and diluted net income per share, common stock | $ | 0.01 | $ | — | $ | 0.45 | $ | — | ||||||||
Common Stock | Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid in Capital | Accumulated Deficit | Total Stockholders’ Equity/ Shareholders’ Deficit | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance — December 31, 2021 | — | $ | — | — | $ | — | 10,000,000 | $ | 1,000 | $ | — | $ | (53,067,678 | ) | $ | (53,066,678 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | — | — | 8,997,219 | 8,997,219 | |||||||||||||||||||||||||||
Balance — March 31, 2022 | — | — | — | — | 10,000,000 | 1,000 | — | (44,070,459 | ) | (44,069,459 | ) | |||||||||||||||||||||||||
Accretion for Class A ordinary shares to redemption amount | — | — | — | — | — | — | — | (574,581 | ) | (574,581 | ) | |||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 12,089,930 | 12,089,930 | |||||||||||||||||||||||||||
Balance — June 30, 2022 | — | — | — | — | 10,000,000 | 1,000 | — | (32,555,110 | ) | (32,554,110 | ) | |||||||||||||||||||||||||
Accretion for Class A ordinary shares to redemption amount | — | — | — | — | — | — | — | (1,792,628 | ) | (1,792,628 | ) | |||||||||||||||||||||||||
Class A ordinary shares no longer redeemable | — | — | 3,402,888 | 340 | — | — | 30,906,182 | — | 30,906,522 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 3,892,215 | 3,892,215 | |||||||||||||||||||||||||||
Adjustment to capital structure due to domestication (see Note 1) | 11,402,888 | 1,140 | (3,402,888 | ) | (340 | ) | (10,000,000 | ) | (1,000 | ) | 200 | — | — | |||||||||||||||||||||||
Balance — September 25, 2022 | 11,402,888 | $ | 1,140 | — | $ | — | — | $ | — | $ | 30,906,382 | $ | (30,455,523 | ) | $ | 451,999 | ||||||||||||||||||||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid in Capital | Accumulated Deficit | Total Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance — December 31, 2020 | — | $ | — | 10,000,000 | $ | 1,000 | $ | — | $ | (57,889,751 | ) | $ | (57,888,751 | ) | ||||||||||||||
Net income | — | — | — | — | — | 19,314,054 | 19,314,054 | |||||||||||||||||||||
Balance — March 31, 2021 | — | — | 10,000,000 | 1,000 | — | (38,575,697 | ) | (38,574,697 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (2,244,949 | ) | (2,244,949 | ) | |||||||||||||||||||
Balance — June 30, 2021 | — | — | 10,000,000 | 1,000 | — | (40,820,646 | ) | (40,819,646 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 5,451,821 | 5,451,821 | |||||||||||||||||||||
Balance — September 26, 2021 | — | $ | — | 10,000,000 | $ | 1,000 | $ | — | $ | (35,368,825 | ) | $ | (35,367,825 | ) | ||||||||||||||
For the Nine Months Ended September 25, | For the Nine Months Ended September 26, | |||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 24,979,364 | $ | 22,520,926 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Interest earned on investments held in Trust Account | (2,117,718 | ) | (129,415 | ) | ||||
Interest on mandatorily redeemable Class A ordinary shares | (3,323,742 | ) | — | |||||
Change in fair value of derivative warrant liabilities | (21,197,500 | ) | (26,230,000 | ) | ||||
Forgiveness of deferred underwriting fee payable | (3,748,361 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 226,250 | 237,163 | ||||||
Accounts payable and accrued expenses | 4,394,519 | 3,031,028 | ||||||
Net cash used in operating activities | (787,188 | ) | (570,298 | ) | ||||
Cash Flows from Investi n g Activities: | ||||||||
Withdrawal of funds from Trust Account | 402,367,209 | — | ||||||
Net restricted cash provided by investing activities | 402,367,209 | — | ||||||
Cash and restricted cash | ||||||||
Cash and restricted cash, beginning of period | 1,027,517 | 1,661,085 | ||||||
Net change in cash and restricted cash | 401,580,021 | (570,298 | ) | |||||
Cash and restricted cash, end of period | $ | 402,607,538 | $ | 1,090,787 | ||||
Reconciliation of cash and restricted cash on the Condensed Consolidated Balance Sheet to the Condensed Consolidated Statement of Cash Flows | ||||||||
Cash | $ | 240,329 | $ | 1,090,787 | ||||
Restricted cash | 402,367,209 | — | ||||||
Cash and restricted cash per the Condensed Consolidated Statement of Cash Flows | $ | 402,607,538 | $ | 1,090,787 | ||||
Non-cash investing and financing activities: | ||||||||
Mandatorily redeemable Class A ordinary shares | $ | 368,136,345 | $ | — | ||||
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Electric Motorcycles | |||||||||||||||||||||||
Electric motorcycles | $ | 1,411 | $ | 2,108 | |||||||||||||||||||
Parts, accessories and apparel | 71 | 208 | |||||||||||||||||||||
$ | 1,482 | $ | 2,316 | ||||||||||||||||||||
STACYC | |||||||||||||||||||||||
Electric balance bikes | $ | 5,508 | $ | 7,322 | |||||||||||||||||||
Parts, accessories and apparel | 772 | 763 | |||||||||||||||||||||
$ | 6,280 | $ | 8,085 | ||||||||||||||||||||
Total Revenue, net | $ | 7,762 | $ | 10,401 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Net loss | $ | (21,147) | $ | (15,979) | |||||||||||||||||||
Basic weighted-average shares outstanding | 202,404 | 161,000 | |||||||||||||||||||||
Effect of dilutive securities – Warrants | — | — | |||||||||||||||||||||
Effect of dilutive securities – employee stock compensation awards | — | — | |||||||||||||||||||||
Diluted weighted-average shares outstanding | 202,404 | 161,000 | |||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | (0.10) | $ | (0.10) | |||||||||||||||||||
Diluted | $ | (0.10) | $ | (0.10) |
March 31, 2023 | December 31, 2022 | ||||||||||
Raw materials and work in process | $ | 1,530 | $ | 48 | |||||||
Electric motorcycles and electric balance bikes | 26,189 | 25,291 | |||||||||
Parts and accessories and apparel | 3,383 | 3,876 | |||||||||
Inventories, net | $ | 31,102 | $ | 29,215 |
March 31, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 232,000 | $ | — | $ | — | $ | 232,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Public Warrants | $ | 4,800 | $ | — | $ | — | $ | 4,800 | |||||||||||||||
Private Placement Warrants | — | 2,520 | — | 2,520 | |||||||||||||||||||
Share-based awards settled in cash | 576 | — | — | 576 | |||||||||||||||||||
$ | 5,376 | $ | 2,520 | $ | — | $ | 7,896 | ||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 257,000 | $ | — | $ | — | $ | 257,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Public Warrants | $ | 5,500 | $ | — | $ | — | $ | 5,500 | |||||||||||||||
Private Placement Warrants | — | 2,888 | — | 2,888 | |||||||||||||||||||
Share-based awards settled in cash | 1,618 | — | — | 1,618 | |||||||||||||||||||
$ | 7,118 | $ | 2,888 | $ | — | $ | 10,006 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Balance, beginning of period | $ | 566 | $ | 1,095 | |||||||||||||||||||
Warranties issued during the period | 69 | 31 | |||||||||||||||||||||
Settlements made during the period | (32) | (138) | |||||||||||||||||||||
Currency Translation Adjustments | — | (16) | |||||||||||||||||||||
Recalls and changes to pre-existing warranty liabilities | (3) | 108 | |||||||||||||||||||||
Balance, end of period | $ | 600 | $ | 1,080 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Electric Motorcycles | |||||||||||||||||||||||
Revenue, net | $ | 1,482 | $ | 2,316 | |||||||||||||||||||
Cost of goods sold | 2,440 | 5,073 | |||||||||||||||||||||
Selling, administrative and engineering expense | 23,811 | 13,926 | |||||||||||||||||||||
Operating loss | (24,769) | (16,683) | |||||||||||||||||||||
STACYC | |||||||||||||||||||||||
Revenue, net | 6,280 | 8,085 | |||||||||||||||||||||
Cost of goods sold | 4,058 | 5,275 | |||||||||||||||||||||
Selling, administrative and engineering expense | 2,360 | 1,826 | |||||||||||||||||||||
Operating income (loss) | (138) | 984 | |||||||||||||||||||||
Operating loss | $ | (24,907) | $ | (15,699) |
Gross proceeds | $ | 400,000,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (18,400,000 | ) | ||
Class A ordinary shares issuance costs | (20,292,642 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 38,692,642 | |||
Class A ordinary shares subject to possible redemption (December 31, 2021) | $ | 400,000,000 | ||
Plus: | ||||
Accretion of carrying value to redemption value | 2,367,209 | |||
Less: | ||||
Redemptions | (368,136,945 | ) | ||
Class A ordinary shares no longer redeemable | (34,230,264 | ) | ||
Common stock subject to possible redemption (September 25, 2022) | $ | — | ||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
September 25, 2022 | September 26, 2021 | September 25, 2022 | September 26, 2021 | |||||||||||||||||||||||||||||
Common Stock | Class A Ordinary Shares | Class B Ordinary Shares | Common Stock | Class A Ordinary Shares | Class B Ordinary Shares | |||||||||||||||||||||||||||
Basic and diluted net income per common share or ordinary share | ||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||
Allocation of net income (1) | 568,473 | $ | 4,361,457 | $ | 1,090,364 | 21,655,622 | $ | 18,016,741 | $ | 4,504,185 | ||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding (2) | 45,912,405 | 40,000,000 | 10,000,000 | 48,612,048 | 40,000,000 | 10,000,000 | ||||||||||||||||||||||||||
Basic and diluted net income per common share | $ | 0.01 | $ | 0.11 | $ | 0.11 | $ | 0.45 | $ | 0.45 | $ | 0.45 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Electric Motorcycles | |||||||||||||||||||||||
Electric motorcycles | $ | 1,411 | $ | 2,108 | |||||||||||||||||||
Parts, accessories and apparel | 71 | 208 | |||||||||||||||||||||
$ | 1,482 | $ | 2,316 | ||||||||||||||||||||
STACYC | |||||||||||||||||||||||
Electric balance bikes | $ | 5,508 | $ | 7,322 | |||||||||||||||||||
Parts, accessories and apparel | 772 | 763 | |||||||||||||||||||||
$ | 6,280 | $ | 8,085 | ||||||||||||||||||||
Total Revenue, net | $ | 7,762 | $ | 10,401 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Net loss | $ | (21,147) | $ | (15,979) | |||||||||||||||||||
Basic weighted-average shares outstanding | 202,404 | 161,000 | |||||||||||||||||||||
Effect of dilutive securities – Warrants | — | — | |||||||||||||||||||||
Effect of dilutive securities – employee stock compensation awards | — | — | |||||||||||||||||||||
Diluted weighted-average shares outstanding | 202,404 | 161,000 | |||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | (0.10) | $ | (0.10) | |||||||||||||||||||
Diluted | $ | (0.10) | $ | (0.10) |
March 31, 2023 | December 31, 2022 | ||||||||||
Raw materials and work in process | $ | 1,530 | $ | 48 | |||||||
Electric motorcycles and electric balance bikes | 26,189 | 25,291 | |||||||||
Parts and accessories and apparel | 3,383 | 3,876 | |||||||||
Inventories, net | $ | 31,102 | $ | 29,215 |
Held-To-Maturity | Amortized Cost | Gross Holding Gain | Fair Value | |||||||||||
December 31, 2021 | U.S. Treasury Securities (Matured on January 13, 2022) | $ | 400,248,942 | $ | 3,389 | $ | 400,252,331 |
March 31, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 232,000 | $ | — | $ | — | $ | 232,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Public Warrants | $ | 4,800 | $ | — | $ | — | $ | 4,800 | |||||||||||||||
Private Placement Warrants | — | 2,520 | — | 2,520 | |||||||||||||||||||
Share-based awards settled in cash | 576 | — | — | 576 | |||||||||||||||||||
$ | 5,376 | $ | 2,520 | $ | — | $ | 7,896 | ||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 257,000 | $ | — | $ | — | $ | 257,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Public Warrants | $ | 5,500 | $ | — | $ | — | $ | 5,500 | |||||||||||||||
Private Placement Warrants | — | 2,888 | — | 2,888 | |||||||||||||||||||
Share-based awards settled in cash | 1,618 | — | — | 1,618 | |||||||||||||||||||
$ | 7,118 | $ | 2,888 | $ | — | $ | 10,006 |
Description | Level | September 25, 2022 | December 31, 2021 | |||||||||
Liabilities: | ||||||||||||
Warrant Liabilities– Public Warrants | 1 | $ | 8,800,000 | $ | 22,700,000 | |||||||
Warrant Liabilities– Private Placement Warrants | 2 | $ | 4,620,000 | $ | 11,917,500 |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Balance, beginning of period | $ | 566 | $ | 1,095 | |||||||||||||||||||
Warranties issued during the period | 69 | 31 | |||||||||||||||||||||
Settlements made during the period | (32) | (138) | |||||||||||||||||||||
Currency Translation Adjustments | — | (16) | |||||||||||||||||||||
Recalls and changes to pre-existing warranty liabilities | (3) | 108 | |||||||||||||||||||||
Balance, end of period | $ | 600 | $ | 1,080 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References inthe Company’s treasury function maintained by H-D utilized a centralized approach to cash management and the financing of its operations. Under this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to AEA-Bridges Impact Corp. References to our “management” or our “management team” refer to our officers and directors, and referencescentralized cash management approach, H-D provided funds to the “Sponsor” referCompany.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this (in thousands):
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Electric Motorcycles | |||||||||||||||||||||||
Revenue, net | $ | 1,482 | $ | 2,316 | |||||||||||||||||||
Cost of goods sold | 2,440 | 5,073 | |||||||||||||||||||||
Selling, administrative and engineering expense | 23,811 | 13,926 | |||||||||||||||||||||
Operating loss | (24,769) | (16,683) | |||||||||||||||||||||
STACYC | |||||||||||||||||||||||
Revenue, net | 6,280 | 8,085 | |||||||||||||||||||||
Cost of goods sold | 4,058 | 5,275 | |||||||||||||||||||||
Selling, administrative and engineering expense | 2,360 | 1,826 | |||||||||||||||||||||
Operating income (loss) | (138) | 984 | |||||||||||||||||||||
Operating loss | $ | (24,907) | $ | (15,699) |
Overview
We are a former blank check company incorporated in the Cayman Islands on July 29, 2020 formedcompany.
On September 16, 2022, we held a special meetingnew organization, including growing headcount and back-office support, increased costs to advance the Company’s electric vehicle systems, and to deliver the S2 platform. Refer to the Electric Motorcycles segment analysis below for further discussion.
Holders of 36,597,112 Class A ordinary shares sold in its initial public offering (the “Initial Shares”) properly exercised their righta previously announced business combination pursuant to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from the Company’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination, which was approximately $10.06 per share, or $368,136,945 in the aggregate.
On September 26, 2022, an aggregate of $368,136,945 was paid from the trust account to holders who properly exercised their right to have their Initial Shares redeemed, and the remaining balance immediately prior to the Closing of approximately $34 million was used to fund the Business Combination.
In connection with the Business Combination, on September 23, 2022, the Sponsor forfeited an aggregate of 2,000,000 Class B ordinary shares in accordance with the Investor Support Agreement,combination agreement, dated as of December 12, 2021 (the “Business Combination Agreement”), by and among the Sponsor,AEA-Bridges Impact Corp (“ABIC”), LiveWire ABIC, John Garcia, John Replogle and George Serafeim. The remaining Class B ordinary shares held by Sponsor automatically converted to 7,950,000 shares of LiveWire Common Stock.
Recent Developments/Subsequent Events
On December 12, 2021, the Company, LiveWire,EV Holdings, Inc., a Delaware corporation (now known as “LiveWire Group, Inc.”), LW EV Merger Sub, Legacy LiveWire andInc., a Delaware corporation (“Merger Sub”), Harley-Davidson, Inc. entered into, a Wisconsin corporation (“H-D”), and LiveWire EV, LLC (“Legacy LiveWire”), a wholly-owned subsidiary of H-D.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through September 25, 2022 were organizational activities“Exchange”), and those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for an initial business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of beingthe Exchange, Legacy LiveWire became a publicdirect, wholly owned subsi
18
For
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||||||||||||||
Wholesale motorcycle unit sales | 45 | 82 | |||||||||||||||||||||
Company retail motorcycle unit sales | 18 | 15 | |||||||||||||||||||||
Total LiveWire motorcycle unit sales (1) | 63 | 97 | |||||||||||||||||||||
Retail motorcycle unit sales: | |||||||||||||||||||||||
Company retail motorcycle unit sales (2) | 18 | 15 | |||||||||||||||||||||
Independent retail partners (3) | 34 | 142 | |||||||||||||||||||||
Total retail motorcycle unit sales | 52 | 157 | |||||||||||||||||||||
Electric balance bike unit sales: | |||||||||||||||||||||||
US | 7,261 | 6,075 | |||||||||||||||||||||
International | 967 | 9,377 | |||||||||||||||||||||
Total electric balance bike unit sales | 8,228 | 15,452 | |||||||||||||||||||||
As of | As of | ||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
Electric Motorcycles | |||||||||||
Company-owned dealer | 1 | 1 | |||||||||
Independent retail partners | 113 | 75 | |||||||||
Total Electric Motorcycles Retail Partners | 114 | 76 | |||||||||
STACYC | |||||||||||
Independent retail partners: | |||||||||||
U.S. | 1,967 | 1,979 | |||||||||
International | 129 | 127 | |||||||||
Total STACYC Independent Retail Partners | 2,096 | 2,106 |
For the nine months ended September 25, 2022, we had a net income of $24,979,364, which consisted of interest earned on investments held in the Trust Account of $2,117,718, change in deferred underwriting fees of $3,748,361, other income and expense (net) of $224,480, interest on mandatorily redeemable Class A ordinary shares of $3,323,742, and change in fair value of derivative warrant liabilities of $21,197,500, partially offset by operating expenses of $5,632,797.
Foroperations for the three months ended September 26, 2021, we had a netMarch 31, 2023 and March 27, 2022 (in thousands):
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | $ Change | % Change | ||||||||||||||||||||
Operating loss from Electric Motorcycles | $ | (24,769) | $ | (16,683) | $ | (8,086) | 48.5 | % | |||||||||||||||
Operating (loss) income from STACYC | (138) | 984 | (1,122) | (114.0) | % | ||||||||||||||||||
Operating loss | (24,907) | (15,699) | (9,208) | 58.7 | % | ||||||||||||||||||
Other income, net | — | 69 | (69) | (100.0) | % | ||||||||||||||||||
Interest expense related party | — | (277) | 277 | (100.0) | % | ||||||||||||||||||
Interest income (expense) | 2,692 | (4) | 2,696 | nm | |||||||||||||||||||
Change in fair value of warrant liabilities | 1,068 | — | 1,068 | nm | |||||||||||||||||||
Loss before income taxes | (21,147) | (15,911) | (5,236) | 32.9 | % | ||||||||||||||||||
Income tax provision | — | 68 | (68) | (100.0) | % | ||||||||||||||||||
Net loss | (21,147) | (15,979) | $ | (5,168) | 32.3 | % | |||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustments | — | (100) | 100 | (100.0) | % | ||||||||||||||||||
Comprehensive loss | $ | (21,147) | $ | (16,079) | $ | (5,068) | 31.5 | % | |||||||||||||||
Net loss per share, basic and diluted | $ | (0.10) | $ | (0.10) | $ | — | — | % |
Forprior year results for the nine months ended September 26, 2021, we had a netCompany. The income of $22,520,926, which consisted ofrecognized was due to the changedecrease in the estimated fair value of warrant liabilities of $26,230,000 and interest earned on marketable securities heldthe warrants during the three months ended March 31, 2023, due to fluctuations in the Trust Accountmarket price of $129,415,the warrants. See Note 7, Warrant Liabilities, in the Consolidated financial statements for further discussion.
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | $ Change | % Change | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Electric motorcycles | $ | 1,411 | $ | 2,108 | $ | (697) | (33.1) | % | |||||||||||||||
Parts, accessories and apparel | 71 | 208 | (137) | (65.9) | % | ||||||||||||||||||
Revenue, net | 1,482 | 2,316 | (834) | (36.0) | % | ||||||||||||||||||
Cost of goods sold | 2,440 | 5,073 | (2,633) | (51.9) | % | ||||||||||||||||||
Gross profit | (958) | (2,757) | 1,799 | (65.3) | % | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, administrative and engineering expense | 23,811 | 13,926 | 9,885 | 71.0 | % | ||||||||||||||||||
Operating loss | $ | (24,769) | $ | (16,683) | $ | (8,086) | 48.5 | % |
Three months ended | |||||||||||||||||||||||
March 31, 2023 | March 27, 2022 | $ Change | % Change | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Electric balance bikes | $ | 5,508 | $ | 7,322 | $ | (1,814) | (24.8) | % | |||||||||||||||
Parts, accessories and apparel | 772 | 763 | 9 | 1.2 | % | ||||||||||||||||||
Revenue, net | 6,280 | 8,085 | (1,805) | (22.3) | % | ||||||||||||||||||
Cost of goods sold | 4,058 | 5,275 | (1,217) | (23.1) | % | ||||||||||||||||||
Gross profit | 2,222 | 2,810 | (588) | (20.9) | % | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, administrative and engineering expense | 2,360 | 1,826 | 534 | 29.2 | % | ||||||||||||||||||
Operating (loss) income | $ | (138) | $ | 984 | $ | (1,122) | (114.0) | % |
the business.
Following the Initial Public Offering andfrom the sale of the Private Placementshares of Common Stock issuable upon such exercise. To the extent any of the Warrants are exercised on a total“cashless basis,” the Company will not receive any proceeds upon such exercise. The Company expects to use any proceeds it receives from Warrant exercises for general corporate and working capital purposes, which would increase its liquidity. The Company believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of $400,000,000cash proceeds the Company would receive, is dependent upon the trading price of its Common Stock. As of March 31, 2023, the reported sales price of Common Stock was placed$6.45 per share. If the trading price of Common Stock is less than the $11.50 exercise price per share of the Warrants, the Company expects that warrant holders will not exercise their Warrants. There is no guarantee the Warrants will be in the Trust Account. We incurred $21,292,016money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless and the Company may receive no proceeds from the exercise of Warrants. As a result, the Company does not expect to rely on the cash exercise of Warrants to fund its operations and the Company does not believe that it needs such proceeds to support working capital and capital expenditure requirements for the next twelve months. The Company will continue to evaluate the probability of Warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrants in transaction costs,its future liquidity projections. The Company instead currently expects to rely on the sources of funding described below, if available on reasonable terms or at all.
Forcertain payments in the nineevent minimum purchase commitments under the Contract Manufacturing Agreement with H-D are not met beginning in the year 2024.
Three months ended | |||||||||||
March 31, 2023 | March 27, 2022 | ||||||||||
Net cash used by operating activities | $ | (24,550) | $ | (19,028) | |||||||
Net cash used by investing activities | (4,648) | (2,492) | |||||||||
Net cash provided by financing activities | — | 30,723 | |||||||||
Net change in cash, cash equivalents and restricted cash | $ | (29,198) | $ | 9,203 |
For the nine months ended September 26, 2021, netpayments. These unfavorable changes in working capital were partially offset by favorable changes in accounts receivable.
At September 25, 2022, we had cash of $402,607,538 held outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination.
Recent Developments
On December 12, 2021, the Company, LiveWire, Merger Sub, Legacy LiveWire and Harley-Davidson, Inc. entered intofinancing raised through the Business Combination Agreement (each as definedand PIPE Financing. The Company estimates capital expenditures to be between $20 million and $25 million in Note 12023.
19
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements asselling prices of September 25, 2022. Weits products do not participateincrease as much or more than its increase in transactions that create relationships with unconsolidated entitiescosts.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement
The underwritersin most markets, those sales are entitled to a deferred fee of $0.35 per Unit, or $13,125,000made in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement. An affiliate of the Sponsor has purchased 2,500,000 Public Units at the Public Offering Price. In connection with the closing of the Business Combination, the underwriters have agreed to reduce the amount of their deferred fees by $3,748,361, which is shown in the condensed consolidated statement of operations as forgiveness of deferred underwriting fee payable.foreign country’s local currency. As a result, the Company’s operating results are affected by fluctuations in the values of the reduction,U.S. dollar relative to foreign currencies, however, the outstanding deferred underwriting fee was reducedimpact of such fluctuations on the Company’s operations to $9,376,638.
Critical Accounting Policies
The preparationdate are not material given the majority of unaudited condensed consolidated financial statements and related disclosures in conformity with accounting principles generally acceptedthe Company’s sales are currently in the United StatesU.S. The Company plans to expand its business and operations internationally and expects its exposure to currency rate risk to increase as it grows its international presence.
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). We account for the warrants in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheets date until exercised, and any change in fair value is recognized in our statements of operations.
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Equity Instruments Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in ASC 480. Equity instruments subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable Equity instruments (including Equity instruments that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, Equity instruments is classified as stockholders’ or shareholders’ equity. Our Equity instruments feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Equity instruments subject to possible redemption are presented as temporary equity, outside of the stockholders’/shareholders’ deficit section of our balance sheets.
Net Income (Loss) per Common Stock or Ordinary Share
Net income (loss) per common stock or ordinary share is computed by dividing net income (loss) by the weighted average number of common stock or ordinary shares outstanding for the period. Accretion associated with the redeemable common stock or Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined in Item 10 of Regulation S-K and are not required to provide the information otherwise required by this item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures, are controls and other proceduresmanagement recognizes that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosureany controls and procedures, include, without limitation,no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures designed to ensuremust reflect the fact that informationthere are resource constraints and that management is required to be disclosedapply judgment in our reports filed or submitted underevaluating the Exchange Act is accumulatedbenefits of possible controls and communicatedprocedures relative to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
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Evaluation of Disclosure Controls and Procedures
As required
not effective at the reasonable assurance level.
There were no changes in our internal control over financial reporting, (as such termthat there is defined in Rules 13a-15(f)a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.
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ITEM
None.
ITEM 1A. RISK FACTORS.
Factors that could cause our actual results to differ materially from thoseLegal Proceedings
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this QuarterlyAnnual Report on Form 10-Q.10-K for the year ended December 31, 2022.
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LiveWire Group, Inc. Exhibit Index to Form 10-Q | |||||||||||||||||||||||
Exhibit No. | Description | Form | File No. | Filing Date | Exhibit Number | Filed/Furnished herewith | |||||||||||||||||
Business Combination Agreement, dated as of December 12, 2021, by and among Harley-Davidson, Inc., AEA-Bridges Impact Corp., LW EV Holdings, Inc., LW EV Merger Sub, Inc. and LiveWire EV, LLC | 8-K | 001-39584 | 12/15/2021 | 2.1 | |||||||||||||||||||
Amended and Restated Certificate of Incorporation of LiveWire Group, Inc. | 8-K | 001-41511 | 9/30/2022 | 3.1 | |||||||||||||||||||
Amended and Restated Bylaws of LiveWire Group, Inc. | 8-K | 001-41511 | 9/30/2022 | 3.2 | |||||||||||||||||||
Warrant Agreement, dated as of October 1, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as Warrant Agent | 8-K | 001-39584 | 10/7/2020 | 4.4 | |||||||||||||||||||
Specimen Warrant Certificate | S-1 | 333-248785 | 9/14/2020 | 4.3 | |||||||||||||||||||
Description of our Securities | 10-K | 001-41511 | 3/6/2022 | 4.3 | |||||||||||||||||||
Chief Executive Officer Certification pursuant to Rule 13a-14(a) | * | ||||||||||||||||||||||
Chief Financial Officer Certification pursuant to Rule 13a-14(a) | * | ||||||||||||||||||||||
Written Statement of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. §1350 | ** | ||||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | * | |||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | * | |||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | * | |||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | * | |||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | * | |||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | * | |||||||||||||||||||||
104 | Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101 | * |
Date: | May 10, 2023 |
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Chief Financial Officer | ||||||||||||||||||||||||||
(Principal Financial Officer) | ||||||||||||||||||||||||||
Date: | May 10, 2023 | /s/ Jon Carter | ||||||||||||||||||||||||
Jon Carter | ||||||||||||||||||||||||||
Chief | ||||||||||||||||||||||||||
(Principal Accounting Officer) |
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