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Delaware | | | 5500 | | | 82-5325852 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Martin C. Glass Jenner & Block LLP 1155 Avenue of the Americas New York, New York 10036 (212) 891-1672 | | | Lev Peker CarLotz, Inc. 3301 W. Moore St. Richmond, Virginia 23230 (804) 510-0744 | | | Valerie Ford Jacob Sebastian L. Fain Freshfields Bruckhaus Deringer US LLP 601 Lexington Avenue New York, NY 10022 (212) 277-4000 |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☒ |
| | | | Emerging growth company | | | ☒ |
☐ | Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
☐ | Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
Jeff Clementz Chief Executive Officer Shift Technologies, Inc. | | | Lev Peker Chief Executive Officer CarLotz, Inc. |
1. | to approve the issuance of shares of Shift Common Stock to the stockholders of CarLotz, Inc. (“CarLotz”), in connection with the merger of Shift Remarketing Operations, Inc., a wholly owned subsidiary of Shift (“Merger Sub”), with and into CarLotz with CarLotz continuing as the surviving corporation and as a wholly owned subsidiary of Shift (the “Merger”), as contemplated by the Agreement and Plan of Merger, dated August 9, 2022 (as it may be amended from time to time, the “Merger Agreement”), by and among Shift, Merger Sub and CarLotz (the “Shift Share Issuance Proposal”); |
2. | to approve an amendment to the Second Amended and Restated Certificate of Incorporation of Shift to effect a reverse stock split of Shift Common Stock at a ratio within a range of 1-for-5 and 1-for-10, as determined by the board of directors of Shift (the “Shift Board”), in the form attached as Annex B to the accompanying joint proxy statement/prospectus (the “Shift Reverse Stock Split Proposal”); and |
3. | to approve the adjournment of the Shift Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Shift Special Meeting to approve the Shift Share Issuance Proposal (the “Shift Adjournment Proposal”). |
1. | to adopt the Merger Agreement (the “CarLotz Merger Proposal”); and |
2. | to approve the adjournment of the CarLotz Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the CarLotz Special Meeting to approve the CarLotz Merger Proposal (the “CarLotz Adjournment Proposal”). |
Luis Solorzano Chairman of the Board CarLotz, Inc. Richmond, Virginia | | | Lev Peker Chief Executive Officer and Director CarLotz, Inc. |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on March 15, 2022 (other than information furnished under Item 2.02); |
• | CarLotz’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 15, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on March 31, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on April 11, 2022; |
• | CarLotz’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 29, 2022; |
• | CarLotz’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed with the SEC on May 9, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on June 6, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on June 10, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on June 21, 2022 (other than information furnished under Item 7.01); |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on July 5, 2022 (other than information furnished under Item 7.01); |
• | CarLotz’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed with the SEC on August 9, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on August 9, 2022 (other than information furnished under Item 2.02); |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on August 12, 2022; |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on September 30, 2022; and |
• | CarLotz’s Current Report on Form 8-K filed with the SEC on October 11, 2022. |
For Shift Stockholders: | | | For CarLotz Stockholders: |
Shift Technologies, Inc. | | | CarLotz, Inc. |
Attention: Corporate Secretary | | | Attention: Corporate Secretary |
290 Division Street, Suite 400 | | | 3301 W. Moore St. |
San Francisco, California 94103 | | | Richmond, Virginia 23230 |
(855) 575-6739 | | | (804) 510-0744 |
For Shift Stockholders: | | | For CarLotz Stockholders: |
MacKenzie Partners, Inc. | | | Morrow Sodali LLC |
1407 Broadway, 27th Floor | | | 333 Ludlow Street, 5th Floor, South Tower |
New York, New York 10018 | | | Stamford, Connecticut 06902 |
(800) 322-2885 (toll-free) proxy@mackenziepartners.com | | | (800) 662-5200 (toll-free) or (203) 658-9400 (banks and brokers can call collect) |
| | LOTZ@investor.morrowsodali.com |
| | Shift Common Stock | | CarLotz Common Stock | | Implied Per Share Value of Merger Consideration | | | Shift Common Stock | | CarLotz Common Stock | | Implied Per Share Value of Merger Consideration | |||||
August 8, 2022 | | $1.53 | | $0.623 | | $1.059 | | $1.53 | | $0.623 | | $1.059 | ||||||
September 20, 2022 | | $0.69 | | $0.355 | | $0.478 | ||||||||||||
October 27, 2022 | | $0.5582 | | $0.2977 | | $0.3864 |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Shift Proposal 1: Shift Share Issuance Proposal | | | Approval requires the affirmative vote of the holders of a majority of the shares of Shift Common Stock present in person or represented by proxy at the Shift Special Meeting and entitled to vote upon the Shift Share Issuance Proposal. | | | The failure to vote any shares present or represented by proxy at the Shift Special Meeting (including if a stockholder who holds shares in “street name” provides voting instructions for one or more other proposals but not for the Shift Share Issuance Proposal) or an abstention from voting will be treated as a vote “AGAINST” the Shift Share Issuance Proposal for the purposes of the requirement that the Shift Share Issuance Proposal receive the affirmative vote of the holders of a majority of the Shift Common Stock having voting power present in person or represented by proxy at the Shift Special Meeting. |
Shift Proposal 2: Shift Reverse Stock Split Proposal | | | Approval requires the affirmative vote of the holders of Shift Common Stock representing at least a majority of the outstanding shares of Shift Common Stock entitled to vote on the Shift Reverse Stock Split Proposal. | | | The failure to vote or the failure to instruct your bank, broker or other nominee to vote shares held in “street name” with respect to the Shift Reverse Stock Split Proposal (except in the event your bank, broker or other nominee exercises its discretionary authority to vote “FOR” the Shift Reverse Stock Split Proposal) or an abstention from voting will be treated as a vote “AGAINST” the Shift Reverse Stock Split Proposal, provided that a quorum is otherwise present at the Shift Special Meeting. |
Shift Proposal 3: Shift Adjournment Proposal | | | Approval requires the affirmative vote of the holders of a majority of the shares of Shift Common Stock present in person or represented by proxy at the Shift Special Meeting and entitled to vote upon the Shift Adjournment Proposal. | | | The failure to vote any shares present or represented by proxy at the Shift Special Meeting (including if a stockholder who holds shares in “street name” provides voting instructions for one or more other proposals but not for the Shift Adjournment Proposal) or an abstention from voting will be treated as a vote “AGAINST” the Shift Adjournment Proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
CarLotz Proposal 1: CarLotz Merger Proposal | | | Approval requires the affirmative vote of the holders of a majority of the outstanding shares of CarLotz Common Stock entitled to vote at the close of business on the Record Date. | | | The failure to vote, the failure to instruct your brokerage firm, bank, dealer or other similar organization, trustee or nominee to vote shares held in “street name” on the CarLotz Merger Proposal or an abstention from voting will have the same effect as a vote “AGAINST” the CarLotz Merger Proposal. |
CarLotz Proposal 2: CarLotz Adjournment Proposal | | | Approval requires the affirmative vote of the holders of a majority of the voting power of the shares of CarLotz Common Stock present, including by remote communication, or represented by proxy at the CarLotz Special Meeting. | | | Any shares not present or represented by proxy (including due to failure of a CarLotz Stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the CarLotz Special Meeting to such bank, broker or other nominee) will have no effect on the outcome of the CarLotz Adjournment Proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the CarLotz Adjournment Proposal will have the same effect as a vote “AGAINST” the CarLotz Adjournment Proposal. In addition, if a CarLotz Stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for the CarLotz Merger Proposal, but not for the CarLotz Adjournment Proposal, it will have the same effect as a vote “AGAINST” the CarLotz Adjournment Proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
CarLotz Proposal 1: CarLotz Merger Proposal | | | Approval requires the affirmative vote of the holders of a majority of the outstanding shares of CarLotz Common Stock entitled to vote at the close of business on the Record Date. | | | The failure to vote, the failure to instruct your brokerage firm, bank, dealer or other similar organization, trustee or nominee to vote shares held in “street name” on the CarLotz Merger Proposal or an abstention from voting will have the same effect as a vote “AGAINST” the CarLotz Merger Proposal. |
CarLotz Proposal 2: CarLotz Adjournment Proposal | | | Approval requires the affirmative vote of the holders of a majority of the voting power of the shares of CarLotz Common Stock present, including by remote communication, or represented by proxy at the CarLotz Special Meeting. | | | Any shares not present or represented by proxy (including due to failure of a CarLotz Stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the CarLotz Special Meeting to such bank, broker or other nominee) will have no effect on the outcome of the CarLotz Adjournment Proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the CarLotz Adjournment Proposal will have the same effect as a vote “AGAINST” the CarLotz Adjournment Proposal. In addition, if a CarLotz Stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for the CarLotz Merger Proposal, but not for the CarLotz Adjournment Proposal, it will have the same effect as a vote “AGAINST” the CarLotz Adjournment Proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
CarLotz Proposal 1: CarLotz Merger Proposal | | | Approval requires the affirmative vote of the holders of a majority of the outstanding shares of CarLotz Common Stock entitled to vote at the close of business on the Record Date. | | | The failure to vote, the failure to instruct your brokerage firm, bank, dealer or other similar organization, trustee or nominee to vote shares held in “street name” on the CarLotz Merger Proposal or an abstention from voting will have the same effect as a vote “AGAINST” the CarLotz Merger Proposal. |
CarLotz Proposal 2: CarLotz Adjournment Proposal | | | Approval requires the affirmative vote of the holders of a majority of the voting power of the shares of CarLotz Common Stock present, including by remote communication, or represented by proxy at the CarLotz Special Meeting. | | | Any shares not present or represented by proxy (including due to failure of a CarLotz Stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the CarLotz Special Meeting to such bank, broker or other nominee) will have no effect on the outcome of the CarLotz Adjournment Proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the CarLotz Adjournment Proposal will have the same effect as a vote “AGAINST” the CarLotz Adjournment Proposal. In addition, if a CarLotz Stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for the CarLotz Merger Proposal, but not for the CarLotz Adjournment Proposal, it will have the same effect as a vote “AGAINST” the CarLotz Adjournment Proposal. |
Valuation Metric | | | 25th percentile | | | Median | | | 75th percentile |
Enterprise Value / 2023E Revenue | | | 0.35x | | | 0.44x | | | 0.50x |
Enterprise Value / 2023E Gross Profit | | | 2.3x | | | 2.5x | | | 4.5x |
Valuation Metric | | | Implied Shift Share Price |
Enterprise Value / 2023E Revenue | | | $0.58 – $0.88 |
Enterprise Value / 2023E Gross Profit | | | $0.07 – $0.83 |
Valuation Metric | | | 25th percentile | | | Median | | | 75th percentile |
Enterprise Value / 2023E Revenue | | | 0.35x | | | 0.44x | | | 0.50x |
Enterprise Value / 2023E Gross Profit | | | 2.3x | | | 2.5x | | | 4.5x |
Valuation Metric | | | Implied CarLotz Share Price |
Enterprise Value / 2023E Revenue | | | $1.42 – $1.48 |
Enterprise Value / 2023E Gross Profit | | | $1.23 – $1.36 |
Valuation Methodology | | | Implied Exchange Ratio |
Selected Trading Comparables (Enterprise Value / 2023E Revenue) | | | 1.61x – 2.55x |
Selected Trading Comparables (Enterprise Value / 2023E Gross Profit) | | | 1.48x – 18.91x |
Discounted Cash Flow Analysis | | | 0.33x – 1.40x |
| | | | Selected Public Company Valuation Multiples | | | Implied Price Per Share Range | |||||||||||
| | Revenue | | | Min | | | Mean | | | Median | | | Max | | | ||
Enterprise Value / CY 2022E Revenue | | | | | | | | | | | | | ||||||
Management Estimate | | | $739 | | | 0.31x | | | 0.71x | | | 0.74x | | | 1.05x | | | $0.53 - $6.26 |
Consensus Forecast | | | $1,013 | | | 0.31x | | | 0.71x | | | 0.74x | | | 1.05x | | | $1.40 - $9.30 |
Enterprise Value / CY 2023E Revenue | | | | | | | | | | | | | ||||||
Management Estimate | | | $577 | | | 0.21x | | | 0.63x | | | 0.65x | | | 1.01x | | | NMF - $4.27 |
Consensus Forecast | | | $1,497 | | | 0.21x | | | 0.63x | | | 0.65x | | | 1.01x | | | $1.40 - $13.28 |
| | | | Selected Public Company Valuation Multiples | | | Implied Price Per Share Range | |||||||||||
| | Revenue | | | Min | | | Mean | | | Median | | | Max | | | ||
Enterprise Value / CY 2022E Revenue | | | | | | | | | | | | | ||||||
Management Estimate | | | $382 | | | 0.31x | | | 0.71x | | | 0.74x | | | 1.05x | | | $1.76 - $3.97 |
Consensus Forecast | | | $295 | | | 0.31x | | | 0.71x | | | 0.74x | | | 1.05x | | | $1.55 - $3.26 |
Enterprise Value / CY 2023E Revenue | | | | | | | | | | | | | ||||||
Management Estimate | | | $654 | | | 0.21x | | | 0.63x | | | 0.65x | | | 1.01x | | | $1.90 - $6.01 |
Consensus Forecast | | | $302 | | | 0.21x | | | 0.63x | | | 0.65x | | | 1.01x | | | $1.33 - $3.23 |
| | CarLotz Implied Price Per Share | | | Shift Implied Price Per Share | | | Implied Exchange Ratio | | | Transaction Exchange Ratio | |
Enterprise Value / CY 2022E Revenue | | | | | | | | | ||||
Management Estimate | | | $1.76 - $3.97 | | | $0.53 - $6.26 | | | 0.2808x - 7.5461x | | | 0.6881x |
Consensus Forecast | | | $1.55 - $3.26 | | | $1.40 - $9.30 | | | 0.1665x - 2.3256x | | | 0.6881x |
Enterprise Value / CY 2023E Revenue | | | | | | | | | ||||
Management Estimate | | | $1.90 - $6.01 | | | NMF - $4.27 | | | 0.4451x - NMF | | | 0.6881x |
Consensus Forecast | | | $1.33 - $3.23 | | | $1.40 - $13.28 | | | 0.1005x - 2.3106x | | | 0.6881x |
(15) | Calculated using CarLotz diluted shares and Shift basic shares. |
| | Implied Premium at $0.96 / share1 | | | Premiums Paid Data Percentile | |||||||||||||||||||||||||
Period | | | 10th | | | 20th | | | 30th | | | 40th | | | 50th | | | 60th | | | 70th | | | 80th | | | 90th | |||
One Day Prior | | | 60.6% | | | 1.8% | | | 12.8% | | | 20.5% | | | 27.6% | | | 35.9% | | | 42.9% | | | 53.9% | | | 69.4% | | | 97.6% |
One Week Prior | | | 112.4% | | | 3.7% | | | 13.9% | | | 22.3% | | | 28.3% | | | 36.4% | | | 43.9% | | | 56.6% | | | 70.7% | | | 98.7% |
One Month Prior | | | 117.5% | | | 5.5% | | | 16.0% | | | 24.6% | | | 31.0% | | | 38.2% | | | 45.5% | | | 57.9% | | | 74.3% | | | 102.3% |
1 | Implied offer price for CarLotz at the Exchange Ratio based on Shift Common Stock closing price as of August 5, 2022. |
($ in millions) | | | FY 2022E | | | FY 2023E | | | FY 2024E | | | FY 2025E | | | FY 2026E | | | FY 2027E | | | FY 2028E | | | FY 2029E | | | FY 2030E | | | FY 2031E |
Revenue | | | $739 | | | $577 | | | $784 | | | $1,170 | | | $1,756 | | | $2,370 | | | $2,963 | | | $3,407 | | | $3,748 | | | $3,935 |
Gross Profit | | | 47 | | | 73 | | | 132 | | | 205 | | | 307 | | | 415 | | | 519 | | | 597 | | | 656 | | | 689 |
Adjusted EBITDA(1) | | | (132) | | | (43) | | | 0 | | | 19 | | | 38 | | | 75 | | | 115 | | | 150 | | | 181 | | | 204 |
(1) | Adjusted EBITDA is defined as EBITDA, plus stock-based compensation, plus non-recurring severance expenses, plus acquisition-related expenses. Adjusted EBITDA is a financial measure that is not defined under or calculated in accordance with GAAP. |
| | Fiscal year ended December 31, | |||||||||||||
| | 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | |
| | (in millions) | | | | | | | |||||||
Revenue | | | $382 | | | $654 | | | $828 | | | $995 | | | $1,169 |
Gross Profit | | | $15 | | | $47 | | | $63 | | | $86 | | | $113 |
Adjusted EBITDA(1) | | | $(85) | | | $(54) | | | $(63) | | | $(52) | | | $(33) |
(1) | Adjusted EBITDA is defined as gross profit minus total operating expenses plus depreciation, amortization and stock-based compensation. |
(1) | any adverse change in general business or economic, financial, capital market, political or social conditions in the United States or in other locations in which (x) CarLotz and CarLotz’s subsidiaries or (y) Shift and Shift’s subsidiaries, as applicable, have material operations; |
(2) | changes in the financial, banking, capital or securities markets generally in the United States or any other country or region in the world, or changes therein, including changes in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries; |
(3) | changes or proposed changes after the date of the Merger Agreement in applicable laws or other legal or regulatory conditions or changes after the date of the Merger Agreement in GAAP or other accounting standards (or the interpretation thereof); |
(4) | any changes after the date of the Merger Agreement in political conditions in the United States or any other country in the world, or acts of war, or hostilities (whether or not pursuant to the declaration of a national emergency or war) sabotage or terrorism, civil unrest, cyberterrorism, curfews, riots or any escalation or worsening thereof in the United States or any other country in the world; |
(5) | any “force majeure” events, acts of God, natural disasters, any hurricane, tornado, flood, earthquake, tsunami, natural disaster, mudslides, wild fires, weather conditions or other calamities occurring after the date of the Merger Agreement or any escalation of the foregoing; |
(6) | the negotiation, execution, delivery or public announcement of the Merger Agreement or the pendency or consummation of the Proposed Transactions, including the identity of, or any facts or circumstances relating to (x) CarLotz and CarLotz’s subsidiaries or (y) Shift and Shift’s subsidiaries, as applicable, and the impact thereof on the relationships, contractual or otherwise, of any of (x) CarLotz or CarLotz’s subsidiaries or (y) Shift or Shift’s subsidiaries, as applicable, with losses of customers, suppliers, distributors, investors, lenders, licensors, licensees, payors or other business partners or employees that are directly attributable to the announcement or pendency of the Merger Agreement; |
(7) | any failure by (x) CarLotz or any CarLotz subsidiary or (y) Shift or any Shift subsidiary, as applicable, to meet, or changes to, any internal or published budgets, projections, forecasts, estimates or predictions (although the underlying facts and circumstances resulting in such failure may be taken into account to the extent not otherwise excluded from this definition pursuant to subclauses (1) through (6), and (8) through (12)); |
(8) | any epidemics, pandemics, disease outbreaks or quarantines, including COVID-19 or any COVID-19 measures or any change in such COVID-19 measures or interpretations thereof; |
(9) | the taking of any action expressly required by the terms of the Merger Agreement; |
(10) | any actions taken or omitted to be taken by (x) CarLotz or a CarLotz subsidiary or (y) Shift or a Shift subsidiary, as applicable, at the express written request or with the express prior written consent of (x) Shift or (y) CarLotz, as applicable; |
(11) | any breach of the Merger Agreement by (x) CarLotz or (y) Shift or Merger Sub, as applicable; |
(12) | any matter set forth in each party’s respective disclosure schedule; or |
(13) | any claims, actions, suits or proceedings arising from allegations of a breach of fiduciary duty or violation of applicable law relating to the Merger Agreement or the Proposed Transactions; |
(A) | enter into or amend any collective bargaining agreement; |
(B) | establish, adopt, enter into, amend or terminate any employee plan or employee agreement or any plan, practice, agreement, arrangement or policy that would be an employee plan or employee agreement if it was in existence on the date of the Merger Agreement (other than (1) in the ordinary course of business in connection with the annual renewal of employee plans that are group health or welfare plans or (2) the entry into employment agreements that are terminable “at will” without any obligation on the part of CarLotz, a CarLotz subsidiary or any affiliates thereof to make any severance, change in control, incentive compensation or similar payment or provide any benefit in the ordinary course of business in connection with the hiring or promotion of any current or former employee, contract worker, officer, board member or other individual service provider (each, an “Associate”) permitted by clause (H) below); |
(C) | pay, or make any new commitment to pay, any bonus, cash incentive payment or profit-sharing or similar payment to, or increase or make any commitment to increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any Associate; provided, that CarLotz and its subsidiaries may make increases to base salary and target bonus opportunity in connection with such promotions in an aggregate amount for such increases of up to $200,000; |
(D) | grant, pay or establish any severance, separation, change in control, termination, retention or similar compensation or benefits to, or increase in any manner the severance, separation, change in control, termination, retention or similar compensation or benefits of, any Associate other than the entry into separation agreements, and payments of termination or separation pay pursuant thereto, in the ordinary course of business consistent with past practice in connection with the termination of employment of any Associate permitted pursuant to clause (I) below and provided that (x) such Associate is not a participant in the CarLotz retention pool established in connection with the Merger Agreement and (y) such separation agreements and payments are on terms consistent with (and provide rights and benefits that are no greater than) CarLotz’s severance policy in effect on the date of the Merger Agreement; |
(E) | enter into any trust, annuity or insurance contract or similar agreement or take any other action to fund or in any other way secure the payment of compensation or benefits under any employee plan; |
(F) | take any action to accelerate the time of payment or vesting of any compensation, benefits or funding obligations under any employee plan or otherwise; |
(G) | make any material determination under any employee plan that is inconsistent with the ordinary course of business or past practice; |
(H) | hire any individual who is a senior director or above or promote any Associate to a senior director role or above (1) that is a newly created position following the date of the Merger Agreement or (2) other than in replacement of a position as of the date of the Merger Agreement, provided that such replacement shall not receive compensation or benefits in excess of the compensation or benefits provided to the person who held such position as of the date of the Merger Agreement; |
(I) | terminate any Associate who is a senior director or above (other than a termination for “cause” as defined under any employee plan as of the date of the Merger Agreement); and |
(J) | effectuate a “plant closing,” “mass layoff” or similar action under the Worker Adjustment and Retraining Notification Act (and any similar foreign, provincial, state or local statute or regulation); or |
(K) | enter into any new contract covering any Associate that, considered individually or collectively with any other such contracts or payments, will or reasonably would be expected to be characterized as a “parachute payment” within the meaning of Section 280G(b)(2) of the Code. |
(i) | if: (A) an unsolicited, bona fide, written acquisition proposal is made to such party after the date of the Merger Agreement and is not withdrawn; (B) such acquisition proposal did not result directly or indirectly from a breach of such party’s non-solicitation covenants; (C) such board of directors determines in good faith that such acquisition proposal constitutes a superior offer; (D) such board of directors determines in good faith, after having taken into account the advice of such party’s outside legal counsel, that, in light of such superior offer, the failure to withdraw or modify its unanimous recommendation, or the failure to terminate the Merger Agreement in order to accept such superior offer, would reasonably be expected to be inconsistent with its fiduciary obligations under applicable |
(ii) | if: (A) there shall arise after the date of the Merger Agreement a material event, material development or change in circumstances that relates to and is material to (1) CarLotz and CarLotz’s subsidiaries or (2) Shift and Shift’s subsidiaries, in each case taken as a whole (but does not relate to any acquisition proposal) that was not known, and would not reasonably be expected to have been known or foreseen on the date of the Merger Agreement (or if known, the consequences of which were not known and would not reasonably be expected to have been known or foreseen as of the date of the Merger Agreement), which event, development or change in circumstance, or any material consequence thereof, becomes known to such party prior to the requisite vote of such party’s stockholders and did not result from or arise out of the announcement or pendency of, or any action required to be taken (or to be refrained from being taken) pursuant to, the Merger Agreement (any such material event, material development or material change in circumstances, a “Change in Circumstances”); (B) such board of directors determines in good faith, after having taken into account the advice of an independent financial advisor and the advice of such party’s outside legal counsel, that, in light of such Change in Circumstances, the failure to withdraw or modify such board of directors’ unanimous recommendation would reasonably be expected to be inconsistent with such board of directors’ fiduciary obligations under applicable law; (C) notice is delivered to the other party no less than four business days prior to withdrawing or modifying such board of directors’ unanimous recommendation, including a description of the Change in Circumstances; (D) throughout such four business day period, such party engages (to the extent requested by the other party) in good faith negotiations with the other party to amend the Merger Agreement in such a manner that the failure to withdraw or modify such board of directors’ unanimous recommendation would not reasonably be expected to be inconsistent with such board of directors’ fiduciary obligations under applicable law in light of such Change in Circumstances; and (E) at the time of withdrawing or modifying such board of directors’ unanimous recommendation, such board of directors determines in good faith, after taking into account the advice of an independent financial advisor and the advice of such party’s outside legal counsel, that the failure to withdraw or modify such board of directors’ unanimous recommendation would reasonably be expected to be inconsistent with such board of directors’ fiduciary obligations under applicable law; provided, however, that when making such determination, such board of directors must consider any changes to the terms of the Merger Agreement proposed by the opposite party as a result of the negotiations described in clause (D) or otherwise. |
Closing Date | | | Shift Minimum Cash Amount | | | CarLotz Minimum Cash Amount |
During 2022 | | | $(10,416,596) | | | $58,330,299 |
During January 2023 | | | $(15,416,596) | | | $53,330,299 |
During February 2023 | | | $(20,416,596) | | | $48,330,299 |
During March 2023 | | | $(25,416,596) | | | $43,330,299 |
During April 2023 | | | $(30,416,596) | | | $38,330,299 |
During May 2023 | | | $(35,416,596) | | | $33,330,299 |
| | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | | | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | |||
Shift Technologies, Inc. | | | | | ||||||||
Net loss per share – basic and diluted: | | | | | ||||||||
Historical | | $(1.37) | | $(2.13) | | $(1.37) | | $(2.13) | ||||
Pro forma combined(1) | | $(1.02) | | $(0.54) | | $(0.99) | | $(0.48) | ||||
Book value per share of Combined Company common stock(2) | | | | | ||||||||
Historical | | $(0.28) | | N/A | | $(0.28) | | N/A | ||||
Pro forma combined(1) | | $0.64 | | N/A | | $0.61 | | N/A | ||||
CarLotz, Inc. | | | | | ||||||||
Net loss per share – basic and diluted: | | | | | ||||||||
Historical | | $(0.52) | | $(0.36) | | $(0.52) | | $(0.36) | ||||
Equivalent pro forma(1)(3) | | $(0.71) | | $(0.37) | | $(0.69) | | $(0.34) | ||||
Book value per share of Combined Company common stock(2) | | | | | ||||||||
Historical | | $1.37 | | N/A | | $1.37 | | N/A | ||||
Equivalent pro forma(1)(3) | | $0.44 | | N/A | | $0.43 | | N/A |
(1) | Amounts calculated based on unaudited pro forma condensed combined financial information giving effect to the Merger. |
(2) | Amounts calculated by dividing total stockholders’ equity by shares of Combined Company common stock outstanding. |
(3) | Amounts calculated by multiplying unaudited pro forma combined per share amounts by the pro forma exchange ratio of |
| | Historical | | | Transaction Accounting Adjustments | | Note 5 | | Pro Forma Combined | | | Historical | | | Transaction Accounting Adjustments | | Note 5 | | Pro Forma Combined | |||||||||||
| | Shift | | CarLotz | | | | Shift | | CarLotz | | |||||||||||||||||||
ASSETS | | | | | | | | | | | ||||||||||||||||||||
Current assets: | | | | | | | | | | | ||||||||||||||||||||
Cash and cash equivalents | | $88,482 | | $70,022 | | $(16,075) | | A | | $142,429 | | $88,482 | | $70,022 | | $(16,075) | | A | | $142,429 | ||||||||||
Restricted Cash | | — | | 4,021 | | | | 4,021 | | — | | 4,021 | | | | 4,021 | ||||||||||||||
Marketable securities - at fair value | | — | | 54,105 | | | | 54,105 | | — | | 54,105 | | | | 54,105 | ||||||||||||||
Accounts receivable, net | | 8,899 | | 8,842 | | | | 17,741 | | 8,899 | | 8,842 | | | | 17,741 | ||||||||||||||
Inventory | | 136,566 | | 31,893 | | | | 168,459 | | 136,566 | | 31,893 | | | | 168,459 | ||||||||||||||
Prepaid expenses and other current assets | | 5,140 | | 8,854 | | | | 13,994 | | 5,140 | | 8,854 | | | | 13,994 | ||||||||||||||
Operating and finance lease assets, property and equipment held for sale | | — | | 28,526 | | | | 28,526 | | — | | 28,526 | | | | 28,526 | ||||||||||||||
Total current assets | | 239,087 | | 206,263 | | (16,075) | | | 429,275 | | 239,087 | | 206,263 | | (16,075) | | | 429,275 | ||||||||||||
Property and equipment, net | | 10,131 | | 9,642 | | | | 19,773 | | 10,131 | | 9,642 | | | | 19,773 | ||||||||||||||
Operating lease right-of-use assets | | 38,110 | | 22,235 | | 70 | | B | | 60,415 | | 38,110 | | 22,235 | | 70 | | B | | 60,415 | ||||||||||
Capitalized website and internal use software costs, net | | 24,047 | | 12,918 | | (9,278) | | C | | 27,687 | | 24,047 | | 12,918 | | (9,278) | | C | | 27,687 | ||||||||||
Goodwill | | 2,524 | | — | | | | 2,524 | | 2,524 | | — | | | | 2,524 | ||||||||||||||
Other intangible assets, net | | — | | — | | 1,110 | | C | | 1,110 | | — | | — | | 1,110 | | C | | 1,110 | ||||||||||
Restricted cash, non-current | | 11,800 | | — | | | | 11,800 | | 11,800 | | — | | | | 11,800 | ||||||||||||||
Deferred borrowing costs | | 414 | | — | | | | 414 | | 414 | | — | | | | 414 | ||||||||||||||
Other non-current assets | | 3,132 | | 4,189 | | | | 7,321 | | 3,132 | | 4,189 | | | | 7,321 | ||||||||||||||
Total assets | | $329,245 | | $255,247 | | $(24,173) | | | $560,319 | | $329,245 | | $255,247 | | $(24,173) | | | $560,319 | ||||||||||||
| | | | | | | | | | |||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | | | | | | | | | | | ||||||||||||||||||||
Current liabilities: | | | | | | | | | | | ||||||||||||||||||||
Accounts payable | | $24,049 | | $3,926 | | | | $27,975 | | $24,049 | | $3,926 | | | | $27,975 | ||||||||||||||
Accrued expenses and other current liabilities | | 30,010 | | 14,784 | | 1,900 | | D | | 46,694 | | 30,010 | | 14,784 | | 7,054 | | D, E | | 51,848 | ||||||||||
Current maturities of operating lease liabilities | | 6,663 | | 4,445 | | | | 11,108 | | 6,663 | | 4,445 | | | | 11,108 | ||||||||||||||
Flooring line of credit | | 93,830 | | 15,689 | | | | 109,519 | | 93,830 | | 15,689 | | | | 109,519 | ||||||||||||||
Operating and finance lease liabilities associated with assets held for sale | | — | | 30,122 | | | | 30,122 | | — | | 30,122 | | | | 30,122 | ||||||||||||||
Total current liabilities | | 154,552 | | 68,966 | | 1,900 | | | 225,418 | | 154,552 | | 68,966 | | 7,054 | | | 230,572 | ||||||||||||
Long-term debt | | 162,341 | | 4,216 | | | | 166,557 | | 162,341 | | 4,216 | | | | 166,557 | ||||||||||||||
Non-current operating lease liabilities | | 34,814 | | 22,336 | | | | 57,150 | | 34,814 | | 22,336 | | | | 57,150 | ||||||||||||||
Other non-current liabilities | | 1,645 | | 3,120 | | | | 4,765 | | 1,645 | | 3,120 | | | | 4,765 | ||||||||||||||
Total liabilities | | 353,352 | | 98,638 | | 1,900 | | | 453,890 | | 353,352 | | 98,638 | | 7,054 | | | 459,044 | ||||||||||||
| | | | | | | | | | |||||||||||||||||||||
Stockholders’ (deficit) equity: | | | | | | | | | | | ||||||||||||||||||||
Common stock | | 9 | | 11 | | (3) | | E | | 17 | | 9 | | 11 | | (3) | | F | | 17 | ||||||||||
Additional paid-in capital | | 525,841 | | 290,398 | | (232,693) | | F | | 583,546 | | 525,841 | | 290,398 | | (242,371) | | G | | 573,868 | ||||||||||
Accumulated deficit | | (549,957) | | (133,657) | | 206,480 | | G | | (477,134) | | (549,957) | | (133,657) | | 211,004 | | H | | (472,610) | ||||||||||
Accumulated other comprehensive loss | | — | | (143) | | 143 | | H | | — | | — | | (143) | | 143 | | I | | — | ||||||||||
Total stockholders’ (deficit) equity | | (24,107) | | 156,609 | | (26,073) | | | 106,429 | | (24,107) | | 156,609 | | (31,227) | | | 101,275 | ||||||||||||
Total liabilities and stockholders’ (deficit) equity | | $329,245 | | $255,247 | | $(24,173) | | | $560,319 | | $329,245 | | $255,247 | | $(24,173) | | | $560,319 |
| | Historical | | | Transaction Accounting Adjustments | | Note 6 | | Pro Forma Combined | | | Historical | | | Transaction Accounting Adjustments | | Note 6 | | Pro Forma Combined | |||||||||||
| | Shift | | CarLotz | | | | Shift | | CarLotz | | |||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net revenue | | $443,312 | | $139,506 | | | | $582,818 | | $443,312 | | $139,506 | | | | $582,818 | ||||||||||||||
Cost of sales | | 420,647 | | 135,947 | | | | 556,594 | | 420,647 | | 135,947 | | | | 556,594 | ||||||||||||||
Gross profit | | 22,665 | | 3,559 | | — | | | 26,224 | | 22,665 | | 3,559 | | — | | | 26,224 | ||||||||||||
Operating expenses: | | | | | | | | | | | ||||||||||||||||||||
Selling, general and administrative expenses | | 122,281 | | 57,509 | | (1,641) | | B, D | | 178,149 | | 122,281 | | 57,509 | | (2,667) | | B, E | | 177,123 | ||||||||||
Depreciation and amortization | | 4,139 | | 4,147 | | (1,517) | | E | | 6,769 | | 4,139 | | 4,147 | | (1,517) | | F | | 6,769 | ||||||||||
Impairment expense | | — | | 724 | | | | 724 | | — | | 724 | | | | 724 | ||||||||||||||
Restructuring expenses | | — | | 10,731 | | | | 10,731 | | — | | 10,731 | | | | 10,731 | ||||||||||||||
Total operating expenses | | 126,420 | | 73,111 | | (3,158) | | | 196,373 | | 126,420 | | 73,111 | | (4,184) | | | 195,347 | ||||||||||||
Loss from operations | | (103,755) | | (69,552) | | 3,158 | | | (170,149) | | (103,755) | | (69,552) | | 4,184 | | | (169,123) | ||||||||||||
Change in fair value of financial instruments | | — | | 11,429 | | | | 11,429 | | — | | 11,429 | | | | 11,429 | ||||||||||||||
Interest and other expense, net | | (5,424) | | (1,210) | | | | (6,634) | | (5,424) | | (1,210) | | | | (6,634) | ||||||||||||||
Other income (expense) | | — | | (408) | | | | (408) | | — | | (408) | | | | (408) | ||||||||||||||
Net loss before income taxes | | (109,179) | | (59,741) | | 3,158 | | | (165,762) | | (109,179) | | (59,741) | | 4,184 | | | (164,736) | ||||||||||||
Provision for income taxes | | 68 | | — | | | G | | 68 | | 68 | | — | | | H | | 68 | ||||||||||||
Net loss and comprehensive loss attributable to common stockholders | | $(109,247) | | $(59,741) | | $3,158 | | | $(165,830) | | $(109,247) | | $(59,741) | | $4,184 | | | $(164,804) | ||||||||||||
Net loss and comprehensive loss per share attributable to common stockholders, basic and diluted | | $(1.37) | | | | | $(1.02) | | $(1.37) | | | | | $(0.99) | ||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | | 79,902,644 | | | 83,054,000 | | H | | 162,956,644 | | 79,902,644 | | | 87,078,994 | | I | | 166,981,638 |
| | Historical | | | Transaction Accounting Adjustments | | Note 6 | | Pro Forma Combined | | | Historical | | | Transaction Accounting Adjustments | | Note 6 | | Pro Forma Combined | |||||||||||
| | Shift | | CarLotz | | | | Shift | | CarLotz | | |||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net revenue | | $636,869 | | $258,534 | | | | $895,403 | | $636,869 | | $258,534 | | | | $895,403 | ||||||||||||||
Cost of sales | | 588,081 | | 247,946 | | | | 836,027 | | 588,081 | | 247,946 | | | | 836,027 | ||||||||||||||
Gross profit | | 48,788 | | 10,588 | | — | | | 59,376 | | 48,788 | | 10,588 | | — | | | 59,376 | ||||||||||||
Operating expenses: | | | | | | | | | | | ||||||||||||||||||||
Selling, general and administrative expenses | | 220,055 | | 144,199 | | (30,746) | | A, B, C, D | | 333,508 | | 220,055 | | 144,199 | | (26,539) | | A, B, C, D, E | | 337,715 | ||||||||||
Depreciation and amortization | | 5,586 | | 3,363 | | (100) | | E | | 8,849 | | 5,586 | | 3,363 | | (100) | | F | | 8,849 | ||||||||||
Impairment expense | | — | | 108 | | | | 108 | | — | | 108 | | | | 108 | ||||||||||||||
Total operating expenses | | 225,641 | | 147,670 | | (30,846) | | | 342,465 | | 225,641 | | 147,670 | | (26,639) | | | 346,672 | ||||||||||||
Loss from operations | | (176,853) | | (137,082) | | 30,846 | | | (283,089) | | (176,853) | | (137,082) | | 26,639 | | | (287,296) | ||||||||||||
Change in fair value of financial instruments | | 18,893 | | 99,338 | | | | 118,231 | | 18,893 | | 99,338 | | | | 118,231 | ||||||||||||||
Bargain purchase gain | | — | | — | | 88,898 | | F | | 88,898 | | — | | — | | 99,709 | | G | | 99,709 | ||||||||||
Interest and other expense, net | | (8,082) | | (1,590) | | | | (9,672) | | (8,082) | | (1,590) | | | | (9,672) | ||||||||||||||
Other income (expense) | | — | | (535) | | | | (535) | | — | | (535) | | | | (535) | ||||||||||||||
Net loss before income taxes | | (166,042) | | (39,869) | | 119,744 | | | (86,167) | | (166,042) | | (39,869) | | 126,348 | | | (79,563) | ||||||||||||
Provision for income taxes | | 226 | | 10 | | | G | | 236 | | 226 | | 10 | | | H | | 236 | ||||||||||||
Net loss and comprehensive loss attributable to common stockholders | | $(166,268) | | $(39,879) | | 119,744 | | | $(86,403) | | $(166,268) | | $(39,879) | | 126,348 | | | $(79,799) | ||||||||||||
Net loss and comprehensive loss per share attributable to common stockholders, basic and diluted | | $(2.13) | | | | | $(0.54) | | $(2.13) | | | | | $(0.48) | ||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | | 78,114,142 | | | 81,678,300 | | H | | 159,792,442 | | 78,114,142 | | | 86,878,703 | | I | | 164,992,845 |
| | Prior Classification | | | Reclassification | | | Notes | | | After Reclassification | |
Accounts receivable, net | | | 10,012 | | | (1,170) | | | (1) | | | 8,842 |
Other current assets | | | 7,684 | | | 1,170 | | | (1) | | | 8,854 |
Marketable securities – at fair value | | | 848 | | | (848) | | | (2) | | | — |
Property and equipment, net | | | 7,044 | | | 2,598 | | | (3) | | | 9,642 |
Finance lease assets, net | | | 2,803 | | | (2,803) | | | (4) | | | — |
Lease vehicles, net | | | 2,598 | | | (2,598) | | | (4) | | | — |
Other assets | | | 538 | | | 3,651 | | | (2)(4) | | | 4,189 |
Current portion of finance lease liabilities | | | 90 | | | (90) | | | (5) | | | — |
Accrued expenses and other current liabilities | | | 14,114 | | | 670 | | | (5)(6) | | | 14,784 |
Other current liabilities | | | 580 | | | (580) | | | (6) | | | — |
Earnout shares liability | | | 1,063 | | | (1,063) | | | (7) | | | — |
Merger warrants liability | | | 1,478 | | | (1,478) | | | (7) | | | — |
Other liabilities | | | 579 | | | 2,541 | | | (7) | | | 3,120 |
(1) | Represents the reclassification of $1.2 million from “Accounts receivable, net” to the “Other current assets” line item in the table set forth above. |
(2) | Represents the reclassification of $0.8 million from “Marketable securities – at fair value” to the “Other assets” line item in the table set forth above. |
(3) | Represents the reclassification of $2.6 million from “Lease vehicles, net” to the “Property and equipment, net” line item in the table set forth above. |
(4) | Represents the reclassification of $2.8 million from “Finance lease assets, net” to the “Other assets” line item in the table set forth above. |
(5) | Represents the reclassification of $0.1 million from “Current portion of finance lease liabilities” to the “Accrued expenses and other current liabilities” line item in the table set forth above. |
(6) | Represents the reclassification of $0.6 million from “Other current liabilities” to the “Accrued expenses and other current liabilities” line item in the table set forth above. |
(7) | Represents the reclassification of $1.1 million from “Earnout shares liability” and $1.5 million from “Merger warrants liability” to the “Other liabilities” line item in the table set forth above. |
| | Prior Classification | | | Reclassification | | | Notes | | | After Reclassification | |
Selling, general and administrative expense | | | 54,684 | | | 2,825 | | | (1) | | | 57,509 |
Stock-based compensation expense | | | 2,825 | | | (2,825) | | | (1) | | | — |
Interest and other expense, net | | | — | | | 1,210 | | | (2) | | | 1,210 |
Interest expense | | | 1,210 | | | (1,210) | | | (2) | | | — |
Change in fair value of financial instruments liability | | | — | | | 11,429 | | | (3) | | | 11,429 |
Change in fair value of Merger warrants liability | | | 4,813 | | | (4,813) | | | (3) | | | — |
Change in fair value of earnout shares | | | 6,616 | | | (6,616) | | | (3) | | | — |
(1) | Represents the reclassification of $2.8 million from “Stock-based compensation expense” to the “Selling, general, and administrative expense” line item in the table set forth above. |
(2) | Represents the reclassification of $1.2 million from “Interest expense” to the “Interest and other expense, net” line item in the table set forth above. |
(3) | Represents the reclassification of $4.8 million from “Change in fair value of Merger warrants liability” and $6.6 million from “Change in fair value of earnout shares” to the “Change in fair value of financial instruments liability” line item in the table set forth above. |
| | Prior Classification | | | Reclassification | | | Notes | | | After Reclassification | |
Selling, general and administrative expense | | | 93,076 | | | 51,123 | | | (1)(2) | | | 144,199 |
Stock-based compensation expense | | | 51,121 | | | (51,121) | | | (1) | | | — |
Management fee expense - related party | | | 2 | | | (2) | | | (2) | | | — |
Interest and other expense, net | | | — | | | 1,590 | | | (3) | | | 1,590 |
Interest expense | | | 1,590 | | | (1,590) | | | (3) | | | — |
Change in fair value of financial instruments liability | | | — | | | 99,338 | | | (4) | | | 99,338 |
Change in fair value of Merger warrants liability | | | 32,733 | | | (32,733) | | | (4) | | | — |
Change in fair value of earnout shares | | | 66,605 | | | (66,605) | | | (4) | | | — |
(1) | Represents the reclassification of $51.1 million from “Stock-based compensation expense” to the “Selling, general, and administrative expense” line item in the table set forth above. |
(2) | Represents the reclassification of $0.4 million from “Other income (expense)” to the “Selling, general, and administrative expense” line item in the table set forth above. |
(3) | Represents the reclassification of $1.6 million from “Interest expense” to the “Interest and other expense, net” line item in the table set forth above. |
(4) | Represents the reclassification of $32.7 million from “Change in fair value of Merger warrants liability” and $66.6 million from “Change in fair value of earnout shares” to the “Change in fair value of financial instruments liability” line item in the table set forth above. |
| | (In thousands) | |
Fair value of shares of Shift Common Stock to be issued to CarLotz Stockholders(1) | | | $ |
Fair value of Replacement Equity Awards(2) | | | |
Estimated Merger Consideration | | | $ |
(1) | The estimated Merger Consideration expected to be transferred reflected in this unaudited pro forma condensed combined financial information does not purport to represent what the actual Merger Consideration transferred will be when the Merger is completed. The |
(2) | Shift has estimated the fair value of the Replacement Equity Awards for the purposes of the unaudited pro forma condensed combined financial information. The portion of the estimated fair value of the Replacement Equity Awards attributable to the pre-Merger vesting is considered as part of the Merger Consideration, while the remaining portion will be recognized as post-Merger compensation expense over the remaining vesting periods. The final values will be impacted by changes in the price of CarLotz Common Stock and the number of the CarLotz equity awards outstanding at the Closing Date and may differ materially from the current estimates. |
| | (In thousands) | |
Book value of net assets acquired as of June 30, 2022 | | | $156,609 |
Adjustments: | | | |
Identifiable intangible assets | | | 4,750 |
Elimination of CarLotz’s historical capitalized software costs | | | (12,918) |
Retention bonuses | | | (1,900) |
Favorable and unfavorable leasehold interests | | | 70 |
Bargain purchase gain | | | ( |
Net assets acquired | | | $ |
| | Preliminary Fair Value (in thousands) | | | Estimated Useful Life (in years) | |
Developed technology | | | $3,640 | | | 3.0 |
Trademarks | | | 1,110 | | | 3.0 |
Total | | | $4,750 | | |
| | (In thousands) | |
Elimination of CarLotz historical additional paid-in capital | | | $(290,398) |
Estimated fair value of shares of Shift Common Stock to be issued as Merger Consideration(1) | | | |
Estimated fair value of Replacement Equity Awards attributable to pre-Merger vesting(2) | | | |
Accelerated vesting of equity awards in connection with the termination of CarLotz Executive Officers(3) | | | 1,133 |
Total | | | $( |
(1) | Reflects the estimated fair value of approximately |
(2) | Reflects the estimated aggregate fair value of the Replacement Equity Awards attributable to the pre-Merger vesting, which is considered as part of Merger Consideration; see Note 3 - Estimate of Merger Consideration Expected to be Transferred for further details. The remaining portion of the estimated fair value of the Replacement Equity Awards will be recognized as compensation expense over the remaining post-Merger service periods. The actual values will be impacted by changes in the price of CarLotz Common Stock and the number of CarLotz equity awards outstanding at the Closing Date, and may differ materially from current estimates. |
(3) | Reflects one-time post-combination compensation expense related to accelerated vesting of certain CarLotz equity awards in connection with the termination of CarLotz’s Executive Officers upon the Merger pursuant to “double-trigger” change of control provisions in their employment agreements with CarLotz. For additional information, refer to the section entitled “CarLotz Change in Control and Severance Arrangements with Executive Officers”included in this joint proxy statement/prospectus. |
| | (In thousands) | |
Elimination of CarLotz’s historical accumulated deficit | | | $133,657 |
Preliminary estimate of the bargain purchase gain(1) | | | |
Estimated acquisition-related transaction costs(2) | | | (16,075) |
Severance benefits in connection with the termination of CarLotz Executive Officers(3) | | | (5,154) |
Accelerated vesting of equity awards in connection with the termination of CarLotz Executive Officers(4) | | | (1,133) |
Total | | | $ |
(1) | Refer to Note 4 - Estimate of Assets to be Acquired and Liabilities to be Assumed for the calculation of the preliminary fair value of assets acquired and liabilities assumed in excess of consideration transferred based on the preliminary allocation of the estimated Merger Consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of CarLotz. |
(2) | Reflects estimated transaction costs of approximately $16.1 million expected to be incurred by Shift and CarLotz in connection with the Merger. None of these transaction costs were incurred prior to June 30, 2022. |
(3) | Reflects the amount of “double-trigger” severance payments in connection with the termination of CarLotz’s Executive Officers in accordance with the terms of their employment agreements with CarLotz. For additional information, refer to the section entitled “CarLotz Change in Control and Severance Arrangements with Executive Officers” included in this joint proxy statement/prospectus. |
(4) | Reflects one-time post-combination compensation expense related to accelerated vesting of certain CarLotz equity awards in connection with the termination of CarLotz’s Executive Officers upon the Merger pursuant to “double-trigger” change of control provisions in their employment agreements with CarLotz. For additional information, refer to the section entitled “CarLotz Change in Control and Severance Arrangements with Executive Officers” included in this joint proxy statement/prospectus. |
| | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | | | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | |||
| (in thousands) | | (in thousands) | |||||||||
Elimination of CarLotz’s historical stock-based compensation expense | | $(2,825) | | $(51,121) | | $(2,825) | | $(51,121) | ||||
Stock-based compensation expense related to Replacement Equity Awards(1) | | 1,115 | | 2,261 | | 89 | | 181 | ||||
Accelerated vesting of equity awards in connection with the termination of CarLotz Executive Officers(2) | | — | | 1,133 | ||||||||
Total | | $(1,710) | | $(48,860) | | $(2,736) | | $(49,807) |
(1) | To reflect post-Merger compensation expense associated with the Replacement Equity Awards. The portion of the estimated fair value of the Replacement Equity Awards attributable to the pre-Merger vesting has been included as part of the estimated Merger Consideration; see Note 3 - Estimate of Merger Consideration Expected to be Transferred for further details. The remaining portion of the estimated fair value of the Replacement Equity Awards will be recognized as compensation expense over the remaining post-Merger service periods. The actual values will be impacted by changes in the price of CarLotz Common Stock and the number of CarLotz equity awards outstanding at the Closing Date, and may differ materially from the current estimates. |
(2) | To reflect one-time post-combination expense related to accelerated vesting of certain CarLotz equity awards in connection with the termination of CarLotz’s Executive Officers. For additional information, refer to the section entitled “CarLotz Change in Control and Severance Arrangements with Executive Officers” included in this joint proxy statement and prospectus. |
| | Six Months Ended June 30, 2022 | | | Year Ended December 31, 2021 | |
| | (in thousands) | ||||
Amortization of the acquired identifiable intangible assets | | | $792 | | | $1,583 |
Elimination of CarLotz’s historical amortization of capitalized software costs | | | (2,309) | | | (1,683) |
Total | | | $(1,517) | | | $(100) |
| | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | | | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | |||
Consideration shares issued(1) | | 80,630,276 | | 80,630,276 | | 81,872,669 | | 81,872,669 | ||||
Post-combination vesting of replacement RSUs(2) | | 2,423,754 | | 1,048,045 | | 5,206,325 | | 5,006,034 | ||||
Total | | 83,054,030 | | 81,678,321 | | 87,078,994 | | 86,878,703 |
(1) | To reflect the issuance of approximately |
(2) | To reflect post-combination vesting of replacement RSUs. The adjustment gives effect to the replacement RSU awards issued to CarLotz stockholders that are expected to vest within 18 months of the acquisition date. The number of RSUs vesting is subject to change based on the number of unvested awards and remaining vesting time as of the Effective Date. |
Director and Executive Officer Unvested Equity Awards Summary Table(5) | Director and Executive Officer Unvested Equity Awards Summary Table(5) | Director and Executive Officer Unvested Equity Awards Summary Table(5) | ||||||||||||||||||||||||||||||||||||||||
Executive Officers | | Unvested CarLotz RSU Awards (#)(1)(2) | | Unvested CarLotz RSU Awards ($) | | Unvested CarLotz Earnout Acquiror RSUs (#)(3) | | Unvested CarLotz Earnout RSUs ($) | | Unvested CarLotz Stock options (#)(4) | | Unvested Stock options ($) | | Estimated Total Cash Value of CarLotz Equity Awards | | Unvested CarLotz RSU Awards or Restricted Shares (#)(1)(2) | | Unvested CarLotz RSU Awards or Restricted Shares ($) | | Unvested CarLotz Earnout Acquiror RSUs (#)(3) | | Unvested CarLotz Earnout RSUs ($) | | Unvested CarLotz Stock options (#)(4) | | Unvested Stock options ($) | | Estimated Total Cash Value of CarLotz Equity Awards | ||||||||||||||
Lev Peker | | 2,834,625 | | $1,700,775 | | 0 | | $0 | | 0 | | $0 | | $1,700,775 | | 2,834,625 | | $1,700,775 | | 0 | | $0 | | 0 | | $0 | | $1,700,775 | ||||||||||||||
Ozan Kaya | | 1,100,000 | | $660,000 | | 0 | | $0 | | 0 | | $0 | | $660,000 | | 1,100,000 | | $660,000 | | 0 | | $0 | | 0 | | $0 | | $660,000 | ||||||||||||||
Eugene Kovshilovsky | | 600,000 | | $360,000 | | 0 | | $0 | | 0 | | $0 | | $360,000 | | 600,000 | | $360,000 | | 0 | | $0 | | 0 | | $0 | | $360,000 | ||||||||||||||
Thomas W. Stoltz | | 172,560 | | $103,536 | | 0 | | $0 | | 452,519 | | $0 | | $103,536 | | 172,560 | | $103,536 | | 0 | | $0 | | 452,519 | | $0 | | $103,536 | ||||||||||||||
Elizabeth Sanders | | 105,321 | | $63,193 | | 41,887 | | $0 | | 151,833 | | $0 | | $63,193 | | 105,321 | | $63,193 | | 41,887 | | $0 | | 151,833 | | $0 | | $63,193 | ||||||||||||||
Luis Solorzano | | 217,665 | | $130,599 | | 0 | | $0 | | 0 | | $0 | | $130,599 | | 217,665 | | $130,599 | | 0 | | $0 | | 0 | | $0 | | $130,599 | ||||||||||||||
Linda B. Abraham | | 217,665 | | $130,599 | | 0 | | $0 | | 0 | | $0 | | $130,599 | | 217,665 | | $130,599 | | 0 | | $0 | | 0 | | $0 | | $130,599 | ||||||||||||||
Steven G. Carrel | | 217,665 | | $130,599 | | 0 | | $0 | | 0 | | $0 | | $130,599 | | 217,665 | | $130,599 | | 0 | | $0 | | 0 | | $0 | | $130,599 | ||||||||||||||
Nanxi Liu | | 259,787 | | $155,872 | | 0 | | $0 | | 0 | | $0 | | $155,872 | | 259,787 | | $155,872 | | 0 | | $0 | | 0 | | $0 | | $155,872 | ||||||||||||||
David R. Mitchell | | 217,665 | | $130,559 | | 0 | | $0 | | 0 | | $0 | | $130,599 | | 217,665 | | $130,559 | | 0 | | $0 | | 0 | | $0 | | $130,599 | ||||||||||||||
Kimberly H. Sheehy | | 217,665 | | $130,559 | | 0 | | $0 | | 0 | | $0 | | $130,599 | | 217,665 | | $130,559 | | 0 | | $0 | | 0 | | $0 | | $130,599 | ||||||||||||||
James E. Skinner | | 217,665 | | $130,559 | | 0 | | $0 | | 0 | | $0 | | $130,599 |
Director and Executive Officer Unvested Equity Awards Summary Table(5) | |||||||||||||||||||||
Executive Officers | | | Unvested CarLotz RSU Awards or Restricted Shares (#)(1)(2) | | | Unvested CarLotz RSU Awards or Restricted Shares ($) | | | Unvested CarLotz Earnout Acquiror RSUs (#)(3) | | | Unvested CarLotz Earnout RSUs ($) | | | Unvested CarLotz Stock options (#)(4) | | | Unvested Stock options ($) | | | Estimated Total Cash Value of CarLotz Equity Awards |
James E. Skinner | | | 217,665 | | | $130,559 | | | 0 | | | $0 | | | 0 | | | $0 | | | $130,599 |
(1) | For Mr. Peker, includes 680,000 restricted shares of CarLotz Common Stock converted from a 2022 annual CarLotz RSU Award |
(2) | Each of Messrs. Solorzano, Carrel, Mitchell and Skinner and Mses. Abraham and Sheehy was granted the number of unvested CarLotz RSU Awards shown in the table at the most recent CarLotz annual meeting. Ms. Liu was granted the number of unvested CarLotz RSU Awards shown in the table upon joining the CarLotz Board. These CarLotz RSU Awards are scheduled to vest in their entirety on the earlier of: (i) the day immediately preceding the date of the first annual meeting of CarLotz Stockholders following the date of grant; and (ii) the first anniversary of the date of grant. Each such CarLotz RSU Award will vest at the Effective Time, subject to the CarLotz director’s continued services through such date. Sarah Kauss was a member of the CarLotz Board through July 2, 2022 and was issued 217,655 CarLotz RSU Awards at the most recent CarLotz annual meeting under the same terms as those described above, but these CarLotz RSU Awards were forfeited upon her exit. Ms. Kauss no longer holds any interest in the Merger that differs from CarLotz stockholders generally. |
(3) | Ms. Sanders was granted CarLotz Earnout Acquiror RSUs in connection with the 2021 Merger. |
(4) | Mr. Stoltz, as of |
(5) | Messrs. Peker, Kaya and Kovshilovsky were each granted a sign-on CarLotz PSU Award in connection with their start of employment. One-third of each executive’s CarLotz PSU Awards is scheduled to vest if and when CarLotz achieves a 20-trading day volume-weighted average CarLotz Common Stock price of $4.00, one-third of each executive’s CarLotz PSU Awards is scheduled to vest if and when CarLotz achieves a 20-trading day volume-weighted average CarLotz Common Stock price of $8.00, and one-third of each executive’s CarLotz PSU Awards is scheduled to vest if and when CarLotz achieves a 20-trading day volume-weighted average CarLotz Common Stock price of $12.00, in each case within 10 years from the date of grant. These CarLotz PSU Awards will be unvested at the time of the Merger, given the assumed CarLotz Common Stock price of $0.60 per share. As noted above, Mr. Peker, Mr. Kaya and Mr. Kovshilovsky have agreed to forfeit their CarLotz PSU Awards in connection with the Merger. |
Name | | Cash ($)(1)(2) | | Equity ($)(3) | | Perquisites / Benefits ($)(4) | | Total ($) | | Cash ($)(1)(2) | | Equity ($)(3) | | Perquisites / Benefits ($)(4) | | Total ($) | ||||||||
Lev Peker | | 3,036,164 | | 1,700,775 | | 15,600 | | 4,752,539 | | 3,036,164 | | 1,700,775 | | 15,600 | | 4,752,539 | ||||||||
Ozan Kaya | | 1,631,014 | | 660,000 | | — | | 2,291,014 | ||||||||||||||||
Eugene Kovshilovsky | | 487,233 | | 360,000 | | 15,600 | | 862,833 |
Name | | | Cash ($)(1)(2) | | | Equity ($)(3) | | | Perquisites / Benefits ($)(4) | | | Total ($) |
Ozan Kaya | | | 1,631,014 | | | 660,000 | | | — | | | 2,291,014 |
Eugene Kovshilovsky | | | 487,233 | | | 360,000 | | | 15,600 | | | 862,833 |
(1) | For the continuing CarLotz named executive officers, reflects the amount of “double-trigger” cash severance payments to which the named executive officer may become entitled under his employment agreement with CarLotz. The amount becomes payable if CarLotz terminates the named executive officer’s employment without cause or if the named executive officer resigns with good reason, in either case, during the 12 months following the Merger, subject to the named executive officer’s timely execution and non-revocation |
(2) | The table below shows the breakdown of cash payments to the CarLotz named executive officers: |
Named Executive Officer | | | Severance ($)(a) | | | Sign-On Bonus ($)(b) | | | Prorated Target Annual Bonus ($)(c) | | | Total ($) |
Lev Peker | | | 1,500,000 | | | 900,000 | | | 636,164 | | | 3,036,164 |
Ozan Kaya | | | 880,000 | | | 440,000 | | | 311,014 | | | 1,631,014 |
Eugene Kovshilovsky | | | 360,000 | | | 0 | | | 127,233 | | | 487,233 |
(a) | Represents a lump-sum payment equal to the sum of the executive’s annual base salary and target bonus, for Messrs. Peker and Kaya, and the executive’s annual base salary, for Mr. Kovshilovsky. |
(b) | Represents, for each of Messrs. Peker and Kaya, if not yet paid, the executive’s sign-on bonus that was provided for in his employment agreement, which is equal to 150% of annual base salary for Mr. Peker and 100% of annual base salary for Mr. Kaya. The sign-on bonus will be paid in April 2023, which is its originally scheduled payment date. |
(c) | Each executive is entitled to a pro-rated portion of the executive’s annual bonus for the bonus period of termination, based on actual performance, paid at the originally scheduled time pursuant to the respective employment agreements. For purposes of this table, we have included the executives’ annual target bonuses. |
(3) | Represents double-trigger vesting of time-based equity awards payable under the same conditions as the cash severance described above (as noted above, the executives agreed to forfeit these CarLotz PSU Awards upon the Closing). For more detail on the unvested CarLotz equity awards held by the CarLotz named executive officers, see the section entitled “—Executive Officer Unvested Equity Award Table” above. |
(4) | Represents Surviving Corporation-paid premiums for continued coverage under COBRA for up to 12 months following termination payable as a double-trigger benefit under the same conditions as the cash severance described above. |
Shift | | | CarLotz |
Authorized and Outstanding Capital Stock | |||
| | ||
Shift’s authorized capital stock consists of (i) 500,000,000 shares of Class A common stock, par value $0.0001 per share (“Shift Common Stock”) and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Shift Preferred Stock”). At the close of business on the Shift Record Date, there were [ • ] shares of Shift Common Stock outstanding and zero shares of Shift Preferred Stock outstanding. If the Shift Reverse Stock Split Proposal is approved by Shift Stockholders and the Shift Board determines to implement the reverse stock split, the number of shares of Shift Common Stock outstanding at the time the certificate of amendment to Shift’s Charter is effective will be reduced by a ratio selected by the Shift Board (such ratio being between 1-to-5 and 1-to-10). See the section entitled “Shift Proposal 2: Amendment to the Shift Charter Effecting the Reverse Stock Split” for more information. | | | CarLotz’s authorized capital stock consists of (i) 500,000,000 shares of Class A common stock, par value $0.0001 per share (“CarLotz Common Stock”), and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share (“CarLotz Preferred Stock”). At the close of business on the CarLotz Record Date, there were [ • ] shares of CarLotz Common Stock outstanding and zero shares of CarLotz Preferred Stock outstanding. |
| | ||
Rights of Preferred Stock | |||
| | ||
The Shift Board is authorized to issue from time to time Shift Preferred Stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as stated and expressed in the resolution or resolutions adopted by the Shift Board providing for the issue of such series and as may be permitted by the DGCL. The number of authorized shares of Shift Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares | | | The CarLotz Board is authorized to issue from time to time CarLotz Preferred Stock in one or more series, without approval of the stockholders of CarLotz, by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series and to fix the designations, powers (including voting powers, if any), preferences and relative, participating, optional or other special rights, if any, of the shares of each such series, and the qualifications, limitations and restrictions thereof, if any, including but not limited to the fixing or alteration of the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the |
Shift | | | CarLotz |
of the capital stock of Shift entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of Shift Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to the terms of such Shift Preferred Stock. In the event the number of shares of any series of Shift Preferred Stock is decreased, the shares constituting such decrease will resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. | | | redemption price or prices, and the liquidation preferences of any wholly unissued series or shares of CarLotz Preferred Stock. Each such series of CarLotz Preferred Stock will have such voting powers, full or limited, or no voting powers, as authorized by the CarLotz Board and stated in the applicable certificate of designation. Unless otherwise provided in the certificate of designation establishing a series of CarLotz Preferred Stock, the CarLotz Board may, by resolution or resolutions, increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of such series and, if the number of shares of such series is so decreased, the shares constituting such decrease will resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. CarLotz will, from time to time and in accordance with applicable law, increase the number of authorized shares of CarLotz Common Stock if at any time the number of shares of CarLotz Common Stock remaining unissued and available for issuance would not be sufficient to permit the conversion of any series of CarLotz Preferred Stock that is otherwise convertible into CarLotz Common Stock. |
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Voting Rights | |||
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Each holder of Shift Common Stock is entitled to one vote for each share on each matter properly submitted to Shift’s stockholders on which the holders of Shift Common Stock are entitled to vote. Except as otherwise required by law, Shift Stockholders are not entitled to vote on any amendment to the Shift Charter that relates solely to the terms of one or more outstanding series of Shift Preferred Stock if the holders of such affected series of Shift Preferred Stock, as applicable, are entitled exclusively, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Shift Charter or the DGCL. | | | Each holder of CarLotz Common Stock is entitled to one vote for each share on the election of directors and on each other matters submitted to a vote of stockholders of CarLotz. Except as otherwise required by law, shares of CarLotz Common Stock do not entitle the holders thereof to vote on any amendment to the CarLotz Charter that alters or changes the powers, preferences, rights or other terms of solely one or more outstanding series of CarLotz Preferred Stock if the holders of such affected series are entitled, separately or together with the holders of one or more other such series, to vote on such amendment pursuant to the CarLotz Charter or pursuant to the DGCL or if no vote of stockholders is required pursuant to the DGCL. |
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Distributions and Dividends | |||
| | ||
The Shift Charter provides that, subject to applicable law and the rights, if any, of the holders of any class or series of Shift capital stock having a preference over or the right to participate with Shift Common Stock with respect to the payment of dividends, Shift | | | The CarLotz Charter provides that, subject to applicable law and any preferential dividend rights of outstanding CarLotz Preferred Stock, CarLotz Stockholders are entitled to receive dividends out of funds legally available therefor at such times and in |
Shift | | | CarLotz |
Stockholders are entitled to receive dividends and other distributions (payable in cash, property or capital stock of Shift) when, as and if declared thereon by the Shift Board from time to time out of any assets or funds of Shift legally available therefor and will share equally on a per share basis in such dividends and distributions. | | | such amounts as the CarLotz Board may determine in its sole discretion. |
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Quorum | |||
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The Shift Bylaws provide that, unless otherwise provided by applicable law, the presence, in person or by proxy, at a stockholder meeting of the holders of shares of outstanding capital stock of Shift representing a majority of the voting power of all outstanding shares of capital stock of Shift entitled to vote at such meeting constitutes a quorum. The Shift Bylaws further provide that, when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series will constitute a quorum of such class or series for the transaction of such business. | | | The CarLotz Bylaws provide that, unless otherwise provided by law, the holders of a majority of the voting power of the stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, will constitute a quorum. The CarLotz Bylaws further provide that, except as otherwise required by applicable law, where a separate vote by one or more classes or series of capital stock of CarLotz is required, the holders of a majority of the voting power of the shares of such one or more series of capital stock of CarLotz issued and outstanding and entitled to vote, present in person or represented by proxy, will constitute a quorum entitled to take action with respect to the vote on that matter. |
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Record Date | |||
| | ||
The Shift Board may fix a record date, which may not precede the date upon which the resolution fixing the record date is adopted by the Shift Board, in order that Shift may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. The record date may not be more than 60 nor less than 10 days before the date of the meeting, nor more than sixty days prior to any other action. If no record date is fixed, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders will be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. | | | The CarLotz Board of Directors may fix a record date for any lawful purpose, including for determining the stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, for determining the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or for determining the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock. The record date cannot be more than sixty nor less than ten days before the date of the meeting, nor more than sixty days prior to any other action. Notwithstanding the foregoing, the CarLotz Board may determine, at the time it fixes the record date for notice of any meeting of stockholders, that a later date on or before the date of the meeting will be the date for making a determination as to which stockholders will be entitled to vote at any such meeting of stockholders. If no record date is fixed, then (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders will be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the |
Shift | | | CarLotz |
| | close of business on the day next preceding the day on which the meeting is held, and (ii) the record date for determining stockholders for any other purpose will be at the close of business on the day on which the CarLotz Board adopts the resolution relating thereto. | |
| | ||
Number of Directors | |||
| | ||
The Shift Charter provides that the number of directors which constitutes the whole Shift Board be fixed from time to time exclusively by the Shift Board pursuant to a resolution adopted by a majority of the Shift Board. There are currently seven directors and one vacant position on the Shift Board. The Charter provides that the Shift Board be divided into three classes of directors. Currently there are (i) two Class I directors, (ii) two Class II directors and one Class II vacancy, and (iii) three Class III directors. In case of any increase or decrease from time to time in the number of directors, the number of directors in each class are to be apportioned as nearly as possible. No decrease in the number of directors shall shorten the term of any incumbent director. Pursuant to the Merger Agreement, Shift has agreed, as of the Effective Time, to expand the size of the Shift Board from eight to ten directors, with the Shift Board consisting of (i) five current members of the Shift Board, designated by Shift, (ii) three current members of the CarLotz Board, designated by CarLotz, (iii) one independent director mutually agreed to by the parties and (iv) the then-serving Chief Executive Officer of Shift. See the section entitled “The Merger—Governance Matters After the Merger” for more information. | | | The CarLotz Charter provides that, subject to the rights of the holders of any series of CarLotz Preferred Stock to elect additional directors and subject to the applicable requirements of the Stockholders Agreement dated January 21, 2021, by and among CarLotz and certain CarLotz Stockholders (the “CarLotz Stockholders Agreement”), the number of directors constituting the whole CarLotz Board will be fixed from time to time by resolution of the CarLotz Board. There are currently seven directors on the CarLotz Board. Except as otherwise fixed by or pursuant to the provisions relating to the rights of the holders of shares of any series of CarLotz Preferred Stock to separately elect additional directors and subject to the applicable requirements of the CarLotz Stockholders Agreement, the CarLotz Board is divided into three classes, designated as Class I, Class II and Class III. Each class will consist, as nearly as possible, of a number of directors equal to one-third of the total number of members of the CarLotz Board. |
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Election of Directors | |||
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Pursuant to the Shift Bylaws and subject to the rights of the holders of one or more series of Shift Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Shift Preferred Stock, at all meetings of stockholders at which a quorum is present, the election of directors will be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. Pursuant to the Shift Charter, subject to applicable law and the rights of the holders of shares of one or more series of Shift Preferred Stock, newly created directorships resulting from an increase in the number of directors and any vacancies on the Shift Board | | | The CarLotz Charter and the CarLotz Bylaws provide that, at each annual meeting of stockholders, the successors of that class of directors whose term expires at that meeting will be elected to hold office in for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. Subject to applicable law, the rights of the holders of shares of one or more series of CarLotz Preferred Stock, and the rights granted pursuant to the Stockholders Agreement, any vacancies on the CarLotz Board resulting from death, disability, resignation, retirement, disqualification or removal from office of a director or from any other cause, or any newly created directorships that increase the number of directors will be filled only |
Shift | | | CarLotz |
resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director (and not by stockholders), and any director so chosen will hold office for the remainder of the full term of the class of directors to which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. The Shift Charter expressly provides that the election of directors need not be by written ballot unless the Shift Bylaws so require. | | | by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director appointed in accordance with the preceding sentence will hold office for a term that coincides with the remaining term of the class to which the director has been appointed and until such director’s successor has been elected and qualified or until his or her earlier death, resignation or removal. If the number of directors is changed, any increase or decrease will be apportioned among the classes as determined by a majority of the CarLotz Board so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a newly created directorship will hold office for the remaining term of that class until such director’s successor is duly elected and qualified (or until such director’s earlier death, resignation or removal), but in no case will a decrease in the number of directors shorten the term of any incumbent director. The CarLotz Charter and the CarLotz Bylaws expressly provide that the election of directors need not be by written ballot. |
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Cumulative Voting | |||
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Shift Stockholders do not have cumulative voting rights. | | | CarLotz Stockholders do not have cumulative voting rights. |
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Removal of Directors | |||
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The Shift Charter provides that, subject to applicable law and the rights of the holders of shares of one or more series of Shift Preferred Stock, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the then outstanding shares of capital stock of Shift entitled to vote generally in the election of directors, voting together as a single class. | | | Subject to the rights of the holders of one or more series of CarLotz Preferred Stock and the rights granted pursuant to the Stockholders Agreement, any director, or the entire CarLotz Board, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of 662∕3% of the voting power of all the then outstanding shares of voting stock of CarLotz entitled to vote at an election of directors, represented in person or by proxy at a meeting for the election of directors duly called pursuant to the CarLotz Bylaws. |
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Director Nominations by Stockholders | |||
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The Shift Bylaws provide that, except as may be otherwise provided by the terms of the Shift Preferred Stock, nominations may be a stockholder of Shift (x) who is a stockholder of record entitled to vote in the election of directors on the date of giving notice and on the record date for the applicable meeting of stockholders and (y) who complies with the notice requirements set out in the Shift Bylaws. The notice requirements generally require that, among other things, the stockholder deliver a notice of any such nomination | | | The CarLotz Bylaws provide that nominations may be made by a stockholder of CarLotz (x) who is a stockholder of record at the time notice required by the CarLotz Bylaws is delivered to CarLotz and must be entitled to vote at the meeting and (y) who complies with the notice requirements set out in the CarLotz Bylaws. The notice requirements generally require that, among other things, the stockholder deliver a notice of any such nomination containing specified information and representations to CarLotz’s corporate secretary not later |
Shift | | | CarLotz |
containing specified information and representations to Shift’s corporate secretary (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received on the 10th day following the day on which public announcement of the date of the annual meeting was first made by Shift and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by Shift. | | | than the close of business on 90 days before nor earlier than the close of business 120 days before the first anniversary of the date of the preceding year’s annual meeting of stockholders. If no annual meeting of stockholders was held in the previous year, or if the date of the applicable annual meeting has been changed by more than 30 days from the date of the previous year’s annual meeting of stockholders, notice by the stockholder to be timely must be so received not earlier than the close of business 120 days before the date of the annual meeting of stockholders and not later than the close of business on the later of (x) 90 days prior to the date of such annual meeting and (y) the 10th day following the day on which public announcement of the date of such annual meeting was first made. |
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Stockholder Proposals | |||
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The Shift Bylaws provide that business may be properly brought before an annual meeting by any stockholder (x) who is a stockholder of record entitled to vote at such annual meeting in the date of the giving of the date of the giving of the notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the with the notice requirements set out in the Shift Bylaws. The notice requirements generally require that, among other things, the stockholder deliver a notice of any such proposal containing specified information and representations to Shift’s corporate secretary not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by Shift. | | | The CarLotz Bylaws provide that business may be properly brought before an annual meeting by any stockholder (x) who is a stockholder of record at the time notice required by the CarLotz Bylaws is delivered to CarLotz and must be entitled to vote at the meeting and (y) who complies with the notice requirements set out in the CarLotz Bylaws. The notice requirements generally require that, among other things, the stockholder deliver a notice of any such proposal containing specified information and representations to CarLotz’s corporate secretary not later than the close of business on 90 days before nor earlier than the close of business 120 days before the first anniversary of the date of the preceding year’s annual meeting of stockholders. If no annual meeting of stockholders was held in the previous year, or if the date of the applicable annual meeting has been changed by more than 30 days from the date of the previous year’s annual meeting of stockholders, notice by the stockholder to be timely must be so received not earlier than the close of business 120 days before the date of the annual meeting of stockholders and not later than the close of business on the later of (x) 90 days prior to the date of such annual meeting and (y) the 10th day following the day on which public announcement of the date of such annual meeting was first made. |
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Stockholder Action by Written Consent | |||
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The Shift Charter provides that, except as may be otherwise provided for or fixed pursuant to the Shift Charter (including any certificate of designations relating to Shift Preferred Stock), any action required or permitted to be taken by the Shift Stockholders must be effected by | | | Subject to the special rights of the holders of one or more series of CarLotz Preferred Stock with respect to such series of CarLotz Preferred Stock, any action required or permitted to be taken by the stockholders of CarLotz must be effected at a duly called annual or special |
Shift | | | CarLotz |
a duly called annual or special meeting of such holders and may not be effected by written consent of the Shift Stockholders. | | | meeting of the stockholders of CarLotz, and may not be effected by any consent in writing by such stockholders; provided, however, that the taking of any action that is required or permitted to be taken by the stockholders of CarLotz at any annual or special meeting of stockholders may be effected by written consent of stockholders in lieu of a meeting if such action and the taking of such action by written consent of stockholders in lieu of a meeting have each been expressly approved in advance by the CarLotz Board. |
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Special Stockholder Meetings | |||
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The Shift Charter provides that, subject to the rights, if any, of the holders of any outstanding series of Shift Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of Shift may be called only by the Chairman of the Shift Board, the chief executive officer of Shift or the Shift Board pursuant to a resolution adopted by a majority of the Shift Board, and the ability of stockholders of Shift to call a special meeting is specifically denied. | | | The CarLotz Charter provides that, except as otherwise required by law and subject to the special rights of the holders of one or more series of CarLotz Preferred Stock, special meetings of stockholders of CarLotz may be called only by a CarLotz officer pursuant to a resolution adopted by a majority of the CarLotz Board then in office, the chairperson of the CarLotz Board or the chief executive officer of CarLotz. |
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Notice of Stockholder Meetings | |||
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The Shift Bylaws provide that written notice of each stockholder meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner stated in the Shift Bylaws to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by Shift not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the DGCL. The Shift Bylaws further provide that, if said notice is for a stockholder meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in Shift’s notice of meeting. Any meeting of stockholders as to which notice has been given may be postponed, and any meeting of stockholders as to which notice has been given may be cancelled, by the Shift Board upon public announcement given before the date previously scheduled for such meeting. | | | Except as otherwise required by law or as provided in the CarLotz Charter or the CarLotz Bylaws, notice, including by electronic transmission in the manner provided by the DGCL of date, time and place (if any) or means of remote communication (if any) by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, of all meetings of stockholder shall be in writing and shall be given to each stockholder entitled to notice of such meeting in accordance with the CarLotz Bylaws not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. In the case of a special meeting of stockholders, the notice shall state the purpose or purposes for which the meeting is called. |
Shift | | | CarLotz |
Adjournment of Stockholder Meetings | |||
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The Shift Bylaws provide that any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Shift Board shall fix a new record date for notice of such adjourned meeting in accordance with the Shift Bylaws and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting. | | | The CarLotz Bylaws provide that, in the absence of a quorum, either (i) the chairperson of the meeting or (ii) the holders of a majority of the voting power of the shares of capital stock of CarLotz entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, have the power to adjourn the meeting to another place (if any), date or time, without notice other than as specified in the CarLotz Bylaws. When an annual or special meeting of stockholders is adjourned to another time or place, if any, date or time, unless the CarLotz Bylaws otherwise require, notice need not be given of the adjourned meeting if the date, time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person, or by remote communication, if applicable, and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At any adjourned meeting, CarLotz may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the CarLotz Board will fix a new record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting. |
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Limitation of Personal Liability of Directors | |||
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The Shift Charter provides that no Shift director will be personally liable to Shift or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended. | | | CarLotz does not limit the personal liability of its directors to CarLotz or its stockholders beyond the indemnification provisions set forth below. |
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Indemnification of Directors and Officers | |||
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The Shift Charter provides that, to the fullest extent permitted by applicable law, Shift will indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution | | | The CarLotz Charter provides that, CarLotz shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, |
Shift | | | CarLotz |
mechanism, investigation, inquiry, administrative hearing or other proceeding, whether civil, criminal, administrative or investigative (formal or informal), including appeals, by reason of their present or past position as a director or officer of Shift or, while a director or officer of Shift, is or was serving at the request of Shift as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan, whether brought by or in the right of Shift or otherwise, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such person in connection with such proceeding. Shift shall, to the fullest extent not prohibited by applicable law, pay the expenses (including attorneys’ fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition, except that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding is to be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay all amounts so advanced if it can be determined that the indemnitee is not entitled to be indemnified. These rights to indemnification and advancement of expenses are contract rights and will continue as to an indemnitee who has ceased to be a director, officer, employee or agent and will inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing, except for proceedings to enforce rights to indemnification and advancement of expenses, Shift shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Shift Board. | | | administrative or investigative by reason of the fact that such person, or a person for whom such person is the legal representative, is or was a director or officer of CarLotz or, while a director or officer of CarLotz, is or was serving at the request of CarLotz as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person in such proceeding. Notwithstanding the preceding sentence, except with regard to claims by directors and officers, CarLotz shall be required to indemnify a person in connection with a proceeding (or part thereof) commenced by such person only if the commencement of such proceeding (or part thereof) by the person was authorized in advance by the CarLotz Board. |
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Rights Upon Liquidation | |||
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The Shift Charter provides that, subject to applicable law, and the rights, if any, of the holders of any outstanding class or series of stock having a preference over or the right to participate with Shift Common Stock with respect to the distribution of assets of Shift upon such dissolution, liquidation or winding up of Shift, in the event of any voluntary or involuntary liquidation, dissolution or winding up of Shift, after payment or provision for payment of the debts and other liabilities of Shift, Shift Stockholders will be entitled to receive all the | | | Subject to the rights of the holders of any outstanding CarLotz Preferred Stock, upon the liquidation, dissolution or winding-up of CarLotz, the assets legally available for distribution to CarLotz Stockholders would be distributable pursuant to the applicable provisions of the DGCL then in effect. |
Shift | | | CarLotz |
remaining assets of Shift available for distribution to its stockholders, ratably in proportion to the number of shares of Shift Common Stock held by them. | | | |
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Stockholder Rights Plan | |||
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The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Shift does not have a stockholder rights plan currently in effect. | | | The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. CarLotz does not have a stockholder rights plan currently in effect. |
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Certain Business Combinations | |||
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Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an” interested stockholder” (generally defined as a holder who, (i) together with its affiliates and associates, owns or (ii) is an affiliate or associate of the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board of directors approves either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board of directors and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Shift Charter has not opted out of Section 203. The DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above. The Shift Charter does not require a greater vote. | | | Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who, (i) together with its affiliates and associates, owns or (ii) is an affiliate or associate of the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board of directors approves either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board of directors and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the CarLotz Charter has not opted out of Section 203. The DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above. The CarLotz Charter does not require a greater vote. |
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Exclusive Forum | |||
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The Shift Charter provides that, unless Shift consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of Shift, (ii) any action | | | The CarLotz Charter and the CarLotz Bylaws provide that, unless CarLotz consents in writing to the selection of an alternative forum, (a) the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of |
Shift | | | CarLotz |
asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Shift to Shift or Shift’s stockholders, (iii) any action asserting a claim against Shift, its directors, officers or employees arising pursuant to any provision of the DGCL, the Shift Charter or the Shift Bylaws or (iv) any action asserting a claim against Shift, its directors, officers or employees governed by the internal affairs doctrine, and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, except any action (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within 10 days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction or (D) any action arising under the federal securities laws, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. | | | Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of CarLotz, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of CarLotz to CarLotz or to CarLotz’s stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL, the CarLotz Charter or the CarLotz Bylaws or (iv) any action, suit or proceeding asserting a claim against CarLotz governed by the internal affairs doctrine and (b) subject to the foregoing, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. If any action the subject matter of which is within the scope of clause (a) of the immediately preceding sentence is filed in a court other than the courts in the State of Delaware in the name of any stockholder, such stockholder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with any action brought in any such court to enforce the provisions of clause (a) of the immediately preceding sentence and (y) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in such action as agent for such stockholder. |
| | Shift Common Stock | | | Shift Common Stock | |||||||
Name and Address of Beneficial Owners | | Number | | % of class | | Number | | % of class | ||||
Directors and Executive Officers:(1) | | | | | ||||||||
George Arison(2) | | 2,263,170 | | 2.6% | | 2,263,170 | | 2.6% | ||||
Toby Russell(3) | | 1,851,418 | | 2.2% | | 1,851,418 | | 2.2% | ||||
Oded Shein | | 68,010 | | * | | 80,882 | | * | ||||
Sean Foy(4) | | 328,594 | | * | | 328,594 | | * | ||||
Victoria McInnis(5) | | 34,707 | | * | | 34,707 | | * | ||||
Kellyn Smith Kenny | | 19,707 | | * | | 19,707 | | * | ||||
Jason Krikorian(6) | | 2,387,450 | | 2.8% | | 2,387,450 | | 2.8% | ||||
Adam Nash(7) | | 36,968 | | * | | 36,968 | | * | ||||
Manish Patel | | 16,436 | | * | | 16,436 | | * | ||||
All directors and executive officers as a group (twelve individuals) | | 7,705,486 | | 9.0% | | 7,736,925 | | 9.0% |
5% or Greater Beneficial Owners: | | | | | ||
Nantahala Capital Management, LLC(8) | | | 6,846,018 | | | 8.0% |
Lithia Motors Inc.(9) | | | 12,827,826 | | | 15.0% |
* | Less than one percent. |
(1) | Unless otherwise noted, the business address of each of the following individuals is c/o Shift Technologies, Inc., 290 Division Street, Suite 400, San Francisco, CA 94103. |
(2) | Includes 77,101 shares allocated to Mr. Arison and held in escrow, pursuant to the terms of the Agreement and Plan of Merger (the “Shift SPAC Merger Agreement”), dated as of June 29, 2020, by and among Insurance Acquisition Corp., IAC Merger Sub, Inc. and Shift Technologies, Inc. (“Additional Shares”). Includes 526,309 shares of Shift Common Stock underlying currently exercisable stock options and restricted stock unit awards subject to release within 60 days of |
(3) | Includes 54,972 Additional Shares allocated to Mr. Russell and held in escrow, pursuant to the terms of the Shift SPAC Merger Agreement. Includes 525,964 shares of Shift Common Stock underlying currently exercisable stock options. |
(4) | Includes 8,975 Additional Shares allocated to Mr. Foy and held in escrow, pursuant to the terms of the Shift SPAC Merger Agreement. Includes 165,038 shares of Shift Common Stock underlying currently exercisable options and restricted stock unit awards subject to release within 60 days of |
(5) | Shares are held directly by the Victoria McInnis Grantor Retained Annuity Trust, u/a/d May 26, 2021. |
(6) | Shares are held directly by DCM Affiliates Fund VIII, L.P., DCM Ventures China Fund (DCM VIII), L.P., DCM VIII, L.P. and A-Fund, L.P., including 183,401 Additional Shares allocated to such entities and held in escrow, pursuant to the terms of the Shift SPAC Merger Agreement. As a General Partner of DCM Venture Capital, Mr. Krikorian may be deemed to share beneficial ownership of the shares of Shift Common Stock owned by such entities. Mr. Krikorian disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. |
(7) | Includes 131 Additional Shares allocated to Mr. Nash and held in escrow, pursuant to the terms of the Shift SPAC Merger Agreement. Shares are held directly by the Adam and Carolyn Nash Family Trust. Includes 22,648 shares underlying stock options exercisable within 60 days of |
(8) | Per the Schedule 13G filed on February 14, 2022: Nantahala Capital Management, LLC has shared voting power with respect to 6,846,018 shares and shared dispositive power with respect to 6,846,018 shares; Wilmot B. Harkey has shared voting power with respect to 6,846,018 shares and shared dispositive power with respect to 6,846,018 shares; and Daniel Mack has shared voting power with respect to 6,846,018 shares and shared dispositive power with respect to 6,846,018 shares. Each of Messrs. Harkey and Mack are control persons in respect of shares beneficially owned by Nantahala Capital Management, LLC. The address of such persons is 130 Main St., 2nd Floor, New Canaan, CT 06840. |
(9) | Per the Schedule 13G filed on February 14, 2022: Lithia Motors, Inc. has the sole voting power with respect to 12,827,826 shares and the sole dispositive power with respect to 12,827,826 shares. The address of Lithia Motors, Inc. is 150 North Bartlett Street, Medford, OR. |
Name of Beneficial Owner | | | Shares Beneficially Owned | | | Shares Beneficially Owned | ||||||
| Number of Shares(1) | | Percent of Class(2) | | Number of Shares(1) | | Percent of Class(2) | |||||
5% Beneficial Owners | | | | | ||||||||
| | | | |||||||||
TRP(3) | | 21,799,776 | | 19.0% | | 21,799,776 | | 18.2% | ||||
Tremblant Capital Group(4) | | 7,516,338 | | 6.5% | | 7,516,338 | | 6.3% | ||||
Named Executive Officers, Directors and Certain Executive Officers | | | | | ||||||||
Nanxi Liu(5) | | — | | — | | — | | — | ||||
Lev Peker(6) | | 290,178 | | * | | 3,206,549 | | 2.7% | ||||
David R. Mitchell(3) | | 21,799,776 | | 19.0% | | 21,799,776 | | 18.2% | ||||
Steven G. Carrel(3) | | 21,799,776 | | 19.0% | | 21,799,776 | | 18.2% | ||||
Luis Solorzano(7) | | 8,623,175 | | 7.4% | | 8,623,175 | | 7.1% | ||||
James E. Skinner(8) | | 40,049 | | * | | 40,049 | | * | ||||
Linda B. Abraham(9) | | 30,049 | | * | | 30,049 | | * | ||||
Ozan Kaya(10) | | — | | — | | 1,100,000 | | * | ||||
Eugene Kovshilovsky(11) | | — | | — | | 600,000 | | * | ||||
Kimberly H. Sheehy(12) | | 30,049 | | * | | 30,049 | | * | ||||
Michael W. Bor(13) | | 5,356,261 | | 4.6% | | 5,356,261 | | 4.4% | ||||
John W. Foley II(14) | | 875,784 | | * | | 875,785 | | * | ||||
Daniel A. Valerian(15) | | 759,703 | | * | | 622,101 | | * | ||||
All executive officers and directors as a group (12 persons)(16) | | 31,607,723 | | 27.0% | | 36,132,628 | | 29.7% |
* | Less than one percent |
(1) | The number of shares includes restricted stock units subject to vesting requirements and options exercisable within 60 days of |
(2) | Shares subject to restricted stock units vesting and options exercisable within 60 days of |
(3) | Does not include 2,287,420 CarLotz Earnout Shares; and does not include an aggregate of 435,330 shares of CarLotz Common Stock underlying restricted stock units granted to Messrs. Mitchell and |
(4) | This information is based solely on a Schedule 13G filed with the SEC on February 14, 2022 by Tremblant Capital Group, which reports sole and dispositive voting power with respect to 7,516,338 shares of CarLotz Common Stock. The address of the principle business office of Tremblant Capital Group is 767 Fifth Avenue, New York, New York 10153. |
(5) | Does not include 259,787 shares of CarLotz Common Stock underlying restricted stock units that do not vest within 60 days of |
(6) | Consists of |
(7) | Includes 1,266,884 shares issuable upon the exercise of warrants that are currently exercisable held by Acamar Sponsor, 7,331,521 shares held by Acamar Sponsor and 24,770 shares held directly. Does not include 217,665 shares of CarLotz Common Stock underlying restricted stock units that do not vest within 60 days of |
(8) | Does not include securities held by Acamar Sponsor in which Mr. Skinner has an indirect pecuniary interest but over which Mr. Skinner does not have voting or dispositive control or 217,665 shares of CarLotz Common Stock underlying restricted stock units that do not vest within 60 days of |
(9) | Does not include 217,665 shares of CarLotz Common Stock underlying restricted stock units that do not vest within 60 days of |
(10) |
(11) |
(12) | Does not include 217,665 shares of CarLotz Common Stock underlying restricted stock units that do not vest within 60 days of |
(13) | Based solely on Schedule 13D/A filed with the SEC by Mr. Bor on June 27, 2022. Consists of 2,927,958 shares of CarLotz Common Stock held directly and 1,123,117 shares of CarLotz Common Stock issuable upon exercise of options held directly, 952,593 shares of CarLotz Common Stock held in trust by Katherine G. Bor, Trustee of the Michael W. Bor 2020 Irrevocable Family Trust dated October 16, 2020 and 352,593 shares of CarLotz Common Stock held in trust by Michael W. Bor, Trustee of the Michael W. Bor 2020 Qualified Grantor Retained Annuity Trust dated October 16, 2020. Mr. Bor’s last date of employment was on March 16, 2022. |
(14) | Consists of 7,773 shares of CarLotz Common Stock reported as held by Mr. Foley in his Form 4 filed with the SEC on March 21, 2022 and |
(15) | Consists of 5,441 shares of CarLotz Common Stock reported as held by Mr. Valerian in his Form 4 filed with the SEC on February 2, 2022 and |
(16) | Includes |
• | Shift’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 16, 2022, as amended on April 25, 2022; |
• | Shift’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2022 and June 30, 2022, filed with the SEC on May 10, 2022 and August 9, 2022, respectively; |
• | Shift’s Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.02 or 7.01 thereof) filed with the SEC on January 12, 2022, February 24, 2022, March 15, 2022, May 6, 2022, May 13, 2022, June 24, 2022, July 11, 2022, August 9, 2022, August 12, 2022, August 25, 2022, September 13, 2022, |
the description of securities registered pursuant to Section 12 of the Exchange Act filed as Exhibit 4.3 to Shift’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 18, 2021. |
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Exhibit A | | | - | | | |
| | if to Parent or Merger Sub: | | |||||||||
| | | | Shift Technologies, Inc. | | |||||||
| | | | 290 Division Street, Suite 400 | | |||||||
| | | | San Francisco, CA 94103 | | |||||||
| | | | Attention: Jeff Clementz | | |||||||
| | | | Email: jeff.clementz@shift.com | | |||||||
| | with a copy (which shall not constitute notice) to: | | |||||||||
| | | | Jenner & Block LLP | | |||||||
| | | | 1155 Avenue of the Americas | | |||||||
| | | | New York, NY 10036-2711 | | |||||||
| | | | Attention: | | | Robert J. Rawn; Jeremy A. Casper | | ||||
| | | | Email: | | | rrawn@jenner.com; jcasper@jenner.com | | ||||
| | if to the Company: | | |||||||||
| | | | CarLotz, Inc. | | |||||||
| | | | 3301 W Moore St | | |||||||
| | | | Richmond, VA 23230 | | |||||||
| | | | Attention: | | | Lev Peker | | ||||
| | | | Email: | | | lev@carlotz.com | | ||||
| | | | with a copy (which shall not constitute notice) to: | ||||||||
| | | | Freshfields Bruckhaus Deringer LLP | | |||||||
| | | | 601 Lexington Avenue, 31st Floor | | |||||||
| | | | New York, NY 10022 | | |||||||
| | | | Attention: | | | Valerie Ford Jacob; Sebastian L. Fain | | ||||
| | | | Email: | | | valerie.jacob@freshfields.com; | | ||||
| | | | | | sebastian.fain@freshfields.com | |
| | SHIFT TECHNOLOGIES, INC. | ||||
| | | | |||
| | By: | | | /s/ George Arison | |
| | Name: | | | George Arison | |
| | Title: | | | Chief Executive Officer | |
| | | | |||
| | SHIFT REMARKETING OPERATIONS, INC. | ||||
| | | | |||
| | By: | | | /s/ George Arison | |
| | Name: | | | George Arison | |
| | Title: | | | Chief Executive Officer | |
| | | | |||
| | CARLOTZ, INC. | ||||
| | | | |||
| | By: | | | /s/ Lev Peker | |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
1. | TRP Capital Partners LP |
2. | Acamar Partners Acquisition Corp. |
3. | Luis Solorzano |
1. | George Arison, Irakly George LLC and IGA Holdings, LLC |
2. | DCM VIII, L.P. and DCM Affiliates Fund VIII, L.P. |
3. | Threshold Ventures I, L.P. and Threshold Ventures I Partner Fund, LLC |
4. | G2VP, LLC |
5 | Tobias Russell |
1. | The Sponsor hereby agrees and acknowledges that (i) the Company, Parent and Merger Sub would be irreparably injured in the event of a breach by the Sponsor of its obligations under paragraphs 2 and 4 of this Sponsor Letter Agreement, (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach. |
2. | The Sponsor agrees that it shall not Transfer any Restricted Parent Shares until (collectively, the “Lock-up Period”): |
a. | with respect to 50% of such Restricted Parent Shares, the date on which the closing trading price of the Parent Common Stock has been greater than a per-share amount equal to $12.50, divided by the Exchange Ratio (in each case, as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the Parent Common Stock) over any twenty (20) Trading Days within any thirty (30) Trading Day period from the Closing of the Merger; and |
3. | The certificates evidencing the Restricted Parent Shares shall be stamped or otherwise imprinted with a legend in substantially the following form: |
4. | Notwithstanding the provisions set forth in paragraph 2, Transfers of the Restricted Parent Shares that are held by the Sponsor or any of its permitted transferees (that have complied with this paragraph 4) are permitted (a) to Parent’s officers or directors, any affiliates and its employees or family member of any of Parent’s officers or directors, (b) to any members of the Sponsor or any affiliates of the Sponsor; (c) in the case of an individual, by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (d) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (e) in the case of an individual, pursuant to a qualified domestic relations order; (f) by private sales transfer made in connection with the consummation of the Merger; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement with Parent agreeing to be bound by the transfer restrictions in and other provisions contained in this Agreement. |
6. | Forfeiture of Restricted Parent Shares. In the event of the failure to achieve the trading price threshold set forth in Section 2(a) on or prior to January 21, 2026 (the first Business Day following the end of such period, the “Forfeiture Date”), or the failure to achieve the trading price threshold set forth in Section 2(b) on or prior to the Forfeiture Date, the portion of the Restricted Parent Shares, the release of the lockup of which is subject to the achievement of the applicable threshold, shall be forfeited and transferred to Parent by the holder that Beneficially Owns such Restricted Parent Shares without any consideration for such Transfer. For the avoidance of doubt, prior to the Forfeiture Date, all of the holders of Restricted Parent Shares shall have the right to vote such shares and to receive dividends with respect to such shares. |
7. | The Sponsor represents and warrants that it has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked. The Sponsor represents and warrants that it is not subject to, or a respondent in, any legal action for any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he or she has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person or (iii) pertaining to any dealings in any securities and it is not currently a defendant in any such criminal proceeding. |
8. | The Sponsor has full right and power, without violating any agreement to which it is bound (including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Sponsor Letter Agreement. |
9. | As used herein: |
(i) | “Beneficially Own” has the meaning ascribed to it in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); |
(ii) | “Transfer” shall mean the (a) direct or indirect transfer, sale of, offer to sell, contract or any agreement to sell, hypothecate, pledge, encumber grant of any option to purchase or otherwise dispose of, either voluntarily or involuntarily, or any agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease |
10. | This Sponsor Letter Agreement and the other agreements referenced herein constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby, including, without limitation, with respect to the Sponsor, the Company and CarLotz Opco, the Prior Letter Agreement. This Sponsor Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by the Company and Parent, or after the Closing, by Parent, and the other parties charged with such change, amendment, modification or waiver. In the event of any valid termination of the Merger Agreement, this Sponsor Letter Agreement shall be null and void and of no further force or effect in accordance with Section 16. |
11. | No party hereto may, except as set forth herein, assign either this Sponsor Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Sponsor Letter Agreement shall be binding on, and inure to the benefit of, the Sponsor, Parent, the Company and CarLotz OpCo and their respective successors, heirs, personal representatives and assigns and permitted transferees. |
12. | This Sponsor Letter Agreement may be executed in any number of original, electronic or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. |
13. | This Sponsor Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Sponsor Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Sponsor Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable. |
14. | This Sponsor Letter Agreement, and all claims or causes of action based upon, arising out of, or related to this Sponsor Letter Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Applicable Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Applicable Laws of another jurisdiction. Any Legal Proceeding based upon, arising out of or related to this Sponsor Letter Agreement or the transactions contemplated hereby shall be heard and determined exclusively in the Delaware Court of Chancery; provided, however, that if jurisdiction is not then available in the Delaware Court of Chancery, then any such Legal Proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Legal Proceeding, waives any objection it may now or hereafter have to personal jurisdiction, venue or convenience of forum, agrees that all claims in respect of the Legal Proceeding shall be heard and determined only in any such court, and agrees not to bring any Legal Proceeding arising out of or relating to this Sponsor Letter Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Applicable Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Legal Proceeding brought pursuant to this paragraph. The prevailing party in any such Legal Proceeding (as determined by a court of competent jurisdiction) shall be entitled to be reimbursed by the non-prevailing party for its reasonable expenses, including reasonable attorneys’ fees, incurred with |
15. | Any notice, consent or request to be given in connection with any of the terms or provisions of this Sponsor Letter Agreement shall be in writing and shall be sent or given in accordance with the terms of Section 9.8 of the Merger Agreement to the applicable party at its principal place of business. |
16. | This Sponsor Letter Agreement shall terminate on the earlier of (a) the Final Release Date occurring on or before the Forfeiture Date and (b) the Forfeiture Date. In the event of a valid termination of the Merger Agreement, this Sponsor Letter Agreement shall be of no force and effect and shall revert to the Prior Letter Agreement. No such termination or reversion shall relieve the Sponsor, Parent or the Company from any obligation accruing, or liability resulting from a breach of this Sponsor Letter Agreement occurring prior to such termination or reversion. |
17. | The Sponsor hereby represents and warrants to Parent and the Company as follows: (i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, and the execution, delivery and performance of this Sponsor Letter Agreement and the consummation of the transactions contemplated hereby are within the Sponsor’s limited liability company powers and have been duly authorized by all necessary limited liability company actions on the part of the Sponsor; (ii) this Sponsor Letter Agreement has been duly executed and delivered by the Sponsor and, assuming due authorization, execution and delivery by the other parties to this Sponsor Letter Agreement, this Sponsor Letter Agreement constitutes a legally valid and binding obligation of the Sponsor, enforceable against the Sponsor in accordance with the terms hereof (subject to Enforceability Exceptions); (iii) the execution and delivery of this Sponsor Letter Agreement by the Sponsor does not, and the performance by the Sponsor of its obligations hereunder will not, (A) conflict with or result in a violation of the organizational documents of the Sponsor, or (B) require any consent or approval that has not been given or other action that has not been taken by any third party (including under any Contract binding upon the Sponsor or the Sponsor’s Restricted Founder Shares or Restricted Parent Shares), in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by the Sponsor of its obligations under this Sponsor Letter Agreement; (iv) there are no Legal Proceedings pending against the Sponsor or, to the knowledge of the Sponsor, threatened against the Sponsor, before (or, in the case of threatened Legal Proceedings, that would be before) any arbitrator or any Governmental Authority, which in any manner challenges or seeks to prevent, enjoin or materially delay the performance by the Sponsor of its obligations under this Sponsor Letter Agreement; (v) no financial advisor, investment banker, broker, finder or other similar intermediary is entitled to any fee or commission from the Sponsor, any of its Subsidiaries or any of its respective Affiliates in connection with the Merger Agreement or this Sponsor Letter Agreement or any of the respective transactions contemplated thereby and hereby, in each case, based upon any arrangement or agreement made by or, to the knowledge of the Sponsor, on behalf of the Sponsor, for which Parent, the Company or any of their respective Affiliates would have any obligations or liabilities of any kind or nature; (vi) the Sponsor has had the opportunity to read the Merger Agreement and this Sponsor Letter Agreement and has had the opportunity to consult with its tax and legal advisors; (vii) the Sponsor has not entered into, and shall not enter into, any agreement that would restrict, limit or interfere with the performance of the Sponsor’s obligations hereunder; and (viii) the Sponsor has good title to all such Restricted Founder Shares. |
18. | If, and as often as, there are any changes in Parent or the Restricted Parent Shares by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Sponsor Letter Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to Parent or Parent’s successor or the surviving entity of such transaction and the Restricted Parent Shares, each as so changed. For avoidance of doubt, such equitable adjustment shall be made to the performance criteria set forth in paragraph 2. |
19. | Each of the parties hereto agrees to execute and deliver hereafter any further document, agreement or instrument of assignment, transfer or conveyance as may be necessary or desirable to effectuate the purposes hereof and as may be reasonably requested in writing by another party hereto. |
| | Sincerely, | ||||
| | ACAMAR PARTNERS SPONSOR I LLC | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: |
| | Acknowledged and Agreed: | ||||
| | SHIFT TECHNOLOGIES, INC. | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | Acknowledged and Agreed: | ||||
| | CARLOTZ, INC. | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | Acknowledged and Agreed: | ||||
| | CARLOTZ GROUP, INC. | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: |
| | ||
| | Name: [•] | |
| | Title: Authorized Person |
1. | The name of this corporation is Shift Technologies, Inc. |
2. | This corporation’s Second Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on October 13, 2020. |
3. | This Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation was duly proposed, adopted and approved by the Corporation’s board of directors and by the affirmative vote of holders of a majority of the Corporation’s outstanding common stock entitled to vote in accordance with the applicable provisions of Sections 222 and 242 of the General Corporation Law of the State of Delaware. |
4. | Article IV of the Second Amended and Restated Certificate of Incorporation is hereby amended to add the following as Section 4.06: |
5. | All other provisions of the Second Amended and Restated Certificate of Incorporation shall remain in full force and effect. |
6. | This Certificate of Amendment shall be effective at 12:01 a.m. Eastern Time on [____]. |
1 | To be determined by the Shift board of directors in its discretion. |
| | SHIFT TECHNOLOGIES, INC.. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | |
If to the Voting Party, addressed as follows: | | | with a copy to (which shall not constitute notice): |
| | ||
[•] [•] [•] Attention: [•] Email: [•] | | | [•] [•] [•] Attention: [•] Email: [•] |
| | ||
If to Parent or the Company (following the Closing), addressed as follows: | | | with a copy to (which shall not constitute notice): |
| | ||
Shift Technologies, Inc. 290 Division Street, Suite 400 San Francisco, CA 94103 Attention: Jeff Clementz Email: jeff.clementz@shift.com | | | Jenner & Block LLP 1155 Avenue of the Americas New York, NY 10036-2711 Attention: Robert J. Rawn; Jeremy A. Casper Email: rrawn@jenner.com; jcasper@jenner.com |
| | ||
If to the Company (prior to the Closing), addressed as follows: | | | with a copy to (which shall not constitute notice): |
| | ||
CarLotz, Inc. 3301 West Moore Street Richmond, VA 23230 Attention: Lev Peker Email: lev@carlotz.com | | | Freshfields Bruckhaus Deringer LLP 601 Lexington Avenue, 31st Floor New York, NY 10022 Attention: Valerie Ford Jacob; Sebastian L. Fain Email: valerie.jacob@freshfields.com; sebastian.fain@freshfields.com |
| | PARENT: | | | |||||
| | | | ||||||
| | SHIFT TECHNOLOGIES, INC. | | | |||||
| | | | | | ||||
| | By: | | | | | |||
| | Name: | | | | | |||
| | Title: | | | | |
| | COMPANY: | | | |||||
| | | | ||||||
| | CARLOTZ, INC. | | | |||||
| | | | | | ||||
| | By: | | | | | |||
| | Name: | | | | | |||
| | Title: | | | | |
| | VOTING PARTY: | | | |||||
| | | | ||||||
| | [•] | | | |||||
| | | | | | ||||
| | By: | | | | | |||
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Voting Shares: | | | |
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If to the Voting Party, addressed as follows: | | | with a copy to (which shall not constitute notice): |
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[•] | | | [•] |
[•] | | | [•] |
[•] | | | [•] |
Attention: [•] | | | Attention: [•] |
Email: [•] | | | Email: [•] |
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If to Parent or the Company (following the Closing), addressed as follows: | | | with a copy to (which shall not constitute notice): |
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Shift Technologies, Inc. 290 Division Street, Suite 400 San Francisco, CA 94103 Attention: Jeff Clementz Email: jeff.clementz@shift.com | | | Jenner & Block LLP 1155 Avenue of the Americas New York, NY 10036-2711 Attention: Robert J. Rawn; Jeremy A. Casper Email: rrawn@jenner.com; jcasper@jenner.com |
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If to the Company (prior to the Closing), addressed as follows: | | | with a copy to (which shall not constitute notice): |
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CarLotz, Inc. 3301 West Moore Street Richmond, VA 23230 Attention: Lev Peker Email: lev@carlotz.com | | | Freshfields Bruckhaus Deringer LLP 601 Lexington Avenue, 31st Floor New York, NY 10022 Attention: Valerie Ford Jacob; Sebastian L. Fain Email: valerie.jacob@freshfields.com; sebastian.fain@freshfields.com |
| | PARENT: | | | |||||
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| | SHIFT TECHNOLOGIES, INC. | | | |||||
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| | CARLOTZ, INC. | | | |||||
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| | VOTING PARTY: | | | |||||
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☒ | ANNUAL 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 | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
611 Bainbridge Street, Suite 100 | | | Richmond | | | Virginia | | | 23224 |
(Address of principal executive offices) (Zip Code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ |
| | | | Emerging growth company | | | ☒ |
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PART I | | | ||||
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| | Information about our Executive Officers | | | ||
PART II | | | ||||
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PART III | | | ||||
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PART IV | | | ||||
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Business |
Risk Factors |
i. | with respect to 25% of the shares, the date on which the closing price of the common stock has exceeded $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) over any 20 trading days within any 30-trading day period commencing 150 days after January 21, 2021 (the “Closing Date”); and |
ii. | with respect to 25% of the shares, the date on which the closing trading price of the common stock has exceeded $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) over any 20 trading days within any 30-trading day period commencing 150 days after the Closing Date; |
iii. | provided that, if any condition set forth in clause (i) or (ii) above is not met before the first business day following 60 months from the Closing Date, the applicable portion of the shares will be forfeited. |
Unresolved Staff Comments |
Properties |
Location | | | Integrated Processing Center | | | Size (Sq. Ft.) | | | Lease Expiration Date |
Midlothian, Virginia | | | | | 3,200 | | | November 2023 | |
Richmond, Virginia | | | | | 1,580 | | | August 2024 | |
Chesapeake, Virginia | | | | | 1,440 | | | October 2024 | |
Greensboro, North Carolina | | | * | | | 3,150 | | | January 2026 |
Monroe (Charlotte), North Carolina | | | * | | | 13,610 | | | May 2024 |
Tampa, Florida | | | * | | | 11,018 | | | October 2027 |
Downers Grove (Chicago), Illinois | | | * | | | 29,823 | | | August 2023 |
San Antonio, Texas | | | * | | | 21,882 | | | January 2024 |
Lynnwood (Seattle), Washington | | | * | | | 33,110 | | | November 2025 |
Merritt Island (Orlando), Florida | | | * | | | 13,674 | | | March 2031 |
Madison (Nashville), TN | | | * | | | 42,292 | | | July 2031 |
Charlottesville, VA | | | * | | | 13,816 | | | April 2026 |
Highland Park, IL | | | * | | | 18,000 | | | August 2031 |
Bakersfield, CA | | | * | | | 18,729 | | | April 2026 |
Clearwater, FL | | | * | | | 26,885 | | | September 2036 |
Denver, CO | | | * | | | 19,703 | | | November 2036 |
Fairview Heights (St. Louis), IL | | | * | | | 8,541 | | | September 2031 |
Stone Mountain (Atlanta), GA | | | * | | | 40,594 | | | December 2031 |
Plano, TX | | | * | | | 52,735 | | | September 2031 |
Pomona, CA | | | * | | | 12,502 | | | September 2028 |
Mobile, AL | | | * | | | 30,079 | | | November 2026 |
Huntsville, AL | | | * | | | 23,056 | | | December 2028 |
Las Vegas, NV | | | * | | | 26,240 | | | July 2032 |
Baton Rouge, LA | | | * | | | 39,582 | | | December 2036 |
Reno, NV | | | * | | | 20,074 | | | September 2031 |
Irving, TX | | | * | | | 38,752 | | | October 2031 |
Legal Proceedings |
Mine Safety Disclosures |
Name | | | Age | | | Position |
Michael W. Bor | | | 48 | | | Chief Executive Officer |
John W. Foley II | | | 45 | | | Chief Operating Officer |
Daniel A. Valerian | | | 48 | | | Chief Technology Officer |
Elizabeth Sanders | | | 31 | | | Chief Administrative Officer |
Rebecca C. Polak | | | 51 | | | Chief Commercial Officer and General Counsel |
Thomas W. Stoltz | | | 61 | | | Chief Financial Officer |
Michael Chapman | | | 48 | | | Chief Marketing Officer |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases |
Reserved |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles sold | | | 9,748 | | | 6,215 | | | 6,435 |
Number of hubs | | | 22 | | | 8 | | | 8 |
Average monthly unique visitors | | | 237,673 | | | 66,505 | | | 57,151 |
Vehicles available for sale | | | 2,113 | | | 2,019 | | | 1,061 |
Retail gross profit per unit | | | $1,208 | | | $1,797 | | | $1,393 |
Percentage of unit sales sourced non-competitively(1) | | | 72% 89% | | | 89% | | | 61% |
(1) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
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Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income (Expense), net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout provision | | | 66,605 | | | — | | | — |
Other (expense) income | | | (535) | | | (95) | | | (267) |
Total Other Income, net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||||||||
Revenue: | | | | | | | | | | | |||||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | 108.6% | | | $90,382 | | | 15.3% |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 218.1% | | | 8,454 | | | 18.1% |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Lease income, net | | | 492 | | | 490 | | | 0.4% | | | 533 | | | (8.1)% |
Total revenues | | | 258,534 | | | 118,625 | | | 117.9% | | | 102,486 | | | 15.7% |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||||||||
Cost of sales: | | | | | | | | | | | |||||
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 121.2% | | | 84,534 | | | 14.7% |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 221.9% | | | 9,246 | | | 12.3% |
Total cost of sales | | | $247,946 | | | $107,369 | | | 130.9% | | | $93,780 | | | 14.5% |
Gross profit: | | | | | | | | | | | |||||
Retail vehicle gross profit | | | $2,927 | | | $7,270 | | | (59.7)% | | | $5,848 | | | 24.3% |
Wholesale vehicle gross loss | | | (1,675) | | | (402) | | | (316.7)% | | | (792) | | | 49.2% |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Lease income, net | | | 492 | | | 490 | | | 0.4% | | | 533 | | | (8.1)% |
Total gross profit | | | $10,588 | | | $11,256 | | | (5.9)% | | | $8,706 | | | 29.3% |
Retail gross profit per unit(1): | | | | | | | | | | | |||||
Retail vehicle gross profit | | | 2,927 | | | 7,270 | | | (59.7)% | | | 5,848 | | | 24.3% |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Total retail vehicle and finance and insurance gross profit | | | 11,771 | | | 11,168 | | | 5.4% | | | 8,965 | | | 24.6% |
Retail vehicle units sold | | | 9,748 | | | 6,215 | | | 56.8% | | | 6,435 | | | (3.4)% |
Retail vehicle gross profit per unit | | | $1,208 | | | $1,797 | | | (32.8)% | | | $1,393 | | | 29.0% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands) | |||||||||||||
Compensation and benefits(1) | | | $29,218 | | | $7,864 | | | 271.5% | | | $8,879 | | | (11.4)% |
Marketing | | | 21,804 | | | 2,808 | | | 676.5% | | | 3,803 | | | (26.2)% |
Technology | | | 9,238 | | | 651 | | | 1319.0% | | | 577 | | | 12.8% |
Accounting and Legal | | | 11,442 | | | 1,838 | | | 522.7% | | | 520 | | | 253.1% |
Insurance | | | 7,219 | | | 478 | | | 1411.7% | | | 391 | | | 22.2% |
Occupancy | | | 8,101 | | | 2,722 | | | 197.6% | | | 2,917 | | | (6.7)% |
Other costs(2) | | | 6,054 | | | 1,146 | | | 428.1% | | | 1,105 | | | 3.7% |
Total selling, general and administrative expenses | | | $93,076 | | | $17,507 | | | 431.7% | | | $18,192 | | | (3.8)% |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ in thousands) | |||||||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjusted to exclude the following: | | | | | | | |||
Interest expense | | | 1,590 | | | 518 | | | 651 |
Income tax expense | | | 10 | | | 10 | | | 11 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
EBITDA | | | $(34,916) | | | $(5,683) | | | $(11,512) |
Other expense | | | 535 | | | 95 | | | 267 |
Stock compensation expense | | | 51,121 | | | 45 | | | 113 |
Management fee expense - related party | | | 2 | | | 215 | | | 250 |
Change in fair value of warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Change in fair value of earnout provision | | | (66,605) | | | — | | | — |
Adjusted EBITDA | | | $(82,596) | | | $(6,251) | | | $(9,486) |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Adjusted retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit | | | $2,927 | | | $7,270 | | | $5,848 |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 3,117 |
Total retail gross profit | | | 11,771 | | | 11,168 | | | 8,965 |
Change in inventory reserve(2) | | | 806 | | | (50) | | | 80 |
Total adjusted retail gross profit | | | 12,577 | | | 11,118 | | | 9,045 |
Retail vehicle units sold | | | 9,748 | | | 6,215 | | | 6,435 |
Retail vehicle adjusted gross profit per unit | | | $1,290 | | | $1,789 | | | $1,406 |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ in thousands) | |||||||
Cash Flow Data: | | | | | | | |||
Net cash (used in) operating activities | | | $(111,281) | | | $(4,592) | | | $(5,473) |
Net cash (used in) investing activities | | | (146,515) | | | (1,227) | | | (487) |
Net cash provided by financing activities | | | 334,348 | | | 4,530 | | | 8,492 |
Quantitative and Qualitative Disclosures about Market Risk |
Financial Statements and Supplementary Data |
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,029 | | | $2,208 |
Restricted cash | | | 4,336 | | | 605 |
Marketable securities – at fair value | | | 116,589 | | | 1,032 |
Accounts receivable, net | | | 8,206 | | | 4,132 |
Inventories | | | 40,985 | | | 11,202 |
Other current assets | | | 4,705 | | | 6,679 |
Total Current Assets | | | 249,850 | | | 25,858 |
Marketable securities – at fair value | | | 1,941 | | | — |
Property and equipment, net | | | 22,628 | | | 1,868 |
Capitalized website and internal-use software costs, net | | | 13,716 | | | — |
Lease vehicles, net | | | 1,596 | | | 173 |
Other assets | | | 558 | | | 299 |
Total Assets | | | $290,289 | | | $28,198 |
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Long-term debt, current | | | $509 | | | $6,370 |
Floorplan notes payable | | | 27,815 | | | 6,039 |
Accounts payable | | | 6,352 | | | 6,283 |
Accrued transaction expenses | | | — | | | 6,052 |
Accrued expenses | | | 14,428 | | | 3,563 |
Accrued expenses – related party | | | — | | | 5,082 |
Other current liabilities | | | 754 | | | 256 |
Total Current Liabilities | | | 49,858 | | | 33,645 |
Long-term debt, less current portion | | | 12,206 | | | 2,999 |
Redeemable convertible preferred stock tranche obligation | | | — | | | 2,832 |
Earnout shares liability | | | 7,679 | | | — |
Merger warrants liability | | | 6,291 | | | — |
Other liabilities | | | 744 | | | 1,959 |
Total Liabilities | | | 76,778 | | | 41,435 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,996,401 and 58,621,042 shares issued and outstanding at December 31, 2021 and December 31, 2020 | | | 11 | | | 6 |
Additional paid-in capital | | | 287,509 | | | 20,779 |
Accumulated deficit | | | (73,916) | | | (34,037) |
Accumulated other comprehensive (loss) income | | | (93) | | | 15 |
Total Stockholders’ Equity (Deficit) | | | 213,511 | | | (13,237) |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $290,289 | | | $28,198 |
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income, net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout shares | | | 66,605 | | | — | | | — |
Other income (expense), net | | | (535) | | | (95) | | | (267) |
Total Other Income (Expense), net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Net Loss per Share, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
| | 2021 | | | 2020 | | | 2019 | |
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Other Comprehensive (Loss) Income, net of tax: | | | | | | | |||
Unrealized (losses) gains on marketable securities arising during the period | | | (101) | | | 16 | | | — |
Tax effect | | | — | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (101) | | | 16 | | | — |
Reclassification adjustment for realized gains | | | (7) | | | (1) | | | — |
Tax effect | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (7) | | | (1) | | | — |
Other Comprehensive (Loss) Income, net of tax | | | (108) | | | 15 | | | — |
Total Comprehensive (Loss) | | | $(39,987) | | | $(6,537) | | | $(12,678) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance January 1, 2019 | | | 1,220,851 | | | $8,670 | | | 37,881,435 | | | $4 | | | $6,526 | | | $(14,807) | | | $— | | | $(8,277) |
Retroactive application of recapitalization | | | (1,220,851) | | | $(8,670) | | | 12,443,768 | | | $1 | | | $8,669 | | | $— | | | $— | | | $8,670 |
Adjusted balance, beginning of period | | | — | | | $— | | | 50,325,203 | | | $5 | | | $15,195 | | | $(14,807) | | | $— | | | $393 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(12,678) | | | $— | | | $(12,678) |
Redeemable convertible preferred stock issuance, shown as if recapitalized | | | — | | | $— | | | 8,295,840 | | | $1 | | | $8,889 | | | $— | | | $— | | | $8,890 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,579) | | | $— | | | $— | | | $(1,579) |
Stock based compensation | | | — | | | $— | | | — | | | $— | | | $113 | | | $— | | | $— | | | $113 |
Balance December 31, 2019 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $22,618 | | | $(27,485) | | | $— | | | $(4,861) |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(6,552) | | | $— | | | $(6,552) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $15 | | | $15 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,884) | | | $— | | | $— | | | $(1,884) |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $45 | | | $— | | | $— | | | $45 |
Balance December 31, 2020 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $20,779 | | | $(34,037) | | | $15 | | | $(13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (39,879) | | | — | | | (39,879) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (108) | | | (108) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (20) | | | — | | | — | | | (20) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former CarLotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 51,121 | | | — | | | — | | | 51,121 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,024) | | | — | | | — | | | (39,024) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Net issuance of Class A common stock to settle vested restricted stock units | | | — | | | — | | | 71,523 | | | — | | | (84) | | | — | | | — | | | (84) |
Exercise of stock options | | | — | | | — | | | 254,818 | | | — | | | 163 | | | — | | | — | | | 163 |
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
| | 2021 | | | 2020 | | | 2019 | |
Cash Flow from Operating Activities | | | | | | | |||
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | |||
Depreciation and amortization – property and equipment and capitalized software | | | 3,257 | | | 195 | | | 260 |
Impairment – property and equipment | | | 108 | | | — | | | — |
Amortization and accretion - marketable securities | | | 2,465 | | | — | | | — |
Depreciation – lease vehicles | | | 106 | | | 146 | | | 244 |
Loss on disposition of property and equipment | | | — | | | — | | | 321 |
Gain on marketable securities | | | — | | | (36) | | | — |
Provision for doubtful accounts | | | 233 | | | 40 | | | (14) |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Change in fair value of Merger warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of historic warrants liability | | | — | | | 14 | | | (24) |
Change in fair value of earnout shares | | | (66,605) | | | — | | | — |
Change in fair value of debt issuance costs and stock warrant | | | — | | | 25 | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Unpaid interest expense on capital lease obligations | | | 340 | | | — | | | — |
Change in Operating Assets and Liabilities: | | | | | | | |||
Accounts receivable | | | (4,307) | | | (916) | | | (830) |
Inventories | | | (29,519) | | | (3,333) | | | 2,883 |
Other current assets | | | (3,918) | | | (6,445) | | | (6) |
Other assets | | | (259) | | | 44 | | | (38) |
Accounts payable | | | 69 | | | 4,149 | | | 1,392 |
Accrued expenses | | | 9,041 | | | 8,039 | | | 525 |
Accrued expenses – related party | | | (229) | | | 96 | | | 172 |
Other current liabilities | | | 498 | | | (178) | | | 229 |
Other liabilities | | | (1,070) | | | 998 | | | 582 |
Net Cash Used in Operating Activities | | | (111,281) | | | (4,592) | | | (5,473) |
Cash Flows from Investing Activities | | | | | | | |||
Purchase of property and equipment | | | (10,148) | | | (154) | | | (235) |
Capitalized website and internal-use software costs | | | (14,609) | | | — | | | — |
Purchase of marketable securities | | | (359,896) | | | (1,049) | | | — |
Proceeds from sales of marketable securities | | | 239,931 | | | 68 | | | — |
Purchase of lease vehicles | | | (1,793) | | | (92) | | | (252) |
Net Cash Used in Investing Activities | | | (146,515) | | | (1,227) | | | (487) |
Cash Flows from Financing Activities | | | | | | | |||
Issuance of redeemable convertible preferred stock | | | — | | | — | | | 7,988 |
Payments made on long-term debt | | | (153) | | | (9) | | | (8) |
Advance from holder of marketable securities | | | 4,722 | | | — | | | — |
Repayment of advance from marketable securities | | | (4,722) | | | — | | | — |
PIPE issuance | | | 125,000 | | | — | | | — |
Merger financing | | | 309,999 | | | — | | | — |
Payment made on accrued dividends | | | (4,853) | | | — | | | — |
Payments to existing shareholders of Former CarLotz | | | (62,693) | | | — | | | — |
Transaction costs and advisory fees | | | (47,579) | | | — | | | — |
| | 2021 | | | 2020 | | | 2019 | |
Payments made on cash considerations associated with stock options | | | (2,465) | | | — | | | — |
Repayment of Paycheck Protection Program loan | | | (1,749) | | | — | | | — |
Payments made on note payable | | | (3,000) | | | — | | | (418) |
Payments of debt issuance costs | | | — | | | (10) | | | (112) |
Borrowings on long-term debt | | | — | | | 5,249 | | | 3,000 |
Payments on floor plan notes payable | | | (150,090) | | | (24,948) | | | (41,711) |
Borrowings on floor plan notes payable | | | 171,866 | | | 24,248 | | | 39,753 |
Employee stock option exercise | | | 404 | | | — | | | — |
Payments made for tax on equity award transactions | | | (339) | | | — | | | — |
Net Cash Provided by Financing Activities | | | 334,348 | | | 4,530 | | | 8,492 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | 76,552 | | | (1,289) | | | 2,532 |
Cash and cash equivalents and restricted cash, beginning | | | 2,813 | | | 4,102 | | | 1,570 |
Cash and cash equivalents and restricted cash, ending | | | $79,365 | | | $2,813 | | | $4,102 |
Supplemental Disclosure of Cash Flow Information | | | | | | | |||
Cash paid for interest | | | $1,743 | | | $346 | | | $684 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | | | |||
Transfer from property and equipment to inventory | | | $— | | | $27 | | | $53 |
Transfer from lease vehicles to inventory | | | $264 | | | $217 | | | $295 |
Redeemable convertible preferred stock distributions accrued | | | — | | | 1,884 | | | 1,579 |
Issuance of common stock warrants | | | — | | | 15 | | | 72 |
KAR/AFC exercise of stock warrants | | | (144) | | | — | | | — |
KAR/AFC conversion of notes payable | | | (3,625) | | | — | | | — |
Convertible redeemable preferred stock tranche obligation expiration | | | (2,832) | | | — | | | — |
Capitalized website and internal use software costs accrued | | | (790) | | | — | | | — |
Purchase of property and equipment costs accrued | | | (1,034) | | | — | | | — |
Purchases of property under capital lease obligation | | | (11,261) | | | 1,305 | | | — |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | (902) |
Leasehold Improvements | | | Lesser of 15 years or underlying lease terms |
Equipment, Furniture and Fixtures | | | 1 – 5 years |
Corporate Vehicles | | | 5 years |
Quantitative and Qualitative Disclosures about Market Risk |
Financial Statements and Supplementary Data |
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,029 | | | $2,208 |
Restricted cash | | | 4,336 | | | 605 |
Marketable securities – at fair value | | | 116,589 | | | 1,032 |
Accounts receivable, net | | | 8,206 | | | 4,132 |
Inventories | | | 40,985 | | | 11,202 |
Other current assets | | | 4,705 | | | 6,679 |
Total Current Assets | | | 249,850 | | | 25,858 |
Marketable securities – at fair value | | | 1,941 | | | — |
Property and equipment, net | | | 22,628 | | | 1,868 |
Capitalized website and internal-use software costs, net | | | 13,716 | | | — |
Lease vehicles, net | | | 1,596 | | | 173 |
Other assets | | | 558 | | | 299 |
Total Assets | | | $290,289 | | | $28,198 |
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Long-term debt, current | | | $509 | | | $6,370 |
Floorplan notes payable | | | 27,815 | | | 6,039 |
Accounts payable | | | 6,352 | | | 6,283 |
Accrued transaction expenses | | | — | | | 6,052 |
Accrued expenses | | | 14,428 | | | 3,563 |
Accrued expenses – related party | | | — | | | 5,082 |
Other current liabilities | | | 754 | | | 256 |
Total Current Liabilities | | | 49,858 | | | 33,645 |
Long-term debt, less current portion | | | 12,206 | | | 2,999 |
Redeemable convertible preferred stock tranche obligation | | | — | | | 2,832 |
Earnout shares liability | | | 7,679 | | | — |
Merger warrants liability | | | 6,291 | | | — |
Other liabilities | | | 744 | | | 1,959 |
Total Liabilities | | | 76,778 | | | 41,435 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,996,401 and 58,621,042 shares issued and outstanding at December 31, 2021 and December 31, 2020 | | | 11 | | | 6 |
Additional paid-in capital | | | 287,509 | | | 20,779 |
Accumulated deficit | | | (73,916) | | | (34,037) |
Accumulated other comprehensive (loss) income | | | (93) | | | 15 |
Total Stockholders’ Equity (Deficit) | | | 213,511 | | | (13,237) |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $290,289 | | | $28,198 |
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income, net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout shares | | | 66,605 | | | — | | | — |
Other income (expense), net | | | (535) | | | (95) | | | (267) |
Total Other Income (Expense), net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Net Loss per Share, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
| | 2021 | | | 2020 | | | 2019 | |
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Other Comprehensive (Loss) Income, net of tax: | | | | | | | |||
Unrealized (losses) gains on marketable securities arising during the period | | | (101) | | | 16 | | | — |
Tax effect | | | — | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (101) | | | 16 | | | — |
Reclassification adjustment for realized gains | | | (7) | | | (1) | | | — |
Tax effect | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (7) | | | (1) | | | — |
Other Comprehensive (Loss) Income, net of tax | | | (108) | | | 15 | | | — |
Total Comprehensive (Loss) | | | $(39,987) | | | $(6,537) | | | $(12,678) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance January 1, 2019 | | | 1,220,851 | | | $8,670 | | | 37,881,435 | | | $4 | | | $6,526 | | | $(14,807) | | | $— | | | $(8,277) |
Retroactive application of recapitalization | | | (1,220,851) | | | $(8,670) | | | 12,443,768 | | | $1 | | | $8,669 | | | $— | | | $— | | | $8,670 |
Adjusted balance, beginning of period | | | — | | | $— | | | 50,325,203 | | | $5 | | | $15,195 | | | $(14,807) | | | $— | | | $393 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(12,678) | | | $— | | | $(12,678) |
Redeemable convertible preferred stock issuance, shown as if recapitalized | | | — | | | $— | | | 8,295,840 | | | $1 | | | $8,889 | | | $— | | | $— | | | $8,890 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,579) | | | $— | | | $— | | | $(1,579) |
Stock based compensation | | | — | | | $— | | | — | | | $— | | | $113 | | | $— | | | $— | | | $113 |
Balance December 31, 2019 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $22,618 | | | $(27,485) | | | $— | | | $(4,861) |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(6,552) | | | $— | | | $(6,552) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $15 | | | $15 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,884) | | | $— | | | $— | | | $(1,884) |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $45 | | | $— | | | $— | | | $45 |
Balance December 31, 2020 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $20,779 | | | $(34,037) | | | $15 | | | $(13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (39,879) | | | — | | | (39,879) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (108) | | | (108) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (20) | | | — | | | — | | | (20) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former CarLotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 51,121 | | | — | | | — | | | 51,121 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,024) | | | — | | | — | | | (39,024) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Net issuance of Class A common stock to settle vested restricted stock units | | | — | | | — | | | 71,523 | | | — | | | (84) | | | — | | | — | | | (84) |
Exercise of stock options | | | — | | | — | | | 254,818 | | | — | | | 163 | | | — | | | — | | | 163 |
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
| | 2021 | | | 2020 | | | 2019 | |
Cash Flow from Operating Activities | | | | | | | |||
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | |||
Depreciation and amortization – property and equipment and capitalized software | | | 3,257 | | | 195 | | | 260 |
Impairment – property and equipment | | | 108 | | | — | | | — |
Amortization and accretion - marketable securities | | | 2,465 | | | — | | | — |
Depreciation – lease vehicles | | | 106 | | | 146 | | | 244 |
Loss on disposition of property and equipment | | | — | | | — | | | 321 |
Gain on marketable securities | | | — | | | (36) | | | — |
Provision for doubtful accounts | | | 233 | | | 40 | | | (14) |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Change in fair value of Merger warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of historic warrants liability | | | — | | | 14 | | | (24) |
Change in fair value of earnout shares | | | (66,605) | | | — | | | — |
Change in fair value of debt issuance costs and stock warrant | | | — | | | 25 | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Unpaid interest expense on capital lease obligations | | | 340 | | | — | | | — |
Change in Operating Assets and Liabilities: | | | | | | | |||
Accounts receivable | | | (4,307) | | | (916) | | | (830) |
Inventories | | | (29,519) | | | (3,333) | | | 2,883 |
Other current assets | | | (3,918) | | | (6,445) | | | (6) |
Other assets | | | (259) | | | 44 | | | (38) |
Accounts payable | | | 69 | | | 4,149 | | | 1,392 |
Accrued expenses | | | 9,041 | | | 8,039 | | | 525 |
Accrued expenses – related party | | | (229) | | | 96 | | | 172 |
Other current liabilities | | | 498 | | | (178) | | | 229 |
Other liabilities | | | (1,070) | | | 998 | | | 582 |
Net Cash Used in Operating Activities | | | (111,281) | | | (4,592) | | | (5,473) |
Cash Flows from Investing Activities | | | | | | | |||
Purchase of property and equipment | | | (10,148) | | | (154) | | | (235) |
Capitalized website and internal-use software costs | | | (14,609) | | | — | | | — |
Purchase of marketable securities | | | (359,896) | | | (1,049) | | | — |
Proceeds from sales of marketable securities | | | 239,931 | | | 68 | | | — |
Purchase of lease vehicles | | | (1,793) | | | (92) | | | (252) |
Net Cash Used in Investing Activities | | | (146,515) | | | (1,227) | | | (487) |
Cash Flows from Financing Activities | | | | | | | |||
Issuance of redeemable convertible preferred stock | | | — | | | — | | | 7,988 |
Payments made on long-term debt | | | (153) | | | (9) | | | (8) |
Advance from holder of marketable securities | | | 4,722 | | | — | | | — |
Repayment of advance from marketable securities | | | (4,722) | | | — | | | — |
PIPE issuance | | | 125,000 | | | — | | | — |
Merger financing | | | 309,999 | | | — | | | — |
Payment made on accrued dividends | | | (4,853) | | | — | | | — |
Payments to existing shareholders of Former CarLotz | | | (62,693) | | | — | | | — |
Transaction costs and advisory fees | | | (47,579) | | | — | | | — |
| | 2021 | | | 2020 | | | 2019 | |
Payments made on cash considerations associated with stock options | | | (2,465) | | | — | | | — |
Repayment of Paycheck Protection Program loan | | | (1,749) | | | — | | | — |
Payments made on note payable | | | (3,000) | | | — | | | (418) |
Payments of debt issuance costs | | | — | | | (10) | | | (112) |
Borrowings on long-term debt | | | — | | | 5,249 | | | 3,000 |
Payments on floor plan notes payable | | | (150,090) | | | (24,948) | | | (41,711) |
Borrowings on floor plan notes payable | | | 171,866 | | | 24,248 | | | 39,753 |
Employee stock option exercise | | | 404 | | | — | | | — |
Payments made for tax on equity award transactions | | | (339) | | | — | | | — |
Net Cash Provided by Financing Activities | | | 334,348 | | | 4,530 | | | 8,492 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | 76,552 | | | (1,289) | | | 2,532 |
Cash and cash equivalents and restricted cash, beginning | | | 2,813 | | | 4,102 | | | 1,570 |
Cash and cash equivalents and restricted cash, ending | | | $79,365 | | | $2,813 | | | $4,102 |
Supplemental Disclosure of Cash Flow Information | | | | | | | |||
Cash paid for interest | | | $1,743 | | | $346 | | | $684 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | | | |||
Transfer from property and equipment to inventory | | | $— | | | $27 | | | $53 |
Transfer from lease vehicles to inventory | | | $264 | | | $217 | | | $295 |
Redeemable convertible preferred stock distributions accrued | | | — | | | 1,884 | | | 1,579 |
Issuance of common stock warrants | | | — | | | 15 | | | 72 |
KAR/AFC exercise of stock warrants | | | (144) | | | — | | | — |
KAR/AFC conversion of notes payable | | | (3,625) | | | — | | | — |
Convertible redeemable preferred stock tranche obligation expiration | | | (2,832) | | | — | | | — |
Capitalized website and internal use software costs accrued | | | (790) | | | — | | | — |
Purchase of property and equipment costs accrued | | | (1,034) | | | — | | | — |
Purchases of property under capital lease obligation | | | (11,261) | | | 1,305 | | | — |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | (902) |
Leasehold Improvements | | | Lesser of 15 years or underlying lease terms |
Equipment, Furniture and Fixtures | | | 1 – 5 years |
Corporate Vehicles | | | 5 years |
Quantitative and Qualitative Disclosures about Market Risk |
Financial Statements and Supplementary Data |
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,029 | | | $2,208 |
Restricted cash | | | 4,336 | | | 605 |
Marketable securities – at fair value | | | 116,589 | | | 1,032 |
Accounts receivable, net | | | 8,206 | | | 4,132 |
Inventories | | | 40,985 | | | 11,202 |
Other current assets | | | 4,705 | | | 6,679 |
Total Current Assets | | | 249,850 | | | 25,858 |
Marketable securities – at fair value | | | 1,941 | | | — |
Property and equipment, net | | | 22,628 | | | 1,868 |
Capitalized website and internal-use software costs, net | | | 13,716 | | | — |
Lease vehicles, net | | | 1,596 | | | 173 |
Other assets | | | 558 | | | 299 |
Total Assets | | | $290,289 | | | $28,198 |
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Long-term debt, current | | | $509 | | | $6,370 |
Floorplan notes payable | | | 27,815 | | | 6,039 |
Accounts payable | | | 6,352 | | | 6,283 |
Accrued transaction expenses | | | — | | | 6,052 |
Accrued expenses | | | 14,428 | | | 3,563 |
Accrued expenses – related party | | | — | | | 5,082 |
Other current liabilities | | | 754 | | | 256 |
Total Current Liabilities | | | 49,858 | | | 33,645 |
Long-term debt, less current portion | | | 12,206 | | | 2,999 |
Redeemable convertible preferred stock tranche obligation | | | — | | | 2,832 |
Earnout shares liability | | | 7,679 | | | — |
Merger warrants liability | | | 6,291 | | | — |
Other liabilities | | | 744 | | | 1,959 |
Total Liabilities | | | 76,778 | | | 41,435 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,996,401 and 58,621,042 shares issued and outstanding at December 31, 2021 and December 31, 2020 | | | 11 | | | 6 |
Additional paid-in capital | | | 287,509 | | | 20,779 |
Accumulated deficit | | | (73,916) | | | (34,037) |
Accumulated other comprehensive (loss) income | | | (93) | | | 15 |
Total Stockholders’ Equity (Deficit) | | | 213,511 | | | (13,237) |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $290,289 | | | $28,198 |
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income, net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout shares | | | 66,605 | | | — | | | — |
Other income (expense), net | | | (535) | | | (95) | | | (267) |
Total Other Income (Expense), net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Net Loss per Share, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
| | 2021 | | | 2020 | | | 2019 | |
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Other Comprehensive (Loss) Income, net of tax: | | | | | | | |||
Unrealized (losses) gains on marketable securities arising during the period | | | (101) | | | 16 | | | — |
Tax effect | | | — | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (101) | | | 16 | | | — |
Reclassification adjustment for realized gains | | | (7) | | | (1) | | | — |
Tax effect | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (7) | | | (1) | | | — |
Other Comprehensive (Loss) Income, net of tax | | | (108) | | | 15 | | | — |
Total Comprehensive (Loss) | | | $(39,987) | | | $(6,537) | | | $(12,678) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance January 1, 2019 | | | 1,220,851 | | | $8,670 | | | 37,881,435 | | | $4 | | | $6,526 | | | $(14,807) | | | $— | | | $(8,277) |
Retroactive application of recapitalization | | | (1,220,851) | | | $(8,670) | | | 12,443,768 | | | $1 | | | $8,669 | | | $— | | | $— | | | $8,670 |
Adjusted balance, beginning of period | | | — | | | $— | | | 50,325,203 | | | $5 | | | $15,195 | | | $(14,807) | | | $— | | | $393 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(12,678) | | | $— | | | $(12,678) |
Redeemable convertible preferred stock issuance, shown as if recapitalized | | | — | | | $— | | | 8,295,840 | | | $1 | | | $8,889 | | | $— | | | $— | | | $8,890 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,579) | | | $— | | | $— | | | $(1,579) |
Stock based compensation | | | — | | | $— | | | — | | | $— | | | $113 | | | $— | | | $— | | | $113 |
Balance December 31, 2019 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $22,618 | | | $(27,485) | | | $— | | | $(4,861) |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(6,552) | | | $— | | | $(6,552) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $15 | | | $15 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,884) | | | $— | | | $— | | | $(1,884) |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $45 | | | $— | | | $— | | | $45 |
Balance December 31, 2020 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $20,779 | | | $(34,037) | | | $15 | | | $(13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (39,879) | | | — | | | (39,879) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (108) | | | (108) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (20) | | | — | | | — | | | (20) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former CarLotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 51,121 | | | — | | | — | | | 51,121 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,024) | | | — | | | — | | | (39,024) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Net issuance of Class A common stock to settle vested restricted stock units | | | — | | | — | | | 71,523 | | | — | | | (84) | | | — | | | — | | | (84) |
Exercise of stock options | | | — | | | — | | | 254,818 | | | — | | | 163 | | | — | | | — | | | 163 |
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
| | 2021 | | | 2020 | | | 2019 | |
Cash Flow from Operating Activities | | | | | | | |||
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | |||
Depreciation and amortization – property and equipment and capitalized software | | | 3,257 | | | 195 | | | 260 |
Impairment – property and equipment | | | 108 | | | — | | | — |
Amortization and accretion - marketable securities | | | 2,465 | | | — | | | — |
Depreciation – lease vehicles | | | 106 | | | 146 | | | 244 |
Loss on disposition of property and equipment | | | — | | | — | | | 321 |
Gain on marketable securities | | | — | | | (36) | | | — |
Provision for doubtful accounts | | | 233 | | | 40 | | | (14) |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Change in fair value of Merger warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of historic warrants liability | | | — | | | 14 | | | (24) |
Change in fair value of earnout shares | | | (66,605) | | | — | | | — |
Change in fair value of debt issuance costs and stock warrant | | | — | | | 25 | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Unpaid interest expense on capital lease obligations | | | 340 | | | — | | | — |
Change in Operating Assets and Liabilities: | | | | | | | |||
Accounts receivable | | | (4,307) | | | (916) | | | (830) |
Inventories | | | (29,519) | | | (3,333) | | | 2,883 |
Other current assets | | | (3,918) | | | (6,445) | | | (6) |
Other assets | | | (259) | | | 44 | | | (38) |
Accounts payable | | | 69 | | | 4,149 | | | 1,392 |
Accrued expenses | | | 9,041 | | | 8,039 | | | 525 |
Accrued expenses – related party | | | (229) | | | 96 | | | 172 |
Other current liabilities | | | 498 | | | (178) | | | 229 |
Other liabilities | | | (1,070) | | | 998 | | | 582 |
Net Cash Used in Operating Activities | | | (111,281) | | | (4,592) | | | (5,473) |
Cash Flows from Investing Activities | | | | | | | |||
Purchase of property and equipment | | | (10,148) | | | (154) | | | (235) |
Capitalized website and internal-use software costs | | | (14,609) | | | — | | | — |
Purchase of marketable securities | | | (359,896) | | | (1,049) | | | — |
Proceeds from sales of marketable securities | | | 239,931 | | | 68 | | | — |
Purchase of lease vehicles | | | (1,793) | | | (92) | | | (252) |
Net Cash Used in Investing Activities | | | (146,515) | | | (1,227) | | | (487) |
Cash Flows from Financing Activities | | | | | | | |||
Issuance of redeemable convertible preferred stock | | | — | | | — | | | 7,988 |
Payments made on long-term debt | | | (153) | | | (9) | | | (8) |
Advance from holder of marketable securities | | | 4,722 | | | — | | | — |
Repayment of advance from marketable securities | | | (4,722) | | | — | | | — |
PIPE issuance | | | 125,000 | | | — | | | — |
Merger financing | | | 309,999 | | | — | | | — |
Payment made on accrued dividends | | | (4,853) | | | — | | | — |
Payments to existing shareholders of Former CarLotz | | | (62,693) | | | — | | | — |
Transaction costs and advisory fees | | | (47,579) | | | — | | | — |
| | 2021 | | | 2020 | | | 2019 | |
Payments made on cash considerations associated with stock options | | | (2,465) | | | — | | | — |
Repayment of Paycheck Protection Program loan | | | (1,749) | | | — | | | — |
Payments made on note payable | | | (3,000) | | | — | | | (418) |
Payments of debt issuance costs | | | — | | | (10) | | | (112) |
Borrowings on long-term debt | | | — | | | 5,249 | | | 3,000 |
Payments on floor plan notes payable | | | (150,090) | | | (24,948) | | | (41,711) |
Borrowings on floor plan notes payable | | | 171,866 | | | 24,248 | | | 39,753 |
Employee stock option exercise | | | 404 | | | — | | | — |
Payments made for tax on equity award transactions | | | (339) | | | — | | | — |
Net Cash Provided by Financing Activities | | | 334,348 | | | 4,530 | | | 8,492 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | 76,552 | | | (1,289) | | | 2,532 |
Cash and cash equivalents and restricted cash, beginning | | | 2,813 | | | 4,102 | | | 1,570 |
Cash and cash equivalents and restricted cash, ending | | | $79,365 | | | $2,813 | | | $4,102 |
Supplemental Disclosure of Cash Flow Information | | | | | | | |||
Cash paid for interest | | | $1,743 | | | $346 | | | $684 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | | | |||
Transfer from property and equipment to inventory | | | $— | | | $27 | | | $53 |
Transfer from lease vehicles to inventory | | | $264 | | | $217 | | | $295 |
Redeemable convertible preferred stock distributions accrued | | | — | | | 1,884 | | | 1,579 |
Issuance of common stock warrants | | | — | | | 15 | | | 72 |
KAR/AFC exercise of stock warrants | | | (144) | | | — | | | — |
KAR/AFC conversion of notes payable | | | (3,625) | | | — | | | — |
Convertible redeemable preferred stock tranche obligation expiration | | | (2,832) | | | — | | | — |
Capitalized website and internal use software costs accrued | | | (790) | | | — | | | — |
Purchase of property and equipment costs accrued | | | (1,034) | | | — | | | — |
Purchases of property under capital lease obligation | | | (11,261) | | | 1,305 | | | — |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | (902) |
Leasehold Improvements | | | Lesser of 15 years or underlying lease terms |
Equipment, Furniture and Fixtures | | | 1 – 5 years |
Corporate Vehicles | | | 5 years |
Level 1: | Observable inputs such as quoted prices in active markets. |
Level 2: | Inputs other than quoted prices in active markets that are either directly or indirectly observable. |
Level 3: | Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,284) |
Less: Merger warrants liability | | | (39,024) |
| | December 31, 2021 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $217,439 | | | $— | | | $217,439 |
Wholesale vehicle sales | | | 31,759 | | | — | | | 31,759 |
Finance and insurance, net | | | 8,844 | | | — | | | 8,844 |
Lease income, net | | | — | | | 492 | | | 492 |
Total Revenues | | | $258,042 | | | $492 | | | $258,534 |
| | 2020 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $104,253 | | | $— | | | $104,253 |
Wholesale vehicle sales | | | 9,984 | | | — | | | 9,984 |
Finance and insurance, net | | | 3,898 | | | — | | | 3,898 |
Lease income, net | | | — | | | 490 | | | 490 |
Total Revenues | | | $118,135 | | | $490 | | | $118,625 |
| | 2019 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $90,382 | | | $— | | | $90,382 |
Wholesale vehicle sales | | | 8,454 | | | — | | | 8,454 |
Finance and insurance, net | | | 3,117 | | | — | | | 3,117 |
Lease income, net | | | — | | | 533 | | | 533 |
Total Revenues | | | $101,953 | | | $533 | | | $102,486 |
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 84,534 |
Gross Profit – Retail Vehicles | | | $2,927 | | | $7,270 | | | $5,848 |
Wholesale vehicles: | | | | | | | |||
Wholesale vehicle sales | | | $31,759 | | | $9,984 | | | $8,454 |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 9,246 |
Gross Profit – Wholesale Vehicles | | | $(1,675) | | | $(402) | | | $(792) |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $240 | | | $6 | | | $— | | | $246 |
Corporate bonds | | | 261 | | | 5 | | | (1) | | | 265 |
U.S. states, territories and political subdivisions | | | 141 | | | 5 | | | — | | | 146 |
Total Fixed Maturity Debt Securities | | | $642 | | | $16 | | | $(1) | | | $657 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $116,114 | | | $116,031 |
Due after one year through five years | | | 1,593 | | | 1,585 |
Due after five years through ten years | | | 358 | | | 356 |
Total | | | $118,065 | | | $117,972 |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | 19,945 | | | (7) | | | 340 | | | (3) | | | 20,285 | | | (10) |
Foreign governments | | | 12,152 | | | (18) | | | — | | | — | | | 12,152 | | | (18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | | | | | December 31, 2020 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
Total Fixed Maturity Debt Securities | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | December 31, 2020 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $335 | | | $375 |
| | December 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $239,930 | | | $7 | | | $— | | | $7 |
Equity securities | | | 1 | | | — | | | — | | | — |
Total Marketable Securities | | | $239,931 | | | $7 | | | $— | | | $7 |
| | December 31, 2020 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $18 | | | $— | | | $— | | | $— |
Equity securities | | | 50 | | | 1 | | | (2) | | | (1) |
Total Marketable Securities | | | $68 | | | $1 | | | $(2) | | | $(1) |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 3,941 | | | 2,350 | | | — | | | 6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $405 | | | $— | | | $— | | | $405 |
Equity securities | | | 375 | | | — | | | — | | | 375 |
Fixed maturity debt securities | | | 246 | | | 411 | | | — | | | 657 |
Total Assets | | | $1,026 | | | $411 | | | $— | | | $1,437 |
Liabilities: | | | | | | | | | ||||
Redeemable convertible preferred stock tranche obligation | | | $— | | | $— | | | $2,832 | | | $2,832 |
Historic warrants liability | | | — | | | — | | | 144 | | | 144 |
Total Liabilities | | | $— | | | $— | | | $2,976 | | | $2,976 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares liability | | | — | | | 74,284 | | | — | | | (66,605) | | | 7,679 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(66,605) | | | $7,679 |
| | January 1, 2020 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2020 | |
Redeemable convertible preferred stock tranche obligation | | | $3,755 | | | $— | | | $— | | | $(923) | | | $2,832 |
Historic warrants liability | | | 115 | | | 15 | | | — | | | 14 | | | 144 |
Total | | | $3,870 | | | $15 | | | $— | | | $(909) | | | $2,976 |
| | December 31, 2021 | | | January 21, 2021 | |
Expected volatility | | | 80.00% | | | 80.00% |
Starting stock price | | | $2.27 | | | $11.31 |
Expected term (in years) | | | 4.1 years | | | 5 years |
Risk-free interest rate | | | 1.04% | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | December 31, 2021 | | | December 31, 2020 | |
Contracts in transit | | | $7,836 | | | $3,321 |
Trade | | | 386 | | | 240 |
Finance commission | | | 284 | | | 132 |
Other | | | — | | | 506 |
Total | | | 8,506 | | | 4,199 |
Allowance for doubtful accounts | | | (300) | | | (67) |
Total Accounts Receivable, net | | | $8,206 | | | $4,132 |
| | December 31, 2021 | | | December 31, 2020 | |
Used vehicles | | | $40,739 | | | $11,202 |
Parts | | | 246 | | | — |
Total | | | $40,985 | | | $11,202 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease assets | | | $12,566 | | | $1,305 |
Leasehold improvements | | | 4,628 | | | 702 |
Furniture, fixtures and equipment | | | 7,993 | | | 760 |
Corporate vehicles | | | 158 | | | 143 |
Total property and equipment | | | 25,345 | | | 2,910 |
Less: accumulated depreciation | | | (2,609) | | | (1,042) |
Less: impairment | | | (108) | | | — |
Property and Equipment, net | | | $22,628 | | | $1,868 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $36 |
Deferred acquisition costs | | | 46 | | | 72 |
Prepaid expenses | | | 3,664 | | | 679 |
Interest receivable | | | 966 | | | — |
Deferred transaction costs | | | — | | | 5,892 |
Total Other Current Assets | | | $4,705 | | | $6,679 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 35 | | | 48 |
Security deposits | | | 507 | | | 235 |
Total Other Assets | | | $558 | | | $299 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease obligation | | | $12,715 | | | $1,305 |
Promissory note | | | — | | | 2,990 |
Convertible notes payable, net | | | — | | | 3,325 |
Paycheck Protection Program loan | | | — | | | 1,749 |
| | 12,715 | | | 9,369 | |
Current portion of long-term debt | | | (509) | | | (6,370) |
Long-term Debt | | | $12,206 | | | $2,999 |
| | December 31, 2021 | | | December 31, 2020 | |
License and title fees | | | $903 | | | $785 |
Payroll and bonuses | | | 2,047 | | | 837 |
Deferred rent | | | 1,636 | | | 199 |
Technology | | | 1,127 | | | — |
Inventory | | | 2,542 | | | 1 |
Other | | | 6,173 | | | 1,741 |
Total Accrued Expenses | | | $14,428 | | | $3,563 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $754 | | | $256 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 622 | | | 1,680 |
Other long-term liabilities | | | 122 | | | 135 |
Historic warrants liability | | | — | | | 144 |
Other Liabilities, Long-term | | | $744 | | | $1,959 |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | 6,788 | | | 1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (Balance January 1, 2019) | | | 1,647,650 | | | $0.60 |
Granted | | | — | | | — |
Forfeited | | | (76,445) | | | 0.67 |
Balance (December 31, 2019) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Exercised | | | (310,877) | | | 0.57 |
Forfeited | | | — | | | — |
Balance (December 31, 2021) | | | 1,260,328 | | | 0.56 |
Vested (as of December 31, 2021) | | | 1,260,328 | | | $0.56 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,260,328 | | | 0.67 years | | | $0.56 |
Exercisable | | | 1,260,328 | | | 0.67 years | | | $0.56 |
| | Number of Stock Options | | | Weighted Averaged Exercise Price | |
Balance (Balance January 1, 2019) | | | 2,599,669 | | | $0.92 |
Granted | | | 1,569,676 | | | 0.92 |
Forfeited | | | (1,323,787) | | | 0.92 |
Balance (December 31, 2019) | | | 2,845,557 | | | 0.92 |
Granted | | | 1,116,101 | | | 0.92 |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 3,961,658 | | | 0.92 |
Granted | | | — | | | — |
Forfeited | | | (25,482) | | | 0.92 |
Balance (December 31, 2021) | | | 3,936,176 | | | 0.92 |
Vested (as of December 31, 2021) | | | 3,538,672 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,936,176 | | | 7.55 years | | | $0.92 |
Exercisable | | | 3,538,672 | | | 7.43 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.5 - 4.7 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Balance (Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,490,519 | | | 11.02 |
Forfeited | | | (21,222) | | | 4.31 |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,469,297 | | | 8.96 years | | | $11.12 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 80% - 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 0.62% - 1.34% |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 710,993 | | | 5.58 |
Forfeited | | | (18,884) | | | 4.32 |
Vested (as of December 31, 2021) | | | (94,370) | | | 5.87 |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases |
Reserved |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles sold | | | 9,748 | | | 6,215 | | | 6,435 |
Number of hubs | | | 22 | | | 8 | | | 8 |
Average monthly unique visitors | | | 237,673 | | | 66,505 | | | 57,151 |
Vehicles available for sale | | | 2,113 | | | 2,019 | | | 1,061 |
Retail gross profit per unit | | | $1,208 | | | $1,797 | | | $1,393 |
Percentage of unit sales sourced non-competitively(1) | | | 72% 89% | | | 89% | | | 61% |
(1) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
| | | | | | ||||
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income (Expense), net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout provision | | | 66,605 | | | — | | | — |
Other (expense) income | | | (535) | | | (95) | | | (267) |
Total Other Income, net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||||||||
Revenue: | | | | | | | | | | | |||||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | 108.6% | | | $90,382 | | | 15.3% |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 218.1% | | | 8,454 | | | 18.1% |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Lease income, net | | | 492 | | | 490 | | | 0.4% | | | 533 | | | (8.1)% |
Total revenues | | | 258,534 | | | 118,625 | | | 117.9% | | | 102,486 | | | 15.7% |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||||||||
Cost of sales: | | | | | | | | | | | |||||
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 121.2% | | | 84,534 | | | 14.7% |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 221.9% | | | 9,246 | | | 12.3% |
Total cost of sales | | | $247,946 | | | $107,369 | | | 130.9% | | | $93,780 | | | 14.5% |
Gross profit: | | | | | | | | | | | |||||
Retail vehicle gross profit | | | $2,927 | | | $7,270 | | | (59.7)% | | | $5,848 | | | 24.3% |
Wholesale vehicle gross loss | | | (1,675) | | | (402) | | | (316.7)% | | | (792) | | | 49.2% |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Lease income, net | | | 492 | | | 490 | | | 0.4% | | | 533 | | | (8.1)% |
Total gross profit | | | $10,588 | | | $11,256 | | | (5.9)% | | | $8,706 | | | 29.3% |
Retail gross profit per unit(1): | | | | | | | | | | | |||||
Retail vehicle gross profit | | | 2,927 | | | 7,270 | | | (59.7)% | | | 5,848 | | | 24.3% |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Total retail vehicle and finance and insurance gross profit | | | 11,771 | | | 11,168 | | | 5.4% | | | 8,965 | | | 24.6% |
Retail vehicle units sold | | | 9,748 | | | 6,215 | | | 56.8% | | | 6,435 | | | (3.4)% |
Retail vehicle gross profit per unit | | | $1,208 | | | $1,797 | | | (32.8)% | | | $1,393 | | | 29.0% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands) | |||||||||||||
Compensation and benefits(1) | | | $29,218 | | | $7,864 | | | 271.5% | | | $8,879 | | | (11.4)% |
Marketing | | | 21,804 | | | 2,808 | | | 676.5% | | | 3,803 | | | (26.2)% |
Technology | | | 9,238 | | | 651 | | | 1319.0% | | | 577 | | | 12.8% |
Accounting and Legal | | | 11,442 | | | 1,838 | | | 522.7% | | | 520 | | | 253.1% |
Insurance | | | 7,219 | | | 478 | | | 1411.7% | | | 391 | | | 22.2% |
Occupancy | | | 8,101 | | | 2,722 | | | 197.6% | | | 2,917 | | | (6.7)% |
Other costs(2) | | | 6,054 | | | 1,146 | | | 428.1% | | | 1,105 | | | 3.7% |
Total selling, general and administrative expenses | | | $93,076 | | | $17,507 | | | 431.7% | | | $18,192 | | | (3.8)% |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ in thousands) | |||||||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjusted to exclude the following: | | | | | | | |||
Interest expense | | | 1,590 | | | 518 | | | 651 |
Income tax expense | | | 10 | | | 10 | | | 11 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
EBITDA | | | $(34,916) | | | $(5,683) | | | $(11,512) |
Other expense | | | 535 | | | 95 | | | 267 |
Stock compensation expense | | | 51,121 | | | 45 | | | 113 |
Management fee expense - related party | | | 2 | | | 215 | | | 250 |
Change in fair value of warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Change in fair value of earnout provision | | | (66,605) | | | — | | | — |
Adjusted EBITDA | | | $(82,596) | | | $(6,251) | | | $(9,486) |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Adjusted retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit | | | $2,927 | | | $7,270 | | | $5,848 |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 3,117 |
Total retail gross profit | | | 11,771 | | | 11,168 | | | 8,965 |
Change in inventory reserve(2) | | | 806 | | | (50) | | | 80 |
Total adjusted retail gross profit | | | 12,577 | | | 11,118 | | | 9,045 |
Retail vehicle units sold | | | 9,748 | | | 6,215 | | | 6,435 |
Retail vehicle adjusted gross profit per unit | | | $1,290 | | | $1,789 | | | $1,406 |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ in thousands) | |||||||
Cash Flow Data: | | | | | | | |||
Net cash (used in) operating activities | | | $(111,281) | | | $(4,592) | | | $(5,473) |
Net cash (used in) investing activities | | | (146,515) | | | (1,227) | | | (487) |
Net cash provided by financing activities | | | 334,348 | | | 4,530 | | | 8,492 |
Quantitative and Qualitative Disclosures about Market Risk |
Financial Statements and Supplementary Data |
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,029 | | | $2,208 |
Restricted cash | | | 4,336 | | | 605 |
Marketable securities – at fair value | | | 116,589 | | | 1,032 |
Accounts receivable, net | | | 8,206 | | | 4,132 |
Inventories | | | 40,985 | | | 11,202 |
Other current assets | | | 4,705 | | | 6,679 |
Total Current Assets | | | 249,850 | | | 25,858 |
Marketable securities – at fair value | | | 1,941 | | | — |
Property and equipment, net | | | 22,628 | | | 1,868 |
Capitalized website and internal-use software costs, net | | | 13,716 | | | — |
Lease vehicles, net | | | 1,596 | | | 173 |
Other assets | | | 558 | | | 299 |
Total Assets | | | $290,289 | | | $28,198 |
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Long-term debt, current | | | $509 | | | $6,370 |
Floorplan notes payable | | | 27,815 | | | 6,039 |
Accounts payable | | | 6,352 | | | 6,283 |
Accrued transaction expenses | | | — | | | 6,052 |
Accrued expenses | | | 14,428 | | | 3,563 |
Accrued expenses – related party | | | — | | | 5,082 |
Other current liabilities | | | 754 | | | 256 |
Total Current Liabilities | | | 49,858 | | | 33,645 |
Long-term debt, less current portion | | | 12,206 | | | 2,999 |
Redeemable convertible preferred stock tranche obligation | | | — | | | 2,832 |
Earnout shares liability | | | 7,679 | | | — |
Merger warrants liability | | | 6,291 | | | — |
Other liabilities | | | 744 | | | 1,959 |
Total Liabilities | | | 76,778 | | | 41,435 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,996,401 and 58,621,042 shares issued and outstanding at December 31, 2021 and December 31, 2020 | | | 11 | | | 6 |
Additional paid-in capital | | | 287,509 | | | 20,779 |
Accumulated deficit | | | (73,916) | | | (34,037) |
Accumulated other comprehensive (loss) income | | | (93) | | | 15 |
Total Stockholders’ Equity (Deficit) | | | 213,511 | | | (13,237) |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $290,289 | | | $28,198 |
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income, net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout shares | | | 66,605 | | | — | | | — |
Other income (expense), net | | | (535) | | | (95) | | | (267) |
Total Other Income (Expense), net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Net Loss per Share, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
| | 2021 | | | 2020 | | | 2019 | |
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Other Comprehensive (Loss) Income, net of tax: | | | | | | | |||
Unrealized (losses) gains on marketable securities arising during the period | | | (101) | | | 16 | | | — |
Tax effect | | | — | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (101) | | | 16 | | | — |
Reclassification adjustment for realized gains | | | (7) | | | (1) | | | — |
Tax effect | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (7) | | | (1) | | | — |
Other Comprehensive (Loss) Income, net of tax | | | (108) | | | 15 | | | — |
Total Comprehensive (Loss) | | | $(39,987) | | | $(6,537) | | | $(12,678) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance January 1, 2019 | | | 1,220,851 | | | $8,670 | | | 37,881,435 | | | $4 | | | $6,526 | | | $(14,807) | | | $— | | | $(8,277) |
Retroactive application of recapitalization | | | (1,220,851) | | | $(8,670) | | | 12,443,768 | | | $1 | | | $8,669 | | | $— | | | $— | | | $8,670 |
Adjusted balance, beginning of period | | | — | | | $— | | | 50,325,203 | | | $5 | | | $15,195 | | | $(14,807) | | | $— | | | $393 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(12,678) | | | $— | | | $(12,678) |
Redeemable convertible preferred stock issuance, shown as if recapitalized | | | — | | | $— | | | 8,295,840 | | | $1 | | | $8,889 | | | $— | | | $— | | | $8,890 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,579) | | | $— | | | $— | | | $(1,579) |
Stock based compensation | | | — | | | $— | | | — | | | $— | | | $113 | | | $— | | | $— | | | $113 |
Balance December 31, 2019 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $22,618 | | | $(27,485) | | | $— | | | $(4,861) |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(6,552) | | | $— | | | $(6,552) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $15 | | | $15 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,884) | | | $— | | | $— | | | $(1,884) |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $45 | | | $— | | | $— | | | $45 |
Balance December 31, 2020 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $20,779 | | | $(34,037) | | | $15 | | | $(13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (39,879) | | | — | | | (39,879) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (108) | | | (108) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (20) | | | — | | | — | | | (20) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former CarLotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 51,121 | | | — | | | — | | | 51,121 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,024) | | | — | | | — | | | (39,024) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Net issuance of Class A common stock to settle vested restricted stock units | | | — | | | — | | | 71,523 | | | — | | | (84) | | | — | | | — | | | (84) |
Exercise of stock options | | | — | | | — | | | 254,818 | | | — | | | 163 | | | — | | | — | | | 163 |
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
| | 2021 | | | 2020 | | | 2019 | |
Cash Flow from Operating Activities | | | | | | | |||
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | |||
Depreciation and amortization – property and equipment and capitalized software | | | 3,257 | | | 195 | | | 260 |
Impairment – property and equipment | | | 108 | | | — | | | — |
Amortization and accretion - marketable securities | | | 2,465 | | | — | | | — |
Depreciation – lease vehicles | | | 106 | | | 146 | | | 244 |
Loss on disposition of property and equipment | | | — | | | — | | | 321 |
Gain on marketable securities | | | — | | | (36) | | | — |
Provision for doubtful accounts | | | 233 | | | 40 | | | (14) |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Change in fair value of Merger warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of historic warrants liability | | | — | | | 14 | | | (24) |
Change in fair value of earnout shares | | | (66,605) | | | — | | | — |
Change in fair value of debt issuance costs and stock warrant | | | — | | | 25 | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Unpaid interest expense on capital lease obligations | | | 340 | | | — | | | — |
Change in Operating Assets and Liabilities: | | | | | | | |||
Accounts receivable | | | (4,307) | | | (916) | | | (830) |
Inventories | | | (29,519) | | | (3,333) | | | 2,883 |
Other current assets | | | (3,918) | | | (6,445) | | | (6) |
Other assets | | | (259) | | | 44 | | | (38) |
Accounts payable | | | 69 | | | 4,149 | | | 1,392 |
Accrued expenses | | | 9,041 | | | 8,039 | | | 525 |
Accrued expenses – related party | | | (229) | | | 96 | | | 172 |
Other current liabilities | | | 498 | | | (178) | | | 229 |
Other liabilities | | | (1,070) | | | 998 | | | 582 |
Net Cash Used in Operating Activities | | | (111,281) | | | (4,592) | | | (5,473) |
Cash Flows from Investing Activities | | | | | | | |||
Purchase of property and equipment | | | (10,148) | | | (154) | | | (235) |
Capitalized website and internal-use software costs | | | (14,609) | | | — | | | — |
Purchase of marketable securities | | | (359,896) | | | (1,049) | | | — |
Proceeds from sales of marketable securities | | | 239,931 | | | 68 | | | — |
Purchase of lease vehicles | | | (1,793) | | | (92) | | | (252) |
Net Cash Used in Investing Activities | | | (146,515) | | | (1,227) | | | (487) |
Cash Flows from Financing Activities | | | | | | | |||
Issuance of redeemable convertible preferred stock | | | — | | | — | | | 7,988 |
Payments made on long-term debt | | | (153) | | | (9) | | | (8) |
Advance from holder of marketable securities | | | 4,722 | | | — | | | — |
Repayment of advance from marketable securities | | | (4,722) | | | — | | | — |
PIPE issuance | | | 125,000 | | | — | | | — |
Merger financing | | | 309,999 | | | — | | | — |
Payment made on accrued dividends | | | (4,853) | | | — | | | — |
Payments to existing shareholders of Former CarLotz | | | (62,693) | | | — | | | — |
Transaction costs and advisory fees | | | (47,579) | | | — | | | — |
| | 2021 | | | 2020 | | | 2019 | |
Payments made on cash considerations associated with stock options | | | (2,465) | | | — | | | — |
Repayment of Paycheck Protection Program loan | | | (1,749) | | | — | | | — |
Payments made on note payable | | | (3,000) | | | — | | | (418) |
Payments of debt issuance costs | | | — | | | (10) | | | (112) |
Borrowings on long-term debt | | | — | | | 5,249 | | | 3,000 |
Payments on floor plan notes payable | | | (150,090) | | | (24,948) | | | (41,711) |
Borrowings on floor plan notes payable | | | 171,866 | | | 24,248 | | | 39,753 |
Employee stock option exercise | | | 404 | | | — | | | — |
Payments made for tax on equity award transactions | | | (339) | | | — | | | — |
Net Cash Provided by Financing Activities | | | 334,348 | | | 4,530 | | | 8,492 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | 76,552 | | | (1,289) | | | 2,532 |
Cash and cash equivalents and restricted cash, beginning | | | 2,813 | | | 4,102 | | | 1,570 |
Cash and cash equivalents and restricted cash, ending | | | $79,365 | | | $2,813 | | | $4,102 |
Supplemental Disclosure of Cash Flow Information | | | | | | | |||
Cash paid for interest | | | $1,743 | | | $346 | | | $684 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | | | |||
Transfer from property and equipment to inventory | | | $— | | | $27 | | | $53 |
Transfer from lease vehicles to inventory | | | $264 | | | $217 | | | $295 |
Redeemable convertible preferred stock distributions accrued | | | — | | | 1,884 | | | 1,579 |
Issuance of common stock warrants | | | — | | | 15 | | | 72 |
KAR/AFC exercise of stock warrants | | | (144) | | | — | | | — |
KAR/AFC conversion of notes payable | | | (3,625) | | | — | | | — |
Convertible redeemable preferred stock tranche obligation expiration | | | (2,832) | | | — | | | — |
Capitalized website and internal use software costs accrued | | | (790) | | | — | | | — |
Purchase of property and equipment costs accrued | | | (1,034) | | | — | | | — |
Purchases of property under capital lease obligation | | | (11,261) | | | 1,305 | | | — |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | (902) |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | (19,221) | | | 10.70 |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
| | 2021 | | | 2020 | | | 2019 | |
Current Income Tax Expense: | | | | | | | |||
Federal | | | $— | | | $— | | | $— |
State and local | | | 10 | | | 10 | | | 11 |
Total Current Income Tax Expense | | | 10 | | | 10 | | | 11 |
Deferred Income Tax Expense: | | | | | | | |||
Federal | | | — | | | — | | | — |
State and local | | | — | | | — | | | — |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
| | 2021 | | | 2020 | |
Deferred Tax Assets: | | | | | ||
Net operating losses | | | $27,794 | | | $7,042 |
Accrued expenses | | | — | | | 109 |
Unearned premiums | | | 339 | | | 466 |
Contract expense | | | 2,188 | | | 332 |
Intangible assets | | | 188 | | | 204 |
Equity awards | | | 2,199 | | | 189 |
Other | | | 1,532 | | | 217 |
Total deferred tax assets | | | 34,240 | | | 8,559 |
Less: valuation allowance | | | (34,138) | | | (8,559) |
Net Deferred Tax Assets | | | 102 | | | — |
| | 2021 | | | 2020 | |
Deferred Tax Liabilities | | | | | ||
Fixed assets | | | (102) | | | — |
Total deferred tax liabilities | | | (102) | | | — |
Net Deferred Tax Liabilities | | | (102) | | | — |
Net Deferred Tax Assets/Liabilities | | | $— | | | $— |
Leasehold Improvements | | | Lesser of 15 years or underlying lease terms |
Equipment, Furniture and Fixtures | | | 1 – 5 years |
Corporate Vehicles | | | 5 years |
Level 1: | Observable inputs such as quoted prices in active markets. |
Level 2: | Inputs other than quoted prices in active markets that are either directly or indirectly observable. |
Level 3: | Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
| | 2021 | | | 2020 | | | 2019 | |
January 1, | | | $8,559 | | | $6,910 | | | $3,986 |
Additions – Charged | | | 25,579 | | | 1,649 | | | 2,924 |
Deductions – Charged | | | — | | | — | | | — |
Other | | | — | | | — | | | — |
December 31, | | | $34,138 | | | $8,559 | | | $6,910 |
| | 2021 | | | 2020 | | | 2019 | |
Loss Before Income Tax Expense | | | $(39,869) | | | $(6,542) | | | $(12,667) |
Income tax benefit at federal statutory rates | | | (8,372) | | | (1,372) | | | (2,660) |
State and local income taxes | | | (3,634) | | | (79) | | | (471) |
Valuation allowances | | | 24,391 | | | 1,649 | | | 2,924 |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (194) | | | 293 |
Executive compensation | | | 8,690 | | | — | | | — |
Change in fair value of Merger warrants liability | | | (6,874) | | | — | | | — |
Change in fair value of earnout shares | | | (13,987) | | | — | | | — |
Other | | | (204) | | | 6 | | | (75) |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
Effective Tax Rate | | | (0.03)% | | | (0.15)% | | | (0.09)% |
| | 2021 | | | 2020 | | | 2019 | |
Numerator: | | | | | | | |||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Denominator: | | | | | | | |||
Weighted average common shares outstanding, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
| | 2021 | | | 2020 | | | 2019 | |
Public warrants | | | 10,185,774 | | | — | | | — |
Private warrants | | | 6,074,310 | | | — | | | — |
Earnout RSUs | | | 630,810 | | | — | | | — |
Earnout shares | | | 6,945,732 | | | — | | | — |
Convertible notes payable | | | — | | | 3,556,335 | | | 2,876,492 |
Historic warrants | | | — | | | 777,265 | | | 699,025 |
Stock options outstanding to purchase shares of common stock | | | 6,665,801 | | | 5,532,863 | | | 4,416,762 |
Unvested RSUs | | | 597,139 | | | — | | | — |
Total | | | 31,099,566 | | | 9,866,463 | | | 7,992,279 |
| | Total vehicle purchases from vendor to total vehicle purchases for the year ended December 31, | |||||||
Vendor | | | 2021 | | | 2020 | | | 2019 |
Vendor A | | | 24% | | | 33% | | | —% |
Vendor B | | | 11% | | | —% | | | —% |
Vendor C | | | 10% | | | —% | | | —% |
Vendor D | | | —% | | | 13% | | | 12% |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,284) |
Less: Merger warrants liability | | | (39,024) |
| | December 31, 2021 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $217,439 | | | $— | | | $217,439 |
Wholesale vehicle sales | | | 31,759 | | | — | | | 31,759 |
Finance and insurance, net | | | 8,844 | | | — | | | 8,844 |
Lease income, net | | | — | | | 492 | | | 492 |
Total Revenues | | | $258,042 | | | $492 | | | $258,534 |
| | 2020 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $104,253 | | | $— | | | $104,253 |
Wholesale vehicle sales | | | 9,984 | | | — | | | 9,984 |
Finance and insurance, net | | | 3,898 | | | — | | | 3,898 |
Lease income, net | | | — | | | 490 | | | 490 |
Total Revenues | | | $118,135 | | | $490 | | | $118,625 |
| | 2019 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $90,382 | | | $— | | | $90,382 |
Wholesale vehicle sales | | | 8,454 | | | — | | | 8,454 |
Finance and insurance, net | | | 3,117 | | | — | | | 3,117 |
Lease income, net | | | — | | | 533 | | | 533 |
Total Revenues | | | $101,953 | | | $533 | | | $102,486 |
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 84,534 |
Gross Profit – Retail Vehicles | | | $2,927 | | | $7,270 | | | $5,848 |
Wholesale vehicles: | | | | | | | |||
Wholesale vehicle sales | | | $31,759 | | | $9,984 | | | $8,454 |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 9,246 |
Gross Profit – Wholesale Vehicles | | | $(1,675) | | | $(402) | | | $(792) |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $240 | | | $6 | | | $— | | | $246 |
Corporate bonds | | | 261 | | | 5 | | | (1) | | | 265 |
U.S. states, territories and political subdivisions | | | 141 | | | 5 | | | — | | | 146 |
Total Fixed Maturity Debt Securities | | | $642 | | | $16 | | | $(1) | | | $657 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $116,114 | | | $116,031 |
Due after one year through five years | | | 1,593 | | | 1,585 |
Due after five years through ten years | | | 358 | | | 356 |
Total | | | $118,065 | | | $117,972 |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | 19,945 | | | (7) | | | 340 | | | (3) | | | 20,285 | | | (10) |
Foreign governments | | | 12,152 | | | (18) | | | — | | | — | | | 12,152 | | | (18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | | | | | December 31, 2020 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
Total Fixed Maturity Debt Securities | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | December 31, 2020 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $335 | | | $375 |
| | December 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $239,930 | | | $7 | | | $— | | | $7 |
Equity securities | | | 1 | | | — | | | — | | | — |
Total Marketable Securities | | | $239,931 | | | $7 | | | $— | | | $7 |
| | December 31, 2020 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $18 | | | $— | | | $— | | | $— |
Equity securities | | | 50 | | | 1 | | | (2) | | | (1) |
Total Marketable Securities | | | $68 | | | $1 | | | $(2) | | | $(1) |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 3,941 | | | 2,350 | | | — | | | 6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $405 | | | $— | | | $— | | | $405 |
Equity securities | | | 375 | | | — | | | — | | | 375 |
Fixed maturity debt securities | | | 246 | | | 411 | | | — | | | 657 |
Total Assets | | | $1,026 | | | $411 | | | $— | | | $1,437 |
Liabilities: | | | | | | | | | ||||
Redeemable convertible preferred stock tranche obligation | | | $— | | | $— | | | $2,832 | | | $2,832 |
Historic warrants liability | | | — | | | — | | | 144 | | | 144 |
Total Liabilities | | | $— | | | $— | | | $2,976 | | | $2,976 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares liability | | | — | | | 74,284 | | | — | | | (66,605) | | | 7,679 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(66,605) | | | $7,679 |
| | January 1, 2020 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2020 | |
Redeemable convertible preferred stock tranche obligation | | | $3,755 | | | $— | | | $— | | | $(923) | | | $2,832 |
Historic warrants liability | | | 115 | | | 15 | | | — | | | 14 | | | 144 |
Total | | | $3,870 | | | $15 | | | $— | | | $(909) | | | $2,976 |
| | December 31, 2021 | | | January 21, 2021 | |
Expected volatility | | | 80.00% | | | 80.00% |
Starting stock price | | | $2.27 | | | $11.31 |
Expected term (in years) | | | 4.1 years | | | 5 years |
Risk-free interest rate | | | 1.04% | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | December 31, 2021 | | | December 31, 2020 | |
Contracts in transit | | | $7,836 | | | $3,321 |
Trade | | | 386 | | | 240 |
Finance commission | | | 284 | | | 132 |
Other | | | — | | | 506 |
Total | | | 8,506 | | | 4,199 |
Allowance for doubtful accounts | | | (300) | | | (67) |
Total Accounts Receivable, net | | | $8,206 | | | $4,132 |
| | December 31, 2021 | | | December 31, 2020 | |
Used vehicles | | | $40,739 | | | $11,202 |
Parts | | | 246 | | | — |
Total | | | $40,985 | | | $11,202 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease assets | | | $12,566 | | | $1,305 |
Leasehold improvements | | | 4,628 | | | 702 |
Furniture, fixtures and equipment | | | 7,993 | | | 760 |
Corporate vehicles | | | 158 | | | 143 |
Total property and equipment | | | 25,345 | | | 2,910 |
Less: accumulated depreciation | | | (2,609) | | | (1,042) |
Less: impairment | | | (108) | | | — |
Property and Equipment, net | | | $22,628 | | | $1,868 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $36 |
Deferred acquisition costs | | | 46 | | | 72 |
Prepaid expenses | | | 3,664 | | | 679 |
Interest receivable | | | 966 | | | — |
Deferred transaction costs | | | — | | | 5,892 |
Total Other Current Assets | | | $4,705 | | | $6,679 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 35 | | | 48 |
Security deposits | | | 507 | | | 235 |
Total Other Assets | | | $558 | | | $299 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease obligation | | | $12,715 | | | $1,305 |
Promissory note | | | — | | | 2,990 |
Convertible notes payable, net | | | — | | | 3,325 |
Paycheck Protection Program loan | | | — | | | 1,749 |
| | 12,715 | | | 9,369 | |
Current portion of long-term debt | | | (509) | | | (6,370) |
Long-term Debt | | | $12,206 | | | $2,999 |
| | December 31, 2021 | | | December 31, 2020 | |
License and title fees | | | $903 | | | $785 |
Payroll and bonuses | | | 2,047 | | | 837 |
Deferred rent | | | 1,636 | | | 199 |
Technology | | | 1,127 | | | — |
Inventory | | | 2,542 | | | 1 |
Other | | | 6,173 | | | 1,741 |
Total Accrued Expenses | | | $14,428 | | | $3,563 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $754 | | | $256 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 622 | | | 1,680 |
Other long-term liabilities | | | 122 | | | 135 |
Historic warrants liability | | | — | | | 144 |
Other Liabilities, Long-term | | | $744 | | | $1,959 |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | 6,788 | | | 1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (Balance January 1, 2019) | | | 1,647,650 | | | $0.60 |
Granted | | | — | | | — |
Forfeited | | | (76,445) | | | 0.67 |
Balance (December 31, 2019) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Exercised | | | (310,877) | | | 0.57 |
Forfeited | | | — | | | — |
Balance (December 31, 2021) | | | 1,260,328 | | | 0.56 |
Vested (as of December 31, 2021) | | | 1,260,328 | | | $0.56 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,260,328 | | | 0.67 years | | | $0.56 |
Exercisable | | | 1,260,328 | | | 0.67 years | | | $0.56 |
| | Number of Stock Options | | | Weighted Averaged Exercise Price | |
Balance (Balance January 1, 2019) | | | 2,599,669 | | | $0.92 |
Granted | | | 1,569,676 | | | 0.92 |
Forfeited | | | (1,323,787) | | | 0.92 |
Balance (December 31, 2019) | | | 2,845,557 | | | 0.92 |
Granted | | | 1,116,101 | | | 0.92 |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 3,961,658 | | | 0.92 |
Granted | | | — | | | — |
Forfeited | | | (25,482) | | | 0.92 |
Balance (December 31, 2021) | | | 3,936,176 | | | 0.92 |
Vested (as of December 31, 2021) | | | 3,538,672 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,936,176 | | | 7.55 years | | | $0.92 |
Exercisable | | | 3,538,672 | | | 7.43 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.5 - 4.7 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Balance (Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,490,519 | | | 11.02 |
Forfeited | | | (21,222) | | | 4.31 |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,469,297 | | | 8.96 years | | | $11.12 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 80% - 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 0.62% - 1.34% |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 710,993 | | | 5.58 |
Forfeited | | | (18,884) | | | 4.32 |
Vested (as of December 31, 2021) | | | (94,370) | | | 5.87 |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases |
Reserved |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles sold | | | 9,748 | | | 6,215 | | | 6,435 |
Number of hubs | | | 22 | | | 8 | | | 8 |
Average monthly unique visitors | | | 237,673 | | | 66,505 | | | 57,151 |
Vehicles available for sale | | | 2,113 | | | 2,019 | | | 1,061 |
Retail gross profit per unit | | | $1,208 | | | $1,797 | | | $1,393 |
Percentage of unit sales sourced non-competitively(1) | | | 72% 89% | | | 89% | | | 61% |
(1) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
| | | | | | ||||
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income (Expense), net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout provision | | | 66,605 | | | — | | | — |
Other (expense) income | | | (535) | | | (95) | | | (267) |
Total Other Income, net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||||||||
Revenue: | | | | | | | | | | | |||||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | 108.6% | | | $90,382 | | | 15.3% |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 218.1% | | | 8,454 | | | 18.1% |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Lease income, net | | | 492 | | | 490 | | | 0.4% | | | 533 | | | (8.1)% |
Total revenues | | | 258,534 | | | 118,625 | | | 117.9% | | | 102,486 | | | 15.7% |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||||||||
Cost of sales: | | | | | | | | | | | |||||
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 121.2% | | | 84,534 | | | 14.7% |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 221.9% | | | 9,246 | | | 12.3% |
Total cost of sales | | | $247,946 | | | $107,369 | | | 130.9% | | | $93,780 | | | 14.5% |
Gross profit: | | | | | | | | | | | |||||
Retail vehicle gross profit | | | $2,927 | | | $7,270 | | | (59.7)% | | | $5,848 | | | 24.3% |
Wholesale vehicle gross loss | | | (1,675) | | | (402) | | | (316.7)% | | | (792) | | | 49.2% |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Lease income, net | | | 492 | | | 490 | | | 0.4% | | | 533 | | | (8.1)% |
Total gross profit | | | $10,588 | | | $11,256 | | | (5.9)% | | | $8,706 | | | 29.3% |
Retail gross profit per unit(1): | | | | | | | | | | | |||||
Retail vehicle gross profit | | | 2,927 | | | 7,270 | | | (59.7)% | | | 5,848 | | | 24.3% |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 126.9% | | | 3,117 | | | 25.1% |
Total retail vehicle and finance and insurance gross profit | | | 11,771 | | | 11,168 | | | 5.4% | | | 8,965 | | | 24.6% |
Retail vehicle units sold | | | 9,748 | | | 6,215 | | | 56.8% | | | 6,435 | | | (3.4)% |
Retail vehicle gross profit per unit | | | $1,208 | | | $1,797 | | | (32.8)% | | | $1,393 | | | 29.0% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Year Ended December 31, | |||||||||||||
| | 2021 | | | 2020 | | | Change | | | 2019 | | | Change | |
| | ($ in thousands) | |||||||||||||
Compensation and benefits(1) | | | $29,218 | | | $7,864 | | | 271.5% | | | $8,879 | | | (11.4)% |
Marketing | | | 21,804 | | | 2,808 | | | 676.5% | | | 3,803 | | | (26.2)% |
Technology | | | 9,238 | | | 651 | | | 1319.0% | | | 577 | | | 12.8% |
Accounting and Legal | | | 11,442 | | | 1,838 | | | 522.7% | | | 520 | | | 253.1% |
Insurance | | | 7,219 | | | 478 | | | 1411.7% | | | 391 | | | 22.2% |
Occupancy | | | 8,101 | | | 2,722 | | | 197.6% | | | 2,917 | | | (6.7)% |
Other costs(2) | | | 6,054 | | | 1,146 | | | 428.1% | | | 1,105 | | | 3.7% |
Total selling, general and administrative expenses | | | $93,076 | | | $17,507 | | | 431.7% | | | $18,192 | | | (3.8)% |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ in thousands) | |||||||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjusted to exclude the following: | | | | | | | |||
Interest expense | | | 1,590 | | | 518 | | | 651 |
Income tax expense | | | 10 | | | 10 | | | 11 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
EBITDA | | | $(34,916) | | | $(5,683) | | | $(11,512) |
Other expense | | | 535 | | | 95 | | | 267 |
Stock compensation expense | | | 51,121 | | | 45 | | | 113 |
Management fee expense - related party | | | 2 | | | 215 | | | 250 |
Change in fair value of warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Change in fair value of earnout provision | | | (66,605) | | | — | | | — |
Adjusted EBITDA | | | $(82,596) | | | $(6,251) | | | $(9,486) |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Adjusted retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit | | | $2,927 | | | $7,270 | | | $5,848 |
Finance and insurance gross profit | | | 8,844 | | | 3,898 | | | 3,117 |
Total retail gross profit | | | 11,771 | | | 11,168 | | | 8,965 |
Change in inventory reserve(2) | | | 806 | | | (50) | | | 80 |
Total adjusted retail gross profit | | | 12,577 | | | 11,118 | | | 9,045 |
Retail vehicle units sold | | | 9,748 | | | 6,215 | | | 6,435 |
Retail vehicle adjusted gross profit per unit | | | $1,290 | | | $1,789 | | | $1,406 |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Year Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ in thousands) | |||||||
Cash Flow Data: | | | | | | | |||
Net cash (used in) operating activities | | | $(111,281) | | | $(4,592) | | | $(5,473) |
Net cash (used in) investing activities | | | (146,515) | | | (1,227) | | | (487) |
Net cash provided by financing activities | | | 334,348 | | | 4,530 | | | 8,492 |
Quantitative and Qualitative Disclosures about Market Risk |
Financial Statements and Supplementary Data |
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,029 | | | $2,208 |
Restricted cash | | | 4,336 | | | 605 |
Marketable securities – at fair value | | | 116,589 | | | 1,032 |
Accounts receivable, net | | | 8,206 | | | 4,132 |
Inventories | | | 40,985 | | | 11,202 |
Other current assets | | | 4,705 | | | 6,679 |
Total Current Assets | | | 249,850 | | | 25,858 |
Marketable securities – at fair value | | | 1,941 | | | — |
Property and equipment, net | | | 22,628 | | | 1,868 |
Capitalized website and internal-use software costs, net | | | 13,716 | | | — |
Lease vehicles, net | | | 1,596 | | | 173 |
Other assets | | | 558 | | | 299 |
Total Assets | | | $290,289 | | | $28,198 |
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Long-term debt, current | | | $509 | | | $6,370 |
Floorplan notes payable | | | 27,815 | | | 6,039 |
Accounts payable | | | 6,352 | | | 6,283 |
Accrued transaction expenses | | | — | | | 6,052 |
Accrued expenses | | | 14,428 | | | 3,563 |
Accrued expenses – related party | | | — | | | 5,082 |
Other current liabilities | | | 754 | | | 256 |
Total Current Liabilities | | | 49,858 | | | 33,645 |
Long-term debt, less current portion | | | 12,206 | | | 2,999 |
Redeemable convertible preferred stock tranche obligation | | | — | | | 2,832 |
Earnout shares liability | | | 7,679 | | | — |
Merger warrants liability | | | 6,291 | | | — |
Other liabilities | | | 744 | | | 1,959 |
Total Liabilities | | | 76,778 | | | 41,435 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,996,401 and 58,621,042 shares issued and outstanding at December 31, 2021 and December 31, 2020 | | | 11 | | | 6 |
Additional paid-in capital | | | 287,509 | | | 20,779 |
Accumulated deficit | | | (73,916) | | | (34,037) |
Accumulated other comprehensive (loss) income | | | (93) | | | 15 |
Total Stockholders’ Equity (Deficit) | | | 213,511 | | | (13,237) |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $290,289 | | | $28,198 |
| | 2021 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Wholesale vehicle sales | | | 31,759 | | | 9,984 | | | 8,454 |
Finance and insurance, net | | | 8,844 | | | 3,898 | | | 3,117 |
Lease income, net | | | 492 | | | 490 | | | 533 |
Total Revenues | | | 258,534 | | | 118,625 | | | 102,486 |
Cost of sales (exclusive of depreciation) | | | 247,946 | | | 107,369 | | | 93,780 |
Gross Profit | | | 10,588 | | | 11,256 | | | 8,706 |
Operating Expenses: | | | | | | | |||
Selling, general and administrative | | | 93,076 | | | 17,507 | | | 18,192 |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Depreciation and amortization expense | | | 3,363 | | | 341 | | | 504 |
Management fee expense – related party | | | 2 | | | 215 | | | 250 |
Impairment expense | | | 108 | | | — | | | — |
Total Operating Expenses | | | 147,670 | | | 18,108 | | | 19,059 |
Loss from Operations | | | (137,082) | | | (6,852) | | | (10,353) |
Interest expense | | | 1,590 | | | 518 | | | 651 |
Other Income, net | | | | | | | |||
Change in fair value of Merger warrants liability | | | 32,733 | | | — | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | 923 | | | (1,396) |
Change in fair value of earnout shares | | | 66,605 | | | — | | | — |
Other income (expense), net | | | (535) | | | (95) | | | (267) |
Total Other Income (Expense), net | | | 98,803 | | | 828 | | | (1,663) |
Loss Before Income Tax Expense | | | (39,869) | | | (6,542) | | | (12,667) |
Income tax expense | | | 10 | | | 10 | | | 11 |
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Net Loss per Share, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
| | 2021 | | | 2020 | | | 2019 | |
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Other Comprehensive (Loss) Income, net of tax: | | | | | | | |||
Unrealized (losses) gains on marketable securities arising during the period | | | (101) | | | 16 | | | — |
Tax effect | | | — | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (101) | | | 16 | | | — |
Reclassification adjustment for realized gains | | | (7) | | | (1) | | | — |
Tax effect | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (7) | | | (1) | | | — |
Other Comprehensive (Loss) Income, net of tax | | | (108) | | | 15 | | | — |
Total Comprehensive (Loss) | | | $(39,987) | | | $(6,537) | | | $(12,678) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance January 1, 2019 | | | 1,220,851 | | | $8,670 | | | 37,881,435 | | | $4 | | | $6,526 | | | $(14,807) | | | $— | | | $(8,277) |
Retroactive application of recapitalization | | | (1,220,851) | | | $(8,670) | | | 12,443,768 | | | $1 | | | $8,669 | | | $— | | | $— | | | $8,670 |
Adjusted balance, beginning of period | | | — | | | $— | | | 50,325,203 | | | $5 | | | $15,195 | | | $(14,807) | | | $— | | | $393 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(12,678) | | | $— | | | $(12,678) |
Redeemable convertible preferred stock issuance, shown as if recapitalized | | | — | | | $— | | | 8,295,840 | | | $1 | | | $8,889 | | | $— | | | $— | | | $8,890 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,579) | | | $— | | | $— | | | $(1,579) |
Stock based compensation | | | — | | | $— | | | — | | | $— | | | $113 | | | $— | | | $— | | | $113 |
Balance December 31, 2019 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $22,618 | | | $(27,485) | | | $— | | | $(4,861) |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(6,552) | | | $— | | | $(6,552) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $15 | | | $15 |
Accrued dividends on redeemable convertible preferred stock | | | — | | | $— | | | — | | | $— | | | $(1,884) | | | $— | | | $— | | | $(1,884) |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $45 | | | $— | | | $— | | | $45 |
Balance December 31, 2020 | | | — | | | $— | | | 58,621,042 | | | $6 | | | $20,779 | | | $(34,037) | | | $15 | | | $(13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (39,879) | | | — | | | (39,879) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (108) | | | (108) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (20) | | | — | | | — | | | (20) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former CarLotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 51,121 | | | — | | | — | | | 51,121 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,024) | | | — | | | — | | | (39,024) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Net issuance of Class A common stock to settle vested restricted stock units | | | — | | | — | | | 71,523 | | | — | | | (84) | | | — | | | — | | | (84) |
Exercise of stock options | | | — | | | — | | | 254,818 | | | — | | | 163 | | | — | | | — | | | 163 |
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
| | 2021 | | | 2020 | | | 2019 | |
Cash Flow from Operating Activities | | | | | | | |||
Net loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | |||
Depreciation and amortization – property and equipment and capitalized software | | | 3,257 | | | 195 | | | 260 |
Impairment – property and equipment | | | 108 | | | — | | | — |
Amortization and accretion - marketable securities | | | 2,465 | | | — | | | — |
Depreciation – lease vehicles | | | 106 | | | 146 | | | 244 |
Loss on disposition of property and equipment | | | — | | | — | | | 321 |
Gain on marketable securities | | | — | | | (36) | | | — |
Provision for doubtful accounts | | | 233 | | | 40 | | | (14) |
Stock-based compensation expense | | | 51,121 | | | 45 | | | 113 |
Change in fair value of Merger warrants liability | | | (32,733) | | | — | | | — |
Change in fair value of historic warrants liability | | | — | | | 14 | | | (24) |
Change in fair value of earnout shares | | | (66,605) | | | — | | | — |
Change in fair value of debt issuance costs and stock warrant | | | — | | | 25 | | | — |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (923) | | | 1,396 |
Unpaid interest expense on capital lease obligations | | | 340 | | | — | | | — |
Change in Operating Assets and Liabilities: | | | | | | | |||
Accounts receivable | | | (4,307) | | | (916) | | | (830) |
Inventories | | | (29,519) | | | (3,333) | | | 2,883 |
Other current assets | | | (3,918) | | | (6,445) | | | (6) |
Other assets | | | (259) | | | 44 | | | (38) |
Accounts payable | | | 69 | | | 4,149 | | | 1,392 |
Accrued expenses | | | 9,041 | | | 8,039 | | | 525 |
Accrued expenses – related party | | | (229) | | | 96 | | | 172 |
Other current liabilities | | | 498 | | | (178) | | | 229 |
Other liabilities | | | (1,070) | | | 998 | | | 582 |
Net Cash Used in Operating Activities | | | (111,281) | | | (4,592) | | | (5,473) |
Cash Flows from Investing Activities | | | | | | | |||
Purchase of property and equipment | | | (10,148) | | | (154) | | | (235) |
Capitalized website and internal-use software costs | | | (14,609) | | | — | | | — |
Purchase of marketable securities | | | (359,896) | | | (1,049) | | | — |
Proceeds from sales of marketable securities | | | 239,931 | | | 68 | | | — |
Purchase of lease vehicles | | | (1,793) | | | (92) | | | (252) |
Net Cash Used in Investing Activities | | | (146,515) | | | (1,227) | | | (487) |
Cash Flows from Financing Activities | | | | | | | |||
Issuance of redeemable convertible preferred stock | | | — | | | — | | | 7,988 |
Payments made on long-term debt | | | (153) | | | (9) | | | (8) |
Advance from holder of marketable securities | | | 4,722 | | | — | | | — |
Repayment of advance from marketable securities | | | (4,722) | | | — | | | — |
PIPE issuance | | | 125,000 | | | — | | | — |
Merger financing | | | 309,999 | | | — | | | — |
Payment made on accrued dividends | | | (4,853) | | | — | | | — |
Payments to existing shareholders of Former CarLotz | | | (62,693) | | | — | | | — |
Transaction costs and advisory fees | | | (47,579) | | | — | | | — |
| | 2021 | | | 2020 | | | 2019 | |
Payments made on cash considerations associated with stock options | | | (2,465) | | | — | | | — |
Repayment of Paycheck Protection Program loan | | | (1,749) | | | — | | | — |
Payments made on note payable | | | (3,000) | | | — | | | (418) |
Payments of debt issuance costs | | | — | | | (10) | | | (112) |
Borrowings on long-term debt | | | — | | | 5,249 | | | 3,000 |
Payments on floor plan notes payable | | | (150,090) | | | (24,948) | | | (41,711) |
Borrowings on floor plan notes payable | | | 171,866 | | | 24,248 | | | 39,753 |
Employee stock option exercise | | | 404 | | | — | | | — |
Payments made for tax on equity award transactions | | | (339) | | | — | | | — |
Net Cash Provided by Financing Activities | | | 334,348 | | | 4,530 | | | 8,492 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | 76,552 | | | (1,289) | | | 2,532 |
Cash and cash equivalents and restricted cash, beginning | | | 2,813 | | | 4,102 | | | 1,570 |
Cash and cash equivalents and restricted cash, ending | | | $79,365 | | | $2,813 | | | $4,102 |
Supplemental Disclosure of Cash Flow Information | | | | | | | |||
Cash paid for interest | | | $1,743 | | | $346 | | | $684 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | | | |||
Transfer from property and equipment to inventory | | | $— | | | $27 | | | $53 |
Transfer from lease vehicles to inventory | | | $264 | | | $217 | | | $295 |
Redeemable convertible preferred stock distributions accrued | | | — | | | 1,884 | | | 1,579 |
Issuance of common stock warrants | | | — | | | 15 | | | 72 |
KAR/AFC exercise of stock warrants | | | (144) | | | — | | | — |
KAR/AFC conversion of notes payable | | | (3,625) | | | — | | | — |
Convertible redeemable preferred stock tranche obligation expiration | | | (2,832) | | | — | | | — |
Capitalized website and internal use software costs accrued | | | (790) | | | — | | | — |
Purchase of property and equipment costs accrued | | | (1,034) | | | — | | | — |
Purchases of property under capital lease obligation | | | (11,261) | | | 1,305 | | | — |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | (902) |
Leasehold Improvements | | | Lesser of 15 years or underlying lease terms |
Equipment, Furniture and Fixtures | | | 1 – 5 years |
Corporate Vehicles | | | 5 years |
Level 1: | Observable inputs such as quoted prices in active markets. |
Level 2: | Inputs other than quoted prices in active markets that are either directly or indirectly observable. |
Level 3: | Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,284) |
Less: Merger warrants liability | | | (39,024) |
| | December 31, 2021 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $217,439 | | | $— | | | $217,439 |
Wholesale vehicle sales | | | 31,759 | | | — | | | 31,759 |
Finance and insurance, net | | | 8,844 | | | — | | | 8,844 |
Lease income, net | | | — | | | 492 | | | 492 |
Total Revenues | | | $258,042 | | | $492 | | | $258,534 |
| | 2020 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $104,253 | | | $— | | | $104,253 |
Wholesale vehicle sales | | | 9,984 | | | — | | | 9,984 |
Finance and insurance, net | | | 3,898 | | | — | | | 3,898 |
Lease income, net | | | — | | | 490 | | | 490 |
Total Revenues | | | $118,135 | | | $490 | | | $118,625 |
| | 2019 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $90,382 | | | $— | | | $90,382 |
Wholesale vehicle sales | | | 8,454 | | | — | | | 8,454 |
Finance and insurance, net | | | 3,117 | | | — | | | 3,117 |
Lease income, net | | | — | | | 533 | | | 533 |
Total Revenues | | | $101,953 | | | $533 | | | $102,486 |
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 84,534 |
Gross Profit – Retail Vehicles | | | $2,927 | | | $7,270 | | | $5,848 |
Wholesale vehicles: | | | | | | | |||
Wholesale vehicle sales | | | $31,759 | | | $9,984 | | | $8,454 |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 9,246 |
Gross Profit – Wholesale Vehicles | | | $(1,675) | | | $(402) | | | $(792) |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $240 | | | $6 | | | $— | | | $246 |
Corporate bonds | | | 261 | | | 5 | | | (1) | | | 265 |
U.S. states, territories and political subdivisions | | | 141 | | | 5 | | | — | | | 146 |
Total Fixed Maturity Debt Securities | | | $642 | | | $16 | | | $(1) | | | $657 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $116,114 | | | $116,031 |
Due after one year through five years | | | 1,593 | | | 1,585 |
Due after five years through ten years | | | 358 | | | 356 |
Total | | | $118,065 | | | $117,972 |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | 19,945 | | | (7) | | | 340 | | | (3) | | | 20,285 | | | (10) |
Foreign governments | | | 12,152 | | | (18) | | | — | | | — | | | 12,152 | | | (18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | | | | | December 31, 2020 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
Total Fixed Maturity Debt Securities | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | December 31, 2020 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $335 | | | $375 |
| | December 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $239,930 | | | $7 | | | $— | | | $7 |
Equity securities | | | 1 | | | — | | | — | | | — |
Total Marketable Securities | | | $239,931 | | | $7 | | | $— | | | $7 |
| | December 31, 2020 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $18 | | | $— | | | $— | | | $— |
Equity securities | | | 50 | | | 1 | | | (2) | | | (1) |
Total Marketable Securities | | | $68 | | | $1 | | | $(2) | | | $(1) |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 3,941 | | | 2,350 | | | — | | | 6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $405 | | | $— | | | $— | | | $405 |
Equity securities | | | 375 | | | — | | | — | | | 375 |
Fixed maturity debt securities | | | 246 | | | 411 | | | — | | | 657 |
Total Assets | | | $1,026 | | | $411 | | | $— | | | $1,437 |
Liabilities: | | | | | | | | | ||||
Redeemable convertible preferred stock tranche obligation | | | $— | | | $— | | | $2,832 | | | $2,832 |
Historic warrants liability | | | — | | | — | | | 144 | | | 144 |
Total Liabilities | | | $— | | | $— | | | $2,976 | | | $2,976 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares liability | | | — | | | 74,284 | | | — | | | (66,605) | | | 7,679 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(66,605) | | | $7,679 |
| | January 1, 2020 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2020 | |
Redeemable convertible preferred stock tranche obligation | | | $3,755 | | | $— | | | $— | | | $(923) | | | $2,832 |
Historic warrants liability | | | 115 | | | 15 | | | — | | | 14 | | | 144 |
Total | | | $3,870 | | | $15 | | | $— | | | $(909) | | | $2,976 |
| | December 31, 2021 | | | January 21, 2021 | |
Expected volatility | | | 80.00% | | | 80.00% |
Starting stock price | | | $2.27 | | | $11.31 |
Expected term (in years) | | | 4.1 years | | | 5 years |
Risk-free interest rate | | | 1.04% | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | December 31, 2021 | | | December 31, 2020 | |
Contracts in transit | | | $7,836 | | | $3,321 |
Trade | | | 386 | | | 240 |
Finance commission | | | 284 | | | 132 |
Other | | | — | | | 506 |
Total | | | 8,506 | | | 4,199 |
Allowance for doubtful accounts | | | (300) | | | (67) |
Total Accounts Receivable, net | | | $8,206 | | | $4,132 |
| | December 31, 2021 | | | December 31, 2020 | |
Used vehicles | | | $40,739 | | | $11,202 |
Parts | | | 246 | | | — |
Total | | | $40,985 | | | $11,202 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease assets | | | $12,566 | | | $1,305 |
Leasehold improvements | | | 4,628 | | | 702 |
Furniture, fixtures and equipment | | | 7,993 | | | 760 |
Corporate vehicles | | | 158 | | | 143 |
Total property and equipment | | | 25,345 | | | 2,910 |
Less: accumulated depreciation | | | (2,609) | | | (1,042) |
Less: impairment | | | (108) | | | — |
Property and Equipment, net | | | $22,628 | | | $1,868 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $36 |
Deferred acquisition costs | | | 46 | | | 72 |
Prepaid expenses | | | 3,664 | | | 679 |
Interest receivable | | | 966 | | | — |
Deferred transaction costs | | | — | | | 5,892 |
Total Other Current Assets | | | $4,705 | | | $6,679 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 35 | | | 48 |
Security deposits | | | 507 | | | 235 |
Total Other Assets | | | $558 | | | $299 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease obligation | | | $12,715 | | | $1,305 |
Promissory note | | | — | | | 2,990 |
Convertible notes payable, net | | | — | | | 3,325 |
Paycheck Protection Program loan | | | — | | | 1,749 |
| | 12,715 | | | 9,369 | |
Current portion of long-term debt | | | (509) | | | (6,370) |
Long-term Debt | | | $12,206 | | | $2,999 |
| | December 31, 2021 | | | December 31, 2020 | |
License and title fees | | | $903 | | | $785 |
Payroll and bonuses | | | 2,047 | | | 837 |
Deferred rent | | | 1,636 | | | 199 |
Technology | | | 1,127 | | | — |
Inventory | | | 2,542 | | | 1 |
Other | | | 6,173 | | | 1,741 |
Total Accrued Expenses | | | $14,428 | | | $3,563 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $754 | | | $256 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 622 | | | 1,680 |
Other long-term liabilities | | | 122 | | | 135 |
Historic warrants liability | | | — | | | 144 |
Other Liabilities, Long-term | | | $744 | | | $1,959 |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | 6,788 | | | 1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (Balance January 1, 2019) | | | 1,647,650 | | | $0.60 |
Granted | | | — | | | — |
Forfeited | | | (76,445) | | | 0.67 |
Balance (December 31, 2019) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Exercised | | | (310,877) | | | 0.57 |
Forfeited | | | — | | | — |
Balance (December 31, 2021) | | | 1,260,328 | | | 0.56 |
Vested (as of December 31, 2021) | | | 1,260,328 | | | $0.56 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,260,328 | | | 0.67 years | | | $0.56 |
Exercisable | | | 1,260,328 | | | 0.67 years | | | $0.56 |
| | Number of Stock Options | | | Weighted Averaged Exercise Price | |
Balance (Balance January 1, 2019) | | | 2,599,669 | | | $0.92 |
Granted | | | 1,569,676 | | | 0.92 |
Forfeited | | | (1,323,787) | | | 0.92 |
Balance (December 31, 2019) | | | 2,845,557 | | | 0.92 |
Granted | | | 1,116,101 | | | 0.92 |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 3,961,658 | | | 0.92 |
Granted | | | — | | | — |
Forfeited | | | (25,482) | | | 0.92 |
Balance (December 31, 2021) | | | 3,936,176 | | | 0.92 |
Vested (as of December 31, 2021) | | | 3,538,672 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,936,176 | | | 7.55 years | | | $0.92 |
Exercisable | | | 3,538,672 | | | 7.43 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.5 - 4.7 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Balance (Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,490,519 | | | 11.02 |
Forfeited | | | (21,222) | | | 4.31 |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,469,297 | | | 8.96 years | | | $11.12 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 80% - 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 0.62% - 1.34% |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 710,993 | | | 5.58 |
Forfeited | | | (18,884) | | | 4.32 |
Vested (as of December 31, 2021) | | | (94,370) | | | 5.87 |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of Company common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of Company common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of Company common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | (19,221) | | | 10.70 |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Expected volatility | | | 80.00% |
Starting stock price | | | $11.31 |
Expected term (in years) | | | 5 years |
Risk-free interest rate | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 |
| | 2021 | | | 2020 | | | 2019 | |
Current Income Tax Expense: | | | | | | | |||
Federal | | | $— | | | $— | | | $— |
State and local | | | 10 | | | 10 | | | 11 |
Total Current Income Tax Expense | | | 10 | | | 10 | | | 11 |
Deferred Income Tax Expense: | | | | | | | |||
Federal | | | — | | | — | | | — |
State and local | | | — | | | — | | | — |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
| | 2021 | | | 2020 | |
Deferred Tax Assets: | | | | | ||
Net operating losses | | | $27,794 | | | $7,042 |
Accrued expenses | | | — | | | 109 |
Unearned premiums | | | 339 | | | 466 |
Contract expense | | | 2,188 | | | 332 |
Intangible assets | | | 188 | | | 204 |
Equity awards | | | 2,199 | | | 189 |
Other | | | 1,532 | | | 217 |
Total deferred tax assets | | | 34,240 | | | 8,559 |
Less: valuation allowance | | | (34,138) | | | (8,559) |
Net Deferred Tax Assets | | | 102 | | | — |
| | 2021 | | | 2020 | |
Deferred Tax Liabilities | | | | | ||
Fixed assets | | | (102) | | | — |
Total deferred tax liabilities | | | (102) | | | — |
Net Deferred Tax Liabilities | | | (102) | | | — |
Net Deferred Tax Assets/Liabilities | | | $— | | | $— |
| | 2021 | | | 2020 | | | 2019 | |
January 1, | | | $8,559 | | | $6,910 | | | $3,986 |
Additions – Charged | | | 25,579 | | | 1,649 | | | 2,924 |
Deductions – Charged | | | — | | | — | | | — |
Other | | | — | | | — | | | — |
December 31, | | | $34,138 | | | $8,559 | | | $6,910 |
| | 2021 | | | 2020 | | | 2019 | |
Loss Before Income Tax Expense | | | $(39,869) | | | $(6,542) | | | $(12,667) |
Income tax benefit at federal statutory rates | | | (8,372) | | | (1,372) | | | (2,660) |
State and local income taxes | | | (3,634) | | | (79) | | | (471) |
Valuation allowances | | | 24,391 | | | 1,649 | | | 2,924 |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (194) | | | 293 |
Executive compensation | | | 8,690 | | | — | | | — |
Change in fair value of Merger warrants liability | | | (6,874) | | | — | | | — |
Change in fair value of earnout shares | | | (13,987) | | | — | | | — |
Other | | | (204) | | | 6 | | | (75) |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
Effective Tax Rate | | | (0.03)% | | | (0.15)% | | | (0.09)% |
| | 2021 | | | 2020 | | | 2019 | |
Numerator: | | | | | | | |||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Denominator: | | | | | | | |||
Weighted average common shares outstanding, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
| | 2021 | | | 2020 | | | 2019 | |
Public warrants | | | 10,185,774 | | | — | | | — |
Private warrants | | | 6,074,310 | | | — | | | — |
Earnout RSUs | | | 630,810 | | | — | | | — |
Earnout shares | | | 6,945,732 | | | — | | | — |
Convertible notes payable | | | — | | | 3,556,335 | | | 2,876,492 |
Historic warrants | | | — | | | 777,265 | | | 699,025 |
Stock options outstanding to purchase shares of common stock | | | 6,665,801 | | | 5,532,863 | | | 4,416,762 |
Unvested RSUs | | | 597,139 | | | — | | | — |
Total | | | 31,099,566 | | | 9,866,463 | | | 7,992,279 |
| | Total vehicle purchases from vendor to total vehicle purchases for the year ended December 31, | |||||||
Vendor | | | 2021 | | | 2020 | | | 2019 |
Vendor A | | | 24% | | | 33% | | | —% |
Vendor B | | | 11% | | | —% | | | —% |
Vendor C | | | 10% | | | —% | | | —% |
Vendor D | | | —% | | | 13% | | | 12% |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Controls and Procedures |
| | Balance at beginning of the period | | | Bad debt expense | | | Write-offs | | | Balance at the end of period | |
| | (in thousands) | ||||||||||
Allowance for doubtful accounts: | | | | | | | | | ||||
Year ended December 31, 2021 | | | 67 | | | 731 | | | (498) | | | 300 |
Year ended December 31, 2020 | | | 27 | | | 44 | | | (4) | | | 67 |
Year ended December 31, 2019 | | | 41 | | | 44 | | | (58) | | | 27 |
| | ||
| | ||
Corporate Vehicles | | | |
5 years |
| | March 31, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,328 | | | $75,029 |
Restricted cash | | | 4,011 | | | 4,336 |
Marketable securities – at fair value | | | 74,109 | | | 116,589 |
Accounts receivable, net | | | 6,922 | | | 8,206 |
Inventories | | | 46,095 | | | 40,985 |
Other current assets | | | 10,741 | | | 4,705 |
Total Current Assets | | | 217,206 | | | 249,850 |
Marketable securities – at fair value | | | 971 | | | 1,941 |
Property and equipment, net | | | 13,042 | | | 22,628 |
Capitalized website and internal-use software costs, net | | | 13,385 | | | 13,716 |
Operating lease assets | | | 49,608 | | | — |
Finance lease assets, net | | | 11,811 | | | — |
Lease vehicles, net | | | 2,223 | | | 1,596 |
Other assets | | | 553 | | | 558 |
Total Assets | | | $308,799 | | | $290,289 |
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Current portion of finance lease liabilities | | | $560 | | | $509 |
Floor plan notes payable | | | 22,052 | | | 27,815 |
Accounts payable | | | 7,914 | | | 6,352 |
Accrued expenses | | | 14,369 | | | 14,428 |
Current portion of operating lease liabilities | | | 6,810 | | | — |
Other current liabilities | | | 662 | | | 754 |
Total Current Liabilities | | | 52,367 | | | 49,858 |
Finance lease liabilities, less current portion | | | 12,080 | | | 12,206 |
Operating lease liabilities, less current portion | | | 45,076 | | | — |
Earnout shares liability | | | 3,650 | | | 7,679 |
Merger warrants liability | | | 4,691 | | | 6,291 |
Other liabilities | | | 651 | | | 744 |
Total Liabilities | | | 118,515 | | | 76,778 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,111,796 and 113,996,401 shares issued and outstanding at March 31, 2022 and December 31, 2021 | | | 11 | | | 11 |
Additional paid-in capital | | | 289,191 | | | 287,509 |
Accumulated deficit | | | (98,752) | | | (73,916) |
Accumulated other comprehensive (loss) income | | | (166) | | | (93) |
Total Stockholders’ Equity (Deficit) | | | 190,284 | | | 213,511 |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $308,799 | | | $290,289 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock-based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income, net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout shares | | | 4,029 | | | 31,846 |
Other income (expense) | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
Net Loss per Share, basic and diluted | | | $(0.22) | | | $(0.15) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 114,054,597 | | | 100,817,385 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net loss | | | $(24,836) | | | $(15,022) |
Other Comprehensive (Loss), net of tax: | | | | | ||
Unrealized (losses) gains on marketable securities arising during the period | | | (73) | | | (131) |
Tax effect | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (73) | | | (131) |
Reclassification adjustment for realized losses | | | — | | | — |
Tax effect | | | — | | | — |
Reclassification adjustment for realized losses, net of tax | | | — | | | — |
Other Comprehensive (Loss), net of tax | | | (73) | | | (131) |
Total Comprehensive (Loss) | | | $(24,909) | | | $(15,153) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $ — | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Cash Flow from Operating Activities | | | | | ||
Net loss | | | $(24,836) | | | $(15,022) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | | 4,097 | | | 105 |
Amortization and accretion - marketable securities | | | 440 | | | 238 |
Depreciation – lease vehicles | | | 85 | | | 15 |
Loss on marketable securities | | | — | | | — |
Provision for doubtful accounts | | | (30) | | | — |
Stock-based compensation expense | | | 1,684 | | | 41,963 |
Change in fair value of Merger warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout shares | | | (4,029) | | | (31,846) |
Change in Operating Assets and Liabilities: | | | | | ||
Accounts receivable | | | 1,314 | | | (5,192) |
Inventories | | | (5,110) | | | 1,991 |
Other current assets | | | (6,036) | | | (5,868) |
Other assets | | | 5 | | | (3,038) |
Accounts payable | | | 1,562 | | | 3,140 |
Accrued expenses | | | 975 | | | 6,187 |
Accrued expenses – related party | | | — | | | (229) |
Other current liabilities | | | (92) | | | 559 |
Other liabilities | | | (93) | | | (245) |
Net Cash Used in Operating Activities | | | (31,664) | | | (19,600) |
Cash Flows from Investing Activities | | | | | ||
Purchase of property and equipment | | | (4,091) | | | (586) |
Capitalized website and internal-use software costs | | | (611) | | | (1,154) |
Purchase of marketable securities | | | (21,974) | | | (217,689) |
Proceeds from sales of marketable securities | | | 64,917 | | | 59 |
Purchase of lease vehicles | | | (712) | | | — |
Net Cash (Used in) Provided by Investing Activities | | | 37,529 | | | (219,370) |
Cash Flows from Financing Activities | | | | | ||
Payments made on finance leases | | | (126) | | | — |
PIPE issuance | | | — | | | 125,000 |
Merger financing | | | — | | | 309,999 |
Payment made on accrued dividends | | | — | | | (4,853) |
Payments to existing shareholders of Former CarLotz | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | (47,579) |
Payments made on cash considerations associated with stock options | | | — | | | (2,465) |
Repayment of Paycheck Protection Program loan | | | — | | | (1,749) |
Payments made on note payable | | | — | | | (3,000) |
Payments on floor plan notes payable | | | (41,728) | | | (11,150) |
Borrowings on floor plan notes payable | | | 35,965 | | | 9,236 |
Payments made for tax on equity award transactions | | | (2) | | | — |
Net Cash (Used in) Provided by Financing Activities | | | (5,891) | | | 310,746 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (26) | | | 71,776 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $79,339 | | | $74,589 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $615 | | | $402 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $100 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (1,400) |
Level 1: | Observable inputs such as quoted prices in active markets. |
Level 2: | Inputs other than quoted prices in active markets that are either directly or indirectly observable. |
Level 3: | Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,284) |
Less: Merger warrants liability | | | (39,024) |
| | December 31, 2021 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $217,439 | | | $— | | | $217,439 |
Wholesale vehicle sales | | | 31,759 | | | — | | | 31,759 |
Finance and insurance, net | | | 8,844 | | | — | | | 8,844 |
Lease income, net | | | — | | | 492 | | | 492 |
Total Revenues | | | $258,042 | | | $492 | | | $258,534 |
| | 2020 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $104,253 | | | $— | | | $104,253 |
Wholesale vehicle sales | | | 9,984 | | | — | | | 9,984 |
Finance and insurance, net | | | 3,898 | | | — | | | 3,898 |
Lease income, net | | | — | | | 490 | | | 490 |
Total Revenues | | | $118,135 | | | $490 | | | $118,625 |
| | 2019 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $90,382 | | | $— | | | $90,382 |
Wholesale vehicle sales | | | 8,454 | | | — | | | 8,454 |
Finance and insurance, net | | | 3,117 | | | — | | | 3,117 |
Lease income, net | | | — | | | 533 | | | 533 |
Total Revenues | | | $101,953 | | | $533 | | | $102,486 |
| | 2021 | | | 2020 | | | 2019 | |
Retail vehicles: | | | | | | | |||
Retail vehicle sales | | | $217,439 | | | $104,253 | | | $90,382 |
Retail vehicle cost of sales | | | 214,512 | | | 96,983 | | | 84,534 |
Gross Profit – Retail Vehicles | | | $2,927 | | | $7,270 | | | $5,848 |
Wholesale vehicles: | | | | | | | |||
Wholesale vehicle sales | | | $31,759 | | | $9,984 | | | $8,454 |
Wholesale vehicle cost of sales | | | 33,434 | | | 10,386 | | | 9,246 |
Gross Profit – Wholesale Vehicles | | | $(1,675) | | | $(402) | | | $(792) |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $240 | | | $6 | | | $— | | | $246 |
Corporate bonds | | | 261 | | | 5 | | | (1) | | | 265 |
U.S. states, territories and political subdivisions | | | 141 | | | 5 | | | — | | | 146 |
Total Fixed Maturity Debt Securities | | | $642 | | | $16 | | | $(1) | | | $657 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $116,114 | | | $116,031 |
Due after one year through five years | | | 1,593 | | | 1,585 |
Due after five years through ten years | | | 358 | | | 356 |
Total | | | $118,065 | | | $117,972 |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | 19,945 | | | (7) | | | 340 | | | (3) | | | 20,285 | | | (10) |
Foreign governments | | | 12,152 | | | (18) | | | — | | | — | | | 12,152 | | | (18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | | | | | December 31, 2020 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
Total Fixed Maturity Debt Securities | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | December 31, 2020 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $335 | | | $375 |
| | December 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $239,930 | | | $7 | | | $— | | | $7 |
Equity securities | | | 1 | | | — | | | — | | | — |
Total Marketable Securities | | | $239,931 | | | $7 | | | $— | | | $7 |
| | December 31, 2020 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $18 | | | $— | | | $— | | | $— |
Equity securities | | | 50 | | | 1 | | | (2) | | | (1) |
Total Marketable Securities | | | $68 | | | $1 | | | $(2) | | | $(1) |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 3,941 | | | 2,350 | | | — | | | 6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $405 | | | $— | | | $— | | | $405 |
Equity securities | | | 375 | | | — | | | — | | | 375 |
Fixed maturity debt securities | | | 246 | | | 411 | | | — | | | 657 |
Total Assets | | | $1,026 | | | $411 | | | $— | | | $1,437 |
Liabilities: | | | | | | | | | ||||
Redeemable convertible preferred stock tranche obligation | | | $— | | | $— | | | $2,832 | | | $2,832 |
Historic warrants liability | | | — | | | — | | | 144 | | | 144 |
Total Liabilities | | | $— | | | $— | | | $2,976 | | | $2,976 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares liability | | | — | | | 74,284 | | | — | | | (66,605) | | | 7,679 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(66,605) | | | $7,679 |
| | January 1, 2020 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2020 | |
Redeemable convertible preferred stock tranche obligation | | | $3,755 | | | $— | | | $— | | | $(923) | | | $2,832 |
Historic warrants liability | | | 115 | | | 15 | | | — | | | 14 | | | 144 |
Total | | | $3,870 | | | $15 | | | $— | | | $(909) | | | $2,976 |
| | December 31, 2021 | | | January 21, 2021 | |
Expected volatility | | | 80.00% | | | 80.00% |
Starting stock price | | | $2.27 | | | $11.31 |
Expected term (in years) | | | 4.1 years | | | 5 years |
Risk-free interest rate | | | 1.04% | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | December 31, 2021 | | | December 31, 2020 | |
Contracts in transit | | | $7,836 | | | $3,321 |
Trade | | | 386 | | | 240 |
Finance commission | | | 284 | | | 132 |
Other | | | — | | | 506 |
Total | | | 8,506 | | | 4,199 |
Allowance for doubtful accounts | | | (300) | | | (67) |
Total Accounts Receivable, net | | | $8,206 | | | $4,132 |
| | December 31, 2021 | | | December 31, 2020 | |
Used vehicles | | | $40,739 | | | $11,202 |
Parts | | | 246 | | | — |
Total | | | $40,985 | | | $11,202 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease assets | | | $12,566 | | | $1,305 |
Leasehold improvements | | | 4,628 | | | 702 |
Furniture, fixtures and equipment | | | 7,993 | | | 760 |
Corporate vehicles | | | 158 | | | 143 |
Total property and equipment | | | 25,345 | | | 2,910 |
Less: accumulated depreciation | | | (2,609) | | | (1,042) |
Less: impairment | | | (108) | | | — |
Property and Equipment, net | | | $22,628 | | | $1,868 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $36 |
Deferred acquisition costs | | | 46 | | | 72 |
Prepaid expenses | | | 3,664 | | | 679 |
Interest receivable | | | 966 | | | — |
Deferred transaction costs | | | — | | | 5,892 |
Total Other Current Assets | | | $4,705 | | | $6,679 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 35 | | | 48 |
Security deposits | | | 507 | | | 235 |
Total Other Assets | | | $558 | | | $299 |
| | December 31, 2021 | | | December 31, 2020 | |
Capital lease obligation | | | $12,715 | | | $1,305 |
Promissory note | | | — | | | 2,990 |
Convertible notes payable, net | | | — | | | 3,325 |
Paycheck Protection Program loan | | | — | | | 1,749 |
| | 12,715 | | | 9,369 | |
Current portion of long-term debt | | | (509) | | | (6,370) |
Long-term Debt | | | $12,206 | | | $2,999 |
| | December 31, 2021 | | | December 31, 2020 | |
License and title fees | | | $903 | | | $785 |
Payroll and bonuses | | | 2,047 | | | 837 |
Deferred rent | | | 1,636 | | | 199 |
Technology | | | 1,127 | | | — |
Inventory | | | 2,542 | | | 1 |
Other | | | 6,173 | | | 1,741 |
Total Accrued Expenses | | | $14,428 | | | $3,563 |
| | December 31, 2021 | | | December 31, 2020 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $754 | | | $256 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 622 | | | 1,680 |
Other long-term liabilities | | | 122 | | | 135 |
Historic warrants liability | | | — | | | 144 |
Other Liabilities, Long-term | | | $744 | | | $1,959 |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | 6,788 | | | 1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (Balance January 1, 2019) | | | 1,647,650 | | | $0.60 |
Granted | | | — | | | — |
Forfeited | | | (76,445) | | | 0.67 |
Balance (December 31, 2019) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Exercised | | | (310,877) | | | 0.57 |
Forfeited | | | — | | | — |
Balance (December 31, 2021) | | | 1,260,328 | | | 0.56 |
Vested (as of December 31, 2021) | | | 1,260,328 | | | $0.56 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,260,328 | | | 0.67 years | | | $0.56 |
Exercisable | | | 1,260,328 | | | 0.67 years | | | $0.56 |
| | Number of Stock Options | | | Weighted Averaged Exercise Price | |
Balance (Balance January 1, 2019) | | | 2,599,669 | | | $0.92 |
Granted | | | 1,569,676 | | | 0.92 |
Forfeited | | | (1,323,787) | | | 0.92 |
Balance (December 31, 2019) | | | 2,845,557 | | | 0.92 |
Granted | | | 1,116,101 | | | 0.92 |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 3,961,658 | | | 0.92 |
Granted | | | — | | | — |
Forfeited | | | (25,482) | | | 0.92 |
Balance (December 31, 2021) | | | 3,936,176 | | | 0.92 |
Vested (as of December 31, 2021) | | | 3,538,672 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,936,176 | | | 7.55 years | | | $0.92 |
Exercisable | | | 3,538,672 | | | 7.43 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.5 - 4.7 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Balance (Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,490,519 | | | 11.02 |
Forfeited | | | (21,222) | | | 4.31 |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,469,297 | | | 8.96 years | | | $11.12 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 80% - 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 0.62% - 1.34% |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 710,993 | | | 5.58 |
Forfeited | | | (18,884) | | | 4.32 |
Vested (as of December 31, 2021) | | | (94,370) | | | 5.87 |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of Company common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of Company common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of Company common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | (19,221) | | | 10.70 |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Expected volatility | | | 80.00% |
Starting stock price | | | $11.31 |
Expected term (in years) | | | 5 years |
Risk-free interest rate | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 |
| | 2021 | | | 2020 | | | 2019 | |
Current Income Tax Expense: | | | | | | | |||
Federal | | | $— | | | $— | | | $— |
State and local | | | 10 | | | 10 | | | 11 |
Total Current Income Tax Expense | | | 10 | | | 10 | | | 11 |
Deferred Income Tax Expense: | | | | | | | |||
Federal | | | — | | | — | | | — |
State and local | | | — | | | — | | | — |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
| | 2021 | | | 2020 | |
Deferred Tax Assets: | | | | | ||
Net operating losses | | | $27,794 | | | $7,042 |
Accrued expenses | | | — | | | 109 |
Unearned premiums | | | 339 | | | 466 |
Contract expense | | | 2,188 | | | 332 |
Intangible assets | | | 188 | | | 204 |
Equity awards | | | 2,199 | | | 189 |
Other | | | 1,532 | | | 217 |
Total deferred tax assets | | | 34,240 | | | 8,559 |
Less: valuation allowance | | | (34,138) | | | (8,559) |
Net Deferred Tax Assets | | | 102 | | | — |
| | 2021 | | | 2020 | |
Deferred Tax Liabilities | | | | | ||
Fixed assets | | | (102) | | | — |
Total deferred tax liabilities | | | (102) | | | — |
Net Deferred Tax Liabilities | | | (102) | | | — |
Net Deferred Tax Assets/Liabilities | | | $— | | | $— |
| | 2021 | | | 2020 | | | 2019 | |
January 1, | | | $8,559 | | | $6,910 | | | $3,986 |
Additions – Charged | | | 25,579 | | | 1,649 | | | 2,924 |
Deductions – Charged | | | — | | | — | | | — |
Other | | | — | | | — | | | — |
December 31, | | | $34,138 | | | $8,559 | | | $6,910 |
| | 2021 | | | 2020 | | | 2019 | |
Loss Before Income Tax Expense | | | $(39,869) | | | $(6,542) | | | $(12,667) |
Income tax benefit at federal statutory rates | | | (8,372) | | | (1,372) | | | (2,660) |
State and local income taxes | | | (3,634) | | | (79) | | | (471) |
Valuation allowances | | | 24,391 | | | 1,649 | | | 2,924 |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (194) | | | 293 |
Executive compensation | | | 8,690 | | | — | | | — |
Change in fair value of Merger warrants liability | | | (6,874) | | | — | | | — |
Change in fair value of earnout shares | | | (13,987) | | | — | | | — |
Other | | | (204) | | | 6 | | | (75) |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
Effective Tax Rate | | | (0.03)% | | | (0.15)% | | | (0.09)% |
| | 2021 | | | 2020 | | | 2019 | |
Numerator: | | | | | | | |||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Denominator: | | | | | | | |||
Weighted average common shares outstanding, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
| | 2021 | | | 2020 | | | 2019 | |
Public warrants | | | 10,185,774 | | | — | | | — |
Private warrants | | | 6,074,310 | | | — | | | — |
Earnout RSUs | | | 630,810 | | | — | | | — |
Earnout shares | | | 6,945,732 | | | — | | | — |
Convertible notes payable | | | — | | | 3,556,335 | | | 2,876,492 |
Historic warrants | | | — | | | 777,265 | | | 699,025 |
Stock options outstanding to purchase shares of common stock | | | 6,665,801 | | | 5,532,863 | | | 4,416,762 |
Unvested RSUs | | | 597,139 | | | — | | | — |
Total | | | 31,099,566 | | | 9,866,463 | | | 7,992,279 |
| | Total vehicle purchases from vendor to total vehicle purchases for the year ended December 31, | |||||||
Vendor | | | 2021 | | | 2020 | | | 2019 |
Vendor A | | | 24% | | | 33% | | | —% |
Vendor B | | | 11% | | | —% | | | —% |
Vendor C | | | 10% | | | —% | | | —% |
Vendor D | | | —% | | | 13% | | | 12% |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Controls and Procedures |
Leasehold Improvements | | | Lesser of 15 years or underlying lease terms |
Equipment, Furniture and Fixtures | | | 1 – 5 years |
Corporate Vehicles | | | 5 years |
Level 1: | Observable inputs such as quoted prices in active markets. |
Level 2: | Inputs other than quoted prices in active markets that are either directly or indirectly observable. |
Level 3: | Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | |
Less: Merger warrants liability | | | (39,024) |
| | ||
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $217,439 | | | $— | | | $217,439 |
Wholesale vehicle sales | | | 31,759 | | | — | | | 31,759 |
Finance and insurance, net | | | 8,844 | | | — | | | 8,844 |
Lease income, net | | | — | | | 492 | | | 492 |
Total Revenues | | | $258,042 | | | $492 | | | $258,534 |
| | 2020 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $104,253 | | | $— | | | $104,253 |
Wholesale vehicle sales | | | 9,984 | | | — | | | 9,984 |
Finance and insurance, net | | | 3,898 | | | — | | | 3,898 |
Lease income, net | | | — | | | 490 | | | 490 |
Total Revenues | | | $118,135 | | | $490 | | | $118,625 |
| | 2019 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $90,382 | | | $— | | | $90,382 |
Wholesale vehicle sales | | | 8,454 | | | — | | | 8,454 |
Finance and insurance, net | | | 3,117 | | | — | | | 3,117 |
Lease income, net | | | — | | | 533 | | | 533 |
Total Revenues | | | $101,953 | | | $533 | | | $102,486 |
| | Three Months Ended March 31, 2022 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,588 | | | $— | | | $50,588 |
Wholesale vehicle sales | | | 8,575 | | | — | | | 8,575 |
Finance and insurance, net | | | $3,705 | | | $— | | | $3,705 |
Lease income, net | | | — | | | 146 | | | 146 |
Total Revenues | | | $62,868 | | | $146 | | | $63,014 |
| | Three Months Ended March 31, 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,383 | | | $— | | | $50,383 |
Wholesale vehicle sales | | | 4,568 | | | — | | | 4,568 |
Finance and insurance, net | | | $1,554 | | | $— | | | $1,554 |
Lease income, net | | | — | | | 107 | | | 107 |
Total Revenues | | | $56,505 | | | $107 | | | $56,612 |
| | Three Months Ended March 31, | |||||||||||||
| | 2022 | | 2021 | | | 2021 | | 2020 | | 2019 | ||||
Retail vehicles: | | | | | | ||||||||||
Retail vehicle sales | | $50,588 | | $50,383 | | $217,439 | | $104,253 | | $90,382 | |||||
Retail vehicle cost of sales | | 52,415 | | 48,917 | | 214,512 | | 96,983 | | 84,534 | |||||
Gross Profit – Retail Vehicles | | $(1,827) | | $1,466 | | $2,927 | | $7,270 | | $5,848 | |||||
Wholesale vehicles: | | | | | | ||||||||||
Wholesale vehicle sales | | $8,575 | | $4,568 | | $31,759 | | $9,984 | | $8,454 | |||||
Wholesale vehicle cost of sales | | 8,521 | | 5,687 | | 33,434 | | 10,386 | | 9,246 | |||||
Gross Profit – Wholesale Vehicles | | $54 | | $(1,119) | | $(1,675) | | $(402) | | $(792) |
| | March 31, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 30,216 | | | 2 | | | (114) | | | 30,104 |
Municipal bonds | | | 21,990 | | | 5 | | | (40) | | | 21,955 |
Commercial paper | | | 19,997 | | | — | | | — | | | 19,997 |
Foreign governments | | | 2,491 | | | 2 | | | (21) | | | 2,472 |
Total Fixed Maturity Debt Securities | | | $74,694 | | | $9 | | | $(175) | | | $74,528 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $240 | | | $6 | | | $— | | | $246 |
Corporate bonds | | | 261 | | | 5 | | | (1) | | | 265 |
U.S. states, territories and political subdivisions | | | 141 | | | 5 | | | — | | | 146 |
Total Fixed Maturity Debt Securities | | | $642 | | | $16 | | | $(1) | | | $657 |
| | Amortized Cost | | Fair Value | | | Amortized Cost | | Fair Value | |||
Due in one year or less | | $73,667 | | $73,557 | | $116,114 | | $116,031 | ||||
Due after one year through five years | | 731 | | 694 | | 1,593 | | 1,585 | ||||
Due after five years through ten years | | 296 | | 277 | | 358 | | 356 | ||||
Total | | $74,694 | | $74,528 | | $118,065 | | $117,972 |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | 19,945 | | | (7) | | | 340 | | | (3) | | | 20,285 | | | (10) |
Foreign governments | | | 12,152 | | | (18) | | | — | | | — | | | 12,152 | | | (18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | | | | | December 31, 2020 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
Total Fixed Maturity Debt Securities | | | $39 | | | $(1) | | | $— | | | $— | | | $39 | | | $(1) |
| | | | | | March 31, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $29,890 | | | $(98) | | | $209 | | | $(16) | | | $30,099 | | | $(114) |
Municipal bonds | | | 19,289 | | | (32) | | | 133 | | | (8) | | | 19,422 | | | (40) |
Foreign governments | | | 2,236 | | | (18) | | | 117 | | | (3) | | | 2,353 | | | (21) |
Total Fixed Maturity Debt Securities | | | $51,415 | | | $(148) | | | $459 | | | $(27) | | | $51,874 | | | $(175) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | March 31, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $430 | | | $552 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | December 31, 2020 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $335 | | | $375 |
| | December 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $239,930 | | | $7 | | | $— | | | $7 |
Equity securities | | | 1 | | | — | | | — | | | — |
Total Marketable Securities | | | $239,931 | | | $7 | | | $— | | | $7 |
| | December 31, 2020 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $18 | | | $— | | | $— | | | $— |
Equity securities | | | 50 | | | 1 | | | (2) | | | (1) |
Total Marketable Securities | | | $68 | | | $1 | | | $(2) | | | $(1) |
| | March 31, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 552 | | | — | | | — | | | 552 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 118,347 | | | — | | | 118,347 |
Total Assets | | | $552 | | | $118,347 | | | $— | | | $118,899 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 2,939 | | | 1,752 | | | — | | | 4,691 |
Earnout shares liability | | | — | | | — | | | 3,650 | | | 3,650 |
Total Liabilities | | | $2,939 | | | $1,752 | | | $3,650 | | | $8,341 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 3,941 | | | 2,350 | | | — | | | 6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $405 | | | $— | | | $— | | | $405 |
Equity securities | | | 375 | | | — | | | — | | | 375 |
Fixed maturity debt securities | | | 246 | | | 411 | | | — | | | 657 |
Total Assets | | | $1,026 | | | $411 | | | $— | | | $1,437 |
Liabilities: | | | | | | | | | ||||
Redeemable convertible preferred stock tranche obligation | | | $— | | | $— | | | $2,832 | | | $2,832 |
Historic warrants liability | | | — | | | — | | | 144 | | | 144 |
Total Liabilities | | | $— | | | $— | | | $2,976 | | | $2,976 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (4,029) | | | 3,650 |
Total | | | $7,679 | | | $— | | | $— | | | $(4,029) | | | $3,650 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (31,846) | | | 42,438 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(31,846) | | | $42,438 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares liability | | | — | | | 74,284 | | | — | | | (66,605) | | | 7,679 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(66,605) | | | $7,679 |
| | January 1, 2020 | | | Issuances | | | Settlements | | | Change in fair value | | | December 31, 2020 | |
Redeemable convertible preferred stock tranche obligation | | | $3,755 | | | $— | | | $— | | | $(923) | | | $2,832 |
Historic warrants liability | | | 115 | | | 15 | | | — | | | 14 | | | 144 |
Total | | | $3,870 | | | $15 | | | $— | | | $(909) | | | $2,976 |
| | March 31, 2022 | | March 31, 2021 | | | December 31, 2021 | | January 21, 2021 | |||
Expected volatility | | 85.00% | | 80.00% | | 80.00% | | 80.00% | ||||
Starting stock price | | $1.37 | | $7.13 | | $2.27 | | $11.31 | ||||
Expected term (in years) | | 3.7 years | | 4.70 years | | 4.1 years | | 5 years | ||||
Risk-free interest rate | | 2.44% | | 0.87% | | 1.04% | | 0.45% | ||||
Earnout hurdle | | $12.50-$15.00 | | $12.50-$15.00 | | $12.50-$15.00 | | $12.50-$15.00 |
| | March 31, 2022 | | December 31, 2021 | | | December 31, 2021 | | December 31, 2020 | |||
Contracts in transit | | $6,117 | | $7,836 | | $7,836 | | $3,321 | ||||
Trade | | 1 | | 386 | | 386 | | 240 | ||||
Finance commission | | 593 | | 284 | | 284 | | 132 | ||||
Other | | 481 | | — | | — | | 506 | ||||
Total | | 7,192 | | 8,506 | | 8,506 | | 4,199 | ||||
Allowance for doubtful accounts | | (270) | | (300) | | (300) | | (67) | ||||
Total Accounts Receivable, net | | $6,922 | | $8,206 | | $8,206 | | $4,132 |
| | December 31, 2021 | | | December 31, 2020 | |
Used vehicles | | | $40,739 | | | $11,202 |
Parts | | | 246 | | | — |
Total | | | $40,985 | | | $11,202 |
| | March 31, 2022 | | | December 31, 2021 | |
Used vehicles | | | $45,846 | | | $40,739 |
Parts | | | 249 | | | 246 |
Total | | | $46,095 | | | $40,985 |
| | March 31, 2022 | | December 31, 2021 | | | December 31, 2021 | | December 31, 2020 | |||
Capital lease assets | | — | | 12,566 | | $12,566 | | $1,305 | ||||
Leasehold improvements | | 8,030 | | 4,628 | | 4,628 | | 702 | ||||
Furniture, fixtures and equipment | | 7,570 | | 7,993 | | 7,993 | | 760 | ||||
Corporate vehicles | | 138 | | 158 | | 158 | | 143 | ||||
Total property and equipment | | 15,738 | | 25,345 | | 25,345 | | 2,910 | ||||
Less: accumulated depreciation | | (2,696) | | (2,609) | | (2,609) | | (1,042) | ||||
Less: impairment | | — | | (108) | | (108) | | — | ||||
Property and Equipment, net | | $13,042 | | $22,628 | | $22,628 | | $1,868 |
| | March 31, 2022 | | December 31, 2021 | | | December 31, 2021 | | December 31, 2020 | |||
Other Current Assets: | | | | | ||||||||
Lease receivable, net | | $29 | | $29 | | $29 | | $36 | ||||
Deferred acquisition costs | | 40 | | 46 | | 46 | | 72 | ||||
Prepaid expenses | | 10,133 | | 3,664 | | 3,664 | | 679 | ||||
Interest receivable | | 539 | | 966 | | 966 | | — | ||||
Deferred transaction costs | | — | | 5,892 | ||||||||
Total Other Current Assets | | $10,741 | | $4,705 | | $4,705 | | $6,679 | ||||
Other Assets: | | | | | ||||||||
Lease receivable, net | | $16 | | $16 | | $16 | | $16 | ||||
Deferred acquisition costs | | 30 | | 35 | | 35 | | 48 | ||||
Security deposits | | 507 | | 507 | | 507 | | 235 | ||||
Total Other Assets | | $553 | | $558 | | $558 | | $299 |
| | March 31, 2022 | | December 31, 2021 | | | December 31, 2021 | | December 31, 2020 | |||
Capital lease obligation | | $— | | $12,715 | | $12,715 | | $1,305 | ||||
Finance lease liabilities | | $12,640 | | $— | ||||||||
Promissory note | | — | | 2,990 | ||||||||
Convertible notes payable, net | | — | | 3,325 | ||||||||
Paycheck Protection Program loan | | — | | 1,749 | ||||||||
| 12,640 | | 12,715 | | 12,715 | | 9,369 | |||||
Current portion of long-term debt | | — | | (509) | | (509) | | (6,370) | ||||
Current portion of finance lease liabilities | | (560) | | — | ||||||||
Long-term Debt | | $12,080 | | $12,206 | | $12,206 | | $2,999 |
| | March 31, 2022 | | December 31, 2021 | | | December 31, 2021 | | December 31, 2020 | |||
License and title fees | | $784 | | $903 | | $903 | | $785 | ||||
Payroll and bonuses | | 4,564 | | 2,047 | | 2,047 | | 837 | ||||
Deferred rent | | — | | 1,636 | | 1,636 | | 199 | ||||
Technology | | 1,120 | | 1,127 | | 1,127 | | — | ||||
Inventory | | 3,612 | | 2,542 | | 2,542 | | 1 | ||||
Other | | 4,289 | | 6,173 | | 6,173 | | 1,741 | ||||
Total Accrued Expenses | | $14,369 | | $14,428 | | $14,428 | | $3,563 |
| | March 31, 2022 | | December 31, 2021 | | | December 31, 2021 | | December 31, 2020 | |||
Other Liabilities, Current | | | ||||||||||
Other Current Liabilities | | | ||||||||||
Unearned insurance premiums | | $662 | | $754 | | $754 | | $256 | ||||
Other Liabilities | | | | | ||||||||
Unearned insurance premiums | | 530 | | 622 | | 622 | | 1,680 | ||||
Other long-term liabilities | | 121 | | 122 | | 122 | | 135 | ||||
Historic warrants liability | | — | | 144 | ||||||||
Other Liabilities, Long-term | | $651 | | $744 | | $744 | | $1,959 |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | 6,788 | | | 1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 7,118 | | | 1,281 |
Fiscal 2023 | | | 9,268 | | | 1,669 |
Fiscal 2024 | | | 8,518 | | | 1,694 |
Fiscal 2025 | | | 7,887 | | | 1,721 |
Fiscal 2026 | | | 6,875 | | | 1,766 |
Thereafter | | | 26,074 | | | 14,322 |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Total lease payments | | | 65,740 | | | 22,453 |
Less: interest | | | (13,854) | | | (9,813) |
Present value of lease liabilities | | | 51,886 | | | 12,640 |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (Balance January 1, 2019) | | | 1,647,650 | | | $0.60 |
Granted | | | — | | | — |
Forfeited | | | (76,445) | | | 0.67 |
Balance (December 31, 2019) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 1,571,205 | | | 0.59 |
Granted | | | — | | | — |
Exercised | | | (310,877) | | | 0.57 |
Forfeited | | | — | | | — |
Balance (December 31, 2021) | | | 1,260,328 | | | 0.56 |
Vested (as of December 31, 2021) | | | 1,260,328 | | | $0.56 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,260,328 | | | 0.67 years | | | $0.56 |
Exercisable | | | 1,260,328 | | | 0.67 years | | | $0.56 |
| | Number of Stock Options | | | Weighted Averaged Exercise Price | |
Balance (Balance January 1, 2019) | | | 2,599,669 | | | $0.92 |
Granted | | | 1,569,676 | | | 0.92 |
Forfeited | | | (1,323,787) | | | 0.92 |
Balance (December 31, 2019) | | | 2,845,557 | | | 0.92 |
Granted | | | 1,116,101 | | | 0.92 |
Forfeited | | | — | | | — |
Balance (December 31, 2020) | | | 3,961,658 | | | 0.92 |
Granted | | | — | | | — |
Forfeited | | | (25,482) | | | 0.92 |
Balance (December 31, 2021) | | | 3,936,176 | | | 0.92 |
Vested (as of December 31, 2021) | | | 3,538,672 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,936,176 | | | 7.55 years | | | $0.92 |
Exercisable | | | 3,538,672 | | | 7.43 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.5 - 4.7 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Balance (Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,490,519 | | | 11.02 |
Forfeited | | | (21,222) | | | 4.31 |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,469,297 | | | 8.96 years | | | $11.12 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 80% - 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 0.62% - 1.34% |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 710,993 | | | 5.58 |
Forfeited | | | (18,884) | | | 4.32 |
Vested (as of December 31, 2021) | | | (94,370) | | | 5.87 |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of Company common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of Company common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of Company common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | (19,221) | | | 10.70 |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Expected volatility | | | 80.00% |
Starting stock price | | | $11.31 |
Expected term (in years) | | | 5 years |
Risk-free interest rate | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 |
| | 2021 | | | 2020 | | | 2019 | |
Current Income Tax Expense: | | | | | | | |||
Federal | | | $— | | | $— | | | $— |
State and local | | | 10 | | | 10 | | | 11 |
Total Current Income Tax Expense | | | 10 | | | 10 | | | 11 |
Deferred Income Tax Expense: | | | | | | | |||
Federal | | | — | | | — | | | — |
State and local | | | — | | | — | | | — |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
| | 2021 | | | 2020 | |
Deferred Tax Assets: | | | | | ||
Net operating losses | | | $27,794 | | | $7,042 |
Accrued expenses | | | — | | | 109 |
Unearned premiums | | | 339 | | | 466 |
Contract expense | | | 2,188 | | | 332 |
Intangible assets | | | 188 | | | 204 |
Equity awards | | | 2,199 | | | 189 |
Other | | | 1,532 | | | 217 |
Total deferred tax assets | | | 34,240 | | | 8,559 |
Less: valuation allowance | | | (34,138) | | | (8,559) |
Net Deferred Tax Assets | | | 102 | | | — |
| | 2021 | | | 2020 | |
Deferred Tax Liabilities | | | | | ||
Fixed assets | | | (102) | | | — |
Total deferred tax liabilities | | | (102) | | | — |
Net Deferred Tax Liabilities | | | (102) | | | — |
Net Deferred Tax Assets/Liabilities | | | $— | | | $— |
| | 2021 | | | 2020 | | | 2019 | |
January 1, | | | $8,559 | | | $6,910 | | | $3,986 |
Additions – Charged | | | 25,579 | | | 1,649 | | | 2,924 |
Deductions – Charged | | | — | | | — | | | — |
Other | | | — | | | — | | | — |
December 31, | | | $34,138 | | | $8,559 | | | $6,910 |
| | 2021 | | | 2020 | | | 2019 | |
Loss Before Income Tax Expense | | | $(39,869) | | | $(6,542) | | | $(12,667) |
Income tax benefit at federal statutory rates | | | (8,372) | | | (1,372) | | | (2,660) |
State and local income taxes | | | (3,634) | | | (79) | | | (471) |
Valuation allowances | | | 24,391 | | | 1,649 | | | 2,924 |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | — | | | (194) | | | 293 |
Executive compensation | | | 8,690 | | | — | | | — |
Change in fair value of Merger warrants liability | | | (6,874) | | | — | | | — |
Change in fair value of earnout shares | | | (13,987) | | | — | | | — |
Other | | | (204) | | | 6 | | | (75) |
Total Income Tax Expense | | | $10 | | | $10 | | | $11 |
Effective Tax Rate | | | (0.03)% | | | (0.15)% | | | (0.09)% |
| | 2021 | | | 2020 | | | 2019 | |
Numerator: | | | | | | | |||
Net Loss | | | $(39,879) | | | $(6,552) | | | $(12,678) |
Denominator: | | | | | | | |||
Weighted average common shares outstanding, basic and diluted | | | 110,574,519 | | | 58,621,042 | | | 56,475,860 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.36) | | | $(0.11) | | | $(0.22) |
| | 2021 | | | 2020 | | | 2019 | |
Public warrants | | | 10,185,774 | | | — | | | — |
Private warrants | | | 6,074,310 | | | — | | | — |
Earnout RSUs | | | 630,810 | | | — | | | — |
Earnout shares | | | 6,945,732 | | | — | | | — |
Convertible notes payable | | | — | | | 3,556,335 | | | 2,876,492 |
Historic warrants | | | — | | | 777,265 | | | 699,025 |
Stock options outstanding to purchase shares of common stock | | | 6,665,801 | | | 5,532,863 | | | 4,416,762 |
Unvested RSUs | | | 597,139 | | | — | | | — |
Total | | | 31,099,566 | | | 9,866,463 | | | 7,992,279 |
| | Total vehicle purchases from vendor to total vehicle purchases for the year ended December 31, | |||||||
Vendor | | | 2021 | | | 2020 | | | 2019 |
Vendor A | | | 24% | | | 33% | | | —% |
Vendor B | | | 11% | | | —% | | | —% |
Vendor C | | | 10% | | | —% | | | —% |
Vendor D | | | —% | | | 13% | | | 12% |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Controls and Procedures |
Other Information |
Disclosure Regarding Foreign Jurisdiction that Prevent Inspections |
Directors, Executive Officers and Corporate Governance |
Executive Compensation |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Certain Relationships and Related Party Transactions, and Director Independence |
Principal Accountant Fees and Services |
Exhibits and Financial Statement Schedules |
| | Balance at beginning of the period | | | Bad debt expense | | | Write-offs | | | Balance at the end of period | |
| | (in thousands) | ||||||||||
Allowance for doubtful accounts: | | | | | | | | | ||||
Year ended December 31, 2021 | | | 67 | | | 731 | | | (498) | | | 300 |
Year ended December 31, 2020 | | | 27 | | | 44 | | | (4) | | | 67 |
Year ended December 31, 2019 | | | 41 | | | 44 | | | (58) | | | 27 |
Exhibit No. | | | Description |
| | Agreement and Plan of Merger, dated as of October 21, 2020, by and among Acamar Partners Acquisition Corp., Acamar Partners Sub, Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on October 22, 2020) | |
| | ||
| | Amendment No. 1 to Agreement and Plan of Merger, dated as of December 16, 2020, by and among Acamar Partners Acquisition Corp., Acamar Partners Sub, Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on December 16, 2020 | |
| | ||
| | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) | |
| | ||
| | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Warrant Agreement, dated February 21, 2019, by and between the Company and American Stock Transfer & Trust Company, LLC, as warrant agent (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on February 26, 2019) | |
| | ||
| | Specimen Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.5 to the Company’s Form S-4/A (File No. 333-249723), filed with the SEC on December 16, 2020 | |
| | ||
| | Specimen Warrant Certificate of the Company (incorporated by reference to Exhibit 4.6 to the Company’s Form S-4/A (File No. 333-249723), filed with the SEC on December 16, 2020 | |
| | ||
| | Description of the Securities of CarLotz, Inc. (incorporated by reference to Exhibit 4.4 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Registration Rights and Lock-Up Agreement among the Company and the holders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021 | |
| | ||
| | Form of Subscription Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on October 22, 2020) | |
| | ||
| | Stockholders Agreement, dated as of January 21, 2021, by and among TRP Capital Partners, LP, Acamar Partners Sponsor I LLC, Michael W. Bor and the Company (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Amended and Restated Executive Employment Agreement, dated September 18, 2017, between CarLotz, Inc. and Michael W. Bor (incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| |
Exhibit No. | | | Description |
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Michael W. Bor (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Letter Agreement, dated October 16, 2017, between CarLotz, Inc. and John W. Foley II (incorporated by reference to Exhibit 10.30 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and John W. Foley II (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Letter Agreement, dated January 1, 2015, between CarLotz, Inc. and Daniel A. Valerian (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Daniel A. Valerian (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-4/A (File No. 333-249723) filed by the Registrant on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Rebecca C. Polak (incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Thomas W. Stoltz (incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | 2020 Incentive Award Plan of the Company (incorporated by reference to Exhibit 10.12 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Form of 2020 Incentive Award Plan RSU Award Agreement (incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-4/A (Form No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2020 Incentive Award Plan Option Award Agreement (incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of Indemnification Agreement by and between the Company and its directors and officers (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Demand Promissory Note and Security Agreement, dated January 22, 2016, between CarLotz, Inc. and Automotive Finance Corporation (incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| |
Exhibit No. | | | Description |
| | Amendment to Demand Promissory Note and Security Agreement, dated January 25, 2019, between CarLotz, Inc. and Automotive Finance Corporation (incorporated by reference to Exhibit 10.21.1 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q (File No. 001-38818) filed with the SEC on May 10, 2021 | |
| | ||
| | ||
| | CarLotz, Inc. 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Amendment to CarLotz, Inc. 2011 Stock Option Plan (incorporated by reference to Exhibit 10.25.1 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | CarLotz, Inc. 2017 Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2011 CarLotz Stock Incentive Plan Agreement (incorporated by reference to Exhibit 10.27 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2017 CarLotz Stock Option Agreement (incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Inventory Financing and Security Agreement, dated March 10, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 10.22 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Addendum to Inventory Financing and Security Agreement, dated April 7, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz Group, Inc. (incorporated by reference to Exhibit 10.22.1 to the Company’s Form POS AM (File No. 333-252993), filed with the SEC on May 25, 2021) | |
| | ||
| | Addendum to Inventory Financing and Security Agreement, dated March 10, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | CarLotz, Inc. Short-term Incentive Program (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. | |
| | ||
| | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. | |
| | ||
| | List of Subsidiaries | |
| | ||
| | Consent of Independent Registered Public Accounting Firm - Deloitte & Touche LLP | |
| |
Exhibit No. | | | Description |
24.1* | | | Power of Attorney (included on the signatures page of this Annual Report on Form 10-K) |
| | ||
| | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
| | ||
101.INS* | | | XBRL Instance 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 |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
+ | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Regulation S-K, Item 601(b)(10). |
Form 10-K Summary |
| | CarLotz, Inc. | ||||
| | | | |||
| | By: | | | /s/ Thomas W. Stoltz | |
| | | | Thomas W. Stoltz | ||
| | | | Chief Financial Officer | ||
| | | | (Duly Authorized Officer and Principal Financial Officer) | ||
Date: March 15, 2022 | | | | |
Signature | | | Title | | | Date |
/s/ Michael W. Bor | | | Chief Executive Officer (Principal Executive Officer) | | | March 15, 2022 |
Michael W. Bor | | | ||||
| | | | |||
/s/ Thomas W. Stoltz | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | March 15, 2022 |
Thomas W. Stoltz | | | ||||
| | | | |||
/s/ Luis Ignacio Solorzano Aizpuru | | | Chairman of the Board | | | March 15, 2022 |
Luis Ignacio Solorzano Aizpuru | | | | | ||
| | | | |||
/s/ David R. Mitchell | | | Director | | | March 15, 2022 |
David R. Mitchell | | | | | ||
| | | | |||
/s/ Kimberly H. Sheehy | | | Director | | | March 15, 2022 |
Kimberly H. Sheehy | | | | | ||
| | | | |||
/s/ Steven G. Carrel | | | Director | | | March 15, 2022 |
Steven G. Carrel | | | | | ||
| | | | |||
/s/ James E. Skinner | | | Director | | | March 15, 2022 |
James E. Skinner | | | | | ||
| | | | |||
/s/ Linda B. Abraham | | | Director | | | March 15, 2022 |
Linda B. Abraham | | | | | ||
| | | | |||
/s/ Sarah M. Kauss | | | Director | | | March 15, 2022 |
Sarah M. Kauss | | | | |
Delaware | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
3301 W. Moore Street | | | Richmond | | | Virginia | | | 23230 |
(Address of principal executive offices, including zip code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ | | | |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | |
| | | | Emerging growth company | | | ☒ | | |
| | | | Page | ||
| | Part I - Financial Information | | | ||
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| | Part II - Other Information | | | ||
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Financial Statements |
| | March 31, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,328 | | | $75,029 |
Restricted cash | | | 4,011 | | | 4,336 |
Marketable securities – at fair value | | | 74,109 | | | 116,589 |
Accounts receivable, net | | | 6,922 | | | 8,206 |
Inventories | | | 46,095 | | | 40,985 |
Other current assets | | | 10,741 | | | 4,705 |
Total Current Assets | | | 217,206 | | | 249,850 |
Marketable securities – at fair value | | | 971 | | | 1,941 |
Property and equipment, net | | | 13,042 | | | 22,628 |
Capitalized website and internal-use software costs, net | | | 13,385 | | | 13,716 |
Operating lease assets | | | 49,608 | | | — |
Finance lease assets, net | | | 11,811 | | | — |
Lease vehicles, net | | | 2,223 | | | 1,596 |
Other assets | | | 553 | | | 558 |
Total Assets | | | $308,799 | | | $290,289 |
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Current portion of finance lease liabilities | | | $560 | | | $509 |
Floor plan notes payable | | | 22,052 | | | 27,815 |
Accounts payable | | | 7,914 | | | 6,352 |
Accrued expenses | | | 14,369 | | | 14,428 |
Current portion of operating lease liabilities | | | 6,810 | | | — |
Other current liabilities | | | 662 | | | 754 |
Total Current Liabilities | | | 52,367 | | | 49,858 |
Finance lease liabilities, less current portion | | | 12,080 | | | 12,206 |
Operating lease liabilities, less current portion | | | 45,076 | | | — |
Earnout shares liability | | | 3,650 | | | 7,679 |
Merger warrants liability | | | 4,691 | | | 6,291 |
Other liabilities | | | 651 | | | 744 |
Total Liabilities | | | 118,515 | | | 76,778 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,111,796 and 113,996,401 shares issued and outstanding at March 31, 2022 and December 31, 2021 | | | 11 | | | 11 |
Additional paid-in capital | | | 289,191 | | | 287,509 |
Accumulated deficit | | | (98,752) | | | (73,916) |
Accumulated other comprehensive (loss) income | | | (166) | | | (93) |
Total Stockholders’ Equity (Deficit) | | | 190,284 | | | 213,511 |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $308,799 | | | $290,289 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock-based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income, net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout shares | | | 4,029 | | | 31,846 |
Other income (expense) | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
Net Loss per Share, basic and diluted | | | $(0.22) | | | $(0.15) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 114,054,597 | | | 100,817,385 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net loss | | | $(24,836) | | | $(15,022) |
Other Comprehensive (Loss), net of tax: | | | | | ||
Unrealized (losses) gains on marketable securities arising during the period | | | (73) | | | (131) |
Tax effect | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (73) | | | (131) |
Reclassification adjustment for realized losses | | | — | | | — |
Tax effect | | | — | | | — |
Reclassification adjustment for realized losses, net of tax | | | — | | | — |
Other Comprehensive (Loss), net of tax | | | (73) | | | (131) |
Total Comprehensive (Loss) | | | $(24,909) | | | $(15,153) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $ — | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Cash Flow from Operating Activities | | | | | ||
Net loss | | | $(24,836) | | | $(15,022) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | | 4,097 | | | 105 |
Amortization and accretion - marketable securities | | | 440 | | | 238 |
Depreciation – lease vehicles | | | 85 | | | 15 |
Loss on marketable securities | | | — | | | — |
Provision for doubtful accounts | | | (30) | | | — |
Stock-based compensation expense | | | 1,684 | | | 41,963 |
Change in fair value of Merger warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout shares | | | (4,029) | | | (31,846) |
Change in Operating Assets and Liabilities: | | | | | ||
Accounts receivable | | | 1,314 | | | (5,192) |
Inventories | | | (5,110) | | | 1,991 |
Other current assets | | | (6,036) | | | (5,868) |
Other assets | | | 5 | | | (3,038) |
Accounts payable | | | 1,562 | | | 3,140 |
Accrued expenses | | | 975 | | | 6,187 |
Accrued expenses – related party | | | — | | | (229) |
Other current liabilities | | | (92) | | | 559 |
Other liabilities | | | (93) | | | (245) |
Net Cash Used in Operating Activities | | | (31,664) | | | (19,600) |
Cash Flows from Investing Activities | | | | | ||
Purchase of property and equipment | | | (4,091) | | | (586) |
Capitalized website and internal-use software costs | | | (611) | | | (1,154) |
Purchase of marketable securities | | | (21,974) | | | (217,689) |
Proceeds from sales of marketable securities | | | 64,917 | | | 59 |
Purchase of lease vehicles | | | (712) | | | — |
Net Cash (Used in) Provided by Investing Activities | | | 37,529 | | | (219,370) |
Cash Flows from Financing Activities | | | | | ||
Payments made on finance leases | | | (126) | | | — |
PIPE issuance | | | — | | | 125,000 |
Merger financing | | | — | | | 309,999 |
Payment made on accrued dividends | | | — | | | (4,853) |
Payments to existing shareholders of Former CarLotz | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | (47,579) |
Payments made on cash considerations associated with stock options | | | — | | | (2,465) |
Repayment of Paycheck Protection Program loan | | | — | | | (1,749) |
Payments made on note payable | | | — | | | (3,000) |
Payments on floor plan notes payable | | | (41,728) | | | (11,150) |
Borrowings on floor plan notes payable | | | 35,965 | | | 9,236 |
Payments made for tax on equity award transactions | | | (2) | | | — |
Net Cash (Used in) Provided by Financing Activities | | | (5,891) | | | 310,746 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (26) | | | 71,776 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $79,339 | | | $74,589 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $615 | | | $402 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $100 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (1,400) |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
| | Recapitalization | |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,285) |
Less: Merger warrants liability | | | (39,024) |
| | March 31, 2022 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Three Months Ended March 31, 2022 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,588 | | | $— | | | $50,588 |
Wholesale vehicle sales | | | 8,575 | | | — | | | 8,575 |
Finance and insurance, net | | | $3,705 | | | $— | | | $3,705 |
Lease income, net | | | — | | | 146 | | | 146 |
Total Revenues | | | $62,868 | | | $146 | | | $63,014 |
| | Three Months Ended March 31, 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,383 | | | $— | | | $50,383 |
Wholesale vehicle sales | | | 4,568 | | | — | | | 4,568 |
Finance and insurance, net | | | $1,554 | | | $— | | | $1,554 |
Lease income, net | | | — | | | 107 | | | 107 |
Total Revenues | | | $56,505 | | | $107 | | | $56,612 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Retail vehicles: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Retail vehicle cost of sales | | | 52,415 | | | 48,917 |
Gross Profit – Retail Vehicles | | | $(1,827) | | | $1,466 |
Wholesale vehicles: | | | | | ||
Wholesale vehicle sales | | | $8,575 | | | $4,568 |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 |
Gross Profit – Wholesale Vehicles | | | $54 | | | $(1,119) |
| | March 31, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 30,216 | | | 2 | | | (114) | | | 30,104 |
Municipal bonds | | | 21,990 | | | 5 | | | (40) | | | 21,955 |
Commercial paper | | | 19,997 | | | — | | | — | | | 19,997 |
Foreign governments | | | 2,491 | | | 2 | | | (21) | | | 2,472 |
Total Fixed Maturity Debt Securities | | | $74,694 | | | $9 | | | $(175) | | | $74,528 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $73,667 | | | $73,557 |
Due after one year through five years | | | 731 | | | 694 |
Due after five years through ten years | | | 296 | | | 277 |
Total | | | $74,694 | | | $74,528 |
| | | | | | March 31, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $29,890 | | | $(98) | | | $209 | | | $(16) | | | $30,099 | | | $(114) |
Municipal bonds | | | 19,289 | | | (32) | | | 133 | | | (8) | | | 19,422 | | | (40) |
Foreign governments | | | 2,236 | | | (18) | | | 117 | | | (3) | | | 2,353 | | | (21) |
Total Fixed Maturity Debt Securities | | | $51,415 | | | $(148) | | | $459 | | | $(27) | | | $51,874 | | | $(175) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | March 31, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $430 | | | $552 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | March 31, 2022 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $64,911 | | | $— | | | $— | | | $— |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $64,911 | | | $— | | | $— | | | $— |
| | March 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $59 | | | $— | | | $— | | | $— |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $59 | | | $— | | | $— | | | $— |
| | March 31, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 552 | | | — | | | — | | | 552 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 118,347 | | | — | | ��� | 118,347 |
Total Assets | | | $552 | | | $118,347 | | | $— | | | $118,899 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 2,939 | | | 1,752 | | | — | | | 4,691 |
Earnout shares liability | | | — | | | — | | | 3,650 | | | 3,650 |
Total Liabilities | | | $2,939 | | | $1,752 | | | $3,650 | | | $8,341 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (4,029) | | | 3,650 |
Total | | | $7,679 | | | $— | | | $— | | | $(4,029) | | | $3,650 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (31,846) | | | 42,438 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(31,846) | | | $42,438 |
| | March 31, 2022 | | | March 31, 2021 | |
Expected volatility | | | 85.00% | | | 80.00% |
Starting stock price | | | $1.37 | | | $7.13 |
Expected term (in years) | | | 3.7 years | | | 4.70 years |
Risk-free interest rate | | | 2.44% | | | 0.87% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | March 31, 2022 | | | December 31, 2021 | |
Contracts in transit | | | $6,117 | | | $7,836 |
Trade | | | 1 | | | 386 |
Finance commission | | | 593 | | | 284 |
Other | | | 481 | | | — |
Total | | | 7,192 | | | 8,506 |
Allowance for doubtful accounts | | | (270) | | | (300) |
Total Accounts Receivable, net | | | $6,922 | | | $8,206 |
| | March 31, 2022 | | | December 31, 2021 | |
Used vehicles | | | $45,846 | | | $40,739 |
Parts | | | 249 | | | 246 |
Total | | | $46,095 | | | $40,985 |
| | March 31, 2022 | | | December 31, 2021 | |
Capital lease assets | | | — | | | 12,566 |
Leasehold improvements | | | 8,030 | | | 4,628 |
Furniture, fixtures and equipment | | | 7,570 | | | 7,993 |
Corporate vehicles | | | 138 | | | 158 |
Total property and equipment | | | 15,738 | | | 25,345 |
Less: accumulated depreciation | | | (2,696) | | | (2,609) |
Less: impairment | | | — | | | (108) |
Property and Equipment, net | | | $13,042 | | | $22,628 |
| | March 31, 2022 | | | December 31, 2021 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $29 |
Deferred acquisition costs | | | 40 | | | 46 |
Prepaid expenses | | | 10,133 | | | 3,664 |
Interest receivable | | | 539 | | | 966 |
Total Other Current Assets | | | $10,741 | | | $4,705 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 30 | | | 35 |
Security deposits | | | 507 | | | 507 |
Total Other Assets | | | $553 | | | $558 |
| | March 31, 2022 | | | December 31, 2021 | |
Capital lease obligation | | | $— | | | $12,715 |
Finance lease liabilities | | | $12,640 | | | $— |
| | 12,640 | | | 12,715 | |
Current portion of long-term debt | | | — | | | (509) |
Current portion of finance lease liabilities | | | (560) | | | — |
Long-term Debt | | | $12,080 | | | $12,206 |
| | March 31, 2022 | | | December 31, 2021 | |
License and title fees | | | $784 | | | $903 |
Payroll and bonuses | | | 4,564 | | | 2,047 |
Deferred rent | | | — | | | 1,636 |
Technology | | | 1,120 | | | 1,127 |
Inventory | | | 3,612 | | | 2,542 |
Other | | | 4,289 | | | 6,173 |
Total Accrued Expenses | | | $14,369 | | | $14,428 |
| | March 31, 2022 | | | December 31, 2021 | |
Other Liabilities, Current | | | | | ||
Unearned insurance premiums | | | $662 | | | $754 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 530 | | | 622 |
Other long-term liabilities | | | 121 | | | 122 |
Other Liabilities, Long-term | | | $651 | | | $744 |
| | Three Months Ended March 31, 2022 | |
Operating lease cost(1) | | | $2,435 |
Finance lease cost: | | | |
Depreciation of lease assets | | | 263 |
Interest on lease liabilities | | | 287 |
Total finance lease cost | | | 550 |
Total lease cost | | | 2,985 |
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
| | Classification | | | As of March 31, 2022 | |
Assets: | | | | | ||
Operating lease assets | | | | | 49,608 | |
Finance lease assets | | | | | 11,811 | |
Total lease assets | | | | | 61,419 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Current portion of operating lease liabilities | | | | | 6,810 | |
Current portion of finance lease liabilities | | | | | 560 | |
Long-term: | | | | | ||
Operating leases, less current portion | | | | | 45,076 | |
Finance leases, less current portion | | | | | 12,080 | |
Total lease liabilities | | | | | 64,526 |
(1) | Finance lease assets are recorded net of accumulated depreciation of $755 as of March 31, 2022. |
Lease Term and Discount Rate | | | As of March 31, 2022 |
Weighted Average Remaining Lease Term (in years) | | | |
Operating leases | | | 8.01 years |
Finance leases | | | 11.92 years |
| | ||
Weighted Average Discount Rate | | | |
Operating leases | | | 5.87% |
Finance leases | | | 10.01% |
| | Three Months Ended March 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | | | 2,308 |
Operating cash flows from finance leases | | | 287 |
Financing cash flows from finance leases | | | 126 |
| | ||
Lease assets obtained in exchange for lease obligation | | | |
Operating leases | | | 51,916 |
Finance leases | | | — |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 7,118 | | | 1,281 |
Fiscal 2023 | | | 9,268 | | | 1,669 |
Fiscal 2024 | | | 8,518 | | | 1,694 |
Fiscal 2025 | | | 7,887 | | | 1,721 |
Fiscal 2026 | | | 6,875 | | | 1,766 |
Thereafter | | | 26,074 | | | 14,322 |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Total lease payments | | | 65,740 | | | 22,453 |
Less: interest | | | (13,854) | | | (9,813) |
Present value of lease liabilities | | | 51,886 | | | 12,640 |
(1) | There are no legally binding minimum lease payments for leases signed but not yet commenced excluded from the table. |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2021) | | | 1,260,328 | | | $0.56 |
Granted | | | — | | | — |
Exercised | | | (50,964) | | | 0.32 |
Forfeited | | | — | | | — |
Balance (March 31, 2022) | | | 1,209,364 | | | 0.57 |
Vested (as of March 31, 2022) | | | 1,209,364 | | | $0.57 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2020) | | | 1,571,205 | | | $0.59 |
Granted | | | — | | | — |
Exercised | | | (56,059) | | | 0.24 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 1,515,146 | | | 0.58 |
Vested (as of March 31, 2021) | | | 1,515,146 | | | $0.58 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,209,364 | | | 0.42 years | | | $0.57 |
Exercisable | | | 1,209,364 | | | 0.42 years | | | $0.57 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 3,936,176 | | | $0.92 |
Granted | | | — | | | — |
Exercised | | | (6,371) | | | $0.92 |
Forfeited | | | (19,111) | | | 0.92 |
Balance (March 31, 2022) | | | 3,910,694 | | | $0.92 |
Vested (as of March 31, 2022) | | | 3,631,681 | | | $0.92 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | 3,961,658 | | | $0.92 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 3,961,658 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,910,694 | | | 7.30 years | | | $0.92 |
Exercisable | | | 3,631,681 | | | 7.21 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.6 - 4.8 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Granted | | | 1,573,361 | | | $1.68 |
Forfeited | | | (74,626) | | | $10.47 |
Balance (March 31, 2022) | | | 2,968,032 | | | $6.13 |
Exercisable | | | 388,691 | | | $11.34 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,409,401 | | | 11.35 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 1,409,401 | | | $11.35 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 2,968,032 | | | 9.20 years | | | $6.13 |
Exercisable | | | 388,691 | | | 7.27 years | | | $11.34 |
Balance (Expected volatility) | | | 80% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6 years |
Risk-free interest rate | | | 2.20% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Granted | | | 1,235,437 | | | $1.68 |
Forfeited | | | (54,208) | | | $5.56 |
Vested (as of March 31, 2022) | | | (71,273) | | | $5.69 |
Balance (March 31, 2022) | | | 1,707,695 | | | $2.75 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Granted | | | — | | | — |
Forfeited | | | (141,350) | | | 10.70 |
Balance (March 31, 2022) | | | 479,850 | | | $10.70 |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 640,421 | | | $10.70 |
Expected volatility | | | 80.00% |
Starting stock price | | | $11.31 |
Expected term (in years) | | | 5 years |
Risk-free interest rate | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Numerator: | | | | | ||
Net Loss | | | $(24,836) | | | $(15,022) |
Denominator: | | | | | ||
Weighted average common shares outstanding, basic and diluted | | | 114,054,597 | | | 100,817,385 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.22) | | | $(0.15) |
| | 2022 | | | 2021 | |
Public warrants | | | 10,185,774 | | | 10,185,774 |
Private warrants | | | 6,074,310 | | | 6,074,310 |
Earnout RSUs | | | 479,850 | | | 640,421 |
Earnout shares | | | 6,945,732 | | | 6,945,732 |
Convertible notes payable | | | — | | | — |
Historic warrants | | | — | | | — |
Stock options outstanding to purchase shares of common stock | | | 8,088,090 | | | 6,886,205 |
Unvested RSUs | | | 1,707,695 | | | — |
Total | | | 33,481,451 | | | 30,732,442 |
| | Total purchases from vendor to total vehicle purchases for the three months ended March 31, | ||||
Vendor | | | 2022 | | | 2021 |
Vendor A | | | 20% | | | 62% |
Vendor B | | | —% | | | —% |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Retail vehicles sold | | | 2,270 | | | 2,554 |
Number of hubs | | | 22 | | | 11 |
Average monthly unique visitors | | | 257,022 | | | 178,783 |
Vehicles available for sale | | | 2,184 | | | 1,581 |
Retail gross profit per unit | | | $827 | | | $1,182 |
Percentage of unit sales sourced non-competitively(1) | | | 65% | | | 99% |
(1) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
| | | | |||
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income (Expense), net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout provision | | | 4,029 | | | 31,846 |
Other (expense) income | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
| | Three Months Ended March 31, | |||||||
| | 2022 | | | 2021 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||
Revenue: | | | | | | | |||
Retail vehicle sales | | | $50,588 | | | $50,383 | | | 0.4% |
Wholesale vehicle sales | | | 8,575 | | | 4,568 | | | 87.7% |
Finance and insurance, net | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total revenues | | | 63,014 | | | 56,612 | | | 11.3% |
Cost of sales: | | | | | | | |||
Retail vehicle cost of sales | | | 52,415 | | | 48,917 | | | 7.2% |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 | | | 49.8% |
Total cost of sales | | | $60,936 | | | $54,604 | | | 11.6% |
Gross profit: | | | | | | | |||
Retail vehicle gross profit (loss) | | | $(1,827) | | | $1,466 | | | (224.6)% |
Wholesale vehicle gross profit (loss) | | | 54 | | | (1,119) | | | 104.8% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total gross profit | | | $2,078 | | | $2,008 | | | 3.5% |
Retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit (loss) | | | (1,827) | | | 1,466 | | | (224.6)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Total retail vehicle and finance and insurance gross profit | | | 1,878 | | | 3,020 | | | (37.8)% |
Retail vehicle unit sales | | | 2,270 | | | 2,554 | | | (11.1)% |
Retail vehicle gross profit per unit | | | $827 | | | $1,182 | | | (30.0)% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Compensation and benefits(1) | | | $10,798 | | | $6,856 |
Marketing | | | 3,154 | | | 2,526 |
Technology | | | 1,535 | | | 2,925 |
Accounting and legal | | | 2,065 | | | 2,819 |
Insurance | | | 2,236 | | | 1,336 |
Occupancy | | | 3,291 | | | 1,032 |
Other costs(2) | | | 4,595 | | | 1,379 |
Total selling, general and administrative expenses | | | $27,674 | | | $18,873 |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Net Loss | | | $(24,836) | | | $(15,022) |
Adjusted to exclude the following: | | | | | ||
Interest expense | | | 617 | | | 175 |
Income tax expense | | | — | | | — |
Depreciation and amortization expense | | | 1,789 | | | 383 |
EBITDA | | | $(22,430) | | | $(14,464) |
Other expense | | | 779 | | | (162) |
Stock compensation expense | | | 1,684 | | | 41,963 |
Management fee expense - related party | | | — | | | 2 |
Change in fair value of warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout provision | | | (4,029) | | | (31,846) |
Adjusted EBITDA | | | $(25,596) | | | $(16,865) |
| | Three Months Ended March 31, | ||||||||||
| | 2022 | | | 2021 | | | Change | | | Change | |
Adjusted retail gross profit per unit(1): | | | | | | | | | ||||
Retail vehicle gross profit | | | $(1,827) | | | $1,466 | | | $(3,293) | | | (225)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 2,151 | | | 138% |
Total retail gross profit | | | 1,878 | | | 3,020 | | | (1,142) | | | (38)% |
Change in inventory reserve(2) | | | 109 | | | — | | | 109 | | | 100% |
Total adjusted retail gross profit | | | 1,987 | | | 3,020 | | | (1,033) | | | (34)% |
Retail vehicle units sold | | | 2,270 | | | 2,554 | | | (284) | | | (11)% |
Retail vehicle adjusted gross profit per unit | | | $875 | | | $1,182 | | | $(307) | | | (26)% |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Condensed Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Cash Flow Data: | | | | | ||
Net cash (used in) operating activities | | | $(31,664) | | | $(19,600) |
Net cash provided by (used in) investing activities | | | 37,529 | | | (219,370) |
Net cash provided by (used in) financing activities | | | (5,891) | | | 310,746 |
Other Information |
Disclosure Regarding Foreign Jurisdiction that Prevent Inspections |
Directors, Executive Officers and Corporate Governance |
Executive Compensation |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Certain Relationships and Related Party Transactions, and Director Independence |
Principal Accountant Fees and Services |
Exhibits and Financial Statement Schedules |
| | Balance at beginning of the period | | | Bad debt expense | | | Write-offs | | | Balance at the end of period | |
| | (in thousands) | ||||||||||
Allowance for doubtful accounts: | | | | | | | | | ||||
Year ended December 31, 2021 | | | 67 | | | 731 | | | (498) | | | 300 |
Year ended December 31, 2020 | | | 27 | | | 44 | | | (4) | | | 67 |
Year ended December 31, 2019 | | | 41 | | | 44 | | | (58) | | | 27 |
Exhibit No. | | | Description |
| | Agreement and Plan of Merger, dated as of October 21, 2020, by and among Acamar Partners Acquisition Corp., Acamar Partners Sub, Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on October 22, 2020) | |
| | ||
| | Amendment No. 1 to Agreement and Plan of Merger, dated as of December 16, 2020, by and among Acamar Partners Acquisition Corp., Acamar Partners Sub, Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on December 16, 2020 | |
| | ||
| | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) | |
| | ||
| | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Warrant Agreement, dated February 21, 2019, by and between the Company and American Stock Transfer & Trust Company, LLC, as warrant agent (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on February 26, 2019) | |
| | ||
| | Specimen Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.5 to the Company’s Form S-4/A (File No. 333-249723), filed with the SEC on December 16, 2020 | |
| | ||
| | Specimen Warrant Certificate of the Company (incorporated by reference to Exhibit 4.6 to the Company’s Form S-4/A (File No. 333-249723), filed with the SEC on December 16, 2020 | |
| | ||
| | Description of the Securities of CarLotz, Inc. (incorporated by reference to Exhibit 4.4 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Registration Rights and Lock-Up Agreement among the Company and the holders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021 | |
| | ||
| | Form of Subscription Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on October 22, 2020) | |
| | ||
| | Stockholders Agreement, dated as of January 21, 2021, by and among TRP Capital Partners, LP, Acamar Partners Sponsor I LLC, Michael W. Bor and the Company (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Amended and Restated Executive Employment Agreement, dated September 18, 2017, between CarLotz, Inc. and Michael W. Bor (incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| |
Exhibit No. | | | Description |
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Michael W. Bor (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Letter Agreement, dated October 16, 2017, between CarLotz, Inc. and John W. Foley II (incorporated by reference to Exhibit 10.30 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and John W. Foley II (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Letter Agreement, dated January 1, 2015, between CarLotz, Inc. and Daniel A. Valerian (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Daniel A. Valerian (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-4/A (File No. 333-249723) filed by the Registrant on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Rebecca C. Polak (incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Thomas W. Stoltz (incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | 2020 Incentive Award Plan of the Company (incorporated by reference to Exhibit 10.12 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Form of 2020 Incentive Award Plan RSU Award Agreement (incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-4/A (Form No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2020 Incentive Award Plan Option Award Agreement (incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of Indemnification Agreement by and between the Company and its directors and officers (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Demand Promissory Note and Security Agreement, dated January 22, 2016, between CarLotz, Inc. and Automotive Finance Corporation (incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| |
Exhibit No. | | | Description |
| | Amendment to Demand Promissory Note and Security Agreement, dated January 25, 2019, between CarLotz, Inc. and Automotive Finance Corporation (incorporated by reference to Exhibit 10.21.1 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q (File No. 001-38818) filed with the SEC on May 10, 2021 | |
| | ||
| | ||
| | CarLotz, Inc. 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Amendment to CarLotz, Inc. 2011 Stock Option Plan (incorporated by reference to Exhibit 10.25.1 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | CarLotz, Inc. 2017 Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2011 CarLotz Stock Incentive Plan Agreement (incorporated by reference to Exhibit 10.27 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2017 CarLotz Stock Option Agreement (incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Inventory Financing and Security Agreement, dated March 10, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 10.22 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Addendum to Inventory Financing and Security Agreement, dated April 7, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz Group, Inc. (incorporated by reference to Exhibit 10.22.1 to the Company’s Form POS AM (File No. 333-252993), filed with the SEC on May 25, 2021) | |
| | ||
| | Addendum to Inventory Financing and Security Agreement, dated March 10, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | CarLotz, Inc. Short-term Incentive Program (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. | |
| | ||
| | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. | |
| | ||
| | List of Subsidiaries | |
| | ||
| | Consent of Independent Registered Public Accounting Firm - Deloitte & Touche LLP | |
| |
Exhibit No. | | | Description |
24.1* | | | Power of Attorney (included on the signatures page of this Annual Report on Form 10-K) |
| | ||
| | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
| | ||
101.INS* | | | XBRL Instance 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 |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
+ | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Regulation S-K, Item 601(b)(10). |
Form 10-K Summary |
| | CarLotz, Inc. | ||||
| | | | |||
| | By: | | | /s/ Thomas W. Stoltz | |
| | | | Thomas W. Stoltz | ||
| | | | Chief Financial Officer | ||
| | | | (Duly Authorized Officer and Principal Financial Officer) | ||
Date: March 15, 2022 | | | | |
Signature | | | Title | | | Date |
/s/ Michael W. Bor | | | Chief Executive Officer (Principal Executive Officer) | | | March 15, 2022 |
Michael W. Bor | | | ||||
| | | | |||
/s/ Thomas W. Stoltz | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | March 15, 2022 |
Thomas W. Stoltz | | | ||||
| | | | |||
/s/ Luis Ignacio Solorzano Aizpuru | | | Chairman of the Board | | | March 15, 2022 |
Luis Ignacio Solorzano Aizpuru | | | | | ||
| | | | |||
/s/ David R. Mitchell | | | Director | | | March 15, 2022 |
David R. Mitchell | | | | | ||
| | | | |||
/s/ Kimberly H. Sheehy | | | Director | | | March 15, 2022 |
Kimberly H. Sheehy | | | | | ||
| | | | |||
/s/ Steven G. Carrel | | | Director | | | March 15, 2022 |
Steven G. Carrel | | | | | ||
| | | | |||
/s/ James E. Skinner | | | Director | | | March 15, 2022 |
James E. Skinner | | | | | ||
| | | | |||
/s/ Linda B. Abraham | | | Director | | | March 15, 2022 |
Linda B. Abraham | | | | | ||
| | | | |||
/s/ Sarah M. Kauss | | | Director | | | March 15, 2022 |
Sarah M. Kauss | | | | |
Delaware | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
3301 W. Moore Street | | | Richmond | | | Virginia | | | 23230 |
(Address of principal executive offices, including zip code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ | | | |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | |
| | | | Emerging growth company | | | ☒ | | |
| | | | Page | ||
| | Part I - Financial Information | | | ||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | Part II - Other Information | | | ||
| | | | |||
| | | | |||
| | | | |||
| |
Financial Statements |
| | March 31, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $75,328 | | | $75,029 |
Restricted cash | | | 4,011 | | | 4,336 |
Marketable securities – at fair value | | | 74,109 | | | 116,589 |
Accounts receivable, net | | | 6,922 | | | 8,206 |
Inventories | | | 46,095 | | | 40,985 |
Other current assets | | | 10,741 | | | 4,705 |
Total Current Assets | | | 217,206 | | | 249,850 |
Marketable securities – at fair value | | | 971 | | | 1,941 |
Property and equipment, net | | | 13,042 | | | 22,628 |
Capitalized website and internal-use software costs, net | | | 13,385 | | | 13,716 |
Operating lease assets | | | 49,608 | | | — |
Finance lease assets, net | | | 11,811 | | | — |
Lease vehicles, net | | | 2,223 | | | 1,596 |
Other assets | | | 553 | | | 558 |
Total Assets | | | $308,799 | | | $290,289 |
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Current portion of finance lease liabilities | | | $560 | | | $509 |
Floor plan notes payable | | | 22,052 | | | 27,815 |
Accounts payable | | | 7,914 | | | 6,352 |
Accrued expenses | | | 14,369 | | | 14,428 |
Current portion of operating lease liabilities | | | 6,810 | | | — |
Other current liabilities | | | 662 | | | 754 |
Total Current Liabilities | | | 52,367 | | | 49,858 |
Finance lease liabilities, less current portion | | | 12,080 | | | 12,206 |
Operating lease liabilities, less current portion | | | 45,076 | | | — |
Earnout shares liability | | | 3,650 | | | 7,679 |
Merger warrants liability | | | 4,691 | | | 6,291 |
Other liabilities | | | 651 | | | 744 |
Total Liabilities | | | 118,515 | | | 76,778 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
| | | | |||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,111,796 and 113,996,401 shares issued and outstanding at March 31, 2022 and December 31, 2021 | | | 11 | | | 11 |
Additional paid-in capital | | | 289,191 | | | 287,509 |
Accumulated deficit | | | (98,752) | | | (73,916) |
Accumulated other comprehensive (loss) income | | | (166) | | | (93) |
Total Stockholders’ Equity (Deficit) | | | 190,284 | | | 213,511 |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $308,799 | | | $290,289 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock-based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income, net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout shares | | | 4,029 | | | 31,846 |
Other income (expense) | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
Net Loss per Share, basic and diluted | | | $(0.22) | | | $(0.15) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 114,054,597 | | | 100,817,385 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net loss | | | $(24,836) | | | $(15,022) |
Other Comprehensive (Loss), net of tax: | | | | | ||
Unrealized (losses) gains on marketable securities arising during the period | | | (73) | | | (131) |
Tax effect | | | — | | | — |
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | | (73) | | | (131) |
Reclassification adjustment for realized losses | | | — | | | — |
Tax effect | | | — | | | — |
Reclassification adjustment for realized losses, net of tax | | | — | | | — |
Other Comprehensive (Loss), net of tax | | | (73) | | | (131) |
Total Comprehensive (Loss) | | | $(24,909) | | | $(15,153) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $ — | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Cash Flow from Operating Activities | | | | | ||
Net loss | | | $(24,836) | | | $(15,022) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | | 4,097 | | | 105 |
Amortization and accretion - marketable securities | | | 440 | | | 238 |
Depreciation – lease vehicles | | | 85 | | | 15 |
Loss on marketable securities | | | — | | | — |
Provision for doubtful accounts | | | (30) | | | — |
Stock-based compensation expense | | | 1,684 | | | 41,963 |
Change in fair value of Merger warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout shares | | | (4,029) | | | (31,846) |
Change in Operating Assets and Liabilities: | | | | | ||
Accounts receivable | | | 1,314 | | | (5,192) |
Inventories | | | (5,110) | | | 1,991 |
Other current assets | | | (6,036) | | | (5,868) |
Other assets | | | 5 | | | (3,038) |
Accounts payable | | | 1,562 | | | 3,140 |
Accrued expenses | | | 975 | | | 6,187 |
Accrued expenses – related party | | | — | | | (229) |
Other current liabilities | | | (92) | | | 559 |
Other liabilities | | | (93) | | | (245) |
Net Cash Used in Operating Activities | | | (31,664) | | | (19,600) |
Cash Flows from Investing Activities | | | | | ||
Purchase of property and equipment | | | (4,091) | | | (586) |
Capitalized website and internal-use software costs | | | (611) | | | (1,154) |
Purchase of marketable securities | | | (21,974) | | | (217,689) |
Proceeds from sales of marketable securities | | | 64,917 | | | 59 |
Purchase of lease vehicles | | | (712) | | | — |
Net Cash (Used in) Provided by Investing Activities | | | 37,529 | | | (219,370) |
Cash Flows from Financing Activities | | | | | ||
Payments made on finance leases | | | (126) | | | — |
PIPE issuance | | | — | | | 125,000 |
Merger financing | | | — | | | 309,999 |
Payment made on accrued dividends | | | — | | | (4,853) |
Payments to existing shareholders of Former CarLotz | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | (47,579) |
Payments made on cash considerations associated with stock options | | | — | | | (2,465) |
Repayment of Paycheck Protection Program loan | | | — | | | (1,749) |
Payments made on note payable | | | — | | | (3,000) |
Payments on floor plan notes payable | | | (41,728) | | | (11,150) |
Borrowings on floor plan notes payable | | | 35,965 | | | 9,236 |
Payments made for tax on equity award transactions | | | (2) | | | — |
Net Cash (Used in) Provided by Financing Activities | | | (5,891) | | | 310,746 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (26) | | | 71,776 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $79,339 | | | $74,589 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $615 | | | $402 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $100 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (1,400) |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
| | Recapitalization | |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,285) |
Less: Merger warrants liability | | | (39,024) |
| | March 31, 2022 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Three Months Ended March 31, 2022 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,588 | | | $— | | | $50,588 |
Wholesale vehicle sales | | | 8,575 | | | — | | | 8,575 |
Finance and insurance, net | | | $3,705 | | | $— | | | $3,705 |
Lease income, net | | | — | | | 146 | | | 146 |
Total Revenues | | | $62,868 | | | $146 | | | $63,014 |
| | Three Months Ended March 31, 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,383 | | | $— | | | $50,383 |
Wholesale vehicle sales | | | 4,568 | | | — | | | 4,568 |
Finance and insurance, net | | | $1,554 | | | $— | | | $1,554 |
Lease income, net | | | — | | | 107 | | | 107 |
Total Revenues | | | $56,505 | | | $107 | | | $56,612 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Retail vehicles: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Retail vehicle cost of sales | | | 52,415 | | | 48,917 |
Gross Profit – Retail Vehicles | | | $(1,827) | | | $1,466 |
Wholesale vehicles: | | | | | ||
Wholesale vehicle sales | | | $8,575 | | | $4,568 |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 |
Gross Profit – Wholesale Vehicles | | | $54 | | | $(1,119) |
| | March 31, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 30,216 | | | 2 | | | (114) | | | 30,104 |
Municipal bonds | | | 21,990 | | | 5 | | | (40) | | | 21,955 |
Commercial paper | | | 19,997 | | | — | | | — | | | 19,997 |
Foreign governments | | | 2,491 | | | 2 | | | (21) | | | 2,472 |
Total Fixed Maturity Debt Securities | | | $74,694 | | | $9 | | | $(175) | | | $74,528 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $73,667 | | | $73,557 |
Due after one year through five years | | | 731 | | | 694 |
Due after five years through ten years | | | 296 | | | 277 |
Total | | | $74,694 | | | $74,528 |
| | | | | | March 31, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $29,890 | | | $(98) | | | $209 | | | $(16) | | | $30,099 | | | $(114) |
Municipal bonds | | | 19,289 | | | (32) | | | 133 | | | (8) | | | 19,422 | | | (40) |
Foreign governments | | | 2,236 | | | (18) | | | 117 | | | (3) | | | 2,353 | | | (21) |
Total Fixed Maturity Debt Securities | | | $51,415 | | | $(148) | | | $459 | | | $(27) | | | $51,874 | | | $(175) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | March 31, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $430 | | | $552 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | March 31, 2022 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $64,911 | | | $— | | | $— | | | $— |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $64,911 | | | $— | | | $— | | | $— |
| | March 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $59 | | | $— | | | $— | | | $— |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $59 | | | $— | | | $— | | | $— |
| | March 31, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 552 | | | — | | | — | | | 552 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 118,347 | | | — | | ��� | 118,347 |
Total Assets | | | $552 | | | $118,347 | | | $— | | | $118,899 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 2,939 | | | 1,752 | | | — | | | 4,691 |
Earnout shares liability | | | — | | | — | | | 3,650 | | | 3,650 |
Total Liabilities | | | $2,939 | | | $1,752 | | | $3,650 | | | $8,341 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (4,029) | | | 3,650 |
Total | | | $7,679 | | | $— | | | $— | | | $(4,029) | | | $3,650 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (31,846) | | | 42,438 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(31,846) | | | $42,438 |
| | March 31, 2022 | | | March 31, 2021 | |
Expected volatility | | | 85.00% | | | 80.00% |
Starting stock price | | | $1.37 | | | $7.13 |
Expected term (in years) | | | 3.7 years | | | 4.70 years |
Risk-free interest rate | | | 2.44% | | | 0.87% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | March 31, 2022 | | | December 31, 2021 | |
Contracts in transit | | | $6,117 | | | $7,836 |
Trade | | | 1 | | | 386 |
Finance commission | | | 593 | | | 284 |
Other | | | 481 | | | — |
Total | | | 7,192 | | | 8,506 |
Allowance for doubtful accounts | | | (270) | | | (300) |
Total Accounts Receivable, net | | | $6,922 | | | $8,206 |
| | March 31, 2022 | | | December 31, 2021 | |
Used vehicles | | | $45,846 | | | $40,739 |
Parts | | | 249 | | | 246 |
Total | | | $46,095 | | | $40,985 |
| | March 31, 2022 | | | December 31, 2021 | |
Capital lease assets | | | — | | | 12,566 |
Leasehold improvements | | | 8,030 | | | 4,628 |
Furniture, fixtures and equipment | | | 7,570 | | | 7,993 |
Corporate vehicles | | | 138 | | | 158 |
Total property and equipment | | | 15,738 | | | 25,345 |
Less: accumulated depreciation | | | (2,696) | | | (2,609) |
Less: impairment | | | — | | | (108) |
Property and Equipment, net | | | $13,042 | | | $22,628 |
| | March 31, 2022 | | | December 31, 2021 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $29 |
Deferred acquisition costs | | | 40 | | | 46 |
Prepaid expenses | | | 10,133 | | | 3,664 |
Interest receivable | | | 539 | | | 966 |
Total Other Current Assets | | | $10,741 | | | $4,705 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 30 | | | 35 |
Security deposits | | | 507 | | | 507 |
Total Other Assets | | | $553 | | | $558 |
| | March 31, 2022 | | | December 31, 2021 | |
Capital lease obligation | | | $— | | | $12,715 |
Finance lease liabilities | | | $12,640 | | | $— |
| | 12,640 | | | 12,715 | |
Current portion of long-term debt | | | — | | | (509) |
Current portion of finance lease liabilities | | | (560) | | | — |
Long-term Debt | | | $12,080 | | | $12,206 |
| | March 31, 2022 | | | December 31, 2021 | |
License and title fees | | | $784 | | | $903 |
Payroll and bonuses | | | 4,564 | | | 2,047 |
Deferred rent | | | — | | | 1,636 |
Technology | | | 1,120 | | | 1,127 |
Inventory | | | 3,612 | | | 2,542 |
Other | | | 4,289 | | | 6,173 |
Total Accrued Expenses | | | $14,369 | | | $14,428 |
| | March 31, 2022 | | | December 31, 2021 | |
Other Liabilities, Current | | | | | ||
Unearned insurance premiums | | | $662 | | | $754 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 530 | | | 622 |
Other long-term liabilities | | | 121 | | | 122 |
Other Liabilities, Long-term | | | $651 | | | $744 |
| | Three Months Ended March 31, 2022 | |
Operating lease cost(1) | | | $2,435 |
Finance lease cost: | | | |
Depreciation of lease assets | | | 263 |
Interest on lease liabilities | | | 287 |
Total finance lease cost | | | 550 |
Total lease cost | | | 2,985 |
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
| | Classification | | | As of March 31, 2022 | |
Assets: | | | | | ||
Operating lease assets | | | | | 49,608 | |
Finance lease assets | | | | | 11,811 | |
Total lease assets | | | | | 61,419 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Current portion of operating lease liabilities | | | | | 6,810 | |
Current portion of finance lease liabilities | | | | | 560 | |
Long-term: | | | | | ||
Operating leases, less current portion | | | | | 45,076 | |
Finance leases, less current portion | | | | | 12,080 | |
Total lease liabilities | | | | | 64,526 |
(1) | Finance lease assets are recorded net of accumulated depreciation of $755 as of March 31, 2022. |
Lease Term and Discount Rate | | | As of March 31, 2022 |
Weighted Average Remaining Lease Term (in years) | | | |
Operating leases | | | 8.01 years |
Finance leases | | | 11.92 years |
| | ||
Weighted Average Discount Rate | | | |
Operating leases | | | 5.87% |
Finance leases | | | 10.01% |
| | Three Months Ended March 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | | | 2,308 |
Operating cash flows from finance leases | | | 287 |
Financing cash flows from finance leases | | | 126 |
| | ||
Lease assets obtained in exchange for lease obligation | | | |
Operating leases | | | 51,916 |
Finance leases | | | — |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 7,118 | | | 1,281 |
Fiscal 2023 | | | 9,268 | | | 1,669 |
Fiscal 2024 | | | 8,518 | | | 1,694 |
Fiscal 2025 | | | 7,887 | | | 1,721 |
Fiscal 2026 | | | 6,875 | | | 1,766 |
Thereafter | | | 26,074 | | | 14,322 |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Total lease payments | | | 65,740 | | | 22,453 |
Less: interest | | | (13,854) | | | (9,813) |
Present value of lease liabilities | | | 51,886 | | | 12,640 |
(1) | There are no legally binding minimum lease payments for leases signed but not yet commenced excluded from the table. |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2021) | | | 1,260,328 | | | $0.56 |
Granted | | | — | | | — |
Exercised | | | (50,964) | | | 0.32 |
Forfeited | | | — | | | — |
Balance (March 31, 2022) | | | 1,209,364 | | | 0.57 |
Vested (as of March 31, 2022) | | | 1,209,364 | | | $0.57 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2020) | | | 1,571,205 | | | $0.59 |
Granted | | | — | | | — |
Exercised | | | (56,059) | | | 0.24 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 1,515,146 | | | 0.58 |
Vested (as of March 31, 2021) | | | 1,515,146 | | | $0.58 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,209,364 | | | 0.42 years | | | $0.57 |
Exercisable | | | 1,209,364 | | | 0.42 years | | | $0.57 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 3,936,176 | | | $0.92 |
Granted | | | — | | | — |
Exercised | | | (6,371) | | | $0.92 |
Forfeited | | | (19,111) | | | 0.92 |
Balance (March 31, 2022) | | | 3,910,694 | | | $0.92 |
Vested (as of March 31, 2022) | | | 3,631,681 | | | $0.92 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | 3,961,658 | | | $0.92 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 3,961,658 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,910,694 | | | 7.30 years | | | $0.92 |
Exercisable | | | 3,631,681 | | | 7.21 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.6 - 4.8 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Granted | | | 1,573,361 | | | $1.68 |
Forfeited | | | (74,626) | | | $10.47 |
Balance (March 31, 2022) | | | 2,968,032 | | | $6.13 |
Exercisable | | | 388,691 | | | $11.34 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,409,401 | | | 11.35 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 1,409,401 | | | $11.35 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 2,968,032 | | | 9.20 years | | | $6.13 |
Exercisable | | | 388,691 | | | 7.27 years | | | $11.34 |
Balance (Expected volatility) | | | 80% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6 years |
Risk-free interest rate | | | 2.20% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Granted | | | 1,235,437 | | | $1.68 |
Forfeited | | | (54,208) | | | $5.56 |
Vested (as of March 31, 2022) | | | (71,273) | | | $5.69 |
Balance (March 31, 2022) | | | 1,707,695 | | | $2.75 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Granted | | | — | | | — |
Forfeited | | | (141,350) | | | 10.70 |
Balance (March 31, 2022) | | | 479,850 | | | $10.70 |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 640,421 | | | $10.70 |
Expected volatility | | | 80.00% |
Starting stock price | | | $11.31 |
Expected term (in years) | | | 5 years |
Risk-free interest rate | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Numerator: | | | | | ||
Net Loss | | | $(24,836) | | | $(15,022) |
Denominator: | | | | | ||
Weighted average common shares outstanding, basic and diluted | | | 114,054,597 | | | 100,817,385 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.22) | | | $(0.15) |
| | 2022 | | | 2021 | |
Public warrants | | | 10,185,774 | | | 10,185,774 |
Private warrants | | | 6,074,310 | | | 6,074,310 |
Earnout RSUs | | | 479,850 | | | 640,421 |
Earnout shares | | | 6,945,732 | | | 6,945,732 |
Convertible notes payable | | | — | | | — |
Historic warrants | | | — | | | — |
Stock options outstanding to purchase shares of common stock | | | 8,088,090 | | | 6,886,205 |
Unvested RSUs | | | 1,707,695 | | | — |
Total | | | 33,481,451 | | | 30,732,442 |
| | Total purchases from vendor to total vehicle purchases for the three months ended March 31, | ||||
Vendor | | | 2022 | | | 2021 |
Vendor A | | | 20% | | | 62% |
Vendor B | | | —% | | | —% |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Retail vehicles sold | | | 2,270 | | | 2,554 |
Number of hubs | | | 22 | | | 11 |
Average monthly unique visitors | | | 257,022 | | | 178,783 |
Vehicles available for sale | | | 2,184 | | | 1,581 |
Retail gross profit per unit | | | $827 | | | $1,182 |
Percentage of unit sales sourced non-competitively(1) | | | 65% | | | 99% |
(1) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
| | | | |||
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income (Expense), net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout provision | | | 4,029 | | | 31,846 |
Other (expense) income | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
| | Three Months Ended March 31, | |||||||
| | 2022 | | | 2021 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||
Revenue: | | | | | | | |||
Retail vehicle sales | | | $50,588 | | | $50,383 | | | 0.4% |
Wholesale vehicle sales | | | 8,575 | | | 4,568 | | | 87.7% |
Finance and insurance, net | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total revenues | | | 63,014 | | | 56,612 | | | 11.3% |
Cost of sales: | | | | | | | |||
Retail vehicle cost of sales | | | 52,415 | | | 48,917 | | | 7.2% |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 | | | 49.8% |
Total cost of sales | | | $60,936 | | | $54,604 | | | 11.6% |
Gross profit: | | | | | | | |||
Retail vehicle gross profit (loss) | | | $(1,827) | | | $1,466 | | | (224.6)% |
Wholesale vehicle gross profit (loss) | | | 54 | | | (1,119) | | | 104.8% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total gross profit | | | $2,078 | | | $2,008 | | | 3.5% |
Retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit (loss) | | | (1,827) | | | 1,466 | | | (224.6)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Total retail vehicle and finance and insurance gross profit | | | 1,878 | | | 3,020 | | | (37.8)% |
Retail vehicle unit sales | | | 2,270 | | | 2,554 | | | (11.1)% |
Retail vehicle gross profit per unit | | | $827 | | | $1,182 | | | (30.0)% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Compensation and benefits(1) | | | $10,798 | | | $6,856 |
Marketing | | | 3,154 | | | 2,526 |
Technology | | | 1,535 | | | 2,925 |
Accounting and legal | | | 2,065 | | | 2,819 |
Insurance | | | 2,236 | | | 1,336 |
Occupancy | | | 3,291 | | | 1,032 |
Other costs(2) | | | 4,595 | | | 1,379 |
Total selling, general and administrative expenses | | | $27,674 | | | $18,873 |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Net Loss | | | $(24,836) | | | $(15,022) |
Adjusted to exclude the following: | | | | | ||
Interest expense | | | 617 | | | 175 |
Income tax expense | | | — | | | — |
Depreciation and amortization expense | | | 1,789 | | | 383 |
EBITDA | | | $(22,430) | | | $(14,464) |
Other expense | | | 779 | | | (162) |
Stock compensation expense | | | 1,684 | | | 41,963 |
Management fee expense - related party | | | — | | | 2 |
Change in fair value of warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout provision | | | (4,029) | | | (31,846) |
Adjusted EBITDA | | | $(25,596) | | | $(16,865) |
| | Three Months Ended March 31, | ||||||||||
| | 2022 | | | 2021 | | | Change | | | Change | |
Adjusted retail gross profit per unit(1): | | | | | | | | | ||||
Retail vehicle gross profit | | | $(1,827) | | | $1,466 | | | $(3,293) | | | (225)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 2,151 | | | 138% |
Total retail gross profit | | | 1,878 | | | 3,020 | | | (1,142) | | | (38)% |
Change in inventory reserve(2) | | | 109 | | | — | | | 109 | | | 100% |
Total adjusted retail gross profit | | | 1,987 | | | 3,020 | | | (1,033) | | | (34)% |
Retail vehicle units sold | | | 2,270 | | | 2,554 | | | (284) | | | (11)% |
Retail vehicle adjusted gross profit per unit | | | $875 | | | $1,182 | | | $(307) | | | (26)% |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Condensed Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Cash Flow Data: | | | | | ||
Net cash (used in) operating activities | | | $(31,664) | | | $(19,600) |
Net cash provided by (used in) investing activities | | | 37,529 | | | (219,370) |
Net cash provided by (used in) financing activities | | | (5,891) | | | 310,746 |
Other Information |
Disclosure Regarding Foreign Jurisdiction that Prevent Inspections |
Directors, Executive Officers and Corporate Governance |
Executive Compensation |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Certain Relationships and Related Party Transactions, and Director Independence |
Principal Accountant Fees and Services |
| | Balance at beginning of the period | | | Bad debt expense | | | Write-offs | | | Balance at the end of period | |
| | (in thousands) | ||||||||||
Allowance for doubtful accounts: | | | | | | | | | ||||
Year ended December 31, 2021 | | | 67 | | | 731 | | | (498) | | | 300 |
Year ended December 31, 2020 | | | 27 | | | 44 | | | (4) | | | 67 |
Year ended December 31, 2019 | | | 41 | | | 44 | | | (58) | | | 27 |
Exhibit No. | | | Description |
| | Agreement and Plan of Merger, dated as of October 21, 2020, by and among Acamar Partners Acquisition Corp., Acamar Partners Sub, Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on October 22, 2020) | |
| | ||
| | Amendment No. 1 to Agreement and Plan of Merger, dated as of December 16, 2020, by and among Acamar Partners Acquisition Corp., Acamar Partners Sub, Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on December 16, 2020 | |
| | ||
| | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) | |
| | ||
| | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | ||
| | ||
| | Specimen Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.5 to the Company’s Form S-4/A (File No. 333-249723), filed with the SEC on December 16, 2020 | |
| | ||
| | Specimen Warrant Certificate of the Company (incorporated by reference to Exhibit 4.6 to the Company’s Form S-4/A (File No. 333-249723), filed with the SEC on December 16, 2020 | |
| | ||
| | Description of the Securities of CarLotz, Inc. (incorporated by reference to Exhibit 4.4 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Registration Rights and Lock-Up Agreement among the Company and the holders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on | |
| | ||
| | Form of Subscription Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on October 22, 2020) | |
| | ||
| | Stockholders Agreement, dated as of January 21, 2021, by and among TRP Capital Partners, LP, Acamar Partners Sponsor I LLC, Michael W. Bor and the Company (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Amended and Restated Executive Employment Agreement, dated September 18, 2017, between CarLotz, Inc. and Michael W. Bor (incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| |
Exhibit No. | | | Description |
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Michael W. Bor (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Letter Agreement, dated October 16, 2017, between CarLotz, Inc. and John W. Foley II (incorporated by reference to Exhibit 10.30 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and John W. Foley II (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Letter Agreement, dated January 1, 2015, between CarLotz, Inc. and Daniel A. Valerian (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Daniel A. Valerian (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-4/A (File No. 333-249723) filed by the Registrant on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Rebecca C. Polak (incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Employment Agreement, dated as of December 11, 2020, between CarLotz, Inc. and Thomas W. Stoltz (incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | 2020 Incentive Award Plan of the Company (incorporated by reference to Exhibit 10.12 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Form of 2020 Incentive Award Plan RSU Award Agreement (incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-4/A (Form No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2020 Incentive Award Plan Option Award Agreement (incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of Indemnification Agreement by and between the Company and its directors and officers (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
| | Demand Promissory Note and Security Agreement, dated January 22, 2016, between CarLotz, Inc. and Automotive Finance Corporation (incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| |
Exhibit No. | | | Description |
| | Amendment to Demand Promissory Note and Security Agreement, dated January 25, 2019, between CarLotz, Inc. and Automotive Finance Corporation (incorporated by reference to Exhibit 10.21.1 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q (File No. 001-38818) filed with the SEC on May 10, 2021 | |
| | ||
| | ||
| | CarLotz, Inc. 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Amendment to CarLotz, Inc. 2011 Stock Option Plan (incorporated by reference to Exhibit 10.25.1 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | CarLotz, Inc. 2017 Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2011 CarLotz Stock Incentive Plan Agreement (incorporated by reference to Exhibit 10.27 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Form of 2017 CarLotz Stock Option Agreement (incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-4/A (File No. 333-249723) filed with the SEC by Acamar Partners Acquisition Corp. on December 16, 2020). | |
| | ||
| | Inventory Financing and Security Agreement, dated March 10, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 10.22 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Addendum to Inventory Financing and Security Agreement, dated April 7, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz Group, Inc. (incorporated by reference to Exhibit 10.22.1 to the Company’s Form POS AM (File No. 333-252993), filed with the SEC on May 25, 2021) | |
| | ||
| | Addendum to Inventory Financing and Security Agreement, dated March 10, 2021, by and among Ally Bank, Ally Financial Inc. and CarLotz, Inc. (incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | CarLotz, Inc. Short-term Incentive Program (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K (File No. 001-38818), filed with the SEC on March 15, 2021) | |
| | ||
| | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. | |
| | ||
| | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. | |
| | ||
| | ||
| | ||
| | ||
| |
Exhibit | | | Description |
24.1* | | | Power of Attorney (included on the |
| | ||
| | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
| | ||
| | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
| | ||
101.INS* | | | XBRL Instance 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 |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
+ | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Regulation S-K, Item 601(b)(10). |
Form 10-K Summary |
| | CarLotz, Inc. | |||||||
| | | | ||||||
| | By: | | | /s/ | ||||
| | | | Thomas W. Stoltz | |||||
| | | | Chief Financial Officer | |||||
| | | | (Duly Authorized Officer and Principal Financial Officer) | |||||
Date: March 15, 2022 | | | | |
Signature | | | Title | | | Date |
/s/ Michael W. Bor | | | Chief Executive Officer (Principal Executive Officer) | | | March 15, 2022 |
Michael W. Bor | | | ||||
| | | | |||
/s/ Thomas W. Stoltz | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | March 15, 2022 |
Thomas W. Stoltz | | | ||||
| | | | |||
/s/ Luis Ignacio Solorzano Aizpuru | | | Chairman of the Board | | | March 15, 2022 |
Luis Ignacio Solorzano Aizpuru | | | | | ||
| | | | |||
/s/ David R. Mitchell | | | Director | | | March 15, 2022 |
David R. Mitchell | | | | | ||
| | | | |||
/s/ Kimberly H. Sheehy | | | Director | | | March 15, 2022 |
Kimberly H. Sheehy | | | | | ||
| | | | |||
/s/ Steven G. Carrel | | | Director | | | March 15, 2022 |
Steven G. Carrel | | | | | ||
| | | | |||
/s/ James E. Skinner | | | Director | | | March 15, 2022 |
James E. Skinner | | | | | ||
| | | | |||
/s/ Linda B. Abraham | | | Director | | | March 15, 2022 |
Linda B. Abraham | | | | | ||
| | | | |||
/s/ Sarah M. Kauss | | | Director | | | March 15, 2022 |
Sarah M. Kauss | | | | |
Delaware | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
3301 W. Moore Street | | | Richmond | | | Virginia | | | 23230 |
(Address of principal executive offices, including zip code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ | | | |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | |
| | | | Emerging growth company | | | ☒ | | |
| | | | Page | |||||
| | Part I - Financial Information | | | |||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | Part II - Other Information | | | |||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| |
Financial Statements |
| | June 30, 2022 | | December 31, 2021 | | | March 31, 2022 | | December 31, 2021 | |||
Assets | | | | | ||||||||
Current Assets: | | | | | ||||||||
Cash and cash equivalents | | $70,022 | | $75,029 | | $75,328 | | $75,029 | ||||
Restricted cash | | 4,021 | | 4,336 | | 4,011 | | 4,336 | ||||
Marketable securities – at fair value | | 54,105 | | 116,589 | | 74,109 | | 116,589 | ||||
Accounts receivable, net | | 10,012 | | 8,206 | | 6,922 | | 8,206 | ||||
Inventories | | 31,893 | | 40,985 | | 46,095 | | 40,985 | ||||
Other current assets | | 7,684 | | 4,705 | | 10,741 | | 4,705 | ||||
Operating and finance lease assets, property, and equipment held for sale | | 28,526 | | — | ||||||||
Total Current Assets | | 206,263 | | 249,850 | | 217,206 | | 249,850 | ||||
Marketable securities – at fair value | | 848 | | 1,941 | | 971 | | 1,941 | ||||
Property and equipment, net | | 7,044 | | 22,628 | | 13,042 | | 22,628 | ||||
Capitalized website and internal-use software costs, net | | 12,918 | | 13,716 | | 13,385 | | 13,716 | ||||
Operating lease assets | | 22,235 | | — | | 49,608 | | — | ||||
Finance lease assets, net | | 2,803 | | — | | 11,811 | | — | ||||
Lease vehicles, net | | 2,598 | | 1,596 | | 2,223 | | 1,596 | ||||
Other assets | | 538 | | 558 | | 553 | | 558 | ||||
Total Assets | | $255,247 | | $290,289 | | $308,799 | | $290,289 | ||||
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||||||||
Current Liabilities: | | | | | ||||||||
Current portion of finance lease liabilities | | $90 | | $509 | | $560 | | $509 | ||||
Floor plan notes payable | | 15,689 | | 27,815 | | 22,052 | | 27,815 | ||||
Accounts payable | | 3,926 | | 6,352 | | 7,914 | | 6,352 | ||||
Accrued expenses | | 14,114 | | 14,428 | | 14,369 | | 14,428 | ||||
Current portion of operating lease liabilities | | 4,445 | | — | | 6,810 | | — | ||||
Other current liabilities | | 580 | | 754 | | 662 | | 754 | ||||
Operating and finance lease liabilities associated with assets held for sale | | 30,122 | | — | ||||||||
Total Current Liabilities | | 68,966 | | 49,858 | | 52,367 | | 49,858 | ||||
Finance lease liabilities, less current portion | | 4,216 | | 12,206 | | 12,080 | | 12,206 | ||||
Operating lease liabilities, less current portion | | 22,336 | | — | | 45,076 | | — | ||||
Earnout shares liability | | 1,063 | | 7,679 | | 3,650 | | 7,679 | ||||
Merger warrants liability | | 1,478 | | 6,291 | | 4,691 | | 6,291 | ||||
Other liabilities | | 579 | | 744 | | 651 | | 744 | ||||
Total Liabilities | | 98,638 | | 76,778 | | 118,515 | | 76,778 | ||||
Commitments and Contingencies (Note 15) | | — | | — | | — | | — | ||||
Stockholders’ Equity (Deficit): | | | | | ||||||||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,479,662 and 113,996,401 shares issued and outstanding at June 30, 2022 and December 31, 2021 | | 11 | | 11 | ||||||||
| | |||||||||||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,111,796 and 113,996,401 shares issued and outstanding at March 31, 2022 and December 31, 2021 | | 11 | | 11 | ||||||||
Additional paid-in capital | | 290,398 | | 287,509 | | 289,191 | | 287,509 | ||||
Accumulated deficit | | (133,657) | | (73,916) | | (98,752) | | (73,916) | ||||
Accumulated other comprehensive loss | | (143) | | (93) | ||||||||
Accumulated other comprehensive (loss) income | | (166) | | (93) | ||||||||
Total Stockholders’ Equity (Deficit) | | 156,609 | | 213,511 | | 190,284 | | 213,511 | ||||
Total Liabilities and Stockholders’ Equity (Deficit) | | $255,247 | | $290,289 | | $308,799 | | $290,289 |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended March 31, | |||||||||||
| | 2022 | | 2021 | | 2022 | | 2021 | | | 2022 | | 2021 | |||||
Revenues: | | | | | | | ||||||||||||
Retail vehicle sales | | $59,211 | | $44,230 | | $109,799 | | $94,613 | | $50,588 | | $50,383 | ||||||
Wholesale vehicle sales | | 13,949 | | 4,660 | | 22,524 | | 9,228 | | 8,575 | | 4,568 | ||||||
Finance and insurance, net | | 3,196 | | 1,780 | | 6,900 | | 3,334 | | 3,705 | | 1,554 | ||||||
Lease income, net | | 137 | | 98 | | 283 | | 205 | | 146 | | 107 | ||||||
Total Revenues | | 76,493 | | 50,768 | | 139,506 | | 107,380 | | 63,014 | | 56,612 | ||||||
Cost of sales (exclusive of depreciation) | | 75,011 | | 46,586 | | 135,947 | | 101,190 | | 60,936 | | 54,604 | ||||||
Gross Profit | | 1,482 | | 4,182 | | 3,559 | | 6,190 | | 2,078 | | 2,008 | ||||||
Operating Expenses: | | | | | | | ||||||||||||
Selling, general and administrative | | 27,009 | | 19,386 | | 54,684 | | 38,259 | | 27,674 | | 18,873 | ||||||
Stock-based compensation expense | | 1,141 | | 3,704 | | 2,825 | | 45,667 | | 1,684 | | 41,963 | ||||||
Depreciation and amortization expense | | 2,359 | | 95 | | 4,147 | | 478 | | 1,789 | | 383 | ||||||
Management fee expense – related party | | — | | — | | — | | 2 | | — | | 2 | ||||||
Impairment expense | | 724 | | — | | 724 | | — | ||||||||||
Restructuring expenses | | 10,731 | | — | | 10,731 | | — | ||||||||||
Total Operating Expenses | | 41,964 | | 23,185 | | 73,111 | | 84,406 | | 31,147 | | 61,221 | ||||||
Loss from Operations | | (40,482) | | (19,003) | | (69,552) | | (78,216) | | (29,069) | | (59,213) | ||||||
Interest expense | | 594 | | 184 | | 1,210 | | 359 | | 617 | | 175 | ||||||
Other Income, net | | | | | | | ||||||||||||
Change in fair value of Merger warrants liability | | 3,213 | | 325 | | 4,813 | | 12,683 | | 1,600 | | 12,358 | ||||||
| | | | |||||||||||||||
Change in fair value of earnout shares | | 2,587 | | 12,210 | | 6,616 | | 44,056 | | 4,029 | | 31,846 | ||||||
Other income (expense) | | 371 | | (553) | | (408) | | (391) | | (779) | | 162 | ||||||
Total Other Income, net | | 6,171 | | 11,982 | | 11,021 | | 56,348 | | 4,850 | | 44,366 | ||||||
Loss Before Income Tax Expense | | (34,905) | | (7,205) | | (59,741) | | (22,227) | | (24,836) | | (15,022) | ||||||
Income tax expense | | — | | — | | — | | — | | — | | — | ||||||
Net Loss | | $(34,905) | | $(7,205) | | $(59,741) | | $(22,227) | | $(24,836) | | $(15,022) | ||||||
Net Loss per Share, basic and diluted | | $(0.31) | | $(0.06) | | $(0.52) | | $(0.21) | | $(0.22) | | $(0.15) | ||||||
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | 114,237,681 | | 113,670,060 | | 114,146,645 | | 107,279,227 | | 114,054,597 | | 100,817,385 |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended March 31, | |||||||||||
| | 2022 | | 2021 | | 2022 | | 2021 | | | 2022 | | 2021 | |||||
Net loss | | $(34,905) | | $(7,205) | | $(59,741) | | $(22,227) | | $(24,836) | | $(15,022) | ||||||
Other Comprehensive (Loss), net of tax: | | | | | | | ||||||||||||
Unrealized gains (losses) on marketable securities arising during the period | | 29 | | 61 | | (44) | | (70) | ||||||||||
Unrealized (losses) gains on marketable securities arising during the period | | (73) | | (131) | ||||||||||||||
Tax effect | | — | | — | | — | | — | | — | | — | ||||||
Unrealized gains (losses) on marketable securities arising during the period, net of tax | | 29 | | 61 | | (44) | | (70) | ||||||||||
Reclassification adjustment for realized gains | | (6) | | (5) | | (6) | | (5) | ||||||||||
Unrealized (losses) gains on marketable securities arising during the period, net of tax | | (73) | | (131) | ||||||||||||||
Reclassification adjustment for realized losses | | — | | — | ||||||||||||||
Tax effect | | — | | — | | — | | — | | — | | — | ||||||
Reclassification adjustment for realized gains, net of tax | | (6) | | (5) | | (6) | | (5) | ||||||||||
Other Comprehensive Income (Loss), net of tax | | 23 | | 56 | | (50) | | (75) | ||||||||||
Reclassification adjustment for realized losses, net of tax | | — | | — | ||||||||||||||
Other Comprehensive (Loss), net of tax | | (73) | | (131) | ||||||||||||||
Total Comprehensive (Loss) | | $(34,882) | | $(7,149) | | $(59,791) | | $(22,302) | | $(24,909) | | $(15,153) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(34,905) | | | $— | | | $(34,905) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $23 | | | $23 |
Exercise of options | | | — | | | $— | | | 104,818 | | | $— | | | $66 | | | $— | | | $— | | | $66 |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $1,141 | | | $— | | | $— | | | $1,141 |
Issuance of common stock to settle vested restricted stock units | | | — | | | $— | | | 263,048 | | | $— | | | $— | | | $— | | | $— | | | $— |
Balance June 30, 2022 | | | — | | | $— | | | 114,479,662 | | | $11 | | | $290,398 | | | $(133,657) | | | $(143) | | | $156,609 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $ — | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (7,205) | | | — | | | (7,205) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | 56 | | | 56 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 3,704 | | | — | | | — | | | 3,704 |
Balance June 30, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $281,976 | | | $(56,264) | | | $(60) | | | $225,663 |
| | Six Months Ended June 30, | | | Three Months Ended March 31, | |||||||
| | 2022 | | 2021 | | | 2022 | | 2021 | |||
Cash Flow from Operating Activities | | | | | ||||||||
Net loss | | $(59,741) | | $(22,227) | | $(24,836) | | $(15,022) | ||||
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||||||||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | 6,725 | | 448 | | 4,097 | | 105 | ||||
Impairment expense | | 724 | | — | ||||||||
Restructuring expenses | | 10,731 | | — | ||||||||
Amortization and accretion - marketable securities | | 752 | | 788 | | 440 | | 238 | ||||
Depreciation – lease vehicles | | 217 | | 30 | | 85 | | 15 | ||||
Loss on marketable securities | | — | | — | ||||||||
Provision for doubtful accounts | | 777 | | — | | (30) | | — | ||||
Stock-based compensation expense | | 2,825 | | 45,667 | | 1,684 | | 41,963 | ||||
Change in fair value of Merger warrants liability | | (4,813) | | (12,683) | | (1,600) | | (12,358) | ||||
Change in fair value of earnout shares | | (6,616) | | (44,056) | | (4,029) | | (31,846) | ||||
Change in Operating Assets and Liabilities: | | | | | ||||||||
Accounts receivable | | (2,583) | | (1,279) | | 1,314 | | (5,192) | ||||
Inventories | | 9,092 | | (36,117) | | (5,110) | | 1,991 | ||||
Other current assets | | (2,979) | | (5,466) | | (6,036) | | (5,868) | ||||
Other assets | | 20 | | (4,091) | | 5 | | (3,038) | ||||
Accounts payable | | (2,426) | | 2,499 | | 1,562 | | 3,140 | ||||
Accrued expenses | | (161) | | 6,187 | | 975 | | 6,187 | ||||
Accrued expenses – related party | | — | | (229) | | — | | (229) | ||||
Other current liabilities | | (174) | | 447 | | (92) | | 559 | ||||
Other liabilities | | (166) | | (582) | | (93) | | (245) | ||||
Net Cash Used in Operating Activities | | (47,796) | | (70,664) | | (31,664) | | (19,600) | ||||
Cash Flows from Investing Activities | | | | | ||||||||
Purchase of property and equipment | | (5,106) | | (3,548) | | (4,091) | | (586) | ||||
Capitalized website and internal-use software costs | | (1,734) | | (6,601) | | (611) | | (1,154) | ||||
Purchase of marketable securities | | (52,072) | | (307,560) | | (21,974) | | (217,689) | ||||
Proceeds from sales of marketable securities | | 114,915 | | 128,954 | | 64,917 | | 59 | ||||
Purchase of lease vehicles | | (1,220) | | (344) | | (712) | | — | ||||
Net Cash Provided by (Used in) Investing Activities | | 54,783 | | (189,099) | ||||||||
Net Cash (Used in) Provided by Investing Activities | | 37,529 | | (219,370) | ||||||||
Cash Flows from Financing Activities | | | | | ||||||||
Payments made on finance leases | | (246) | | (18) | | (126) | | — | ||||
Advance from holder of marketable securities | | — | | 4,722 | ||||||||
PIPE issuance | | — | | 125,000 | | — | | 125,000 | ||||
Merger financing | | — | | 309,999 | | — | | 309,999 | ||||
Payment made on accrued dividends | | — | | (4,853) | | — | | (4,853) | ||||
Payments to existing shareholders of Former CarLotz | | — | | (62,693) | | — | | (62,693) | ||||
Transaction costs and advisory fees | | — | | (47,579) | | — | | (47,579) | ||||
Payments made on cash considerations associated with stock options | | — | | (2,465) | | — | | (2,465) | ||||
Repayment of Paycheck Protection Program loan | | — | | (1,749) | | — | | (1,749) | ||||
Payments made on note payable | | — | | (3,000) | | — | | (3,000) | ||||
Payments on floor plan notes payable | | (82,394) | | (29,056) | | (41,728) | | (11,150) | ||||
Borrowings on floor plan notes payable | | 70,268 | | 52,444 | | 35,965 | | 9,236 | ||||
Employee stock option exercise | | 66 | | — | ||||||||
Payments made for tax on equity award transactions | | (3) | | — | | (2) | | — | ||||
Net Cash (Used in) Provided by Financing Activities | | (12,309) | | 340,752 | | (5,891) | | 310,746 | ||||
Net Change in Cash and Cash Equivalents Including Restricted Cash | | (5,322) | | 80,989 | ||||||||
Cash and cash equivalents and restricted cash, beginning | | 79,365 | | 2,813 | ||||||||
Cash and cash equivalents and restricted cash, ending | | $74,043 | | $83,802 | ||||||||
Supplemental Disclosure of Cash Flow Information | | | ||||||||||
Cash paid for interest | | $1,163 | | $490 | ||||||||
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | ||||||||||
Transfer from lease vehicles to inventory | | $— | | $150 | ||||||||
KAR/AFC exercise of stock warrants | | — | | (144) | ||||||||
KAR/AFC conversion of notes payable | | — | | (3,625) | ||||||||
Convertible redeemable preferred stock tranche obligation expiration | | — | | (2,832) | ||||||||
Capitalized website and internal use software costs accrued | | — | | (3,488) | ||||||||
Purchases of property under capital lease obligation | | (247) | | (6,504) |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (26) | | | 71,776 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $79,339 | | | $74,589 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $615 | | | $402 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $100 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (1,400) |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
| | Recapitalization | |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,285) |
Less: Merger warrants liability | | | (39,024) |
| | March 31, 2022 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Three Months Ended March 31, 2022 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,588 | | | $— | | | $50,588 |
Wholesale vehicle sales | | | 8,575 | | | — | | | 8,575 |
Finance and insurance, net | | | $3,705 | | | $— | | | $3,705 |
Lease income, net | | | — | | | 146 | | | 146 |
Total Revenues | | | $62,868 | | | $146 | | | $63,014 |
| | Three Months Ended March 31, 2021 | |||||||
| | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $50,383 | | | $— | | | $50,383 |
Wholesale vehicle sales | | | 4,568 | | | — | | | 4,568 |
Finance and insurance, net | | | $1,554 | | | $— | | | $1,554 |
Lease income, net | | | — | | | 107 | | | 107 |
Total Revenues | | | $56,505 | | | $107 | | | $56,612 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Retail vehicles: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Retail vehicle cost of sales | | | 52,415 | | | 48,917 |
Gross Profit – Retail Vehicles | | | $(1,827) | | | $1,466 |
Wholesale vehicles: | | | | | ||
Wholesale vehicle sales | | | $8,575 | | | $4,568 |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 |
Gross Profit – Wholesale Vehicles | | | $54 | | | $(1,119) |
| | March 31, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 30,216 | | | 2 | | | (114) | | | 30,104 |
Municipal bonds | | | 21,990 | | | 5 | | | (40) | | | 21,955 |
Commercial paper | | | 19,997 | | | — | | | — | | | 19,997 |
Foreign governments | | | 2,491 | | | 2 | | | (21) | | | 2,472 |
Total Fixed Maturity Debt Securities | | | $74,694 | | | $9 | | | $(175) | | | $74,528 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $73,667 | | | $73,557 |
Due after one year through five years | | | 731 | | | 694 |
Due after five years through ten years | | | 296 | | | 277 |
Total | | | $74,694 | | | $74,528 |
| | | | | | March 31, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $29,890 | | | $(98) | | | $209 | | | $(16) | | | $30,099 | | | $(114) |
Municipal bonds | | | 19,289 | | | (32) | | | 133 | | | (8) | | | 19,422 | | | (40) |
Foreign governments | | | 2,236 | | | (18) | | | 117 | | | (3) | | | 2,353 | | | (21) |
Total Fixed Maturity Debt Securities | | | $51,415 | | | $(148) | | | $459 | | | $(27) | | | $51,874 | | | $(175) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | March 31, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $430 | | | $552 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | March 31, 2022 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $64,911 | | | $— | | | $— | | | $— |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $64,911 | | | $— | | | $— | | | $— |
| | March 31, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $59 | | | $— | | | $— | | | $— |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $59 | | | $— | | | $— | | | $— |
| | March 31, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 552 | | | — | | | — | | | 552 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 118,347 | | | — | | ��� | 118,347 |
Total Assets | | | $552 | | | $118,347 | | | $— | | | $118,899 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 2,939 | | | 1,752 | | | — | | | 4,691 |
Earnout shares liability | | | — | | | — | | | 3,650 | | | 3,650 |
Total Liabilities | | | $2,939 | | | $1,752 | | | $3,650 | | | $8,341 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (4,029) | | | 3,650 |
Total | | | $7,679 | | | $— | | | $— | | | $(4,029) | | | $3,650 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | March 31, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (31,846) | | | 42,438 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(31,846) | | | $42,438 |
| | March 31, 2022 | | | March 31, 2021 | |
Expected volatility | | | 85.00% | | | 80.00% |
Starting stock price | | | $1.37 | | | $7.13 |
Expected term (in years) | | | 3.7 years | | | 4.70 years |
Risk-free interest rate | | | 2.44% | | | 0.87% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | March 31, 2022 | | | December 31, 2021 | |
Contracts in transit | | | $6,117 | | | $7,836 |
Trade | | | 1 | | | 386 |
Finance commission | | | 593 | | | 284 |
Other | | | 481 | | | — |
Total | | | 7,192 | | | 8,506 |
Allowance for doubtful accounts | | | (270) | | | (300) |
Total Accounts Receivable, net | | | $6,922 | | | $8,206 |
| | March 31, 2022 | | | December 31, 2021 | |
Used vehicles | | | $45,846 | | | $40,739 |
Parts | | | 249 | | | 246 |
Total | | | $46,095 | | | $40,985 |
| | March 31, 2022 | | | December 31, 2021 | |
Capital lease assets | | | — | | | 12,566 |
Leasehold improvements | | | 8,030 | | | 4,628 |
Furniture, fixtures and equipment | | | 7,570 | | | 7,993 |
Corporate vehicles | | | 138 | | | 158 |
Total property and equipment | | | 15,738 | | | 25,345 |
Less: accumulated depreciation | | | (2,696) | | | (2,609) |
Less: impairment | | | — | | | (108) |
Property and Equipment, net | | | $13,042 | | | $22,628 |
| | March 31, 2022 | | | December 31, 2021 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $29 | | | $29 |
Deferred acquisition costs | | | 40 | | | 46 |
Prepaid expenses | | | 10,133 | | | 3,664 |
Interest receivable | | | 539 | | | 966 |
Total Other Current Assets | | | $10,741 | | | $4,705 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 30 | | | 35 |
Security deposits | | | 507 | | | 507 |
Total Other Assets | | | $553 | | | $558 |
| | March 31, 2022 | | | December 31, 2021 | |
Capital lease obligation | | | $— | | | $12,715 |
Finance lease liabilities | | | $12,640 | | | $— |
| | 12,640 | | | 12,715 | |
Current portion of long-term debt | | | — | | | (509) |
Current portion of finance lease liabilities | | | (560) | | | — |
Long-term Debt | | | $12,080 | | | $12,206 |
| | March 31, 2022 | | | December 31, 2021 | |
License and title fees | | | $784 | | | $903 |
Payroll and bonuses | | | 4,564 | | | 2,047 |
Deferred rent | | | — | | | 1,636 |
Technology | | | 1,120 | | | 1,127 |
Inventory | | | 3,612 | | | 2,542 |
Other | | | 4,289 | | | 6,173 |
Total Accrued Expenses | | | $14,369 | | | $14,428 |
| | March 31, 2022 | | | December 31, 2021 | |
Other Liabilities, Current | | | | | ||
Unearned insurance premiums | | | $662 | | | $754 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 530 | | | 622 |
Other long-term liabilities | | | 121 | | | 122 |
Other Liabilities, Long-term | | | $651 | | | $744 |
| | Three Months Ended March 31, 2022 | |
Operating lease cost(1) | | | $2,435 |
Finance lease cost: | | | |
Depreciation of lease assets | | | 263 |
Interest on lease liabilities | | | 287 |
Total finance lease cost | | | 550 |
Total lease cost | | | 2,985 |
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
| | Classification | | | As of March 31, 2022 | |
Assets: | | | | | ||
Operating lease assets | | | | | 49,608 | |
Finance lease assets | | | | | 11,811 | |
Total lease assets | | | | | 61,419 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Current portion of operating lease liabilities | | | | | 6,810 | |
Current portion of finance lease liabilities | | | | | 560 | |
Long-term: | | | | | ||
Operating leases, less current portion | | | | | 45,076 | |
Finance leases, less current portion | | | | | 12,080 | |
Total lease liabilities | | | | | 64,526 |
(1) | Finance lease assets are recorded net of accumulated depreciation of $755 as of March 31, 2022. |
Lease Term and Discount Rate | | | As of March 31, 2022 |
Weighted Average Remaining Lease Term (in years) | | | |
Operating leases | | | 8.01 years |
Finance leases | | | 11.92 years |
| | ||
Weighted Average Discount Rate | | | |
Operating leases | | | 5.87% |
Finance leases | | | 10.01% |
| | Three Months Ended March 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | | | 2,308 |
Operating cash flows from finance leases | | | 287 |
Financing cash flows from finance leases | | | 126 |
| | ||
Lease assets obtained in exchange for lease obligation | | | |
Operating leases | | | 51,916 |
Finance leases | | | — |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 7,118 | | | 1,281 |
Fiscal 2023 | | | 9,268 | | | 1,669 |
Fiscal 2024 | | | 8,518 | | | 1,694 |
Fiscal 2025 | | | 7,887 | | | 1,721 |
Fiscal 2026 | | | 6,875 | | | 1,766 |
Thereafter | | | 26,074 | | | 14,322 |
| | As of March 31, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Total lease payments | | | 65,740 | | | 22,453 |
Less: interest | | | (13,854) | | | (9,813) |
Present value of lease liabilities | | | 51,886 | | | 12,640 |
(1) | There are no legally binding minimum lease payments for leases signed but not yet commenced excluded from the table. |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2021) | | | 1,260,328 | | | $0.56 |
Granted | | | — | | | — |
Exercised | | | (50,964) | | | 0.32 |
Forfeited | | | — | | | — |
Balance (March 31, 2022) | | | 1,209,364 | | | 0.57 |
Vested (as of March 31, 2022) | | | 1,209,364 | | | $0.57 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2020) | | | 1,571,205 | | | $0.59 |
Granted | | | — | | | — |
Exercised | | | (56,059) | | | 0.24 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 1,515,146 | | | 0.58 |
Vested (as of March 31, 2021) | | | 1,515,146 | | | $0.58 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,209,364 | | | 0.42 years | | | $0.57 |
Exercisable | | | 1,209,364 | | | 0.42 years | | | $0.57 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 3,936,176 | | | $0.92 |
Granted | | | — | | | — |
Exercised | | | (6,371) | | | $0.92 |
Forfeited | | | (19,111) | | | 0.92 |
Balance (March 31, 2022) | | | 3,910,694 | | | $0.92 |
Vested (as of March 31, 2022) | | | 3,631,681 | | | $0.92 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | 3,961,658 | | | $0.92 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 3,961,658 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,910,694 | | | 7.30 years | | | $0.92 |
Exercisable | | | 3,631,681 | | | 7.21 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.6 - 4.8 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Granted | | | 1,573,361 | | | $1.68 |
Forfeited | | | (74,626) | | | $10.47 |
Balance (March 31, 2022) | | | 2,968,032 | | | $6.13 |
Exercisable | | | 388,691 | | | $11.34 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,409,401 | | | 11.35 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 1,409,401 | | | $11.35 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 2,968,032 | | | 9.20 years | | | $6.13 |
Exercisable | | | 388,691 | | | 7.27 years | | | $11.34 |
Balance (Expected volatility) | | | 80% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6 years |
Risk-free interest rate | | | 2.20% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Granted | | | 1,235,437 | | | $1.68 |
Forfeited | | | (54,208) | | | $5.56 |
Vested (as of March 31, 2022) | | | (71,273) | | | $5.69 |
Balance (March 31, 2022) | | | 1,707,695 | | | $2.75 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Granted | | | — | | | — |
Forfeited | | | (141,350) | | | 10.70 |
Balance (March 31, 2022) | | | 479,850 | | | $10.70 |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | — | | | — |
Balance (March 31, 2021) | | | 640,421 | | | $10.70 |
Expected volatility | | | 80.00% |
Starting stock price | | | $11.31 |
Expected term (in years) | | | 5 years |
Risk-free interest rate | | | 0.45% |
Earnout hurdle | | | $12.50-$15.00 |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Numerator: | | | | | ||
Net Loss | | | $(24,836) | | | $(15,022) |
Denominator: | | | | | ||
Weighted average common shares outstanding, basic and diluted | | | 114,054,597 | | | 100,817,385 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.22) | | | $(0.15) |
| | 2022 | | | 2021 | |
Public warrants | | | 10,185,774 | | | 10,185,774 |
Private warrants | | | 6,074,310 | | | 6,074,310 |
Earnout RSUs | | | 479,850 | | | 640,421 |
Earnout shares | | | 6,945,732 | | | 6,945,732 |
Convertible notes payable | | | — | | | — |
Historic warrants | | | — | | | — |
Stock options outstanding to purchase shares of common stock | | | 8,088,090 | | | 6,886,205 |
Unvested RSUs | | | 1,707,695 | | | — |
Total | | | 33,481,451 | | | 30,732,442 |
| | Total purchases from vendor to total vehicle purchases for the three months ended March 31, | ||||
Vendor | | | 2022 | | | 2021 |
Vendor A | | | 20% | | | 62% |
Vendor B | | | —% | | | —% |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
Retail vehicles sold | | | 2,270 | | | 2,554 |
Number of hubs | | | 22 | | | 11 |
Average monthly unique visitors | | | 257,022 | | | 178,783 |
Vehicles available for sale | | | 2,184 | | | 1,581 |
Retail gross profit per unit | | | $827 | | | $1,182 |
Percentage of unit sales sourced non-competitively(1) | | | 65% | | | 99% |
(1) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
| | | | |||
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income (Expense), net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout provision | | | 4,029 | | | 31,846 |
Other (expense) income | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
| | Three Months Ended March 31, | |||||||
| | 2022 | | | 2021 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||
Revenue: | | | | | | | |||
Retail vehicle sales | | | $50,588 | | | $50,383 | | | 0.4% |
Wholesale vehicle sales | | | 8,575 | | | 4,568 | | | 87.7% |
Finance and insurance, net | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total revenues | | | 63,014 | | | 56,612 | | | 11.3% |
Cost of sales: | | | | | | | |||
Retail vehicle cost of sales | | | 52,415 | | | 48,917 | | | 7.2% |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 | | | 49.8% |
Total cost of sales | | | $60,936 | | | $54,604 | | | 11.6% |
Gross profit: | | | | | | | |||
Retail vehicle gross profit (loss) | | | $(1,827) | | | $1,466 | | | (224.6)% |
Wholesale vehicle gross profit (loss) | | | 54 | | | (1,119) | | | 104.8% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total gross profit | | | $2,078 | | | $2,008 | | | 3.5% |
Retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit (loss) | | | (1,827) | | | 1,466 | | | (224.6)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Total retail vehicle and finance and insurance gross profit | | | 1,878 | | | 3,020 | | | (37.8)% |
Retail vehicle unit sales | | | 2,270 | | | 2,554 | | | (11.1)% |
Retail vehicle gross profit per unit | | | $827 | | | $1,182 | | | (30.0)% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Compensation and benefits(1) | | | $10,798 | | | $6,856 |
Marketing | | | 3,154 | | | 2,526 |
Technology | | | 1,535 | | | 2,925 |
Accounting and legal | | | 2,065 | | | 2,819 |
Insurance | | | 2,236 | | | 1,336 |
Occupancy | | | 3,291 | | | 1,032 |
Other costs(2) | | | 4,595 | | | 1,379 |
Total selling, general and administrative expenses | | | $27,674 | | | $18,873 |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Net Loss | | | $(24,836) | | | $(15,022) |
Adjusted to exclude the following: | | | | | ||
Interest expense | | | 617 | | | 175 |
Income tax expense | | | — | | | — |
Depreciation and amortization expense | | | 1,789 | | | 383 |
EBITDA | | | $(22,430) | | | $(14,464) |
Other expense | | | 779 | | | (162) |
Stock compensation expense | | | 1,684 | | | 41,963 |
Management fee expense - related party | | | — | | | 2 |
Change in fair value of warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout provision | | | (4,029) | | | (31,846) |
Adjusted EBITDA | | | $(25,596) | | | $(16,865) |
| | Three Months Ended March 31, | ||||||||||
| | 2022 | | | 2021 | | | Change | | | Change | |
Adjusted retail gross profit per unit(1): | | | | | | | | | ||||
Retail vehicle gross profit | | | $(1,827) | | | $1,466 | | | $(3,293) | | | (225)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 2,151 | | | 138% |
Total retail gross profit | | | 1,878 | | | 3,020 | | | (1,142) | | | (38)% |
Change in inventory reserve(2) | | | 109 | | | — | | | 109 | | | 100% |
Total adjusted retail gross profit | | | 1,987 | | | 3,020 | | | (1,033) | | | (34)% |
Retail vehicle units sold | | | 2,270 | | | 2,554 | | | (284) | | | (11)% |
Retail vehicle adjusted gross profit per unit | | | $875 | | | $1,182 | | | $(307) | | | (26)% |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Condensed Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Cash Flow Data: | | | | | ||
Net cash (used in) operating activities | | | $(31,664) | | | $(19,600) |
Net cash provided by (used in) investing activities | | | 37,529 | | | (219,370) |
Net cash provided by (used in) financing activities | | | (5,891) | | | 310,746 |
Quantitative and Qualitative Disclosures about Market Risk |
Legal Proceedings |
Risk Factors |
Exhibits and Financial Statement Schedules |
Exhibit No. | | | Description |
3.1 | | | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) |
| | ||
3.2 | | | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) |
| | ||
10.1† | | | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.2† | | | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.3† | | | Employment Agreement, dated March 19, 2022, between Ozan Kaya and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 31, 2022) |
| | ||
10.4† | | | Separation and Release Agreement, dated April 8, 2022, between John Foley and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on April 11, 2022) |
| | ||
10.5*† | | | Separation and Release Agreement, dated April 1, 2022, between Daniel Valerian and CarLotz, Inc. |
| | ||
10.5.1*† | | | Amendment to Separation and Release Agreement, dated May 5, 2022, between Daniel Valerian and CarLotz, Inc. |
| | ||
31.1* | | | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
31.2* | | | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
32.1* | | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
32.2* | | | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
101.INS* | | | XBRL Instance Document |
| | ||
101.SCH* | | | XBRL Taxonomy Extension Schema Document |
| | ||
101.CAL* | | | XBRL Taxonomy Extension Calculation Linkbase Document |
| | ||
101.DEF* | | | XBRL Taxonomy Extension Definition Linkbase Document |
Exhibit No. | | | Description |
| | ||
101.LAB* | | | XBRL Taxonomy Extension Label Linkbase Document |
| | ||
101.PRE* | | | XBRL Taxonomy Extension Presentation Linkbase Document |
| | ||
104 | | | Cover Page Interactive Data File (embedded with the Inline XBRL document and included in Exhibit 101) |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
| | | | |||
| | | | CarLotz, Inc. | ||
| | | | |||
| | By: | | | /s/ THOMAS W. STOLTZ | |
| | | | Thomas W. Stoltz | ||
| | | | Chief Financial Officer | ||
| | | | (Duly Authorized Officer and Principal Financial Officer) |
Delaware | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
3301 W. Moore Street | | | Richmond | | | Virginia | | | 23230 |
(Address of principal executive offices, including zip code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ | | | |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | |
| | | | Emerging growth company | | | ☒ | | |
| | | | Page | | ||||
| | Part I - Financial Information | | | | ||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | Part II - Other Information | | | | ||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | | |
Financial Statements |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $70,022 | | | $75,029 |
Restricted cash | | | 4,021 | | | 4,336 |
Marketable securities – at fair value | | | 54,105 | | | 116,589 |
Accounts receivable, net | | | 10,012 | | | 8,206 |
Inventories | | | 31,893 | | | 40,985 |
Other current assets | | | 7,684 | | | 4,705 |
Operating and finance lease assets, property, and equipment held for sale | | | 28,526 | | | — |
Total Current Assets | | | 206,263 | | | 249,850 |
Marketable securities – at fair value | | | 848 | | | 1,941 |
Property and equipment, net | | | 7,044 | | | 22,628 |
Capitalized website and internal-use software costs, net | | | 12,918 | | | 13,716 |
Operating lease assets | | | 22,235 | | | — |
Finance lease assets, net | | | 2,803 | | | — |
Lease vehicles, net | | | 2,598 | | | 1,596 |
Other assets | | | 538 | | | 558 |
Total Assets | | | $255,247 | | | $290,289 |
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Current portion of finance lease liabilities | | | $90 | | | $509 |
Floor plan notes payable | | | 15,689 | | | 27,815 |
Accounts payable | | | 3,926 | | | 6,352 |
Accrued expenses | | | 14,114 | | | 14,428 |
Current portion of operating lease liabilities | | | 4,445 | | | — |
Other current liabilities | | | 580 | | | 754 |
Operating and finance lease liabilities associated with assets held for sale | | | 30,122 | | | — |
Total Current Liabilities | | | 68,966 | | | 49,858 |
Finance lease liabilities, less current portion | | | 4,216 | | | 12,206 |
Operating lease liabilities, less current portion | | | 22,336 | | | — |
Earnout shares liability | | | 1,063 | | | 7,679 |
Merger warrants liability | | | 1,478 | | | 6,291 |
Other liabilities | | | 579 | | | 744 |
Total Liabilities | | | 98,638 | | | 76,778 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,479,662 and 113,996,401 shares issued and outstanding at June 30, 2022 and December 31, 2021 | | | 11 | | | 11 |
Additional paid-in capital | | | 290,398 | | | 287,509 |
Accumulated deficit | | | (133,657) | | | (73,916) |
Accumulated other comprehensive loss | | | (143) | | | (93) |
Total Stockholders’ Equity (Deficit) | | | 156,609 | | | 213,511 |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $255,247 | | | $290,289 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Revenues: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Wholesale vehicle sales | | | 13,949 | | | 4,660 | | | 22,524 | | | 9,228 |
Finance and insurance, net | | | 3,196 | | | 1,780 | | | 6,900 | | | 3,334 |
Lease income, net | | | 137 | | | 98 | | | 283 | | | 205 |
Total Revenues | | | 76,493 | | | 50,768 | | | 139,506 | | | 107,380 |
Cost of sales (exclusive of depreciation) | | | 75,011 | | | 46,586 | | | 135,947 | | | 101,190 |
Gross Profit | | | 1,482 | | | 4,182 | | | 3,559 | | | 6,190 |
Operating Expenses: | | | | | | | | | ||||
Selling, general and administrative | | | 27,009 | | | 19,386 | | | 54,684 | | | 38,259 |
Stock-based compensation expense | | | 1,141 | | | 3,704 | | | 2,825 | | | 45,667 |
Depreciation and amortization expense | | | 2,359 | | | 95 | | | 4,147 | | | 478 |
Management fee expense – related party | | | — | | | — | | | — | | | 2 |
Impairment expense | | | 724 | | | — | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — | | | 10,731 | | | — |
Total Operating Expenses | | | 41,964 | | | 23,185 | | | 73,111 | | | 84,406 |
Loss from Operations | | | (40,482) | | | (19,003) | | | (69,552) | | | (78,216) |
Interest expense | | | 594 | | | 184 | | | 1,210 | | | 359 |
Other Income, net | | | | | | | | | ||||
Change in fair value of Merger warrants liability | | | 3,213 | | | 325 | | | 4,813 | | | 12,683 |
| | | | | | | | |||||
Change in fair value of earnout shares | | | 2,587 | | | 12,210 | | | 6,616 | | | 44,056 |
Other income (expense) | | | 371 | | | (553) | | | (408) | | | (391) |
Total Other Income, net | | | 6,171 | | | 11,982 | | | 11,021 | | | 56,348 |
Loss Before Income Tax Expense | | | (34,905) | | | (7,205) | | | (59,741) | | | (22,227) |
Income tax expense | | | — | | | — | | | — | | | — |
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Net Loss per Share, basic and diluted | | | $(0.31) | | | $(0.06) | | | $(0.52) | | | $(0.21) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 114,237,681 | | | 113,670,060 | | | 114,146,645 | | | 107,279,227 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Other Comprehensive (Loss), net of tax: | | | | | | | | | ||||
Unrealized gains (losses) on marketable securities arising during the period | | | 29 | | | 61 | | | (44) | | | (70) |
Tax effect | | | — | | | — | | | — | | | — |
Unrealized gains (losses) on marketable securities arising during the period, net of tax | | | 29 | | | 61 | | | (44) | | | (70) |
Reclassification adjustment for realized gains | | | (6) | | | (5) | | | (6) | | | (5) |
Tax effect | | | — | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (6) | | | (5) | | | (6) | | | (5) |
Other Comprehensive Income (Loss), net of tax | | | 23 | | | 56 | | | (50) | | | (75) |
Total Comprehensive (Loss) | | | $(34,882) | | | $(7,149) | | | $(59,791) | | | $(22,302) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(34,905) | | | $— | | | $(34,905) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $23 | | | $23 |
Exercise of options | | | — | | | $— | | | 104,818 | | | $— | | | $66 | | | $— | | | $— | | | $66 |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $1,141 | | | $— | | | $— | | | $1,141 |
Issuance of common stock to settle vested restricted stock units | | | — | | | $— | | | 263,048 | | | $— | | | $— | | | $— | | | $— | | | $— |
Balance June 30, 2022 | | | — | | | $— | | | 114,479,662 | | | $11 | | | $290,398 | | | $(133,657) | | | $(143) | | | $156,609 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (7,205) | | | — | | | (7,205) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | 56 | | | 56 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 3,704 | | | — | | | — | | | 3,704 |
Balance June 30, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $281,976 | | | $(56,264) | | | $(60) | | | $225,663 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash Flow from Operating Activities | | | | | ||
Net loss | | | $(59,741) | | | $(22,227) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | | 6,725 | | | 448 |
Impairment expense | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — |
Amortization and accretion - marketable securities | | | 752 | | | 788 |
Depreciation – lease vehicles | | | 217 | | | 30 |
Provision for doubtful accounts | | | 777 | | | — |
Stock-based compensation expense | | | 2,825 | | | 45,667 |
Change in fair value of Merger warrants liability | | | (4,813) | | | (12,683) |
Change in fair value of earnout shares | | | (6,616) | | | (44,056) |
Change in Operating Assets and Liabilities: | | | | | ||
Accounts receivable | | | (2,583) | | | (1,279) |
Inventories | | | 9,092 | | | (36,117) |
Other current assets | | | (2,979) | | | (5,466) |
Other assets | | | 20 | | | (4,091) |
Accounts payable | | | (2,426) | | | 2,499 |
Accrued expenses | | | (161) | | | 6,187 |
Accrued expenses – related party | | | — | | | (229) |
Other current liabilities | | | (174) | | | 447 |
Other liabilities | | | (166) | | | (582) |
Net Cash Used in Operating Activities | | | (47,796) | | | (70,664) |
Cash Flows from Investing Activities | | | | | ||
Purchase of property and equipment | | | (5,106) | | | (3,548) |
Capitalized website and internal-use software costs | | | (1,734) | | | (6,601) |
Purchase of marketable securities | | | (52,072) | | | (307,560) |
Proceeds from sales of marketable securities | | | 114,915 | | | 128,954 |
Purchase of lease vehicles | | | (1,220) | | | (344) |
Net Cash Provided by (Used in) Investing Activities | | | 54,783 | | | (189,099) |
Cash Flows from Financing Activities | | | | | ||
Payments made on finance leases | | | (246) | | | (18) |
Advance from holder of marketable securities | | | — | | | 4,722 |
PIPE issuance | | | — | | | 125,000 |
Merger financing | | | — | | | 309,999 |
Payment made on accrued dividends | | | — | | | (4,853) |
Payments to existing shareholders of Former CarLotz | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | (47,579) |
Payments made on cash considerations associated with stock options | | | — | | | (2,465) |
Repayment of Paycheck Protection Program loan | | | — | | | (1,749) |
Payments made on note payable | | | — | | | (3,000) |
Payments on floor plan notes payable | | | (82,394) | | | (29,056) |
Borrowings on floor plan notes payable | | | 70,268 | | | 52,444 |
Employee stock option exercise | | | 66 | | | — |
Payments made for tax on equity award transactions | | | (3) | | | — |
Net Cash (Used in) Provided by Financing Activities | | | (12,309) | | | 340,752 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (5,322) | | | 80,989 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $74,043 | | | $83,802 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $1,163 | | | $490 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $150 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (3,488) |
Purchases of property under capital lease obligation | | | (247) | | | (6,504) |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,285) |
Less: Merger warrants liability | | | (39,024) |
| | June 30, 2022 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price |
| | Three Months Ended June 30, 2022 | | | Six Months Ended June 30, 2022 | |||||||||||||
| | Vehicle Sales | | | Fleet Management | | | Total | | | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $59,211 | | | $— | | | $59,211 | | | $109,799 | | | $— | | | $109,799 |
Wholesale vehicle sales | | | 13,949 | | | — | | | 13,949 | | | 22,524 | | | — | | | 22,524 |
Finance and insurance, net | | | $3,196 | | | $— | | | $3,196 | | | 6,900 | | | — | | | 6,900 |
Lease income, net | | | — | | | 137 | | | 137 | | | — | | | 283 | | | 283 |
Total Revenues | | | $76,356 | | | $137 | | | $76,493 | | | $139,223 | | | $283 | | | $139,506 |
| | Three Months Ended June 30, 2021 | | | Six Months Ended June 30, 2021 | |||||||||||||
| | Vehicle Sales | | | Fleet Management | | | Total | | | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $44,230 | | | $— | | | $44,230 | | | $94,613 | | | $— | | | $94,613 |
Wholesale vehicle sales | | | 4,660 | | | — | | | 4,660 | | | 9,228 | | | — | | | 9,228 |
Finance and insurance, net | | | $1,780 | | | $— | | | $1,780 | | | 3,334 | | | — | | | 3,334 |
Lease income, net | | | — | | | 98 | | | 98 | | | — | | | 205 | | | 205 |
Total Revenues | | | $50,670 | | | $98 | | | $50,768 | | | $107,175 | | | $205 | | | $107,380 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Retail vehicles: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Retail vehicle cost of sales | | | 59,502 | | | 41,641 | | | 111,917 | | | 90,558 |
Gross Profit – Retail Vehicles | | | $(291) | | | $2,589 | | | $(2,118) | | | $4,055 |
Wholesale vehicles: | | | | | | | | | ||||
Wholesale vehicle sales | | | $13,949 | | | $4,660 | | | $22,524 | | | $9,228 |
Wholesale vehicle cost of sales | | | 15,509 | | | 4,945 | | | 24,030 | | | 10,632 |
Gross Profit – Wholesale Vehicles | | | $(1,560) | | | $(285) | | | $(1,506) | | | $(1,404) |
| | June 30, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 28,317 | | | 1 | | | (98) | | | 28,220 |
Municipal bonds | | | 21,272 | | | 5 | | | (26) | | | 21,251 |
Commercial paper | | | 4,368 | | | — | | | — | | | 4,368 |
Foreign governments | | | 658 | | | 69 | | | (94) | | | 633 |
Total Fixed Maturity Debt Securities | | | $54,615 | | | $75 | | | $(218) | | | $54,472 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $53,709 | | | $53,627 |
Due after one year through five years | | | 650 | | | 624 |
Due after five years through ten years | | | 256 | | | 221 |
Total | | | $54,615 | | | $54,472 |
| | | | | | June 30, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $28,057 | | | $(73) | | | $163 | | | $(23) | | | $28,220 | | | $(96) |
Municipal bonds | | | 21,119 | | | (17) | | | 132 | | | (9) | | | 21,251 | | | (26) |
Commercial paper | | | 4,368 | | | 0 | | | — | | | — | | | 4,368 | | | 0 |
Foreign governments | | | 542 | | | (67) | | | 91 | | | (29) | | | 633 | | | (96) |
Total Fixed Maturity Debt Securities | | | $54,086 | | | $(157) | | | $386 | | | $(61) | | | $54,472 | | | $(218) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | June 30, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $427 | | | $481 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | June 30, 2022 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $114,912 | | | $6 | | | $— | | | $6 |
Equity securities | | | 3 | | | — | | | — | | | — |
Total Marketable Securities | | | $114,915 | | | $6 | | | $— | | | $6 |
| | June 30, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $128,954 | | | $7 | | | $(2) | | | $5 |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $128,954 | | | $7 | | | $(2) | | | $5 |
| | June 30, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 481 | | | — | | | — | | | 481 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 88,119 | | | — | | | 88,119 |
Total Assets | | | $481 | | | $88,119 | | | $— | | | $88,600 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 926 | | | 552 | | | — | | | 1,478 |
Earnout shares liability | | | — | | | — | | | 1,063 | | | 1,063 |
Total Liabilities | | | $926 | | | $552 | | | $1,063 | | | $2,541 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | June 30, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (6,616) | | | 1,063 |
Total | | | $7,679 | | | $— | | | $— | | | $(6,616) | | | $1,063 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | June 30, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (44,056) | | | 30,228 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(44,056) | | | $30,228 |
| | June 30, 2022 | | | June 30, 2021 | |
Expected volatility | | | 120.00% | | | 85.00% |
Starting stock price | | | $0.39 | | | $5.46 |
Expected term (in years) | | | 3.6 years | | | 4.60 years |
Risk-free interest rate | | | 3.00% | | | 0.79% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | June 30, 2022 | | | December 31, 2021 | |
Contracts in transit | | | $8,598 | | | $7,540 |
Trade | | | 958 | | | 386 |
Finance commission | | | 363 | | | 284 |
Other | | | 1,170 | | | 296 |
Total | | | 11,089 | | | 8,506 |
Allowance for doubtful accounts | | | (1,077) | | | (300) |
Total Accounts Receivable, net | | | $10,012 | | | $8,206 |
| | June 30, 2022 | | | December 31, 2021 | |
Used vehicles | | | $31,893 | | | $40,739 |
Parts | | | — | | | 246 |
Total | | | $31,893 | | | $40,985 |
| | June 30, 2022 | | | December 31, 2021 | |
Capital lease assets | | | — | | | 12,566 |
Leasehold improvements | | | 4,732 | | | 4,628 |
Furniture, fixtures and equipment | | | 4,458 | | | 7,993 |
Corporate vehicles | | | 90 | | | 158 |
Total property and equipment | | | 9,280 | | | 25,345 |
Less: accumulated depreciation | | | (2,236) | | | (2,609) |
Less: impairment | | | — | | | (108) |
Property and Equipment, net | | | $7,044 | | | $22,628 |
| | June 30, 2022 | | | December 31, 2021 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $20 | | | $29 |
Deferred acquisition costs | | | 35 | | | 46 |
Prepaid expenses | | | 6,841 | | | 3,664 |
Interest receivable | | | 788 | | | 966 |
Total Other Current Assets | | | $7,684 | | | $4,705 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 26 | | | 35 |
Security deposits | | | 496 | | | 507 |
Total Other Assets | | | $538 | | | $558 |
| | June 30, 2022 | | | December 31, 2021 | |
Capital lease obligation | | | $— | | | $12,715 |
Finance lease liabilities | | | $4,306 | | | $— |
| | 4,306 | | | 12,715 | |
Current portion of long-term debt | | | — | | | (509) |
Current portion of finance lease liabilities | | | (90) | | | — |
Long-term Debt | | | $4,216 | | | $12,206 |
| | June 30, 2022 | | | December 31, 2021 | |
License and title fees | | | $887 | | | $903 |
Payroll and bonuses | | | 5,135 | | | 2,047 |
Deferred rent | | | — | | | 1,636 |
Technology | | | 1,458 | | | 1,127 |
Inventory | | | 2,709 | | | 2,542 |
Other | | | 3,925 | | | 6,173 |
Total Accrued Expenses | | | $14,114 | | | $14,428 |
| | June 30, 2022 | | | December 31, 2021 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $580 | | | $754 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 451 | | | 622 |
Other long-term liabilities | | | 128 | | | 122 |
Other Liabilities | | | $579 | | | $744 |
| | Three Months Ended June 30, 2022 | | | Six Months Ended June 30, 2022 | |
Operating lease cost(1) | | | $2,302 | | | $4,737 |
Finance lease cost: | | | | | ||
Depreciation of lease assets | | | 263 | | | 526 |
Interest on lease liabilities | | | 287 | | | 573 |
Total finance lease cost | | | 550 | | | 1,099 |
Total lease cost | | | 2,852 | | | 5,836 |
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
| | Classification | | | As of June 30, 2022 | |
Assets: | | | | | ||
Operating lease assets | | | Operating lease assets | | | 22,235 |
| | Operating and finance lease assets, property, and equipment held for sale | | | 20,467 | |
Finance lease assets | | | Finance lease assets | | | 2,803 |
| | Operating and finance lease assets, property, and equipment held for sale | | | 7,622 | |
Total lease assets | | | | | 53,127 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Operating leases | | | Current portion of operating lease liabilities | | | 4,445 |
| | Operating and finance lease liabilities associated with assets held for sale | | | 21,731 | |
Finance leases | | | Current portion of finance lease liabilities | | | 90 |
| | Operating and finance lease liabilities associated with assets held for sale | | | 8,391 | |
Long-term: | | | | | ||
Operating leases, less current portion | | | | | 22,336 | |
Finance leases, less current portion | | | | | 4,216 | |
Total lease liabilities | | | | | 61,209 |
(1) | Finance lease assets are recorded net of accumulated depreciation of $971 as of June 30, 2022. |
(2) | Operating lease assets are recorded net of impairment of $600 due to a change in the physical condition of a right-of-use asset in the three months ended June 30, 2022. |
Lease Term and Discount Rate | | | As of June 30, 2022 |
Weighted Average Remaining Lease Term (in years) | | | |
Operating leases | | | 7.85 years |
Finance leases | | | 11.57 years |
| | ||
Weighted Average Discount Rate | | | |
Operating leases | | | 5.88% |
Finance leases | | | 9.97% |
| | Six Months Ended June 30, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | | | 4,710 |
Operating cash flows from finance leases | | | 526 |
Financing cash flows from finance leases | | | 246 |
| | ||
Lease assets obtained in exchange for lease obligation | | | |
Operating leases | | | 49,183 |
Finance leases | | | 247 |
| | As of June 30, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 4,611 | | | 852 |
Fiscal 2023 | | | 8,964 | | | 1,726 |
Fiscal 2024 | | | 8,189 | | | 1,751 |
Fiscal 2025 | | | 7,445 | | | 1,777 |
Fiscal 2026 | | | 6,399 | | | 1,823 |
Thereafter | | | 25,697 | | | 14,327 |
Total lease payments | | | 61,305 | | | 22,256 |
Less: interest | | | (12,793) | | | (9,559) |
Present value of lease liabilities | | | 48,512 | | | 12,697 |
(1) | There are no legally binding minimum lease payments for leases signed but not yet commenced excluded from the table. |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2021) | | | 1,260,328 | | | $0.56 |
Granted | | | — | | | — |
Exercised | | | (155,782) | | | 0.53 |
Forfeited | | | (281,574) | | | 0.64 |
Balance (June 30, 2022) | | | 822,972 | | | 0.54 |
Vested (as of June 30, 2022) | | | 822,972 | | | $0.54 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2020) | | | 1,571,205 | | | $0.59 |
Granted | | | — | | | — |
Exercised | | | (56,059) | | | 0.24 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 1,515,146 | | | 0.58 |
Vested (as of June 30, 2021) | | | 1,515,146 | | | $0.58 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 822,972 | | | 0.17 years | | | $0.54 |
Exercisable | | | 822,972 | | | 0.17 years | | | $0.54 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 3,936,176 | | | $0.92 |
Granted | | | — | | | — |
Exercised | | | (6,371) | | | $0.92 |
Forfeited | | | (309,891) | | | 0.92 |
Balance (June 30, 2022) | | | 3,619,914 | | | $0.92 |
Vested (as of June 30, 2022) | | | 3,340,901 | | | $0.92 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | 3,961,658 | | | $0.92 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 3,961,658 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,619,914 | | | 7.03 years | | | $0.92 |
Exercisable | | | 3,340,901 | | | 6.94 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.6 - 4.8 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Granted | | | 1,573,361 | | | $1.68 |
Forfeited | | | (1,426,349) | | | $7.00 |
Balance (June 30, 2022) | | | 1,616,309 | | | $6.46 |
Exercisable | | | 321,284 | | | $11.34 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,426,514 | | | 11.34 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 1,426,514 | | | $11.34 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,616,309 | | | 9.21 years | | | $6.46 |
Exercisable | | | 321,284 | | | 8.56 years | | | $11.34 |
Balance (Expected volatility) | | | 80% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6 years |
Risk-free interest rate | | | 2.20% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Granted | | | 3,002,883 | | | $1.00 |
Forfeited | | | (805,124) | | | $3.78 |
Vested (as of June 30, 2022) | | | (247,115) | | | $5.69 |
Balance (June 30, 2022) | | | 2,548,383 | | | $1.03 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Granted | | | — | | | — |
Forfeited | | | (466,309) | | | 10.70 |
Balance (June 30, 2022) | | | 154,891 | | | $10.70 |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 640,421 | | | $10.70 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 569,677 | | | $0.61 |
Forfeited | | | — | | | $— |
Balance (June 30, 2022) | | | 569,677 | | | $0.61 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 569,677 | | | 9.88 years | | | $0.61 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 2.86% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 5,619,822 | | | $0.61 |
Forfeited | | | — | | | $— |
Vested (as of June 30, 2022) | | | (87,458) | | | $0.61 |
Balance (June 30, 2022) | | | 5,532,364 | | | $0.61 |
i. | One-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $4.00 (the threshold price); |
ii. | One-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $8.00 (the target price); |
iii. | and one-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $12.00 (the target price); |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 5,100,000 | | | 0.55 |
Forfeited | | | — | | | — |
Balance (June 30, 2022) | | | 5,100,000 | | | $0.55 |
Expected volatility | | | 105.00% |
Starting stock price | | | $0.61 |
Expected term (in years) | | | 10 years |
Risk-free interest rate | | | 2.88% |
Earnout hurdle | | | $4.00-$8.00-$12.00 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 114,237,681 | | | 113,670,060 | | | 114,146,645 | | | 107,279,227 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.31) | | | $(0.06) | | | $(0.52) | | | $(0.21) |
| | 2022 | | | 2021 | |
Public warrants | | | 10,185,774 | | | 10,185,774 |
Private warrants | | | 6,074,310 | | | 6,074,310 |
Earnout RSUs | | | 154,891 | | | 640,421 |
Earnout shares | | | 6,945,732 | | | 6,945,732 |
Stock options outstanding to purchase shares of common stock | | | 6,628,872 | | | 6,903,318 |
Unvested RSUs | | | 13,180,747 | | | 615,180 |
Total | | | 43,170,326 | | | 31,364,735 |
| | Total purchases from vendor to total vehicle purchases for the three months ended June 30, | | | Total purchases from vendor to total vehicle purchases for the six months ended June 30, | |||||||
Vendor | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Vendor A | | | 18% | | | 32% | | | 19% | | | 48% |
| | Three months ended June 30, 2022 | | | Six months ended June 30, 2022 | |
Inventory reserves associated with restructuring | | | $1,010 | | | $1,010 |
Operating lease asset impairment | | | 2,548 | | | 2,548 |
Finance lease asset impairment | | | 1,371 | | | 1,371 |
Property and equipment impairment | | | 5,832 | | | 5,832 |
Loss on sale of assets related to closed hubs | | | — | | | — |
Labor and other costs incurred closing hubs | | | 465 | | | 465 |
Severance | | | 515 | | | 515 |
Contract termination costs | | | — | | | — |
Total | | | 11,741 | | | 11,741 |
| | As of June 30, 2022 | |
Operating lease assets | | | $20,467 |
Finance lease assets | | | $7,622 |
Property and equipment | | | $437 |
Total | | | $28,526 |
| | ||
Operating lease liabilities | | | $21,731 |
Finance lease liabilities | | | $8,391 |
Total | | | $30,122 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Revenues: | | | | | ||
Retail vehicle sales | | | $50,588 | | | $50,383 |
Wholesale vehicle sales | | | 8,575 | | | 4,568 |
Finance and insurance, net | | | 3,705 | | | 1,554 |
Lease income, net | | | 146 | | | 107 |
Total Revenues | | | 63,014 | | | 56,612 |
Cost of sales (exclusive of depreciation) | | | 60,936 | | | 54,604 |
Gross Profit | | | 2,078 | | | 2,008 |
| | | | |||
Operating Expenses: | | | | | ||
Selling, general and administrative | | | 27,674 | | | 18,873 |
Stock based compensation expense | | | 1,684 | | | 41,963 |
Depreciation and amortization expense | | | 1,789 | | | 383 |
Management fee expense – related party | | | — | | | 2 |
Total Operating Expenses | | | 31,147 | | | 61,221 |
Loss from Operations | | | (29,069) | | | (59,213) |
Interest expense | | | 617 | | | 175 |
Other Income (Expense), net | | | | | ||
Change in fair value of Merger warrants liability | | | 1,600 | | | 12,358 |
Change in fair value of earnout provision | | | 4,029 | | | 31,846 |
Other (expense) income | | | (779) | | | 162 |
Total Other Income, net | | | 4,850 | | | 44,366 |
Loss Before Income Tax Expense | | | (24,836) | | | (15,022) |
Income tax expense | | | — | | | — |
Net Loss | | | $(24,836) | | | $(15,022) |
| | Three Months Ended March 31, | |||||||
| | 2022 | | | 2021 | | | Change | |
| | ($ in thousands, except per unit metrics) | |||||||
Revenue: | | | | | | | |||
Retail vehicle sales | | | $50,588 | | | $50,383 | | | 0.4% |
Wholesale vehicle sales | | | 8,575 | | | 4,568 | | | 87.7% |
Finance and insurance, net | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total revenues | | | 63,014 | | | 56,612 | | | 11.3% |
Cost of sales: | | | | | | | |||
Retail vehicle cost of sales | | | 52,415 | | | 48,917 | | | 7.2% |
Wholesale vehicle cost of sales | | | 8,521 | | | 5,687 | | | 49.8% |
Total cost of sales | | | $60,936 | | | $54,604 | | | 11.6% |
Gross profit: | | | | | | | |||
Retail vehicle gross profit (loss) | | | $(1,827) | | | $1,466 | | | (224.6)% |
Wholesale vehicle gross profit (loss) | | | 54 | | | (1,119) | | | 104.8% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Lease income, net | | | 146 | | | 107 | | | 36.4% |
Total gross profit | | | $2,078 | | | $2,008 | | | 3.5% |
Retail gross profit per unit(1): | | | | | | | |||
Retail vehicle gross profit (loss) | | | (1,827) | | | 1,466 | | | (224.6)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 138.4% |
Total retail vehicle and finance and insurance gross profit | | | 1,878 | | | 3,020 | | | (37.8)% |
Retail vehicle unit sales | | | 2,270 | | | 2,554 | | | (11.1)% |
Retail vehicle gross profit per unit | | | $827 | | | $1,182 | | | (30.0)% |
(1) | Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Compensation and benefits(1) | | | $10,798 | | | $6,856 |
Marketing | | | 3,154 | | | 2,526 |
Technology | | | 1,535 | | | 2,925 |
Accounting and legal | | | 2,065 | | | 2,819 |
Insurance | | | 2,236 | | | 1,336 |
Occupancy | | | 3,291 | | | 1,032 |
Other costs(2) | | | 4,595 | | | 1,379 |
Total selling, general and administrative expenses | | | $27,674 | | | $18,873 |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Net Loss | | | $(24,836) | | | $(15,022) |
Adjusted to exclude the following: | | | | | ||
Interest expense | | | 617 | | | 175 |
Income tax expense | | | — | | | — |
Depreciation and amortization expense | | | 1,789 | | | 383 |
EBITDA | | | $(22,430) | | | $(14,464) |
Other expense | | | 779 | | | (162) |
Stock compensation expense | | | 1,684 | | | 41,963 |
Management fee expense - related party | | | — | | | 2 |
Change in fair value of warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout provision | | | (4,029) | | | (31,846) |
Adjusted EBITDA | | | $(25,596) | | | $(16,865) |
| | Three Months Ended March 31, | ||||||||||
| | 2022 | | | 2021 | | | Change | | | Change | |
Adjusted retail gross profit per unit(1): | | | | | | | | | ||||
Retail vehicle gross profit | | | $(1,827) | | | $1,466 | | | $(3,293) | | | (225)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 2,151 | | | 138% |
Total retail gross profit | | | 1,878 | | | 3,020 | | | (1,142) | | | (38)% |
Change in inventory reserve(2) | | | 109 | | | — | | | 109 | | | 100% |
Total adjusted retail gross profit | | | 1,987 | | | 3,020 | | | (1,033) | | | (34)% |
Retail vehicle units sold | | | 2,270 | | | 2,554 | | | (284) | | | (11)% |
Retail vehicle adjusted gross profit per unit | | | $875 | | | $1,182 | | | $(307) | | | (26)% |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Condensed Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Cash Flow Data: | | | | | ||
Net cash (used in) operating activities | | | $(31,664) | | | $(19,600) |
Net cash provided by (used in) investing activities | | | 37,529 | | | (219,370) |
Net cash provided by (used in) financing activities | | | (5,891) | | | 310,746 |
Quantitative and Qualitative Disclosures about Market Risk |
Legal Proceedings |
Risk Factors |
Exhibits and Financial Statement Schedules |
Exhibit No. | | | Description |
3.1 | | | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) |
| | ||
3.2 | | | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) |
| | ||
10.1† | | | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.2† | | | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.3† | | | Employment Agreement, dated March 19, 2022, between Ozan Kaya and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 31, 2022) |
| | ||
10.4† | | | Separation and Release Agreement, dated April 8, 2022, between John Foley and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on April 11, 2022) |
| | ||
10.5*† | | | Separation and Release Agreement, dated April 1, 2022, between Daniel Valerian and CarLotz, Inc. |
| | ||
10.5.1*† | | | Amendment to Separation and Release Agreement, dated May 5, 2022, between Daniel Valerian and CarLotz, Inc. |
| | ||
31.1* | | | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
31.2* | | | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
32.1* | | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
32.2* | | | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
101.INS* | | | XBRL Instance Document |
| | ||
101.SCH* | | | XBRL Taxonomy Extension Schema Document |
| | ||
101.CAL* | | | XBRL Taxonomy Extension Calculation Linkbase Document |
| | ||
101.DEF* | | | XBRL Taxonomy Extension Definition Linkbase Document |
Exhibit No. | | | Description |
| | ||
101.LAB* | | | XBRL Taxonomy Extension Label Linkbase Document |
| | ||
101.PRE* | | | XBRL Taxonomy Extension Presentation Linkbase Document |
| | ||
104 | | | Cover Page Interactive Data File (embedded with the Inline XBRL document and included in Exhibit 101) |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
| | | | |||
| | | | CarLotz, Inc. | ||
| | | | |||
| | By: | | | /s/ THOMAS W. STOLTZ | |
| | | | Thomas W. Stoltz | ||
| | | | Chief Financial Officer | ||
| | | | (Duly Authorized Officer and Principal Financial Officer) |
Delaware | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
3301 W. Moore Street | | | Richmond | | | Virginia | | | 23230 |
(Address of principal executive offices, including zip code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ | | | |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | |
| | | | Emerging growth company | | | ☒ | | |
| | | | Page | | ||||
| | Part I - Financial Information | | | | ||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | Part II - Other Information | | | | ||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | | |
Financial Statements |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $70,022 | | | $75,029 |
Restricted cash | | | 4,021 | | | 4,336 |
Marketable securities – at fair value | | | 54,105 | | | 116,589 |
Accounts receivable, net | | | 10,012 | | | 8,206 |
Inventories | | | 31,893 | | | 40,985 |
Other current assets | | | 7,684 | | | 4,705 |
Operating and finance lease assets, property, and equipment held for sale | | | 28,526 | | | — |
Total Current Assets | | | 206,263 | | | 249,850 |
Marketable securities – at fair value | | | 848 | | | 1,941 |
Property and equipment, net | | | 7,044 | | | 22,628 |
Capitalized website and internal-use software costs, net | | | 12,918 | | | 13,716 |
Operating lease assets | | | 22,235 | | | — |
Finance lease assets, net | | | 2,803 | | | — |
Lease vehicles, net | | | 2,598 | | | 1,596 |
Other assets | | | 538 | | | 558 |
Total Assets | | | $255,247 | | | $290,289 |
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Current portion of finance lease liabilities | | | $90 | | | $509 |
Floor plan notes payable | | | 15,689 | | | 27,815 |
Accounts payable | | | 3,926 | | | 6,352 |
Accrued expenses | | | 14,114 | | | 14,428 |
Current portion of operating lease liabilities | | | 4,445 | | | — |
Other current liabilities | | | 580 | | | 754 |
Operating and finance lease liabilities associated with assets held for sale | | | 30,122 | | | — |
Total Current Liabilities | | | 68,966 | | | 49,858 |
Finance lease liabilities, less current portion | | | 4,216 | | | 12,206 |
Operating lease liabilities, less current portion | | | 22,336 | | | — |
Earnout shares liability | | | 1,063 | | | 7,679 |
Merger warrants liability | | | 1,478 | | | 6,291 |
Other liabilities | | | 579 | | | 744 |
Total Liabilities | | | 98,638 | | | 76,778 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,479,662 and 113,996,401 shares issued and outstanding at June 30, 2022 and December 31, 2021 | | | 11 | | | 11 |
Additional paid-in capital | | | 290,398 | | | 287,509 |
Accumulated deficit | | | (133,657) | | | (73,916) |
Accumulated other comprehensive loss | | | (143) | | | (93) |
Total Stockholders’ Equity (Deficit) | | | 156,609 | | | 213,511 |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $255,247 | | | $290,289 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Revenues: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Wholesale vehicle sales | | | 13,949 | | | 4,660 | | | 22,524 | | | 9,228 |
Finance and insurance, net | | | 3,196 | | | 1,780 | | | 6,900 | | | 3,334 |
Lease income, net | | | 137 | | | 98 | | | 283 | | | 205 |
Total Revenues | | | 76,493 | | | 50,768 | | | 139,506 | | | 107,380 |
Cost of sales (exclusive of depreciation) | | | 75,011 | | | 46,586 | | | 135,947 | | | 101,190 |
Gross Profit | | | 1,482 | | | 4,182 | | | 3,559 | | | 6,190 |
Operating Expenses: | | | | | | | | | ||||
Selling, general and administrative | | | 27,009 | | | 19,386 | | | 54,684 | | | 38,259 |
Stock-based compensation expense | | | 1,141 | | | 3,704 | | | 2,825 | | | 45,667 |
Depreciation and amortization expense | | | 2,359 | | | 95 | | | 4,147 | | | 478 |
Management fee expense – related party | | | — | | | — | | | — | | | 2 |
Impairment expense | | | 724 | | | — | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — | | | 10,731 | | | — |
Total Operating Expenses | | | 41,964 | | | 23,185 | | | 73,111 | | | 84,406 |
Loss from Operations | | | (40,482) | | | (19,003) | | | (69,552) | | | (78,216) |
Interest expense | | | 594 | | | 184 | | | 1,210 | | | 359 |
Other Income, net | | | | | | | | | ||||
Change in fair value of Merger warrants liability | | | 3,213 | | | 325 | | | 4,813 | | | 12,683 |
| | | | | | | | |||||
Change in fair value of earnout shares | | | 2,587 | | | 12,210 | | | 6,616 | | | 44,056 |
Other income (expense) | | | 371 | | | (553) | | | (408) | | | (391) |
Total Other Income, net | | | 6,171 | | | 11,982 | | | 11,021 | | | 56,348 |
Loss Before Income Tax Expense | | | (34,905) | | | (7,205) | | | (59,741) | | | (22,227) |
Income tax expense | | | — | | | — | | | — | | | — |
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Net Loss per Share, basic and diluted | | | $(0.31) | | | $(0.06) | | | $(0.52) | | | $(0.21) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 114,237,681 | | | 113,670,060 | | | 114,146,645 | | | 107,279,227 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Other Comprehensive (Loss), net of tax: | | | | | | | | | ||||
Unrealized gains (losses) on marketable securities arising during the period | | | 29 | | | 61 | | | (44) | | | (70) |
Tax effect | | | — | | | — | | | — | | | — |
Unrealized gains (losses) on marketable securities arising during the period, net of tax | | | 29 | | | 61 | | | (44) | | | (70) |
Reclassification adjustment for realized gains | | | (6) | | | (5) | | | (6) | | | (5) |
Tax effect | | | — | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (6) | | | (5) | | | (6) | | | (5) |
Other Comprehensive Income (Loss), net of tax | | | 23 | | | 56 | | | (50) | | | (75) |
Total Comprehensive (Loss) | | | $(34,882) | | | $(7,149) | | | $(59,791) | | | $(22,302) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(34,905) | | | $— | | | $(34,905) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $23 | | | $23 |
Exercise of options | | | — | | | $— | | | 104,818 | | | $— | | | $66 | | | $— | | | $— | | | $66 |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $1,141 | | | $— | | | $— | | | $1,141 |
Issuance of common stock to settle vested restricted stock units | | | — | | | $— | | | 263,048 | | | $— | | | $— | | | $— | | | $— | | | $— |
Balance June 30, 2022 | | | — | | | $— | | | 114,479,662 | | | $11 | | | $290,398 | | | $(133,657) | | | $(143) | | | $156,609 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (7,205) | | | — | | | (7,205) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | 56 | | | 56 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 3,704 | | | — | | | — | | | 3,704 |
Balance June 30, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $281,976 | | | $(56,264) | | | $(60) | | | $225,663 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash Flow from Operating Activities | | | | | ||
Net loss | | | $(59,741) | | | $(22,227) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | | 6,725 | | | 448 |
Impairment expense | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — |
Amortization and accretion - marketable securities | | | 752 | | | 788 |
Depreciation – lease vehicles | | | 217 | | | 30 |
Provision for doubtful accounts | | | 777 | | | — |
Stock-based compensation expense | | | 2,825 | | | 45,667 |
Change in fair value of Merger warrants liability | | | (4,813) | | | (12,683) |
Change in fair value of earnout shares | | | (6,616) | | | (44,056) |
Change in Operating Assets and Liabilities: | | | | | ||
Accounts receivable | | | (2,583) | | | (1,279) |
Inventories | | | 9,092 | | | (36,117) |
Other current assets | | | (2,979) | | | (5,466) |
Other assets | | | 20 | | | (4,091) |
Accounts payable | | | (2,426) | | | 2,499 |
Accrued expenses | | | (161) | | | 6,187 |
Accrued expenses – related party | | | — | | | (229) |
Other current liabilities | | | (174) | | | 447 |
Other liabilities | | | (166) | | | (582) |
Net Cash Used in Operating Activities | | | (47,796) | | | (70,664) |
Cash Flows from Investing Activities | | | | | ||
Purchase of property and equipment | | | (5,106) | | | (3,548) |
Capitalized website and internal-use software costs | | | (1,734) | | | (6,601) |
Purchase of marketable securities | | | (52,072) | | | (307,560) |
Proceeds from sales of marketable securities | | | 114,915 | | | 128,954 |
Purchase of lease vehicles | | | (1,220) | | | (344) |
Net Cash Provided by (Used in) Investing Activities | | | 54,783 | | | (189,099) |
Cash Flows from Financing Activities | | | | | ||
Payments made on finance leases | | | (246) | | | (18) |
Advance from holder of marketable securities | | | — | | | 4,722 |
PIPE issuance | | | — | | | 125,000 |
Merger financing | | | — | | | 309,999 |
Payment made on accrued dividends | | | — | | | (4,853) |
Payments to existing shareholders of Former CarLotz | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | (47,579) |
Payments made on cash considerations associated with stock options | | | — | | | (2,465) |
Repayment of Paycheck Protection Program loan | | | — | | | (1,749) |
Payments made on note payable | | | — | | | (3,000) |
Payments on floor plan notes payable | | | (82,394) | | | (29,056) |
Borrowings on floor plan notes payable | | | 70,268 | | | 52,444 |
Employee stock option exercise | | | 66 | | | — |
Payments made for tax on equity award transactions | | | (3) | | | — |
Net Cash (Used in) Provided by Financing Activities | | | (12,309) | | | 340,752 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (5,322) | | | 80,989 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $74,043 | | | $83,802 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $1,163 | | | $490 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $150 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (3,488) |
Purchases of property under capital lease obligation | | | (247) | | | (6,504) |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,285) |
Less: Merger warrants liability | | | (39,024) |
| | June 30, 2022 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price |
| | Three Months Ended June 30, 2022 | | | Six Months Ended June 30, 2022 | |||||||||||||
| | Vehicle Sales | | | Fleet Management | | | Total | | | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $59,211 | | | $— | | | $59,211 | | | $109,799 | | | $— | | | $109,799 |
Wholesale vehicle sales | | | 13,949 | | | — | | | 13,949 | | | 22,524 | | | — | | | 22,524 |
Finance and insurance, net | | | $3,196 | | | $— | | | $3,196 | | | 6,900 | | | — | | | 6,900 |
Lease income, net | | | — | | | 137 | | | 137 | | | — | | | 283 | | | 283 |
Total Revenues | | | $76,356 | | | $137 | | | $76,493 | | | $139,223 | | | $283 | | | $139,506 |
| | Three Months Ended June 30, 2021 | | | Six Months Ended June 30, 2021 | |||||||||||||
| | Vehicle Sales | | | Fleet Management | | | Total | | | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $44,230 | | | $— | | | $44,230 | | | $94,613 | | | $— | | | $94,613 |
Wholesale vehicle sales | | | 4,660 | | | — | | | 4,660 | | | 9,228 | | | — | | | 9,228 |
Finance and insurance, net | | | $1,780 | | | $— | | | $1,780 | | | 3,334 | | | — | | | 3,334 |
Lease income, net | | | — | | | 98 | | | 98 | | | — | | | 205 | | | 205 |
Total Revenues | | | $50,670 | | | $98 | | | $50,768 | | | $107,175 | | | $205 | | | $107,380 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Retail vehicles: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Retail vehicle cost of sales | | | 59,502 | | | 41,641 | | | 111,917 | | | 90,558 |
Gross Profit – Retail Vehicles | | | $(291) | | | $2,589 | | | $(2,118) | | | $4,055 |
Wholesale vehicles: | | | | | | | | | ||||
Wholesale vehicle sales | | | $13,949 | | | $4,660 | | | $22,524 | | | $9,228 |
Wholesale vehicle cost of sales | | | 15,509 | | | 4,945 | | | 24,030 | | | 10,632 |
Gross Profit – Wholesale Vehicles | | | $(1,560) | | | $(285) | | | $(1,506) | | | $(1,404) |
| | June 30, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 28,317 | | | 1 | | | (98) | | | 28,220 |
Municipal bonds | | | 21,272 | | | 5 | | | (26) | | | 21,251 |
Commercial paper | | | 4,368 | | | — | | | — | | | 4,368 |
Foreign governments | | | 658 | | | 69 | | | (94) | | | 633 |
Total Fixed Maturity Debt Securities | | | $54,615 | | | $75 | | | $(218) | | | $54,472 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $53,709 | | | $53,627 |
Due after one year through five years | | | 650 | | | 624 |
Due after five years through ten years | | | 256 | | | 221 |
Total | | | $54,615 | | | $54,472 |
| | | | | | June 30, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $28,057 | | | $(73) | | | $163 | | | $(23) | | | $28,220 | | | $(96) |
Municipal bonds | | | 21,119 | | | (17) | | | 132 | | | (9) | | | 21,251 | | | (26) |
Commercial paper | | | 4,368 | | | 0 | | | — | | | — | | | 4,368 | | | 0 |
Foreign governments | | | 542 | | | (67) | | | 91 | | | (29) | | | 633 | | | (96) |
Total Fixed Maturity Debt Securities | | | $54,086 | | | $(157) | | | $386 | | | $(61) | | | $54,472 | | | $(218) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | June 30, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $427 | | | $481 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | June 30, 2022 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $114,912 | | | $6 | | | $— | | | $6 |
Equity securities | | | 3 | | | — | | | — | | | — |
Total Marketable Securities | | | $114,915 | | | $6 | | | $— | | | $6 |
| | June 30, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $128,954 | | | $7 | | | $(2) | | | $5 |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $128,954 | | | $7 | | | $(2) | | | $5 |
| | June 30, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 481 | | | — | | | — | | | 481 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 88,119 | | | — | | | 88,119 |
Total Assets | | | $481 | | | $88,119 | | | $— | | | $88,600 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 926 | | | 552 | | | — | | | 1,478 |
Earnout shares liability | | | — | | | — | | | 1,063 | | | 1,063 |
Total Liabilities | | | $926 | | | $552 | | | $1,063 | | | $2,541 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | June 30, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (6,616) | | | 1,063 |
Total | | | $7,679 | | | $— | | | $— | | | $(6,616) | | | $1,063 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | June 30, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (44,056) | | | 30,228 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(44,056) | | | $30,228 |
| | June 30, 2022 | | | June 30, 2021 | |
Expected volatility | | | 120.00% | | | 85.00% |
Starting stock price | | | $0.39 | | | $5.46 |
Expected term (in years) | | | 3.6 years | | | 4.60 years |
Risk-free interest rate | | | 3.00% | | | 0.79% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | June 30, 2022 | | | December 31, 2021 | |
Contracts in transit | | | $8,598 | | | $7,540 |
Trade | | | 958 | | | 386 |
Finance commission | | | 363 | | | 284 |
Other | | | 1,170 | | | 296 |
Total | | | 11,089 | | | 8,506 |
Allowance for doubtful accounts | | | (1,077) | | | (300) |
Total Accounts Receivable, net | | | $10,012 | | | $8,206 |
| | June 30, 2022 | | | December 31, 2021 | |
Used vehicles | | | $31,893 | | | $40,739 |
Parts | | | — | | | 246 |
Total | | | $31,893 | | | $40,985 |
| | June 30, 2022 | | | December 31, 2021 | |
Capital lease assets | | | — | | | 12,566 |
Leasehold improvements | | | 4,732 | | | 4,628 |
Furniture, fixtures and equipment | | | 4,458 | | | 7,993 |
Corporate vehicles | | | 90 | | | 158 |
Total property and equipment | | | 9,280 | | | 25,345 |
Less: accumulated depreciation | | | (2,236) | | | (2,609) |
Less: impairment | | | — | | | (108) |
Property and Equipment, net | | | $7,044 | | | $22,628 |
| | June 30, 2022 | | | December 31, 2021 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $20 | | | $29 |
Deferred acquisition costs | | | 35 | | | 46 |
Prepaid expenses | | | 6,841 | | | 3,664 |
Interest receivable | | | 788 | | | 966 |
Total Other Current Assets | | | $7,684 | | | $4,705 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 26 | | | 35 |
Security deposits | | | 496 | | | 507 |
Total Other Assets | | | $538 | | | $558 |
| | June 30, 2022 | | | December 31, 2021 | |
Capital lease obligation | | | $— | | | $12,715 |
Finance lease liabilities | | | $4,306 | | | $— |
| | 4,306 | | | 12,715 | |
Current portion of long-term debt | | | — | | | (509) |
Current portion of finance lease liabilities | | | (90) | | | — |
Long-term Debt | | | $4,216 | | | $12,206 |
| | June 30, 2022 | | | December 31, 2021 | |
License and title fees | | | $887 | | | $903 |
Payroll and bonuses | | | 5,135 | | | 2,047 |
Deferred rent | | | — | | | 1,636 |
Technology | | | 1,458 | | | 1,127 |
Inventory | | | 2,709 | | | 2,542 |
Other | | | 3,925 | | | 6,173 |
Total Accrued Expenses | | | $14,114 | | | $14,428 |
| | June 30, 2022 | | | December 31, 2021 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $580 | | | $754 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 451 | | | 622 |
Other long-term liabilities | | | 128 | | | 122 |
Other Liabilities | | | $579 | | | $744 |
| | Three Months Ended June 30, 2022 | | | Six Months Ended June 30, 2022 | |
Operating lease cost(1) | | | $2,302 | | | $4,737 |
Finance lease cost: | | | | | ||
Depreciation of lease assets | | | 263 | | | 526 |
Interest on lease liabilities | | | 287 | | | 573 |
Total finance lease cost | | | 550 | | | 1,099 |
Total lease cost | | | 2,852 | | | 5,836 |
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
| | Classification | | | As of June 30, 2022 | |
Assets: | | | | | ||
Operating lease assets | | | Operating lease assets | | | 22,235 |
| | Operating and finance lease assets, property, and equipment held for sale | | | 20,467 | |
Finance lease assets | | | Finance lease assets | | | 2,803 |
| | Operating and finance lease assets, property, and equipment held for sale | | | 7,622 | |
Total lease assets | | | | | 53,127 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Operating leases | | | Current portion of operating lease liabilities | | | 4,445 |
| | Operating and finance lease liabilities associated with assets held for sale | | | 21,731 | |
Finance leases | | | Current portion of finance lease liabilities | | | 90 |
| | Operating and finance lease liabilities associated with assets held for sale | | | 8,391 | |
Long-term: | | | | | ||
Operating leases, less current portion | | | | | 22,336 | |
Finance leases, less current portion | | | | | 4,216 | |
Total lease liabilities | | | | | 61,209 |
(1) | Finance lease assets are recorded net of accumulated depreciation of $971 as of June 30, 2022. |
(2) | Operating lease assets are recorded net of impairment of $600 due to a change in the physical condition of a right-of-use asset in the three months ended June 30, 2022. |
Lease Term and Discount Rate | | | As of June 30, 2022 |
Weighted Average Remaining Lease Term (in years) | | | |
Operating leases | | | 7.85 years |
Finance leases | | | 11.57 years |
| | ||
Weighted Average Discount Rate | | | |
Operating leases | | | 5.88% |
Finance leases | | | 9.97% |
| | Six Months Ended June 30, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | | | 4,710 |
Operating cash flows from finance leases | | | 526 |
Financing cash flows from finance leases | | | 246 |
| | ||
Lease assets obtained in exchange for lease obligation | | | |
Operating leases | | | 49,183 |
Finance leases | | | 247 |
| | As of June 30, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 4,611 | | | 852 |
Fiscal 2023 | | | 8,964 | | | 1,726 |
Fiscal 2024 | | | 8,189 | | | 1,751 |
Fiscal 2025 | | | 7,445 | | | 1,777 |
Fiscal 2026 | | | 6,399 | | | 1,823 |
Thereafter | | | 25,697 | | | 14,327 |
Total lease payments | | | 61,305 | | | 22,256 |
Less: interest | | | (12,793) | | | (9,559) |
Present value of lease liabilities | | | 48,512 | | | 12,697 |
(1) | There are no legally binding minimum lease payments for leases signed but not yet commenced excluded from the table. |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2021) | | | 1,260,328 | | | $0.56 |
Granted | | | — | | | — |
Exercised | | | (155,782) | | | 0.53 |
Forfeited | | | (281,574) | | | 0.64 |
Balance (June 30, 2022) | | | 822,972 | | | 0.54 |
Vested (as of June 30, 2022) | | | 822,972 | | | $0.54 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2020) | | | 1,571,205 | | | $0.59 |
Granted | | | — | | | — |
Exercised | | | (56,059) | | | 0.24 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 1,515,146 | | | 0.58 |
Vested (as of June 30, 2021) | | | 1,515,146 | | | $0.58 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 822,972 | | | 0.17 years | | | $0.54 |
Exercisable | | | 822,972 | | | 0.17 years | | | $0.54 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 3,936,176 | | | $0.92 |
Granted | | | — | | | — |
Exercised | | | (6,371) | | | $0.92 |
Forfeited | | | (309,891) | | | 0.92 |
Balance (June 30, 2022) | | | 3,619,914 | | | $0.92 |
Vested (as of June 30, 2022) | | | 3,340,901 | | | $0.92 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | 3,961,658 | | | $0.92 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 3,961,658 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,619,914 | | | 7.03 years | | | $0.92 |
Exercisable | | | 3,340,901 | | | 6.94 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.6 - 4.8 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Granted | | | 1,573,361 | | | $1.68 |
Forfeited | | | (1,426,349) | | | $7.00 |
Balance (June 30, 2022) | | | 1,616,309 | | | $6.46 |
Exercisable | | | 321,284 | | | $11.34 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,426,514 | | | 11.34 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 1,426,514 | | | $11.34 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,616,309 | | | 9.21 years | | | $6.46 |
Exercisable | | | 321,284 | | | 8.56 years | | | $11.34 |
Balance (Expected volatility) | | | 80% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6 years |
Risk-free interest rate | | | 2.20% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Granted | | | 3,002,883 | | | $1.00 |
Forfeited | | | (805,124) | | | $3.78 |
Vested (as of June 30, 2022) | | | (247,115) | | | $5.69 |
Balance (June 30, 2022) | | | 2,548,383 | | | $1.03 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Granted | | | — | | | — |
Forfeited | | | (466,309) | | | 10.70 |
Balance (June 30, 2022) | | | 154,891 | | | $10.70 |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 640,421 | | | $10.70 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 569,677 | | | $0.61 |
Forfeited | | | — | | | $— |
Balance (June 30, 2022) | | | 569,677 | | | $0.61 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 569,677 | | | 9.88 years | | | $0.61 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 2.86% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 5,619,822 | | | $0.61 |
Forfeited | | | — | | | $— |
Vested (as of June 30, 2022) | | | (87,458) | | | $0.61 |
Balance (June 30, 2022) | | | 5,532,364 | | | $0.61 |
i. | One-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $4.00 (the threshold price); |
ii. | One-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $8.00 (the target price); |
iii. | and one-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $12.00 (the target price); |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 5,100,000 | | | 0.55 |
Forfeited | | | — | | | — |
Balance (June 30, 2022) | | | 5,100,000 | | | $0.55 |
Expected volatility | | | 105.00% |
Starting stock price | | | $0.61 |
Expected term (in years) | | | 10 years |
Risk-free interest rate | | | 2.88% |
Earnout hurdle | | | $4.00-$8.00-$12.00 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 114,237,681 | | | 113,670,060 | | | 114,146,645 | | | 107,279,227 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.31) | | | $(0.06) | | | $(0.52) | | | $(0.21) |
| | 2022 | | | 2021 | |
Public warrants | | | 10,185,774 | | | 10,185,774 |
Private warrants | | | 6,074,310 | | | 6,074,310 |
Earnout RSUs | | | 154,891 | | | 640,421 |
Earnout shares | | | 6,945,732 | | | 6,945,732 |
Stock options outstanding to purchase shares of common stock | | | 6,628,872 | | | 6,903,318 |
Unvested RSUs | | | 13,180,747 | | | 615,180 |
Total | | | 43,170,326 | | | 31,364,735 |
| | Total purchases from vendor to total vehicle purchases for the three months ended June 30, | | | Total purchases from vendor to total vehicle purchases for the six months ended June 30, | |||||||
Vendor | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Vendor A | | | 18% | | | 32% | | | 19% | | | 48% |
| | Three months ended June 30, 2022 | | | Six months ended June 30, 2022 | |
Inventory reserves associated with restructuring | | | $1,010 | | | $1,010 |
Operating lease asset impairment | | | 2,548 | | | 2,548 |
Finance lease asset impairment | | | 1,371 | | | 1,371 |
Property and equipment impairment | | | 5,832 | | | 5,832 |
Loss on sale of assets related to closed hubs | | | — | | | — |
Labor and other costs incurred closing hubs | | | 465 | | | 465 |
Severance | | | 515 | | | 515 |
Contract termination costs | | | — | | | — |
Total | | | 11,741 | | | 11,741 |
| | As of June 30, 2022 | |
Operating lease assets | | | $20,467 |
Finance lease assets | | | $7,622 |
Property and equipment | | | $437 |
Total | | | $28,526 |
| | ||
Operating lease liabilities | | | $21,731 |
Finance lease liabilities | | | $8,391 |
Total | | | $30,122 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Retail vehicles sold | | | 2,421 | | | 2,009 | | | 4,691 | | | 4,563 |
Number of hubs(1) | | | 11 | | | 15 | | | 11 | | | 15 |
Average monthly unique visitors | | | 264,565 | | | 177,377 | | | 260,794 | | | 178,080 |
Vehicles available for sale | | | 981 | | | 1,431 | | | 981 | | | 1,431 |
Retail gross profit per unit | | | $1,200 | | | $2,175 | | | $1,019 | | | $1,619 |
Percentage of unit sales sourced non-competitively(2) | | | 78% | | | 92% | | | 72% | | | 96% |
Wholesale vehicles sold | | | $706 | | | $394 | | | $1,270 | | | $837 |
Wholesale gross profit per unit | | | $(2,210) | | | $(723) | | | $(1,186) | | | $(1,677) |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended March 31, | |||||||||||
| | 2022 | | 2021 | | 2022 | | 2021 | | | 2022 | | 2021 | |||||
| ($ in thousands) | | | ($ in thousands) | ||||||||||||||
Revenues: | | | | | | | ||||||||||||
Retail vehicle sales | | $59,211 | | $44,230 | | $109,799 | | $94,613 | | $50,588 | | $50,383 | ||||||
Wholesale vehicle sales | | 13,949 | | 4,660 | | 22,524 | | 9,228 | | 8,575 | | 4,568 | ||||||
Finance and insurance, net | | 3,196 | | 1,780 | | 6,900 | | 3,334 | | 3,705 | | 1,554 | ||||||
Lease income, net | | 137 | | 98 | | 283 | | 205 | | 146 | | 107 | ||||||
Total Revenues | | 76,493 | | 50,768 | | 139,506 | | 107,380 | | 63,014 | | 56,612 | ||||||
Cost of sales (exclusive of depreciation) | | 75,011 | | 46,586 | | 135,947 | | 101,190 | | 60,936 | | 54,604 | ||||||
Gross Profit | | 1,482 | | 4,182 | | 3,559 | | 6,190 | | 2,078 | | 2,008 | ||||||
| | |||||||||||||||||
Operating Expenses: | | | | | | | ||||||||||||
Selling, general and administrative | | 27,009 | | 19,386 | | 54,684 | | 38,259 | | 27,674 | | 18,873 | ||||||
Stock based compensation expense | | 1,141 | | 3,704 | | 2,825 | | 45,667 | | 1,684 | | 41,963 | ||||||
Depreciation and amortization expense | | 2,359 | | 95 | | 4,147 | | 478 | | 1,789 | | 383 | ||||||
Management fee expense – related party | | — | | — | | — | | 2 | | — | | 2 | ||||||
Impairment expense | | 724 | | — | | 724 | | — | ||||||||||
Restructuring expenses | | 10,731 | | — | | 10,731 | | — | ||||||||||
Total Operating Expenses | | 41,964 | | 23,185 | | 73,111 | | 84,406 | | 31,147 | | 61,221 | ||||||
Loss from Operations | | (40,482) | | (19,003) | | (69,552) | | (78,216) | | (29,069) | | (59,213) | ||||||
Interest expense | | 594 | | 184 | | 1,210 | | 359 | | 617 | | 175 | ||||||
Other Income (Expense), net | | | | | | | ||||||||||||
Change in fair value of Merger warrants liability | | 3,213 | | 325 | | 4,813 | | 12,683 | | 1,600 | | 12,358 | ||||||
Change in fair value of earnout provision | | 2,587 | | 12,210 | | 6,616 | | 44,056 | | 4,029 | | 31,846 | ||||||
Other (expense) income | | 371 | | (553) | | (408) | | (391) | | (779) | | 162 | ||||||
Total Other Income, net | | 6,171 | | 11,982 | | 11,021 | | 56,348 | | 4,850 | | 44,366 | ||||||
Loss Before Income Tax Expense | | (34,905) | | (7,205) | | (59,741) | | (22,227) | | (24,836) | | (15,022) | ||||||
Income tax expense | | — | | — | | — | | — | | — | | — | ||||||
Net Loss | | $(34,905) | | $(7,205) | | $(59,741) | | $(22,227) | | $(24,836) | | $(15,022) |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended March 31, | ||||||||||||||||||||
| | 2022 | | 2021 | | Change | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | ||||||||
| ($ in thousands, except per unit metrics) | | ($ in thousands, except per unit metrics) | | | ($ in thousands, except per unit metrics) | |||||||||||||||||||||
Revenue: | | | | | | | | | | ||||||||||||||||||
Retail vehicle sales | | $59,211 | | $44,230 | | 33.9% | | $109,799 | | $94,613 | | 16.1% | | $50,588 | | $50,383 | | 0.4% | |||||||||
Wholesale vehicle sales | | 13,949 | | 4,660 | | 199.3% | | 22,524 | | 9,228 | | 144.1% | | 8,575 | | 4,568 | | 87.7% | |||||||||
Finance and insurance, net | | 3,196 | | 1,780 | | 79.6% | | 6,900 | | 3,334 | | 107.0% | | 3,705 | | 1,554 | | 138.4% | |||||||||
Lease income, net | | 137 | | 98 | | 39.8% | | 283 | | 205 | | 38.0% | | 146 | | 107 | | 36.4% | |||||||||
Total revenues | | 76,493 | | 50,768 | | 50.7% | | 139,506 | | 107,380 | | 29.9% | | 63,014 | | 56,612 | | 11.3% | |||||||||
Cost of sales: | | | | | | | | | | ||||||||||||||||||
Retail vehicle cost of sales | | 59,502 | | 41,641 | | 42.9% | | 111,917 | | 90,558 | | 23.6% | | 52,415 | | 48,917 | | 7.2% | |||||||||
Wholesale vehicle cost of sales | | 15,509 | | 4,945 | | 213.6% | | 24,030 | | 10,632 | | 126.0% | | 8,521 | | 5,687 | | 49.8% | |||||||||
Total cost of sales | | $75,011 | | $46,586 | | 61.0% | | $135,947 | | $101,190 | | 34.3% | | $60,936 | | $54,604 | | 11.6% | |||||||||
Gross profit: | | | | | | | | | | ||||||||||||||||||
Retail vehicle gross profit (loss) | | $(291) | | $2,589 | | (111.2)% | | $(2,118) | | $4,055 | | (152.2)% | | $(1,827) | | $1,466 | | (224.6)% | |||||||||
Wholesale vehicle gross profit (loss) | | (1,560) | | (285) | | (447.4)% | | (1,506) | | (1,404) | | 7.3% | | 54 | | (1,119) | | 104.8% | |||||||||
Finance and insurance gross profit | | 3,196 | | 1,780 | | 79.6% | | 6,900 | | 3,334 | | 107.0% | | 3,705 | | 1,554 | | 138.4% | |||||||||
Lease income, net | | 137 | | 98 | | 39.8% | | 283 | | 205 | | 38.0% | | 146 | | 107 | | 36.4% | |||||||||
Total gross profit | | $1,482 | | $4,182 | | (64.6)% | | $3,559 | | $6,190 | | (42.5)% | | $2,078 | | $2,008 | | 3.5% | |||||||||
Retail gross profit per unit(1): | | | | | | | | | | ||||||||||||||||||
Retail vehicle gross profit (loss) | | (291) | | 2,589 | | (111.2)% | | (2,118) | | 4,055 | | (152.2)% | | (1,827) | | 1,466 | | (224.6)% | |||||||||
Finance and insurance gross profit | | 3,196 | | 1,780 | | 79.6% | | 6,900 | | 3,334 | | 107.0% | | 3,705 | | 1,554 | | 138.4% | |||||||||
Total retail vehicle and finance and insurance gross profit | | 2,905 | | 4,369 | | (33.5)% | | 4,782 | | 7,389 | | (35.3)% | | 1,878 | | 3,020 | | (37.8)% | |||||||||
Retail vehicle unit sales | | 2,421 | | 2,009 | | 20.5% | | 4,691 | | 4,563 | | 2.8% | | 2,270 | | 2,554 | | (11.1)% | |||||||||
Retail vehicle gross profit per unit | | $1,200 | | $2,175 | | (44.8)% | | $1,019 | | $1,619 | | (37.1)% | | $827 | | $1,182 | | (30.0)% | |||||||||
Wholesale gross profit per unit(2): | | | | | | | |||||||||||||||||||||
Wholesale vehicle gross profit (loss) | | (1,560) | | (285) | | (447.4)% | | (1,506) | | (1,404) | | 7.3% | |||||||||||||||
Wholesale vehicle unit sales | | 706 | | 394 | | 79.2% | | 1,270 | | 837 | | 51.7% | |||||||||||||||
Wholesale vehicle gross profit per unit | | $(2,210) | | $(723) | | (205.7)% | | $(1,186) | | $(1,677) | | 29.3% |
(1) |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | | Three Months Ended March 31, | ||||||||||||||||
| | 2022 | | 2021 | | 2022 | | 2021 | | Change | | | | 2022 | | 2021 | ||||||||
| | ($ in thousands) | | ($ in thousands) | | | ($ in thousands) | |||||||||||||||||
Compensation and benefits(1) | | $9,307 | | $5,907 | | $20,105 | | $12,763 | | 58% | | | $10,798 | | $6,856 | |||||||||
Marketing | | 2,393 | | 3,906 | | 5,547 | | 6,432 | | (39)% | | | 3,154 | | 2,526 | |||||||||
Technology | | 1,400 | | 2,453 | | 2,935 | | 5,378 | | (43)% | | | 1,535 | | 2,925 | |||||||||
Accounting and legal | | 1,680 | | 2,017 | | 3,745 | | 4,668 | | (17)% | | | 2,065 | | 2,819 | |||||||||
Insurance | | 2,270 | | 1,890 | | 4,507 | | 3,221 | | 20% | | | 2,236 | | 1,336 | |||||||||
Occupancy | | 3,046 | | 1,580 | | 6,337 | | 2,611 | | 93% | | | 3,291 | | 1,032 | |||||||||
Other costs(2) | | 6,913 | | 1,634 | | 11,508 | | 3,186 | | 323% | | | 4,595 | | 1,379 | |||||||||
Total selling, general and administrative expenses | | $27,009 | | $19,386 | | $54,684 | | $38,259 | | 39% | | | $27,674 | | $18,873 |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
| | ($ in thousands) | ||||||||||
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Adjusted to exclude the following: | | | | | | | | | ||||
Interest expense | | | 594 | | | 184 | | | 1,210 | | | 359 |
Income tax expense | | | — | | | — | | | — | | | — |
Depreciation and amortization expense | | | 2,359 | | | 95 | | | 4,147 | | | 478 |
EBITDA | | | $(31,952) | | | $(6,926) | | | $(54,384) | | | $(21,390) |
Other expense | | | (371) | | | 553 | | | 408 | | | 391 |
Stock compensation expense | | | 1,141 | | | 3,704 | | | 2,825 | | | 45,667 |
Management fee expense - related party | | | — | | | — | | | — | | | 2 |
Change in fair value of warrants liability | | | (3,213) | | | (325) | | | (4,813) | | | (12,683) |
Change in fair value of earnout provision | | | (2,587) | | | (12,210) | | | (6,616) | | | (44,056) |
Restructuring expense | | | 11,741 | | | — | | | 11,741 | | | — |
Adjusted EBITDA | | | $(25,241) | | | $(15,204) | | | $(50,839) | | | $(32,069) |
| | Three Months Ended March 31, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Net Loss | | | $(24,836) | | | $(15,022) |
Adjusted to exclude the following: | | | | | ||
Interest expense | | | 617 | | | 175 |
Income tax expense | | | — | | | — |
Depreciation and amortization expense | | | 1,789 | | | 383 |
EBITDA | | | $(22,430) | | | $(14,464) |
Other expense | | | 779 | | | (162) |
Stock compensation expense | | | 1,684 | | | 41,963 |
Management fee expense - related party | | | — | | | 2 |
Change in fair value of warrants liability | | | (1,600) | | | (12,358) |
Change in fair value of earnout provision | | | (4,029) | | | (31,846) |
Adjusted EBITDA | | | $(25,596) | | | $(16,865) |
| | Three Months Ended March 31, | ||||||||||
| | 2022 | | | 2021 | | | Change | | | Change | |
Adjusted retail gross profit per unit(1): | | | | | | | | | ||||
Retail vehicle gross profit | | | $(1,827) | | | $1,466 | | | $(3,293) | | | (225)% |
Finance and insurance gross profit | | | 3,705 | | | 1,554 | | | 2,151 | | | 138% |
Total retail gross profit | | | 1,878 | | | 3,020 | | | (1,142) | | | (38)% |
Change in inventory reserve(2) | | | 109 | | | — | | | 109 | | | 100% |
Total adjusted retail gross profit | | | 1,987 | | | 3,020 | | | (1,033) | | | (34)% |
Retail vehicle units sold | | | 2,270 | | | 2,554 | | | (284) | | | (11)% |
Retail vehicle adjusted gross profit per unit | | | $875 | | | $1,182 | | | $(307) | | | (26)% |
(1) | Adjusted gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, excluding any cost of sales associated with recording existing inventory to net realizable value, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | The change in inventory reserve represents the impact on the Condensed Consolidated Statements of Operations related to the adjustment for lower of cost or net realizable value of inventory in the period. |
| | Six Months Ended June 30, | | | Three Months Ended March 31, | |||||||
| | 2022 | | 2021 | | | 2022 | | 2021 | |||
| ($ in thousands) | | | ($ in thousands) | ||||||||
Cash Flow Data: | | | | | ||||||||
Net cash (used in) operating activities | | $(47,796) | | $(70,664) | | $(31,664) | | $(19,600) | ||||
Net cash provided by (used in) investing activities | | 54,783 | | (189,099) | | 37,529 | | (219,370) | ||||
Net cash provided by (used in) financing activities | | (12,309) | | 340,752 | | (5,891) | | 310,746 |
Quantitative and Qualitative Disclosures about Market Risk |
Legal Proceedings |
Risk Factors |
Exhibits and Financial Statement Schedules |
Exhibit No. | | | Description |
3.1 | | | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) |
| | ||
3.2 | | | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) |
| | ||
10.1† | | | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.2† | | | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.3† | | | Employment Agreement, dated March 19, 2022, between Ozan Kaya and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 31, 2022) |
| | ||
10.4† | | | Separation and Release Agreement, dated April 8, 2022, between John Foley and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on April 11, 2022) |
| | ||
10.5*† | | | Separation and Release Agreement, dated April 1, 2022, between Daniel Valerian and CarLotz, Inc. |
| | ||
10.5.1*† | | | Amendment to Separation and Release Agreement, dated May 5, 2022, between Daniel Valerian and CarLotz, Inc. |
| | ||
31.1* | | | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
31.2* | | | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
32.1* | | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
32.2* | | | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
101.INS* | | | XBRL Instance Document |
| | ||
101.SCH* | | | XBRL Taxonomy Extension Schema Document |
| | ||
101.CAL* | | | XBRL Taxonomy Extension Calculation Linkbase Document |
| | ||
101.DEF* | | | XBRL Taxonomy Extension Definition Linkbase Document |
Exhibit No. | | | Description |
| | ||
101.LAB* | | | XBRL Taxonomy Extension Label Linkbase Document |
| | ||
101.PRE* | | | XBRL Taxonomy Extension Presentation Linkbase Document |
| | ||
104 | | | Cover Page Interactive Data File (embedded with the Inline XBRL document and included in Exhibit 101) |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
| | | | |||
| | | | CarLotz, Inc. | ||
| | | | |||
| | By: | | | /s/ THOMAS W. STOLTZ | |
| | | | Thomas W. Stoltz | ||
| | | | Chief Financial Officer | ||
| | | | (Duly Authorized Officer and Principal Financial Officer) |
Delaware | | | | | | | 83-2456129 | ||
(State or other jurisdiction of incorporation or organization) | | | | | | | (I.R.S. Employer Identification No.) | ||
3301 W. Moore Street | | | Richmond | | | Virginia | | | 23230 |
(Address of principal executive offices, including zip code) |
| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | |
| Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market | |
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market | |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☒ | | | |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | |
| | | | Emerging growth company | | | ☒ | | |
| | | | Page | | ||||
| | Part I - Financial Information | | | | ||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | Part II - Other Information | | | | ||||
| | | | | |||||
| | | | | |||||
| | | | | |||||
| | | |
Financial Statements |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $70,022 | | | $75,029 |
Restricted cash | | | 4,021 | | | 4,336 |
Marketable securities – at fair value | | | 54,105 | | | 116,589 |
Accounts receivable, net | | | 10,012 | | | 8,206 |
Inventories | | | 31,893 | | | 40,985 |
Other current assets | | | 7,684 | | | 4,705 |
Operating and finance lease assets, property, and equipment held for sale | | | 28,526 | | | — |
Total Current Assets | | | 206,263 | | | 249,850 |
Marketable securities – at fair value | | | 848 | | | 1,941 |
Property and equipment, net | | | 7,044 | | | 22,628 |
Capitalized website and internal-use software costs, net | | | 12,918 | | | 13,716 |
Operating lease assets | | | 22,235 | | | — |
Finance lease assets, net | | | 2,803 | | | — |
Lease vehicles, net | | | 2,598 | | | 1,596 |
Other assets | | | 538 | | | 558 |
Total Assets | | | $255,247 | | | $290,289 |
Liabilities and Stockholders’ Equity (Deficit) | | | | | ||
Current Liabilities: | | | | | ||
Current portion of finance lease liabilities | | | $90 | | | $509 |
Floor plan notes payable | | | 15,689 | | | 27,815 |
Accounts payable | | | 3,926 | | | 6,352 |
Accrued expenses | | | 14,114 | | | 14,428 |
Current portion of operating lease liabilities | | | 4,445 | | | — |
Other current liabilities | | | 580 | | | 754 |
Operating and finance lease liabilities associated with assets held for sale | | | 30,122 | | | — |
Total Current Liabilities | | | 68,966 | | | 49,858 |
Finance lease liabilities, less current portion | | | 4,216 | | | 12,206 |
Operating lease liabilities, less current portion | | | 22,336 | | | — |
Earnout shares liability | | | 1,063 | | | 7,679 |
Merger warrants liability | | | 1,478 | | | 6,291 |
Other liabilities | | | 579 | | | 744 |
Total Liabilities | | | 98,638 | | | 76,778 |
Commitments and Contingencies (Note 15) | | | — | | | — |
Stockholders’ Equity (Deficit): | | | | | ||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,479,662 and 113,996,401 shares issued and outstanding at June 30, 2022 and December 31, 2021 | | | 11 | | | 11 |
Additional paid-in capital | | | 290,398 | | | 287,509 |
Accumulated deficit | | | (133,657) | | | (73,916) |
Accumulated other comprehensive loss | | | (143) | | | (93) |
Total Stockholders’ Equity (Deficit) | | | 156,609 | | | 213,511 |
Total Liabilities and Stockholders’ Equity (Deficit) | | | $255,247 | | | $290,289 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Revenues: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Wholesale vehicle sales | | | 13,949 | | | 4,660 | | | 22,524 | | | 9,228 |
Finance and insurance, net | | | 3,196 | | | 1,780 | | | 6,900 | | | 3,334 |
Lease income, net | | | 137 | | | 98 | | | 283 | | | 205 |
Total Revenues | | | 76,493 | | | 50,768 | | | 139,506 | | | 107,380 |
Cost of sales (exclusive of depreciation) | | | 75,011 | | | 46,586 | | | 135,947 | | | 101,190 |
Gross Profit | | | 1,482 | | | 4,182 | | | 3,559 | | | 6,190 |
Operating Expenses: | | | | | | | | | ||||
Selling, general and administrative | | | 27,009 | | | 19,386 | | | 54,684 | | | 38,259 |
Stock-based compensation expense | | | 1,141 | | | 3,704 | | | 2,825 | | | 45,667 |
Depreciation and amortization expense | | | 2,359 | | | 95 | | | 4,147 | | | 478 |
Management fee expense – related party | | | — | | | — | | | — | | | 2 |
Impairment expense | | | 724 | | | — | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — | | | 10,731 | | | — |
Total Operating Expenses | | | 41,964 | | | 23,185 | | | 73,111 | | | 84,406 |
Loss from Operations | | | (40,482) | | | (19,003) | | | (69,552) | | | (78,216) |
Interest expense | | | 594 | | | 184 | | | 1,210 | | | 359 |
Other Income, net | | | | | | | | | ||||
Change in fair value of Merger warrants liability | | | 3,213 | | | 325 | | | 4,813 | | | 12,683 |
| | | | | | | | |||||
Change in fair value of earnout shares | | | 2,587 | | | 12,210 | | | 6,616 | | | 44,056 |
Other income (expense) | | | 371 | | | (553) | | | (408) | | | (391) |
Total Other Income, net | | | 6,171 | | | 11,982 | | | 11,021 | | | 56,348 |
Loss Before Income Tax Expense | | | (34,905) | | | (7,205) | | | (59,741) | | | (22,227) |
Income tax expense | | | — | | | — | | | — | | | — |
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Net Loss per Share, basic and diluted | | | $(0.31) | | | $(0.06) | | | $(0.52) | | | $(0.21) |
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | | | 114,237,681 | | | 113,670,060 | | | 114,146,645 | | | 107,279,227 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Other Comprehensive (Loss), net of tax: | | | | | | | | | ||||
Unrealized gains (losses) on marketable securities arising during the period | | | 29 | | | 61 | | | (44) | | | (70) |
Tax effect | | | — | | | — | | | — | | | — |
Unrealized gains (losses) on marketable securities arising during the period, net of tax | | | 29 | | | 61 | | | (44) | | | (70) |
Reclassification adjustment for realized gains | | | (6) | | | (5) | | | (6) | | | (5) |
Tax effect | | | — | | | — | | | — | | | — |
Reclassification adjustment for realized gains, net of tax | | | (6) | | | (5) | | | (6) | | | (5) |
Other Comprehensive Income (Loss), net of tax | | | 23 | | | 56 | | | (50) | | | (75) |
Total Comprehensive (Loss) | | | $(34,882) | | | $(7,149) | | | $(59,791) | | | $(22,302) |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2021 | | | — | | | $— | | | 113,996,401 | | | $11 | | | $287,509 | | | $(73,916) | | | $(93) | | | $213,511 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (24,836) | | | — | | | (24,836) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) |
Cashless exercise of options | | | — | | | — | | | 44,424 | | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,684 | | | — | | | — | | | 1,684 |
Issuance of common stock to settle vested restricted stock units | | | — | | | — | | | 70,971 | | | — | | | (2) | | | — | | | — | | | (2) |
Balance March 31, 2022 | | | — | | | $— | | | 114,111,796 | | | $11 | | | $289,191 | | | $(98,752) | | | $(166) | | | $190,284 |
Net loss | | | — | | | $— | | | — | | | $— | | | $— | | | $(34,905) | | | $— | | | $(34,905) |
Other comprehensive income, net of tax | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $23 | | | $23 |
Exercise of options | | | — | | | $— | | | 104,818 | | | $— | | | $66 | | | $— | | | $— | | | $66 |
Stock-based compensation | | | — | | | $— | | | — | | | $— | | | $1,141 | | | $— | | | $— | | | $1,141 |
Issuance of common stock to settle vested restricted stock units | | | — | | | $— | | | 263,048 | | | $— | | | $— | | | $— | | | $— | | | $— |
Balance June 30, 2022 | | | — | | | $— | | | 114,479,662 | | | $11 | | | $290,398 | | | $(133,657) | | | $(143) | | | $156,609 |
| | Redeemable Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive (Loss) Income | | | Stockholders’ Equity (Deficit) | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance December 31, 2020 | | | 2,034,751 | | | $17,560 | | | 37,881,435 | | | $4 | | | $3,221 | | | $(34,037) | | | $15 | | | $(30,797) |
Retroactive application of recapitalization | | | (2,034,751) | | | (17,560) | | | 20,739,607 | | | 2 | | | 17,558 | | | — | | | — | | | 17,560 |
Adjusted balance, beginning of period | | | — | | | — | | | 58,621,042 | | | 6 | | | 20,779 | | | (34,037) | | | 15 | | | (13,237) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (15,022) | | | — | | | (15,022) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (131) | | | (131) |
Accrued dividends on redeemable convertible preferred stock | | | — | | | — | | | — | | | — | | | (19) | | | — | | | — | | | (19) |
PIPE issuance | | | — | | | — | | | 12,500,000 | | | 1 | | | 124,999 | | | — | | | — | | | 125,000 |
Merger financing | | | — | | | — | | | 38,194,390 | | | 4 | | | 309,995 | | | — | | | — | | | 309,999 |
Consideration to existing shareholders of Former CarLotz, net of accrued dividends | | | — | | | — | | | — | | | — | | | (62,693) | | | — | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | — | | | — | | | — | | | (47,579) | | | — | | | — | | | (47,579) |
Settlement of redeemable convertible preferred stock tranche obligation | | | — | | | — | | | — | | | — | | | 2,832 | | | — | | | — | | | 2,832 |
Cashless exercise of options | | | — | | | — | | | 54,717 | | | — | | | — | | | — | | | — | | | — |
Cash consideration paid to Former Carlotz optionholders | | | — | | | — | | | — | | | — | | | (2,465) | | | — | | | — | | | (2,465) |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 41,963 | | | — | | | — | | | 41,963 |
Earnout liability | | | — | | | — | | | — | | | — | | | (74,284) | | | — | | | — | | | (74,284) |
Merger warrants liability | | | — | | | — | | | — | | | — | | | (39,025) | | | — | | | — | | | (39,025) |
KAR/AFC note payable conversion | | | — | | | — | | | 3,546,984 | | | — | | | 3,625 | | | — | | | — | | | 3,625 |
KAR/AFC warrant exercise | | | — | | | — | | | 752,927 | | | — | | | 144 | | | — | | | — | | | 144 |
Balance March 31, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $278,272 | | | $(49,059) | | | $(116) | | | $229,108 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (7,205) | | | — | | | (7,205) |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | 56 | | | 56 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 3,704 | | | — | | | — | | | 3,704 |
Balance June 30, 2021 | | | — | | | $— | | | 113,670,060 | | | $11 | | | $281,976 | | | $(56,264) | | | $(60) | | | $225,663 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash Flow from Operating Activities | | | | | ||
Net loss | | | $(59,741) | | | $(22,227) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | ||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | | | 6,725 | | | 448 |
Impairment expense | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — |
Amortization and accretion - marketable securities | | | 752 | | | 788 |
Depreciation – lease vehicles | | | 217 | | | 30 |
Provision for doubtful accounts | | | 777 | | | — |
Stock-based compensation expense | | | 2,825 | | | 45,667 |
Change in fair value of Merger warrants liability | | | (4,813) | | | (12,683) |
Change in fair value of earnout shares | | | (6,616) | | | (44,056) |
Change in Operating Assets and Liabilities: | | | | | ||
Accounts receivable | | | (2,583) | | | (1,279) |
Inventories | | | 9,092 | | | (36,117) |
Other current assets | | | (2,979) | | | (5,466) |
Other assets | | | 20 | | | (4,091) |
Accounts payable | | | (2,426) | | | 2,499 |
Accrued expenses | | | (161) | | | 6,187 |
Accrued expenses – related party | | | — | | | (229) |
Other current liabilities | | | (174) | | | 447 |
Other liabilities | | | (166) | | | (582) |
Net Cash Used in Operating Activities | | | (47,796) | | | (70,664) |
Cash Flows from Investing Activities | | | | | ||
Purchase of property and equipment | | | (5,106) | | | (3,548) |
Capitalized website and internal-use software costs | | | (1,734) | | | (6,601) |
Purchase of marketable securities | | | (52,072) | | | (307,560) |
Proceeds from sales of marketable securities | | | 114,915 | | | 128,954 |
Purchase of lease vehicles | | | (1,220) | | | (344) |
Net Cash Provided by (Used in) Investing Activities | | | 54,783 | | | (189,099) |
Cash Flows from Financing Activities | | | | | ||
Payments made on finance leases | | | (246) | | | (18) |
Advance from holder of marketable securities | | | — | | | 4,722 |
PIPE issuance | | | — | | | 125,000 |
Merger financing | | | — | | | 309,999 |
Payment made on accrued dividends | | | — | | | (4,853) |
Payments to existing shareholders of Former CarLotz | | | — | | | (62,693) |
Transaction costs and advisory fees | | | — | | | (47,579) |
Payments made on cash considerations associated with stock options | | | — | | | (2,465) |
Repayment of Paycheck Protection Program loan | | | — | | | (1,749) |
Payments made on note payable | | | — | | | (3,000) |
Payments on floor plan notes payable | | | (82,394) | | | (29,056) |
Borrowings on floor plan notes payable | | | 70,268 | | | 52,444 |
Employee stock option exercise | | | 66 | | | — |
Payments made for tax on equity award transactions | | | (3) | | | — |
Net Cash (Used in) Provided by Financing Activities | | | (12,309) | | | 340,752 |
Net Change in Cash and Cash Equivalents Including Restricted Cash | | | (5,322) | | | 80,989 |
Cash and cash equivalents and restricted cash, beginning | | | 79,365 | | | 2,813 |
Cash and cash equivalents and restricted cash, ending | | | $74,043 | | | $83,802 |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash paid for interest | | | $1,163 | | | $490 |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | ||
Transfer from lease vehicles to inventory | | | $— | | | $150 |
KAR/AFC exercise of stock warrants | | | — | | | (144) |
KAR/AFC conversion of notes payable | | | — | | | (3,625) |
Convertible redeemable preferred stock tranche obligation expiration | | | — | | | (2,832) |
Capitalized website and internal use software costs accrued | | | — | | | (3,488) |
Purchases of property under capital lease obligation | | | (247) | | | (6,504) |
| | Recapitalization | |
Cash - Acamar Partners’ trust and cash | | | $309,999 |
Cash - PIPE | | | 125,000 |
Less: consideration delivered to existing shareholders of Former CarLotz | | | (62,693) |
Less: consideration to pay accrued dividends | | | (4,853) |
Less: transaction costs and advisory fees paid | | | (47,579) |
Less: payments on cash considerations associated with stock options | | | (2,465) |
Net contributions from Merger and PIPE financing | | | 317,409 |
Liabilities relieved: preferred stock obligation | | | 2,832 |
Liabilities relieved: KAR/AFC note payable | | | 3,625 |
Liabilities relieved: historic warrant liability | | | 144 |
Less: earnout shares liability | | | (74,285) |
Less: Merger warrants liability | | | (39,024) |
| | June 30, 2022 | |
Stock warrants outstanding - Public | | | 10,185,774 |
Stock warrants outstanding - Private | | | 6,074,310 |
Stock warrants cancelled | | | — |
Stock warrants exercised | | | — |
Stock warrants outstanding | | | 16,260,084 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), the Company will issue 50% of the earnout shares. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), the Company will issue 50% of the earnout shares. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unissued earnout shares are forfeited. All unissued earnout shares will be issued if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price |
| | Three Months Ended June 30, 2022 | | | Six Months Ended June 30, 2022 | |||||||||||||
| | Vehicle Sales | | | Fleet Management | | | Total | | | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $59,211 | | | $— | | | $59,211 | | | $109,799 | | | $— | | | $109,799 |
Wholesale vehicle sales | | | 13,949 | | | — | | | 13,949 | | | 22,524 | | | — | | | 22,524 |
Finance and insurance, net | | | $3,196 | | | $— | | | $3,196 | | | 6,900 | | | — | | | 6,900 |
Lease income, net | | | — | | | 137 | | | 137 | | | — | | | 283 | | | 283 |
Total Revenues | | | $76,356 | | | $137 | | | $76,493 | | | $139,223 | | | $283 | | | $139,506 |
| | Three Months Ended June 30, 2021 | | | Six Months Ended June 30, 2021 | |||||||||||||
| | Vehicle Sales | | | Fleet Management | | | Total | | | Vehicle Sales | | | Fleet Management | | | Total | |
Retail vehicle sales | | | $44,230 | | | $— | | | $44,230 | | | $94,613 | | | $— | | | $94,613 |
Wholesale vehicle sales | | | 4,660 | | | — | | | 4,660 | | | 9,228 | | | — | | | 9,228 |
Finance and insurance, net | | | $1,780 | | | $— | | | $1,780 | | | 3,334 | | | — | | | 3,334 |
Lease income, net | | | — | | | 98 | | | 98 | | | — | | | 205 | | | 205 |
Total Revenues | | | $50,670 | | | $98 | | | $50,768 | | | $107,175 | | | $205 | | | $107,380 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Retail vehicles: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Retail vehicle cost of sales | | | 59,502 | | | 41,641 | | | 111,917 | | | 90,558 |
Gross Profit – Retail Vehicles | | | $(291) | | | $2,589 | | | $(2,118) | | | $4,055 |
Wholesale vehicles: | | | | | | | | | ||||
Wholesale vehicle sales | | | $13,949 | | | $4,660 | | | $22,524 | | | $9,228 |
Wholesale vehicle cost of sales | | | 15,509 | | | 4,945 | | | 24,030 | | | 10,632 |
Gross Profit – Wholesale Vehicles | | | $(1,560) | | | $(285) | | | $(1,506) | | | $(1,404) |
| | June 30, 2022 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 28,317 | | | 1 | | | (98) | | | 28,220 |
Municipal bonds | | | 21,272 | | | 5 | | | (26) | | | 21,251 |
Commercial paper | | | 4,368 | | | — | | | — | | | 4,368 |
Foreign governments | | | 658 | | | 69 | | | (94) | | | 633 |
Total Fixed Maturity Debt Securities | | | $54,615 | | | $75 | | | $(218) | | | $54,472 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost/ Cost Basis | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
U.S. Treasuries | | | $— | | | $— | | | $— | | | $— |
Corporate bonds | | | 57,460 | | | — | | | (72) | | | 57,388 |
Municipal bonds | | | 28,325 | | | 5 | | | (10) | | | 28,320 |
Commercial paper | | | 19,989 | | | — | | | — | | | 19,989 |
Foreign governments | | | 12,291 | | | 2 | | | (18) | | | 12,275 |
Total Fixed Maturity Debt Securities | | | $118,065 | | | $7 | | | $(100) | | | $117,972 |
| | Amortized Cost | | | Fair Value | |
Due in one year or less | | | $53,709 | | | $53,627 |
Due after one year through five years | | | 650 | | | 624 |
Due after five years through ten years | | | 256 | | | 221 |
Total | | | $54,615 | | | $54,472 |
| | | | | | June 30, 2022 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $28,057 | | | $(73) | | | $163 | | | $(23) | | | $28,220 | | | $(96) |
Municipal bonds | | | 21,119 | | | (17) | | | 132 | | | (9) | | | 21,251 | | | (26) |
Commercial paper | | | 4,368 | | | 0 | | | — | | | — | | | 4,368 | | | 0 |
Foreign governments | | | 542 | | | (67) | | | 91 | | | (29) | | | 633 | | | (96) |
Total Fixed Maturity Debt Securities | | | $54,086 | | | $(157) | | | $386 | | | $(61) | | | $54,472 | | | $(218) |
| | | | | | December 31, 2021 | ||||||||||||
| | Less Than 12 Months | | | 12 Months or More | | | Total | ||||||||||
| | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | | | Fair Value | | | Unrealized Losses | |
Corporate bonds | | | $56,902 | | | $(69) | | | $376 | | | $(3) | | | $57,278 | | | $(72) |
Municipal bonds | | | $19,945 | | | $(7) | | | $340 | | | $(3) | | | $20,285 | | | $(10) |
Foreign governments | | | $12,152 | | | $(18) | | | $— | | | $— | | | $12,152 | | | $(18) |
Total Fixed Maturity Debt Securities | | | $88,999 | | | $(94) | | | $716 | | | $(6) | | | $89,715 | | | $(100) |
| | June 30, 2022 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $427 | | | $481 |
| | December 31, 2021 | ||||
| | Cost | | | Fair Value | |
Equity securities | | | $432 | | | $558 |
| | June 30, 2022 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $114,912 | | | $6 | | | $— | | | $6 |
Equity securities | | | 3 | | | — | | | — | | | — |
Total Marketable Securities | | | $114,915 | | | $6 | | | $— | | | $6 |
| | June 30, 2021 | ||||||||||
| | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized Gain | |
Fixed maturity debt securities | | | $128,954 | | | $7 | | | $(2) | | | $5 |
Equity securities | | | — | | | — | | | — | | | — |
Total Marketable Securities | | | $128,954 | | | $7 | | | $(2) | | | $5 |
| | June 30, 2022 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 481 | | | — | | | — | | | 481 |
Fixed maturity debt securities, including cash equivalents | | | — | | | 88,119 | | | — | | | 88,119 |
Total Assets | | | $481 | | | $88,119 | | | $— | | | $88,600 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | 926 | | | 552 | | | — | | | 1,478 |
Earnout shares liability | | | — | | | — | | | 1,063 | | | 1,063 |
Total Liabilities | | | $926 | | | $552 | | | $1,063 | | | $2,541 |
| | December 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Money market funds | | | $— | | | $— | | | $— | | | $— |
Equity securities | | | 558 | | | — | | | — | | | 558 |
Fixed maturity debt securities | | | — | | | 135,346 | | | — | | | 135,346 |
Total Assets | | | $558 | | | $135,346 | | | $— | | | $135,904 |
Liabilities: | | | | | | | | | ||||
Merger warrants liability | | | $3,941 | | | $2,350 | | | $— | | | $6,291 |
Earnout shares liability | | | — | | | — | | | 7,679 | | | 7,679 |
Total Liabilities | | | $3,941 | | | $2,350 | | | $7,679 | | | $13,970 |
| | January 1, 2022 | | | Issuances | | | Settlements | | | Change in fair value | | | June 30, 2022 | |
Earnout shares | | | 7,679 | | | — | | | — | | | (6,616) | | | 1,063 |
Total | | | $7,679 | | | $— | | | $— | | | $(6,616) | | | $1,063 |
| | January 1, 2021 | | | Issuances | | | Settlements | | | Change in fair value | | | June 30, 2021 | |
Redeemable convertible preferred stock tranche obligation | | | $2,832 | | | $— | | | $(2,832) | | | $— | | | $— |
Historic warrants liability | | | 144 | | | — | | | (144) | | | — | | | — |
Earnout shares | | | — | | | 74,284 | | | — | | | (44,056) | | | 30,228 |
Total | | | $2,976 | | | $74,284 | | | $(2,976) | | | $(44,056) | | | $30,228 |
| | June 30, 2022 | | | June 30, 2021 | |
Expected volatility | | | 120.00% | | | 85.00% |
Starting stock price | | | $0.39 | | | $5.46 |
Expected term (in years) | | | 3.6 years | | | 4.60 years |
Risk-free interest rate | | | 3.00% | | | 0.79% |
Earnout hurdle | | | $12.50-$15.00 | | | $12.50-$15.00 |
| | June 30, 2022 | | | December 31, 2021 | |
Contracts in transit | | | $8,598 | | | $7,540 |
Trade | | | 958 | | | 386 |
Finance commission | | | 363 | | | 284 |
Other | | | 1,170 | | | 296 |
Total | | | 11,089 | | | 8,506 |
Allowance for doubtful accounts | | | (1,077) | | | (300) |
Total Accounts Receivable, net | | | $10,012 | | | $8,206 |
| | June 30, 2022 | | | December 31, 2021 | |
Used vehicles | | | $31,893 | | | $40,739 |
Parts | | | — | | | 246 |
Total | | | $31,893 | | | $40,985 |
| | June 30, 2022 | | | December 31, 2021 | |
Capital lease assets | | | — | | | 12,566 |
Leasehold improvements | | | 4,732 | | | 4,628 |
Furniture, fixtures and equipment | | | 4,458 | | | 7,993 |
Corporate vehicles | | | 90 | | | 158 |
Total property and equipment | | | 9,280 | | | 25,345 |
Less: accumulated depreciation | | | (2,236) | | | (2,609) |
Less: impairment | | | — | | | (108) |
Property and Equipment, net | | | $7,044 | | | $22,628 |
| | June 30, 2022 | | | December 31, 2021 | |
Other Current Assets: | | | | | ||
Lease receivable, net | | | $20 | | | $29 |
Deferred acquisition costs | | | 35 | | | 46 |
Prepaid expenses | | | 6,841 | | | 3,664 |
Interest receivable | | | 788 | | | 966 |
Total Other Current Assets | | | $7,684 | | | $4,705 |
Other Assets: | | | | | ||
Lease receivable, net | | | $16 | | | $16 |
Deferred acquisition costs | | | 26 | | | 35 |
Security deposits | | | 496 | | | 507 |
Total Other Assets | | | $538 | | | $558 |
| | June 30, 2022 | | | December 31, 2021 | |
Capital lease obligation | | | $— | | | $12,715 |
Finance lease liabilities | | | $4,306 | | | $— |
| | 4,306 | | | 12,715 | |
Current portion of long-term debt | | | — | | | (509) |
Current portion of finance lease liabilities | | | (90) | | | — |
Long-term Debt | | | $4,216 | | | $12,206 |
| | June 30, 2022 | | | December 31, 2021 | |
License and title fees | | | $887 | | | $903 |
Payroll and bonuses | | | 5,135 | | | 2,047 |
Deferred rent | | | — | | | 1,636 |
Technology | | | 1,458 | | | 1,127 |
Inventory | | | 2,709 | | | 2,542 |
Other | | | 3,925 | | | 6,173 |
Total Accrued Expenses | | | $14,114 | | | $14,428 |
| | June 30, 2022 | | | December 31, 2021 | |
Other Current Liabilities | | | | | ||
Unearned insurance premiums | | | $580 | | | $754 |
Other Liabilities | | | | | ||
Unearned insurance premiums | | | 451 | | | 622 |
Other long-term liabilities | | | 128 | | | 122 |
Other Liabilities | | | $579 | | | $744 |
| | Three Months Ended June 30, 2022 | | | Six Months Ended June 30, 2022 | |
Operating lease cost(1) | | | $2,302 | | | $4,737 |
Finance lease cost: | | | | | ||
Depreciation of lease assets | | | 263 | | | 526 |
Interest on lease liabilities | | | 287 | | | 573 |
Total finance lease cost | | | 550 | | | 1,099 |
Total lease cost | | | 2,852 | | | 5,836 |
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
| | Classification | | | As of June 30, 2022 | |
Assets: | | | | | ||
Operating lease assets | | | Operating lease assets | | | 22,235 |
| | Operating and finance lease assets, property, and equipment held for sale | | | 20,467 | |
Finance lease assets | | | Finance lease assets | | | 2,803 |
| | Operating and finance lease assets, property, and equipment held for sale | | | 7,622 | |
Total lease assets | | | | | 53,127 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Operating leases | | | Current portion of operating lease liabilities | | | 4,445 |
| | Operating and finance lease liabilities associated with assets held for sale | | | 21,731 | |
Finance leases | | | Current portion of finance lease liabilities | | | 90 |
| | Operating and finance lease liabilities associated with assets held for sale | | | 8,391 | |
Long-term: | | | | | ||
Operating leases, less current portion | | | | | 22,336 | |
Finance leases, less current portion | | | | | 4,216 | |
Total lease liabilities | | | | | 61,209 |
(1) | Finance lease assets are recorded net of accumulated depreciation of $971 as of June 30, 2022. |
(2) | Operating lease assets are recorded net of impairment of $600 due to a change in the physical condition of a right-of-use asset in the three months ended June 30, 2022. |
Lease Term and Discount Rate | | | As of June 30, 2022 |
Weighted Average Remaining Lease Term (in years) | | | |
Operating leases | | | 7.85 years |
Finance leases | | | 11.57 years |
| | ||
Weighted Average Discount Rate | | | |
Operating leases | | | 5.88% |
Finance leases | | | 9.97% |
| | Six Months Ended June 30, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | | | 4,710 |
Operating cash flows from finance leases | | | 526 |
Financing cash flows from finance leases | | | 246 |
| | ||
Lease assets obtained in exchange for lease obligation | | | |
Operating leases | | | 49,183 |
Finance leases | | | 247 |
| | As of June 30, 2022 | ||||
| | Operating Leases(1) | | | Finance Leases(1) | |
Fiscal 2022, remaining | | | 4,611 | | | 852 |
Fiscal 2023 | | | 8,964 | | | 1,726 |
Fiscal 2024 | | | 8,189 | | | 1,751 |
Fiscal 2025 | | | 7,445 | | | 1,777 |
Fiscal 2026 | | | 6,399 | | | 1,823 |
Thereafter | | | 25,697 | | | 14,327 |
Total lease payments | | | 61,305 | | | 22,256 |
Less: interest | | | (12,793) | | | (9,559) |
Present value of lease liabilities | | | 48,512 | | | 12,697 |
(1) | There are no legally binding minimum lease payments for leases signed but not yet commenced excluded from the table. |
| | Total Per Year | | | Total Capital Leases | |
2022 | | | $6,788 | | | $1,643 |
2023 | | | 6,931 | | | 1,669 |
2024 | | | 6,657 | | | 1,695 |
2025 | | | 6,832 | | | 1,721 |
2026 | | | 5,884 | | | 1,766 |
Thereafter | | | 23,715 | | | 14,322 |
Total | | | $56,807 | | | $22,816 |
Less: amount representing interest | | | | | (10,101) | |
Present value of minimum lease payments | | | | | 12,715 | |
Less: current obligation | | | | | (509) | |
Long-term obligations under capital lease | | | | | $12,206 |
| | Payments Due to Third-Parties | | | Future Receipts | |
2022 | | | $1,435 | | | $1,721 |
2023 | | | 1,017 | | | 1,205 |
2024 | | | 605 | | | 716 |
2025 | | | 180 | | | 216 |
2026 | | | 55 | | | 69 |
Total | | | 3,292 | | | 3,927 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2021) | | | 1,260,328 | | | $0.56 |
Granted | | | — | | | — |
Exercised | | | (155,782) | | | 0.53 |
Forfeited | | | (281,574) | | | 0.64 |
Balance (June 30, 2022) | | | 822,972 | | | 0.54 |
Vested (as of June 30, 2022) | | | 822,972 | | | $0.54 |
| | Number of Stock Options | | | Weighted Average Exercise Price | |
Balance (December 31, 2020) | | | 1,571,205 | | | $0.59 |
Granted | | | — | | | — |
Exercised | | | (56,059) | | | 0.24 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 1,515,146 | | | 0.58 |
Vested (as of June 30, 2021) | | | 1,515,146 | | | $0.58 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 822,972 | | | 0.17 years | | | $0.54 |
Exercisable | | | 822,972 | | | 0.17 years | | | $0.54 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 3,936,176 | | | $0.92 |
Granted | | | — | | | — |
Exercised | | | (6,371) | | | $0.92 |
Forfeited | | | (309,891) | | | 0.92 |
Balance (June 30, 2022) | | | 3,619,914 | | | $0.92 |
Vested (as of June 30, 2022) | | | 3,340,901 | | | $0.92 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | 3,961,658 | | | $0.92 |
Granted | | | — | | | — |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 3,961,658 | | | $0.92 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 3,619,914 | | | 7.03 years | | | $0.92 |
Exercisable | | | 3,340,901 | | | 6.94 years | | | $0.92 |
Balance (Expected volatility) | | | 80.00% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 3.6 - 4.8 years |
Risk-free interest rate | | | 0.32% - 0.45% |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | 1,469,297 | | | $11.12 |
Granted | | | 1,573,361 | | | $1.68 |
Forfeited | | | (1,426,349) | | | $7.00 |
Balance (June 30, 2022) | | | 1,616,309 | | | $6.46 |
Exercisable | | | 321,284 | | | $11.34 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 1,426,514 | | | 11.34 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 1,426,514 | | | $11.34 |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 1,616,309 | | | 9.21 years | | | $6.46 |
Exercisable | | | 321,284 | | | 8.56 years | | | $11.34 |
Balance (Expected volatility) | | | 80% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6 years |
Risk-free interest rate | | | 2.20% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | 597,739 | | | $5.57 |
Granted | | | 3,002,883 | | | $1.00 |
Forfeited | | | (805,124) | | | $3.78 |
Vested (as of June 30, 2022) | | | (247,115) | | | $5.69 |
Balance (June 30, 2022) | | | 2,548,383 | | | $1.03 |
i. | If at any time during the 60 months following the Closing Date (the first business day following the end of such period, the “Forfeiture Date”), the closing trading price of the common stock is greater than $12.50 over any 20 trading days within any 30 trading day period (the “First Threshold”), 50% of the Earnout RSUs will vest. |
ii. | If at any time prior to the Forfeiture Date, the closing trading price of the common stock is greater than $15.00 over any 20 trading days within any 30 trading day period (the “Second Threshold”), 50% of the Earnout RSUs will vest. |
iii. | If either the First Threshold or the Second Threshold is not met on or before the Forfeiture Date, any unvested Earnout RSUs are forfeited. All unvested Earnout RSUs will vest if there is a change of control of the Company that will result in the holders of the common stock receiving a per share price equal to or in excess of $10.00 (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock) prior to the Forfeiture Date. |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | 621,200 | | | $10.70 |
Granted | | | — | | | — |
Forfeited | | | (466,309) | | | 10.70 |
Balance (June 30, 2022) | | | 154,891 | | | $10.70 |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2020) | | | — | | | $— |
Granted | | | 640,421 | | | 10.70 |
Forfeited | | | — | | | — |
Balance (June 30, 2021) | | | 640,421 | | | $10.70 |
| | Number of Units | | | Weighted Averaged Exercise Price | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 569,677 | | | $0.61 |
Forfeited | | | — | | | $— |
Balance (June 30, 2022) | | | 569,677 | | | $0.61 |
Exercisable | | | — | | | $— |
| | Number of Stock Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | |
Outstanding | | | 569,677 | | | 9.88 years | | | $0.61 |
Exercisable | | | — | | | — | | | $— |
Balance (Expected volatility) | | | 85% |
Expected dividend yield | | | —% |
Expected term (in years) | | | 6.25 years |
Risk-free interest rate | | | 2.86% |
| | Balance (Number of Units | | | Weighted Average Grant Date Fair Value | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 5,619,822 | | | $0.61 |
Forfeited | | | — | | | $— |
Vested (as of June 30, 2022) | | | (87,458) | | | $0.61 |
Balance (June 30, 2022) | | | 5,532,364 | | | $0.61 |
i. | One-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $4.00 (the threshold price); |
ii. | One-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $8.00 (the target price); |
iii. | and one-third of the shares will vest on the first day the Company’s stock achieves a twenty (20) trading-day volume weighted average price of $12.00 (the target price); |
| | Number of Units | | | Weighted Average grant date fair value | |
Balance (December 31, 2021) | | | — | | | $— |
Granted | | | 5,100,000 | | | 0.55 |
Forfeited | | | — | | | — |
Balance (June 30, 2022) | | | 5,100,000 | | | $0.55 |
Expected volatility | | | 105.00% |
Starting stock price | | | $0.61 |
Expected term (in years) | | | 10 years |
Risk-free interest rate | | | 2.88% |
Earnout hurdle | | | $4.00-$8.00-$12.00 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 114,237,681 | | | 113,670,060 | | | 114,146,645 | | | 107,279,227 |
Net Loss per Share Attributable to Common Stockholders, basic and diluted | | | $(0.31) | | | $(0.06) | | | $(0.52) | | | $(0.21) |
| | 2022 | | | 2021 | |
Public warrants | | | 10,185,774 | | | 10,185,774 |
Private warrants | | | 6,074,310 | | | 6,074,310 |
Earnout RSUs | | | 154,891 | | | 640,421 |
Earnout shares | | | 6,945,732 | | | 6,945,732 |
Stock options outstanding to purchase shares of common stock | | | 6,628,872 | | | 6,903,318 |
Unvested RSUs | | | 13,180,747 | | | 615,180 |
Total | | | 43,170,326 | | | 31,364,735 |
| | Total purchases from vendor to total vehicle purchases for the three months ended June 30, | | | Total purchases from vendor to total vehicle purchases for the six months ended June 30, | |||||||
Vendor | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Vendor A | | | 18% | | | 32% | | | 19% | | | 48% |
| | Three months ended June 30, 2022 | | | Six months ended June 30, 2022 | |
Inventory reserves associated with restructuring | | | $1,010 | | | $1,010 |
Operating lease asset impairment | | | 2,548 | | | 2,548 |
Finance lease asset impairment | | | 1,371 | | | 1,371 |
Property and equipment impairment | | | 5,832 | | | 5,832 |
Loss on sale of assets related to closed hubs | | | — | | | — |
Labor and other costs incurred closing hubs | | | 465 | | | 465 |
Severance | | | 515 | | | 515 |
Contract termination costs | | | — | | | — |
Total | | | 11,741 | | | 11,741 |
| | As of June 30, 2022 | |
Operating lease assets | | | $20,467 |
Finance lease assets | | | $7,622 |
Property and equipment | | | $437 |
Total | | | $28,526 |
| | ||
Operating lease liabilities | | | $21,731 |
Finance lease liabilities | | | $8,391 |
Total | | | $30,122 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Retail vehicles sold | | | 2,421 | | | 2,009 | | | 4,691 | | | 4,563 |
Number of hubs(1) | | | 11 | | | 15 | | | 11 | | | 15 |
Average monthly unique visitors | | | 264,565 | | | 177,377 | | | 260,794 | | | 178,080 |
Vehicles available for sale | | | 981 | | | 1,431 | | | 981 | | | 1,431 |
Retail gross profit per unit | | | $1,200 | | | $2,175 | | | $1,019 | | | $1,619 |
Percentage of unit sales sourced non-competitively(2) | | | 78% | | | 92% | | | 72% | | | 96% |
Wholesale vehicles sold | | | $706 | | | $394 | | | $1,270 | | | $837 |
Wholesale gross profit per unit | | | $(2,210) | | | $(723) | | | $(1,186) | | | $(1,677) |
(1) | The Company closed retail operations at 11 hub locations on June 21, 2022. |
(2) | Vehicles are sourced non-competitively through our consignment to retail sales model, through purchases directly from consumers and through arrangements with corporate vehicle sourcing partners. |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
| | ($ in thousands) | ||||||||||
Revenues: | | | | | | | | | ||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | $109,799 | | | $94,613 |
Wholesale vehicle sales | | | 13,949 | | | 4,660 | | | 22,524 | | | 9,228 |
Finance and insurance, net | | | 3,196 | | | 1,780 | | | 6,900 | | | 3,334 |
Lease income, net | | | 137 | | | 98 | | | 283 | | | 205 |
Total Revenues | | | 76,493 | | | 50,768 | | | 139,506 | | | 107,380 |
Cost of sales (exclusive of depreciation) | | | 75,011 | | | 46,586 | | | 135,947 | | | 101,190 |
Gross Profit | | | 1,482 | | | 4,182 | | | 3,559 | | | 6,190 |
Operating Expenses: | | | | | | | | | ||||
Selling, general and administrative | | | 27,009 | | | 19,386 | | | 54,684 | | | 38,259 |
Stock based compensation expense | | | 1,141 | | | 3,704 | | | 2,825 | | | 45,667 |
Depreciation and amortization expense | | | 2,359 | | | 95 | | | 4,147 | | | 478 |
Management fee expense – related party | | | — | | | — | | | — | | | 2 |
Impairment expense | | | 724 | | | — | | | 724 | | | — |
Restructuring expenses | | | 10,731 | | | — | | | 10,731 | | | — |
Total Operating Expenses | | | 41,964 | | | 23,185 | | | 73,111 | | | 84,406 |
Loss from Operations | | | (40,482) | | | (19,003) | | | (69,552) | | | (78,216) |
Interest expense | | | 594 | | | 184 | | | 1,210 | | | 359 |
Other Income (Expense), net | | | | | | | | | ||||
Change in fair value of Merger warrants liability | | | 3,213 | | | 325 | | | 4,813 | | | 12,683 |
Change in fair value of earnout provision | | | 2,587 | | | 12,210 | | | 6,616 | | | 44,056 |
Other (expense) income | | | 371 | | | (553) | | | (408) | | | (391) |
Total Other Income, net | | | 6,171 | | | 11,982 | | | 11,021 | | | 56,348 |
Loss Before Income Tax Expense | | | (34,905) | | | (7,205) | | | (59,741) | | | (22,227) |
Income tax expense | | | — | | | — | | | — | | | — |
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||||||||
| | 2022 | | | 2021 | | | Change | | | 2022 | | | 2021 | | | Change | |
| | ($ in thousands, except per unit metrics) | | | ($ in thousands, except per unit metrics) | |||||||||||||
Revenue: | | | | | | | | | | | | | ||||||
Retail vehicle sales | | | $59,211 | | | $44,230 | | | 33.9% | | | $109,799 | | | $94,613 | | | 16.1% |
Wholesale vehicle sales | | | 13,949 | | | 4,660 | | | 199.3% | | | 22,524 | | | 9,228 | | | 144.1% |
Finance and insurance, net | | | 3,196 | | | 1,780 | | | 79.6% | | | 6,900 | | | 3,334 | | | 107.0% |
Lease income, net | | | 137 | | | 98 | | | 39.8% | | | 283 | | | 205 | | | 38.0% |
Total revenues | | | 76,493 | | | 50,768 | | | 50.7% | | | 139,506 | | | 107,380 | | | 29.9% |
Cost of sales: | | | | | | | | | | | | | ||||||
Retail vehicle cost of sales | | | 59,502 | | | 41,641 | | | 42.9% | | | 111,917 | | | 90,558 | | | 23.6% |
Wholesale vehicle cost of sales | | | 15,509 | | | 4,945 | | | 213.6% | | | 24,030 | | | 10,632 | | | 126.0% |
Total cost of sales | | | $75,011 | | | $46,586 | | | 61.0% | | | $135,947 | | | $101,190 | | | 34.3% |
Gross profit: | | | | | | | | | | | | | ||||||
Retail vehicle gross profit (loss) | | | $(291) | | | $2,589 | | | (111.2)% | | | $(2,118) | | | $4,055 | | | (152.2)% |
Wholesale vehicle gross profit (loss) | | | (1,560) | | | (285) | | | (447.4)% | | | (1,506) | | | (1,404) | | | 7.3% |
Finance and insurance gross profit | | | 3,196 | | | 1,780 | | | 79.6% | | | 6,900 | | | 3,334 | | | 107.0% |
Lease income, net | | | 137 | | | 98 | | | 39.8% | | | 283 | | | 205 | | | 38.0% |
Total gross profit | | | $1,482 | | | $4,182 | | | (64.6)% | | | $3,559 | | | $6,190 | | | (42.5)% |
Retail gross profit per unit(1): | | | | | | | | | | | | | ||||||
Retail vehicle gross profit (loss) | | | (291) | | | 2,589 | | | (111.2)% | | | (2,118) | | | 4,055 | | | (152.2)% |
Finance and insurance gross profit | | | 3,196 | | | 1,780 | | | 79.6% | | | 6,900 | | | 3,334 | | | 107.0% |
Total retail vehicle and finance and insurance gross profit | | | 2,905 | | | 4,369 | | | (33.5)% | | | 4,782 | | | 7,389 | | | (35.3)% |
Retail vehicle unit sales | | | 2,421 | | | 2,009 | | | 20.5% | | | 4,691 | | | 4,563 | | | 2.8% |
Retail vehicle gross profit per unit | | | $1,200 | | | $2,175 | | | (44.8)% | | | $1,019 | | | $1,619 | | | (37.1)% |
Wholesale gross profit per unit(2): | | | | | | | | | | | | | ||||||
Wholesale vehicle gross profit (loss) | | | (1,560) | | | (285) | | | (447.4)% | | | (1,506) | | | (1,404) | | | 7.3% |
Wholesale vehicle unit sales | | | 706 | | | 394 | | | 79.2% | | | 1,270 | | | 837 | | | 51.7% |
Wholesale vehicle gross profit per unit | | | $(2,210) | | | $(723) | | | (205.7)% | | | $(1,186) | | | $(1,677) | | | 29.3% |
(1) | Retail gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. |
(2) | Wholesale gross profit per unit is calculated as gross profit for wholesale vehicles, each of which is divided by the total number of wholesale vehicles sold in the period. |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | | | |||||||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | | | Change | | |||
| | ($ in thousands) | | | ($ in thousands) | | | |||||||||||
Compensation and benefits(1) | | | $9,307 | | | $5,907 | | | $20,105 | | | $12,763 | | | 58% | | ||
Marketing | | | 2,393 | | | 3,906 | | | 5,547 | | | 6,432 | | | (39)% | | ||
Technology | | | 1,400 | | | 2,453 | | | 2,935 | | | 5,378 | | | (43)% | | ||
Accounting and legal | | | 1,680 | | | 2,017 | | | 3,745 | | | 4,668 | | | (17)% | | ||
Insurance | | | 2,270 | | | 1,890 | | | 4,507 | | | 3,221 | | | 20% | | ||
Occupancy | | | 3,046 | | | 1,580 | | | 6,337 | | | 2,611 | | | 93% | | ||
Other costs(2) | | | 6,913 | | | 1,634 | | | 11,508 | | | 3,186 | | | 323% | | ||
Total selling, general and administrative expenses | | | $27,009 | | | $19,386 | | | $54,684 | | | $38,259 | | | 39% | |
(1) | Compensation and benefits includes all payroll and related costs, including benefits, and payroll taxes, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets. |
(2) | Other costs include all other selling, general and administrative expenses such as logistics and other administrative expenses. |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
| | ($ in thousands) | ||||||||||
Net Loss | | | $(34,905) | | | $(7,205) | | | $(59,741) | | | $(22,227) |
Adjusted to exclude the following: | | | | | | | | | ||||
Interest expense | | | 594 | | | 184 | | | 1,210 | | | 359 |
Income tax expense | | | — | | | — | | | — | | | — |
Depreciation and amortization expense | | | 2,359 | | | 95 | | | 4,147 | | | 478 |
EBITDA | | | $(31,952) | | | $(6,926) | | | $(54,384) | | | $(21,390) |
Other expense | | | (371) | | | 553 | | | 408 | | | 391 |
Stock compensation expense | | | 1,141 | | | 3,704 | | | 2,825 | | | 45,667 |
Management fee expense - related party | | | — | | | — | | | — | | | 2 |
Change in fair value of warrants liability | | | (3,213) | | | (325) | | | (4,813) | | | (12,683) |
Change in fair value of earnout provision | | | (2,587) | | | (12,210) | | | (6,616) | | | (44,056) |
Restructuring expense | | | 11,741 | | | — | | | 11,741 | | | — |
Adjusted EBITDA | | | $(25,241) | | | $(15,204) | | | $(50,839) | | | $(32,069) |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | ($ in thousands) | ||||
Cash Flow Data: | | | | | ||
Net cash (used in) operating activities | | | $(47,796) | | | $(70,664) |
Net cash provided by (used in) investing activities | | | 54,783 | | | (189,099) |
Net cash provided by (used in) financing activities | | | (12,309) | | | 340,752 |
Quantitative and Qualitative Disclosures about Market Risk |
Controls and Procedures |
Legal Proceedings |
Risk Factors |
Exhibits and Financial Statement Schedules |
Exhibit No. | | | Description |
| | Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252993), filed with the SEC on February 11, 2021) | |
| | ||
| | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on January 27, 2021) | |
| | ||
10.1† | | | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.2† | | | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 15, 2022) |
| | ||
10.3† | | | Employment Agreement, dated March 19, 2022, between Ozan Kaya and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on March 31, 2022) |
| | ||
10.4† | | | Separation and Release Agreement, dated April 8, 2022, between John Foley and CarLotz, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-38818), filed with the SEC on April 11, 2022) |
| | ||
10.5*† | | | Separation and Release Agreement, dated April 1, 2022, between Daniel Valerian and CarLotz, Inc. (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q (File No. 001-38818), filed with the SEC on May 9, 2022) |
| | ||
10.5.1*† | | | Amendment to Separation and Release Agreement, dated May 5, 2022, between Daniel Valerian and CarLotz, Inc. (incorporated by reference to Exhibit 10.5.1 to the Company’s Form 10-Q (File No. 001-38818), filed with the SEC on May 9, 2022) |
| | ||
10.6† | | | Form of Inducement Award Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-8 (File No. 333-264980), filed with the SEC on May 16, 2022) |
| | ||
10.7† | | | Form of Inducement Award Stock Option Award Grant Notice and Stock Option Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-8 (File No. 333-264980), filed with the SEC on May 16, 2022) |
| | ||
31.1* | | | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
31.2* | | | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | ||
32.1* | | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| |
Exhibit No. | | | Description |
32.2* | | | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| | ||
101.INS* | | | XBRL Instance 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 (embedded with the Inline XBRL document and included in Exhibit 101) |
* | Filed herewith |
† | Indicates a management contract or compensatory plan or arrangement. |
| | | | |||
| | | | CarLotz, Inc. | ||
| | | | |||
| | By: | | | /s/ THOMAS W. STOLTZ | |
| | | | Thomas W. Stoltz Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
CARLOTZ, INC. |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check all boxes that apply): | |||
☒ | | | No fee required |
☐ | | | Fee paid previously with preliminary materials |
☐ | | | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | |||
Date and Time: | | | 9:00 a.m., Eastern Daylight Time, on June 2, 2022 |
Place: | | | Online at www.virtualshareholdermeeting.com/LOTZ2022 |
Admission: | | | To attend the 2022 annual meeting, visit www.virtualshareholdermeeting.com/LOTZ2022. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials. |
Items of Business: | | | Proposal No. 1: To elect each of the director nominees listed in this proxy statement to the Board of Directors. Proposal No. 2: To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2022. To transact any other business as may properly come before the meeting or any adjournments or postponements thereof. |
Record Date: | | | You are entitled to vote at the 2022 annual meeting and at any adjournments or postponements thereof if you were a stockholder of record at the close of business on April 12, 2022. A list of stockholders entitled to vote at the 2022 annual meeting will be available for examination during ordinary business hours for 10 days prior to the meeting at the address listed above, and the list will also be available online during the meeting. |
Voting by Proxy: | | | Whether or not you plan to virtually attend the 2022 annual meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail so that your shares can be voted at the 2022 annual meeting in accordance with your instructions. For specific instructions on voting, please refer to the instructions on your enclosed proxy card. |
| | On Behalf of the Board of Directors, | |
| | ||
April 29, 2022 Richmond, Virginia | | | |
| | Rebecca C. Polak | |
| | Chief Commercial Officer, General Counsel and Secretary |
Date and Time: | | | 9:00 a.m., Eastern Daylight Time, on June 2, 2022 |
Location: | | | Online at www.virtualshareholdermeeting.com/LOTZ2022 |
Record Date: | | | Stockholders of record as of the close of business on April 12, 2022 are entitled to vote. Each share of common stock (“common stock”) is entitled to one vote for each director nominee and for each of the other proposals to be voted on at the 2022 annual meeting of stockholders. On the record date, the Company had 114,077,043 shares of common stock issued and outstanding. |
Nasdaq Symbol: | | | LOTZ |
Registrar and Transfer Agent: | | | American Stock Transfer & Trust Company, LLC |
Proposal | | | Our Board’s Recommendation | |||
1. | | | Election of each of the two Class II director nominees. | | | FOR |
2. | | | Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2022. | | | FOR |
Name | | | Age | | | Director Since | | | Independent | | | Primary Occupation | | | Committee Membership** |
Steven G. Carrel | | | 47 | | | 2021 | | | Yes | | | Managing Director of TRP Capital Partners, LP | | | NCGC |
| | | | | | | | | | ||||||
James E. Skinner | | | 68 | | | 2020 | | | Yes | | | Former Chief Financial Officer and Chief Operating Officer of Neiman Marcus Group (retired) | | | NCGC (Chair) AC |
Name | | | Age | | | Director Since | | | Independent | | | Primary Occupation | | | Committee Membership** |
Linda B. Abraham | | | 59 | | | 2021 | | | Yes | | | Managing Director of Crimson Capital | | | CC (Chair) |
Sarah M. Kauss | | | 46 | | | 2021 | | | Yes | | | Founder of S’well | | | |
David R. Mitchell | | | 55 | | | 2021 | | | Yes | | | Managing Director of TRP Capital Partners, LP | | | AC |
Lev Peker | | | 40 | | | 2022 | | | No | | | Chief Executive Officer of CarLotz | | | |
Kimberly H. Sheehy | | | 58 | | | 2021 | | | Yes | | | Former Chief Financial Officer of Resman LLC (retired) | | | AC (Chair) CC |
Luis Solorzano* | | | 49 | | | 2018 | | | Yes | | | Partner and Chief Executive Officer of Acamar Partners | | | CC NCGC |
* | Chairman of the Board |
** | AC = Audit Committee |
✔ | Director and Committee Independence: Seven of our eight directors are independent, and all committees of our Board of Directors (the “Board”) are comprised entirely of independent directors. |
✔ | Executive Sessions: Our independent directors meet in executive session at each regularly scheduled Board meeting. |
✔ | Separate Chairman and Chief Executive Officer: Our separate Chairman and Chief Executive Officer roles enable our independent Chairman to oversee our Board and corporate governance matters and our Chief Executive Officer to lead the Company’s business. |
✔ | Gender Diversity: More than one-third of our Board is comprised of women. |
✔ | Annual Board and Committee Evaluations: The Board and its committees each evaluates its performance each year. |
✔ | Anti-Hedging and Pledging Policies: Our directors and executive officers are prohibited from hedging or pledging Company stock. |
✔ | Annual Management and CEO Evaluation and Succession Planning Review: Our Board conducts an annual evaluation and review of our CEO and each executive officer’s performance, development and succession plan. |
✔ | Board Risk Oversight: Our Board has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through the regular reporting to our Board by the Audit Committee. The Audit Committee represents our Board by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls and our compliance with legal and regulatory requirements. Through its regular meetings with management, the Audit Committee reviews and discusses all significant areas of our business and summarizes for our Board all areas of risk and the appropriate mitigating factors. In addition, our Board receives periodic detailed operating performance reviews from management. |
✔ | | | Independent Compensation Committee: All of the members of our Compensation Committee are independent under Nasdaq rules. | | | ✔ | | | Maximum payout caps: The Compensation Committee sets maximum amounts that may be payable for annual cash incentive compensation and performance based equity awards. |
✔ | | | Independent compensation consultant: The Compensation Committee retains its own independent compensation consultant to evaluate and review our executive compensation program and practices. | | | ✔ | | | Moderate change in control benefits: Change in control severance benefits are one times base salary and a pro-rated portion of the bonus the executive officer would have earned if he or she had remained employed through the end of the year. |
✔ | | | Incentivize long-term performance: We grant equity awards that vest over three or four years, as applicable, to motivate long-term performance and to align the interests of our executive officers with those of our stockholders | | | ✔ | | | “Double-trigger” equity vesting: Accelerated vesting of assumed or replaced equity awards upon a change in control of the Company is only permitted if an executive experiences a qualifying termination of employment in connection with or following such change in control. |
✘ | | | Provide excessive perquisites: We provide a limited number of perquisites that are designed to support a competitive total compensation package. | | | ✘ | | | Allow hedging or pledging of the Company’s securities: We prohibit hedging, pledging and short sales of Company stock by our directors and executive officers. |
✘ | | | Provide pension benefits or supplemental retirement plans: We do not maintain a defined benefit pension or supplemental retirement plans for our executive officers. | | | ✘ | | | Reprice stock options: Stock option exercise prices are set equal to the grant date market price and cannot be repriced or discounted without stockholder approval. |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Managing Director of TRP, a transportation private equity investment fund, from 1998 to 2002 and from 2004 to present | | | ✔ | | | Expertise in automotive, transportation, retail and transportation services industries |
• | | | Analyst in the Investment Banking Division of Merrill Lynch from 1996 to 1998 | | | ✔ | | | Over 20 years of investing and industry experience |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Graduate of Pennsylvania State University (BS) and Harvard Business School (MBA) | | | ✔ | | | Deep and intimate knowledge of the Company’s business as a Managing Director of TRP and member of the CarLotz board of directors prior to the Merger (as defined below) |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Retired Vice Chairman of Neiman Marcus Group (NMG), a luxury fashion retailer, from 2001 to 2016; also served as Chief Operating Officer and Chief Financial Officer for NMG | | | ✔ | | | Over 30 years of finance, accounting and broad executive experience |
• | | | Various positions at CompUSA, a pioneer in computer retailing, from 1991 to 2000, including Executive Vice President and Chief Financial Officer | | | ✔ | | | Certified Public Accountant with experience in public accounting and public companies |
• | | | 16 years with Ernst & Young until 1991, including the last four years as a partner | | | ✔ | | | Public company board experience, including chairing audit and compensation committees |
• | | | Graduate of Texas Tech University (B.B.A.) with a CPA in Texas | | | | | ||
Other Public Company Directorships (Current and in Last Five Years): | | | | | |||||
• | | | Director of Ares Commercial Real Estate Corporation since 2016 | | | | | ||
• | | | Former director of Acamar Partners Acquisition Corp., Fossil Group, Inc. and Hudson Group | | | | |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Managing Director of Crimson Capital, which invests in and advises early-stage technology companies spanning data and analytics, cybersecurity, machine learning, e-commerce, educational technology and virtual reality, since 2014 | | | ✔ | | | Extensive experience as a technology entrepreneur |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Co-Founder and Executive Vice President of comScore from 1999 to 2013 | | | ✔ | | | Expert in consumer analytics |
• | | | Co-Founder of Paragren Technologies, today owned by Oracle, and served in various roles at Procter & Gamble and Information Resources, Inc., where she developed and commercialized a series of data-driven analytical products | | | ✔ | | | Served on the boards of various public and private companies |
• | | | Graduate of Penn State University (BS) | | | | | ||
• | | | Fellow in the Stanford University Distinguished Careers Institute | | | | | ||
Other Public Company Directorships (Current and in Last Five Years): | | | | | |||||
• | | | Director of SITE Centers Corp. since 2018 | | | | |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Founder of S’well, which manufactures reusable, insulated products for the retail and wholesale market, and its Chairwoman from 2010 to 2022 and its Chief Executive Officer from 2010 to 2020 | | | ✔ | | | Extensive experience in retail |
• | | | Former CPA at Ernst & Young | | | ✔ | | | Experience founding and leading a successful retail company |
• | | | Graduate of the University of Colorado at Boulder (BS) and Harvard Business School (MBA) | | | ✔ | | | Experience and expertise in finance and accounting |
Other Public Company Directorships (Current and in Last Five Years): | | | | | |||||
• | | | Director of Thorne HealthTech since 2021 | | | | | ||
• | | | Director of Desenio AB since 2021 | | | | | ||
• | | | Director of Athena Consumer Acquisition Corp. since 2022 | | | | |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Managing Director of TRP, a transportation private equity investment fund, since 2002 | | | ✔ | | | Expertise in several industries, including automotive, transportation, consumer products, retail and building products |
• | | | Founding partner of Kaufman Peters, a small growth consulting firm, from 2000 to 2002 | | | ✔ | | | Advised numerous clients in the areas of strategy, organization design, cost reduction, supply chain management, manufacturing and information technology |
| | Vice President with RJ Peters & Company from 1999 to 2000 | | | ✔ | | | Deep and intimate knowledge of the Company’s business as a Managing Director of TRP and member of the CarLotz board of directors prior to the Merger (as defined below) |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Senior Manager, Manager and Senior Consultant with Deloitte Consulting in the automotive and manufacturing practice from 1994 to 1999 | | | | | ||
• | | | Senior Consultant with Accenture (formerly Andersen Consulting) from 1989 to 1992 | | | | | ||
• | | | Graduate of the University of Notre Dame (BS) and the Stanford University Graduate School of Business (MBA) | | | | | ||
Other Public Company Directorships in Last Five Years: | | | | | |||||
• | | | Former director of Spy Optic, Inc. | | | | |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Chief Executive Officer of CarParts.com, Inc. from January 2019 to April 2022 | | | ✔ | | | Valuable experience leading a consumer facing, technology-enabled and operationally complex business, with industry capabilities in online retail and a track record of shareholder value creation |
• | | | Chief Marketing Officer of Adorama Camera Inc. from August 2015 to December 2018 | | | ✔ | | | Experience and expertise in finance, accounting and marketing |
• | | | Senior Director and General Manager of eCommerce Strategy and Operations of Sears Holding Corporation from August 2014 to July 2015 | | | | | ||
• | | | Various positions at CarParts.com, Inc. (formerly U.S. Auto Parts Network, Inc.) from April 2008 to July 2014 | | | | | ||
• | | | Senior Financial Analyst at Smart & Final, Inc. from October 2007 to March 2008 | | | | | ||
• | | | Senior Analyst at KPMG from October 2006 to October 2007 | | | | | ||
• | | | Senior Associate at Pricewaterhousecoopers LLP from July 2004 to October 2006 | | | | | ||
• | | | Graduate of University of Southern California (BS) and University of California, Los Angeles (MBA) | | | | | ||
Other Public Company Directorships in Last Five Years: | | | | | |||||
• | | | Former director of CarParts.com, Inc. | | | | | ||
| | | | | | ||||
| | | | | |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Chief Financial Officer of ResMan LLC, a privately owned software company providing software solutions to multi-family residential property managers, from 2019 to 2020 | | | ✔ | | | Over 30 years of tax, accounting, financial and executive experience |
• | | | Chief Financial Officer of Lori’s Gifts Inc., a privately owned retail company serving hospitals throughout the U.S., from 2018 to 2019 | | | ✔ | | | Certified Public Accountant with experience in public accounting and public companies |
• | | | Chief Financial Officer of Stackpath LLC, a privately held entity offering a secure edge platform from 2015 to 2017 | | | ✔ | | | Public company board experience, including serving as a chair of an audit committee |
• | | | Chief Financial and Administrative Officer of CyrusOne Inc, a public real estate investment trust specializing in engineering, building and managing data center properties from 2012 to 2015 | | | | | ||
• | | | Various roles, including Treasurer and Vice President of Investor Relations, Vice President of Finance and Treasurer, Vice President of Financial Planning and Analysis and Managing Director of Corporate Tax, at Cincinnati Bell Inc. from 1996 to 2012 | | | | | ||
• | | | Accounting and tax positions at Ernst & Young from 1989 to 1996 | | | | | ||
• | | | Graduate of the University of Cincinnati (BA) with a CPA in Ohio | | | | | ||
Other Public Company Directorships (Current and in Last Five Years): | | | | | |||||
• | | | Director of Switch Inc. since 2017 | | | | | ||
• | | | Director of Evolv Technologies since 2021 | | | | |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Partner and Chief Executive Officer of Acamar Partners since 2018 | | | ✔ | | | 20 years of investment experience across various sectors and geographies |
• | | | Partner, Managing Director and Chairman of the Latin America’s Investment Committee of Advent International from 2001 to 2017 | | | ✔ | | | Played a significant role in supporting portfolio companies in the design and implementation of various strategic, operating and financial value creation initiatives |
Career Highlights | | | Skills and Qualifications | ||||||
• | | | Co-founder of Brabex Capital, an investment management firm | | | ✔ | | | Investment experience covers both the Americas and Europe |
• | | | Graduate of the Instituto Tecnológico Autónomo de México (ITAM) (Economics degree (cum laude)) and Harvard Business School (MBA) | | | ✔ | | | Served on the boards of various public and private companies |
Other Public Company Directorships (Current and in Last Five Years): | | | | | |||||
• | | | Director of Grupo Aeroportuario Centro Norte, S.A.B. de C.V. since April 2018 | | | | | ||
• | | | Former director of Acamar Partners Acquisition Corp. | | | | |
Name | | | Audit Committee | | | Compensation Committee | | | Nominating and Corporate Governance Committee |
Linda B. Abraham | | | | | | | |||
Steven G. Carrel | | | | | | | |||
Sarah M. Kauss | | | | | | | |||
David R. Mitchell | | | | | | | |||
Lev Peker* | | | | | | | |||
Kimberly H. Sheehy | | | | | | | |||
James E. Skinner | | | | | | | |||
Luis Solorzano** | | | | | | |
** | Chairman of the Board |
Total Number of Directors | | | 8 | |||
| | Female | | | Male | |
Part 1: Gender Identity | | | | | ||
Directors | | | 3 | | | 5 |
Part II: Demographic Background | | | | | ||
Hispanic or Latinx | | | 0 | | | 1 |
White | | | 3 | | | 4 |
Document | | | Purpose/Application |
Code of Conduct | | | Applies to all of the Company’s employees, officers and directors, including those officers responsible for financial reporting. |
Code of Ethics for Principal Executive and Senior Financial Officers | | | Applies to the Company’s principal executive officer, principal financial and accounting officer and all other senior financial officers. |
Corporate Governance Guidelines | | | Contains general principles regarding the functions of the Board and its committees. |
Committee Charters | | | Apply to the following Board committees, as applicable: Audit Committee; Compensation Committee; and Nominating and Corporate Governance Committee. |
Components of Director Compensation Program For 2021 Service(1): | | | Annual Amount | | | Form of Payment |
Annual Cash Retainer | | | $40,000 | | | Cash |
Annual Stock Retainer(2) | | | $135,000 | | | Restricted Stock Units |
Lead Independent Director Fee(3) | | | $20,000 | | | Cash |
Audit Committee Chair Fee(4) | | | $15,000 | | | Cash |
Audit Committee Member Fee(4) | | | $7,500 | | | Cash |
Compensation Committee Chair Fee | | | $12,000 | | | Cash |
Compensation Committee Member Fee | | | $6,000 | | | Cash |
Nominating and Corporate Governance Chair Fee | | | $8,000 | | | Cash |
Nominating and Corporate Governance Member Fee | | | $4,000 | | | Cash |
(1) | The Company’s Non-Employee Director Compensation Policy was amended on April 7, 2021 to include Steven G. Carrel, David R. Mitchell and Luis Solorzano. |
(2) | Pursuant to our Policy on Granting Equity Awards, unless specifically provided otherwise by the Compensation Committee or the Board, annual grants for directors are effective on the date of the annual meeting at which the director was elected or re-elected. The grant is eligible to vest on the earlier of (i) the day immediately preceding the date of the first annual meeting of Company stockholders following the date of grant; and (ii) the first anniversary of the date of grant, subject to the non-employee director’s continuous service through the applicable vesting date. Each director received a prorated portion of such award in connection with the Merger. |
(3) | Effective as of October 26, 2021, the Board approved to pay the Company’s Lead Independent Director a cash retainer of $20,000. Effective as of March 15, 2022, the Board separated the roles of Chairman and Chief Executive Officer and approved to pay the Chairman of the Board a cash retainer of $50,000. This payment replaces the Lead Independent Director cash retainer of $20,000. |
(4) | The Board approved an increase to the fees paid to the Audit Committee Chair (increased from $15,000 to $20,000) and the Audit Committee’s members (increased from $7,500 to $10,000) to be effective as of the date of the annual meeting of stockholders on June 2, 2022. |
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | Total ($) |
Linda B. Abraham | | | 49,151 | | | 173,407 | | | 222,558 |
Steven G. Carrel | | | 29,479 | | | 173,407 | | | 202,886 |
Sarah M. Kauss | | | 50,568 | | | 173,407 | | | 223,975 |
David R. Mitchell | | | 29,479 | | | 173,407 | | | 202,886 |
Kimberly H. Sheehy | | | 55,767 | | | 173,407 | | | 229,174 |
James E. Skinner | | | 52,459 | | | 173,407 | | | 225,866 |
Luis Solorzano | | | 40,521 | | | 173,407 | | | 213,928 |
(1) | Amounts reflect the full grant date fair value of restricted stock units granted during 2021 computed in accordance with FASB ASC Topic 718, rather than the amounts paid to or realized by the named individual. For information regarding assumptions underlying the valuation of stock awards, see Note 17 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 15, 2022. |
Name | | | Number of Unvested Restricted Stock Units Outstanding at Fiscal Year End |
Linda B. Abraham | | | 24,770 |
Steven G. Carrel | | | 24,770 |
Sarah M. Kauss | | | 24,770 |
David R. Mitchell | | | 24,770 |
Kimberly H. Sheehy | | | 24,770 |
James E. Skinner | | | 24,770 |
Luis Solorzano | | | 24,770 |
| | Shares Beneficially Owned | ||||
Name of Beneficial Owner | | | Number of Shares(1) | | | Percent of Class(2) |
5% BENEFICIAL OWNERS | | | | | ||
TRP(3) | | | 21,799,776 | | | 19.1% |
Tremblant Capital Group(4) | | | 7,516,338 | | | 6.6% |
NAMED EXECUTIVE OFFICERS AND DIRECTORS | | | | | ||
Michael W. Bor(5) | | | 11,683,558 | | | 10.1% |
John W. Foley II(6) | | | 1,041,025 | | | * |
Daniel A. Valerian(7) | | | 1,041,030 | | | * |
David R. Mitchell(3) | | | 21,799,776 | | | 19.1% |
Steven G. Carrel(3) | | | 21,799,776 | | | 19.1% |
Luis Solorzano(8) | | | 6,223,803 | | | 5.2% |
James E. Skinner(9) | | | 40,049 | | | * |
Linda B. Abraham(10) | | | 30,049 | | | * |
Sarah M. Kauss(11) | | | 30,049 | | | * |
Kimberly H. Sheehy(12) | | | 30,049 | | | * |
All executive officers and directors as a group (14 persons)(13) | | | 28,874,956 | | | 24.8% |
* | Less than one percent |
(1) | The number of shares includes restricted stock units subject to vesting requirements and options exercisable within 60 days of April 12, 2022. |
(2) | Shares subject to restricted stock units vesting and options exercisable within 60 days of April 12, 2022 are considered outstanding for the purpose of determining the percent of the class held by the holder of such restricted stock units or options, but not for the purpose of computing the percentage held by others. |
(3) | Includes 49,540 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022. Does not include 2,287,420 shares of common stock (“Earnout Shares”) issuable upon the satisfaction of certain conditions. TRP Capital Management, LLC (“TRP Capital”) is the general partner of TRP. Each of David R. Mitchell, Steven G. Carrel, Michael A. DiRienzo and James A. Hislop have shared voting and investment power over Company securities held by TRP. TRP Capital and each of Messrs. Mitchell, Carrel, DiRienzo and Hislop may be deemed to own all of the outstanding shares of common stock held by TRP. Each of TRP Capital and Messrs. Mitchell, Carrel, DiRienzo and Hislop disclaim beneficial ownership of such shares except to the extent of their pecuniary interest therein. The business address of TRP Capital Partners, LP is 380 N. Old Woodward Ave., Suite 205, Birmingham, Michigan 48009. |
(4) | This information is based on a Schedule 13G filed with the SEC on February 1, 2021 by Tremblant Capital Group, which reports sole and dispositive voting power with respect to 7,516,338 shares of common stock. |
(5) | Consists of (a) 8,914,303 shares of common stock held by Mr. Bor, (b) 952,593 shares of common stock held in trust by Katherine G. Bor, Trustee of the Michael W. Bor 2020 Irrevocable Family Trust dated October 16, 2020, (c) 352,593 shares of common stock held in trust by Michael W. Bor, Trustee of the Michael W. Bor 2020 Qualified Grantor Retained Annuity Trust dated October 16, 2020, (d) 1,442,043 shares of common stock issuable pursuant to options exercisable within 60 days of April 12, 2022 and (e) 22,026 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022. Does not include 1,107,469 Earnout Shares, which may be issued upon the satisfaction of certain conditions. Mr. Bor’s last date of employment was on March 16, 2022. |
(6) | Consists of (a) 7,773 shares of common stock held by Mr. Foley and (b) 1,033,252 shares of common stock issuable pursuant to options exercisable within 60 days of April 12, 2022. Mr. Foley’s last date of employment was on April 8, 2022. |
(7) | Consists of (a) 5,441 shares of common stock held by Mr. Valerian and (b) 1,173,191 shares of common stock issuable pursuant to options exercisable within 60 days of April 12, 2022. Does not include 33,657 shares of common stock issuable pursuant to options |
(8) | Consists of (a) 1,112,484 shares, (b) 24,770 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022, and (c) 1,266,884 shares issuable upon the exercise of warrants that are currently exercisable held directly by Mr. Solorzano. In addition, includes 3,819,665 shares held by the Sponsor that are subject to forfeiture if certain conditions are not met prior to January 21, 2026 (“Founder Shares Subject to Forfeiture”). Each of Juan Carlos Torres Carretero, Luis Ignacio Solorzano Aizpuru, Raffaele R. Vitale, Joseba Asier Picaza Ucar and Juan Duarte Hinterholzer is a managing member of Acamar Sponsor. Each such person may thus be deemed to have beneficial ownership of the securities held directly by Acamar Sponsor. Each such person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest he may have therein. The business address of Acamar Sponsor is 1450 Brickell Avenue, Suite 2130, Miami, Florida 33131. |
(9) | Consists of (a) 15,279 shares of common stock held by Mr. Skinner and (b) 24,770 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022. Does not include securities held by Acamar Sponsor in which Mr. Skinner has an indirect pecuniary interest but over which Mr. Skinner does not have voting or dispositive control. |
(10) | Consists of (a) 5,279 shares of common stock held by Ms. Abraham and (b) 24,770 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022. |
(11) | Consists of (a) 5,279 shares of common stock held by Ms. Kauss and (b) 24,770 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022. |
(12) | Consists of (a) 5,279 shares of common stock held by Ms. Sheehy and (b) 24,770 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022. |
(13) | Includes 685,682 shares of common stock issuable pursuant to options exercisable within 60 days of April 12, 2022, 173,390 shares of common stock underlying restricted stock units that vest within 60 days of April 12, 2022, 1,266,884 shares of common stock issuable upon the exercise of warrants and 3,819,665 Founder Shares Subject to Forfeiture. Does not include 128,063 shares of common stock underlying Earnout RSUs, 2,287,420 Earnout Shares and 725,496 shares of common stock underlying restricted stock units and 1,594,529 shares of common stock underlying options that do not vest within 60 days of April 12, 2022. |
Name and Principal Position | | | Year | | | Salary ($)(1) | | | Bonus ($)(2) | | | Stock Awards ($)(3) | | | Option Awards ($)(3) | | | Non-Equity Incentive Plan Compensation(4) | | | All Other Compensation ($)(5) | | | Total ($) |
Michael W. Bor Former CEO | | | 2021 | | | 577,846 | | | 450,000 | | | 1,985,768 | | | 13,287,492 | | | — | | | 77,781 | | | 16,378,887 |
| 2020 | | | 345,457 | | | — | | | — | | | — | | | — | | | 27,957 | | | 382,989 | ||
John W. Foley II Former COO | | | 2021 | | | 386,154 | | | 350,000 | | | 1,541,505 | | | 11,668,929 | | | — | | | 40,750 | | | 13,987,338 |
| 2020 | | | 206,731 | | | — | | | — | | | — | | | 18,750 | | | 20,478 | | | 245,959 | ||
Daniel A. Valerian(6) Former CTO | | | 2021 | | | 329,231 | | | 150,000 | | | 1,438,403 | | | 8,619,612 | | | — | | | 15,641 | | | 10,552,887 |
(1) | Amounts represent the named executive officer’s base salary during the fiscal year covered. |
(2) | In 2021, Messrs. Bor, Foley and Valerian received transaction bonuses equal to $450,000, $350,000 and $150,000, respectively, in connection with the consummation of the Merger. |
(3) | Amounts reflect the sum of (i) the full grant date fair value of stock options, service vesting restricted stock units and |
(4) | None of our named executive officers earned an annual cash bonus for 2021. In 2020, Mr. Foley received an annual cash incentive payment of $18,750 based on the achievement of certain performance goals relating to sales operations, dealer inventory, organizational development and personal development. |
(5) | The amounts in this column for 2021 reflect the following: |
(6) | Mr. Valerian was not a named executive officer in 2020. |
| | Option Awards | | | Stock Awards | |||||||||||||||||||||||||
Name | | | Grant Date | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) |
Michael W. Bor | | | 1/21/21(1) | | | 254,818 | | | — | | | — | | | 0.64 | | | 8/31/22 | | | — | | | — | | | — | | | — |
| 1/21/21(1) | | | 613,480 | | | — | | | — | | | 0.92 | | | 4/23/28 | | | — | | | — | | | — | | | — | ||
| 1/21/21(1) | | | 509,637 | | | — | | | — | | | 0.92 | | | 2/4/30 | | | — | | | — | | | — | | | — | ||
| 1/21/21(2) | | | — | | | 128,218 | | | — | | | 11.35 | | | 1/21/31 | | | — | | | — | | | — | | | — | ||
| 1/21/21(3) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 138,800 | | | 315,076 | ||
| 6/11/21(2) | | | — | | | — | | | — | | | — | | | — | | | 88,106 | | | 200,001 | | | — | | | — | ||
John W. Foley II | | | 1/21/21(4) | | | 178,373 | | | — | | | — | | | 0.64 | | | 8/31/22 | | | — | | | — | | | — | | | — |
| 1/21/21(4) | | | 613,480 | | | — | | | — | | | 0.92 | | | 5/14/28 | | | — | | | — | | | — | | | — | ||
| 1/21/21(4) | | | 407,710 | | | — | | | — | | | 0.92 | | | 11/1/29 | | | — | | | — | | | — | | | — | ||
| 1/21/21(5) | | | — | | | 64,109 | | | — | | | 11.35 | | | 1/21/31 | | | — | | | — | | | — | | | — | ||
| 1/21/21(3) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 120,698 | | | 273,984 | ||
| 6/11/21(5) | | | — | | | — | | | — | | | — | | | — | | | 44,053 | | | 100,000 | | | — | | | — | ||
Daniel A. Valerian | | | 1/21/21(6) | | | 101,928 | | | — | | | — | | | 0.24 | | | 8/31/22 | | | — | | | — | | | — | | | — |
| 1/21/21(6) | | | 305,782 | | | — | | | — | | | 0.64 | | | 8/31/22 | | | — | | | — | | | — | | | — | ||
| 1/21/21(6) | | | 61,156 | | | — | | | — | | | 0.92 | | | 4/23/28 | | | — | | | — | | | — | | | — | ||
| 1/21/21(6) | | | 509,637 | | | — | | | — | | | 0.92 | | | 11/1/29 | | | — | | | — | | | — | | | — | ||
| 1/21/21(6) | | | 183,469 | | | — | | | — | | | 0.92 | | | 8/10/30 | | | — | | | — | | | — | | | — | ||
| 1/21/21(7) | | | — | | | 44,876 | | | — | | | 11.35 | | | 1/21/31 | | | — | | | — | | | — | | | — | ||
| 1/21/21(3) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 118,091 | | | 268,067 | ||
| 6/11/21(7) | | | — | | | — | | | — | | | — | | | — | | | 30,837 | | | 70,000 | | | — | | | — |
(1) | Each award was fully vested as of December 31, 2021. Each such award was received in the Merger in exchange for options to purchase shares of Former CarLotz that were held by Mr. Bor. With respect to Mr. Bor’s stock option awards granted on January 21, 2021: (i) the 254,818 stock options with an exercise price per share of $0.64 will remain exercisable for three months following the date of his termination of employment; and (ii) the stock options with an exercise price per share of $0.92 will remain exercisable until their respective original expiration dates. |
(2) | Each award provides for 25% of the award to vest on each of the first four anniversaries of January 21, 2021, subject to Mr. Bor’s continuous service through the applicable vesting dates. With respect to Mr. Bor’s stock option award granted on January 21, 2021, 25% vested in the ordinary course on January 21, 2022 and an additional 25% vested on the date of his termination of employment. Such vested portions of the option will remain exercisable for three months following the date of his termination of employment. The remaining unvested portion of the option was automatically cancelled and forfeited on the date of his termination of employment. With respect to Mr. Bor’s restricted stock unit award granted on June 11, 2021, 25% vested in the ordinary course on January 21, 2022, an additional 25% vested on the date of his termination of employment and the remaining unvested portion of the restricted stock unit award was automatically cancelled and forfeited on the date of his termination of employment. |
(3) | Award will vest if certain performance conditions are met. Specifically, (i) 50% of each such award will vest if, on or prior to January 21, 2026, the closing trading price of the Company’s common stock exceeds $12.50 per share (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions) for any 20 trading days out of any consecutive 30-trading day period, and (ii) the remaining 50% of each such award will vest if, on or prior to January 21, 2026, the closing trading price of the Company’s common stock exceeds $15.00 per share (as equitably adjusted for stock |
(4) | Each award was fully vested as of December 31, 2021. Each such award was received in the Merger in exchange for options to purchase shares of Former CarLotz that were held by Mr. Foley. With respect to Mr. Foley’s stock option awards granted on January 21, 2021: (i) 151,617 of the 178,373 stock options with an exercise price per share of $0.64 will remain exercisable for three months following the date of his termination of employment (the remaining 26,756 stock options were cancelled and forfeited as of the date of his termination of employment pursuant to Mr. Foley’s separation agreement); (ii) 521,458 of the 613,480 stock options with an exercise price per share of $0.92 will remain exercisable until May 14, 2028 (the remaining 92,022 stock options were cancelled and forfeited as of the date of his termination of employment pursuant to Mr. Foley’s separation agreement); and (iii) 346,554 of the 407,710 stock options with an exercise price per share of $0.92 will remain exercisable until November 1, 2029 (the remaining 61,156 stock options were cancelled and forfeited as of the date of his termination of employment pursuant to Mr. Foley’s separation agreement). |
(5) | Each award provides for 25% of the award to vest on each of the first four anniversaries of January 21, 2021, subject to Mr. Foley’s continuous service through the applicable vesting dates. With respect to Mr. Foley’s 64,109 stock options granted on January 21, 2021, 16,027 vested in the ordinary course on January 21, 2022, of which 13,623 will remain exercisable for three months following the date of his termination of employment and the remaining 2,404 of which were cancelled and forfeited on the date of his termination of employment pursuant to Mr. Foley’s separation agreement (the remaining 48,028 stock options that had not vested in the ordinary course were automatically cancelled and forfeited as of the date of his termination of employment). With respect to Mr. Foley’s restricted stock unit award granted on June 11, 2021, 25% vested in the ordinary course on January 21, 2022 and the remaining unvested portion of the restricted stock unit award was automatically cancelled and forfeited on the date of his termination of employment. |
(6) | Each award was fully vested as of December 31, 2021. Each such award was received in the Merger in exchange for options to purchase shares of Former CarLotz that were held by Mr. Valerian. With respect to Mr. Valerian’s stock option awards granted on January 21, 2021: (i) the 101,928 stock options with an exercise price per share of $0.24 will remain exercisable for three months following the date of his termination of employment; (ii) the 305,782 stock options with an exercise price per share of $0.64 will remain exercisable for three months following the date of his termination of employment; and (iii) the stock options with an exercise price per share of $0.92 will remain exercisable until their respective original expiration dates. |
(7) | Each award provides for 25% of the award to vest on each of the first four anniversaries of January 21, 2021, subject to Mr. Valerian’s continuous service through the applicable vesting dates. With respect to Mr. Valerian’s stock option awards granted on January 21, 2021, 11,219 of the 44,876 stock options with an exercise price of $11.35 vested in the ordinary course on January 21, 2022 and will remain exercisable for three months following the date of his termination of employment (the remaining 33,657 stock options were automatically cancelled and forfeited as of the date of his termination of employment). With respect to Mr. Valerian’s restricted stock unit award granted on June 11, 2021, 25% vested in the ordinary course on January 21, 2022 and the remaining unvested portion of the restricted stock unit award was automatically cancelled and forfeited on the date of his termination of employment. |
(8) | Values are based on the closing price of our common stock on December 31, 2021, which was equal to $2.27. |
Name | | | Annual Base Salary ($) | | | Target Bonus (%) |
Michael W. Bor | | | 600,000 | | | 100 |
John W. Foley II | | | 400,000 | | | 75 |
Daniel A. Valerian | | | 350,000 | | | 50 |
Equity Compensation Plan Information Table | |||||||||
Plan Category | | | Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#)(a) | | | Weighted- average Exercise Price of Outstanding Options, Warrants and Rights ($)(b) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#)(c) |
Equity Compensation Plans Approved by Stockholders | | | 7,884,740(1) | | | 3.10(2) | | | 7,284,276(3) |
Equity Compensation Plans Not Approved by Stockholders | | | — | | | — | | | — |
Total | | | 7,884,740 | | | 3.10 | | | 7,284,276 |
(1) | Includes shares issuable pursuant to equity awards outstanding under (i) the 2020 Plan, which consists of (a) options to purchase 1,469,297 shares; and (b) 1,218,939 shares subject to unvested restricted share units, (ii) the 2017 Plan, which consists of options to purchase 3,936,176 shares, and (iii) the 2011 Plan, which consists of options to purchase 1,260,328 shares. No further awards will be made under the 2017 Plan or the 2011 Plan. |
(2) | The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding restricted stock units, which have no exercise price. |
(3) | Includes 7,284,276 shares that remain available for future issuance under the 2020 Plan. |
| | Year Ended December 31, 2021 | | | Year Ended December 31, 2020 | |
Audit Fees(1) | | | $690,000 | | | $497,000 |
Audit-Related Fees(2) | | | $50,000 | | | — |
Tax Fees(3) | | | $10,000 | | | — |
All Other Fees | | | — | | | — |
Total | | | $750,000 | | | $497,000 |
| | Year Ended December 31, 2021 | | | Year Ended December 31, 2020 | |
Audit Fees(1) | | | — | | | $89,165 |
Audit-Related Fees(2) | | | $32,445 | | | — |
Tax Fees | | | — | | | $3,000 |
All Other Fees | | | — | | | — |
Total | | | $32,445 | | | $92,165 |
Equity Compensation Plan Information Table | |||||||||
Plan Category | | | Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#)(a) | | | Weighted- average Exercise Price of Outstanding Options, Warrants and Rights ($)(b) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#)(c) |
Equity Compensation Plans Approved by Stockholders | | | 7,884,740(1) | | | 3.10(2) | | | 7,284,276(3) |
Equity Compensation Plans Not Approved by Stockholders | | | — | | | — | | | — |
Total | | | 7,884,740 | | | 3.10 | | | 7,284,276 |
(1) | Includes shares issuable pursuant to equity awards outstanding under (i) the 2020 Plan, which consists of (a) options to purchase 1,469,297 shares; and (b) 1,218,939 shares subject to unvested restricted share units, (ii) the 2017 Plan, which consists of options to purchase 3,936,176 shares, and (iii) the 2011 Plan, which consists of options to purchase 1,260,328 shares. No further awards will be made under the 2017 Plan or the 2011 Plan. |
(2) | The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding restricted stock units, which have no exercise price. |
(3) | Includes 7,284,276 shares that remain available for future issuance under the 2020 Plan. |
Equity Compensation Plan Information Table | |||||||||
Plan Category | | | Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#)(a) | | | Weighted- average Exercise Price of Outstanding Options, Warrants and Rights ($)(b) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#)(c) |
Equity Compensation Plans Approved by Stockholders | | | 7,884,740(1) | | | 3.10(2) | | | 7,284,276(3) |
Equity Compensation Plans Not Approved by Stockholders | | | — | | | — | | | — |
Total | | | 7,884,740 | | | 3.10 | | | 7,284,276 |
(1) | Includes shares issuable pursuant to equity awards outstanding under (i) the 2020 Plan, which consists of (a) options to purchase 1,469,297 shares; and (b) 1,218,939 shares subject to unvested restricted share units, (ii) the 2017 Plan, which consists of options to purchase 3,936,176 shares, and (iii) the 2011 Plan, which consists of options to purchase 1,260,328 shares. No further awards will be made under the 2017 Plan or the 2011 Plan. |
(2) | The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding restricted stock units, which have no exercise price. |
(3) | Includes 7,284,276 shares that remain available for future issuance under the 2020 Plan. |
| | Year Ended December 31, 2021 | | | Year Ended December 31, 2020 | |
Audit Fees(1) | | | $690,000 | | | $497,000 |
Audit-Related Fees(2) | | | $50,000 | | | — |
Tax Fees(3) | | | $10,000 | | | — |
All Other Fees | | | — | | | — |
Total | | | $750,000 | | | $497,000 |
| | Year Ended December 31, 2021 | | | Year Ended December 31, 2020 | |
Audit Fees(1) | | | — | | | $89,165 |
Audit-Related Fees(2) | | | $32,445 | | | — |
Tax Fees | | | — | | | $3,000 |
All Other Fees | | | — | | | — |
Total | | | $32,445 | | | $92,165 |
(1) | Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end consolidated financial statements and the review of our financial statements included in our quarterly filings on Form 10-Q, as well as services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings. |
(2) | Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end consolidated financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. |
(3) | Tax Fees. Tax fees consist of fees billed for state and local tax analysis for certain new states the Company entered into in 2021. |
Q: | Why am I receiving these materials? |
A: | We are providing these proxy materials to you in connection with the solicitation, by our Board, of proxies to be voted at the Company’s 2022 annual meeting of stockholders and at any adjournments or postponements thereof. Stockholders are invited to attend the 2022 annual meeting to be held via a live audio webcast on June 2, 2022 beginning at 9:00 a.m., Eastern Daylight Time, at http://www.virtualshareholdermeeting.com/LOTZ2022, where stockholders will be able to listen to the meeting live, submit questions and vote online. You will need the 16-digit control number provided on your Notice (as defined below under “Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?”), on your proxy card or on the instructions that accompanied your proxy materials. Our proxy materials are first being distributed to stockholders on or about April 29, 2022. |
Q: | What proposals will be voted on, what is the Board’s voting recommendation, and what are the standards for determining whether a proposal has been approved? |
A: | Proposal |
| | | | Voting Choices and Board Recommendation | | | Voting Standard | | | Effect of Abstention | | | Effect of Broker Non-Vote | ||
1. | | | Election of Directors | | | • Vote “FOR” all nominees • Vote “FOR” specific nominees • “WITHHOLD” vote for all nominees • “WITHHOLD” vote for specific nominees | | | The two nominees receiving the greatest number of votes cast | | | No effect | | | No effect |
| | | | The Board recommends a vote “FOR” each of the director nominees. | | | | | | | |||||
2. | | | Ratification of Independent Registered Accounting Firm | | | • Vote “FOR” the ratification • Vote “AGAINST” the ratification • Abstain from voting on the ratification | | | Majority of the shares present and entitled to vote | | | Vote against | | | Not applicable |
| | | | The Board recommends a vote “FOR” the ratification of the appointment of Deloitte as our independent registered accounting firm for 2022 | | | | | | |
Q: | Who is entitled to vote? |
A: | All shares owned by you as of the record date, which is the close of business on April 12, 2022, may be voted by you. You may cast one vote per share of our common stock that you held on the record date. |
Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
A: | Stockholder of Record. If your shares are registered in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, you are considered a “stockholder of record” with respect to those shares. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person online during the 2022 annual meeting. |
Q: | How can I vote my shares and participate at the 2022 annual meeting? |
A: | Stockholders may participate in the 2022 annual meeting by visiting the following website: http://www.virtualshareholdermeeting.com/LOTZ2022. To participate in the 2022 annual meeting, you will need the 16-digit control number provided on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. |
Q: | How can I vote my shares without attending the 2022 annual meeting? |
A: | Whether you hold your shares directly as the stockholder of record or beneficially in street name, you may vote without attending the 2022 annual meeting in one of the following manners: |
Q: | What is the quorum requirement for the 2022 annual meeting? |
A: | A quorum of stockholders is necessary to hold the 2022 annual meeting. A quorum at the 2022 annual meeting exists if the holders of a majority of the Company’s capital stock issued and outstanding and entitled to vote at the 2022 annual meeting are present in person or represented by proxy. Abstentions and broker non-votes are counted as present for establishing a quorum. A broker non-vote occurs on an item when a broker, bank or other nominee is not permitted to vote on that item absent instruction from the beneficial owner of the shares and no instruction is given. |
Q: | What happens if I do not give specific voting instructions? |
A: | Stockholder of Record. If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the 2022 annual meeting. |
Q: | What does it mean if I receive more than one proxy card or voting instruction form? |
A: | It means your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction forms you receive. |
Q: | Who will count the vote? |
A: | The votes will be counted by the inspector of election appointed for the 2022 annual meeting. |
Q: | Can I revoke my proxy or change my vote? |
A: | Yes. You may revoke your proxy or change your voting instructions at any time prior to the vote at the 2022 annual meeting by: |
Q: | Who will bear the cost of soliciting proxies for the 2022 annual meeting? |
A: | The Company pays the cost of soliciting your proxy and reimburses brokers and others for forwarding to you the proxy materials as beneficial owners of our common stock. The Company’s directors, officers and employees may also solicit proxies by mail, telephone and personal contact. They will not receive any additional compensation for these activities. |
Q: | I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials? |
A: | We have adopted a procedure call “householding,” which the SEC has approved. Under this procedure, we may deliver a single copy of the Notice and, if applicable, this proxy statement and the Company’s Annual Report to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. |
Q: | How can I obtain a copy of the Annual Report on Form 10-K? |
A: | Copies of the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC, are available to stockholders free of charge on the investor relations page of our website, investors.carlotz.com, or by writing to CarLotz, Inc., Investor Relations, 3301 W. Moore Street, Richmond, Virginia 23230. |
Q: | Where can I find the voting results of the 2022 annual meeting? |
A: | CarLotz will announce preliminary voting results at the 2022 annual meeting and publish preliminary, or final results if available, in a Current Report on Form 8-K within four business days of the 2022 annual meeting. |
Q: | How can I attend the 2022 annual meeting? |
A: | The 2022 annual meeting will be a completely virtual meeting of stockholders, which will be conducted through a live audio webcast. There will be no physical meeting location. You are entitled to participate in the annual meeting only if you were a Company stockholder as of the close of business on April 12, 2022 or if you hold a valid proxy for the annual meeting. |
Q: | Why is the 2022 annual meeting virtual? |
A: | We are excited to host a virtual annual meeting to provide ease of access, real-time communication and cost savings for our stockholders and the Company. Hosting a virtual meeting facilitates stockholder attendance and participation by enabling stockholders to participate from around the world. In addition, hosting a virtual meeting provides improved communication and cost savings for our stockholders and the Company. |
Q: | What if I have technical difficulties or trouble accessing the meeting? |
A: | If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting log-in page at http://www.virtualshareholdermeeting.com/LOTZ2022. |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 2.02. | Results of Operations and Financial Condition. |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Separation and Release Agreement, dated March 14, 2022, between Michael Bor and CarLotz, Inc. | |
| | ||
| | Employment Agreement, dated March 12, 2022, between Lev Peker and CarLotz, Inc. | |
| | ||
| | Press release dated March 15, 2022 | |
| | ||
| | Press release dated March 15, 2022 | |
| | ||
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: March 15, 2022 | | | By: | | | /s/ Rebecca C. Polak |
| | Name: | | | Rebecca C. Polak | |
| | Title: | | | Chief Commercial Officer and General Counsel |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Employment Agreement, dated March 19, 2022, between Ozan Kaya and CarLotz, Inc. | |
| | ||
| | Press release dated March 31, 2022 | |
| | ||
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: March 31, 2022 | | | By: | | | /s/ Rebecca C. Polak |
| | Name: | | | Rebecca C. Polak | |
| | Title: | | | Chief Commercial Officer and General Counsel |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Separation and Release Agreement, dated April 8, 2022, between John Foley and CarLotz, Inc. | |
| | ||
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: April 11, 2022 | | | By: | | | /s/ Rebecca C. Polak |
| | Name: | | | Rebecca C. Polak | |
| | Title: | | | Chief Commercial Officer and General Counsel |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 5.07. | Submission of Matters to a Vote of Security Holders. |
(a) | The annual meeting of stockholders of CarLotz, Inc. (the “Company”) was held on June 2, 2022 (the “Annual Meeting”). |
(b) | At the Annual Meeting, the stockholders: |
NOMINEE | | | VOTES FOR | | | VOTES WITHHELD | | | BROKER NON-VOTES |
Steven G. Carrel | | | 51,888,175 | | | 3,022,152 | | | 24,074,794 |
James E. Skinner | | | 41,626,023 | | | 13,284,304 | | | 24,074,794 |
VOTES FOR | | | VOTES AGAINST | | | VOTES ABSTAINED |
77,949,437 | | | 399,123 | | | 636,561 |
(c) | Not applicable. |
(d) | Not applicable. |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: June 6, 2022 | | | By: | | | /s/ Rebecca C. Polak |
| | Name: | | | Rebecca C. Polak | |
| | Title: | | | Chief Commercial Officer and General Counsel |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 3.01. | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: June 10, 2022 | | | By: | | | /s/ Rebecca C. Polak |
| | Name: | | | Rebecca C. Polak | |
| | Title: | | | Chief Commercial Officer and General Counsel |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 2.05. | Costs Associated with Exit or Disposal Activities. |
Item 2.06 | Material Impairments. |
Item 7.01. | Regulation FD Disclosure. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Press release dated June 21, 2022 | |
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: June 21, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Exhibit No. | | | Exhibit Title |
| | Press release dated July 5, 2022 | |
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: July 5, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☒ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 2.02 | Results of Operations and Financial Condition. |
Item 8.01 | Other Events. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Press Release dated August 9, 2022 | |
| | Joint Press Release dated August 9, 2022 | |
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: August 9, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☒ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 1.01 | Entry into a Material Definitive Agreement. |
Closing Date | | | Shift Minimum Cash Amount | | | CarLotz Minimum Cash Amount |
During 2022 | | | $(10,416,596) | | | $58,330,299 |
During January 2023 | | | $(15,416,596) | | | $53,330,299 |
During February 2023 | | | $(20,416,596) | | | $48,330,299 |
During March 2023 | | | $(25,416,596) | | | $43,330,299 |
During April 2023 | | | $(30,416,596) | | | $38,330,299 |
During May 2023 | | | $(35,416,596) | | | $33,330,299 |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Press Release dated August 9, 2022 | |
| | Joint Press Release dated August 9, 2022 | |
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: August 9, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☒ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 1.01 | Entry into a Material Definitive Agreement. |
Closing Date | | | Shift Minimum Cash Amount | | | CarLotz Minimum Cash Amount |
During 2022 | | | $(10,416,596) | | | $58,330,299 |
During January 2023 | | | $(15,416,596) | | | $53,330,299 |
During February 2023 | | | $(20,416,596) | | | $48,330,299 |
During March 2023 | | | $(25,416,596) | | | $43,330,299 |
During April 2023 | | | $(30,416,596) | | | $38,330,299 |
During May 2023 | | | $(35,416,596) | | | $33,330,299 |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Press Release dated August 9, 2022 | |
| | Joint Press Release dated August 9, 2022 | |
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: August 9, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☒ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | ||
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | ||
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
Item 1.01 | Entry into a Material Definitive Agreement. |
Closing Date | | | Shift Minimum Cash Amount | | | CarLotz Minimum Cash Amount |
During 2022 | | | $(10,416,596) | | | $58,330,299 |
During January 2023 | | | $(15,416,596) | | | $53,330,299 |
During February 2023 | | | $(20,416,596) | | | $48,330,299 |
During March 2023 | | | $(25,416,596) | | | $43,330,299 |
During April 2023 | | | $(30,416,596) | | | $38,330,299 |
During May 2023 | | | $(35,416,596) | | | $33,330,299 |
(i) | with respect to 50% of such Sponsor Shares, the date on which the closing trading price of Shift common stock has been greater than a per-share amount equal to $12.50, divided by the Exchange Ratio (in each case, as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting Shift common stock) over any twenty (20) trading days within any thirty (30) trading day period from the closing of the Merger; and |
(ii) | with respect to 50% of such Sponsor Shares, the date on which the closing trading price of Shift common stock has been greater than a per-share amount equal to $15.00, divided by the Exchange Ratio (in each case, as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting Shift common stock) over any twenty (20) trading days within any thirty (30) trading day period from the closing of the Merger. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | | | Exhibit Title |
| | Agreement and Plan of Merger dated August 9, 2022, by and among Shift Technologies, Inc., Shift Remarketing Operations, Inc. and CarLotz, Inc. † | |
| | ||
| | Form of Voting and Support Agreement among Shift Technologies, Inc., CarLotz, Inc., and certain shareholders of Shift Technologies, Inc. | |
| | ||
| | Form of Voting and Support Agreement, among Shift Technologies, Inc., CarLotz, Inc., and certain shareholders of CarLotz, Inc. | |
| | ||
| | Amended and Restated Sponsor Letter Agreement, dated August 9,2022, by and among Shift Technologies, Inc., Carlotz, Inc. and Acamar Partners Sponsor I LLC | |
| | ||
104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
† | Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. CarLotz agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request. |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: August 12, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: September 30, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Delaware | | | 001-38818 | | | 83-2456129 |
(State or other jurisdiction of incorporation) | | | (Commission File Number) | | | (IRS Employer Identification No.) |
☐ | | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | | | Trading Symbol(s) | | | Name of Each Exchange on Which Registered |
Class A common stock, par value $0.0001 per share | | | LOTZ | | | The Nasdaq Global Market |
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | | | LOTZW | | | The Nasdaq Global Market |
| | CARLOTZ, INC. | ||||
| | | | |||
Dated: October 11, 2022 | | | By: | | | /s/ Lev Peker |
| | Name: | | | Lev Peker | |
| | Title: | | | Chief Executive Officer |
Indemnification of Directors and Officers |
Exhibits and Financial Statement Schedules |
Exhibit Number | | | Description |
2.1† | | | Agreement and Plan of Merger, dated August 9, 2022, by and among Shift Technologies, Inc., Shift Remarketing Operations, Inc. and CarLotz, Inc. (included as Annex A to the joint proxy statement/ prospectus, which forms a part of this registration statement). |
| | Agreement and Plan of Merger, dated June 29, 2020, by and among Insurance Acquisition Corp., IAC Merger Sub, Inc. and Shift Technologies, Inc. (incorporated by reference to Exhibit 2.1 to Shift’s Current Report on Form 8-K filed on June 29, 2020). | |
| | First Amendment to Agreement and Plan of Merger, dated August 19, 2020, by and among Insurance Acquisition Corp., IAC Merger Sub, Inc. and Shift Technologies, Inc. (incorporated by reference to Exhibit 2.2 to Shift’s Amendment No. 5 to Form S-4 filed on September 23, 2020, which was included in Annex A thereto). | |
| | Second Amended and Restated Certificate of Incorporation of Shift (incorporated by reference to Exhibit 3.1 to Shift’s Current Report on Form 8-K filed on October 14, 2020). | |
| | Second Amended and Restated Bylaws of Shift (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on October 14, 2020). | |
| | Form of Opinion of Jenner & Block LLP. | |
| | Opinion of Jenner & Block LLP regarding certain U.S. federal income tax matters. | |
| | Consent of Deloitte & Touche LLP, independent registered public accounting firm of Shift Technologies, Inc. | |
| | Consent of Deloitte & Touche LLP, independent registered public accounting firm of CarLotz, Inc. | |
| | Consent of Jenner & Block LLP (included in Exhibit 5.1). | |
| | Consent of Jenner & Block LLP (included in Exhibit 8.1). | |
| | Power of Attorney (included on the signature page to the initial filing of the registration statement). | |
| | Consent of Centerview Partners LLC. | |
| | Consent of William Blair & Company, L.L.C. | |
| | Consent of Luis Solorzano to be named as a director nominee. | |
| | Consent of James E. Skinner to be named as a director nominee. | |
| | Consent of Kimberly H. Sheehy to be named as a director nominee. | |
| | Form of Proxy Card for Special Meeting of Shift Technologies, Inc. | |
| | Form of Proxy Card for Special Meeting of CarLotz, Inc. | |
| | Filing Fee Table |
† | Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Shift agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request. |
* | To be filed by amendment |
** | Previously filed |
Undertakings |
(a) | The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”); (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the |
(b) | The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(d) | The undersigned registrant hereby undertakes that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(e) | The undersigned registrant undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424; (ii) any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant; (iii) the portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and (iv) any other communication that is an offer in the offering made by the registrant to the purchaser. |
(f) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(g) | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(h) | The undersigned registrant undertakes that every prospectus: (i) that is filed pursuant to the paragraph immediately preceding; or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is |
(i) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the undersigned registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(j) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(k) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
| | Shift Technologies, Inc. | |||||||
| | | | | | ||||
| | By: | | | /s/ Jeff Clementz | ||||
| | | | Name: | | | Jeff Clementz | ||
| | | | Title: | | | Chief Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/ Jeff Clementz | | | Chief Executive Officer (Principal Executive Officer) | | | |
Jeff Clementz | | |||||
| | | | |||
/s/ Oded Shein | | | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | | |
Oded Shein | | |||||
| | | | |||
* | | | Director | | | |
Kellyn Smith Kenny | | |||||
| | | | |||
* | | | Director | | | |
Jason Krikorian | | |||||
| | | | |||
* | | | Director | | | |
Victoria McInnis | | |||||
| | | | |||
* | | | Director | | | |
Adam Nash | | |||||
| | | | |||
* | | | Director | | | |
Manish Patel | | |||||
| | | | |||
* | | | Director | | | |
Toby Russell | | |||||
| | | | |||
* | | | Director | | | |
George Arison | |
*By: | | | /s/ Jeff Clementz | | | |
| | Jeff Clementz Attorney-in-fact | | |