REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of CarLotz, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CarLotz, Inc. and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
Detroit, Michigan
March 15, 2021
We have served as the Company’s auditor since 2020.
F-1
December 31, 2020 and 2019
(In thousands, except share data)
| | | 2020 | | | 2019 | | ||||||
Assets | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 2,208 | | | | | $ | 3,214 | | |
Restricted cash | | | | | 605 | | | | | | 888 | | |
Marketable securities – at fair value | | | | | 1,032 | | | | | | — | | |
Accounts receivable, net | | | | | 4,132 | | | | | | 3,256 | | |
Inventories | | | | | 11,202 | | | | | | 7,625 | | |
Other current assets | | | | | 6,679 | | | | | | 234 | | |
Total Current Assets | | | | | 25,858 | | | | | | 15,217 | | |
Property and equipment, net | | | | | 1,868 | | | | | | 631 | | |
Lease vehicles, net | | | | | 173 | | | | | | 444 | | |
Other assets | | | | | 299 | | | | | | 343 | | |
Total Assets | | | | $ | 28,198 | | | | | $ | 16,635 | | |
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | |
Long-term debt, current | | | | $ | 6,370 | | | | | $ | 2,825 | | |
Floor plan notes payable | | | | | 6,039 | | | | | | 6,739 | | |
Accounts payable | | | | | 6,283 | | | | | | 2,134 | | |
Accrued transaction expenses | | | | | 6,052 | | | | | | — | | |
Accrued expenses | | | | | 3,563 | | | | | | 1,576 | | |
Accrued expenses – related party | | | | | 5,082 | | | | | | 3,102 | | |
Other current liabilities | | | | | 256 | | | | | | 434 | | |
Total Current Liabilities | | | | | 33,645 | | | | | | 16,810 | | |
Long-term debt, less current portion | | | | | 2,999 | | | | | | — | | |
Redeemable convertible preferred stock tranche obligation | | | | | 2,832 | | | | | | 3,755 | | |
Other liabilities | | | | | 1,959 | | | | | | 931 | | |
Total Liabilities | | | | | 41,435 | | | | | | 21,496 | | |
Commitments and Contingencies (Note 17) | | | | | — | | | | | | — | | |
Redeemable Convertible Preferred Stock: | | | | | | | | | | | | | |
Series A Preferred Stock $0.001 stated value; authorized 3,052,127 shares; issued and outstanding 2,034,751 shares; aggregate liquidation preference of approximately $37,114 and $34,300 as of December 31, 2020 and 2019, respectively | | | | | 17,560 | | | | | | 17,560 | | |
Stockholders’ Equity (Deficit): | | | | | | | | | | | | | |
Common stock, $0.001 par value; authorized 7,600,000 shares, issued 3,869,118 shares, and outstanding 3,716,526 shares | | | | | 4 | | | | | | 4 | | |
Additional paid-in capital | | | | | 4,721 | | | | | | 6,560 | | |
Accumulated deficit | | | | | (34,037) | | | | | | (27,485) | | |
Accumulated other comprehensive income | | | | | 15 | | | | | | — | | |
Treasury stock, $0.001 par value; 152,592 shares | | | | | (1,500) | | | | | | (1,500) | | |
Total Stockholders’ Equity (Deficit) | | | | | (30,797) | | | | | | (22,421) | | |
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | | | | $ | 28,198 | | | | | $ | 16,635 | | |
Years Ended December 31, 2020, 2019, and 2018
(In thousands, except per share and share data)
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
Retail vehicle sales | | | | $ | 104,253 | | | | | $ | 90,382 | | | | | $ | 53,448 | | |
Wholesale vehicle sales | | | | | 9,984 | | | | | | 8,454 | | | | | | 3,153 | | |
Finance and insurance, net | | | | | 3,898 | | | | | | 3,117 | | | | | | 1,608 | | |
Lease income, net | | | | | 490 | | | | | | 533 | | | | | | 142 | | |
Total Revenues | | | | | 118,625 | | | | | | 102,486 | | | | | | 58,351 | | |
Cost of sales (exclusive of depreciation) | | | | | 107,369 | | | | | | 93,780 | | | | | | 52,708 | | |
Gross Profit | | | | | 11,256 | | | | | | 8,706 | | | | | | 5,643 | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | | | 17,552 | | | | | | 18,305 | | | | | | 11,661 | | |
Depreciation expense | | | | | 341 | | | | | | 504 | | | | | | 338 | | |
Management fee expense – related party | | | | | 215 | | | | | | 250 | | | | | | 250 | | |
Total Operating Expenses | | | | | 18,108 | | | | | | 19,059 | | | | | | 12,249 | | |
Loss from Operations | | | | | (6,852) | | | | | | (10,353) | | | | | | (6,606) | | |
Interest Expense | | | | | 518 | | | | | | 651 | | | | | | 466 | | |
Other Income (Expense), net | | | | | | | | | | | | | | | | | | | |
Management fee income – related party | | | | | — | | | | | | — | | | | | | 127 | | |
Change in fair value of warrants liability | | | | | (14) | | | | | | 24 | | | | | | (2) | | |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | | | 923 | | | | | | (1,396) | | | | | | (272) | | |
Other income (expense) | | | | | (81) | | | | | | (291) | | | | | | 662 | | |
Total Other Income (Expense), net | | | | | 828 | | | | | | (1,663) | | | | | | 515 | | |
Loss Before Income Tax Expense | | | | | (6,542) | | | | | | (12,667) | | | | | | (6,557) | | |
Income Tax Expense | | | | | 10 | | | | | | 11 | | | | | | 3 | | |
Net Loss | | | | $ | (6,552) | | | | | $ | (12,678) | | | | | $ | (6,560) | | |
Redeemable convertible preferred stock dividends (undeclared and cumulative) | | | | | (1,884) | | | | | | (1,579) | | | | | | (1,014) | | |
Net loss attributable to common stockholders | | | | $ | (8,436) | | | | | $ | (14,257) | | | | | $ | (7,574) | | |
Net loss per share attributable to common stockholders, basic and diluted | | | | $ | (2.27) | | | | | $ | (3.84) | | | | | $ | (2.04) | | |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | | | | | 3,716,526 | | | | | | 3,716,526 | | | | | | 3,716,526 | | |
Years Ended December 31, 2020, 2019, and 2018
(In thousands, except per share and share data)
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Net loss | | | | $ | (6,552) | | | | | $ | (12,678) | | | | | $ | (6,560) | | |
Other comprehensive income, net of tax: | | | | | | | | | | | | | | | | | | | |
Unrealized gains on marketable securities arising during the period | | | | | 16 | | | | | | — | | | | | | — | | |
Tax effect | | | | | — | | | | | | — | | | | | | — | | |
Unrealized gains on marketable securities arising during the period, net of tax | | | | | 16 | | | | | | — | | | | | | — | | |
Reclassification adjustment for realized losses | | | | | (1) | | | | | | — | | | | | | — | | |
Tax effect | | | | | — | | | | | | — | | | | | | — | | |
Reclassification adjustment for realized losses, net of tax | | | | | (1) | | | | | | — | | | | | | — | | |
Other Comprehensive Income, net of tax | | | | | 15 | | | | | | — | | | | | | — | | |
Total Comprehensive Income | | | | $ | (6,537) | | | | | $ | (12,678) | | | | | $ | (6,560) | | |
Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Years Ended December 31, 2020, 2019, and 2018
(In thousands, except share data)
| | | Redeemable Convertible Preferred Stock | | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income | | | Treasury Stock | | | Stockholders’ Equity (Deficit) | | | |||||||||||||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | | Shares | | | Amount | | | Shares | | | Amount | | | ||||||||||||||||||||||||||||||||||||||||||||
Balance January 1, 2018 | | | | | 1,220,851 | | | | | $ | 8,670 | | | | | | | 3,869,118 | | | | | $ | 4 | | | | | $ | 8,889 | | | | | $ | (8,247) | | | | | $ | — | | | | | | (152,592) | | | | | $ | (1,500) | | | | | $ | (854) | | | | ||
Net loss | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,560) | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,560) | | | | ||
Accrued dividends on redeemable convertible preferred stock | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | (1,014) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,014) | | | | ||
Stock-based compensation expense | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 151 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 151 | | | | ||
Balance December 31, 2018 | | | | | 1,220,851 | | | | | $ | 8,670 | | | | | | | 3,869,118 | | | | | $ | 4 | | | | | $ | 8,026 | | | | | $ | (14,807) | | | | | $ | — | | | | | | (152,592) | | | | | $ | (1,500) | | | | | $ | (8,277) | | | | ||
Net loss | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (12,678) | | | | | | — | | | | | | — | | | | | | — | | | | | | (12,678) | | | | ||
Redeemable convertible preferred stock issuance | | | | | 813,900 | | | | | | 8,890 | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Accrued dividends on redeemable convertible preferred stock | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | (1,579) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,579) | | | | ||
Stock-based compensation expense | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 113 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 113 | | | | ||
Balance December 31, 2019 | | | | | 2,034,751 | | | | | $ | 17,560 | | | | | | | 3,869,118 | | | | | $ | 4 | | | | | $ | 6,560 | | | | | $ | (27,485) | | | | | $ | — | | | | | | (152,592) | | | | | $ | (1,500) | | | | | $ | (22,421) | | | | ||
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 expense | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 45 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 45 | | | | ||
Balance December 31, 2020 | | | | | 2,034,751 | | | | | $ | 17,560 | | | | | | | 3,869,118 | | | | | $ | 4 | | | | | $ | 4,721 | | | | | $ | (34,037) | | | | | $ | 15 | | | | | | (152,592) | | | | | $ | (1,500) | | | | | $ | (30,797) | | | |
Years Ended December 31, 2020, 2019, and 2018
(In thousands, except share data)
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Cash Flow from Operating Activities | | | | | | | | | | | | | | | | | | | |
Net loss | | | | $ | (6,552) | | | | | $ | (12,678) | | | | | $ | (6,560) | | |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | | | | | | | | | | | | | |
Depreciation – property and equipment | | | | | 195 | | | | | | 260 | | | | | | 253 | | |
Depreciation – lease vehicles | | | | | 146 | | | | | | 244 | | | | | | 85 | | |
Loss on disposition of property and equipment | | | | | — | | | | | | 321 | | | | | | — | | |
Gain on sale of lease vehicles | | | | | — | | | | | | — | | | | | | (16) | | |
Provision for doubtful accounts | | | | | 40 | | | | | | (14) | | | | | | (30) | | |
Share-based compensation expense | | | | | 45 | | | | | | 113 | | | | | | 151 | | |
Gain on marketable securities | | | | | (36) | | | | | | — | | | | | | — | | |
Change in fair value of warrants liability | | | | | 14 | | | | | | (24) | | | | | | 2 | | |
Amortization of debt issuance costs | | | | | 14 | | | | | | — | | | | | | — | | |
Amortization of warrant liability | | | | | 11 | | | | | | — | | | | | | — | | |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | | | (923) | | | | | | 1,396 | | | | | | 272 | | |
Other | | | | | — | | | | | | — | | | | | | (599) | | |
Change in Operating Assets and Liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts receivable | | | | | (916) | | | | | | (830) | | | | | | (706) | | |
Inventories | | | | | (3,333) | | | | | | 2,883 | | | | | | (4,810) | | |
Other current assets | | | | | (6,445) | | | | | | (6) | | | | | | 48 | | |
Other assets | | | | | 44 | | | | | | (38) | | | | | | (164) | | |
Accounts payable | | | | | 4,149 | | | | | | 1,392 | | | | | | 223 | | |
Accrued expenses and transaction expenses | | | | | 8,039 | | | | | | 525 | | | | | | 133 | | |
Accrued expenses – related party | | | | | 96 | | | | | | 172 | | | | | | (9) | | |
Other current liabilities | | | | | (178) | | | | | | 229 | | | | | | 20 | | |
Other liabilities | | | | | 998 | | | | | | 582 | | | | | | (54) | | |
Net Cash Used in Operating Activities | | | | | (4,592) | | | | | | (5,473) | | | | | | (11,761) | | |
Cash Flows from Investing Activities | | | | | | | | | | | | | | | | | | | |
Cash related to consolidation of Orange Grove | | | | | — | | | | | | — | | | | | | 5 | | |
Purchase of property and equipment | | | | | (154) | | | | | | (235) | | | | | | (474) | | |
Proceeds from sale of lease vehicles | | | | | — | | | | | | — | | | | | | 119 | | |
Purchase of lease vehicles | | | | | (92) | | | | | | (252) | | | | | | (12) | | |
Purchase of marketable securities | | | | | (1,049) | | | | | | — | | | | | | — | | |
Proceeds from sales of marketable securities | | | | | 68 | | | | | | — | | | | | | — | | |
Net Cash Used in Investing Activities | | | | | (1,227) | | | | | | (487) | | | | | | (362) | | |
Cash Flows from Financing Activities | | | | | | | | | | | | | | | | | | | |
Issuance of redeemable convertible preferred stock, net | | | | | — | | | | | | 7,988 | | | | | | — | | |
Payments made on long-term debt | | | | | (9) | | | | | | (8) | | | | | | (4) | | |
Borrowings on long-term debt | | | | | 5,249 | | | | | | 3,000 | | | | | | — | | |
Payments of debt issuance costs | | | | | (10) | | | | | | (112) | | | | | | — | | |
Payments on floor plan notes payable | | | | | (24,948) | | | | | | (41,711) | | | | | | (24,567) | | |
Borrowings on floor plan notes payable | | | | | 24,248 | | | | | | 39,753 | | | | | | 29,171 | | |
Payments made on promissory note | | | | | — | | | | | | (418) | | | | | | (97) | | |
Net Cash Provided by Financing Activities | | | | | 4,530 | | | | | | 8,492 | | | | | | 4,503 | | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Net Change in Cash and Cash Equivalents and Restricted Cash | | | | | (1,289) | | | | | | 2,532 | | | | | | (7,620) | | |
Cash and cash equivalents and restricted cash, beginning | | | | | 4,102 | | | | | | 1,570 | | | | | | 9,190 | | |
Cash and cash equivalents and restricted cash, ending | | | | $ | 2,813 | | | | | $ | 4,102 | | | | | $ | 1,570 | | |
Supplemental Disclosure of Cash Flow Information | | | | | | | | | | | | | | | | | | | |
Cash paid for interest | | | | $ | 346 | | | | | $ | 684 | | | | | $ | 436 | | |
Supplementary Schedule of Non-cash Investing and Financing Activities: | | | | | | | | | | | | | | | | | | | |
Purchases of property under capital lease obligations | | | | $ | 1,305 | | | | | $ | — | | | | | $ | — | | |
Transfer from property and equipment to inventory | | | | $ | 27 | | | | | $ | 53 | | | | | $ | 26 | | |
Transfer from lease vehicles to inventory | | | | $ | 217 | | | | | $ | 295 | | | | | $ | — | | |
Redeemable convertible preferred stock distributions accrued | | | | $ | 1,884 | | | | | $ | 1,579 | | | | | $ | 1,014 | | |
Purchase of property and equipment with long-term debt | | | | $ | — | | | | | $ | — | | | | | $ | 21 | | |
Promissory note based on consolidation of Orange Grove | | | | $ | — | | | | | $ | — | | | | | $ | 515 | | |
Issuance of common stock warrants | | | | $ | 15 | | | | | $ | 72 | | | | | $ | — | | |
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 | |
| | | 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 | | |
| | | 2018 | | |||||||||||||||
| | | Vehicle Sales | | | Fleet Management | | | Total | | |||||||||
Retail vehicle sales | | | | $ | 53,448 | | | | | $ | — | | | | | $ | 53,448 | | |
Wholesale vehicle sales | | | | | 3,153 | | | | | | — | | | | | | 3,153 | | |
Finance and insurance, net | | | | | 1,608 | | | | | | — | | | | | | 1,608 | | |
Lease income, net | | | | | — | | | | | | 142 | | | | | | 142 | | |
Total Revenues | | | | $ | 58,209 | | | | | $ | 142 | | | | | $ | 58,351 | | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Retail vehicles: | | | | | | | | | | | | | | | | | | | |
Retail vehicle sales | | | | $ | 104,253 | | | | | $ | 90,382 | | | | | $ | 53,448 | | |
Retail vehicle cost of sales | | | | | 96,983 | | | | | | 84,534 | | | | | | 48,523 | | |
Gross Profit – Retail Vehicles | | | | $ | 7,270 | | | | | $ | 5,848 | | | | | $ | 4,925 | | |
Wholesale vehicles: | | | | | | | | | | | | | | | | | | | |
Wholesale vehicle sales | | | | $ | 9,984 | | | | | $ | 8,454 | | | | | $ | 3,153 | | |
Wholesale vehicle cost of sales | | | | | 10,386 | | | | | | 9,246 | | | | | | 4,185 | | |
Gross Profit – Wholesale Vehicles | | | | $ | (402) | | | | | $ | (792) | | | | | $ | (1,032) | | |
| | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Estimated Fair Value | | ||||||||||||
Fixed Maturity Debt Securities | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Treasuries | | | | $ | 240 | | | | | $ | 6 | | | | | $ | — | | | | | $ | 246 | | |
Corporates | | | | | 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 | | | Estimated Fair Value | | ||||||
Due in one year or less | | | | $ | 77 | | | | | $ | 78 | | |
Due after one year through five years | | | | | 379 | | | | | | 388 | | |
Due after five years through ten years | | | | | 186 | | | | | | 191 | | |
Total | | | | $ | 642 | | | | | $ | 657 | | |
| | | Less Than 12 Months | | | 12 Months or more | | | Total | | |||||||||||||||||||||||||||
| | | Estimated Fair Value | | | Unrealized Losses | | | Estimated Fair Value | | | Unrealized Losses | | | Estimated Fair Value | | | Unrealized Losses | | ||||||||||||||||||
Fixed maturity debt securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate Bonds | | | | $ | 39 | | | | | $ | (1) | | | | | $ | — | | | | | $ | — | | | | | $ | 39 | | | | | $ | (1) | | |
Total Fixed Maturity Debt Securities | | | | $ | 39 | | | | | $ | (1) | | | | | $ | — | | | | | $ | — | | | | | $ | 39 | | | | | $ | (1) | | |
| | | Cost | | | Estimated Fair Value | | ||||||
Equity securities | | | | $ | 335 | | | | | $ | 375 | | |
| | | Proceeds | | | Gross Realized Gains | | | Gross Realized Losses | | | Net Realized (Losses) | | | ||||||||||||||
Fixed maturity debt securities | | | | $ | 18 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | ||
Equity securities | | | | | 50 | | | | | | 1 | | | | | | (2) | | | | | | (1) | | | | | |
Total Marketable Securities | | | | $ | 68 | | | | | $ | 1 | | | | | $ | (2) | | | | | $ | (1) | | | |
| | | 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 | | |
Stock warrants liability | | | | | — | | | | | | — | | | | | | 144 | | | | | | 144 | | |
Total Liabilities: | | | | $ | — | | | | | $ | — | | | | | $ | 2,976 | | | | | $ | 2,976 | | |
| | | 2019 | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Money market funds | | | | $ | 688 | | | | | $ | — | | | | | $ | — | | | | | $ | 688 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Redeemable convertible preferred stock tranche obligation | | | | | — | | | | | | — | | | | | | 3,755 | | | | | | 3,755 | | |
Stock warrants liability | | | | | — | | | | | | — | | | | | | 115 | | | | | | 115 | | |
Total Liabilities: | | | | $ | — | | | | | $ | — | | | | | $ | 3,870 | | | | | $ | 3,870 | | |
Year-ended December 31, 2020 | | | January 1, | | | Issuances | | | Settlements | | | Change in Fair Value | | | December 31, | | |||||||||||||||
Redeemable convertible preferred stock tranche obligation | | | | $ | 3,755 | | | | | $ | — | | | | | $ | — | | | | | $ | (923) | | | | | $ | 2,832 | | |
Stock warrants liability | | | | | 115 | | | | | | 15 | | | | | | — | | | | | | 14 | | | | | | 144 | | |
Total | | | | $ | 3,870 | | | | | $ | 15 | | | | | $ | — | | | | | $ | (909) | | | | | $ | 2,976 | | |
Year-ended December 31, 2019 | | | January 1, | | | Issuances | | | Settlements | | | Change in Fair Value | | | December 31, | | | |||||||||||||||||
Redeemable convertible preferred stock tranche obligation | | | | $ | 3,261 | | | | | $ | — | | | | | $ | (902) | | | | | $ | 1,396 | | | | | $ | 3,755 | | | | ||
Stock warrants liability | | | | | 67 | | | | | | 72 | | | | | | — | | | | | | (24) | | | | | | 115 | | | | | |
Total | | | | $ | 3,328 | | | | | $ | 72 | | | | | $ | (902) | | | | | $ | 1,372 | | | | | $ | 3,870 | | | |
| | | 2020 | | | 2019 | | ||||||
Expected volatility | | | | | 65.00% | | | | | | 45.00% | | |
Expected dividend yield | | | | | 0.00% | | | | | | 0.00% | | |
Expected term (in years) | | | 4 years | | | 5 years | | ||||||
Risk-free interest rate | | | | | 0.27% | | | | | | 1.69% | | |
Marketability discount | | | | | 60.00% | | | | | | 50.00% | | |
| | | 2020 | | | 2019 | | | ||||||||
Contracts in transit | | | | $ | 3,321 | | | | | $ | 2,645 | | | | ||
Trade | | | | | 240 | | | | | | 202 | | | | ||
Finance commission | | | | | 132 | | | | | | 87 | | | | ||
Other | | | | | 506 | | | | | | 349 | | | | ||
Total | | | | | 4,199 | | | | | | 3,283 | | | | ||
Allowance for doubtful accounts | | | | | (67) | | | | | | (27) | | | | | |
Total Accounts Receivable, net | | | | $ | 4,132 | | | | | $ | 3,256 | | | |
| | | 2020 | | | 2019 | | ||||||
Used vehicles | | | | $ | 11,202 | | | | | $ | 7,592 | | |
Parts | | | | | — | | | | | | 33 | | |
Total | | | | $ | 11,202 | | | | | $ | 7,625 | | |
| | | 2020 | | | 2019 | | ||||||
Capital lease asset building | | | | $ | 1,305 | | | | | $ | — | | |
Leasehold improvements | | | | | 702 | | | | | | 688 | | |
Furniture, fixtures, and equipment | | | | | 760 | | | | | | 715 | | |
Corporate vehicles | | | | | 143 | | | | | | 104 | | |
Total property and equipment | | | | | 2,910 | | | | | | 1,507 | | |
Less: accumulated depreciation | | | | | (1,042) | | | | | | (876) | | |
Property and Equipment, net | | | | $ | 1,868 | | | | | $ | 631 | | |
| | | 2020 | | | 2019 | | ||||||
Vehicles | | | | $ | 629 | | | | | $ | 1,083 | | |
Less: accumulated depreciation | | | | | (456) | | | | | | (639) | | |
Total Lease Vehicles, net | | | | $ | 173 | | | | | $ | 444 | | |
Year | | | Minimum Rental Receipts Under Operating Leases | | |||
2021 | | | | $ | 37 | | |
2022 | | | | | 24 | | |
2023 | | | | | 2 | | |
Total | | | | $ | 63 | | |
| | | 2020 | | | 2019 | | ||||||
Other Current Assets: | | | | | | | | | | | | | |
Lease receivable, net | | | | $ | 36 | | | | | $ | 13 | | |
Deferred acquisition costs | | | | | 72 | | | | | | 32 | | |
Prepaid expenses | | | | | 679 | | | | | | 189 | | |
Stock issuance costs | | | | | 5,892 | | | | | | — | | |
Total Other Current Assets | | | | $ | 6,679 | | | | | $ | 234 | | |
Other Assets: | | | | | | | | | | | | | |
Lease receivable, net | | | | $ | 16 | | | | | $ | 38 | | |
Deferred acquisition costs | | | | | 48 | | | | | | 50 | | |
Security deposits | | | | | 235 | | | | | | 255 | | |
Total Other Assets | | | | $ | 299 | | | | | $ | 343 | | |
| | | 2020 | | | 2019 | | ||||||
Beginning | | | | $ | 82 | | | | | $ | 22 | | |
Written | | | | | 173 | | | | | | 93 | | |
Amortized | | | | | (135) | | | | | | (33) | | |
Ending | | | | | 120 | | | | | | 82 | | |
Less: current portion | | | | | 72 | | | | | | 32 | | |
Non-current | | | | | 48 | | | | | | 50 | | |
Total Deferred Acquisition Costs | | | | $ | 120 | | | | | $ | 82 | | |
| | | 2020 | | | 2019 | | ||||||
Term note payable | | | | $ | — | | | | | $ | 9 | | |
Capital lease obligation | | | | | 1,305 | | | | | | — | | |
Promissory note | | | | | 2,990 | | | | | | | | |
Convertible notes payable, net | | | | | 3,325 | | | | | | 2,816 | | |
Paycheck Protection Program loan | | | | | 1,749 | | | | | | | | |
| | | | | 9,369 | | | | | | 2,825 | | |
Current portion of long-term debt | | | | | (6,370) | | | | | | (2,825) | | |
Long-term Debt | | | | $ | 2,999 | | | | | $ | — | | |
| Maturity | | | 4 years | |
| Risk-free interest rate | | | 0.27% | |
| Volatility | | | 85.00 % | |
| Dividend yield | | | 0.00% | |
| Weighted average fair value per common share | | | 1.89 | |
| | | 2020 | | | 2019 | | ||||||
Stock warrants outstanding, January 1 | | | | | 68,581 | | | | | | 23,460 | | |
Stock warrants issued with convertible notes payable | | | | | 7,676 | | | | | | 45,121 | | |
Stock warrants cancelled | | | | | — | | | | | | — | | |
Stock warrants exercised | | | | | — | | | | | | — | | |
Stock warrants outstanding, December 31 | | | | | 76,257 | | | | | | 68,581 | | |
| | | 2020 | | | 2019 | | ||||||
License and title fees | | | | $ | 785 | | | | | $ | 399 | | |
Payroll and bonuses | | | | | 837 | | | | | | 388 | | |
Deferred rent | | | | | 199 | | | | | | 300 | | |
Other accrued expenses | | | | | 1,742 | | | | | | 489 | | |
Total Accrued Expenses | | | | $ | 3,563 | | | | | $ | 1,576 | | |
| | | 2020 | | | 2019 | | ||||||
Other Liabilities, Current | | | | | | | | | | | | | |
Unearned insurance premiums | | | | $ | 257 | | | | | $ | 434 | | |
Other Liabilities | | | | | | | | | | | | | |
Unearned insurance premiums | | | | | 1,680 | | | | | | 719 | | |
Other long-term liabilities | | | | | 135 | | | | | | 97 | | |
Stock warrants liability | | | | | 144 | | | | | | 115 | | |
Other Liabilities, Long-term | | | | $ | 1,959 | | | | | $ | 931 | | |
| | | Operating Leases | | | Capital Leases | | ||||||
2021 | | | | $ | 2,303 | | | | | $ | 139 | | |
2022 | | | | | 2,372 | | | | | | 183 | | |
2023 | | | | | 2,209 | | | | | | 187 | | |
2024 | | | | | 1,216 | | | | | | 190 | | |
2025 | | | | | 993 | | | | | | 194 | | |
Thereafter | | | | | 511 | | | | | | 1,078 | | |
Total Minimum Lease Payments | | | | $ | 9,604 | | | | | $ | 1,971 | | |
Less: amount representing interest | | | | | | | | | | | (666) | | |
Present value of minimum lease payments | | | | | | | | | | | 1,305 | | |
Less: current obligation | | | | | | | | | | | (55) | | |
Long-term obligations under capital lease | | | | | | | | | | $ | 1,250 | | |
| | | Payments Due to Third Parties | | | Future Receipts | | ||||||
2021 | | | | $ | 1,538 | | | | | $ | 1,862 | | |
2022 | | | | | 1,024 | | | | | | 1,236 | | |
2023 | | | | | 596 | | | | | | 711 | | |
2024 | | | | | 194 | | | | | | 233 | | |
2025 | | | | | 2 | | | | | | 3 | | |
Total | | | | $ | 3,354 | | | | | $ | 4,045 | | |
| | | Number of Stock Options | | | Weighted Averaged Exercise Price | | ||||||
Balance (January 1, 2018) | | | | | 175,150 | | | | | $ | 5.99 | | |
Granted | | | | | — | | | | | | — | | |
Forfeited | | | | | (13,500) | | | | | | 5.56 | | |
Balance (December 31, 2018) | | | | | 161,650 | | | | | | 6.07 | | |
Granted | | | | | — | | | | | | — | | |
Forfeited | | | | | (7,500) | | | | | | 6.82 | | |
Balance (December 31, 2019) | | | | | 154,150 | | | | | | 6.03 | | |
Granted | | | | | — | | | | | | — | | |
Forfeited | | | | | — | | | | | | — | | |
Balance (December 31, 2020) | | | | | 154,150 | | | | | | 6.03 | | |
Vested (as of December 31, 2020) | | | | | 146,613 | | | | | $ | 5.99 | | |
| | | Number of Options | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | | |||||||||
Outstanding | | | | | 154,150 | | | | | | 1.67 years | | | | | $ | 6.03 | | |
Exercisable | | | | | 146,613 | | | | | | 1.67 years | | | | | $ | 5.99 | | |
| | | Number of Stock Options | | | Weighted Averaged Exercise Price | | ||||||
Balance (January 1, 2018) | | | | | — | | | | | | — | | |
Granted | | | | | 261,552 | | | | | $ | 9.82 | | |
Forfeited | | | | | (6,500) | | | | | | 9.82 | | |
Balance (December 31, 2018) | | | | | 255,052 | | | | | | 9.82 | | |
Granted | | | | | 154,000 | | | | | | 9.82 | | |
Forfeited | | | | | (129,876) | | | | | | 9.82 | | |
Balance (December 31, 2019) | | | | | 279,176 | | | | | $ | 9.82 | | |
Granted | | | | | 109,500 | | | | | $ | 9.82 | | |
Forfeited | | | | | — | | | | | $ | 9.82 | | |
Balance (December 31, 2019) | | | | | 388,676 | | | | | $ | 9.82 | | |
| Expected volatility | | | 81.00% | |
| Expected dividend yield | | | —% | |
| Expected term (in years) | | | 5 years | |
| Risk-free interest rate | | | 0.37% | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Current Income Tax Expense: | | | | | | | | | | | | | | | | | | | |
Federal | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
State and local | | | | | 10 | | | | | | 11 | | | | | | 3 | | |
Total Current Income Tax Expense | | | | | 10 | | | | | | 11 | | | | | | 3 | | |
Deferred Income Tax Expense: | | | | | | | | | | | | | | | | | | | |
Federal | | | | | — | | | | | | — | | | | | | — | | |
State and local | | | | | — | | | | | | — | | | | | | — | | |
Total Income Tax Expense | | | | $ | 10 | | | | | $ | 11 | | | | | $ | 3 | | |
| | | 2020 | | | 2019 | | ||||||
Deferred Tax Assets: | | | | | | | | | | | | | |
Net operating losses | | | | $ | 7,042 | | | | | $ | 5,881 | | |
Accrued expenses | | | | | 109 | | | | | | | | |
Unearned premiums | | | | | 466 | | | | | | | | |
Contract expense | | | | | 332 | | | | | | 262 | | |
Intangible assets | | | | | 204 | | | | | | | | |
Other | | | | | 406 | | | | | | 809 | | |
Total deferred tax assets | | | | | 8,559 | | | | | | 6,952 | | |
Less: valuation allowance | | | | | (8,559) | | | | | | (6,910) | | |
Net Deferred Tax Assets | | | | | — | | | | | | 42 | | |
Deferred Tax Liabilities | | | | | | | | | | | | | |
Fixed assets | | | | | — | | | | | | (42) | | |
Total deferred tax liabilities | | | | | — | | | | | | (42) | | |
Net Deferred Tax Liabilities | | | | | — | | | | | | (42) | | |
Net Deferred Tax Assets/Liabilities | | | | $ | — | | | | | $ | — | | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
January 1, | | | | $ | 6,910 | | | | | $ | 3,986 | | | | | $ | 2,008 | | |
Additions – Charged | | | | | 1,649 | | | | | | 2,924 | | | | | | 1,731 | | |
Deductions – Charged | | | | | — | | | | | | — | | | | | | — | | |
Other | | | | | — | | | | | | — | | | | | | 247 | | |
December 31, | | | | $ | 8,559 | | | | | $ | 6,910 | | | | | $ | 3,986 | | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Loss Before Income Tax Expense | | | | $ | (6,542) | | | | | $ | (12,667) | | | | | $ | (6,557) | | |
Income tax benefit at federal statutory rates | | | | | (1,372) | | | | | | (2,660) | | | | | | (1,377) | | |
State and local income taxes | | | | | (79) | | | | | | (471) | | | | | | (238) | | |
Investment remeasurement | | | | | — | | | | | | — | | | | | | (126) | | |
Valuation allowances | | | | | 1,649 | | | | | | 2,924 | | | | | | 1,731 | | |
Change in fair value of redeemable convertible preferred stock tranche obligation | | | | | (194) | | | | | | 293 | | | | | | 57 | | |
Other | | | | | 6 | | | | | | (75) | | | | | | (44) | | |
Total Income Tax Expense | | | | $ | 10 | | | | | $ | 11 | | | | | $ | 3 | | |
Effective Tax Rate | | | | | (0.15)% | | | | | | (0.09)% | | | | | | (0.05)% | | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Numerator: | | | | | | | | | | | | | | | | | | | |
Net loss | | | | $ | (6,552) | | | | | $ | (12,678) | | | | | $ | (6,560) | | |
Redeemable Convertible Preferred Stock dividends (undeclared and cumulative) | | | | | (1,884) | | | | | | (1,579) | | | | | | (1,014) | | |
Net loss attributable to common stockholders | | �� | | | (8,436) | | | | | | (14,257) | | | | | | (7,574) | | |
Denominator: | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding, basic and diluted | | | | | 3,716,526 | | | | | | 3,716,526 | | | | | | 3,716,526 | | |
Net loss per share attributable to common stockholders, basic and diluted | | | | $ | (2.27) | | | | | $ | (3.84) | | | | | $ | (2.04) | | |
| | | 2020 | | | 2019 | | | 2018 | | |||||||||
Redeemable Convertible Preferred Stock outstanding | | | | | 2,034,751 | | | | | | 2,034,751 | | | | | | 1,220,851 | | |
Convertible notes payable | | | | | 348,910 | | | | | | 282,211 | | | | | | — | | |
Stock warrants | | | | | 76,257 | | | | | | 68,581 | | | | | | 23,460 | | |
Stock options outstanding to purchase shares of common stock | | | | | 542,826 | | | | | | 433,326 | | | | | | 416,702 | | |
Total | | | | | 3,002,744 | | | | | | 2,818,869 | | | | | | 1,661,013 | | |
| | | Total purchases from vendor to total purchases for the year ended December 31, | | |||||||||||||||
Vendor | | | 2020 | | | 2019 | | | 2018 | | |||||||||
Vendor A | | | | | 33% | | | | | | —% | | | | | | —% | | |
Vendor B | | | | | 13% | | | | | | 12% | | | | | | —% | | |
| | | Accounts payable to the vendor as of December 31, | | |||||||||
Vendor | | | 2020 | | | 2019 | | ||||||
Vendor A | | | | $ | 2,918 | | | | | $ | — | | |
Vendor B | | | | $ | 368 | | | | | $ | 257— | | |