Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 18, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40910 | |
Entity Registrant Name | Rubicon Technologies, Inc. | |
Entity Central Index Key | 0001862068 | |
Entity Tax Identification Number | 88-3703651 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 100 West Main Street Suite #610 | |
Entity Address, City or Town | Lexington | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40507 | |
City Area Code | (844) | |
Local Phone Number | 479-1507 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Class A common stock, par value $0.0001 per share | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | RBT | |
Security Exchange Name | NYSE | |
Warrants, each exercisable for one share of Class A common stock at an exercise price of $11.50 per share | ||
Title of 12(b) Security | Warrants, each exercisable for one share of Class A common stock at an exercise price of $11.50 per share | |
Trading Symbol | RBT WS | |
Security Exchange Name | NYSE | |
Common Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 49,714,239 | |
Common Class V [Member] | ||
Entity Common Stock, Shares Outstanding | 114,886,453 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 4,464 | $ 10,617 |
Accounts receivable, net | 58,662 | 42,660 |
Contract assets | 62,805 | 56,984 |
Prepaid expenses | 11,755 | 6,227 |
Other current assets | 1,835 | 1,769 |
Total Current Assets | 139,521 | 118,257 |
Property and equipment, net | 2,741 | 2,611 |
Operating right-of-use assets | 3,119 | 3,920 |
Other noncurrent assets | 2,661 | 4,558 |
Goodwill | 32,132 | 32,132 |
Intangible assets, net | 11,685 | 14,163 |
Total Assets | 191,859 | 175,641 |
Current Liabilities: | ||
Accounts payable | 58,498 | 47,531 |
Line of credit | 30,095 | 29,916 |
Accrued expenses | 162,428 | 65,538 |
Deferred compensation expense | 1,250 | 8,321 |
Contract liabilities | 4,461 | 4,603 |
Operating lease liabilities, current | 1,832 | 1,675 |
Warrant liabilities | 100 | 1,380 |
Current portion of long-term debt, net of debt issuance costs | 22,666 | |
Total Current Liabilities | 258,664 | 181,630 |
Long-Term Liabilities: | ||
Deferred income taxes | 219 | 178 |
Operating lease liabilities, noncurrent | 2,340 | 3,770 |
Long-term debt, net of debt issuance costs | 69,543 | 51,000 |
Forward purchase option derivative | 8,205 | |
Earn-out liabilities | 7,000 | |
Other long-term liabilities | 517 | 367 |
Total Long-Term Liabilities | 87,824 | 55,315 |
Total Liabilities | 346,488 | 236,945 |
Stockholders’ (Deficit) Equity/Members’ (Deficit) Equity: | ||
Preferred stock – par value of $0.0001 per share, 10,000,000 shares authorized, 0 issued and outstanding as of September 30, 2022 | ||
Additional paid-in capital | 11,805 | |
Members’ deficit | (61,304) | |
Accumulated deficit | (327,216) | |
Total stockholders’ deficit attributable to Rubicon Technologies, Inc. | (315,394) | |
Noncontrolling interests | 160,765 | |
Total Stockholders’ Deficit /Members’ Deficit | (154,629) | (61,304) |
Total Liabilities and Stockholders’ (Deficit) Equity/ Members’ (Deficit) Equity | 191,859 | 175,641 |
Common Class A [Member] | ||
Stockholders’ (Deficit) Equity/Members’ (Deficit) Equity: | ||
Common stock value | 5 | |
Common Class V [Member] | ||
Stockholders’ (Deficit) Equity/Members’ (Deficit) Equity: | ||
Common stock value | $ 12 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) | Sep. 30, 2022 $ / shares shares |
Preferred stock, par value | $ / shares | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Common Class A [Member] | |
Common stock, par value | $ / shares | $ 0.0001 |
Common stock, authorized shares | 690,000,000 |
Common stock, shares issued | 49,714,239 |
Common stock, shares outstanding | 49,714,239 |
Common Class V [Member] | |
Common stock, par value | $ / shares | $ 0.0001 |
Common stock, authorized shares | 275,000,000 |
Common stock, shares issued | 115,463,646 |
Common stock, shares outstanding | 115,463,646 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | |||||
Service | $ 162,789 | $ 127,256 | $ 437,755 | $ 365,511 | |
Recyclable commodity | 22,194 | 21,952 | 71,640 | 54,251 | |
Total revenue | 184,983 | 149,208 | 509,395 | 419,762 | |
Cost of revenue (exclusive of amortization and depreciation): | |||||
Service | 157,504 | 122,771 | 423,382 | 351,287 | |
Recyclable commodity | 20,234 | 20,340 | 65,856 | 51,098 | |
Total cost of revenue (exclusive of amortization and depreciation) | 177,738 | 143,111 | 489,238 | 402,385 | |
Sales and marketing | 4,840 | 3,808 | 13,336 | 10,604 | |
Product development | 9,803 | 4,827 | 28,336 | 13,350 | |
General and administrative | 186,640 | 11,561 | 212,520 | 34,968 | |
Amortization and depreciation | 1,439 | 1,344 | 4,331 | 4,958 | |
Total Costs and Expenses | 380,460 | 164,651 | 747,761 | 466,265 | |
Loss from Operations | (195,477) | (15,443) | (238,366) | (46,503) | |
Other Income (Expense): | |||||
Interest earned | 1 | 1 | 2 | ||
Gain on forgiveness of debt | 10,900 | ||||
Gain (loss) on change in fair value of warrant liabilities | 74 | (436) | |||
Gain on change in fair value of earn-out liabilities | 67,100 | 67,100 | |||
Loss on change in fair value of forward purchase option derivative | (76,919) | (76,919) | |||
Excess fair value over the consideration received for SAFE | 800 | ||||
Other income (expense) | 1,307 | 326 | 1,994 | 730 | |
Interest expense | (4,578) | (2,611) | (12,264) | (7,461) | |
Total Other Income (Expense) | (15,629) | (2,937) | (25,312) | 2,711 | |
Loss Before Income Taxes | (211,106) | (18,380) | (263,678) | (43,792) | |
Income tax expense (benefit) | (19) | 252 | (60) | 961 | |
Net Loss | $ (34,741) | (211,125) | (18,128) | (263,738) | (42,831) |
Net loss attributable to Holdings LLC unitholders prior to the Mergers | (176,384) | (18,128) | (228,997) | (42,831) | |
Net loss attributable to noncontrolling interests | $ 16,933 | (16,933) | (16,933) | ||
Net Loss Attributable to Class A Common Stockholders | $ (17,808) | $ (17,808) | |||
Net loss per Class A Common share basic and diluted | $ (0.37) | ||||
Weighted average shares outstanding, basic and diluted | 48,670,776 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (UNAUDITED) - USD ($) $ in Thousands | Common Stock [Member] | Common Stock Class A [Member] | Common Stock Class V [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ (21,186) | $ (21,186) | ||||||
Beginning balance, shares at Dec. 31, 2020 | 32,426,264 | |||||||
Activities prior to the Mergers: | ||||||||
Compensation costs related to incentive units | $ 364 | 364 | ||||||
Warrants exercised | $ 30,496 | 30,496 | ||||||
Warrants exercised, shares | 1,016,540 | |||||||
Net loss | $ (24,703) | (24,703) | ||||||
Ending balance, value at Jun. 30, 2021 | $ (15,029) | (15,029) | ||||||
Ending balance, shares at Jun. 30, 2021 | 33,442,804 | |||||||
Activities prior to the Mergers: | ||||||||
Compensation costs related to incentive units | $ 122 | 122 | ||||||
Warrants exercised | $ 1,994 | 1,994 | ||||||
Warrants exercised, shares | 66,468 | |||||||
Net loss | $ (18,128) | (18,128) | ||||||
Ending balance, value at Sep. 30, 2021 | $ (31,041) | (31,041) | ||||||
Ending balance, shares at Sep. 30, 2021 | 33,509,272 | |||||||
Beginning balance, value at Dec. 31, 2021 | $ (61,304) | (61,304) | ||||||
Beginning balance, shares at Dec. 31, 2021 | 33,509,272 | |||||||
Activities prior to the Mergers: | ||||||||
Compensation costs related to incentive units | $ 184 | 184 | ||||||
Net loss | (52,613) | (52,613) | ||||||
Ending balance, value at Jun. 30, 2022 | $ (113,733) | (113,733) | ||||||
Ending balance, shares at Jun. 30, 2022 | 33,509,272 | |||||||
Activities prior to the Mergers: | ||||||||
Compensation costs related to incentive units | $ 46 | 46 | ||||||
Net loss | (176,384) | (176,384) | ||||||
Effects of the Mergers: | ||||||||
Proceeds, net of redemptions | 196,775 | 196,775 | ||||||
Transaction costs related to the Mergers | (36,075) | (31,249) | (67,324) | |||||
Accelerated vesting and conversion of incentive units | $ 77,403 | 77,403 | ||||||
Accelerated vesting and conversion of incentive units, shares | 3,070,151 | |||||||
Exchange of liability classified warrants | $ 1,717 | 1,717 | ||||||
Exchange of liability classified warrants, shares | 62,003 | |||||||
Reclassification of SAFE | 8,800 | 8,800 | ||||||
Phantom units rollover | 15,104 | 15,104 | ||||||
Reverse recapitalization | $ 247,026 | (189,430) | (57,596) | |||||
Reverse recapitalization, shares | (36,641,426) | |||||||
Issuance of common stock upon the Mergers - Class A and Class V | $ 5 | $ 12 | (14) | 3 | ||||
Issuance of common stock upon the Mergers - Class A and Class V, shares | 46,300,005 | 118,677,880 | ||||||
Establishment of earn-out liabilities | (74,100) | (74,100) | ||||||
Establishment of noncontrolling liability | (177,698) | 177,698 | ||||||
Activities subsequent to the Mergers | ||||||||
Equity-based compensation | 10,913 | 10,913 | ||||||
Issuance of common stock in connection with SEPA – Class A | $ 0 | 892 | 892 | |||||
[custom:IssuanceOfCommonStockInConnectionWithSepaClassShares] | 200,000 | |||||||
Exchange of Class V Common Stock to Class A Common Stock | $ 0 | $ 0 | ||||||
Exchange of Class V Common Stock to Class A Common Stock, shares | 3,214,234 | (3,214,234) | ||||||
Net loss | (17,808) | (16,933) | (34,741) | |||||
Ending balance, value at Sep. 30, 2022 | $ 5 | $ 12 | $ 11,805 | $ (327,216) | $ 160,765 | $ (154,629) | ||
Ending balance, shares at Sep. 30, 2022 | 49,714,239 | 115,463,646 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (263,738) | $ (42,831) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Loss (Gain) on disposal of property and equipment | 23 | (30) |
Amortization and depreciation | 4,026 | 4,958 |
Amortization of debt issuance costs | 2,378 | 1,018 |
Bad debt reserve | (2,366) | 3,143 |
Loss on change in fair value of warrant liabilities | 436 | |
Loss on change in fair value of forward purchase option derivative | 76,919 | |
Gain on change in fair value of earn-out liabilities | (67,100) | |
Excess fair value over the consideration received for SAFE | 800 | |
SEPA commitment fee settled in Class A Common Stock | 892 | |
Equity-based compensation | 88,546 | 486 |
Phantom unit expense | 6,783 | 2,907 |
Deferred compensation expense | 1,250 | |
Gain on forgiveness of debt | (10,900) | |
Deferred income taxes | 41 | (1,006) |
Change in operating assets and liabilities: | ||
Accounts receivable | 13,636 | 5,774 |
Contract assets | 5,821 | 11,819 |
Prepaid expenses | 5,528 | 1,842 |
Other current assets | (131) | (328) |
Operating right-of-use assets | 801 | 633 |
Other noncurrent assets | (355) | 67 |
Accounts payable | 10,967 | 11,773 |
Accrued expenses | 52,450 | 5,816 |
Contract liabilities | (142) | (399) |
Operating lease liabilities | (1,273) | (996) |
Other liabilities | 150 | 148 |
Net cash flows from operating activities | (112,918) | (45,110) |
Cash flows from investing activities: | ||
Property and equipment purchases | (1,150) | (1,294) |
Forward purchase option derivative purchase | (68,715) | |
Intangible asset purchases | (50) | |
Net cash flows from investing activities | (69,865) | (1,344) |
Cash flows from financing activities: | ||
Net borrowings(payments) on line of credit | 179 | (4,373) |
Proceeds from long-term debt | 22,254 | |
Repayments of long-term debt | (4,500) | (1,500) |
Financing costs paid | (2,000) | (800) |
Warrants exercised | (32,490) | |
Proceeds from SAFE | 8,000 | |
Proceeds from the Mergers | 196,778 | |
Equity issuance costs | (21,827) | |
Net cash flows from financing activities | 176,630 | 48,071 |
Net change in cash and cash equivalents | (6,153) | 1,617 |
Cash, beginning of period | 10,617 | 6,021 |
Cash, end of period | 4,464 | 7,638 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 9,023 | 6,119 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Exchange of warrant liability for Class A and Class V Common Stock | 1,716 | |
Conversion of SAFE for Class V Common Stock | 8,000 | |
Establishment of earn-out liabilities | 74,100 | |
Equity issuance costs accrued but not paid | $ 44,235 |
Nature of operations and summar
Nature of operations and summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations and summary of significant accounting policies | Note 1— Nature of operations and summary of significant accounting policies Description of Business Rubicon provides consultation and management services to customers for waste removal, waste management, logistics, and recycling solutions. Consultation and management services include planning, consolidation of billing and administration, cost savings analyses, and vendor performance monitoring and management. The combination of Rubicon’s technology and services provides a holistic audit of customer waste streams. Rubicon also provides logistics services and markets and resells recyclable commodities. Rubicon Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.” Mergers In connection with the Mergers, the Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by Rubicon Technologies Holdings, LLC and continue to operate through Rubicon Technologies Holdings, LLC and its subsidiaries, and Rubicon Technologies, Inc.’s material assets are the equity interests of Rubicon Technologies Holdings, LLC indirectly held by it. Pursuant to the Merger Agreement, the Mergers were accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) (the “Reverse Recapitalization”). Under this method of accounting, Founder was treated as the acquired company and Holdings LLC was treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Holdings LLC issuing stock for the net assets of Founder, accompanied by a recapitalization. Thus, these condensed consolidated financial statements reflect (i) the historical operating results of Holdings LLC prior to the Mergers; (ii) the results of Rubicon Technologies, Inc. following the Mergers; and (iii) the acquired assets and liabilities of Founder stated at historical cost, with no goodwill or other intangible assets recorded. See Note 3 for further information regarding the Mergers. Basis of Presentation and Consolidation Segments Use of Estimates Emerging Growth Company Revenue Recognition Service Revenue: Service revenues are primarily derived from long-term contracts with waste generator customers including multiple promises delivered through the Company’s digital marketplace platform. The promises include waste removal, consultation services, billing administration and consolidation, cost savings analyses, and vendor procurement and performance management, each of which constitutes an input to the combined service managed through the digital platform. The digital platform and services are highly interdependent, and accordingly, each contractual promise is not considered a distinct performance obligation in the context of the contract and is combined into a single performance obligation. In general, fees are invoiced, and revenue is recognized over time as control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing the service. The Company invoices for certain services prior to performance. These advance invoices are included in contract liabilities and recognized as revenue in the period service is provided. Service revenues also include software-as-a-service subscription, maintenance, equipment and other professional services, which represent separate performance obligations. Once the performance obligations and the transaction price are determined, including an estimate of any variable consideration, the Company then allocates the transaction price to each performance obligation in the contract using a relative standalone selling price method. The Company determines standalone selling price based on the price at which the good or service is sold separately. Recyclable Commodity Revenue: The Company recognizes recyclable commodity revenue through the purchase and sale of old corrugated cardboard (“OCC”), old newsprint (“ONP”), aluminum, glass, pallets, and other recyclable materials at market prices. The Company purchases recyclable commodities from certain waste generator customers and sells the recyclable materials to recycling and processing facilities. Revenue recognized under these agreements is variable in nature based on the market, type and volume or weight of the materials sold. The amount of revenue recognized is based on commodity prices at the time of sale, which are unknown at contract inception. Fees are billed, and revenue is recognized at a point in time when control is transferred to the recycling and processing facilities. Management reviews contracts and agreements the Company has with its waste generator customers and hauling and recycling partners, and performs an evaluation to consider the most appropriate manner in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606-10, Revenue Recognition: Principal Agent Considerations Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether the Company controls the service provided to the end-user and are the principal in the transaction (gross), or the Company arranges for other parties to provide the service to the end-user and are the agent in the transaction (net). Management has concluded that the Company is the principal in most arrangements as it controls the waste removal service and is the primary obligor in the transactions. Cost of Revenue, exclusive of amortization and depreciation Cost of recyclable commodity revenues primarily consists of expenses related to purchase of OCC, ONP, aluminum, glass, pallets and other recyclable materials, and any associated transportation fees. The Company recognizes the cost of revenue exclusive of any amortization or depreciation expenses, which are recognized in operating expense on the condensed consolidated statements of operations. Cash and Cash Equivalents Accounts Receivable Contract Balances 62.8 57.0 50.0 Contract liabilities (deferred revenue) consists of amounts collected prior to having satisfied the performance obligation. The Company periodically invoices customers for recurring front load services in advance on a monthly basis. As of September 30, 2022 and December 31, 2021, the Company had deferred revenue balances of $ 4.5 4.6 4.1 Accrued Hauler Expenses Fair Value Measurements Offering Costs 0 1.1 67.3 23.1 44.2 Customer Acquisition Costs Warrants Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded in liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized in other income (expense) on the consolidated statement of operations. As of September 30, 2022, the Company has both liability-classified and equity-classified warrants outstanding. See Note 9 for further information. Earn-out Liabilities 1,488,519 8,900,840 0.0001 (1) 50% of the Earn-Out Interests if the volume weighted average price (the “VWAP”) of the Class A Common Stock equals or exceeds $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for twenty (20) of thirty (30) consecutive trading days during the Earn-Out Period; and (2) 50% of the Earn-Out Interests if the VWAP of the Class A Common Stock equals or exceeds $16.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for twenty (20) of any thirty (30) consecutive trading days during the Earn-Out Period. Earn-Out Interests are classified as liability transactions at initial issuance which offset against additional paid-in capital as of the Closing. At each period end, Earn-Out Interests are remeasured to their fair value with the changes during that period recognized in other income (expense) on the consolidated statement of operations. Upon issuance and release of the shares after each Earn-Out Condition is met, the related Earn-Out Interests will be remeasured to their fair value at that time with the changes recognized in other income (expense), and such Earn-Out Interests will be reclassed to stockholders’ equity (deficit) on the consolidated balance sheet. As of the Closing Date, the Earn-Out Interests had a fair value of $74.1 million. As of September 30, 2022, the Earn-out Interests had a fair value of $ 7.0 67.1 Noncontrolling Interest Upon completion of the Mergers, Rubicon Technologies, Inc. issued an aggregate 118,667,880 The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 70.5% of Holdings LLC’s net loss during the period of August 15, 2022, the Closing Date, through September 30, 2022 was allocated to noncontrolling interests (“NCI”). Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes Income Taxes; Interim Reporting ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. The Company’s income tax expense (benefit) was $- 0 0.3 (0.0) 1.4 0.1 1.0 (0.0) 2.2 During the nine months ended September 30, 2022, the Company recorded a full valuation allowance against its deferred tax assets. The Company intends to maintain this position until there is sufficient evidence to support the reversal of all or some portion of the allowance. The Company also has certain assets with indefinite lives for which the basis is different for book and tax. In accordance with ASC 740-10-30-18, the deferred tax liability related to these intangible assets cannot be used to offset deferred tax assets when determining the amount of the valuation allowance for deferred tax assets which are not more-likely-than-not to be realized. As a result, the Company is in a net deferred tax liability position of $ 0.2 Tax Receivable Agreement Obligation The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows: a. recognizes a contingent liability for the TRA obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that the Company will pay; b. records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange; c. to the extent the Company estimates that the full benefit represented by the deferred tax asset will not be fully realized based on an analysis that will consider, among other things, the expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance; and d. the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss. As of September 30, 2022, no TRA liability was recorded based on current projections of the Company’s future taxable income taking into consideration the Company’s full valuation allowance against its deferred tax asset. Earnings (Loss) Per Share (“EPS”) Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 14 for additional information on dilutive securities. Prior to the Mergers, the membership structure of Holdings LLC included units which had liquidation preferences. The Company analyzed the calculation of loss per unit for periods prior to the Mergers and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. As a result, loss per share information has not been presented for periods prior to the Mergers on August 15, 2022. Derivative Financial Instruments Stock-Based Compensation The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. |
Recent accounting pronouncement
Recent accounting pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Recent Accounting Pronouncements | |
Recent accounting pronouncements | Note 2— Recent accounting pronouncements Accounting pronouncements adopted during 2022 In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and contracts in an Entity’s Own Equity Accounting pronouncements issued, but not adopted as of September 30, 2022 In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In October 2021, the FASB issued ASU 2021-08, Business Combination (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers |
Mergers
Mergers | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Mergers | Note 3— Mergers As further discussed in Note 1, on August 15, 2022, the Mergers were consummated pursuant to the Merger Agreement. In connection with the Closing, the following occurred in addition to the disclosures in Note 1: - (a) Each then-issued and outstanding Class A ordinary share, par value $ 0.0001 0.0001 each representing a right to acquire one Founder Class A Share for $11.50 (a “Founder Public Warrant”), converted automatically, on a one-for-one basis, into a public warrant of the Company (a “Public Warrant”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement, dated October 14, 2021, by and between Founder and Continental Stock Transfer and Trust Company (as amended, the “Warrant Agreement”), (d) each then-issued and outstanding private placement warrant of Founder, each representing a right to acquire one Founder Class A Share for $11.50 (a “Founder Private Placement Warrant”), converted automatically, on a one-for-one basis, into a private placement warrant of the Company (the “Private Warrant” and together with the Public Warrants, the “Warrants”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement - The Company was issued Class A Units in Holdings LLC (“Class A Units”) and all preferred units, common units, and incentive units of Holdings LLC (including such convertible instruments, the “Rubicon Interests”) outstanding as of immediately prior to the Merger were automatically recapitalized into Class A Units and Class B Units of Holdings LLC (“Class B Units”), as authorized by the Eighth Amended and Restated Limited Liability Company Agreement of Holdings LLC (“A&R LLCA”) that was adopted at the time of the Merger. Following the Blocker Mergers, (a) holders of Rubicon Interests immediately before the Closing, other than the Blocker Companies (the “Blocked Unitholders”), were issued Class B Units (the “Rubicon Continuing Unitholders”), (b) Rubicon Continuing Unitholders were issued a number of shares of Class V Common Stock equal to the number of Class B Units issued to the Rubicon Continuing Unitholders, (c) Blocked Unitholders were issued shares of Class A Common Stock (as a result of the Blocker Mergers), and (d) following the adoption of the equity incentive award plan of Rubicon adopted at the Closing (the “2022 Plan”) and the effectiveness of a registration statement on Form S-8 filed on October 19, 2022, holders of phantom units of Holdings LLC immediately prior to the Closing (“Rubicon Phantom Unitholders”) and those current and former directors, officers and employees of Holdings LLC entitled to certain cash bonuses (the “Rubicon Management Rollover Holders”) are to receive restricted stock units (“RSUs”) and deferred stock units (“DSUs”), and such RSUs and DSUs will vest into shares of Class A Common Stock on February 11, 2023, the date that is 180 days following the Closing. $ 47.6 - Certain investors (the “PIPE Investors”) purchased, and the Company sold to such PIPE Investors an aggregate of 12,100,000 10.00 - Certain investors (the “FPA Sellers”) purchased, and the Company issued and sold to such FPA Sellers, an aggregate of 7,082,616 - The Company (a) caused to be issued to certain investors 880,000 160,000 160,000 - Blocked Unitholders and Rubicon Continuing Unitholders retained aggregate 19,846,916 118,677,880 83.5 - The Company and Holdings LLC entered into the Tax Receivable Agreement with the TRA Holders. See Note 1 for further information. - The Company contributed approximately $ 73.8 28.9 121.0 - The Company incurred $ 67.3 23.1 |
Property and equipment
Property and equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Note 4— Property and equipment Property and equipment, net is comprised of the following as of September 30, 2022 and December 31, 2021 (in thousands): Schedule of propertyand equipment September 30, 2022 December 31, Computers, equipment and software $ 3,668 $ 2,968 Customer equipment 1,380 1,122 Furniture and fixtures 1,699 1,570 Leasehold improvements 3,771 3,769 Total property and equipment 10,518 9,429 Less accumulated depreciation and amortization (7,777 ) (6,818 ) Total property and equipment, net $ 2,741 $ 2,611 Depreciation and amortization expense reflected in operating expense for the three months ended September 30, 2022 and 2021 was $ 0.3 0.4 1.0 1.2 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 5— Debt Revolving Credit Facility 60.0 million “Revolving Credit Facility” secured by all assets of the Company including accounts receivable, intellectual property, and general intangibles. The Revolving Credit Facility was subsequently amended, and bore SOFR plus 4.6 % ( 7.6 % at September 30, 2022 ) with the maturity date of December 14, 2022 . On November 18, 2022, the Company entered into an amendment to the Revolving Credit Facility, extending the maturity date to December 14, 2023 and modifying the interest rate the Revolving Credit Facility bears to SOFR plus 5.6% (see Note 20). The borrowing capacity of the Revolving Credit Facility is calculated based on qualified billed and unbilled receivables. Interest and fees are payable monthly with principal due upon maturity. The Revolving Credit Facility requires a lockbox arrangement, which provides for receipts to be swept daily to reduce borrowings outstanding at the discretion of the lender. This arrangement, combined with the existence of the subjective acceleration clause, necessitates the Revolving Credit Facility be classified as a current liability on the consolidated balance sheets. The acceleration clause allows for amounts due under the facility to become immediately due in the event of a material adverse change in the Company’s business condition (financial or otherwise), operations, properties or prospects, change of management, or change in control. As of September 30, 2022, the Company’s total outstanding borrowings under the Revolving Credit Facility were $ 30.1 21.2 29.9 23.0 Term Loan Facilities 20.0 million “Term Loan” agreement secured by a second lien on all assets of the Company including accounts receivable, intellectual property and general intangibles. The Term Loan agreement was subsequently amended, and currently has the principal amount of $ 60.0 million, bears an interest rate of LIBOR plus 9.5 % ( 13.1 March 29, 2024 or the maturity date of the Revolving Credit Facility. The Term Loan was amended on November 18, 2022 to, among other things, require the Company to repay the Term Loan with any net proceeds provided by the SEPA until such time that the Term Loan is repaid in full. (see Note 20). The Term Loan also includes a qualified equity contributions requirement, requiring the Company to raise $ 50.0 50.0 20.0 8.7 Pursuant to the amended Term Loan agreement, on October 15, 2021, the Company entered into warrant agreements and issued common unit purchase warrants (the “Term Loan Warrants”). The Term Loan Warrants were converted into Class A Common Stock and Class B Units upon the consummation of the Mergers. On December 22, 2021, the Company entered into a $ 20.0 million “Subordinated Term Loan” agreement secured by a third lien on all assets of the Company including accounts receivable, intellectual property and general intangibles. The Subordinated Term Loan was scheduled to mature on December 22, 2022 and bears an interest rate of 15.0 %. On November 18, 2022, the Company entered into an amendment to the Subordinated Term Loan agreement, extending its maturity date to December 31, 2023 (see Note 20). Pursuant to the Subordinated Term Loan agreement, the Company entered into warrant agreements and issued common unit purchase warrants (the “Subordinated Term Loan Warrants”). If the Company does not repay the Subordinated Term Loan on or before its maturity, the Subordinated Term Loan Warrants will be exercisable for additional Class A Common Stock until the Company fully pays the principal and interest in cash. See Note 9 for further information regarding the Term Loan Warrants and the Subordinated Term Loan Warrants. See Note 20 for further information regarding the amended agreements entered into for the Revolving Credit Facility, Term Loan, and Subordinated Term Loan on November 18, 2022. Amortization of deferred debt charges were $ 0.8 0.1 2.5 0.4 Components of long-term debt were as follows (in thousands): Schedule of components of long-term debt September 30, 2022 December 31, Term loan balance $ 72,500 $ 77,000 Less unamortized loan origination costs (2,957 ) (3,334 ) Total borrowed 69,543 76,666 Less short-term loan balance - (22,666 ) Long-term loan balance $ 69,543 $ 51,000 At September 30,2022, the aggregate maturities of long-term debt for the remainder of 2022 and subsequent years are as follows (in thousands): Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2022 $ 1,500 2023 71,000 Total $ 72,500 PPP Loans The PPP Loans were eligible for forgiveness as part of the CARES Act, if certain requirements were met. The Company applied for forgiveness with the SBA in December 2020. On March 30, 2021, the SBA forgave the principal balance and associated accumulated interest of one of the two PPP Loans in full. On June 10, 2021, the SBA forgave the principal balance and associated accumulated interest of the second PPP Loans in full. As a result, the Company recognized $ 10.9 The Company elected to repay $ 2.3 0 Interest expense related to the Revolving Credit Facility, the Term Loan, the Subordinated Term Loan, and PPP Loan, as applicable, was $ 4.6 2.6 12.3 7.5 |
Accrued expenses
Accrued expenses | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Note 6— Accrued expenses Accrued expenses consist of the following as of September 30, 2022 and December 31, 2021 (in thousands): Schedule of Accrued expenses September 30, 2022 December 31, Accrued hauler expenses $ 55,773 $ 49,607 Accrued compensation 57,632 9,656 Accrued income taxes - 3 Accrued Mergers transaction expenses 44,235 - Other accrued expenses 4,788 6,272 Total accrued expenses $ 162,428 $ 65,538 |
Goodwill and other intangibles
Goodwill and other intangibles | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangibles | Note 7— Goodwill and other intangibles There were no additions to goodwill for the year ended December 31, 2021 or the nine months ended September 30, 2022. No impairment of goodwill was identified for the year ended December 31, 2021 or the nine months ended September 30, 2022. Intangible assets consisted of the following (in thousands, except years): Schedule of Intangible Assets and Goodwill September 30, 2022 Useful Life Gross Carrying Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (11,502 ) 9,474 Non-competition agreements 3 4 550 (550 ) - Technology 3 3,178 (1,802 ) 1,376 Total finite-lived intangible assets 25,432 (14,582 ) 10,850 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (14,582 ) $ 11,685 December 31, 2021 Useful Life Gross Carrying Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (9,582 ) 11,394 Non-competition agreements 3 4 550 (487 ) 63 Technology 3 3,178 (1,307 ) 1,871 Total finite-lived intangible assets 25,432 (12,104 ) 13,328 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (12,104 ) $ 14,163 Amortization expense for intangible assets was $ 0.8 0.7 2.5 2.2 Schedule of Finite- Lived Intangible Assets, Future Amortization Expense Fiscal Years Ending December 31, 2022 $ 804 2023 3,220 2024 3,110 2025 2,559 2026 1,157 Total finite-lived intangible assets, net $ 10,850 |
Stockholders_ (deficit) equity
Stockholders’ (deficit) equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ (deficit) equity | Note 8— Stockholders’ (deficit) equity Upon closing of the Mergers on August 15, 2022, as discussed in Note 3, the Company’s capital stock consisted of (i) shares of Class A Common Stock issued as a result of the automatic conversion of Founder Class A Shares on a one-for-one basis, (ii) shares of Class A Common Stock issued to the PIPE Investors, (iii) shares of Class A Common Stock issued to the Blocked Unitholders and (iv) shares of Class V Common Stock issued to the Rubicon Continuing Unitholders. The table set forth below reflects information about the Company’s equity, as of September 30, 2022. The Earn-Out Interests are considered contingently issuable shares and therefore excluded from the number of shares of Class A Common Stock and Class V Common Stock issued and outstanding in the table below. Schedule of Stockholders Equity Authorized Issued Outstanding Class A Common Stock 690,000,000 49,714,239 49,714,239 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of September 30, 2022 975,000,000 165,177,885 165,177,885 Each share of Class A Common Stock and Class V Common Stock entitles the holder one vote per share. Only holders of Class A Common Stock have the right to receive dividend distributions. In the event of liquidation, dissolution or winding up of the affairs of the Company, only holders of Class A Common Stock have the right to receive liquidation proceeds, while the holders of Class V Common Stock are entitled to only the par value of their shares. The holders of Class V Common Stock have the right to exchange Class V Common Stock for an equal number of shares of Class A Common Stock. The Company’s board of directors has discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2022 | |
Warrants | |
Warrants | Note 9— Warrants Public Warrants and Private Warrants Company assumed a total of 30,016,875 11.50 15,812,500 14,204,375 In accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity The Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Warrants. The Warrants became exercisable on September 14, 2022, 30 days after the Closing and no Warrant has been exercised through September 30, 2022. The Warrants will expire five years from the Closing or earlier upon redemption. The Company may redeem the Public Warrants and any Private Warrants no longer held by the initial purchaser thereof or its permitted transferee: - in whole and not in part; - at a price of $ 0.01 - upon not less than 30 days’ prior written notice to each Warrant holder and - if and only if, the last reported price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders. The Company determined the initial fair value of its Public Warrants based on the publicly listed trading price as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. As the terms of the Private Warrants are identical to those of the Public Warrants except as otherwise stated above, the Company determined the initial fair value of its Private Warrants based on the publicly listed trading price of the Public Warrants as of the valuation date and have classified the Private Warrants as Level 2 financial instruments. Warrant Liabilities 62,003 0.01 Distinguishing Liabilities from Equity 1.8 1.3 0.5 Pursuant to the Subordinated Term Loan agreement entered on December 22, 2021 (see Note 5), the Company concurrently entered into warrant agreements and issued the Subordinated Term Loan Warrants under the condition that if the Company does not repay the Subordinated Term Loan on or prior to the maturity date, the lender receives right to purchase up to the number of Class A Common Stock worth $2.0 million, at the exercise price of $0.01 any time after the maturity date prior to the earlier of the date principal and interest on all outstanding term loans under this Subordinated Term Loan agreement are repaid or the tenth anniversary of the issuance date. Additionally, if the Company does not repay the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants will be exercisable for additional $0.2 million of Class A Common Stock each additional full calendar month after the maturity date until the Company fully repays the principal and interest in cash. If the Company repays the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants will automatically terminate and be voided and no Subordinated Term Loan Warrant will be exercisable. Distinguishing Liabilities from Equity 0.1 0.1 See Note 20 regarding the amendment to Subordinated Term Loan Warrants agreements the Company entered into on November 18, 2022. |
Equity Investment Agreement
Equity Investment Agreement | 9 Months Ended |
Sep. 30, 2022 | |
Equity Investment Agreement | |
Equity Investment Agreement | Note 10— Equity Investment Agreement On May 25, 2022, the Company entered into the Rubicon Equity Investment Agreement with certain investors, whereby, the investors have agreed to advance to the Company up to $8,000,000 and, upon consummation of the Mergers, and in exchange for the advancements, (a) the Company will cause to be issued up to 880,000 Class B Units of the Company and 160,000 shares of Class A Common Stock to the investors and (b) Sponsor will forfeit up to 160,000 shares of Class A Common Stock, in each case subject to actual amounts advanced by the investors. In accordance with the Rubicon Equity Investment Agreement, on May 25, 2022, the Company received $8,000,000 of cash from the investors. Distinguishing Liabilities from Equity 0.8 880,000 160,000 160,000 |
Forward Purchase Agreement
Forward Purchase Agreement | 9 Months Ended |
Sep. 30, 2022 | |
Forward Purchase Agreement | |
Forward Purchase Agreement | Note 11— Forward Purchase Agreement On August 4, 2022, the Company and ACM Seller entered into the Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). Pursuant to the terms of the Forward Purchase Agreement, the FPA Sellers intended, but were not obligated, to purchase (a) Founder Class A Shares after the date of the Forward Purchase Agreement from holders of the Founder Class A Shares (other than Founder or affiliates of Founder) who elected to redeem Founder Class A Shares (such purchased Founder Class A Shares, the “Recycled Shares”) pursuant to redemption rights set forth in Founder’s amended and restated memorandum and articles of association (the “Governing Documents”) in connection with the Mergers (such holders, “Redeeming Holders”) and (b) Founder Class A Shares in an issuance from Founder at a price per Founder Class A Share equal to approximately $10.17 per share, the per-share redemption price as set forth in the Governing Documents (such Founder Class A Shares, the “Additional Shares” and, together with the Recycled Shares, the “Subject Shares”). Pursuant to the terms of the FPA Agreement, the aggregate number of Subject Shares could not exceed 15 million shares (the “Maximum Number of Shares”). In addition, the FPA Sellers purchased an additional 1 million Founder Class A Shares from other Redeeming Holders (the “Separate Shares”). The FPA Sellers may not beneficially own greater than 9.9% of the Common Stock on a post-Mergers pro forma basis. Pursuant to the terms of the Forward Purchase Agreement, the FPA Sellers purchased 7,082,616 Founder Class A Shares, which included 6,082,616 Subject Shares and 1,000,000 Separate Shares, at the per-share redemption price prior to the closing of the Mergers, in exchange for the prepayment by Founder of $68.7 million out of the funds in Founder’s trust account that were to be received by the Company at the Closing. The prepayment amount was calculated as (a) the per-share redemption price multiplied by the 6,082,616 Subject Shares, less (b) 50% of the product of the 6,082,616 Subject Shares multiplied by $1.33 (the “Prepayment Shortfall”) and (c) an amount equal to the product of Separate Shares multiplied by the per-share redemption price. The FPA Sellers did not purchase any Additional Shares. From time to time following the Closing, the FPA Sellers, in their discretion, may sell the Subject Shares, the effect of which is to terminate the Forward Purchase Agreement in respect of such Subject Shares sold (the “Terminated Shares”) and repay to the Company a portion of the forward price, in amounts corresponding to the number of shares sold. The Forward Purchase Agreement is to mature on the earlier of (a) the third anniversary of the Closing and (b) the date specified by the FPA Sellers at the FPA Sellers’ discretion after the occurrence of a VWAP Trigger Event (the “FPA Maturity Date”). A VWAP Triggering Event occurs if (i) during the first 90 days following the Closing, the VWAP for 20 trading days during any 30 consecutive trading day period is less than $3.00 per share and (ii) from the 91 st In accordance with ASC 815, Derivatives and Hedging See Note 20 regarding certain subsequent event related to the Forward Purchase Agreement specific to the occurrence of a VWAP Trigger Event. |
Standby Equity Purchase Agreeme
Standby Equity Purchase Agreement | 9 Months Ended |
Sep. 30, 2022 | |
Standby Equity Purchase Agreement | |
Standby Equity Purchase Agreement | Note 12— Standby Equity Purchase Agreement On August 31, 2022, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd. (the “Yorkville Investor”). Pursuant to the SEPA, the Company has the right to sell to the Yorkville Investor, from time to time, up to $200.0 million of shares of Class A Common Stock until the earlier of the 36-month anniversary of the SEPA or until the date on which the facility has been fully utilized, subject to certain limitations and conditions set forth in the SEPA, including the requirement that there be an effective registration statement registering such shares and limitations on the volume of shares that may be sold. Shares will be sold to the Yorkville Investor at a price equal to 97% of the lowest daily VWAP of the Class A Common Stock during the three consecutive trading days immediately prior to any notice to sell such securities provided by the Company. The Yorkville Investor may not beneficially own greater than 9.99% of the outstanding shares of Class A Common Stock. 200,000 |
Equity-based compensation
Equity-based compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-based compensation | Note 13— Equity-based compensation 2014 Plan The 2014 Profits Participation Plan and Unit Appreciation Rights Plan (the “2014 Plan”) was a Board-approved plan of Holdings LLC. Under the 2014 Plan, Holdings LLC had the authority to grant incentive and phantom units to acquire common units. Unit awards generally vest at 25% of the units on the one year anniversary of continued employment, with the remaining 75% vesting in equal monthly installments over the next three years, unless otherwise specified. As further described in Note 3, upon consummation of the Mergers, all incentive units granted under the 2014 Plan vested and converted into the Class V Common Stock and all phantom units granted under the 2014 Plan converted into RSUs and DSUs which will vest into shares of Class A Common Stock on February 11, 2023. The unrecognized compensation cost related to the 2014 Plan that was remaining at the Closing was recognized as expense as of upon consummation of the Mergers. Incentive Units Management utilized the Black-Scholes-Merton option pricing model to determine the fair value of units issued. There were no incentive units granted during the nine months ended September 30, 2022. Compensation expense for all incentive units awarded to date was recognized over the vesting term of the underlying incentive units. The following represents a summary of the Company’s incentive unit activity and related information during 2022 immediately prior to the consummation of the Mergers: Schedule Of Incentive Unit Activity Units Outstanding - January 1, 2022 3,084,650 Granted - Forfeited (14,499 ) Outstanding – August 15, 2022 3,070,151 Vested – August 15, 2022 3,070,151 A summary of nonvested incentive units and changes during 2022 immediately prior to the consummation of the Mergers follows: Schedule Of Non vested Incentive Units Units Weighted Average Nonvested - January 1, 2022 198,210 $ 10.25 Granted - - Vested (183,711 ) 10.25 Forfeited (14,499 ) - Nonvested – August 15, 2022 - $ - Holdings LLC was authorized to issue phantom units to eligible employees under the terms of the Unit Appreciation Rights Plan. The Company estimated the fair value of the phantom units as of the end of each reporting period and expensed the vested fair market value of each award. The fair value of the phantom units was measured using the same independent valuation assessment as the incentive units. The Company did not award any phantom units during the nine months ended September 30, 2022. At the Closing of the Mergers, all vested and unvested phantom units were exchanged for 970,389 2022 Plan The 2022 Equity Incentive Plan (the “2022 Plan”), which became effective on August 15, 2022 in connection with the Closing, provides for the grant to certain employees, officers, non-employee directors and other services providers of options, stock appreciation rights, RSUs, restricted stock and other stock-based awards, any of which may be performance-based, and for incentive bonuses, which may be paid in cash, Common Stock or a combination thereof, as determined by the Company’s Compensation Committee. Under the 2022 Plan, 29,000,000 2,485,711 The following represents a summary of the Company’s RSU activity and related information during 2022 immediately after the consummation of the Mergers: Schedule of RSUs RSUs Outstanding – August 15, 2022 (prior to the Mergers consummation) - Granted – Phantom Unit exchanges 970,389 Granted – Morris Employment Agreement 4,821,358 Granted – Partial settlement of Management Rollover Consideration 3,561,469 Forfeited - Outstanding – August 15, 2022 (subsequent to the Mergers consummation) 9,353,216 Vested – August 15, 2022 (subsequent to the Mergers consummation) 970,389 The RSUs exchanged for phantom units vested upon the Closing of the Mergers. The remaining RSUs will vest over the requisite services periods ranging from six to thirty-six months from the grant date. The Company recognized $ 90.6 0.8 95.3 3.4 Pursuant to an Employment Agreement with Mr. Nate Morris, the Company’s former Chief Executive Officer, dated February 9, 2021 and amended on April 26, 2022 and August 10, 2022, the Company is obligated to grant Mr. Morris an additional RSU award with a value equal to $ 5.0 Deferred compensation cost recognized during the three months ended September 30, 2022 and 2021 was $ 1.3 0 1.3 0 |
Loss per share
Loss per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Loss per share | Note 14— Loss per share Basic net loss per share of Class A Common Stock is computed by dividing net loss attributable to the Company by the weighted average number of shares of Class A Common Stock outstanding during the period from August 15, 2022 (the Closing Date) to September 30, 2022. Diluted net loss per share of Class A Common Stock is computed dividing net loss attributable to the Company, adjusted for the assumed exchange of all potentially dilutive securities, by weighted average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares. Prior to the Mergers, the membership structure of Holdings LLC included units which had profit interests. The Company analyzed the calculation of loss per unit for periods prior to the Mergers and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, net loss per share information has not been presented for periods prior to August 15, 2022. The basic and diluted loss per share for the three and nine months ended September 30, 2022 represent only the period from August 15, 2022 to September 30, 2022. Furthermore, shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented. The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for period from August 15, 2022 (the Closing Date) to September 30, 2022 are as follows (amounts in thousands, except for share and per share amounts): Schedule of net loss per share Numerator: Net loss for the period from August 15, 2022 through September 30, 2022 $ (34,741 ) Less: Net loss attributable to non-controlling interests for the period from August 15, 2022 through September 30, 2022 (16,933 ) Net loss for the period from August 15, 2022 through September 30, 2022 attributable to Rubicon Technologies, Inc. – Basic and diluted $ (17,808 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 48,670,776 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.37 ) The Company’s potentially dilutive securities below were excluded from the computation of diluted loss per share as their effect would be anti-dilutive: - 15,812,500 14,204,375 - 1,488,519 - 970,389 540,032 |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 15— Fair value measurements The following tables summarize the Company’s financial assets and liabilities measured at fair value on recurring basis by level within the fair value hierarchy as of the dates indicated (in thousands): Schedule of assets and liabilities measured at fair value on recurring basis September 30, 2022 Liabilities Level 1 Level 2 Level 3 Forward purchase option derivative - - (8,205 ) Earn-out liabilities - - (7,000 ) Warrant liabilities - - (100 ) Total - - (15,305 ) December 31, 2021 Liabilities Level 1 Level 2 Level 3 Warrant liabilities - - (1,380 ) Deferred compensation – phantom units - - (8,321 ) Total - - (9,701 ) Level 3 Rollfoward Forward purchase option derivative Earn-out liabilities Warrant liabilities Deferred compensation – phantom units Beginning balances - - (1,380 ) (8,321 ) Additions 16,615 (74,100 ) - - Changes in fair value (24,820 ) 67,100 (436 ) (6,783 ) Reclassified to equity - - 1,716 15,104 Ending balances (8,205 ) (7,000 ) (100 ) - The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and contract assets and liabilities, approximate fair value due to their short-term maturities and are excluded from the fair value table above. The fair value of the forward purchase option derivative was estimated using a Monte-Carlo Simulation in a risk-neutral framework. Specifically, the future stock price is simulated assuming a Geometric Brownian Motion (“GBM”). For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted at the term-matched risk-free rate. Finally, the value of the forward is calculated as the average present value over all simulated paths. The Company measured the fair value of the forward purchase option derivative as of the Closing Date and September 30, 2022, with the respective fair value adjustments recorded within the accompanying condensed consolidated statement of operations. For the contingent consideration related to the Earn-Out Interests, the fair value was estimated using a Monte-Carlo Simulation in which the fair value was based on the simulated stock price of the Company over the maturity date of the contingent consideration. The key inputs used in the determination of the fair value included current stock price, volatility, and expected term. The Company measured the fair value of the Earn-Out Interests as of the Closing Date and September 30, 2022, with the respective fair value adjustments recorded within the accompanying condensed consolidated statement of operations. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 16— Commitments and contingencies Legal Matters In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on the Company’s condensed consolidated results of operations, cash flows or financial position. However, depending on the nature and timing of any such dispute or other contingency, an unfavorable resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both. Leases The Company leases its office facilities under operating lease agreements expiring through 2031. While each of the leases includes renewal options, the Company has only included the base lease term in its calculation of lease assets and liabilities as it is not reasonably certain to utilize the renewal options. The Company does not have any finance leases. The following table presents information regarding the maturities of the undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented on the September 30, 2022 condensed consolidated balance sheet (in thousands). Schedule of operating lease payments Years Ending December 31, 2022 $ 563 2023 2,276 2024 1,228 2025 151 2026 152 Thereafter 732 Total minimum lease payments $ 5,102 Less: Imputed interest (930 ) Total operating lease liabilities $ 4,172 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 17— Related party transactions The Company entered into a certain software subscription agreement with Palantir Technologies, Inc., including related support and update services on September 22, 2021. The Company subsequently amended the agreement on December 15, 2021. The term of the agreement is through December 31, 2024. Pursuant to the agreement, as of September 30, 2022, the Company is committed to pay $ 15.5 |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 18— Concentrations During the three months ended September 30, 2022 and 2021, the Company had two significant customers that accounted for approximately 24 31 27 29 22 23 |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Note 19— Liquidity During the nine months ended September 30, 2022, and in each fiscal year since the Company’s inception, it has incurred losses from operations and generated negative cash flows from operating activities. The Company also has negative working capital and stockholders’ deficit as of September 30, 2022. As of September 30, 2022, cash and cash equivalents totaled $ 4.5 58.7 62.8 60.0 21.2 200.0 36.2 51.0 20.0 The Company currently projects that it will not have sufficient cash on hand or available liquidity under existing arrangements to meet the Company’s projected liquidity needs for the next 12 months. In the absence of additional capital, there is substantial doubt about the Company’s ability to continue as a going concern. To address the Company’s projected liquidity needs for the next 12 months, the Company has negotiated and received a binding commitment for $ 30.0 30.0 The Company believes that the extended maturity of the Revolving Credit Facility and the Financing Commitment along with cash on hand and available under the Revolving Credit Facility, and other cash flows from operations are expected to provide sufficient liquidity to meet the Company’s known liquidity needs for the next 12 months. The Company believes this plan is probable of being achieved and alleviates substantial doubt about the Company’s ability to continue as a going concern. |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 20— Subsequent events On October 13, 2022 (the “Transition Date”), the Company entered into a CEO Transition Agreement with Mr. Nate Morris, the former Chief Executive Officer (the “CEO”) of the Company. Pursuant to the CEO Transition Agreement, Mr. Morris ceased serving as the Company’s CEO, but continued his role as Chairman of the Board of the Directors of the Company (the “Board”) and was given the title of Founder, Chairman and Strategic Advisor through February 10, 2023 (the “End Date”). Mr. Morris will also continue to serve as a member of the Board until the earlier of (a) the first anniversary of the Transition Date, (b) the date of the Company’s annual shareholder meeting in 2023, and (c) the 10 th 8,378,986 RSUs on October 19, 2022 pursuant to the CEO Transition Agreement. In October 2022, a VWAP Trigger Event occurred and the Forward Purchase Agreement could mature on the date specified by the FPA Sellers at the FPA Sellers’ discretion. The FPA Sellers have not specified the Maturity Date of the Forward Purchase Agreement as of the issuance of these unaudited interim condensed consolidated financial statements. On November 4, 2022, the Company entered into an amended agreement for certain professional services provided in connection with the Mergers. Pursuant to the amended agreement, the Company agreed to settle the unpaid fees with $ 1.0 1.0 12.7 10.7 On November 14, 2022, the Company entered into a binding Financing Commitment with certain existing investors, whereby the investors intend to provide $ 30.0 On November 17, 2022, the Company’s Board of Directors committed to a reduction in force plan (the “Plan”) as part of the Company’s measures to reduce spending and preserve cash available for the Company’s operations. The Plan involves a reduction of 55 employees, which is approximately 11% of the Company’s workforce. The Company currently estimates that it will incur one-time cash charges of approximately $0.6 million, primarily consisting of an estimated $0.5 million in severance payments, and $0.1 million in related costs. The Company expects that most of these charges will be incurred in the fourth quarter of 2022, and that the reduction in force will be substantially complete by the end of 2022. In aggregate, over the next twelve months, the reduction in force is expected to result in approximately $5.5 million in annual cash savings for the Company. On November 18, 2022, the Company entered into an amendment to the Revolving Credit Facility agreement, in which the lender consented to the amendment to the Subordinated Term Loan agreement. The amendment also extended its term through December 14, 2023 and modified the interest rate the Revolving Credit Facility bears to SOFR plus 5.6 5.0 25.0 On November 18, 2022, the Company entered into an amendment to the Term Loan agreement, in which the lender consented to the amendments to the Revolving Credit Facility agreement and the Subordinated Term Loan agreement. Additionally, the Company committed to raise $5.0 million from the Financing Commitment or a similar commitment by November 23, 2022, and additional $25.0 million from the issuance of equity by the earlier of (i) 5 business days after the date the Company’s S-1 filed with the SEC on August 22, 2022 becomes effective, or (ii) January 31, 2023. The amended Term Loan agreement also requires the Company to cause the Yorkville Investor to purchase the maximum amount of the Company’s equity interests available under the SEPA and to utilize the net proceeds from such drawdowns to repay the Term Loan until it is fully repaid. If the Company does not repay the Term Loan in full by March 27, 2023, the Company will be liable for an additional fee in the amount of $2.0 million, out of which $1.0 million will be due in cash on March 27, 2023, and the other $1.0 million will accrue to the principal balance of the Term Loan. Furthermore, beginning on March 27, 2023, an additional $0.15 million fee will accrue to the principal balance of the Term Loan each week thereafter until the Term Loan is fully repaid. The Company may not use the SEPA to fund the new equity financing commitments it agreed to in the amendments to the Revolving Credit Facility and the Term Loan, and the financings used to satisfy the commitments under the Revolving Credit Facility amendment may be used to also satisfy the commitments under the Term Loan amendment. On November 18, 2022, the Company entered into an amendment to the Subordinated Term Loan agreement. The amendment extended the Subordinated Term Loan maturity through December 31, 2023. Concurrently, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which (i) increased the number of Class A Common Stock the lender has the right to purchase with the Subordinated Term Loan Warrants to such number of Class A Common Stock worth $2.6 million ($2.0 million prior to the amendment), (ii) caused the Subordinated Term Loan Warrants to be immediately exercisable upon execution of the amended Subordinated Term Loan Warrants agreements, and (iii) increased the value of Class A Common Stock the Subordinated Term Loan Warrants will earn each additional full calendar month after March 22, 2023 to $0.25 million ($0.2 million prior to the amendment) until the Company repays the Subordinated Term Loan in full. |
Nature of operations and summ_2
Nature of operations and summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Rubicon provides consultation and management services to customers for waste removal, waste management, logistics, and recycling solutions. Consultation and management services include planning, consolidation of billing and administration, cost savings analyses, and vendor performance monitoring and management. The combination of Rubicon’s technology and services provides a holistic audit of customer waste streams. Rubicon also provides logistics services and markets and resells recyclable commodities. Rubicon Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.” |
Mergers | Mergers In connection with the Mergers, the Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by Rubicon Technologies Holdings, LLC and continue to operate through Rubicon Technologies Holdings, LLC and its subsidiaries, and Rubicon Technologies, Inc.’s material assets are the equity interests of Rubicon Technologies Holdings, LLC indirectly held by it. Pursuant to the Merger Agreement, the Mergers were accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) (the “Reverse Recapitalization”). Under this method of accounting, Founder was treated as the acquired company and Holdings LLC was treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Holdings LLC issuing stock for the net assets of Founder, accompanied by a recapitalization. Thus, these condensed consolidated financial statements reflect (i) the historical operating results of Holdings LLC prior to the Mergers; (ii) the results of Rubicon Technologies, Inc. following the Mergers; and (iii) the acquired assets and liabilities of Founder stated at historical cost, with no goodwill or other intangible assets recorded. See Note 3 for further information regarding the Mergers. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation |
Segments | Segments |
Use of Estimates | Use of Estimates |
Emerging Growth Company | Emerging Growth Company |
Revenue Recognition | Revenue Recognition Service Revenue: Service revenues are primarily derived from long-term contracts with waste generator customers including multiple promises delivered through the Company’s digital marketplace platform. The promises include waste removal, consultation services, billing administration and consolidation, cost savings analyses, and vendor procurement and performance management, each of which constitutes an input to the combined service managed through the digital platform. The digital platform and services are highly interdependent, and accordingly, each contractual promise is not considered a distinct performance obligation in the context of the contract and is combined into a single performance obligation. In general, fees are invoiced, and revenue is recognized over time as control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing the service. The Company invoices for certain services prior to performance. These advance invoices are included in contract liabilities and recognized as revenue in the period service is provided. Service revenues also include software-as-a-service subscription, maintenance, equipment and other professional services, which represent separate performance obligations. Once the performance obligations and the transaction price are determined, including an estimate of any variable consideration, the Company then allocates the transaction price to each performance obligation in the contract using a relative standalone selling price method. The Company determines standalone selling price based on the price at which the good or service is sold separately. Recyclable Commodity Revenue: The Company recognizes recyclable commodity revenue through the purchase and sale of old corrugated cardboard (“OCC”), old newsprint (“ONP”), aluminum, glass, pallets, and other recyclable materials at market prices. The Company purchases recyclable commodities from certain waste generator customers and sells the recyclable materials to recycling and processing facilities. Revenue recognized under these agreements is variable in nature based on the market, type and volume or weight of the materials sold. The amount of revenue recognized is based on commodity prices at the time of sale, which are unknown at contract inception. Fees are billed, and revenue is recognized at a point in time when control is transferred to the recycling and processing facilities. Management reviews contracts and agreements the Company has with its waste generator customers and hauling and recycling partners, and performs an evaluation to consider the most appropriate manner in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606-10, Revenue Recognition: Principal Agent Considerations Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether the Company controls the service provided to the end-user and are the principal in the transaction (gross), or the Company arranges for other parties to provide the service to the end-user and are the agent in the transaction (net). Management has concluded that the Company is the principal in most arrangements as it controls the waste removal service and is the primary obligor in the transactions. |
Cost of Revenue, exclusive of amortization and depreciation | Cost of Revenue, exclusive of amortization and depreciation Cost of recyclable commodity revenues primarily consists of expenses related to purchase of OCC, ONP, aluminum, glass, pallets and other recyclable materials, and any associated transportation fees. The Company recognizes the cost of revenue exclusive of any amortization or depreciation expenses, which are recognized in operating expense on the condensed consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable |
Contract Balances | Contract Balances 62.8 57.0 50.0 Contract liabilities (deferred revenue) consists of amounts collected prior to having satisfied the performance obligation. The Company periodically invoices customers for recurring front load services in advance on a monthly basis. As of September 30, 2022 and December 31, 2021, the Company had deferred revenue balances of $ 4.5 4.6 4.1 |
Accrued Hauler Expenses | Accrued Hauler Expenses |
Fair Value Measurements | Fair Value Measurements |
Offering Costs | Offering Costs 0 1.1 67.3 23.1 44.2 |
Customer Acquisition Costs | Customer Acquisition Costs |
Warrants | Warrants Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded in liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized in other income (expense) on the consolidated statement of operations. As of September 30, 2022, the Company has both liability-classified and equity-classified warrants outstanding. See Note 9 for further information. |
Earn-out Liabilities | Earn-out Liabilities 1,488,519 8,900,840 0.0001 (1) 50% of the Earn-Out Interests if the volume weighted average price (the “VWAP”) of the Class A Common Stock equals or exceeds $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for twenty (20) of thirty (30) consecutive trading days during the Earn-Out Period; and (2) 50% of the Earn-Out Interests if the VWAP of the Class A Common Stock equals or exceeds $16.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for twenty (20) of any thirty (30) consecutive trading days during the Earn-Out Period. Earn-Out Interests are classified as liability transactions at initial issuance which offset against additional paid-in capital as of the Closing. At each period end, Earn-Out Interests are remeasured to their fair value with the changes during that period recognized in other income (expense) on the consolidated statement of operations. Upon issuance and release of the shares after each Earn-Out Condition is met, the related Earn-Out Interests will be remeasured to their fair value at that time with the changes recognized in other income (expense), and such Earn-Out Interests will be reclassed to stockholders’ equity (deficit) on the consolidated balance sheet. As of the Closing Date, the Earn-Out Interests had a fair value of $74.1 million. As of September 30, 2022, the Earn-out Interests had a fair value of $ 7.0 67.1 |
Noncontrolling Interest | Noncontrolling Interest Upon completion of the Mergers, Rubicon Technologies, Inc. issued an aggregate 118,667,880 The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 70.5% of Holdings LLC’s net loss during the period of August 15, 2022, the Closing Date, through September 30, 2022 was allocated to noncontrolling interests (“NCI”). |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes Income Taxes; Interim Reporting ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. The Company’s income tax expense (benefit) was $- 0 0.3 (0.0) 1.4 0.1 1.0 (0.0) 2.2 During the nine months ended September 30, 2022, the Company recorded a full valuation allowance against its deferred tax assets. The Company intends to maintain this position until there is sufficient evidence to support the reversal of all or some portion of the allowance. The Company also has certain assets with indefinite lives for which the basis is different for book and tax. In accordance with ASC 740-10-30-18, the deferred tax liability related to these intangible assets cannot be used to offset deferred tax assets when determining the amount of the valuation allowance for deferred tax assets which are not more-likely-than-not to be realized. As a result, the Company is in a net deferred tax liability position of $ 0.2 |
Tax Receivable Agreement Obligation | Tax Receivable Agreement Obligation The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows: a. recognizes a contingent liability for the TRA obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that the Company will pay; b. records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange; c. to the extent the Company estimates that the full benefit represented by the deferred tax asset will not be fully realized based on an analysis that will consider, among other things, the expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance; and d. the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss. As of September 30, 2022, no TRA liability was recorded based on current projections of the Company’s future taxable income taking into consideration the Company’s full valuation allowance against its deferred tax asset. |
Earnings (Loss) Per Share (“EPS”) | Earnings (Loss) Per Share (“EPS”) Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 14 for additional information on dilutive securities. Prior to the Mergers, the membership structure of Holdings LLC included units which had liquidation preferences. The Company analyzed the calculation of loss per unit for periods prior to the Mergers and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. As a result, loss per share information has not been presented for periods prior to the Mergers on August 15, 2022. |
Derivative Financial Instruments | Derivative Financial Instruments |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. |
Property and equipment (Tables)
Property and equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of propertyand equipment | Schedule of propertyand equipment September 30, 2022 December 31, Computers, equipment and software $ 3,668 $ 2,968 Customer equipment 1,380 1,122 Furniture and fixtures 1,699 1,570 Leasehold improvements 3,771 3,769 Total property and equipment 10,518 9,429 Less accumulated depreciation and amortization (7,777 ) (6,818 ) Total property and equipment, net $ 2,741 $ 2,611 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of components of long-term debt | Schedule of components of long-term debt September 30, 2022 December 31, Term loan balance $ 72,500 $ 77,000 Less unamortized loan origination costs (2,957 ) (3,334 ) Total borrowed 69,543 76,666 Less short-term loan balance - (22,666 ) Long-term loan balance $ 69,543 $ 51,000 |
Schedule of maturities of long-term debt | Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2022 $ 1,500 2023 71,000 Total $ 72,500 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued expenses | Schedule of Accrued expenses September 30, 2022 December 31, Accrued hauler expenses $ 55,773 $ 49,607 Accrued compensation 57,632 9,656 Accrued income taxes - 3 Accrued Mergers transaction expenses 44,235 - Other accrued expenses 4,788 6,272 Total accrued expenses $ 162,428 $ 65,538 |
Goodwill and other intangibles
Goodwill and other intangibles (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Schedule of Intangible Assets and Goodwill September 30, 2022 Useful Life Gross Carrying Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (11,502 ) 9,474 Non-competition agreements 3 4 550 (550 ) - Technology 3 3,178 (1,802 ) 1,376 Total finite-lived intangible assets 25,432 (14,582 ) 10,850 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (14,582 ) $ 11,685 December 31, 2021 Useful Life Gross Carrying Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (9,582 ) 11,394 Non-competition agreements 3 4 550 (487 ) 63 Technology 3 3,178 (1,307 ) 1,871 Total finite-lived intangible assets 25,432 (12,104 ) 13,328 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (12,104 ) $ 14,163 |
Schedule of Finite- Lived Intangible Assets, Future Amortization Expense | Schedule of Finite- Lived Intangible Assets, Future Amortization Expense Fiscal Years Ending December 31, 2022 $ 804 2023 3,220 2024 3,110 2025 2,559 2026 1,157 Total finite-lived intangible assets, net $ 10,850 |
Stockholders_ (deficit) equity
Stockholders’ (deficit) equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | Schedule of Stockholders Equity Authorized Issued Outstanding Class A Common Stock 690,000,000 49,714,239 49,714,239 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of September 30, 2022 975,000,000 165,177,885 165,177,885 |
Equity-based compensation (Tabl
Equity-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule Of Incentive Unit Activity | Schedule Of Incentive Unit Activity Units Outstanding - January 1, 2022 3,084,650 Granted - Forfeited (14,499 ) Outstanding – August 15, 2022 3,070,151 Vested – August 15, 2022 3,070,151 |
Schedule Of Non vested Incentive Units | Schedule Of Non vested Incentive Units Units Weighted Average Nonvested - January 1, 2022 198,210 $ 10.25 Granted - - Vested (183,711 ) 10.25 Forfeited (14,499 ) - Nonvested – August 15, 2022 - $ - |
Schedule of RSUs | Schedule of RSUs RSUs Outstanding – August 15, 2022 (prior to the Mergers consummation) - Granted – Phantom Unit exchanges 970,389 Granted – Morris Employment Agreement 4,821,358 Granted – Partial settlement of Management Rollover Consideration 3,561,469 Forfeited - Outstanding – August 15, 2022 (subsequent to the Mergers consummation) 9,353,216 Vested – August 15, 2022 (subsequent to the Mergers consummation) 970,389 |
Loss per share (Tables)
Loss per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per share | Schedule of net loss per share Numerator: Net loss for the period from August 15, 2022 through September 30, 2022 $ (34,741 ) Less: Net loss attributable to non-controlling interests for the period from August 15, 2022 through September 30, 2022 (16,933 ) Net loss for the period from August 15, 2022 through September 30, 2022 attributable to Rubicon Technologies, Inc. – Basic and diluted $ (17,808 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 48,670,776 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.37 ) |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | Schedule of assets and liabilities measured at fair value on recurring basis September 30, 2022 Liabilities Level 1 Level 2 Level 3 Forward purchase option derivative - - (8,205 ) Earn-out liabilities - - (7,000 ) Warrant liabilities - - (100 ) Total - - (15,305 ) December 31, 2021 Liabilities Level 1 Level 2 Level 3 Warrant liabilities - - (1,380 ) Deferred compensation – phantom units - - (8,321 ) Total - - (9,701 ) Level 3 Rollfoward Forward purchase option derivative Earn-out liabilities Warrant liabilities Deferred compensation – phantom units Beginning balances - - (1,380 ) (8,321 ) Additions 16,615 (74,100 ) - - Changes in fair value (24,820 ) 67,100 (436 ) (6,783 ) Reclassified to equity - - 1,716 15,104 Ending balances (8,205 ) (7,000 ) (100 ) - |
Commitments and contingencies (
Commitments and contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating lease payments | Schedule of operating lease payments Years Ending December 31, 2022 $ 563 2023 2,276 2024 1,228 2025 151 2026 152 Thereafter 732 Total minimum lease payments $ 5,102 Less: Imputed interest (930 ) Total operating lease liabilities $ 4,172 |
Nature of operations and summ_3
Nature of operations and summary of significant accounting policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 15, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Unbilled receivables | $ 62,800 | $ 62,800 | $ 57,000 | |||
Customer invoice | 50,000 | |||||
Deferred revenue | 4,500 | 4,500 | 4,600 | |||
Contract with customer, liability, revenue recognized | 4,100 | |||||
Deferred offering costs capitalized | 0 | 0 | 1,100 | |||
Additional paid-in capital | 67,300 | 67,300 | $ 23,100 | |||
Accrued expenses | 44,200 | 44,200 | ||||
Fair value of Earn-out Interests | 7,000 | |||||
Other income (expense) | 67,100 | |||||
Income tax expense (benefit) | $ 0 | $ 300 | $ 100 | $ 1,000 | ||
Effective tax rate | (0.00%) | 1.40% | (0.00%) | 2.20% | ||
Net deferred tax liability | $ 200 | $ 200 | ||||
Common Class A [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Shares issued | 160,000 | |||||
Common Class A [Member] | Merger Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued | 1,488,519 | 1,488,519 | ||||
Common Class B [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued | 880,000 | |||||
Common Class B [Member] | Merger Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued | 8,900,840 | 8,900,840 | ||||
Common Class V [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Issuance of shares | 118,667,880 |
Mergers (Details Narrative)
Mergers (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Aug. 15, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Compensation expenses | $ 47,600 | |
Voting rights percentage | 83.50% | |
Contributed capital | $ 73,800 | |
Cash consideration | 28,900 | |
Aggregate proceeds received from the PIPE Investors | 121,000 | |
Transaction costs | 67,300 | |
Accrued expenses | $ 23,100 | |
Common Stock Class A [Member] | ||
Business Acquisition [Line Items] | ||
Retained aggregate shares | 19,846,916 | |
Common Stock Class B [Member] | ||
Business Acquisition [Line Items] | ||
Retained aggregate shares | 118,677,880 | |
Founder Warrants [Member] | ||
Business Acquisition [Line Items] | ||
Warrant, description | each representing a right to acquire one Founder Class A Share for $11.50 (a “Founder Public Warrant”), converted automatically, on a one-for-one basis, into a public warrant of the Company (a “Public Warrant”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement, dated October 14, 2021, by and between Founder and Continental Stock Transfer and Trust Company (as amended, the “Warrant Agreement”), (d) each then-issued and outstanding private placement warrant of Founder, each representing a right to acquire one Founder Class A Share for $11.50 (a “Founder Private Placement Warrant”), converted automatically, on a one-for-one basis, into a private placement warrant of the Company (the “Private Warrant” and together with the Public Warrants, the “Warrants”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement | |
Founder Class A Shares [Member] | ||
Business Acquisition [Line Items] | ||
Common stock, par value | $ 0.0001 | |
Founder Class B Shares [Member] | ||
Business Acquisition [Line Items] | ||
Common stock, par value | $ 0.0001 | |
Number of shares forfeited | 160,000 | |
Class A Common Stock [Member] | ||
Business Acquisition [Line Items] | ||
Aggregate of shares | 7,082,616 | |
Number of shares newly issued | 160,000 | |
Class A Common Stock [Member] | P I P E Investors [Member] | ||
Business Acquisition [Line Items] | ||
Aggregate of shares | 12,100,000 | |
Share Price | $ 10 | |
Class B Units [Member] | ||
Business Acquisition [Line Items] | ||
Number of shares newly issued | 880,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, net | $ 2,741 | $ 2,611 |
Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 10,518 | 9,429 |
Less accumulated depreciation and amortization | (7,777) | (6,818) |
Total property and equipment, net | 2,741 | 2,611 |
Property, Plant and Equipment [Member] | Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,668 | 2,968 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,380 | 1,122 |
Property, Plant and Equipment [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,699 | 1,570 |
Property, Plant and Equipment [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,771 | $ 3,769 |
Property and equipment (Detai_2
Property and equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Amortization and depreciation expense | $ 300 | $ 400 | ||
Depreciation expense | $ 1,000 | $ 1,200 |
Debt (Details-Components of lon
Debt (Details-Components of long-term debt) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Term loan balance | $ 72,500 | $ 77,000 |
Less unamortized loan origination costs | (2,957) | (3,334) |
Total borrowed | 69,543 | 76,666 |
Less short-term loan balance | 22,666 | |
Long-term loan balance | $ 69,543 | $ 51,000 |
Debt (Details-Maturities of lon
Debt (Details-Maturities of long-term debt) $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 1,500 |
2023 | 71,000 |
Total | $ 72,500 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Dec. 14, 2018 | Dec. 22, 2021 | Feb. 27, 2020 | Mar. 29, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Feb. 28, 2022 | Dec. 31, 2021 | Mar. 24, 2021 | |
Line of Credit Facility [Line Items] | ||||||||||||
Equity contribution | $ 50,000 | |||||||||||
Minimum equity raise requirement | $ 50,000 | |||||||||||
Credit facility reduced | $ 20,000 | |||||||||||
Gain on forgiveness of debt | 10,900 | |||||||||||
Interest expense | $ 4,578 | $ 2,611 | 12,264 | $ 7,461 | ||||||||
Revolving Credit Facility [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-Term Debt, Gross | $ 60,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.60% | 7.60% | ||||||||||
Debt Instrument, Maturity Date | Sep. 30, 2022 | Dec. 14, 2022 | ||||||||||
Remainning credit value | 30,100 | 30,100 | $ 29,900 | |||||||||
Line of credit | $ 21,200 | 21,200 | 23,000 | |||||||||
Credit facility reduced | $ 8,700 | |||||||||||
Term Loan Facility [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-Term Debt, Gross | $ 20,000 | $ 60,000 | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 9.50% | 13.10% | 13.10% | |||||||||
Debt Instrument, Maturity Date | Dec. 22, 2022 | Mar. 29, 2024 | ||||||||||
Long-Term Construction Loan | $ 20,000 | |||||||||||
Subordinated Borrowing, Interest Rate | 15% | |||||||||||
Amortization of Deferred Charges | $ 800 | 100 | $ 2,500 | 400 | ||||||||
Interest expense | 4,600 | $ 2,600 | 12,300 | $ 7,500 | ||||||||
Paycheck Protection Program Loan [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Repayment of debt | 2,300 | |||||||||||
Long-term debt | $ 0 | $ 0 | $ 0 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued hauler expenses | $ 55,773 | $ 49,607 |
Accrued compensation | 57,632 | 9,656 |
Accrued income taxes | 3 | |
Accrued Mergers transaction expenses | 44,235 | |
Other accrued expenses | 4,788 | 6,272 |
Total accrued expenses | $ 162,428 | $ 65,538 |
Goodwill and other intangible_2
Goodwill and other intangibles (Details-Intangible assets) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 25,432 | $ 25,432 |
Accumulated Amortization | (14,582) | (12,104) |
Net Carrying Amount | 10,850 | 13,328 |
Accumulated Amortization | 14,582 | 12,104 |
Finite-Lived Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 26,267 | 26,267 |
Accumulated Amortization | (14,582) | (12,104) |
Net Carrying Amount | 11,685 | 14,163 |
Accumulated Amortization | 14,582 | 12,104 |
Domain Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 835 | 835 |
Accumulated Amortization | ||
Net Carrying Amount | 835 | 835 |
Accumulated Amortization | ||
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | 5 years |
Gross Carrying Amount | $ 728 | $ 728 |
Accumulated Amortization | (728) | (728) |
Net Carrying Amount | ||
Accumulated Amortization | 728 | 728 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,976 | 20,976 |
Accumulated Amortization | (11,502) | (9,582) |
Net Carrying Amount | 9,474 | 11,394 |
Accumulated Amortization | $ 11,502 | $ 9,582 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | 2 years |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 8 years | 8 years |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 550 | $ 550 |
Accumulated Amortization | (550) | 487 |
Net Carrying Amount | 63 | |
Accumulated Amortization | $ 550 | $ (487) |
Noncompete Agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Noncompete Agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | 4 years |
Technology Equipment [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Gross Carrying Amount | $ 3,178 | $ 3,178 |
Accumulated Amortization | (1,802) | (1,307) |
Net Carrying Amount | 1,376 | 1,871 |
Accumulated Amortization | $ 1,802 | $ 1,307 |
Goodwill and other intangible_3
Goodwill and other intangibles (Details-Future Amortization Expense) $ in Thousands | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 804 |
2023 | 3,220 |
2024 | 3,110 |
2025 | 2,559 |
2026 | 1,157 |
Total finite-lived intangible assets, net | $ 10,850 |
Goodwill and other intangible_4
Goodwill and other intangibles (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 800 | $ 700 | $ 2,500 | $ 2,200 |
Stockholders' (deficit) equity
Stockholders' (deficit) equity (Details) | Sep. 30, 2022 shares |
Class of Stock [Line Items] | |
Preferred Stock, shares authorized | 10,000,000 |
Preferred Stock, shares issued | 0 |
Preferred Stock, shares Outstanding | 0 |
Equity [Member] | |
Class of Stock [Line Items] | |
Total shares authorized | 975,000,000 |
Total shares issued | 165,177,885 |
Total shares Outstanding | 165,177,885 |
Common Class A [Member] | |
Class of Stock [Line Items] | |
Common stock, shares authorized | 690,000,000 |
Common stock, shares Issued | 49,714,239 |
Common stock, shares Outstanding | 49,714,239 |
Common Class A [Member] | Equity [Member] | |
Class of Stock [Line Items] | |
Common stock, shares authorized | 690,000,000 |
Common stock, shares Issued | 49,714,239 |
Common stock, shares Outstanding | 49,714,239 |
Common Class V [Member] | |
Class of Stock [Line Items] | |
Common stock, shares authorized | 275,000,000 |
Common stock, shares Issued | 115,463,646 |
Common stock, shares Outstanding | 115,463,646 |
Common Class V [Member] | Equity [Member] | |
Class of Stock [Line Items] | |
Common stock, shares authorized | 275,000,000 |
Common stock, shares Issued | 115,463,646 |
Common stock, shares Outstanding | 115,463,646 |
Preferred Stock [Member] | Equity [Member] | |
Class of Stock [Line Items] | |
Preferred Stock, shares authorized | 10,000,000 |
Preferred Stock, shares issued | |
Preferred Stock, shares Outstanding |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Aug. 15, 2022 | May 25, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Warrants, description | Company assumed a total of 30,016,875 outstanding Warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $11.50 per share. | |||
Outstanding warrants | 30,016,875 | |||
Exercise price | $ 11.50 | |||
Warrant price per share | $ 0.01 | |||
Warrant liabilities | $ 1,800 | $ 1,300 | ||
Other expense | $ 800 | $ 500 | ||
Public Warrants [Member] | IPO [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Outstanding warrants | 15,812,500 | |||
Private Warrants [Member] | Private Placement [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Outstanding warrants | 14,204,375 | |||
Warrant [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Exercise price | $ 0.01 | |||
Purchase of units | 62,003 | |||
Warrant agreements, description | the Company concurrently entered into warrant agreements and issued the Subordinated Term Loan Warrants under the condition that if the Company does not repay the Subordinated Term Loan on or prior to the maturity date, the lender receives right to purchase up to the number of Class A Common Stock worth $2.0 million, at the exercise price of $0.01 any time after the maturity date prior to the earlier of the date principal and interest on all outstanding term loans under this Subordinated Term Loan agreement are repaid or the tenth anniversary of the issuance date. Additionally, if the Company does not repay the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants will be exercisable for additional $0.2 million of Class A Common Stock each additional full calendar month after the maturity date until the Company fully repays the principal and interest in cash. If the Company repays the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants will automatically terminate and be voided and no Subordinated Term Loan Warrant will be exercisable. | |||
Term Loan Warrants [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Warrant liabilities | $ 100 | $ 100 |
Equity Investment Agreement (De
Equity Investment Agreement (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
May 25, 2022 | Sep. 30, 2022 | Aug. 15, 2022 | |
Equity investment agreement, description | the Company entered into the Rubicon Equity Investment Agreement with certain investors, whereby, the investors have agreed to advance to the Company up to $8,000,000 and, upon consummation of the Mergers, and in exchange for the advancements, (a) the Company will cause to be issued up to 880,000 Class B Units of the Company and 160,000 shares of Class A Common Stock to the investors and (b) Sponsor will forfeit up to 160,000 shares of Class A Common Stock, in each case subject to actual amounts advanced by the investors. In accordance with the Rubicon Equity Investment Agreement, on May 25, 2022, the Company received $8,000,000 of cash from the investors. | ||
Other expense | $ 800 | $ 500 | |
Common Class B [Member] | |||
Shares issued | 880,000 | ||
Common Class A [Member] | |||
Shares issued | 160,000 | ||
Forfeiture shares | 160,000 |
Forward Purchase Agreement (Det
Forward Purchase Agreement (Details Narrative) | 1 Months Ended |
Aug. 04, 2022 | |
Forward Purchase Agreement | |
Forward purchase agreement, description | Pursuant to the terms of the Forward Purchase Agreement, the FPA Sellers purchased 7,082,616 Founder Class A Shares, which included 6,082,616 Subject Shares and 1,000,000 Separate Shares, at the per-share redemption price prior to the closing of the Mergers, in exchange for the prepayment by Founder of $68.7 million out of the funds in Founder’s trust account that were to be received by the Company at the Closing. The prepayment amount was calculated as (a) the per-share redemption price multiplied by the 6,082,616 Subject Shares, less (b) 50% of the product of the 6,082,616 Subject Shares multiplied by $1.33 (the “Prepayment Shortfall”) and (c) an amount equal to the product of Separate Shares multiplied by the per-share redemption price. The FPA Sellers did not purchase any Additional Shares. |
Standby Equity Purchase Agree_2
Standby Equity Purchase Agreement (Details Narrative) - shares | 1 Months Ended | |
Aug. 31, 2022 | Aug. 15, 2022 | |
Standby equity purchase agreement, description | Company entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd. (the “Yorkville Investor”). Pursuant to the SEPA, the Company has the right to sell to the Yorkville Investor, from time to time, up to $200.0 million of shares of Class A Common Stock until the earlier of the 36-month anniversary of the SEPA or until the date on which the facility has been fully utilized, subject to certain limitations and conditions set forth in the SEPA, including the requirement that there be an effective registration statement registering such shares and limitations on the volume of shares that may be sold. Shares will be sold to the Yorkville Investor at a price equal to 97% of the lowest daily VWAP of the Class A Common Stock during the three consecutive trading days immediately prior to any notice to sell such securities provided by the Company. The Yorkville Investor may not beneficially own greater than 9.99% of the outstanding shares of Class A Common Stock. | |
Common Class A [Member] | ||
Shares issued | 160,000 | |
Common Class A [Member] | Yorkville [Member] | ||
Shares issued | 200,000 |
Equity incentive plan (Details
Equity incentive plan (Details - Incentives Unit Activity) | 7 Months Ended |
Aug. 15, 2022 shares | |
Share-Based Payment Arrangement [Abstract] | |
Options outstanding, beginning balance | 3,084,650 |
Options granted | |
Options Forfeited | (14,499) |
Options outstanding,ending balance | 3,070,151 |
Options vested | 3,070,151 |
Equity incentive plan (Details-
Equity incentive plan (Details-Nonvested Incentive Units) | 7 Months Ended |
Aug. 15, 2022 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Option nonvested, beginning | 198,210 |
Weighted average grant date fair Value, beginning | $ / shares | $ 10.25 |
Weighted Average Grant Date Fair Value, granted | |
Vested | (183,711) |
Weighted Average Grant Date Fair Value, vested | $ / shares | $ 10.25 |
Forfeited | (14,499) |
Weighted Average Grant Date Fair Value, forfeited | $ / shares | |
Option nonvested, ending | |
Weighted average grant date fair Value, ending | $ / shares |
Equity incentive plan (Detail_2
Equity incentive plan (Details- RSUs Activity) | 7 Months Ended |
Aug. 15, 2022 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options outstanding, beginning balance | 3,084,650 |
Options granted | |
Options granted | 14,499 |
Options Forfeited | 14,499 |
Options vested | 3,070,151 |
Restricted Stock Units (RSUs) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options Forfeited | 9,353,216 |
Restricted Stock Units (RSUs) [Member] | Merger Consummation [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options outstanding, beginning balance | |
Options vested | 970,389 |
Restricted Stock Units (RSUs) [Member] | Phantom Unit Exchanges [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options granted | 970,389 |
Options granted | |
Restricted Stock Units (RSUs) [Member] | Morris Employment Agreement [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options granted | 4,821,358 |
Restricted Stock Units (RSUs) [Member] | Management Rollover Consideration [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options granted | 3,561,469 |
Equity-based compensation (Deta
Equity-based compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 15, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Exchange of vested RSUs | 970,389 | 970,389 | |||
Equity compensation costs | $ 90,600 | $ 800 | $ 95,300 | $ 3,400 | |
Deferred compensation cost | $ 1,300 | $ 0 | 1,300 | $ 0 | |
Restricted Stock Units (RSUs) [Member] | Morris Employment Agreemen [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted shares value | $ 5,000 | ||||
Common Class A [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock, shares authorized | 690,000,000 | 690,000,000 | |||
Common stock, shares issued | 49,714,239 | 49,714,239 | |||
Common stock, shares outstanding | 49,714,239 | 49,714,239 | |||
Common Class A [Member] | Two Thousand Twenty Two Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock, shares authorized | 29,000,000 | ||||
Common stock, shares issued | 2,485,711 | ||||
Common stock, shares outstanding | 2,485,711 |
Loss per share (Details)
Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net loss | $ (34,741) | $ (211,125) | $ (18,128) | $ (263,738) | $ (42,831) |
Net loss attributable to non-controlling interests | (16,933) | $ 16,933 | $ 16,933 | ||
Net loss for Basic and Diluted | $ (17,808) | ||||
Public Warrants [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Anti-dilutive shares | 15,812,500 | ||||
Private Warrants [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Anti-dilutive shares | 14,204,375 | ||||
Earn Out Class A Shares [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Anti-dilutive shares | 1,488,519 | ||||
Vested R S Us [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Anti-dilutive shares | 970,389 | ||||
Vested D S Us [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Anti-dilutive shares | 540,032 | ||||
Common Class A [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Weighted average shares of Basic and diluted | 48,670,776 | ||||
Net loss per share attributable to Basic and diluted | $ (0.37) |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Inputs, Level 1 [Member] | ||
Liabilities | ||
Forward purchase option derivative | ||
Earn-out liabilities | ||
Warrant liabilities | ||
Total | ||
Deferred compensation – phantom units | ||
Warrant liabilities | ||
Deferred compensation - phantom units | ||
Forward Purchase Option Derivative | ||
Earn-out liabilities | ||
Warrant liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Liabilities | ||
Forward purchase option derivative | ||
Earn-out liabilities | ||
Warrant liabilities | ||
Total | ||
Deferred compensation – phantom units | ||
Warrant liabilities | ||
Deferred compensation - phantom units | ||
Forward Purchase Option Derivative | ||
Earn-out liabilities | ||
Warrant liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Liabilities | ||
Forward purchase option derivative | (8,205) | |
Earn-out liabilities | (7,000) | |
Warrant liabilities | (100) | (1,380) |
Total | (15,305) | (9,701) |
Deferred compensation – phantom units | (8,321) | |
Warrant liabilities | (1,380) | |
Deferred compensation - phantom units | (8,321) | |
Forward Purchase Option Derivative | (8,205) | |
Earn-out liabilities | (7,000) | |
Warrant liabilities | (100) | |
Fair Value, Inputs, Level 3 [Member] | Forward Purchase Option Derivative [Member] | ||
Liabilities | ||
Forward purchase option derivative | (8,205) | |
Forward purchase option derivative | ||
Additions | 16,615 | |
Changes in fair value | (24,820) | |
Relcassified to equity | ||
Forward Purchase Option Derivative | (8,205) | |
Fair Value, Inputs, Level 3 [Member] | Earn Out Liability [Member] | ||
Liabilities | ||
Earn-out liabilities | (7,000) | |
Earn-out liabilities | ||
Additions | (74,100) | |
Changes in fair value | 67,100 | |
Relcassified to equity | ||
Earn-out liabilities | (7,000) | |
Fair Value, Inputs, Level 3 [Member] | Warrant Liability [Member] | ||
Liabilities | ||
Warrant liabilities | (100) | (1,380) |
Warrant liabilities | (1,380) | |
Additions | ||
Changes in fair value | (436) | |
Relcassified to equity | 1,716 | |
Warrant liabilities | (100) | |
Fair Value, Inputs, Level 3 [Member] | Deferred compensation phantom units [Member] | ||
Liabilities | ||
Deferred compensation – phantom units | $ (8,321) | |
Deferred compensation - phantom units | (8,321) | |
Additions | ||
Changes in fair value | (6,783) | |
Relcassified to equity | 15,104 | |
Deferred Compensation Liability, Current and Noncurrent |
Commitments and contingencie (D
Commitments and contingencie (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 563 |
2023 | 2,276 |
2024 | 1,228 |
2025 | 151 |
2026 | 152 |
Thereafter | 732 |
Total minimum lease payments | 5,102 |
Less: Imputed interest | (930) |
Total operating lease liabilities | $ 4,172 |
Related party transactions (Det
Related party transactions (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Related Party Transactions [Abstract] | |
Software subscription, description | The Company entered into a certain software subscription agreement with Palantir Technologies, Inc., including related support and update services on September 22, 2021. The Company subsequently amended the agreement on December 15, 2021. The term of the agreement is through December 31, 2024. Pursuant to the agreement, as of September 30, 2022, the Company is committed to pay $15.5 million in the next 12 months and $18.8 million thereafter through October 2024. Palantir Technologies, Inc. was a PIPE Investor and purchased $35.0 million of Class A Common Stock at $10.00 per share on the Closing Date. |
Proceed from related party | $ 15,500 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue Benchmark [Member] | Two Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 24% | 31% | 27% | 29% | |
Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 22% | 23% |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Nov. 15, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||
Cash equivalents | $ 4,464 | $ 10,617 | |
Contribute cash | 30,000 | ||
Subsequent Event [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Principal amount | $ 36,200 | ||
Subsequent Event [Member] | Term Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Principal amount | 51,000 | ||
Subsequent Event [Member] | Subordinated Term Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Principal amount | $ 20,000 | ||
Binding [Member] | |||
Line of Credit Facility [Line Items] | |||
Binding commitment | 30,000 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Cash equivalents | 4,500 | ||
Accounts receivable | 58,700 | ||
Unbilled accounts receivable | 62,800 | ||
Borrow amount | 21,200 | ||
Revolving Credit Facility [Member] | Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Borrow amount | 60,000 | ||
Revolving Credit Facility [Member] | Borrowings [Member] | Yorkville Investor [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of shares sales amount | $ 200,000 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) - USD ($) $ in Thousands | 7 Months Ended | ||||||||
Nov. 18, 2022 | Nov. 18, 2022 | Nov. 17, 2022 | Nov. 04, 2022 | Oct. 13, 2022 | Aug. 15, 2022 | Nov. 14, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||||||||
Shares granted | |||||||||
Accrued expenses | $ 12,700 | ||||||||
Accrued expense | $ 55,773 | $ 49,607 | |||||||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Unpaid fees | $ 1,000 | ||||||||
Accrued expense | $ 10,700 | ||||||||
Debt amount | $ 30,000 | ||||||||
Subsequent events, description | the Company’s Board of Directors committed to a reduction in force plan (the “Plan”) as part of the Company’s measures to reduce spending and preserve cash available for the Company’s operations. The Plan involves a reduction of 55 employees, which is approximately 11% of the Company’s workforce. The Company currently estimates that it will incur one-time cash charges of approximately $0.6 million, primarily consisting of an estimated $0.5 million in severance payments, and $0.1 million in related costs. The Company expects that most of these charges will be incurred in the fourth quarter of 2022, and that the reduction in force will be substantially complete by the end of 2022. In aggregate, over the next twelve months, the reduction in force is expected to result in approximately $5.5 million in annual cash savings for the Company. | ||||||||
Interest rate | 5.60% | 5.60% | |||||||
Financing Commitment | $ 5,000 | $ 5,000 | |||||||
Issuance of equity | $ 25,000 | 25,000 | |||||||
Term Loan agreement, description | the Company entered into an amendment to the Term Loan agreement, in which the lender consented to the amendments to the Revolving Credit Facility agreement and the Subordinated Term Loan agreement. Additionally, the Company committed to raise $5.0 million from the Financing Commitment or a similar commitment by November 23, 2022, and additional $25.0 million from the issuance of equity by the earlier of (i) 5 business days after the date the Company’s S-1 filed with the SEC on August 22, 2022 becomes effective, or (ii) January 31, 2023. The amended Term Loan agreement also requires the Company to cause the Yorkville Investor to purchase the maximum amount of the Company’s equity interests available under the SEPA and to utilize the net proceeds from such drawdowns to repay the Term Loan until it is fully repaid. If the Company does not repay the Term Loan in full by March 27, 2023, the Company will be liable for an additional fee in the amount of $2.0 million, out of which $1.0 million will be due in cash on March 27, 2023, and the other $1.0 million will accrue to the principal balance of the Term Loan. Furthermore, beginning on March 27, 2023, an additional $0.15 million fee will accrue to the principal balance of the Term Loan each week thereafter until the Term Loan is fully repaid. | ||||||||
Subordinated Term Loan agreement, description | Company entered into an amendment to the Subordinated Term Loan agreement. The amendment extended the Subordinated Term Loan maturity through December 31, 2023. Concurrently, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which (i) increased the number of Class A Common Stock the lender has the right to purchase with the Subordinated Term Loan Warrants to such number of Class A Common Stock worth $2.6 million ($2.0 million prior to the amendment), (ii) caused the Subordinated Term Loan Warrants to be immediately exercisable upon execution of the amended Subordinated Term Loan Warrants agreements, and (iii) increased the value of Class A Common Stock the Subordinated Term Loan Warrants will earn each additional full calendar month after March 22, 2023 to $0.25 million ($0.2 million prior to the amendment) until the Company repays the Subordinated Term Loan in full. | ||||||||
Subsequent Event [Member] | Common Class A [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares amount | $ 1,000 | ||||||||
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares granted | 8,378,986 |