Cover
Cover | 6 Months Ended |
Jun. 30, 2023 | |
Entity Addresses [Line Items] | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | Amendment No. 4 |
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 | 335 Madison Avenue |
Entity Address, Address Line Two | 4th Floor |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10017 |
City Area Code | 844 |
Local Phone Number | 479-1507 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | 335 Madison Avenue |
Entity Address, Address Line Two | 4th Floor |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10017 |
City Area Code | 844 |
Local Phone Number | 479-1507 |
Contact Personnel Name | Philip Rodoni |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 10,079 | $ 10,617 |
Accounts receivable, net | 65,923 | 42,660 |
Contract assets | 55,184 | 56,984 |
Prepaid expenses | 10,466 | 6,227 |
Other current assets | 2,109 | 1,769 |
Related-party notes receivable | 7,020 | |
Total Current Assets | 150,781 | 118,257 |
Property and equipment, net | 2,644 | 2,611 |
Operating right-of-use assets | 2,827 | 3,920 |
Other noncurrent assets | 4,764 | 4,558 |
Goodwill | 32,132 | 32,132 |
Intangible assets, net | 10,881 | 14,163 |
Total Assets | 204,029 | 175,641 |
Current Liabilities: | ||
Accounts payable | 75,113 | 47,531 |
Line of credit | 51,823 | 29,916 |
Accrued expenses | 108,002 | 65,538 |
Deferred compensation | 8,321 | |
Contract liabilities | 5,888 | 4,603 |
Operating lease liabilities, current | 1,880 | 1,675 |
Warrant liabilities | 20,890 | 1,380 |
Debt obligations, net of debt issuance costs | 3,771 | 22,666 |
Total Current Liabilities | 267,367 | 181,630 |
Long-Term Liabilities: | ||
Deferred income taxes | 217 | 178 |
Operating lease liabilities, noncurrent | 1,826 | 3,770 |
Debt obligations, net of debt issuance costs | 69,458 | 51,000 |
Related-party debt obligations, net of debt issuance costs | 10,597 | |
Derivative liabilities | 826 | |
Earn-out liabilities | 5,600 | |
Other long-term liabilities | 2,590 | 367 |
Total Long-Term Liabilities | 91,114 | 55,315 |
Total Liabilities | 358,481 | 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 December 31, 2022 | ||
Additional paid-in capital | 34,658 | |
Members’ deficit | (61,304) | |
Accumulated deficit | (337,875) | |
Total stockholders’ deficit attributable to Rubicon Technologies, Inc. | (303,199) | |
Noncontrolling interests | 148,747 | |
Total Stockholders’ Deficit /Members’ Deficit | (154,452) | (61,304) |
Total Liabilities and Stockholders’ (Deficit) Equity/ Members’ (Deficit) Equity | 204,029 | 175,641 |
Common Class A [Member] | ||
Stockholders’ (Deficit) Equity/Members’ (Deficit) Equity: | ||
Common stock value | 6 | |
Common Class V [Member] | ||
Stockholders’ (Deficit) Equity/Members’ (Deficit) Equity: | ||
Common stock value | $ 12 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 15, 2022 | Dec. 31, 2021 |
Common Stock, Shares Authorized | 59,504,853 | 59,504,853 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |||
Preferred Stock, Shares Authorized | 10,000,000 | |||
Preferred Stock, Shares Outstanding | 0 | |||
Common Class A [Member] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 690,000,000 | |||
Common Stock, Shares, Outstanding | 229,818,370 | 55,886,692 | ||
Common Class V [Member] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 275,000,000 | |||
Common Stock, Shares, Outstanding | 35,402,821 | 115,463,646 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | |||
Service | $ 589,810 | $ 500,911 | |
Recyclable commodity | 85,578 | 82,139 | |
Total revenue | 675,388 | 583,050 | |
Cost of revenue (exclusive of amortization and depreciation): | |||
Service | 569,750 | 481,642 | |
Recyclable commodity | 78,083 | 77,030 | |
Total cost of revenue (exclusive of amortization and depreciation) | 647,833 | 558,672 | |
Sales and marketing | 16,177 | 14,457 | |
Product development | 37,450 | 22,485 | |
General and administrative | 221,493 | 52,915 | |
Amortization and depreciation | 5,723 | 7,128 | |
Total Costs and Expenses | 928,676 | 655,657 | |
Loss from Operations | (253,288) | (72,607) | |
Other Income (Expense): | |||
Interest earned | 2 | 2 | |
Gain on forgiveness of debt | 10,900 | ||
Loss on change in fair value of warrant liabilities | (1,777) | (606) | |
Gain on change in fair value of earn-out liabilities | 68,500 | ||
Loss on change in fair value of derivatives | (72,641) | ||
Excess fair value over the consideration received for SAFE | (800) | ||
Excess fair value over the consideration received for pre-funded warrant | (14,000) | ||
Gain on service fee settlements in connection with the Mergers | 12,126 | ||
Other expense | (2,954) | (1,055) | |
Interest expense | (16,863) | (11,455) | |
Total Other Income (Expense) | (28,407) | (2,214) | |
Loss Before Income Taxes | (281,695) | (74,821) | |
Income tax expense (benefit) | 76 | (1,670) | |
Net Loss | (281,771) | (73,151) | |
Net loss attributable to Holdings LLC unitholders prior to the Mergers | (228,997) | (73,151) | |
Net loss attributable to noncontrolling interests | (22,621) | ||
Net Loss Attributable to Class A Common Stockholders | $ (30,153) | ||
Net loss per Class A Common share basic and diluted | $ (0.60) | ||
Weighted average shares outstanding, basic and diluted | 49,885,394 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - 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 | $ 543 | 543 | ||||||
Net loss | (73,151) | (73,151) | ||||||
Activities subsequent to the Mergers | ||||||||
Warrants exercised | $ 32,490 | 32,490 | ||||||
Warrants exercised, shares | 1,083,008 | |||||||
Ending balance, value at Dec. 31, 2021 | $ (61,304) | (61,304) | ||||||
Ending balance, shares at Dec. 31, 2021 | 33,509,272 | |||||||
Activities prior to the Mergers: | ||||||||
Compensation costs related to incentive units | $ 58 | 58 | ||||||
Net loss | (24,819) | (24,819) | ||||||
Ending balance, value at Mar. 31, 2022 | (86,065) | (86,065) | ||||||
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 | $ 230 | 230 | ||||||
Net loss | (228,997) | (228,997) | ||||||
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 | ||||||
Reclassification of SAFEShares | 880,000 | |||||||
Phantom units rollover | 15,104 | 15,104 | ||||||
Reverse recapitalization | $ (238,226) | 180,630 | 57,596 | |||||
Reverse recapitalization, shares | (37,521,426) | |||||||
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 interest | (171,368) | 171,368 | ||||||
Activities subsequent to the Mergers | ||||||||
Equity-based compensation | 16,571 | 16,571 | ||||||
Issuance of common stock in connection with SEPA | $ 0 | 892 | 892 | |||||
Issuance of common stock in connection with SEPA, shares | 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) | ||||||
Retirement of common stock in connection with the termination of the Forward Purchase Agreement | $ 0 | (4,644) | (4,644) | |||||
Retirement of common stock in connection with the termination of the Forward Purchase Agreement, shares | (2,222,119) | |||||||
Issuance of common stock for services rendered | $ 1 | 15,600 | 15,601 | |||||
Issuance of common stock for services rendered ,Shares | 7,302,155 | |||||||
Exercise and conversion of liability classified warrants | $ 0 | 1,595 | 1,595 | |||||
Exercise and conversion of liability classified warrants shares | 1,092,417 | |||||||
Net loss | (30,153) | (22,621) | (52,774) | |||||
Ending balance, value at Dec. 31, 2022 | $ 6 | $ 12 | 34,658 | (337,875) | 148,747 | (154,452) | ||
Ending balance, shares at Dec. 31, 2022 | 55,886,692 | 115,463,646 | ||||||
Beginning balance, value at Mar. 31, 2022 | $ (86,065) | (86,065) | ||||||
Activities prior to the Mergers: | ||||||||
Compensation costs related to incentive units | 126 | 126 | ||||||
Net loss | (27,794) | (27,794) | ||||||
Ending balance, value at Jun. 30, 2022 | (113,733) | (113,733) | ||||||
Beginning balance, value at Dec. 31, 2022 | 6 | 12 | 34,658 | (337,875) | 148,747 | (154,452) | ||
Activities prior to the Mergers: | ||||||||
Net loss | (3,129) | (6,322) | (9,451) | |||||
Activities subsequent to the Mergers | ||||||||
Issuance of common stock for services rendered | $ 1 | 10,244 | 10,245 | |||||
Issuance of common stock for services rendered ,Shares | 9,318,052 | |||||||
Ending balance, value at Mar. 31, 2023 | $ 7 | 12 | 58,312 | (341,004) | 142,425 | (140,248) | ||
Activities prior to the Mergers: | ||||||||
Net loss | (13,202) | (9,615) | (22,817) | |||||
Activities subsequent to the Mergers | ||||||||
Exchange of Class V Common Stock to Class A Common Stock | $ 8 | $ (8) | ||||||
Exchange of Class V Common Stock to Class A Common Stock, shares | 80,060,825 | (80,060,825) | ||||||
Ending balance, value at Jun. 30, 2023 | $ 23 | $ 4 | $ 92,532 | $ (354,206) | $ 132,810 | $ (128,838) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (281,771) | $ (73,151) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Loss on disposal of property and equipment | (44) | |
Amortization and depreciation | 5,723 | 7,128 |
Amortization of debt issuance costs | 3,490 | 1,563 |
Paid-in-kind interest capitalized to principal of related-party debt obligations | 30 | |
Bad debt reserve | (2,631) | 4,926 |
Loss on change in fair value of warrant labilities | 1,777 | 606 |
Loss on change in fair value of derivatives | 72,641 | |
Gain on change in fair value of earn-out liabilities | (68,500) | |
Excess fair value over the consideration received for SAFE | 800 | |
Excess fair value over the consideration received for pre-funded warrant | 14,000 | |
Loss on SEPA commitment fee settled in Class A Common Stock | 892 | |
Equity-based compensation | 94,204 | 543 |
Phantom unit expense | 6,783 | 7,242 |
Gain on forgiveness of debt | (10,900) | |
Gain on service fee settlement in connection with the Mergers | (12,126) | |
Deferred income taxes | 39 | (1,720) |
Change in operating assets and liabilities: | ||
Accounts receivable | (20,632) | (2,567) |
Contract assets | 1,800 | (13,627) |
Prepaid expenses | (4,421) | (2,470) |
Other current assets | (472) | 117 |
Operating right-of-use assets | 1,093 | (36) |
Other noncurrent assets | (180) | (89) |
Accounts payable | 27,582 | 5,616 |
Accrued expenses | 29,030 | 16,670 |
Contract liabilities | 1,285 | 610 |
Operating lease liabilities | (1,739) | (522) |
Other liabilities | 223 | 200 |
Net cash flows from operating activities | (131,036) | (59,861) |
Cash flows from investing activities: | ||
Property and equipment purchases | (1,406) | (1,971) |
Forward purchase option derivative purchase | (68,715) | |
Settlement of forward purchase option derivative | (6,000) | |
Intangible asset purchases | (2,031) | |
Net cash flows from investing activities | (76,121) | (4,002) |
Cash flows from financing activities: | ||
Net borrowings on line of credit | 21,907 | 543 |
Proceeds from debt obligations | 7,000 | 42,254 |
Repayments of debt obligations | (6,000) | (3,000) |
Proceeds from related party debt obligations | 3,510 | |
Financing costs paid | (4,021) | (2,771) |
Proceeds from warrant exercise | 32,490 | |
Proceeds from SAFE | 8,000 | |
Proceeds from pre-funded warrant | 6,000 | |
Payments for loan commitment asset | (1,447) | |
Payments of deferred offering costs | (1,057) | |
Proceeds from the Mergers | 196,778 | |
Equity issuance costs | (25,108) | |
Net cash flows from financing activities | 206,619 | 68,459 |
Net change in cash and cash equivalents | (538) | 4,596 |
Cash, beginning of year | 10,617 | 6,021 |
Cash, end of year | 10,079 | 10,617 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 12,234 | 8,366 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Exchange of warrant liabilities for Class A and Class V Common Stock | 3,311 | |
Conversion of SAFE for Class B Units | 8,800 | |
Establishment of earn-out liabilities | 74,100 | |
Equity issuance costs accrued but not paid | 13,433 | |
Equity issuance costs settled with Class A Common Stock | 17,000 | |
Fair value of warrants issued as debt discount | 773 | |
Fair value of warrants issued for debt issuance cost | 430 | |
Fair value of warrants issued for loan commitment asset | 615 | |
Cost accrued for settlement of forward purchase option derivative but not paid | $ 2,000 |
CONDENSED CONSOLIDATED BALANC_3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | |||
Cash and cash equivalents | $ 23,516 | $ 10,079 | $ 10,617 |
Accounts receivable, net | 66,323 | 65,923 | 42,660 |
Contract assets | 51,321 | 55,184 | 56,984 |
Prepaid expenses | 15,624 | 10,466 | 6,227 |
Other current assets | 1,970 | 2,109 | 1,769 |
Related-party notes receivable | 7,020 | ||
Total Current Assets | 158,754 | 150,781 | 118,257 |
Property and equipment, net | 2,569 | 2,644 | 2,611 |
Operating right-of-use assets | 2,205 | 2,827 | 3,920 |
Other noncurrent assets | 2,505 | 4,764 | 4,558 |
Goodwill | 32,132 | 32,132 | 32,132 |
Intangible assets, net | 9,270 | 10,881 | 14,163 |
Total Assets | 207,435 | 204,029 | 175,641 |
Current Liabilities: | |||
Accounts payable | 72,032 | 75,113 | 47,531 |
Line of credit | 46,198 | 51,823 | 29,916 |
Accrued expenses | 66,047 | 108,002 | |
Contract liabilities | 7,397 | 5,888 | 4,603 |
Operating lease liabilities, current | 1,871 | 1,880 | 1,675 |
Warrant liabilities | 29,795 | 20,890 | 1,380 |
Derivative liabilities | 5,684 | ||
Debt obligations, net of debt issuance costs | 3,771 | 22,666 | |
Total Current Liabilities | 229,024 | 267,367 | 181,630 |
Long-Term Liabilities: | |||
Deferred income taxes | 235 | 217 | 178 |
Operating lease liabilities, noncurrent | 903 | 1,826 | 3,770 |
Debt obligations, net of debt issuance costs | 80,276 | 69,458 | 51,000 |
Related-party debt obligations, net of debt issuance costs | 16,161 | 10,597 | |
Derivative liabilities | 9,364 | 826 | |
Earn-out liabilities | 310 | 5,600 | |
Other long-term liabilities | 2,590 | ||
Total Long-Term Liabilities | 107,249 | 91,114 | 55,315 |
Total Liabilities | 336,273 | 358,481 | 236,945 |
Stockholders’ (Deficit) Equity: | |||
Preferred stock – par value of $0.0001 per share, 10,000,000 shares authorized, 0 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | |||
Additional paid-in capital | 92,532 | 34,658 | |
Accumulated deficit | (354,207) | (337,875) | |
Total stockholders’ deficit attributable to Rubicon Technologies, Inc. | (261,648) | (303,199) | |
Noncontrolling interests | 132,810 | 148,747 | |
Total Stockholders’ Deficit /Members’ Deficit | (128,838) | (154,452) | (61,304) |
Total Liabilities and Stockholders’ (Deficit) Equity/ Members’ (Deficit) Equity | 207,435 | 204,029 | 175,641 |
Common Class A [Member] | |||
Stockholders’ (Deficit) Equity: | |||
Common stock value | 23 | 6 | |
Common Class V [Member] | |||
Stockholders’ (Deficit) Equity: | |||
Common stock value | $ 4 | $ 12 |
CONDENSED CONSOLIDATED BALANC_4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 15, 2022 | Dec. 31, 2021 |
Common Stock, Shares Authorized | 59,504,853 | 59,504,853 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |||
Preferred Stock, Shares Authorized | 10,000,000 | |||
Preferred Stock, Shares Outstanding | 0 | |||
Common Class A [Member] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 690,000,000 | |||
Common Stock, Shares, Outstanding | 229,818,370 | 55,886,692 | ||
Common Class V [Member] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 275,000,000 | |||
Common Stock, Shares, Outstanding | 35,402,821 | 115,463,646 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue: | ||||
Service | $ 160,641 | $ 140,268 | $ 327,006 | $ 274,966 |
Recyclable commodity | 13,923 | 24,338 | 28,656 | 49,446 |
Total revenue | 174,564 | 164,606 | 355,662 | 324,412 |
Cost of revenue (exclusive of amortization and depreciation): | ||||
Service | 150,194 | 136,185 | 308,195 | 265,878 |
Recyclable commodity | 11,968 | 22,386 | 25,155 | 45,622 |
Total cost of revenue (exclusive of amortization and depreciation) | 162,162 | 158,571 | 333,350 | 311,500 |
Sales and marketing | 2,747 | 4,546 | 6,021 | 8,496 |
Product development | 7,224 | 9,315 | 15,316 | 18,533 |
General and administrative | 13,932 | 13,253 | 32,079 | 25,880 |
Gain on settlement of incentive compensation | (18,622) | |||
Amortization and depreciation | 1,344 | 1,402 | 2,705 | 2,892 |
Total Costs and Expenses | 187,409 | 187,087 | 370,849 | 367,301 |
Loss from Operations | (12,845) | (22,481) | (15,187) | (42,889) |
Other Income (Expense): | ||||
Interest earned | 5 | 6 | ||
Loss on change in fair value of warrant liabilities | (414) | (232) | (469) | (510) |
Gain on change in fair value of earnout liabilities | 470 | 5,290 | ||
Loss on change in fair value of derivatives | (335) | (2,533) | ||
Excess fair value over the consideration received for SAFE | (800) | (800) | ||
Gain on service fee settlements in connection with the Mergers | 6,364 | 6,996 | ||
Loss on extinguishment of debt obligations | (6,783) | (8,886) | ||
Interest expense | (8,119) | (3,911) | (15,295) | (7,686) |
Related party interest expense | (661) | (1,254) | ||
Other expense | (482) | (357) | (903) | (687) |
Total Other Income (Expense) | (9,955) | (5,300) | (17,048) | (9,683) |
Loss Before Income Taxes | (22,800) | (27,781) | (32,235) | (52,572) |
Income tax expense | 17 | 13 | 33 | 41 |
Net Loss | (22,817) | (27,794) | (32,268) | (52,613) |
Net loss attributable to Holdings LLC unitholders prior to the Mergers | (27,794) | (52,613) | ||
Net loss attributable to noncontrolling interests | (9,615) | (15,937) | ||
Net Loss Attributable to Class A Common Stockholders | $ (13,202) | $ (16,331) | ||
Earnings Per Share, Diluted | $ (0.12) | $ (0.20) | ||
Weighted Average Number of Shares Outstanding, Diluted | 106,211,259 | 82,943,357 |
CONDENSED CONSOLIDATED STATEM_5
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) | ||||||
Compensation costs related to incentive units | 543 | 543 | ||||||
Issuance of common stock for vested DSUs | ||||||||
Net loss | (73,151) | (73,151) | ||||||
Ending balance, value at Dec. 31, 2021 | $ (61,304) | (61,304) | ||||||
Ending balance, shares at Dec. 31, 2021 | 33,509,272 | |||||||
Compensation costs related to incentive units | $ 58 | 58 | ||||||
Issuance of common stock for vested DSUs | ||||||||
Net loss | (24,819) | (24,819) | ||||||
Ending balance, value at Mar. 31, 2022 | $ (86,065) | (86,065) | ||||||
Ending balance, shares at Mar. 31, 2022 | 33,509,272 | |||||||
Beginning balance, value at Dec. 31, 2021 | $ (61,304) | (61,304) | ||||||
Beginning balance, shares at Dec. 31, 2021 | 33,509,272 | |||||||
Compensation costs related to incentive units | $ 230 | 230 | ||||||
Issuance of common stock for vested DSUs | ||||||||
Issuance of common stock for services rendered | $ 1 | 15,600 | 15,601 | |||||
Issuance of common stock for services rendered, shares | 7,302,155 | |||||||
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 | (228,997) | (228,997) | ||||||
Ending balance, value at Dec. 31, 2022 | $ 6 | $ 12 | 34,658 | (337,875) | 148,747 | (154,452) | ||
Ending balance, shares at Dec. 31, 2022 | 55,886,692 | 115,463,646 | ||||||
Beginning balance, value at Mar. 31, 2022 | $ (86,065) | (86,065) | ||||||
Beginning balance, shares at Mar. 31, 2022 | 33,509,272 | |||||||
Compensation costs related to incentive units | $ 126 | 126 | ||||||
Issuance of common stock for vested DSUs | ||||||||
Net loss | (27,794) | (27,794) | ||||||
Ending balance, value at Jun. 30, 2022 | $ (113,733) | (113,733) | ||||||
Ending balance, shares at Jun. 30, 2022 | 33,509,272 | |||||||
Beginning balance, value at Dec. 31, 2022 | $ 6 | $ 12 | 34,658 | (337,875) | 148,747 | (154,452) | ||
Beginning balance, shares at Dec. 31, 2022 | 55,886,692 | 115,463,646 | ||||||
Equity-based compensation | 9,302 | 9,302 | ||||||
Issuance of common stock for vested DSUs | ||||||||
Issuance of common stock for services rendered | $ 1 | 10,244 | 10,245 | |||||
Issuance of common stock for services rendered, shares | 9,318,052 | |||||||
Issuance of equity-classified warrants | 945 | 945 | ||||||
Issuance of common stock for vested RSUs | ||||||||
Issuance of common stock for vested RSUs, shares | 3,711,682 | |||||||
RSUs withheld to pay taxes | (1,067) | (1,067) | ||||||
Conversion of debt obligations to common stock | 3,130 | 3,130 | ||||||
Conversion of debt obligations to common stock, shares | 2,849,962 | |||||||
Proceeds from issuance of common stock | 1,100 | 1,100 | ||||||
Proceeds from issuance of common stock, shares | 1,222,222 | |||||||
Net loss | (3,129) | (6,322) | (9,451) | |||||
Ending balance, value at Mar. 31, 2023 | $ 7 | $ 12 | 58,312 | (341,004) | 142,425 | (140,248) | ||
Ending balance, shares at Mar. 31, 2023 | 72,988,610 | 115,463,646 | ||||||
Equity-based compensation | 1,803 | 1,803 | ||||||
Issuance of common stock for vested DSUs | ||||||||
Issuance of common stock for vested DSUs, shares | 84,818 | |||||||
Conversion of debt obligations to common stock | $ 2 | 7,714 | 7,716 | |||||
Conversion of debt obligations to common stock, shares | 17,288,298 | |||||||
Exercise and conversion of liability classified warrants | 1,073 | 1,073 | ||||||
Exercise and conversion of liability classified warrants, shares | 2,559,375 | |||||||
Proceeds from issuance of common stock | $ 6 | 23,661 | 23,667 | |||||
Proceeds from issuance of common stock, shares | 56,836,444 | |||||||
Exchange of Class V Common Stock to Class A Common Stock | $ 8 | $ (8) | ||||||
Exchange of Class V Common Stock to Class A Common Stock, shares | 80,060,825 | (80,060,825) | ||||||
Common stock issuance costs | (32) | (32) | ||||||
Net loss | (13,202) | (9,615) | (22,817) | |||||
Ending balance, value at Jun. 30, 2023 | $ 23 | $ 4 | $ 92,532 | $ (354,206) | $ 132,810 | $ (128,838) | ||
Ending balance, shares at Jun. 30, 2023 | 229,818,370 | 35,402,821 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (32,268) | $ (52,613) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Loss on disposal of property and equipment | 13 | 21 |
Amortization and depreciation | 2,705 | 2,899 |
Amortization of debt discount and issuance costs | 3,338 | 1,663 |
Amortization of related party debt discount and issuance costs | 504 | |
Paid-in-kind interest capitalized to principal of debt obligations | 3,473 | |
Paid-in-kind interest capitalized to principal of related party debt obligations | 641 | |
Bad debt reserve | 1,398 | (2,467) |
Loss on change in fair value of warrants | 469 | 510 |
Loss on change in fair value of derivatives | 2,533 | |
Gain on change in fair value of earn-out liabilities | (5,290) | |
Loss on extinguishment of debt obligations | 8,886 | |
Excess fair value over the consideration received for SAFE | 800 | |
Equity-based compensation | 11,106 | 184 |
Phantom unit expense | 4,570 | |
Settlement of accrued incentive compensation | (26,826) | |
Service fees settled in common stock | 3,808 | |
Gain on service fee settlement in connection with the Mergers | (6,996) | |
Deferred income taxes | 18 | 40 |
Change in operating assets and liabilities: | ||
Accounts receivable | (1,798) | (2,471) |
Contract assets | 3,863 | (5,159) |
Prepaid expenses | (2,668) | 225 |
Other current assets | 95 | (204) |
Operating right-of-use assets | 622 | 522 |
Other noncurrent assets | (163) | 46 |
Accounts payable | (3,081) | 21,476 |
Accrued expenses | (588) | 14,510 |
Contract liabilities | 1,509 | 87 |
Operating lease liabilities | (932) | (1,011) |
Other liabilities | (1,680) | 100 |
Net cash flows from operating activities | (37,309) | (16,272) |
Cash flows from investing activities: | ||
Property and equipment purchases | (628) | (685) |
Net cash flows from investing activities | (628) | (685) |
Cash flows from financing activities: | ||
Net (payments) borrowings on line of credit | (5,625) | 11,510 |
Proceeds from debt obligations | 86,226 | |
Repayments of debt obligations | (53,500) | (3,000) |
Proceeds from related party debt obligations | 14,520 | |
Financing costs paid | (13,916) | (2,000) |
Proceeds from issuance of common stock | 24,767 | |
Proceeds from SAFE | 8,000 | |
Payments of deferred offering costs | (1,288) | |
Equity issuance costs | (31) | |
RSUs withheld to pay taxes | (1,067) | |
Net cash flows from financing activities | 51,374 | 13,222 |
Net change in cash and cash equivalents | 13,437 | (3,735) |
Cash, beginning of year | 10,079 | 10,617 |
Cash, end of year | 23,516 | 6,882 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 7,010 | 5,940 |
Deferred offering costs recognized in accounts payable | 1,837 | |
Supplemental disclosures of non-cash investing and financing activities: | ||
Exchange of warrant liabilities for common stock | 1,050 | |
Fair value of derivatives issued as debt discount and issuance costs | 12,739 | |
Conversions of debt obligations to common stock | 5,500 | |
Conversions of related-party debt obligations to common stock | 3,080 | |
Equity issuance costs waived | 6,364 | |
Equity issuance costs settled with common stock | 7,069 | |
Loan commitment asset reclassed to debt discount | $ 2,062 |
Nature of operations and summar
Nature of operations and summary of significant accounting policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 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 Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.” Rubicon is a digital marketplace for waste and recycling services and provides cloud-based waste and recycling solutions to businesses and governments. Rubicon’s sustainable waste and recycling solutions provide comprehensive management of customers’ waste streams through a platform that powers a modern, digital experience and delivers data-driven insights and transparency for the customers and hauling and recycling partners. Rubicon also 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. Mergers – Rubicon Technologies, Inc. was initially incorporated in the Cayman Islands on April 26, 2021 as a special purposes acquisition company under the name “Founder SPAC” (“Founder”). Founder was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On August 15, 2022 (the “Closing Date”), Founder consummated the mergers (the “Mergers”), pursuant to that certain Agreement and Plan of Merger, dated December 15, 2021 (the “Merger Agreement”) (the “Closing”). 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 (“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, the accompanying 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 – The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to U.S. GAAP and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of the interim periods presented, under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The Company’s condensed consolidated financial statements include the accounts of Rubicon Technologies, Inc., and subsidiaries. The Company’s condensed consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2023. Certain information and note disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes prepared in accordance with U.S. GAAP have been condensed in, or omitted from, these interim financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements for the fiscal year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2023. Segments – The Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM role is fulfilled by the Executive Leadership Team (“ELT”), who allocates resources and assesses performance based upon consolidated financial information. Use of Estimates – The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of any contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Emerging Growth Company – The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company did not opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, will be required to adopt the new or revised standard at the time the new or revised standard becomes applicable to private companies. The effective dates shown in Note 2 below reflect the election to use the extended transition period. Revenue Recognition – The Company recognizes service revenue over time, consistent with efforts performed and when the customer simultaneously receives and consumes the benefits provided by the Company’s services. The Company recognizes recyclable commodity revenue point in time when the ownership, risks, and rewards transfer. The Company derives its revenue from waste removal, waste management and consultation services, software subscriptions, and the sale of recyclable commodities. 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 sales 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 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 is the principal in the transaction (gross), or the Company arranges for other parties to provide the service to the end-user and is 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. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) which we recognize revenue at the amount to which the Company has the right to invoice for services performed and (iii) variable consideration which is allocated entirely to a wholly unsatisfied performance obligation. After applying these optional exemptions, the aggregate amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations as of June 30, 2023 and December 31, 2022 was insignificant. Cost of Revenue, exclusive of amortization and depreciation – Cost of service revenues primarily consists of expenses related to delivering the Company’s service and providing support, including third-party hauler costs, costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and employee-related costs, such as salaries and benefits. Cost of recyclable commodity revenues primarily consists of expenses related to purchases 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 amortization and depreciation expenses on the condensed consolidated statements of operations. Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed the Federal Deposit Insurance Corporation insurance limits. Accounts Receivable and Contract Balances –Accounts receivable consists of trade accounts receivable for services provided to customers. Accounts receivable is stated at the amount the Company expects to collect. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses and allowance for unbilled receivables based upon the Company’s assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Past-due balances and other higher-risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. As of June 30, 2023 and December 31, 2022, the allowances for accounts receivable were $ 4.1 million and $ 3.6 million, respectively, and the allowances for contract assets were insignificant. In cases where customers pay for services in arrears, the Company accrues revenue in advance of billings as long as the criteria for revenue recognition are met, thus creating a contract asset (unbilled receivable). As of June 30, 2023 and December 31, 2022, the Company had unbilled receivables of $ 51.3 million and $ 55.2 million, respectively. These unbilled balances were the result of services provided in the period, but not yet billed to the customer. During the six months ended June 30, 2023, the Company invoiced its customers $ 53.7 million pertaining to contract assets for services delivered prior to December 31, 2022. Contract liabilities (deferred revenue) consist 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 June 30, 2023 and December 31, 2022, the Company had deferred revenue balances of $ 7.4 million and $ 5.9 million, respectively. During the six months ended June 30, 2023, the Company recognized $ 4.6 million of revenue that was included in the contract liabilities balance as of December 31, 2022. Accrued Hauler Expenses – The Company recognizes hauler costs and the cost of recyclable products when services are performed. Accounting for accrued hauler costs and the cost of recyclable commodities requires estimates and assumptions regarding the quantity of waste collected by the vendors and the frequencies of the collections. The Company estimates quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. Accrued hauler expenses are presented within accrued expenses on the condensed consolidated balance sheets. Fair Value Measurements – In accordance with U.S. GAAP, the Company groups its financial assets and financial liabilities at fair value in three levels, based on the markets in which the financial assets and financial liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the New York Stock Exchange (the “NYSE”). Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities. Level 3 – Valuations for financial assets and financial liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models, and similar techniques and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such financial assets or financial liabilities. See Note 14 for further information regarding fair value measurements. Offering Costs – Offering costs, consisting of legal, accounting, printer, filing and advisory fees related to the Mergers, were deferred and offset against proceeds from the Mergers and additional paid-in capital upon consummation of the Mergers. Deferred offering costs capitalized as of June 30, 2023 and December 31, 2022 were $- 0 -. The total amount of the offering costs recognized as offset against additional paid-in capital at the Closing was $ 67.3 million. The subsequent settlements of certain offering costs during the three and six months ended June 30, 2023 resulted in a gain of $ 6.4 million and $ 7.0 million, respectively, which is recognized as a component of other income (expense) on the accompanying condensed consolidated statements of operations Customer Acquisition Costs – The Company makes certain expenditures related to acquiring contracts for future services. These expenditures are capitalized and amortized in proportion to the expected future revenue from the customer, which in most cases results in straight-line amortization over the estimated life of the customer. Amortization of these customer incentive costs is presented within amortization and depreciation on the condensed consolidated statements of operations. Warrants – The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 per share (“Class A Common Stock”), among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. 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 as a component of other income (expense) on the consolidated statement of operations. As of June 30, 2023, the Company has both liability-classified and equity-classified warrants outstanding. See Note 9 for further information. Earn-out Liabilities – Pursuant to the Merger Agreement, (i) Blocked Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 1,488,519 shares of Class A Common Stock (the “Earn-Out Class A Shares”) and (ii) Rubicon Continuing Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 8,900,840 Class B Units (as defined in Note 3) (“Earn-Out Units”) and an equivalent number of shares of the Company’s Class V common stock, par value $ 0.0001 (“Class V Common Stock”) (“Earn-Out Class V Shares”, and together with Earn-Out Class A Shares and Earn-Out Units, “Earn-Out Interests”), in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing (the “Earn-Out Period”), as set forth below upon satisfaction of any of the following conditions (each, an “Earn-Out Condition”). (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 were 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 as a component of 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 as a component of other income (expense), and such Earn-Out Interests will be reclassed to stockholders’ (deficit) equity on the consolidated balance sheet. As of June 30, 2023 and December 31, 2022, the Earn-Out Interests had a fair value of $ 0.3 million and $ 5.6 million, respectively, with the changes in the fair value of $ 5.3 million recognized as a gain on change in fair value of earn-out liabilities under other income (expense) within the accompanying condensed consolidated statements of operations. Noncontrolling Interest – Noncontrolling interest represents the Company’s noncontrolling interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company. Shares of Class V Common Stock are exchangeable into an equal number of Class A Common Stock. Shares of Class V Common Stock are non-economic voting shares in Rubicon Technologies, Inc., where shares of Class V Common Stock each have one vote per share. The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 45.9% and 52.2% of Holdings LLC’s net loss during the three and six months ended June 30, 2023, respectively, was allocated to noncontrolling interests (“NCI”). Income Taxes – Rubicon Technologies, Inc. is a corporation and is subject to U.S. federal as well as state income taxes including the income or loss allocated from its investment in Rubicon Technologies Holdings, LLC. Rubicon Technologies Holdings, LLC is taxed as a partnership for which the taxable income or loss is allocated to its members. Certain of the Rubicon Technologies Holdings, LLC operating subsidiaries are considered taxable corporations for U.S. income tax purposes. Prior to the Mergers, Holdings LLC was not subject to U.S. federal and certain state income taxes at the entity level. 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. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of June 30, 2023 or December 31, 2022, the Company has no tax positions that met this threshold and, therefore, has not recognized such benefits. 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 estimates 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 was $- 0 - million and $- 0 - million for the three months ended June 30, 2023 and 2022, respectively, with an effective tax rate of (0.1)% and (0.1)% , respectively The Company’s income tax expense was $- 0 - million and $- 0 - million for the six months ended June 30, 2023 and 2022, respectively, with an effective tax rate of (0.1)% and (0.1)% ,, respectively. The provision for income taxes differs from the amount that would result from applying statutory rates primarily due to loss attributable to noncontrolling interest and differences in the deductibility of certain book and tax expenses, including the changes in fair value of earn-out liabilities and derivatives and certain compensation costs. During the six months ended June 30, 2023 and the year ended December 31, 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. As a result, the Company is in a net deferred tax liability position of $ 0.2 million and $ 0.2 million as of June 30, 2023 and December 31, 2022, respectively. Tax Receivable Agreement Obligation – The Company and Holdings LLC entered into a Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with Rubicon Continuing Unitholders (as defined in Note 3) and Blocked Unitholders (as defined in Note 3) (together, the “TRA Holders”). Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to the TRA Holders 85% of certain of the Company’s realized (or in certain cases deemed realized) tax savings as a result of certain tax benefits related to the transactions contemplated by the Merger Agreement and future exchanges of Class B Units for Class A Common Stock or cash. The actual tax benefit, as well as the amount and timing of any payments under the TRA, will vary depending on a number of factors, including the price of Class A Common Stock at the time of the exchange; the timing of future exchanges; the extent to which exchanges are taxable; the amount and timing of the utilization of tax attributes; the amount, timing and character of the Company’s income; the U.S. federal, state and local tax rates then applicable; the depreciation and amortization periods that apply to the increases in tax basis; the timing and amount of any earlier payments that the Company may have made under the TRA; and the portion of the Company’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. 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. A TRA liability is determined and recorded under ASC 450, “ Contingencies Earnings (Loss) Per Share (“EPS”) – Basic income (loss) per share is computed by dividing net income (loss) attributable to Rubicon Technologies, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. 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 13 for additional information on dilutive securities. Prior to the Mergers, the membership structure of Holdings LLC included units with 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 Closing. Derivative Financial Instruments – From time to time, the Company utilizes instruments which may contain embedded derivative instruments as part of our overall strategy. The Company’s derivative instruments are recorded at fair value on the consolidated balance sheets. These derivative instruments have not been designated as hedges; therefore, both realized and unrealized gains and losses are recognized in earnings. For the purposes of cash flow presentation, realized and unrealized gains or losses are included under cash flows from operating activities. Upfront cash payments received upon the issuance of derivative instruments are included within cash flows from financing activities, while the prepayments made upon the issuance of derivative instruments are included within cash flows from investing activities within the consolidated statements of cash flows. Stock-Based Compensation – The Company measures fair value of employee stock-based compensation awards on the date of grant and uses the straight-line attribution method to recognize the related expense over the requisite service period, and accounts for forfeitures as they occur. The fair value of equity-classified restricted stock units and performance-based restricted stock units is equal to the market price of Class A Common Stock on the date of grant. The liability-classified restricted stock units are recognized at their fair value that is equal to the market price of Class A Common Stock on the date of grant and remeasured to the market price of Class A Common Stock at each period-end with related changes in the fair value recognized in general and administrative expense on the consolidated statement of operations. 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. | Note 1— Nature of operations and summary of significant accounting policies Description of Business – Rubicon Technologies, Inc. is a digital marketplace for waste and recycling services and provides cloud-based waste and recycling solutions to businesses and governments. Rubicon’s sustainable waste and recycling solutions provide comprehensive management of customers’ waste streams through a platform that powers a modern, digital experience and delivers data-driven insights and transparency for the customers and hauling and recycling partners. 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 – Rubicon Technologies, Inc. was initially incorporated in the Cayman Islands on April 26, 2021 as a special purposes acquisition company under the name “Founder SPAC” (“Founder”). Founder was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On August 15, 2022 (the “Closing Date”), Founder consummated the mergers described below (collectively the “Mergers”), pursuant to that certain Agreement and Plan of Merger, dated December 15, 2021 (the “Merger Agreement”), by and among Founder, Ravenclaw Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of Founder (“Merger Sub”), Ravenclaw Merger Sub Corporation 1, a Delaware corporation and wholly owned subsidiary of Founder (“Merger Sub Inc. 1”), Ravenclaw Merger Sub Corporation 2, a Delaware corporation and wholly owned subsidiary of Founder (“Merger Sub Inc. 2”), Ravenclaw Merger Sub Corporation 3, a Delaware corporation and wholly owned subsidiary of Founder (“Merger Sub Inc. 3” and, together with Merger Sub Inc. 1 and Merger Sub Inc. 2, each a “Blocker Merger Sub”), Boom Clover Business Limited, a British Virgin Islands corporation (“Blocker Company 1”), NZSF Frontier Investments Inc., a Delaware corporation (“Blocker Company 2”), PLC Blocker A LLC, a Delaware limited liability company (“Blocker Company 3” and, together with Blocker Company 1 and Blocker Company 2, each a “Blocker Company” and collectively, the “Blocker Companies”), and Rubicon Technologies, LLC, a Delaware limited liability company (“Holdings LLC”). On the Closing Date, and in connection with the closing of the Mergers (the “Closing”), pursuant to the Merger Agreement, (a) Founder was domesticated and continues as a Delaware corporation, changing its name to Rubicon Technologies, Inc., (b) Merger Sub merged with and into Holdings LLC (the “Merger”), with Holdings LLC surviving the Merger as a wholly owned subsidiary of Rubicon, and (c) in a series of sequential two-step mergers (i) each Blocker Merger Sub merged with and into its corresponding Blocker Company, with each Blocker Company surviving as a wholly owned subsidiary of Rubicon, following which (ii) each surviving Blocker Company merged with and into Rubicon, with Rubicon surviving the merger (collectively the “Blocker 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 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 – The accompanying consolidated financial statements have been prepared pursuant to U.S. GAAP and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of the periods presented, under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The Company’s consolidated financial statements include the accounts of Rubicon Technologies, Inc., and subsidiaries. The Company’s consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. Segments – The Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM role is fulfilled by the Executive Leadership Team (“ELT”), who allocates resources and assesses performance based upon consolidated financial information. Use of Estimates – The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of any contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Emerging Growth Company – The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company did not opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, will be required to adopt the new or revised standard at the time the new or revised standard becomes applicable to private companies. The effective dates shown in Note 2 below reflect the election to use the extended transition period. Revenue Recognition – In accordance with the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Pursuant to ASC 606, the Company applies the following five-step model: 1. Identify the contract(s) with a customer. 2. Identify the performance obligation(s) in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes service revenue over time, consistent with efforts performed and when the customer simultaneously receives and consumes the benefits provided by the Company’s services. The Company recognizes recyclable commodity revenue point in time when the ownership, risks and rewards transfer. The Company derives its revenue from waste removal, waste management and consultation services, software subscriptions, and the purchase and sale of recyclable commodities. Service Revenue: Service revenues are primarily derived from 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 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 concluded that Rubicon is the principal in most arrangements as the Company controls the waste removal service and are the primary obligor in the transactions. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) which we recognize revenue at the amount to which the Company has the right to invoice for services performed and (iii) variable consideration which is allocated entirely to a wholly unsatisfied performance obligation. After applying these optional exemptions, the aggregate amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations as of December 31, 2022 and 2021 was insignificant. Cost of Revenue, exclusive of amortization and depreciation – Cost of service revenues primarily consists of expenses related to delivering the Company’s services and providing support, including third-party hauler costs, costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and employee-related costs such as salaries and benefits. 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 amortization and depreciation expenses on the consolidated statements of operations. Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed the Federal Deposit Insurance Corporation insurance limits. Accounts Receivable – Accounts receivable consists of trade accounts receivable for services provided to customers. Accounts receivable is stated at the amount the Company expects to collect. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past-due balances and other higher-risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to operations and a credit to an allowance for doubtful accounts. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable. As of December 31, 2022 and 2021, the allowance for doubtful accounts was $ 3.6 million and $ 8.6 million, respectively. Contract Balances – The Company recognizes revenue when services are performed and corresponding performance obligations are satisfied. Timing of invoicing to customers may differ from the timing of revenue recognition, and these timing differences result in contract assets (unbilled accounts receivables) or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. Contract assets represent the Company’s right to consideration based on satisfied performance obligations from contracts with customers but have not yet been invoiced to the customer. Accounting for contract assets requires estimates and assumptions regarding the quantity of waste collected by their vendors. The Company estimates service quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. The changes in contract assets during 2022 and 2021 were as follows (in thousands): Schedule of changes in contract assets Balance, January 1, 2021 $ 43,357 Invoiced to customers in the current period (43,513 ) Changes in estimate related to the prior period 156 Estimated accrual related to the current period 56,984 Balance, December 31, 2021 56,984 Invoiced to customers in the current period (50,085 ) Changes in estimate related to the prior period (6,899 ) Estimated accrual related to the current period 55,184 Balance, December 31, 2022 $ 55,184 Contract liabilities consists of amounts collected prior to having satisfied the performance obligation. The Company periodically invoices customers for recurring services in advance. During the year ended December 31, 2022, the Company recognized $ 4.4 million of revenue that was included in the contract liabilities balance as of December 31, 2021. During the year ended December 31, 2021, the Company recognized $ 4.0 million of revenue that was included in the contract liabilities balance as of December 31, 2020. Accrued Hauler Expenses – The Company recognizes hauler costs and the cost of recyclable products when services are performed. Accounting for accrued hauler costs and the cost of recyclable products requires estimates and assumptions regarding the quantity of waste collected by their vendors. The Company estimates service quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. Accrued hauler expenses are presented within accrued expenses on the consolidated balance sheets. The changes in accrued hauler expenses during 2022 and 2021 were as follows (in thousands): Schedule of changes in accrued hauler expenses Balance, January 1, 2021 $ 37,429 Invoiced by vendors in the current period (37,726 ) Changes in estimate related to the prior period 297 Estimated accrual related to the current period 49,607 Balance, December 31, 2021 49,607 Invoiced by vendors in the current period (42,414 ) Changes in estimate related to the prior period (7,193 ) Estimated accrual related to the current period 44,773 Balance, December 31, 2022 $ 44,773 Fair Value Measurements – In accordance with U.S. GAAP, the Company groups its financial assets and financial liabilities at fair value in three levels, based on the markets in which the financial assets and financial liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the New York Stock Exchange. Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities. Level 3 – Valuations for financial assets and financial liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models, and similar techniques and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such financial assets or financial liabilities. See Note 17 for further information regarding fair value measurements. Property and Equipment – Property and equipment are stated at cost; additions and major improvements are capitalized, while regular maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method based on the estimated useful lives of the related assets. Lives used for depreciation calculations are as follows: Schedule of Lives used for depreciation Computers, equipment and software 3 5 Furniture and fixtures 3 5 Customer equipment 3 10 Leasehold improvements Lesser of useful life or remaining lease term Leases – The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities on the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term. The corresponding lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement, net of any future tenant incentives. The Company’s lease terms may include options to extend or terminate the lease. Periods beyond the noncancelable term of the lease are included in the measurement of the lease liability when it is reasonably certain that the Company will exercise the associated extension option or waive the termination option. The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company. As most of the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. The Company’s incremental borrowing rate is an estimate of the interest rate the Company would have to pay to borrow on a collateralized basis with similar terms and payments. The lease ROU asset is recognized based on the lease liability, adjusted for any rent payments or initial direct costs incurred or tenant incentives received prior to commencement. Lease expenses for minimum lease payments for operating leases are recognized on a straight-line basis over the lease term. The Company has entered into subleases or has made decisions and taken actions to exit and sublease certain unoccupied leased office space. Similar to the Company’s other long-lived assets, management tests ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For leased assets, such circumstances would include the decision to leave a leased facility prior to the end of the minimum lease term or subleases for which estimated cash flow do not fully cover the costs of the associated lease. Offering Costs – Offering costs, consisting of legal, accounting, printer, filing and advisory fees related to the Mergers, were deferred and offset against proceeds from the Mergers and additional paid-in capital upon consummation of the Mergers. Deferred offering costs capitalized as of December 31, 2022 and 2021 were $- 0 - and $ 1.1 million, respectively, and included in other noncurrent assets on the consolidated balance sheets. The total amount of the offering costs recognized as offset against additional paid-in capital on the consolidated balance sheet as of December 31, 2022 was $ 67.3 million, $ 53.9 million of which has been paid while the remaining $ 13.4 million is included in accrued expenses as of December 31, 2022. The subsequent settlements of offering costs during 2022 resulted in a gain of $ 12.1 million which is recognized as a component of other expense on the consolidated statement of operations for the year ended December 31, 2022. The total amount of the offering costs recognized as offset against additional paid-in capital on the consolidated balance sheet as of December 31, 2021 was $- 0 -. Advertising – Advertising expenses are charged to earnings as incurred. The total advertising costs were $ 2.5 million and $ 1.5 million for the years ended December 31, 2022 and 2021, respectively. Advertising costs are included in sales and marketing expenses on the consolidated statements of operations. Goodwill and Intangible Assets – Goodwill represents the excess of the purchase price over fair value of net assets acquired. Goodwill and intangible assets determined to have an indefinite useful life at acquisition are not amortized, but instead tested for impairment at least annually. Any intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their residual values and reviewed for impairment in accordance with accounting standards. The customer and hauler relationship assets are being amortized on a straight-line basis over a period ranging from two to eight years. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. Based on the cumulative evidence obtained during the test, management concluded no impairment losses were recorded for the years ended December 31, 2022 and 2021. Impairment of Long-Lived Assets – Long-lived assets such as property and equipment, including intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company determined there were no impairment charges during 2022 or 2021. Debt Issuance Costs – Debt issuance costs related to term loans are capitalized and reported net of the current and noncurrent debt obligations. The Company amortizes debt issuance costs to interest expense on the term loan using the effective interest method over the life of the debt agreement. Debt issuance costs related to lines of credit are capitalized and reported as a prepaid asset and are amortized to interest expense on a straight-line basis over the life of the debt agreement. Customer Acquisition Costs – The Company makes certain expenditures related to acquiring contracts for future services. These expenditures are capitalized and amortized in proportion to the expected future revenue from the customer, which in most cases results in straight-line amortization over the life of the customer. Amortization of these customer incentive costs is presented within amortization and depreciation on the consolidated statements of operations. Total customer acquisition costs capitalized during the years ended December 31, 2022 and 2021 totaled $- 0 - and $- 0 -, respectively, and are included in other current assets and other noncurrent assets on the consolidated balance sheets. Total amortization of these capitalized costs was $ 1.1 million and $ 2.5 million for the years ended December 31, 2022 and 2021, respectively. Warrants – The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and the applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 per share (“Class A Common Stock”), among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. 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 December 31, 2022, the Company has both liability-classified and equity-classified warrants outstanding. See Note 10 for further information. Earn-out Liabilities – Pursuant to the Merger Agreement, (i) Blocked Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 1,488,519 shares of Class A Common Stock (the “Earn-Out Class A Shares”) and (ii) Rubicon Continuing Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 8,900,840 Class B Units (as defined in Note 3) (“Earn-Out Units”) and an equivalent number of shares of the Company’s Class V common stock, par value $ 0.0001 (“Class V Common Stock”) (“Earn-Out Class V Shares”, and together with Earn-Out Class A Shares and Earn-Out Units, “Earn-Out Interests”), in each case, depending upon the performance of Class A Common Stock during the five (5) year period after the Closing (the “Earn-Out Period”), as set forth below upon satisfaction of any of the following conditions (each, an “Earn-Out Condition”). (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 December 31, 2022, the Earn-out Interests had a fair value of $ 5.6 million, with the changes in the fair value between the Closing Date and December 31, 2022 of $ 68.5 million recognized as a gain in fair value of earn-out liabilities under other income (expense) within accompanying consolidated statements of operations. Noncontrolling Interest – Noncontrolling interest (“NCI”) represents the Company’s interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company. Upon completion of the Mergers, Rubicon Technologies, Inc. issued shares of Class V Common Stock, each of which is exchangeable into an equal number of Class A Common Stock. Shares of Class V Common Stock are non-economic voting shares in Rubicon Technologies, Inc. where shares of Class V Common Stock each have one vote per share. The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 69.8% of Holdings LLC’s net loss during the period of August 15, 2022, the Closing Date, through December 31, 2022 was allocated to NCI. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes 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. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of December 31, 2022 or 2021, the Company has no tax positions that met this threshold and, therefore, has not recognized such benefits. 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, regulati |
Recent accounting pronouncement
Recent accounting pronouncements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Recent Accounting Pronouncements | ||
Recent accounting pronouncements | Note 2— Recent accounting pronouncements Accounting pronouncements adopted during 2023 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 | 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 December 31, 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 | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 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 per share, of Founder (“Founder Class A Shares”) automatically converted into one share of Class A Common Stock, (b) each then-issued and outstanding Class B ordinary share, par value $0.0001 per share, of Founder (“Founder Class B Shares” and, together with Founder Class A Shares, “Founder Ordinary Shares”), converted into one share of Class A Common Stock, pursuant to the Sponsor Agreement, dated December 15, 2021, by and among Founder, Founder SPAC Sponsor LLC (“Sponsor”), Holdings LLC, and certain insiders of Founder, (c) each then-issued and outstanding public warrant of Founder, 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 “IPO Warrants”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement, and (e) each then-issued and outstanding unit of Founder, each representing a Founder Class A Share and one-half of a Founder Public Warrant (a “Founder Unit”), that had not been previously separated into the underlying Founder Class A Share and one-half of one Founder Public Warrant upon the request of the holder thereof, was separated and automatically converted into one share of Class A Common Stock and one-half of one Public Warrant. No fractional Public Warrants were issued upon separation of the Founder Units. - 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 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 on the Closing Date. On the Closing Date, (a) holders of the Rubicon Interests immediately before the Closing, other than Boom Clover Business Limited, NZSF Frontier Investments Inc., and PLC Blocker A LLC (collectively, the “Blocked Unitholders”), were issued Class B Units (the “Rubicon Continuing Unitholders”), (b) the 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) the Blocked Unitholders were issued shares of Class A Common Stock, 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. In addition to the securities issuable at the Closing and the RSUs and DSUs, certain of the Rubicon Management Rollover Holders received one-time cash payments (the “Cash Transaction Bonuses”). In addition, pursuant to the Merger Agreement, (i) the Blocked Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Class A Shares and (ii) the Rubicon Continuing Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Units and an equivalent number of shares of Class V Common Stock, in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing, as discussed in greater detail in Note 1. - Certain investors (the “PIPE Investors”) purchased, and the Company sold to such PIPE Investors an aggregate of 12,100,000 shares of Class A Common Stock at a price of $ 10.00 per share pursuant to and as set forth in the subscription agreements against payment by such PIPE Investors of the respective amounts set forth therein. - Certain investors (the “FPA Sellers”) purchased, and the Company issued and sold to such FPA Sellers, an aggregate of 7,082,616 shares of Class A Common Stock pursuant to and as set forth in the Forward Purchase Agreement entered into between Founder and ACM ARRT F LLC (“ACM Seller”) on August 4, 2022, against payment by such FPA Sellers of the respective amounts set forth therein. The Forward Purchase Agreement was subsequently terminated on November 30, 2022. See Note 10 for further information. - The Company (a) caused to be issued to certain investors 880,000 Class B Units pursuant to the Merger Agreement, (b) issued 160,000 shares of Class A Common Stock to certain investors, and (c) Sponsor forfeited 160,000 shares of Class A Common Stock. - Blocked Unitholders and Rubicon Continuing Unitholders retained aggregate 19,846,916 shares of Class A Common Stock and 118,677,880 shares of Class V Common Stock at the Closing. - 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 million of cash to Rubicon Technologies Holdings, LLC, representing the net amount held in the Company’s trust account following the redemption of Class A Common Stock originally sold in Founder’s initial public offering, less (a) cash consideration of $ 28.9 million paid to Holdings LLC’s certain management members, plus (b) $ 121.0 million in aggregate proceeds received from the PIPE Investors, less (c) the aggregate amount of transaction expenses incurred by the parties to the Merger Agreement and (d) payment to the FPA Sellers pursuant to the Forward Purchase Agreement. - The Company incurred $ 67.3 million in transaction costs relating to the Mergers. The Company settled $ 7.1 million of transaction costs by issuing Class A Common Stock on February 6, 2023, which resulted in a gain of $ 0.6 million and recognized as a component of other income (expense) on the accompanying condensed consolidated statement of operations for the six months ended June 30, 2023. An additional $ 6.4 million of offering costs related to the Mergers was waived by the advisor and settled on April 24, 2023, resulting in a gain of $ 6.4 million recognized in other income (expense) on the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2023. The transaction costs were offset against additional paid-in capital on the consolidated statements of stockholders’ (deficit) equity upon the Closing. | 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 per share, of Founder (“Founder Class A Shares”) automatically converted into one share of Class A Common Stock, (b) each then-issued and outstanding Class B ordinary share, par value $ 0.0001 per share, of Founder (“Founder Class B Shares” and, together with Founder Class A Shares, “Founder Ordinary Shares”), converted into one share of Class A Common Stock, pursuant to the Sponsor Agreement, dated December 15, 2021, by and among Founder, Founder SPAC Sponsor LLC (“Sponsor”), Holdings LLC, and certain insiders of Founder, (c) each then-issued and outstanding public warrant of Founder, 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 , and (e) each then-issued and outstanding unit of Founder, each representing a Founder Class A Share and one-half of a Founder Public Warrant (a “Founder Unit”), that had not been previously separated into the underlying Founder Class A Share and one-half of one Founder Public Warrant upon the request of the holder thereof, was separated and automatically converted into one share of Class A Common Stock and one-half of one Public Warrant. No fractional Public Warrants were issued upon separation of the Founder Units. - 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 the Rubicon Interests immediately before the Closing, other than the Blocker Companies (the “Blocked Unitholders”), were issued Class B Units (the “Rubicon Continuing Unitholders”), (b) the 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. At the consummation of the Mergers, the Company incurred approximately $47.6 million of one-time compensation costs associated with Rubicon management rollover consideration under the Merger Agreement, which is payable in cash or equity at our discretion. On October 19, 2022, the Company granted certain RSU awards, valued at $3.5 million, as replacement awards for $13.9 million of the accrued management rollover consideration. The replacement awards resulted in a $10.4 million gain, which was recognized in general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2022. The remaining $33.7 million of compensation expenses related to the Rubicon Management Rollover Holders’ RSUs and DSUs have been recognized in accrued expenses on the accompanying consolidated balance sheet as of December 31, 2022. In addition to the securities issuable at the Closing and the RSUs and DSUs, certain of the Rubicon Management Rollover Holders received one-time cash payments (the “Cash Transaction Bonuses”). In addition, pursuant to the Merger Agreement, (i) Blocked Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Class A Shares and (ii) Rubicon Continuing Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Units and an equivalent number of shares of Class V Common Stock, in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing, as discussed in greater detail in Note 1. - Certain investors (the “PIPE Investors”) purchased, and the Company sold to such PIPE Investors an aggregate of 12,100,000 shares of Class A Common Stock at a price of $ 10.00 per share pursuant to and as set forth in the subscription agreements against payment by such PIPE Investors of the respective amounts set forth therein. - Certain investors (the “FPA Sellers”) purchased, and the Company issued and sold to such FPA Sellers, an aggregate of 7,082,616 shares of Class A Common Stock pursuant to and as set forth in the Forward Purchase Agreement entered into between Founder and ACM ARRT F LLC (“ACM Seller”) on August 4, 2022, against payment by such FPA Sellers of the respective amounts set forth therein. The Forward Purchase Agreement was subsequently terminated on November 30, 2022. See Note 12 for further information. - The Company (a) caused to be issued to certain investors 880,000 Class B Units pursuant to the Merger Agreement, (b) issued 160,000 shares of Class A Common Stock to certain investors, and (c) Sponsor forfeited 160,000 shares of Class A Common Stock. See Note 11 for further information. - Blocked Unitholders and Rubicon Continuing Unitholders retained aggregate 19,846,916 shares of Class A Common Stock and 118,677,880 shares of Class V Common Stock, representing 83.5 % of voting power in the Company at the Closing. - 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 million of cash to Rubicon Technologies Holdings, LLC, representing the net amount held in the Company’s trust account following the redemption of Class A Common Stock originally sold in Founder’s initial public offering, less (a) cash consideration of $ 28.9 million paid to Holdings LLC’s certain management members, plus (b) $ 121.0 million in aggregate proceeds received from the PIPE Investors, less (c) the aggregate amount of transaction expenses incurred by the parties to the Merger Agreement and (d) payment to the FPA Sellers pursuant to the Forward Purchase Agreement. - The Company incurred $ 67.3 million in transaction costs relating to the Mergers, $ 53.9 million of which was paid or subsequently settled as of December 31, 2022 and the remaining amount was recognized in accrued expenses on the accompanying consolidated balance sheet as of December 31, 2022. The subsequent settlements of transaction costs resulted in a gain of $ 12.1 million which is recognized as a component of other expense on the accompanying consolidated statement of operations for the year ended December 31, 2022. The Company has the option to settle a majority of the transaction costs that were unpaid and accrued as of December 31, 2022 in cash or Class A Common Stock at the Company’s discretion. The transaction costs have been offset against additional paid-in capital in the accompanying consolidated statements of stockholders’ (deficit) equity. |
Property and equipment
Property and equipment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 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 June 30, 2023 and December 31, 2022 (in thousands): Schedule of property and equipment June 30, 2023 December 31, Computers, equipment and software $ 3,914 $ 3,791 Customer equipment 1,882 1,485 Furniture and fixtures 1,766 1,699 Leasehold improvements 3,772 3,772 Total property and equipment 11,334 10,747 Less accumulated amortization and depreciation (8,765 ) (8,103 ) Total property and equipment, net $ 2,569 $ 2,644 Property and equipment amortization and depreciation expense for the three months ended June 30, 2023 and 2022 was $ 0.3 million and $ 0.3 million, respectively. Property and equipment amortization and depreciation expense for the six months ended June 30, 2023 and 2022 was $ 0.7 million and $ 0.7 million, respectively. | Note 4— Property and equipment Property and equipment, net is comprised of the following at December 31 (in thousands): Schedule of property and equipment 2022 2021 Computers, equipment and software $ 3,791 $ 2,968 Customer equipment 1,485 1,122 Furniture and fixtures 1,699 1,570 Leasehold improvements 3,772 3,769 Total property and equipment 10,747 9,429 Less accumulated amortization and depreciation (8,103 ) (6,818 ) Total property and equipment, net $ 2,644 $ 2,611 Property and equipment amortization and depreciation expenses for the years ended December 31, 2022 and 2021 totaled $ 1.3 million and $ 1.6 million, respectively. |
Debt
Debt | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Debt | Note 5— Debt Revolving Credit Facilities 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’s maturity was December 31, 2023 and bore an interest rate of SOFR plus 5.60% ( 9.7% at December 31, 2022). On February 7, 2023, the Company entered into an amendment to the Revolving Credit Facility, which (i) increased the maximum borrowing amount under the facility from $60.0 million to $ 75.0 million and (ii) amended the interest rate it bears to between 4.8% up to SOFR plus 4.9% determined based on certain metrics defined within the amended agreement. On March 22, 2023, the Company amended the Revolving Credit Facility, which (i) the Company and the lender modified its maturity date to the earlier of (a) December 14, 2025 , (b) the maturity of the Term Loan (as defined below) and (c) the maturity of the Subordinated Term Loan (as defined below) and (ii) the lender consented to an amendment to the Subordinated Term Loan agreement. The borrowing capacity was calculated based on qualified billed and unbilled receivables. The fee on the average daily balance of unused loan commitments was 0.70%. Interest and fees were payable monthly with principal due upon maturity. In accordance with ASC 470-50, Debt – Modifications and Extinguishments The Revolving Credit Facility required a lockbox arrangement, which provided 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 in the “Line of Credit” agreement, necessitated the Line of Credit be classified as a current liability on the consolidated balance sheets. The acceleration clause allowed 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. On June 7, 2023, the Company fully prepaid the borrowing under the Revolving Credit Facility in the amount of $ 48.6 million and terminated the facility. As a result, the Company recorded $ 2.6 million of a loss on extinguishment of debt obligations on the accompanying condensed statements of operations for the three and six months ended June 30, 2023. As of December 31, 2022, the Company’s total outstanding borrowings under the Line of Credit were $ 51.8 million and $ 5.6 million remained available to draw. On June 7, 2023, the Company entered into a $ 90.0 million “June 2023 Revolving Credit Facility” secured by the Company’s accounts receivable, all contracts and contract rights and general intangibles, with a maturity date of the earlier of (i) June 7, 2026 or (ii) 90 days prior to the maturity date of the June 2023 Term Loan (defined below) (the “Springing Maturity”). The June 2023 Revolving Credit Facility bears an interest rate of SOFR plus 4.25% (or 3.95% if the Company meets certain conditions defined in the agreement) ( 9.5% as of June 30, 2023). The borrowing capacity is calculated based on qualified billed and unbilled receivables. The fee on the average daily balance of unused loan commitments is 0.5%. Interest and fees are payable monthly in arrears on the first day of each month. The June 2023 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 in the Line of Credit agreement, necessitates the Line of Credit 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 June 30, 2023, the Company’s total outstanding borrowings under the Line of Credit were $ 46.2 million and $ 3.0 million remained available to draw. The June Revolving Credit Facility is subject to certain financial covenants. As of June 30, 2023, the Company was in compliance with these financial covenants. The Company capitalized $ 2.9 million in deferred debt charges related to the June Revolving Credit Facility during the six months ended June 30, 2023, which has been recorded to prepaid expenses on the condensed consolidated balance sheet and are amortized over the remaining term of the June Revolving Credit Facility. Amortization of deferred debt charges related to the June Revolving Credit Facility were $ 0.2 million for the three and six months ended June 30, 2023. 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 was subsequently upsized to $60.0 million and bore an interest rate of LIBOR plus 9.5% ( 13.6% as of December 31, 2022) with a maturity date of the earlier of March 29, 2024 , or the maturity date of the Revolving Credit Facility. 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. The amended Term Loan agreement required the Company to cause the Yorkville Investor (See Note 11) to purchase the maximum amount of the Company’s equity interests available under the SEPA (See Note 11) and to utilize the net proceeds from such drawdowns to repay the Term Loan until it was fully repaid. Per the amended Term Loan agreement, an additional fee was incurred in the amount of $2.0 million, out of which $1.0 million became due in cash and the other $1.0 million was accrued to the principal balance of the Term Loan as the Company did not repay the Term Loan in full on or before March 27, 2023. Furthermore, beginning on April 3, 2023, an additional $0.15 million fee accrued to the principal balance of the Term Loan each week thereafter until the Term Loan was fully repaid. On February 7, 2023, the Company entered into an amendment to the Term Loan agreement, which (i) amended the interest rate the Term Loan bears to SOFR plus 9.6% and (ii) required the Company to make a prepayment of $10.3 million, including $ 10.0 million of the principal and $0.3 million of the prepayment premium. Pursuant to the amended agreement, the Company made a $10.3 million payment to the Term Loan lender on February 7, 2023 and recorded $ 0.8 million as a loss on extinguishments of debt obligations on the accompanying consolidated statements of operations. On May 19, 2023, the Company entered into an amendment to the Term Loan agreement, which extended the maturity date to May 23, 2024. In accordance with ASC 470-50, Debt – Modifications and Extinguishments On June 7, 2023, the Company fully prepaid the borrowing under the Term Loan in the amount of $ 40.5 million and terminated the facility. As a result, the Company recorded $ 2.5 million of a loss on extinguishment of debt obligations on the accompanying condensed statements of operations for the three and six months ended June 30, 2023. 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 originally scheduled to mature on December 22, 2022 , bore an interest rate of 15.0% through the original maturity and 14.0% thereafter. Pursuant to the Subordinated Term Loan agreement, the Company entered into warrant agreements and issued common unit purchase warrants (the “Subordinated Term Loan Warrants”). On December 21, 2022, the Subordinated Term Loan Warrants were converted into Class A Common Stock. The maturity of the Subordinate Term Loan was subsequently extended to December 31, 2023 with the amendment entered into on November 18, 2022. On March 22, 2023, the Company entered into an amendment to the Subordinated Term Loan agreement, modifying its maturity date to March 29, 2024, which was subsequently amended to May 23, 2024 with an amendment entered into on May 19, 2023. Concurrently, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements (see Note 9 for further information regarding the Subordinated Term Loan Warrants). On June 7, 2023, the Company entered into an amendment to the Subordinated Term Loan agreement, which modified (a) its maturity to the earlier of (i) the scheduled maturity date (June 7, 2025, which the Company has an option to extend to June 7, 2026 upon achievement of certain conditions) and (ii) the maturity date of the June 2023 Revolving Credit Facility, unless the Springing Maturity applies, and (b) the interest rate the Subordinated Term Loan bears to 15%, of which 11% will be paid in cash and 4% will be paid in kind by capitalizing such interest accrued to the principal each month in arrears. Any accrued, capitalized and uncapitalized paid-in-kind interest charges will be due and payable in cash at maturity. Concurrently, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements (see Note 9 for further information regarding the Subordinated Term Loan Warrants). In accordance with ASC 470-50, Debt – Modifications and Extinguishments The Company capitalized $ 11.9 million in deferred debt charges related to the Subordinated Term Loan during the six months ended June 30, 2023. Amortization of deferred debt charges related to the Subordinated Term Loan agreement was $ 0.7 million and $ 0.4 million for the three months ended June 30, 2023 and 2022, respectively. Amortization of deferred debt charges related to the Subordinated Term Loan agreement was $ 0.9 million and $ 0.7 million for the six months ended June 30, 2023 and 2022, respectively. On February 2, 2023, the Company issued an unsecured promissory note with a certain entity affiliated with Andres Chico (the chairman of the Company’s board of directors) and Jose Miguel Enrich (a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock) for a principal and purchase price of $ 3.0 million (the “Rodina Note”). The Rodina Note’s maturity date was July 1, 2024 and bore interest at 16.0% per annum which is to be paid in kind by quarterly capitalizing the amount of the interest accrued to the principal at the end of each calendar quarter. On May 19, 2023, the Company entered into a loan conversion agreement to convert the principal and accrued interest of the Rodina Note to Class A Common Stock. Pursuant to the loan conversion agreement, on June 20, 2023, the Company issued 7,521,940 shares of Class A Common Stock to the holder of the Rodina Note for its full and final settlement. On June 7, 2023, the Company entered into a $ 75.0 million “June 2023 Term Loan” agreement secured by the Company’s intellectual property, with a maturity date of the earlier of (i) the scheduled maturity date (June 7, 2025, which the Company has an option to extend to June 7, 2026 upon achievement of certain conditions) and (ii) the maturity date of the June 2023 Revolving Credit Facility, unless the Springing Maturity applies. The June 2023 Term Loan bears an interest rate of the prime rate plus a margin of 8.75% (or 8.25% if the Company meets certain conditions defined in the agreement). The Company has the option to pay the interest in kind each month in arrears by capitalizing such interest which accrues through September 30, 2023 as additional principal, and in such instance, the margin applicable for the interest rate is 10.25% . The Company elected to pay the interest accrued through June 30, 2023 in kind, and thus, the applicable interest rate as of June 30, 2023 was 18.5% . The Company also has the option to pay in kind any excess interest over 13.25% after paying the first 13.25% in cash from October 1, 2023 through the maturity. At the time of any repayment of the June 2023 Term Loan, the Company is required to pay a fee in the amount of 12.0% of the principal repaid. Such repayment fee amount has been accrued as additional principal on the accompanying condensed consolidated balance sheet as of June 30, 2023. Beginning on October 7, 2023 until the June 2023 Term Loan is fully repaid, the lender has the option to elect to convert the outstanding principal into Class A Common Stock. The aggregate number of shares delivered to the lender cannot result in the lender’s ownership exceeding (i) 19.99% of the number shares of Class A Common Stock issued and outstanding or (ii) $10.0 million. Concurrently, the Company entered into warrant agreements and issued common stock purchase warrants (the “June 2023 Term Loan Warrants”) (see Note 9 for further information regarding the June 2023 Term Loan Warrants). The Company capitalized $ 24.0 million in deferred debt charges related to the June 2023 Term Loan during the six months ended June 30, 2023. Amortization of deferred debt charges related to the June 2023 Term Loan agreement was $ 0.4 million for the three and six months ended June 30, 2023. The June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan are subject to certain cross-default provisions under the intercreditor agreement. In addition, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements include the consistent minimum liquidity threshold, which reduces the availability under the June 2023 Revolving Credit Facility initially by $19.0 million (the “Minimum Liquidity Threshold”). During the terms of the agreements, the Minimum Liquidity Threshold could be decreased by up to $9.0 million, which will make the Minimum Liquidity Threshold to $10.0 million, upon the Company’s achievement of certain financial conditions defined in the agreements. As of June 30, 2023, the Minimum Liquidity Threshold was $19.0 million. Furthermore, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements require the Company to maintain a $2.0 million letter of credit, which was reserved under the June 2023 Revolving Credit Facility and reduced the availability as of June 30, 2023. Convertible Debentures 7.0 May 30, 2024 4.0% 1.7 2.5 0.5 1.0 3.3 0.2 9,766,358 5.5 0.3 12,616,320 3.0 On December 16, 2022, the Company issued convertible debentures to certain members of the Company’s management team and board of directors, and certain other existing investors of the Company for a total principal amount of $ 11.9 million and the total net proceeds of $ 10.5 million (the “Insider Convertible Debentures”). The Insider Convertible Debentures had a maturity date of June 16, 2024 and accrue interest at the rate of 6.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Insider Convertible Debentures are outstanding, each of the holders may convert all or part of the principal and accrued and unpaid interest of their Insider Convertible Debentures they hold into shares of Class A Common Stock at a conversion price equal to the lower of 110% of (i) the average closing price of Class A Common Stock for five trading days immediately preceding the date of the issuance of the Insider Convertible Debentures, and (ii) the closing price of Class A Common Stock immediately preceding the date of the issuance of the Insider Convertible Debentures. Concurrent with the issuance of the Insider Convertible Debentures, the Company entered into a lockup agreement with each of the holders of the Insider Convertible Debentures, pursuant to which the holders agreed to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, any shares of Class A Common Stock the holders may receive from their exercise option to convert the Insider Convertible Debentures until the earlier of (i) June 16, 2024, and (ii) when the Yorkville Investor sells all shares of Class A Common Stock issued under the YA Convertible Debentures (the “Insider Lock-Up Agreement”). On June 2, 2023, the Company entered into an amendment to the Insider Convertible Debentures, with the exception of the three debentures, for which the amendment was executed on July 11, 2023 (see Note 19). The amendment extended the maturity date to December 1, 2026. In accordance with ASC 470-50, Debt – Modifications and Extinguishments 0.2 million and $ 0.4 million of accrued interest to the principal of the Insider Convertible Debentures during the three and six months ended June 30, 2023, respectively. Amortization of deferred debt charges related to the Insider Convertible Debentures was $ 0.2 million and $ 0.4 for the three and six months ended June 30, 2023, respectively. As of December 31, 2022, the Company had received $3.5 million of the total $10.5 million net proceeds from the investors and the remaining $7.0 million was recorded in related-party notes receivable on the accompanying condensed consolidated balance sheet as of December 31, 2022. The Company received the remaining $7.0 million in January and February 2023. Neither principal nor accrued interest of the Insider Convertible Debentures was converted to Class A Common Stock from the origination through June 30, 2023. On February 1, 2023, the Company issued convertible debentures to certain third parties for a total principal amount of $ 1.4 million and a total net proceeds of $ 1.2 million (the “Third Party Convertible Debentures”). The Third Party Convertible Debentures have a maturity date of August 1, 2024 and accrue interest at the rate of 6.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Third Party Convertible Debentures are outstanding, each of the holders may convert all or part of the principal and accrued and unpaid interest of their Third Party Convertible Debentures they hold into shares of Class A Common Stock at a conversion price equal to the lower of 110% of (i) the average closing price of Class A Common Stock for five trading days immediately preceding the date of the issuance of the Third Party Convertible Debentures, and (ii) the closing price of Class A Common Stock immediately preceding the date of the issuance of the Third Party Convertible Debentures. Concurrent with the issuance of the Third Party Convertible Debentures, the Company entered into a lockup agreement with each of the holders of the Third Party Convertible Debentures, pursuant to which the holders agreed to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, any shares of Class A Common Stock the holders may receive from their exercise option to convert the Third Party Convertible Debentures until the earlier of (i) August 1, 2024, and (ii) when the Yorkville Investor sells all shares of Class A Common Stock issued under the YA Convertible Debentures (the “Third Party Lock-Up Agreement”). On June 2, 2023, the Company entered into an amendment to the Third Party Convertible Debentures, with the exception of the three debentures, for which the amendment was executed on July 31, 2023 (see Note 19). The amendment extended the maturity date to December 1, 2026. In accordance with ASC 470-50, Debt – Modifications and Extinguishments On February 1, 2023, the Company issued a convertible debenture to Guardians of New Zealand Superannuation (the “NZ Superfund”), a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock, for a total principal amount of $ 5.1 million and the total net proceeds of $ 4.5 million (the “NZ Superfund Convertible Debenture”). The NZ Superfund Convertible Debenture has a maturity date of August 1, 2024 and accrued interest at the rate of 8.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the NZ Superfund Convertible Debenture is outstanding, the NZ Superfund may convert all or part of the principal and accrued and unpaid interest of the NZ Superfund Convertible Debenture it holds into shares of Class A Common Stock at a conversion price equal to the lower of 110% of (i) the average closing price of Class A Common Stock for five trading days immediately preceding the date of the issuance of the NZ Superfund Convertible Debenture, and (ii) the closing price of Class A Common Stock immediately preceding the date of the issuance of the NZ Superfund Convertible Debenture. Concurrent with the issuance of the NZ Superfund Convertible Debenture, the Company entered into a lockup agreement with the NZ Superfund, pursuant to which it agreed to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, any shares of Class A Common Stock the holders may receive from its exercise option to convert the NZ Superfund Convertible Debenture until the earlier of (i) August 1, 2024, and (ii) when the Yorkville Investor sells all shares of Class A Common Stock issued under the YA Convertible Debentures (the NZ Superfund Lock-Up Agreement). On June 2, 2023, the Company entered into an amendment to the NZ Superfund Convertible Debenture, which extended the maturity date to December 1, 2026 and modified the interest rate it bears to 14.0%. In accordance with ASC 470-50, Debt – Modifications and Extinguishments 0.1 million and $ 0.2 million of accrued interest to the principal of the NZ Superfund Convertible Debenture during the three and six months ended June 30, 2023, respectively. Amortization of deferred debt charges related to the NZ Superfund Convertible Debenture was $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2023, respectively. Neither principal nor accrued interest of the NZ Superfund Convertible Debenture was converted from the origination through June 30, 2023. Components of the Company’s debt obligations were as follows (in thousands): Schedule of components of long-term debt June 30, 2023 December 31, Term loan balance $ 105,244 $ 71,000 Convertible debt balance 10,880 7,000 Related-party convertible debt balance 17,670 11,964 Less unamortized debt issuance costs (37,357 ) (6,138 ) Total borrowed 96,437 83,826 Less short-term debt obligation balance - (3,771 ) Long-term debt obligation balance $ 96,437 $ 80,055 At June 30, 2023, the future aggregate maturities of long-term debt for the remainder of 2023 and subsequent periods are as follows (in thousands): Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2023 $ - 2024 - 2025 108,543 2026 25,251 Total $ 133,794 The total interest expense related to the Revolving Credit Facilities, Term Loan Facilities, and Convertible Debentures was $ 8.8 3.9 16.5 7.7 | 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 loan’s original maturity was December 14, 2021 , which was subsequently extended to December 14, 2022 and bore an interest rate of LIBOR plus 4.50 % ( 6.00 % at December 31, 2021). On April 26, 2022, the Company amended the Revolving Credit Facility, replacing the benchmark interest of LIBOR with SOFR, which resulted in the amended interest rate of SOFR plus 4.6%. 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 % ( 9.7 % at December 31, 2022 ). With the amendment, the lender consented to an amendment to the Subordinated Term Loan agreement. The borrowing capacity is calculated based on qualified billed and unbilled receivables. The fee on the average daily balance of unused loan commitments is 0.7%. Interest and fees are payable monthly with principal due upon maturity. Additionally, the Company committed to raise $ 5.0 million from debt and/or equity securities by November 23, 2022, which was subsequently extended to November 30, 2022, and additional $ 25.0 million from the issuance of securities by the earlier of (i) 5 business days after the date the Company’s Form S-1 filed with the SEC on August 22, 2022 becomes effective, and (ii) January 31, 2023, which was subsequently extended to February 3, 2023 (see Note 23). The Company met this fund raise commitment. The maturity date of the Revolving Credit Facility was subsequently amended to the earlier of (a) December 14, 2025, (b) the maturity of the Term Loan and (c) the maturity of the Subordinated Term Loan(See Note 23). In accordance with ASC 470-50, Debt – Modifications and Extinguishments 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 outstanding borrowings 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 December 31, 2022, the Company’s total outstanding borrowings under the Line of Credit were $ 51.8 million and $ 5.6 million remained available to draw. As of December 31, 2021, the Company’s total outstanding borrowings under the Line of Credit were $ 29.9 million and $ 23.0 million remained available to draw. The Revolving Credit Facility is subject to certain financial covenants. As of December 31, 2022, the Company was in compliance with these financial covenants. The Company capitalized $ 0.9 million and $ 0.1 million in deferred debt charges related to the Revolving Credit Facility during the years ended December 31, 2022 and 2021, respectively, which have been recorded to prepaid expenses in the consolidated balance sheet and are expensed over the term of the Revolving Credit Facility. Amortization of deferred debt charges were $ 0.2 million and $ 0.5 million for the years ended December 31, 2022 and 2021, respectively. 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 bore an interest rate of LIBOR plus 9.0%, which was subsequently amended to LIBOR plus 9.5 % ( 13.6 % and 11.5 % as of December 31, 2022 and 2021, respectively), with the maturity date of the earlier of March 29, 2024 , and the maturity date of the Revolving Credit Facility. On March 24, 2021, the Company entered into an amendment to the Term Loan agreement, increasing the principal amount of the facility to $ 60.0 million and deferring principal payments to July 2021. On October 15, 2021, the Company entered into an amendment to the Term Loan agreement, adding terms permitting the Company to enter into additional subordinated loan agreements. 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 V Common Stock upon the consummation of the Mergers. 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 debt and/or equity securities by November 23, 2022, which was subsequently extended to November 30, 2022, and additional $25.0 million from the issuance securities by the earlier of (i) 5 business days after the date the Company’s Form S-1 filed with the SEC on August 22, 2022 becomes effective, and (ii) January 31, 2023, which was subsequently extended to February 3, 2023 (see Note 23). The Company met this fund raise commitment. The amended Term Loan agreement also requires the Company to cause the Yorkville Investor (See Note 13) to purchase the maximum amount of the Company’s equity interests available under the SEPA (See Note 13) 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. In accordance with ASC 470-50, Debt – Modifications and Extinguishments The Term Loan also includes a qualified equity contributions requirement, requiring the Company to raise $ 50.0 million in equity contribution on or prior to June 30, 2022. The Company did not meet this minimum equity raise requirement, allowing the lender to reduce the Term Loan collateral by $ 20.0 million and requiring the use of available funds under the Revolving Credit Facility as additional Term Loan collateral. As a result of the $20.0 million reduction in the Term Loan collateral, the availability under the Revolving Credit Facility was reduced by approximately $ 2.6 million as of December 31, 2022. The Company capitalized $ 2.8 million and $ 2.1 million in deferred debt charges related to the Term Loan during the years ended December 31, 2022 and 2021, respectively. Amortization of deferred debt charges related to the Term Loan agreement was $ 1.8 million and $ 1.0 million for the years ended December 31, 2022 and 2021, respectively. 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 originally scheduled to mature on December 22, 2022 , bore an interest rate of 15.0 % through the original maturity and bears an interest rate of 14% thereafter. 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 did not repay the Subordinated Term Loan on or before its original maturity, the Subordinated Term Loan Warrants would be exercisable for additional Class A Common Stock until the Company fully pays the principal and interest in cash. On November 18, 2022, the Company entered into an amendment to the Subordinated Term Loan agreement, modifying its maturity date to December 31, 2023, which was subsequently extended to March 29, 2024 (see Note 23). Concurrently, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements. In accordance with ASC 470-50, Debt – Modifications and Extinguishments On December 21, 2022, the Subordinated Term Loan Warrants were converted into Class A Common Stock. The Company capitalized $ 0.3 million and $ 1.5 in deferred debt charges related to the Subordinated Term Loan during the years ended December 31, 2022 and 2021, respectively. Amortization of deferred debt charges related to the Subordinated Term Loan agreement was $ 1.3 million for the year ended December 31, 2022 and insignificant for the year ended December 31, 2021. The Revolving Credit Facility, the Term Loan and the Subordinated Term Loan are subject to certain cross default provisions under the intercreditor agreements. See Note 10 for further information regarding the Term Loan Warrants and the Subordinated Term Loan Warrants. Convertible Debentures 7.0 million for a purchase price of $7.0 million (the “First YA Convertible Debenture”). The First YA Convertible Debenture has a maturity date of May 30, 2024 and bears interest at the rate of 4.0 % per annum. The interest is due and payable upon maturity. At any time, so long as the First YA Convertible Debenture is outstanding, the Yorkville Investor may covert all or part of the principal and accrued and unpaid interest of the First YA Convertible Debenture into shares of Class A Common Stock at 90% of the lowest daily VWAP of Class A Common Stock during the seven consecutive trading days immediately preceding each conversion date, but in no event lower than $0.25 per share. Outside of an event of default under the First YA Convertible Debenture, the Yorkville Investor may not convert in any calendar month more than the greater of (a) 25% of the dollar trading volume of the shares of Class A Common Stock during such calendar month, or (b) $3.0 million. The Company capitalized $1.7 million in deferred debt charges related to the First YA Convertible Debenture for its origination. Amortization of deferred debt charges related to the First YA Convertible Debenture was $0.1 million for the year ended December 31, 2022 and $-0- for the year ended December 31, 2021. An insignificant amount and $-0- of accrued and unpaid interest is included in other long-term liabilities on the accompanying consolidated balance sheets as of December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, the Yorkville Investor did not covert any amount of the principal or accrued interest of the First YA Convertible Debenture. On December 16, 2022, the Company issued convertible debentures to certain members of the Company’s management team and board of directors, and certain other existing investors of the Company for a total principal amount of $ 11.9 million and the total net proceeds of $ 10.5 million (the “Insider Convertible Debentures”). The Insider Convertible Debentures have a maturity date of June 16, 2024 and accrue interest at the rate of 6.0 % per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Insider Convertible Debentures are outstanding, each of the holders may covert all or part of the principal and accrued and unpaid interest of their Insider Convertible Debentures they hold into shares of Class A Common Stock at a conversion price equal to the lower of 110% of (i) the average closing price of Class A Common Stock for five trading days immediately preceding the date of the issuance of the Insider Convertible Debentures, and (ii) the closing price of Class A Common Stock immediately preceding the date of the issuance of the Insider Convertible Debentures. Concurrent with the issuance of the Insider Convertible Debentures, the Company entered into a lockup agreement with each of the holders of the Insider Convertible Debentures, pursuant to which the holders agreed to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, any shares of Class A Common Stock the holders may receive from their exercise of option to convert the Insider Convertible Debentures until the earlier of (i) June 16, 2024, and (ii) when the Yorkville Investor sells all shares of Class A Common Stock issued under the YA Convertible Debentures (as defined in Note 13). The Company recorded the Insider Convertible Debentures and interest incurred between December 16, 2022 and December 31, 2022 which the Company elected to capitalize to the principal in related-party debt obligations, net of debt issuance costs on the accompanying consolidated balance sheet as of December 31, 2022. As of December 31, 2022, the company had received $3.5 million of the total $10.5 million net proceeds from the investors. The remaining $7.0 million was subsequently received in 2023 (see Note 23) and is recorded in related-party notes receivable on the accompanying consolidated balance sheet as of December 31, 2022. Components of the Company’s debt obligations were as follows (in thousands): Schedule of components of long-term debt As of December 31, 2022 2021 Term loan balance $ 71,000 $ 77,000 Convertible debt balance 7,000 - Related-party convertible debt balance 11,964 - Less unamortized debt issuance costs and discounts (6,138 ) (3,334 ) Total borrowed 83,826 73,666 Less short-term debt obligation balance (3,771 ) (22,666 ) Long-term debt obligation balance $ 80,055 $ 51,000 At December 31, 2022, the future aggregate maturities of debt obligations are as follows (in thousands): Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2023 $ 6,000 2024 83,964 Total $ 89,964 PPP Loans The Company elected to repay $ 2.3 million of the PPP Loans during the year ended December 31, 2020. The SBA forgave the PPP loans in the full amount of $ 10.8 million along with associated accumulated interest during the year ended December 31, 2021, which resulted in a refund of $ 2.3 million the Company had repaid in 2020. The Company recognized $ 10.9 million to gain on forgiveness of debt on the consolidated statements of operations for the year ended December 31, 2021. The PPP Loan balances totaled $- 0 - as of December 31, 2022 and 2021. Presently, the SBA and other government communications have indicated that all loans in excess of $2.0 million will be subject to audit and that those audits could take up to seven years to complete. If the SBA determines that the PPP Loans were not properly obtained and/or expenditures supporting forgiveness were not appropriate, the Company would be required to repay some or all of the PPP Loans and record additional expense which could have a material adverse effect on the Company business, financial condition and results of operations in a future period. Interest expense related to the Revolving Credit Facility, Term Loan Facilities, PPP Loans, YA Convertible Debt and Insider Convertible Debt was $ 16.9 million and $ 11.5 million for the years ended December 31, 2022 and 2021, respectively. |
Accrued expenses
Accrued expenses | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | ||
Accrued expenses | Note 6— Accrued expenses Accrued expenses consist of the following as of June 30, 2023 and December 31, 2022 (in thousands): Schedule of accrued expenses June 30, 2023 December 31, Accrued hauler expenses $ 44,327 $ 44,773 Accrued compensation 16,001 43,054 Accrued income taxes - 9 Accrued Mergers transaction expenses - 13,433 Other accrued expenses 5,719 6,733 Total accrued expenses $ 66,047 $ 108,002 During the six months ended June 30, 2023, the Company granted certain RSU awards, valued at $ 8.2 million, as replacement awards for $ 26.8 million of the accrued management rollover consideration. The replacement awards resulted in a $ 18.6 million gain, which was included in gain on settlement of incentive compensation on the accompanying condensed consolidated statement of operations for the six months ended June 30, 2023. | Note 6— Accrued expenses Accrued expenses consist of the following as of December 31 (in thousands): Schedule of Accrued expenses 2022 2021 Accrued hauler expenses $ 44,773 $ 49,607 Accrued compensation 43,054 9,656 Accrued income taxes 9 3 Accrued Mergers transaction expenses 13,433 - Other accrued expenses 6,733 6,272 Total accrued expenses $ 108,002 $ 65,538 |
Goodwill and other intangibles
Goodwill and other intangibles | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill and other intangibles | Note 7— Goodwill and other intangibles There were no additions to goodwill during the six months ended June 30, 2023 or the year ended December 31, 2022. No impairment of goodwill was identified for the three or six months ended June 30, 2023 or the year ended December 31, 2022. Intangible assets consisted of the following (in thousands, except years): Schedule of intangible assets and goodwill June 30, 2023 Useful Life Gross Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (13,421 ) 7,555 Non-competition agreements 3 to 4 550 (550 ) - Technology 3 3,178 (2,298 ) 880 Total finite-lived intangible assets 25,432 (16,997 ) 8,435 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (16,997 ) $ 9,270 December 31, 2022 Useful Life Gross Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (12,141 ) 8,835 Non-competition agreements 3 to 4 550 (550 ) - Technology 3 3,178 (1,967 ) 1,211 Total finite-lived intangible assets 25,432 (15,386 ) 10,046 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (15,386 ) $ 10,881 Amortization expense for these intangible assets was $ 0.8 million and $ 0.8 million for the three months ended June 30, 2023 and 2022, respectively. Amortization expense for these intangible assets was $ 1.6 million and $ 1.7 million for the six months ended June 30, 2023 and 2022, respectively. Future amortization expense for the remainder of 2023 and subsequent years is as follows (in thousands): Schedule of finite- lived intangible assets, future amortization expense Fiscal Years Ending December 31, 2023 $ 1,609 2024 3,110 2025 2,559 2026 1,157 Total future amortization of intangible assets $ 8,435 | Note 7— Goodwill and other intangibles The Company holds certain intangible assets recorded in accordance with the accounting policies disclosed in Note 1. Intangible assets consisted of the following (in thousands): Schedule of Intangible Assets and Goodwill December 31, 2022 Useful Life Gross Accumulated Amortization Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (12,141 ) 8,835 Non-competition agreements 3 to 4 550 (550 ) - Technology 3 3,178 (1,967 ) 1,211 Total finite-lived intangible assets 25,432 (15,386 ) 10,046 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (15,386 ) $ 10,881 December 31, 2021 Useful Life Gross Accumulated Amortization Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (9,582 ) 11,394 Non-competition agreements 3 to 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 of these intangible assets for the years ended December 31, 2022 and 2021 was $ 3.3 million and $ 3.0 million, respectively, and future amortization expense is as follows (in thousands): Schedule of Finite- Lived Intangible Assets, Future Amortization Expense Fiscal Years Ending December 31, 2023 $ 3,220 2024 3,110 2025 2,559 2026 1,157 Future amortization of intangible assets $ 10,046 Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized but are tested for impairment at least annually. The carrying amounts of goodwill were as follows (in thousands): Schedule of goodwill Balance at January 1, 2021 $ 32,132 Balance at December 31, 2021 $ 32,132 Balance at December 31, 2022 $ 32,132 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 8— 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. Balance sheet information related to operating leases is as follows (in thousands): Schedule of right-of-use assets and operating lease liabilities Schedule of right-of-use assets and operating lease liabilities As of December 31, 2022 2021 Assets Right-of-use assets $ 2,827 $ 3,920 Liabilities Current lease liabilities 1,880 1,675 Non-current lease liabilities 1,826 3,770 Total liabilities $ 3,706 $ 5,445 Lease expense information related to operating leases is as follows (in thousands): Schedule of operating lease expense Schedule of operating lease expense 2022 2021 Lease expense Operating lease expense $ 1,631 $ 1,507 Short-term lease expense 419 601 Less: Sublease income (802 ) (802 ) Total lease expense $ 1,248 $ 1,306 Lease expenses are included in general and administrative expenses on the Company’s consolidated statements of operations. The impact of the Company’s leases on the consolidated statement of cash flows is presented in the operating activities section, which mainly consisted of cash paid for operating lease liabilities of approximately $ 2.2 million and $ 2.0 million during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, operating leases had weighted-average remaining lease terms of approximately 4.2 years and 4.6 years, respectively, and a weighted-average discount rate of 11.40 % and 11.43 %, respectively, to measure operating lease liabilities. 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 December 31, 2022 consolidated balance sheet (in thousands). Schedule of reconciliation to the amount of the liabilities Years Ending December 31, 2023 $ 2,276 2024 1,228 2025 151 2026 152 2027 154 Thereafter 578 Total minimum lease payments 4,539 Less: Imputed interest (833 ) Total operating lease liabilities $ 3,706 Operating lease amounts above do not include sublease income. The Company has entered into a sublease agreement with a third party. Under the agreement, the Company expects to receive sublease income of approximately $1.9 million over the next three years. |
Members_ equity (deficit) and S
Members’ equity (deficit) and Stockholders’ equity (deficit) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Members’ equity (deficit) and Stockholders’ equity (deficit) | Note 8— Stockholders’ (deficit) equity The table set forth below reflects information about the Company’s equity as of June 30, 2023. Schedule of stockholders equity Authorized Issued Outstanding Class A Common Stock 690,000,000 229,818,370 229,818,370 Class V Common Stock 275,000,000 35,402,821 35,402,821 Preferred Stock 10,000,000 - - Total shares as of June 30, 2023 975,000,000 265,221,191 265,221,191 The table set forth below reflects information about the Company’s equity as of December 31, 2022. Authorized Issued Outstanding Class A Common Stock 690,000,000 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 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. During the six months ended June 30, 2023, 80,060,825 shares of Class V Common Stock were exchanged to the equal number of shares of Class A Common Stock. | Note 9— Members’ equity (deficit) and Stockholders’ equity (deficit) Members’ equity (deficit) Schedule of immediately before the Closing Authorized as of Held by Members as of August 15, 2022 December 31, 2021 August 15, 2022 December 31, 2021 Common units 34,438,298 34,438,298 13,452,262 9,440,108 Series A Preferred 4,834,906 4,834,906 4,834,906 4,834,906 Series B Preferred 6,820,450 6,820,450 6,774,923 6,774,923 Series C Preferred 3,142,815 3,142,815 3,141,500 3,141,500 Series D Preferred 2,816,403 2,816,403 2,787,707 2,787,707 Series E Preferred 7,451,981 7,451,981 6,530,128 6,530,128 59,504,853 59,504,853 37,521,426 33,509,272 The founding member held 8,278,000 common units. During 2021, Holdings LLC received $ 32.5 million from warrant holders in exchange for 1,083,008 Series E preferred units. Under the terms of the LLC Operating Agreement, allocations of profits, losses, capital gains, and distributions were in the following priorities: Profits and Losses Distributions First, to members for tax distributions based on the highest applicable individual income tax rate applied to the allocation of net taxable income. Second, to preferred unit holders on a pro rata basis until each preferred unit holder has received aggregate distributions in full repayment of their capital contributions. Last, to preferred and common unit holders pro rata according to the number of units held by each member. The LLC Operating Agreement also contained provisions governing the sale of the founding member’s interest in certain circumstances. The LLC Operating Agreement also provided for certain limitations of liability of operating managers upon good faith distributions of funds in accordance with the LLC Operating Agreement and limited each member’s liability to their respective capital contribution. Stockholders’ equity (deficit) The table set forth below reflects information about the Company’s equity as of December 31, 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 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 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 | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Warrants | ||
Warrants | Note 9— Warrants Public Warrants and Private Warrants Company assumed a total of 30,016,851 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $11.50 per share. Of these warrants, the 15,812,476 Public Warrants were originally issued in Founder’s initial public offering (the “IPO”) and 14,204,375 Private Warrants were originally issued in a private placement in connection with the IPO. The Private Warrants are identical to the Public Warrants, except the Private Warrants are exercisable on a cashless basis, at the holder’s option, and are non-redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. In accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity The IPO Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the IPO Warrants. The IPO Warrants became exercisable on September 14, 2022, 30 days after the Closing and no IPO Warrants has been exercised through June 30, 2023. The IPO 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 per warrant; - upon not less than 30 days’ prior written notice to each IPO 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 IPO Warrant holders. Warrant Liabilities Company concurrently entered into warrant agreements and issued the Subordinated Term Loan Warrants under the condition that if the Company did not repay the Subordinated Term Loan on or prior to the original maturity date of December 22, 2022, the lender would receive the 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, and the tenth anniversary of the issuance date. Additionally, if the Company did not repay the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would 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 (the “Additional Subordinated Term Loan Warrants”). If the Company repaid the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would automatically terminate and be voided and no Subordinated Term Loan Warrant would be exercisable. On November 18, 2022, 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, (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 Additional Subordinated Term Loan Warrants would earn each additional full calendar month after March 22, 2023 to $ 0.25 million until the Company repays the Subordinated Term Loan in full. On March 22, 2023, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which increased the value of Class A Common Stock the Additional Subordinated Term Loan Warrants earn each additional full calendar month after March 22, 2023 to $ 0.35 million until the Company repays the Subordinated Term Loan in full. On June 7, 2023, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which amended the value of Class A Common Stock the Additional Subordinated Term Loan Warrants earn for the full calendar month starting June 23, 2023 to $ 0.38 million and such amount to increase by $25,000 each additional full calendar month thereafter until the Company repays the Subordinated Term Loan in full. The Company determined that the Subordinated Term Loan Warrants required liability classification pursuant to ASC 480. As such, the outstanding Subordinated Term Loan Warrants were recognized as warrant liabilities on the consolidated balance sheets, measured at their inception date fair value and subsequently remeasured at each reporting period with changes in fair value being recorded as a component of other income (expense) on the consolidated statements of operations. On December 21, 2022, the outstanding Subordinated Term Loan Warrants were converted to 1,092,417 shares of Class A Common Stock and reclassified from liability to the stockholders’ stockholders’ (deficit) equity. In June 2023, the outstanding Additional Subordinated Term Loan Warrants in amount of $ 1.1 million were exercised and converted to 2,559,375 shares of Class A Common Stock and reclassified from liability to stockholders’ (deficit) equity. As of June 30, 2023 and December 31, 2022, no Subordinated Term Loan Warrants were outstanding. The impact to the accompanying condensed consolidated statement of operations from the changes in the fair value of the Subordinated Term Loan Warrants was insignificant for the three and six months ended June 30, 2023 and 2022. Pursuant to ASC 815, the Company determined that the Additional Subordinated Term Loan Warrants are an embedded derivative. This derivative, referred to throughout as the “Additional Subordinated Term Loan Warrants Derivative,” is recorded in derivative liabilities on the accompanying condensed consolidated balance sheet as of June 30, 2023. The Company performed fair value measurements for the Additional Subordinated Term Loan Warrants Derivative, which are described in Note 14. The fair value of the Additional Subordinated Term Loan Warrants Derivative is remeasured at each reporting period. On November 30, 2022, the Company issued a pre-funded warrant for a purchase price of $ 6.0 million which was paid by the Yorkville Investor upon issuance (the “YA Warrant”). The YA Warrant is exercisable into $ 20.0 million of shares of Class A Common Stock at an exercise price of $ 0.0001 per share any time on or after the earlier of (i) August 30, 2023, and (ii) the date upon which all of the YA Convertible Debentures have been fully repaid by the Company or fully converted into shares of Class A Common Stock. The Company determined that the YA Warrant required liability classification pursuant to ASC 480. As such, the outstanding YA Warrant was recognized as warrant liability on the consolidated balance sheets, measured at its inception date fair value and subsequently remeasured at each reporting period with changes being recorded as a component of other income (expense) on the consolidated statements of operations. The Company measured the fair value of the YA Warrant as of June 30, 2023 and December 31, 2022, and recognized $ 20.0 million and $ 20.0 million of warrant liability on the accompanying condensed consolidated balance sheets, respectively. The fair value of the YA Warrant did not change during the three and six months ended June 30, 2023. Since its issuance through June 30, 2023, the YA Warrant was not exercisable. Pursuant to the YA SPA executed with the Yorkville Investor on November 30, 2022 (See Note 11), the Company committed to issue a warrant to an advisor for certain professional services provided in connection with the issuance of the facilities (the “Advisor Warrant”). The Advisor Warrant granted the right to purchase up to 500,000 shares of Class A Common Stock at the exercise price of $ 0.01 any time prior to November 30, 2025. The Advisor Warrant was issued on January 16, 2023. Prior to the issuance of the Advisor Warrant, pursuant to ASC 480 , 0.1 million of loss on change in fair value of the Advisor Warrant as a component of other income (expense) on the accompanying condensed consolidated statement of operations for the six months ended June 30, 2023, and the remeasured Advisory Warrant was reclassified to stockholders’ (deficit) equity on the issuance date. Since the issuance through June 30, 2023, the Advisor Warrant was not exercised. Pursuant to the June 2023 Term Loan agreement entered on June 7, 2023 (see Note 5), the Company concurrently entered into warrant agreements and issued the June 2023 Term Loan Warrants, which granted the lender the right to purchase up to 16,972,829 shares of Class A Common Stock (the June 2023 Term Loan Warrants Shares) at the exercise price of $ 0.01 any time before June 7, 2033. If at any time on or before December 7, 2024, the Company issues additional shares of common stock (excluding any shares of common stock or securities convertible into or exchangeable for shares of common stock under the Company’s equity incentive plans existing as of the issue date), the number of the June 2023 Term Loan Warrants Shares issuable upon exercise immediately prior to such common stock issuance will be proportionately increased such that the percentage represented by the June 2023 Term Loan Warrants Shares in the Company’s diluted common stock outstanding will remain the same. Additionally, the holders of the June 2023 Term Loan Warrants have the right to purchase up to the pro rata portion of any new common stock issuance by the Company up to $20.0 million in the aggregate, other than any issuance in connection with (i) any grant pursuant to any stock option agreement, employee stock purchase plan, or similar equity-based plan or compensation agreement, (ii) the conversion or exchange of any securities into shares of the Company’s common stock, or the exercise of any option, warrant, or other right to acquire such shares, (iii) any acquisition by the Company of the stock, assets, properties, or business, (iv) any merger, consolidation, or other business combination involving the Company, or any other transaction or series of transactions resulting in a change of control of the Company and (v) any stock split, stock dividend, or similar recapitalization transaction. The Company determined that the June 2023 Term Loan Warrants did not qualify for equity classification in accordance with ASC 815. As such, the June 2023 Term Loan Warrants were recognized as warrant liability on the consolidated balance sheets, measured at its inception date fair value and subsequently remeasured at each reporting period with changes in fair value being recorded as a component of other income (expense) on the consolidated statements of operations. The Company measured the fair value of the June 2023 Term Loan Warrants as of the issuance date of June 7, 2023 and June 30, 2023, and recognized $ 9.4 million and $ 9.8 million of warrant liability on the consolidated balance sheets, respectively, with the change in fair value of $ 0.4 million recognized as a component of other income (expense) on the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2023. Since the issuance through June 30, 2023, none of the June 2023 Term Loan Warrants were exercised. | Note 10— Warrants Series E Warrants 844,000 Series E warrants, providing a right to purchase one unit each of Series E units at a price of $ 30.00 per unit any time prior to the third anniversary of the grant date. Grant dates ranged from April 30, 2018 to October 29, 2018. The Series E warrants were evaluated at issuance and were determined to be equity classified. During 2019, the Company issued to the Series E unit holders a total of 240,725 Series E warrants, providing a right to purchase one unit each of Series E units at a price of $30.00 per unit any time prior to the second anniversary of the grant date. Grant dates ranged from July 9, 2019 to August 30, 2019. The Series E warrants were evaluated at issuance and were determined to be equity classified. During 2021, the Company received $ 32.5 million from warrant holders in exchange for 1,083,008 Series E preferred units. The following table summarizes Series E warrant activity as of and for the years ended December 31, 2022 and 2021: Schedule of Series E warrant activity Number Weighted Average Exercise Price Per Warrant Outstanding – January 1, 2021 1,084,725 30.00 Granted - - Exercised (1,083,008 ) 30.00 Expired (1,717 ) 30.00 Outstanding - December 31, 2021 - - Granted - - Exercised - - Expired - - Outstanding - December 31, 2022 - $ - Public Warrants and Private Warrants Company assumed a total of 30,016,851 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $11.50 per share. Of these warrants, the 15,812,476 Public Warrants were originally issued in Founder’s initial public offering (the “IPO”) and 14,204,375 Private Warrants were originally issued in a private placement in connection with the IPO (Public Warrants and Private Warrants collectively, the “IPO Warrants”). The Private Warrants are identical to the Public Warrants, except the Private Warrants are exercisable on a cashless basis, at the holder’s option, and are non-redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. In accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity The IPO Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the IPO Warrants. The IPO Warrants became exercisable on September 14, 2022, 30 days after the Closing and no IPO Warrants has been exercised through December 31, 2022. The IPO 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 per Warrant; - upon not less than 30 days’ prior written notice to each IPO 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 IPO Warrant holders. Warrant Liabilities 62,003 of Holdings LLC’s common units at the exercise price of $ 0.01 any time prior to the earlier of the tenth anniversary of the issuance date of October 15, 2021, and certain triggering events, including a sale of Holdings LLC, Holding LLC’s initial public offering and a merger between Holdings LLC and a special purpose acquisition company (“SPAC”), where the warrants are fully redeemed or exchanged. The Company determined that the Term Loan Warrants required liability classification pursuant to ASC 480 Distinguishing Liabilities from Equity 0.7 million, $ 1.3 million and $1.8 million of warrant liabilities on the consolidated balance sheets, respectively. As of December 31, 2022, there were no outstanding Term Loan Warrants. The Company recorded the $ 0.5 million change in the fair value of the Term Loan Warrants between January 1, 2022 and the Closing Date and the $ 0.6 million change in the fair value between the issuance date and December 31, 2021 as a component of other expense on the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. 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 did not repay the Subordinated Term Loan on or prior to the original maturity date of December 22, 2022, the lender would receive 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, and the tenth anniversary of the issuance date. Additionally, if the Company did not repay the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would 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 repaid the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would automatically terminate and be voided and no Subordinated Term Loan Warrant would be exercisable. On November 18, 2022, 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, (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 until the Company repays the Subordinated Term Loan in full. The Company determined that the Subordinated Term Loan Warrants required liability classification pursuant to ASC 480 Distinguishing Liabilities from Equity 0.1 million, $ 0.1 million and $1.6 million of warrant liabilities on the consolidated balance sheets, respectively. As of December 31, 2022, there was no outstanding Subordinated Term Loan Warrants. The Company recorded the $1.5 million change in the fair value of the Subordinated Term Loan Warrants during the year ended December 31, 2022 as a component of other expense on the consolidated statement of operations for the year ended December 31, 2022. The impact to the consolidated statement of operations from the changes in the fair value of the Subordinated Term Loan Warrants was insignificant for the year ended December 31, 2021. On November 30, 2022, the Company issued a pre-funded warrant for a purchase price of $6.0 million which was paid by the Yorkville Investor upon issuance (the “YA Warrant”). The YA Warrant is exercisable into $20.0 million of shares of Class A Common Stock at exercise price of $0.0001 per share any time on or after the earlier of (i) August 30, 2023, and (ii) the date upon which all of the YA Convertible Debentures (as defined in Note 13) to be issued have been fully repaid by the Company or fully converted into shares of Class A Common Stock. The Company determined that the YA Warrant required liability classification pursuant to ASC 480 Distinguishing Liabilities from Equity 20.0 million and $ 20.0 million of warrant liability on the consolidated balance sheets, respectively. As of the YA Warrant issuance date, the Company recorded $14.0 million, the difference between the purchase price and fair value of the YA Warrant, as a component of other expense on the consolidated statement of operations. The fair value of the YA Warrant did not change during the year ended December 31, 2022. During the year ended December 31, 2022, the outstanding YA Warrant was not exercisable. Pursuant to the YA SPA executed with the Yorkville Investor on November 30, 2022 (See Note 13), the Company committed to issue a warrant to an advisor for certain professional services provided in connection with the issuance of the facilities (the “Advisor Warrant”). The Advisor Warrant would grant the right to purchase up to 500,000 shares of Class A Common Stock at the exercise price of $0.01 any time prior to November 30, 2025. The Advisor Warrant was issued on January 16, 2023 (See Note 23). Prior to the issuance of the Advisor Warrant, pursuant to ASC 480 Distinguishing Liabilities from Equity, 1.0 million and $ 0.9 million of warrant liability on the consolidated balance sheets, respectively, with the difference of $0.1 million recorded as a component of other income on the consolidated statement of operations for the year ended December 31, 2022. |
Equity Investment Agreement
Equity Investment Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Equity Investment Agreement | |
Equity Investment Agreement | Note 11— Equity Investment Agreement On May 25, 2022, the Company entered into the Rubicon Equity Investment Agreement with certain investors who are affiliated with Andres Chico (a member of the Company’s board of directors) and Jose Miguel Enrich (a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock), 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. The Company determined that the Rubicon Equity Investment Agreement required liability classification pursuant to ASC 480 Distinguishing Liabilities from Equity 0.8 million difference between the fair value and the amount of cash received recorded as other expense on the consolidated statements of operations. Between the agreement execution date and the Closing Date, there was no change in the fair value of the Rubicon Equity Investment Agreement. On August 15, 2022, the Mergers closed, and the Company issued 880,000 Class B Units and 160,000 shares of Class A Common Stock to the investors and Sponsor forfeited 160,000 shares of Class A Common Stock. |
Forward Purchase Agreement
Forward Purchase Agreement | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Forward Purchase Agreement | ||
Forward Purchase Agreement | Note 10— Forward Purchase Agreement On August 4, 2022, the Company and the FPA Sellers entered into the Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). On November 30, 2022, the Company and the FPA Sellers entered into the FPA Termination Agreement and terminated the Forward Purchase Agreement. Pursuant to the FPA Termination Agreement, (i) the Company made a one-time $6.0 million cash payment to the FPA Sellers upon execution of the FPA Termination Agreement and agreed to make a $2.0 million payment to the FPA Sellers, which can be settled in cash or shares of Class A Common Stock at the Company’s sole option, on or around the earlier of (a) May 30, 2024 (the “FPA Lock-Up Date”), and (b) six months following 90% or more of the YA Convertible Debentures is repaid or converted into shares of Class A Common Stock (the “FPA Earlier Lock-Up Date”), (ii) the FPA Sellers forfeited and returned to the Company 2,222,119 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 2,140,848 shares of Class A Common Stock the FPA Sellers retained until the earlier of (a) the FPA Lock-Up Date, and (b) the FPA Earlier Lock-Up Date. The value of 2,222,119 shares of Class A Common Stock returned by the FPA Seller and subsequently canceled by the Company was $4.6 million as of the FPA Termination Agreement execution date, which was recognized in common stock – Class A and accumulated deficit on the consolidated balance sheet. The $2.0 million obligation (the “FPA Settlement Liability”) has been included in accrued expenses on the accompanying condensed consolidated balance sheets as of June 30, 2023 and other long-term liabilities as of December 31, 2022 | Note 12— Forward Purchase Agreement On August 4, 2022, the Company and the FPA Sellers 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 On November 30, 2022, the Company and the FPA Sellers entered into the FPA Termination Agreement and terminated the Forward Purchase Agreement. Pursuant to the FPA Termination Agreement, (i) the Company made a one-time $6.0 million cash payment to the FPA Sellers upon execution of the FPA Termination Agreement and agreed to make a $2.0 million payment to the FPA Sellers, which can be settled in cash or shares of Class A Common Stock at the Company’s sole option, on or around the earlier of (a) May 30, 2024 (the “FPA Lock-Up Date”), and (b) six months following 90% or more of the YA Convertible Debentures is repaid or converted into shares of Class A Common Stock (the “FPA Earlier Lock-Up Date”), (ii) the FPA Sellers forfeited and returned to the Company 2,222,119 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 2,140,848 shares of Class A Common Stock the FPA Sellers retained until the earlier of (a) the FPA Lock-Up Date, and (b) the FPA Earlier Lock-Up Date. The value of 2,222,119 shares of Class A Common Stock returned by the FPA Seller and subsequently canceled by the Company was $4.6 million as of the FPA Termination Agreement execution date, which was recognized in common stock – Class A and accumulated deficit on the consolidated balance sheet. The $2.0 million obligation has been included in other long-term liabilities on the accompanying consolidated balance sheet as of December 31, 2022. In accordance with ASC 815, Derivatives and Hedging Termination Agreement execution date, and recognized $16.6 million of derivative asset and $3.4 million of derivative liability on the consolidated balance sheets, respectively. The Company recorded a total of $72.1 million in losses on its consolidated statement of operations for the year ended December 31, 2022. This total loss is made up of two parts: (i) a $52.1 million loss at issuance, calculated as the difference between the amount paid to purchase the forward purchase option derivative and the fair value of this derivative on the Closing Date, and (ii) a $20.0 million loss, calculated as the difference in fair value of the forward purchase option derivative as of the Closing Date and as of the FPA Termination Agreement execution date. Upon execution of the FPA Termination Agreement, the Company also derecognized $3.4 million of the forward purchase option derivative from derivative liabilities on the consolidated balance sheet. There were no derivative assets or liabilities related to the forward purchase option derivative outstanding as of December 31, 2022 and 2021. |
Yorkville Facilities
Yorkville Facilities | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Yorkville Facilities | ||
Yorkville Facilities | Note 11— Yorkville Facilities Standby Equity Purchase Agreement Company entered into a Standby Equity Purchase Agreement (“SEPA”) with the Yorkville Investor, which was subsequently amended on November 30, 2022. 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, and 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 . Sales of Class A Common Stock to the Yorkville Investor under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any securities to the Yorkville Investor under the SEPA. Pursuant to the SEPA, on August 31, 2022, the Company issued the Yorkville Investor 200,000 shares of Class A Common Stock, which represented an initial up-front commitment fee and was recognized in other income (expense) within the accompanying consolidated statements of operations. The Company did not sell any shares of Class A Common Stock under the SEPA during the period between August 31, 2022 and June 30, 2023. Securities Purchase Agreement 7.0 million for a purchase price of $ 7.0 million, and (b) the YA Warrant for a pre-funded purchase price of $6.0 million, and (ii) paid the Yorkville Investor a cash commitment fee in the amount of $ 2.0 million, with such amount being deducted from the proceed of the First YA Convertible Debenture, netting to $11.0 million in total proceeds. The Company issued the YA Warrant to utilize the proceed to fund the cost of the FPA Termination Agreement. See Note 5 for additional information regarding the First YA Convertible Debenture and Note 9 regarding the YA Warrant. Pursuant to execution of the YA SPA, the Company made a $0.4 million payment in cash and committed to issue the Advisor Warrant for certain professional services provided by a third party professional service firm in connection with the issuance of the facilities. The Advisor Warrant was issued on January 16, 2023. See Note 9 for additional information regarding the Advisor Warrant. The cash payment and the Advisor Warrant were recognized as debt issuance cost upon execution of the YA SPA, YA Convertible Debentures and YA Warrant. Pursuant to the YA SPA, the Yorkville Investor committed to purchasing a YA Convertible Debenture in the principal amount of $ 10.0 million for a purchase price of $ 10.0 million upon the Company satisfying certain conditions, including, among others, the Company’s registration statement is declared effective by the SEC for the underlying securities of the First YA Convertible Debenture and YA Warrant. Accordingly, as of the YA SPA execution date, the Company recognized a commitment asset in the amount of $ 2.1 million, which was included in other noncurrent assets on the accompanying condensed consolidated balance sheet as of December 31, 2022. The Second YA Convertible Debenture was issued and sold to the Yorkville Investor on February 3, 2023 and the commitment asset was reclassified to debt discount upon issuance of the Second YA Convertible Debenture. See Note 5 for additional information regarding the Second YA Convertible Debenture. In accordance with ASC 815, the Company has determined that certain redemption feature within the YA Convertible Debentures is an embedded derivative. This derivative, referred to throughout as the “Redemption Feature Derivative” is recorded in derivative liabilities on the accompanying condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022. The Company performed fair value measurements for this derivative as of the YA Convertible Debentures issuance dates, December 31, 2022 and June 30, 2023 which is described further in Note 14. The fair value of the Redemption Feature Derivative is remeasured each reporting period. | Note 13— Yorkville Facilities Standby Equity Purchase Agreement Company entered into a Standby Equity Purchase Agreement (“SEPA”) with the Yorkville Investor, which was subsequently amended on November 30, 2022. 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, and 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. Sales of Class A Common Stock to the Yorkville Investor under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any securities to the Yorkville Investor under the SEPA. Pursuant to the SEPA, on August 31, 2022, the Company issued the Yorkville Investor 200,000 shares of Class A Common Stock, which represented an initial up-front commitment fee and was recognized in other income (expense) within the accompanying consolidated statements of operations. The Company did not sell any shares of Class A Common Stock under the SEPA during the period between August 31, 2022 and December 31, 2022. Securities Purchase Agreement Pursuant to execution of the YA SPA, the Company made a $0.4 million payment in cash and committed to issue the Advisor Warrant for certain professional services provided by a third party professional service firm in connection with the issuance of the facilities. The Advisor Warrant was issued on January 16, 2023. See Note 10 for additional information regarding the Advisor Warrant. The cash payment and the Advisor Warrant were recognized as debt issuance cost upon execution of the YA SPA, YA Convertible Debentures and YA Warrant. Pursuant to the YA SPA, the Yorkville Investor committed to purchase a YA Convertible Debenture in the principal amount of $ 10.0 million for a purchase price of $ 10.0 million (the “Second YA Convertible Debenture”) upon the Company satisfying certain conditions, including, among others, the Company’s registration statement is declared effective by the SEC for the underlying securities of the First YA Convertible Debenture and YA Warrant. Accordingly, as of the YA SPA execution date, the Company recognized a commitment asset in the amount of $ 2.1 million, which was included in other noncurrent assets on the accompanying consolidated balance sheet as of December 31, 2022. The Second YA Convertible Debenture was issued and sold to the Yorkville Investor on February 3, 2023 (See Note 23). In accordance with ASC 815, Derivatives and Hedging |
Equity-based compensation
Equity-based compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Equity-based compensation | Note 14— Equity-based compensation During the year ended December 31, 2022, the Company recorded stock-based compensation related to our 2014 and 2022 Plans (as defined below). As more fully described in Note 1, the Company completed the Mergers with Founder SPAC on August 15, 2022, and all Incentive Units and Phantom Units fully vested as of the Closing Date, and the original operating agreement was terminated and replaced by a new operating agreement consistent with the Company’s Up-C structure. Included within cost of revenue, sales and marketing, product development, and general and administrative expenses are equity-based compensation expenses as follows (in thousands): Schedule Of cost of revenue, sales and marketing, product development, and general and administrative expenses Years Ended December 31, 2022 2021 Cost of revenue $ 72 $ - Sales and marketing 23 - Product development 37 - General and administrative 100,855 7,785 Total equity-based compensation $ 100,987 $ 7,785 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. The unrecognized compensation cost related to the 2014 Plan that was remaining at the Closing was recognized as expense upon consummation of the Mergers. Incentive Units Management utilized the Black-Scholes-Merton option pricing model to determine the fair value of units issued. No incentive units were granted during the year ended December 31, 2022. Incentive units granted in 2021 had a weighted average value of $13.40 per unit, resulting in an aggregate fair value of $2.9 million. Compensation expense for all incentive units awarded was recognized over the vesting term of the underlying options. The assumptions used to calculate fair value of incentive units granted for the year ended December 31, 2021 are as follows. The information for the year ended December 31, 2022 is excluded below as no incentive units were granted during 2022. Schedule of no incentive units As of December 31, 2021 Expected dividend yield 0.00 % Risk-free interest rate 1.40 % Expected life in years 3.00 Expected volatility 48.20 % The following represents a summary of the Company’s incentive unit activity and related information during 2021 and 2022 immediately prior to the consummation of the Mergers: Schedule Of Non vested Incentive Units Units Outstanding - January 1, 2021 3,017,191 Granted 214,642 Forfeited/redeemed (147,183 ) Outstanding - December 31, 2021 3,084,650 Granted - Forfeited/redeemed (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 2021 and 2022 immediately prior to the consummation of the Mergers is as follows: Units Weighted Average Grant Date Fair Value Nonvested - January 1, 2021 275,446 3.91 Granted 214,642 13.40 Vested (144,695 ) 3.75 Forfeited/redeemed (147,183 ) 9.36 Nonvested - December 31, 2021 198,210 10.25 Granted - - Vested (183,711 ) 10.25 Forfeited/redeemed (14,499 ) 10.25 Nonvested – August 15, 2022 - $ - Phantom Units 6.8 million and $ 7.2 million, respectively. At the Closing of the Mergers, all vested and unvested phantom units were exchanged for 970,389 vested RSUs and 540,032 vested DSUs. 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 shares of Class A Common Stock are authorized to be issued. Upon approval by the Company’s board of directors, additional 2,859,270 shares of Class A Common Stock became available for issuance on January 1, 2023 under the 2022 Plan as a result of the plan’s evergreen provision. The following represents a summary of the Company’s RSU activity and related information from immediately after the consummation of the Mergers through December 31, 2022: Schedule of RSUs RSUs Outstanding – August 15, 2022 (prior to the Mergers consummation) - Granted – Phantom Unit exchanges 970,389 Granted – Morris Employment Agreement 8,378,986 Granted – Partial settlement of Management Rollover Consideration 1,828,669 Granted – Non-executive employees 1,665,935 Forfeited (205,041 ) Outstanding – December 31, 2022 (subsequent to the Mergers consummation) 12,638,938 Vested – December 31, 2022 (subsequent to the Mergers consummation) 11,182,243 A summary of nonvested RSUs from immediately after the consummation of the Mergers through December 31, 2022 is as follows: Units Weighted Average Grant Date Fair Value Nonvested - August 15, 2022 (subsequent to the Mergers consummation) - - Granted 12,843,979 2.29 Vested (11,182,243 ) 2.33 Forfeited/redeemed (205,041 ) 1.98 Nonvested – December 31, 2022 1,456,695 $ 1.98 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 $ 94.2 million and $ 0.5 million in total equity compensation costs for the years ended December 31, 2022 and 2021, respectively. | |
Equity-based compensation | Note 12— Equity-based compensation During the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation related to the 2014 and 2022 Plans (as defined below). As more fully described in Notes 1 and 3, the Company completed the Mergers with Founder on August 15, 2022, and all incentive units and phantom units under the 2014 Plan fully vested as of the Closing Date, and the original operating agreement was terminated and replaced by a new operating agreement consistent with the Company’s Up-C structure. 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 vested at 25.0% 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. The unrecognized compensation cost related to the 2014 Plan that was remaining at the Closing was recognized as expense upon consummation of the Mergers. 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 shares of Class A Common Stock are authorized to be issued. Upon approval by the Company’s board of directors, additional 2,859,270 shares of Class A Common Stock became available for issuance on January 1, 2023 under the 2022 Plan as a result of the plan’s evergreen provision. The following represents a summary of the Company’s RSU activity and related information during the six months ended June 30, 2023: Schedule of RSUs activity Units Weighted Average Grant Date Fair Value Nonvested – December 31, 2022 1,456,695 $ 1.98 Granted 15,138,947 1.05 Vested (7,626,353 ) 1.14 Forfeited/redeemed (322,010 ) 1.87 Nonvested – June 30, 2023 8,647,279 $ 1.09 The RSUs exchanged for phantom units vested upon the Closing of the Mergers. The remaining RSUs will vest over the requisite service periods ranging from six to thirty-six months from the grant date. The Company recognized $ 1.8 million and $ 2.1 million in total equity compensation costs, including phantom unit expense, for the three months ended June 30, 2023 and 2022, respectively. The Company recognized $ 11.1 million and $ 4.8 million in total equity compensation costs, including phantom unit expense, for the six months ended June 30, 2023 and 2022, respectively. The majority of RSUs settled during the six months ended June 30, 2023 were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately $1.1 million and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payments to the taxing authorities for employees’ tax obligations pertaining to the withheld shares were $1.0 million. As of June 30, 2023, there were 13,987,442 vested RSUs and 306,802 vested DSUs remaining which are expected to be settled in shares of Class A Common Stock prior to December 31, 2023. As of June 30, 2023, the total unrecognized compensation cost related to outstanding RSUs was $ 9.4 million, which the Company expects to recognize over a weighted-average period of 0.9 years. |
Employee benefits plan
Employee benefits plan | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
Employee benefits plan | Note 15— Employee benefits plan Employees are offered the opportunity to participate in the Company’s 401(k) Plan, which is intended to be a tax-qualified defined contribution plan under Section 401(k) of the Internal Revenue Code. Eligible employees may contribute up to $ 20,500 of their salary to the 401(k) Plan annually during the year ended December 31, 2022 and up to $ 19,500 during the year ended December 31, 2021. The Company’s contributions to the 401(k) Plan were $ 0.3 million and $ 0.5 million for the years ended December 31, 2022 and 2021, respectively. |
Loss per share
Loss per share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Loss per share | Note 13— 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 three and six months ended June 30, 2023. Diluted net loss per share of Class A Common Stock is computed by 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 is not presented for periods prior to August 15, 2022. 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 is not 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 the three and six months ended June 30, 2023 are as follows (amounts in thousands, except for share and per share amounts): Schedule of net loss per share Three Months Ended June 30, Six Months Ended June 30, Numerator: Net loss $ (22,817 ) $ (32,268 ) Less: Net loss attributable to non-controlling interests (9,615 ) (15,937 ) Net loss attributable to Rubicon Technologies, Inc $ (13,202 ) $ (16,331 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 106,211,259 82,943,357 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.12 ) $ (0.20 ) The Company’s potentially dilutive securities below were excluded from the computation of diluted loss per share as their effect would be anti-dilutive: - IPO Warrants, Additional Subordinated Term Loan Warrants, Advisor Warrant, June 2023 Term Loan Warrants and YA Warrant. - Earn-Out Interests. - RSUs and DSUs. Exchangeable Class V Common Stock - Potential settlements in Class A Common Stock of the YA Convertible Debentures, the Insider Convertible Debentures, the Third Party Convertible Debentures, the NZ Superfund Convertible Debentures, the June 2023 Term Loan, the FPA Settlement Liability and portion of fees for the PIPE Software Services Subscription (as defined in Note 15). | Note 16— 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 December 31, 2022. Diluted net loss per share of Class A Common Stock is computed by 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 consolidated financial statements. Therefore, net loss per share information is not presented for periods prior to August 15, 2022. The basic and diluted loss per share for the year ended December 31, 2022 represent only the period from August 15, 2022 to December 31, 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 is not 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 December 31, 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 December 31, 2022 $ (52,774 ) Less: Net loss attributable to non-controlling interests for the period from August 15, 2022 through December 31, 2022 (22,621 ) Net loss for the period from August 15, 2022 through December 31, 2022 attributable to Rubicon Technologies, Inc. – Basic and diluted $ (30,153 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 49,885,394 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.60 ) 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 Public Warrants and 14,204,375 Private Warrants. - 1,488,519 Earn-Out Class A Shares. - 11,182,243 vested RSUs and 540,032 vested DSUs. - 500,000 shares of Class A Common Stock for which the Advisor Warrant is exercisable |
Fair value measurements
Fair value measurements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Fair value measurements | Note 14— 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 As of June 30, 2023 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (29,795 ) $ - Redemption Feature Derivative - - (2,231 ) Additional Subordinated Term Loan Warrants Derivative - - (12,816 ) Earn-out liabilities - - (310 ) Total $ - $ (29,795 ) $ (7,165 ) As of December 31, 2022 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (20,890 ) $ - Redemption Feature Derivative - - (826 ) Earn-out liabilities - - (5,600 ) Total $ - $ (20,890 ) $ (6,426 ) Level 3 Rollfoward Redemption Additional Earn-out December 31, 2022 balances $ (826 ) $ - $ (5,600 ) Additions (474 ) (2,887 ) - Changes in fair value (2,198 ) - 4,820 March 31, 2023 balances (3,498 ) (2,887 ) (780 ) Additions - (9,377 ) - Changes in fair value 1,267 (1,602 ) 470 Reclassified to level 2 - 1,050 - June 30, 2023 balances $ (2,231 ) $ (12,816 ) $ (310 ) 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. Warrant liabilities 0.01 per Class A Common Stock share for the Advisor Warrants and the June 2023 Term Loan Warrants and $ 0.0001 per Class A Common Stock share for the YA Warrant) and did not have significant impact to the fair value measurements of these warrants. See Note 9 for further information regarding the warrant liabilities. Redemption Feature Derivative The Lattice Model the Company utilized is a single-factor model, which means it only considers uncertainty related to the Company’s stock price. It calculates the value of the option to convert the YA Convertible Debentures into Class A Common Stock using a binomial tree structure and backward induction. The payoffs of the YA Convertible Debentures were computed via backward induction and discounted at a blended rate. The key inputs to the Lattice Model are the yield of a hypothetical identical note without the conversion features, and the volatility of common stock. The following table provides quantitative information of the key assumptions utilized in the Redemption Feature Derivative fair value measurements as of measurement dates: Schedule of derivative fair value measurements As of June 30, 2023 As of February 3, As of December 31, Price of Class A Common Stock $ 0.37 $ 1.56 $ 1.78 Risk-free interest rate 5.41 % 4.63 % 4.60 % Yield 13.4 % 13.6 % 15.6 % Expected volatility 50.0 % 50.0 % 50.0 % As of December 31, 2022, the Redemption Feature Derivative outstanding was a derivative embedded in the First YA Convertible Debenture. On February 3, 2023, the Second YA Convertible Debenture was issued with identical terms to the First YA Convertible Debenture, except for the principal amount, purchase price and the fixed conversion price. The Company measured and recognized the fair value of the Redemption Feature Derivative as of December 31, 2022, February 3, 2023 which is the Second YA Convertible Debenture issuance date, March 31, 2023 and June 30, 2023 in derivative liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in loss on change in fair value of derivatives as a component of other income (expense) on the consolidated statements of operations. Additional Subordinated Term Loan Warrants Derivative 0.35 million for each additional full calendar month after March 22, 2023 through June 22, 2023, and starting June 23, 2023, the value the Additional Subordinated Term Loan Warrants earn increases by $25,000 for each additional full calendar month thereafter until the Company repays the Subordinated Term Loan in full. The key assumption utilized was the probability of the Subordinated Term Loan remaining unpaid through its maturity, which the Company determined to be approximately 75% as of March 22, 2023, which was the execution date of the second amendment to the Subordinated Term Loan, and approximately 100% as of June 30, 2023. As of June 30, 2023, the Company applied a discount rate of 15.0% to calculate the present value of the Additional Subordinated Term Loan Warrants Derivative. The Company measured and recognized fair value for the Additional Subordinated Term Loan Warrants Derivative as of the execution dates of the first (November 18, 2022), second (March 22, 2023) and third amendments (June 7, 2023) to the Subordinated Term Loan Warrants agreements, December 31, 2022, March 31, 2023 and June 30, 2023 in derivative liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in loss on change in fair value of derivatives as a component of other income (expense) on the consolidated statements of operations. Earn-out liabilities The following table provides quantitative information of the key assumptions utilized in the earn-out liabilities fair value measurements as of measurement dates: Schedule of derivative fair value measurements As of June 30, As of December 31, Price of Class A Common Stock $ 0.37 $ 1.78 Risk-free interest rate 4.30 % 4.00 % Expected volatility 75.0 % 65.0 % Expected remaining term 4.1 years 4.6 years The Company measured and recognized the fair value of the Earn-Out Interests as of December 31, 2022, March 31, 2023 and June 30, 2023 in earn-out liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in gain on change in fair value of earn-out liabilities as a component of other income (expense) on the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2023. | Note 17— 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 As of December 31, 2022 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (20,890 ) $ - Redemption feature derivative - - (826 ) Earn-out liabilities - - (5,600 ) Total $ - $ (20,890 ) $ (6,426 ) As of 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 Redemption feature derivative Earn-out liabilities Warrant liabilities Deferred December 31, 2021 balances $ - $ - $ (1,380 ) $ (8,321 ) Additions (256 ) (74,100 ) - - Changes in fair value (570 ) 68,500 (1,931 ) (6,783 ) Reclassified to equity - - 3,311 15,104 December 31, 2022 balances $ (826 ) $ (5,600 ) $ - $ - 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. Warrant liabilities Redemption feature derivative The Lattice Model the Company utilized is a single-factor model, which means it only considers uncertainty related to the Company’s stock price. It calculates the value of the option to convert the First YA Convertible Debenture into Class A Common Stock using a binomial tree structure and backward induction. The payoffs of the First YA Convertible Debenture were computed via backward induction and discounted at a blended rate. The key inputs to the Lattice Model are the yield of a hypothetical identical note without the conversion features, and the volatility of common stock. The following table provides quantitative information of the key assumptions utilized in the redemption feature derivative fair value measurements as of measurement dates: Schedule of Redemption feature derivative fair value measurements As of November 30, As of December 31, Price of Class A Common Stock $ 2.09 $ 1.78 Risk-free interest rate 4.56 % 4.60 % Yield 15.6 % 15.6 % Expected volatility 45.0 % 50.0 % The Company measured and recognized the fair value of the redemption feature derivative as of November 30, 2022, the First YA Convertible Debenture issuance date, and December 31, 2022 in derivative liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in loss on change in fair value of derivatives on the consolidated statement of operation for the year ended December 31, 2022. Earn-out liabilities The following table provides quantitative information of the key assumptions utilized in the earn-out liabilities fair value measurements as of measurement dates: As of August 15, As of December 31, Price of Class A Common Stock $ 10.18 $ 1.78 Risk-free interest rate 2.90 % 4.00 % Expected volatility 35.0 % 65.0 % Expected remaining term 5.0 years 4.6 years The Company measured and recognized the fair value of the Earn-Out Interests as of the Closing Date and December 31, 2022 in earn-out liabilities on the consolidated balance sheet, with the respective fair value adjustment recorded in gain on change in fair value of earn-out liabilities on the consolidated statement of operations for the year ended December 31, 2022. For information regarding the fair value measurement of the forward purchase option derivative, see Note 12. For information regarding the fair value measurement of phantom units, see Note 14. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 18— Income taxes Deferred tax attributes resulting from differences between financial accounting amounts and tax basis of assets and liabilities follow (in thousands): Schedule of basis of assets and liabilities As of Deferred tax assets: 2022 2021 Allowance for doubtful accounts $ 66 $ 55 Accrued vacation - 21 Accrued bonuses - 137 Accruals and reserves - 21 Depreciation 14 11 Interest expense limitation 1,922 1 Investment in partnership 2,548 - Lease liability 153 221 Net operating losses 26,852 2,366 Total deferred tax assets before valuation allowance 31,555 2,833 Less: valuation allowance (29,164 ) - Total deferred tax assets after valuation allowance $ 2,391 $ 2,833 Deferred tax liabilities: Right of use asset $ (142 ) $ (206 ) Intangible assets (1,351 ) (1,831 ) Capitalized transaction costs - 53 Goodwill (1,115 ) (1,027 ) Total deferred tax liabilities $ (2,608 ) $ (3,011 ) Net deferred tax liabilities $ (217 ) (178 ) The provision for income taxes consists of the following (in thousands): Schedule of income taxes consists Years Ended December 31, 2022 2021 Current: Federal $ - $ - State 37 50 Total current 37 50 Deferred: Federal 101 (1,197 ) State (62 ) (523 ) Total deferred 39 (1,720 ) Total income tax expense (benefit) $ 76 $ (1,670 ) The reconciliation between the federal statutory rate and the effective income tax rate is as follows: Schedule of reconciliation between the federal statutory rate and the effective income tax rate December 31, 2022 2021 Statutory U.S. federal tax rate 21.00 % 21.00 % Less: rate attributable to noncontrolling interest -17.52 % -19.27 % State income taxes (net of federal benefit) 0.17 % 0.50 % Permanent differences -2.71 % 0.00 % Effective rate change 0.01 % 0.00 % Increase in valuation allowance -0.96 % 0.00 % Other -0.02 % 0.00 % Effective income tax rate -0.03 % 2.23 % On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. Pursuant to the provisions of the CARES Act above, the RiverRoad subsidiary carried back its Federal 2020 tax loss to tax year 2018. The estimated tax benefit for this carryback claim is approximately $ 0.4 million and was recorded as a current tax benefit during 2020. The corresponding $ 0.4 million tax receivable is presented within other current assets on the consolidated balance sheets as of December 31, 2022 and 2021. The provision for income taxes differs from the amount that would result from applying statutory rates because of differences in the deductibility of certain book and tax expenses. Goodwill related to the Company’s business combinations in prior years is tax deductible and amortized over 15 years for tax purposes, but generally not amortized for book purposes. As such, a deferred tax liability is created from this indefinite-lived asset. As of December 31, 2022 and 2021, the net deferred tax liability on such indefinite-lived assets was $ 1.1 million and $ 1.0 million, respectively. During the year ended December 31, 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. As a result, the Company is in a net deferred tax liability position of $ 0.2 million as of December 31, 2022. The net change in the valuation allowance during the year ended December 31, 2022 was an increase of $ 29.2 million. The net change in the valuation allowance during the year ended December 31, 2021 was $- 0 -. As of December 31, 2022, the Company has gross federal and tax-effected state net operating loss (“NOL”) carryforwards of $ 110.8 million and $ 3.5 million, respectively, attributable to its RiverRoad corporate subsidiary purchased in 2018 and the Mergers. $ 3.3 million of the gross federal NOL carryforward will expire at various dates beginning in 2032 while the remaining $ 107.5 million will not expire. $ 3.5 million of tax-effected state NOL carryforward will expire at various dates beginning in 2023. The Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017 limits a taxpayer’s ability to utilize NOL deduction in a year to 80% taxable income for federal NOL arising in tax years beginning after 2017. Utilization of the U.S. federal and state NOL carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income or tax liabilities. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not completed a Section 382 study for the Mergers, which could create an additional limitation. The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes in certain state and local jurisdictions. The Company is no longer subject to the Internal Revenue Service (“IRS”) examination for periods prior to 2019. However, carry forward losses that were generated prior to the 2019 tax year may still be adjusted by the IRS if they are used in a future period. |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and contingencies | Note 15— 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 liabilities 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 consolidated statements of operations, cash flows or balance sheets. 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 June 30, 2023 condensed consolidated balance sheet (in thousands). Schedule of operating lease payments Years Ending December 31, 2023 1,151 2024 1,228 2025 151 2026 152 2027 154 Thereafter 578 Total minimum lease payments 3,414 Less: Imputed interest (640 ) Total operating lease liabilities $ 2,774 Operating lease amounts above do not include sublease income. The Company has entered into a sublease agreement with a third party. Under the agreement, the Company expects to receive sublease income of approximately $ 0.8 million over the next two years. Software services subscription The Company entered into a software services subscription agreement with a certain PIPE Investor (the “PIPE Software Services Subscription”), including related support and update services on September 22, 2021. The Company subsequently amended the agreement on December 15, 2021, March 6, 2023, March 28, 2023 and June 27, 2023. The term of the amended agreement is through December 31, 2024. As of June 30, 2023, $ 16.9 7.5 3.8 7.5 | Note 19— Commitments and contingencies 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 consolidated statements of operations, cash flows or balance sheets. 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. |
Related party transactions
Related party transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Related party transactions | Note 16— Related party transactions Convertible debentures On February 1, 2023, the Company issued the NZ Superfund Convertible Debenture, which was subsequently amended, and entered into the NZ Superfund Lock-Up Agreement with NZ Superfund. See Note 5 for further information regarding these transactions. Chico PIPE Agreements 1,222,222 1.1 March 2023 Financing Commitment 15.0 million of financing to the Company through the issuance by the Company of debt and/or equity securities including, without limitation, shares of capital stock, securities convertible into or exchangeable for shares of capital stock, warrants, options, or other rights for the purchase or acquisition of such shares and other ownership or profit interests of the Company (the “March 2023 Financing Commitment”). Any debt issued pursuant to the March 2023 Financing Commitment would have a term of at least 12 months and any equity or equity linked securities issued under the March 2023 Financing Commitment would have a fixed price such that no other shareholder or other exchange approvals would be required. The amount the entity agreed to contribute under the March 2023 Financing Commitment was reduced on a dollar-for-dollar basis by the amount of any other capital the Company receives through December 31, 2023. Pursuant to the March 2023 Financing Commitment, the Company entered into the May 2023 Equity Agreements (see below) and the March 2023 Financing Commitment amount was reduced to $0. The Rodina Note Conversion Agreement May 2023 Financing Commitment May 2023 PIPE Subscription Agreements 56,836,444 shares of Class A Common Stock in June 2023. | Note 20— Related party transactions Software subscription 4.3 million. Pursuant to the agreement, as of December 31, 2022, $ 19.3 million will become due in the next 12 months and $ 15.0 million thereafter through October 2024. Palantir was a PIPE Investor and purchased $ 35.0 million of Class A Common Stock at $10.00 per share on the Closing Date. Equity Investment Agreement – Insider convertible debts |
Concentrations
Concentrations | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | ||
Concentrations | Note 17— Concentrations During the three and six months ended June 30, 2023, the Company had a customer who individually accounted for approximately 21% 18% 26% 29% 37% 38% | Note 21— Concentrations During the years ended December 31, 2022 and 2021, the Company had two customers who individually accounted for 10% or more of the Company’s total revenue and together for approximately 26 % and 30 % of the total revenues, respectively. As of December 31, 2022, the Company had three customers who individually accounted for 10% or more of the Company’s total accounts receivable and contract assets and together for approximately 38 % of the total accounts receivable and contract assets, while one customer individually accounted for 10% or more of the Company’s total accounts receivable at 15 % as of December 31, 2021. |
Liquidity
Liquidity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Liquidity | Note 22— Liquidity During the year ended December 31, 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 December 31, 2022. As of December 31, 2022, cash and cash equivalents totaled $ 10.1 million, accounts receivable totaled $ 65.9 million and unbilled accounts receivable totaled $ 55.2 million. Availability under the Revolving Credit Facility, which provided the ability to borrow up to $ 60.0 million, was $ 5.6 million. Pursuant to the SEPA, the Company has the right to sell up to $ 200.0 million of shares of Class A Common Stock to the Yorkville Investor, subject to certain limitations and conditions set forth in the SEPA, including the requirement that there be an effective registration statement registering such shares for resale and limitations on the volume of shares that may be sold. Additionally, because shares issued under the SEPA are sold at a discount to the then-current market price, in light of the current market price and the NYSE rules limiting the number of shares that can be issued without the approval of the Company’s shareholders, the amount that could currently be raised pursuant to the SEPA is significantly lower than $200.0 million. Furthermore, the amended Term Loan agreement entered into on November 18, 2022 requires 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 5). 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 (i) upsized the maximum borrowing capacity under the Revolving Credit Facility to $ 75.0 million and extended its maturity date to the earlier of (a) December 14, 2025, (b) the maturity of the Term Loan and (c) the maturity of the Subordinated Term Loan, (ii) extended the maturity date of the Subordinated Term Loan to March 29, 2024, (iii) received a binding commitment for $ 15.0 million of additional financing (the “Financing Commitment”), and (iv) amended the software subscription agreement with Palantir, which allows the Company to satisfy the $ 11.3 million of fees that are scheduled to become due during 2023 in the Company’s equity or debt securities (see Note 23). In addition, the Company has begun to execute its plans to modify its operations to further reduce spending. Initiatives the Company has undertaken since the fourth quarter of 2022 include (i) increased focus on operational efficiencies and cost reduction measures, (ii) eliminating redundancies that have been the byproduct of the Company’s recent growth and expansion, (iii) evaluating the Company’s portfolio and less profitable accounts to better ensure the Company is deploying resources efficiently, and (iv) exercising strict capital discipline for future investments, such as requiring investments to meet minimum hurdle rates. The Company believes that the upsized Revolving Credit Facility, the extended maturities of the Revolving Credit Facility and the Subordinated Term Loan, the Financing Commitment along with cash on hand 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. | |
Liquidity | Note 18— Liquidity During the three and six months ended June 30, 2023, 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 June 30, 2023. However, all of the warrant liabilities and derivative liabilities under current liabilities on the accompanying condensed consolidated balance sheets will be settled in Class A Common Stock. To address liquidity needs, the Company entered into various financial arrangements during the three months ended June 30, 2023, including the June 2023 Revolving Credit Facility, the June 2023 Term Loan, the May 2023 Equity Agreements, maturity extensions of the Subordinated Term Loan, the Insider Convertible Debentures, the Third Party Convertible Debentures and the NZ Superfund Convertible Debenture and a conversion of the Rodina Note to Class A Common Stock. In addition, subsequent to June 30, 2023, the Yorkville Investors assigned the YA Convertible Debentures to certain existing investors of the Company and the debentures’ maturity date was extended (See Note 19). The Company has also been working to execute various initiatives to modify its operations to further reduce spending and improve cash flow. In management’s opinion, the Company’s cash on hand, availability under the line of credit and the execution of the cost reduction initiatives will provide liquidity for the Company for at least one year. However, there can be no assurance that the Company will be successful in executing its cost reduction initiatives and may need to raise additional capital in future periods. |
Subsequent events
Subsequent events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Subsequent Events [Abstract] | ||
Subsequent events | Note 19— Subsequent events On July 6, 2023, the Company issued 5,193,906 shares of Class A Common Stock to a certain PIPE Investor as the payment for the $ 1.9 million of the subscription fee from April 1, 2023 to June 30, 2023 in relation to the PIPE Software Services Subscription. On July 11, 2023, the Company entered into an amendment to three of the Insider Convertible Debentures, which extended their maturity date to December 1, 2026. On July 26, 2023, the Company terminated the operating lease for an office facility in Lexington, Kentucky. On July 31, 2023, the Company entered into an amendment to three of the Third Party Convertible Debentures, which extended their maturity date to December 1, 2026. On August 8, 2023, the Yorkville Investor assigned the YA Convertible Debentures to certain existing investors of the Company affiliated with Jose Miguel Enrich. Pursuant to the assignment agreement, the assignees assumed all of the Yorkville Investor’s duties, liabilities and obligations under the YA Convertible Debentures and the Yorkville Investor was discharged of all of such duties, liabilities and obligations. Subsequently, the Company and the assignees entered into an amendment to the debentures which (a) extended the maturity date to December 1, 2026, (b) modified the fixed conversion price to $1.50 and (c) removed restrictions on the assignees’ ability to convert any portion of Convertible Debentures or receive shares of Class A Common Stock if it would result in (i) the assignees beneficially owning in excess of 4.99% of the Company’s Class A Common Stock and (ii) the greater of (A) 25.0% of the dollar trading volume of the shares of Class A Common Stock during any calendar month or (B) $3.0 million in any calendar month. Subsequent to June 30, 2023, Yorkville Investor converted $ 5.9 million of the Second YA Convertible Debenture principal and an insignificant amount of related accrued interest into 19,772,486 shares of Class A Common Stock. | Note 23— Subsequent events On January 31, 2023, the Company entered into an amendment to the Revolving Credit Facility, which extended the deadline of the $ 25.0 million fund raise requirement to February 3, 2023. The Company met this fund raise commitment. See Note 5 for further information. On January 31, 2023, the Company executed an acknowledgement and consent with the Term Loan lender, which extended the deadline of the $ 25.0 million fund raise requirement to February 3, 2023. The Company met this fund raise commitment. See Note 5 for further information. In January and February 2023, the Company received the remaining $ 7.0 million of the Insider Convertible Debentures from certain members of the board of directors and investors of the Company, which was recorded in related-party notes receivable on the accompanying consolidated balance sheet as of December 31, 2022. See Note 5 for further information regarding the Insider Convertible Debentures. On February 1, 2023, the Company issued convertible debentures to certain third parties for a total principal amount of $ 1.4 million and the total net proceeds of $ 1.2 million (the “Third Party Convertible Debentures”). The Third Party Convertible Debentures have a maturity date of August 1, 2024 and accrue interest at the rate of 6.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Third Party Convertible Debentures are outstanding, each of the holders may covert all or part of the principal and accrued and unpaid interest of their Third Party Convertible Debentures they hold into shares of Class A Common Stock at a conversion price equal to the lower of 110% of (i) the average closing price of Class A Common Stock for five trading days immediately preceding the date of the issuance of the Third Party Convertible Debentures, and (ii) the closing price of Class A Common Stock immediately preceding the date of the issuance of the Third Party Convertible Debentures. Concurrent with the issuance of the Third Party Convertible Debentures, the Company entered into a lockup agreement with each of the holders of the Third Party Convertible Debentures, pursuant to which the holders agreed to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, any shares of Class A Common Stock the holders may receive from their exercise of option to convert the Third Party Convertible Debentures until the earlier of (i) August 1, 2024, and (ii) when Yorkville Investor sells all shares of Class A Common Stock issued under the YA Convertible Debentures. On February 1, 2023, the Company issued a convertible debenture to Guardians of New Zealand Superannuation (the “NZ Superfund”), a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock, for a total principal amount of $ 5.1 million and the total net proceeds of $ 4.5 million (the “NZ Superfund Convertible Debenture”). The NZ Superfund Convertible Debenture has a maturity date of August 1, 2024 and accrues interest at the rate of 8.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the NZ Superfund Convertible Debenture is outstanding, the NZ Superfund may covert all or part of the principal and accrued and unpaid interest of the NZ Superfund Convertible Debenture it holds into shares of Class A Common Stock at a conversion price equal to the lower of 110% of (i) the average closing price of Class A Common Stock for five trading days immediately preceding the date of the issuance of the NZ Superfund Party Convertible Debenture, and (ii) the closing price of Class A Common Stock immediately preceding the date of the issuance of the NZ Superfund Convertible Debenture. Concurrent with the issuance of the NZ Superfund Convertible Debenture, the Company entered into a lockup agreement with the NZ Superfund, pursuant to which it agreed to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, any shares of Class A Common Stock the holders may receive from its exercise of option to convert the NZ Superfund Convertible Debenture until the earlier of (i) August 1, 2024, and (ii) when Yorkville Investor sells all shares of Class A Common Stock issued under the YA Convertible Debentures. On February 2, 2023, the Company issued 3,877,750 shares of Class A Common Stock to an advisor to settle $ 7.1 million of unpaid fees for certain professional services provided in connection with the Mergers, which was included in accrued expense on the accompanying consolidated balance sheet as of December 31, 2022. The settlement resulted in a gain of $ 0.6 million. On February 2, 2023, the Company issued an unsecured promissory note with a certain entity affiliated with Andres Chico (a member of the Company’s board of directors) and Jose Miguel Enrich (a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock) for a principal and purchase price of $ 3.0 million (the “Rodina Note”). The note matures on July 1, 2024 and bears interest at 16.0% per annum, which is due with the principal on the maturity date. On February 3, 2023, the Company issued the Second YA Convertible Debenture for a principal amount of $10.0 million and a purchase price of $10.0 million. The Second YA Convertible Debenture has a maturity date of May 30, 2024 and bears interest at the rate of 4.0% per annum. The interest is due and payable upon maturity. At any time, so long as the Second YA Convertible Debenture is outstanding, the Yorkville Investor may covert all or part of the principal and accrued and unpaid interest of the Second YA Convertible Debenture into shares of Class A Common Stock at 90% of the lowest daily VWAP of Class A Common Stock during the seven consecutive trading days immediately preceding each conversion date, but in no event lower than $0.25 per share. Outside of an event of default under the Second YA Convertible Debenture, the Yorkville Investor may not convert in any calendar month more than the greater of (a) 25% of the dollar trading volume of the shares of Class A Common Stock during such calendar month, or (b) $3.0 million. Upon issuance of the Second YA Convertible Debenture, the $2.1 million commitment asset included in other noncurrent assets on the accompanying consolidated balance sheet as of December 31, 2022 was derecognized and recorded as a debt discount. On February 7, 2023, the Company entered into an amendment to the Revolving Credit Facility, which (i) increased the maximum borrowing amount under the facility from $60.0 million to $75.0 million, (ii) modified the maturity date to the earlier of (a) December 14, 2025, (b) 90 days prior to the maturity of the Term Loan and (c) the maturity of the Subordinated Term Loan, and (iii) amended the interest rate it bears to between 4.8% up to SOFR plus 4.9% determined based on certain metrics defined within the amended agreement. On February 7, 2023, the Company entered into an amendment to the Term Loan agreement, which (i) replaced LIBOR with SOFR as the reference rate utilized to determine the interest rate the Term Loan bears and (ii) required the Company to make a prepayment of $10.3 million, including $10.0 million of the principal and $0.3 million of the prepayment premium. Pursuant to the amended agreement, the Company made the $10.3 million payment to the Term Loan lender on February 7, 2023. On March 6, 2023, the Company entered into an amended software subscription agreement with Palantir, which provides the Company with the option, in its sole discretion, to settle the $11.3 million of fees which are scheduled to become due between April 2023 and December 2023 in (i) cash or (ii) the Company’s equity or debt securities, if the Company satisfies certain conditions as defined within the amended agreement. On March 16, 2023, we entered into Subscription Agreements (the “Chico PIPE Agreements”) with Jose Miguel Enrich, a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock, Felipe Chico Hernandez, and Andres Chico, a director of Rubicon, pursuant to which Rubicon issued shares of Class A Common Stock to each purchaser in exchange for the purchase price set forth therein. The Chico PIPE Agreements include resale restrictions in addition to customary terms, representations, and warranties. On March 20, 2023, the Company entered into the Financing Commitment with a certain entity affiliated with Andres Chico (a member of the Company’s board of directors) and Jose Miguel Enrich (a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock) whereby the entity or a third party entity designated by the entity intends to provide $ 15.0 On March 22, 2023, the Company entered into an amendment to the Revolving Credit Facility agreement, in which (i) the Company and the lender modified its maturity date to the earlier of (a) December 14, 2025, (b) the maturity of the Term Loan and (c) the maturity of the Subordinated Term Loan and (ii) the lender consented to an amendment to the Subordinated Term Loan agreement. On March 22, 2023, the Company entered into an amendment to the Subordinated Term Loan agreement. The amendment extended the Subordinated Term Loan maturity through March 29, 2024. Subsequent to December 31, 2022, the Company granted certain RSU awards, valued at $8.2 million, as replacement awards for $26.8 million of the accrued management rollover consideration. The replacement awards resulted in a $18.6 million gain. |
Stockholders_ (deficit) equity
Stockholders’ (deficit) equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Stockholders’ (deficit) equity | Note 8— Stockholders’ (deficit) equity The table set forth below reflects information about the Company’s equity as of June 30, 2023. Schedule of stockholders equity Authorized Issued Outstanding Class A Common Stock 690,000,000 229,818,370 229,818,370 Class V Common Stock 275,000,000 35,402,821 35,402,821 Preferred Stock 10,000,000 - - Total shares as of June 30, 2023 975,000,000 265,221,191 265,221,191 The table set forth below reflects information about the Company’s equity as of December 31, 2022. Authorized Issued Outstanding Class A Common Stock 690,000,000 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 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. During the six months ended June 30, 2023, 80,060,825 shares of Class V Common Stock were exchanged to the equal number of shares of Class A Common Stock. | Note 9— Members’ equity (deficit) and Stockholders’ equity (deficit) Members’ equity (deficit) Schedule of immediately before the Closing Authorized as of Held by Members as of August 15, 2022 December 31, 2021 August 15, 2022 December 31, 2021 Common units 34,438,298 34,438,298 13,452,262 9,440,108 Series A Preferred 4,834,906 4,834,906 4,834,906 4,834,906 Series B Preferred 6,820,450 6,820,450 6,774,923 6,774,923 Series C Preferred 3,142,815 3,142,815 3,141,500 3,141,500 Series D Preferred 2,816,403 2,816,403 2,787,707 2,787,707 Series E Preferred 7,451,981 7,451,981 6,530,128 6,530,128 59,504,853 59,504,853 37,521,426 33,509,272 The founding member held 8,278,000 common units. During 2021, Holdings LLC received $ 32.5 million from warrant holders in exchange for 1,083,008 Series E preferred units. Under the terms of the LLC Operating Agreement, allocations of profits, losses, capital gains, and distributions were in the following priorities: Profits and Losses Distributions First, to members for tax distributions based on the highest applicable individual income tax rate applied to the allocation of net taxable income. Second, to preferred unit holders on a pro rata basis until each preferred unit holder has received aggregate distributions in full repayment of their capital contributions. Last, to preferred and common unit holders pro rata according to the number of units held by each member. The LLC Operating Agreement also contained provisions governing the sale of the founding member’s interest in certain circumstances. The LLC Operating Agreement also provided for certain limitations of liability of operating managers upon good faith distributions of funds in accordance with the LLC Operating Agreement and limited each member’s liability to their respective capital contribution. Stockholders’ equity (deficit) The table set forth below reflects information about the Company’s equity as of December 31, 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 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 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. |
Nature of operations and summ_2
Nature of operations and summary of significant accounting policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Description of Business | Description of Business – Rubicon Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.” Rubicon is a digital marketplace for waste and recycling services and provides cloud-based waste and recycling solutions to businesses and governments. Rubicon’s sustainable waste and recycling solutions provide comprehensive management of customers’ waste streams through a platform that powers a modern, digital experience and delivers data-driven insights and transparency for the customers and hauling and recycling partners. Rubicon also 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. | Description of Business – Rubicon Technologies, Inc. is a digital marketplace for waste and recycling services and provides cloud-based waste and recycling solutions to businesses and governments. Rubicon’s sustainable waste and recycling solutions provide comprehensive management of customers’ waste streams through a platform that powers a modern, digital experience and delivers data-driven insights and transparency for the customers and hauling and recycling partners. 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 – Rubicon Technologies, Inc. was initially incorporated in the Cayman Islands on April 26, 2021 as a special purposes acquisition company under the name “Founder SPAC” (“Founder”). Founder was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On August 15, 2022 (the “Closing Date”), Founder consummated the mergers (the “Mergers”), pursuant to that certain Agreement and Plan of Merger, dated December 15, 2021 (the “Merger Agreement”) (the “Closing”). 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 (“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, the accompanying 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. | Mergers – Rubicon Technologies, Inc. was initially incorporated in the Cayman Islands on April 26, 2021 as a special purposes acquisition company under the name “Founder SPAC” (“Founder”). Founder was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On August 15, 2022 (the “Closing Date”), Founder consummated the mergers described below (collectively the “Mergers”), pursuant to that certain Agreement and Plan of Merger, dated December 15, 2021 (the “Merger Agreement”), by and among Founder, Ravenclaw Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of Founder (“Merger Sub”), Ravenclaw Merger Sub Corporation 1, a Delaware corporation and wholly owned subsidiary of Founder (“Merger Sub Inc. 1”), Ravenclaw Merger Sub Corporation 2, a Delaware corporation and wholly owned subsidiary of Founder (“Merger Sub Inc. 2”), Ravenclaw Merger Sub Corporation 3, a Delaware corporation and wholly owned subsidiary of Founder (“Merger Sub Inc. 3” and, together with Merger Sub Inc. 1 and Merger Sub Inc. 2, each a “Blocker Merger Sub”), Boom Clover Business Limited, a British Virgin Islands corporation (“Blocker Company 1”), NZSF Frontier Investments Inc., a Delaware corporation (“Blocker Company 2”), PLC Blocker A LLC, a Delaware limited liability company (“Blocker Company 3” and, together with Blocker Company 1 and Blocker Company 2, each a “Blocker Company” and collectively, the “Blocker Companies”), and Rubicon Technologies, LLC, a Delaware limited liability company (“Holdings LLC”). On the Closing Date, and in connection with the closing of the Mergers (the “Closing”), pursuant to the Merger Agreement, (a) Founder was domesticated and continues as a Delaware corporation, changing its name to Rubicon Technologies, Inc., (b) Merger Sub merged with and into Holdings LLC (the “Merger”), with Holdings LLC surviving the Merger as a wholly owned subsidiary of Rubicon, and (c) in a series of sequential two-step mergers (i) each Blocker Merger Sub merged with and into its corresponding Blocker Company, with each Blocker Company surviving as a wholly owned subsidiary of Rubicon, following which (ii) each surviving Blocker Company merged with and into Rubicon, with Rubicon surviving the merger (collectively the “Blocker 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 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 – The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to U.S. GAAP and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of the interim periods presented, under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The Company’s condensed consolidated financial statements include the accounts of Rubicon Technologies, Inc., and subsidiaries. The Company’s condensed consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2023. Certain information and note disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes prepared in accordance with U.S. GAAP have been condensed in, or omitted from, these interim financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements for the fiscal year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2023. | Basis of Presentation and Consolidation – The accompanying consolidated financial statements have been prepared pursuant to U.S. GAAP and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of the periods presented, under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The Company’s consolidated financial statements include the accounts of Rubicon Technologies, Inc., and subsidiaries. The Company’s consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. |
Segments | Segments – The Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM role is fulfilled by the Executive Leadership Team (“ELT”), who allocates resources and assesses performance based upon consolidated financial information. | Segments – The Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM role is fulfilled by the Executive Leadership Team (“ELT”), who allocates resources and assesses performance based upon consolidated financial information. |
Use of Estimates | Use of Estimates – The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of any contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | Use of Estimates – The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of any contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Emerging Growth Company | Emerging Growth Company – The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company did not opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, will be required to adopt the new or revised standard at the time the new or revised standard becomes applicable to private companies. The effective dates shown in Note 2 below reflect the election to use the extended transition period. | Emerging Growth Company – The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company did not opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, will be required to adopt the new or revised standard at the time the new or revised standard becomes applicable to private companies. The effective dates shown in Note 2 below reflect the election to use the extended transition period. |
Revenue Recognition | Revenue Recognition – The Company recognizes service revenue over time, consistent with efforts performed and when the customer simultaneously receives and consumes the benefits provided by the Company’s services. The Company recognizes recyclable commodity revenue point in time when the ownership, risks, and rewards transfer. The Company derives its revenue from waste removal, waste management and consultation services, software subscriptions, and the sale of recyclable commodities. 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 sales 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 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 is the principal in the transaction (gross), or the Company arranges for other parties to provide the service to the end-user and is 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. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) which we recognize revenue at the amount to which the Company has the right to invoice for services performed and (iii) variable consideration which is allocated entirely to a wholly unsatisfied performance obligation. After applying these optional exemptions, the aggregate amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations as of June 30, 2023 and December 31, 2022 was insignificant. | Revenue Recognition – In accordance with the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Pursuant to ASC 606, the Company applies the following five-step model: 1. Identify the contract(s) with a customer. 2. Identify the performance obligation(s) in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes service revenue over time, consistent with efforts performed and when the customer simultaneously receives and consumes the benefits provided by the Company’s services. The Company recognizes recyclable commodity revenue point in time when the ownership, risks and rewards transfer. The Company derives its revenue from waste removal, waste management and consultation services, software subscriptions, and the purchase and sale of recyclable commodities. Service Revenue: Service revenues are primarily derived from 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 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 concluded that Rubicon is the principal in most arrangements as the Company controls the waste removal service and are the primary obligor in the transactions. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) which we recognize revenue at the amount to which the Company has the right to invoice for services performed and (iii) variable consideration which is allocated entirely to a wholly unsatisfied performance obligation. After applying these optional exemptions, the aggregate amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations as of December 31, 2022 and 2021 was insignificant. |
Cost of Revenue, exclusive of amortization and depreciation | Cost of Revenue, exclusive of amortization and depreciation – Cost of service revenues primarily consists of expenses related to delivering the Company’s service and providing support, including third-party hauler costs, costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and employee-related costs, such as salaries and benefits. Cost of recyclable commodity revenues primarily consists of expenses related to purchases 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 amortization and depreciation expenses on the condensed consolidated statements of operations. | Cost of Revenue, exclusive of amortization and depreciation – Cost of service revenues primarily consists of expenses related to delivering the Company’s services and providing support, including third-party hauler costs, costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and employee-related costs such as salaries and benefits. 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 amortization and depreciation expenses on the consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed the Federal Deposit Insurance Corporation insurance limits. | Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed the Federal Deposit Insurance Corporation insurance limits. |
Accounts Receivable and Contract Balances | Accounts Receivable and Contract Balances –Accounts receivable consists of trade accounts receivable for services provided to customers. Accounts receivable is stated at the amount the Company expects to collect. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses and allowance for unbilled receivables based upon the Company’s assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Past-due balances and other higher-risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. As of June 30, 2023 and December 31, 2022, the allowances for accounts receivable were $ 4.1 million and $ 3.6 million, respectively, and the allowances for contract assets were insignificant. In cases where customers pay for services in arrears, the Company accrues revenue in advance of billings as long as the criteria for revenue recognition are met, thus creating a contract asset (unbilled receivable). As of June 30, 2023 and December 31, 2022, the Company had unbilled receivables of $ 51.3 million and $ 55.2 million, respectively. These unbilled balances were the result of services provided in the period, but not yet billed to the customer. During the six months ended June 30, 2023, the Company invoiced its customers $ 53.7 million pertaining to contract assets for services delivered prior to December 31, 2022. Contract liabilities (deferred revenue) consist 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 June 30, 2023 and December 31, 2022, the Company had deferred revenue balances of $ 7.4 million and $ 5.9 million, respectively. During the six months ended June 30, 2023, the Company recognized $ 4.6 million of revenue that was included in the contract liabilities balance as of December 31, 2022. | Accounts Receivable – Accounts receivable consists of trade accounts receivable for services provided to customers. Accounts receivable is stated at the amount the Company expects to collect. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past-due balances and other higher-risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to operations and a credit to an allowance for doubtful accounts. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable. As of December 31, 2022 and 2021, the allowance for doubtful accounts was $ 3.6 million and $ 8.6 million, respectively. |
Contract Balances | Contract Balances – The Company recognizes revenue when services are performed and corresponding performance obligations are satisfied. Timing of invoicing to customers may differ from the timing of revenue recognition, and these timing differences result in contract assets (unbilled accounts receivables) or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. Contract assets represent the Company’s right to consideration based on satisfied performance obligations from contracts with customers but have not yet been invoiced to the customer. Accounting for contract assets requires estimates and assumptions regarding the quantity of waste collected by their vendors. The Company estimates service quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. The changes in contract assets during 2022 and 2021 were as follows (in thousands): Schedule of changes in contract assets Balance, January 1, 2021 $ 43,357 Invoiced to customers in the current period (43,513 ) Changes in estimate related to the prior period 156 Estimated accrual related to the current period 56,984 Balance, December 31, 2021 56,984 Invoiced to customers in the current period (50,085 ) Changes in estimate related to the prior period (6,899 ) Estimated accrual related to the current period 55,184 Balance, December 31, 2022 $ 55,184 Contract liabilities consists of amounts collected prior to having satisfied the performance obligation. The Company periodically invoices customers for recurring services in advance. During the year ended December 31, 2022, the Company recognized $ 4.4 million of revenue that was included in the contract liabilities balance as of December 31, 2021. During the year ended December 31, 2021, the Company recognized $ 4.0 million of revenue that was included in the contract liabilities balance as of December 31, 2020. | |
Accrued Hauler Expenses | Accrued Hauler Expenses – The Company recognizes hauler costs and the cost of recyclable products when services are performed. Accounting for accrued hauler costs and the cost of recyclable commodities requires estimates and assumptions regarding the quantity of waste collected by the vendors and the frequencies of the collections. The Company estimates quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. Accrued hauler expenses are presented within accrued expenses on the condensed consolidated balance sheets. | Accrued Hauler Expenses – The Company recognizes hauler costs and the cost of recyclable products when services are performed. Accounting for accrued hauler costs and the cost of recyclable products requires estimates and assumptions regarding the quantity of waste collected by their vendors. The Company estimates service quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. Accrued hauler expenses are presented within accrued expenses on the consolidated balance sheets. The changes in accrued hauler expenses during 2022 and 2021 were as follows (in thousands): Schedule of changes in accrued hauler expenses Balance, January 1, 2021 $ 37,429 Invoiced by vendors in the current period (37,726 ) Changes in estimate related to the prior period 297 Estimated accrual related to the current period 49,607 Balance, December 31, 2021 49,607 Invoiced by vendors in the current period (42,414 ) Changes in estimate related to the prior period (7,193 ) Estimated accrual related to the current period 44,773 Balance, December 31, 2022 $ 44,773 |
Fair Value Measurements | Fair Value Measurements – In accordance with U.S. GAAP, the Company groups its financial assets and financial liabilities at fair value in three levels, based on the markets in which the financial assets and financial liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the New York Stock Exchange (the “NYSE”). Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities. Level 3 – Valuations for financial assets and financial liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models, and similar techniques and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such financial assets or financial liabilities. See Note 14 for further information regarding fair value measurements. | Fair Value Measurements – In accordance with U.S. GAAP, the Company groups its financial assets and financial liabilities at fair value in three levels, based on the markets in which the financial assets and financial liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the New York Stock Exchange. Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities. Level 3 – Valuations for financial assets and financial liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models, and similar techniques and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such financial assets or financial liabilities. See Note 17 for further information regarding fair value measurements. |
Property and Equipment | Property and Equipment – Property and equipment are stated at cost; additions and major improvements are capitalized, while regular maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method based on the estimated useful lives of the related assets. Lives used for depreciation calculations are as follows: Schedule of Lives used for depreciation Computers, equipment and software 3 5 Furniture and fixtures 3 5 Customer equipment 3 10 Leasehold improvements Lesser of useful life or remaining lease term | |
Leases | Leases – The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities on the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term. The corresponding lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement, net of any future tenant incentives. The Company’s lease terms may include options to extend or terminate the lease. Periods beyond the noncancelable term of the lease are included in the measurement of the lease liability when it is reasonably certain that the Company will exercise the associated extension option or waive the termination option. The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company. As most of the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. The Company’s incremental borrowing rate is an estimate of the interest rate the Company would have to pay to borrow on a collateralized basis with similar terms and payments. The lease ROU asset is recognized based on the lease liability, adjusted for any rent payments or initial direct costs incurred or tenant incentives received prior to commencement. Lease expenses for minimum lease payments for operating leases are recognized on a straight-line basis over the lease term. The Company has entered into subleases or has made decisions and taken actions to exit and sublease certain unoccupied leased office space. Similar to the Company’s other long-lived assets, management tests ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For leased assets, such circumstances would include the decision to leave a leased facility prior to the end of the minimum lease term or subleases for which estimated cash flow do not fully cover the costs of the associated lease. | |
Offering Costs | Offering Costs – Offering costs, consisting of legal, accounting, printer, filing and advisory fees related to the Mergers, were deferred and offset against proceeds from the Mergers and additional paid-in capital upon consummation of the Mergers. Deferred offering costs capitalized as of June 30, 2023 and December 31, 2022 were $- 0 -. The total amount of the offering costs recognized as offset against additional paid-in capital at the Closing was $ 67.3 million. The subsequent settlements of certain offering costs during the three and six months ended June 30, 2023 resulted in a gain of $ 6.4 million and $ 7.0 million, respectively, which is recognized as a component of other income (expense) on the accompanying condensed consolidated statements of operations | Offering Costs – Offering costs, consisting of legal, accounting, printer, filing and advisory fees related to the Mergers, were deferred and offset against proceeds from the Mergers and additional paid-in capital upon consummation of the Mergers. Deferred offering costs capitalized as of December 31, 2022 and 2021 were $- 0 - and $ 1.1 million, respectively, and included in other noncurrent assets on the consolidated balance sheets. The total amount of the offering costs recognized as offset against additional paid-in capital on the consolidated balance sheet as of December 31, 2022 was $ 67.3 million, $ 53.9 million of which has been paid while the remaining $ 13.4 million is included in accrued expenses as of December 31, 2022. The subsequent settlements of offering costs during 2022 resulted in a gain of $ 12.1 million which is recognized as a component of other expense on the consolidated statement of operations for the year ended December 31, 2022. The total amount of the offering costs recognized as offset against additional paid-in capital on the consolidated balance sheet as of December 31, 2021 was $- 0 -. |
Advertising | Advertising – Advertising expenses are charged to earnings as incurred. The total advertising costs were $ 2.5 million and $ 1.5 million for the years ended December 31, 2022 and 2021, respectively. Advertising costs are included in sales and marketing expenses on the consolidated statements of operations. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets – Goodwill represents the excess of the purchase price over fair value of net assets acquired. Goodwill and intangible assets determined to have an indefinite useful life at acquisition are not amortized, but instead tested for impairment at least annually. Any intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their residual values and reviewed for impairment in accordance with accounting standards. The customer and hauler relationship assets are being amortized on a straight-line basis over a period ranging from two to eight years. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. Based on the cumulative evidence obtained during the test, management concluded no impairment losses were recorded for the years ended December 31, 2022 and 2021. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets – Long-lived assets such as property and equipment, including intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company determined there were no impairment charges during 2022 or 2021. | |
Debt Issuance Costs | Debt Issuance Costs – Debt issuance costs related to term loans are capitalized and reported net of the current and noncurrent debt obligations. The Company amortizes debt issuance costs to interest expense on the term loan using the effective interest method over the life of the debt agreement. Debt issuance costs related to lines of credit are capitalized and reported as a prepaid asset and are amortized to interest expense on a straight-line basis over the life of the debt agreement. | |
Customer Acquisition Costs | Customer Acquisition Costs – The Company makes certain expenditures related to acquiring contracts for future services. These expenditures are capitalized and amortized in proportion to the expected future revenue from the customer, which in most cases results in straight-line amortization over the life of the customer. Amortization of these customer incentive costs is presented within amortization and depreciation on the consolidated statements of operations. Total customer acquisition costs capitalized during the years ended December 31, 2022 and 2021 totaled $- 0 - and $- 0 -, respectively, and are included in other current assets and other noncurrent assets on the consolidated balance sheets. Total amortization of these capitalized costs was $ 1.1 million and $ 2.5 million for the years ended December 31, 2022 and 2021, respectively. | |
Warrants | Warrants – The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 per share (“Class A Common Stock”), among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. 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 as a component of other income (expense) on the consolidated statement of operations. As of June 30, 2023, the Company has both liability-classified and equity-classified warrants outstanding. See Note 9 for further information. | Warrants – The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and the applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 per share (“Class A Common Stock”), among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. 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 December 31, 2022, the Company has both liability-classified and equity-classified warrants outstanding. See Note 10 for further information. |
Earn-out Liabilities | Earn-out Liabilities – Pursuant to the Merger Agreement, (i) Blocked Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 1,488,519 shares of Class A Common Stock (the “Earn-Out Class A Shares”) and (ii) Rubicon Continuing Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 8,900,840 Class B Units (as defined in Note 3) (“Earn-Out Units”) and an equivalent number of shares of the Company’s Class V common stock, par value $ 0.0001 (“Class V Common Stock”) (“Earn-Out Class V Shares”, and together with Earn-Out Class A Shares and Earn-Out Units, “Earn-Out Interests”), in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing (the “Earn-Out Period”), as set forth below upon satisfaction of any of the following conditions (each, an “Earn-Out Condition”). (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 were 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 as a component of 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 as a component of other income (expense), and such Earn-Out Interests will be reclassed to stockholders’ (deficit) equity on the consolidated balance sheet. As of June 30, 2023 and December 31, 2022, the Earn-Out Interests had a fair value of $ 0.3 million and $ 5.6 million, respectively, with the changes in the fair value of $ 5.3 million recognized as a gain on change in fair value of earn-out liabilities under other income (expense) within the accompanying condensed consolidated statements of operations. | Earn-out Liabilities – Pursuant to the Merger Agreement, (i) Blocked Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 1,488,519 shares of Class A Common Stock (the “Earn-Out Class A Shares”) and (ii) Rubicon Continuing Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 8,900,840 Class B Units (as defined in Note 3) (“Earn-Out Units”) and an equivalent number of shares of the Company’s Class V common stock, par value $ 0.0001 (“Class V Common Stock”) (“Earn-Out Class V Shares”, and together with Earn-Out Class A Shares and Earn-Out Units, “Earn-Out Interests”), in each case, depending upon the performance of Class A Common Stock during the five (5) year period after the Closing (the “Earn-Out Period”), as set forth below upon satisfaction of any of the following conditions (each, an “Earn-Out Condition”). (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 December 31, 2022, the Earn-out Interests had a fair value of $ 5.6 million, with the changes in the fair value between the Closing Date and December 31, 2022 of $ 68.5 million recognized as a gain in fair value of earn-out liabilities under other income (expense) within accompanying consolidated statements of operations. |
Noncontrolling Interest | Noncontrolling Interest – Noncontrolling interest represents the Company’s noncontrolling interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company. Shares of Class V Common Stock are exchangeable into an equal number of Class A Common Stock. Shares of Class V Common Stock are non-economic voting shares in Rubicon Technologies, Inc., where shares of Class V Common Stock each have one vote per share. The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 45.9% and 52.2% of Holdings LLC’s net loss during the three and six months ended June 30, 2023, respectively, was allocated to noncontrolling interests (“NCI”). | Noncontrolling Interest – Noncontrolling interest (“NCI”) represents the Company’s interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company. Upon completion of the Mergers, Rubicon Technologies, Inc. issued shares of Class V Common Stock, each of which is exchangeable into an equal number of Class A Common Stock. Shares of Class V Common Stock are non-economic voting shares in Rubicon Technologies, Inc. where shares of Class V Common Stock each have one vote per share. The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 69.8% of Holdings LLC’s net loss during the period of August 15, 2022, the Closing Date, through December 31, 2022 was allocated to NCI. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes 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. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of December 31, 2022 or 2021, the Company has no tax positions that met this threshold and, therefore, has not recognized such benefits. 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. Although distributions to the U.S. are generally not subject to U.S. federal taxes, the Company continues to assert permanent reinvestment of foreign earnings. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts. See Note 18 for additional information on income taxes. |
Income Taxes | Income Taxes – Rubicon Technologies, Inc. is a corporation and is subject to U.S. federal as well as state income taxes including the income or loss allocated from its investment in Rubicon Technologies Holdings, LLC. Rubicon Technologies Holdings, LLC is taxed as a partnership for which the taxable income or loss is allocated to its members. Certain of the Rubicon Technologies Holdings, LLC operating subsidiaries are considered taxable corporations for U.S. income tax purposes. Prior to the Mergers, Holdings LLC was not subject to U.S. federal and certain state income taxes at the entity level. 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. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of June 30, 2023 or December 31, 2022, the Company has no tax positions that met this threshold and, therefore, has not recognized such benefits. 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 estimates 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 was $- 0 - million and $- 0 - million for the three months ended June 30, 2023 and 2022, respectively, with an effective tax rate of (0.1)% and (0.1)% , respectively The Company’s income tax expense was $- 0 - million and $- 0 - million for the six months ended June 30, 2023 and 2022, respectively, with an effective tax rate of (0.1)% and (0.1)% ,, respectively. The provision for income taxes differs from the amount that would result from applying statutory rates primarily due to loss attributable to noncontrolling interest and differences in the deductibility of certain book and tax expenses, including the changes in fair value of earn-out liabilities and derivatives and certain compensation costs. During the six months ended June 30, 2023 and the year ended December 31, 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. As a result, the Company is in a net deferred tax liability position of $ 0.2 million and $ 0.2 million as of June 30, 2023 and December 31, 2022, respectively. | Tax Receivable Agreement Obligation – The Company and Holdings LLC entered into a Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with Rubicon Continuing Unitholders (as defined in Note 3) and Blocked Unitholders (as defined in Note 3) (together, the “TRA Holders”). Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to the TRA Holders 85% of certain of the Company’s realized (or in certain cases deemed realized) tax savings as a result of certain tax benefits related to the transactions contemplated by the Merger Agreement and future exchanges of Class B Units for Class A Common Stock or cash. The actual tax benefit, as well as the amount and timing of any payments under the TRA, will vary depending on a number of factors, including the price of the Company’s Class A Common Stock at the time of the exchange; the timing of future exchanges; the extent to which exchanges are taxable; the amount and timing of the utilization of tax attributes; the amount, timing and character of the Company’s income; the U.S. federal, state and local tax rates then applicable; the depreciation and amortization periods that apply to the increases in tax basis; the timing and amount of any earlier payments that the Company may have made under the TRA; and the portion of the Company’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. 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. A TRA liability is determined and recorded under ASC 450, “ Contingencies |
Earnings (Loss) Per Share | Earnings (Loss) Per Share (“EPS”) – Basic income (loss) per share is computed by dividing net income (loss) attributable to Rubicon Technologies, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. 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 13 for additional information on dilutive securities. Prior to the Mergers, the membership structure of Holdings LLC included units with 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 Closing. | Earnings (Loss) Per Share (“EPS”) – Basic income (loss) per share is computed by dividing net income (loss) attributable to Rubicon Technologies, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. 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 16 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 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 – From time to time, the Company utilizes instruments which may contain embedded derivative instruments as part of our overall strategy. The Company’s derivative instruments are recorded at fair value on the consolidated balance sheets. These derivative instruments have not been designated as hedges; therefore, both realized and unrealized gains and losses are recognized in earnings. For the purposes of cash flow presentation, realized and unrealized gains or losses are included under cash flows from operating activities. Upfront cash payments received upon the issuance of derivative instruments are included within cash flows from financing activities, while the prepayments made upon the issuance of derivative instruments are included within cash flows from investing activities within the consolidated statements of cash flows. | Derivative Financial Instruments – From time to time, the Company utilizes instruments which may contain embedded derivative instruments as part of the overall strategy. The Company’s derivative instruments are recorded at fair value on the consolidated balance sheets. These derivative instruments have not been designated as hedges; therefore, both realized and unrealized gains and losses are recognized in earnings. For the purposes of cash flow presentation, realized and unrealized gains or losses are included within cash flows from operating activities. Upfront cash payments received upon the issuance of derivative instruments are included within cash flows from financing activities, while the prepayments made upon the issuance of derivative instruments are included within cash flows from investing activities within the consolidated statements of cash flows. |
Stock-Based Compensation | Stock-Based Compensation – The Company measures fair value of employee stock-based compensation awards on the date of grant and uses the straight-line attribution method to recognize the related expense over the requisite service period, and accounts for forfeitures as they occur. The fair value of equity-classified restricted stock units and performance-based restricted stock units is equal to the market price of Class A Common Stock on the date of grant. The liability-classified restricted stock units are recognized at their fair value that is equal to the market price of Class A Common Stock on the date of grant and remeasured to the market price of Class A Common Stock at each period-end with related changes in the fair value recognized in general and administrative expense on the consolidated statement of operations. 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. | Stock-Based Compensation – The Company measures fair value of employee stock-based compensation awards on the date of grant and uses the straight-line attribution method to recognize the related expense over the requisite service period, and accounts for forfeitures as they occur. The fair value of equity-classified restricted stock units and performance-based restricted stock units is equal to the market price of the Class A Common Stock on the date of grant. The liability-classified restricted stock units are recognized at their fair value that is equal to the market price of the Class A Common Stock on the date of grant and remeasured to the market price of the Class A Common Stock at each period-end with related changes in the fair value recognized in general and administrative expense on the consolidated statement of operations. 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. |
Customer Acquisition Costs | Customer Acquisition Costs – The Company makes certain expenditures related to acquiring contracts for future services. These expenditures are capitalized and amortized in proportion to the expected future revenue from the customer, which in most cases results in straight-line amortization over the estimated life of the customer. Amortization of these customer incentive costs is presented within amortization and depreciation on the condensed consolidated statements of operations. | |
Tax Receivable Agreement Obligation | Tax Receivable Agreement Obligation – The Company and Holdings LLC entered into a Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with Rubicon Continuing Unitholders (as defined in Note 3) and Blocked Unitholders (as defined in Note 3) (together, the “TRA Holders”). Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to the TRA Holders 85% of certain of the Company’s realized (or in certain cases deemed realized) tax savings as a result of certain tax benefits related to the transactions contemplated by the Merger Agreement and future exchanges of Class B Units for Class A Common Stock or cash. The actual tax benefit, as well as the amount and timing of any payments under the TRA, will vary depending on a number of factors, including the price of Class A Common Stock at the time of the exchange; the timing of future exchanges; the extent to which exchanges are taxable; the amount and timing of the utilization of tax attributes; the amount, timing and character of the Company’s income; the U.S. federal, state and local tax rates then applicable; the depreciation and amortization periods that apply to the increases in tax basis; the timing and amount of any earlier payments that the Company may have made under the TRA; and the portion of the Company’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. 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. A TRA liability is determined and recorded under ASC 450, “ Contingencies |
Nature of operations and summ_3
Nature of operations and summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of changes in contract assets | Schedule of changes in contract assets Balance, January 1, 2021 $ 43,357 Invoiced to customers in the current period (43,513 ) Changes in estimate related to the prior period 156 Estimated accrual related to the current period 56,984 Balance, December 31, 2021 56,984 Invoiced to customers in the current period (50,085 ) Changes in estimate related to the prior period (6,899 ) Estimated accrual related to the current period 55,184 Balance, December 31, 2022 $ 55,184 |
Schedule of changes in accrued hauler expenses | Schedule of changes in accrued hauler expenses Balance, January 1, 2021 $ 37,429 Invoiced by vendors in the current period (37,726 ) Changes in estimate related to the prior period 297 Estimated accrual related to the current period 49,607 Balance, December 31, 2021 49,607 Invoiced by vendors in the current period (42,414 ) Changes in estimate related to the prior period (7,193 ) Estimated accrual related to the current period 44,773 Balance, December 31, 2022 $ 44,773 |
Schedule of Lives used for depreciation | Schedule of Lives used for depreciation Computers, equipment and software 3 5 Furniture and fixtures 3 5 Customer equipment 3 10 Leasehold improvements Lesser of useful life or remaining lease term |
Property and equipment (Tables)
Property and equipment (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment | Schedule of property and equipment June 30, 2023 December 31, Computers, equipment and software $ 3,914 $ 3,791 Customer equipment 1,882 1,485 Furniture and fixtures 1,766 1,699 Leasehold improvements 3,772 3,772 Total property and equipment 11,334 10,747 Less accumulated amortization and depreciation (8,765 ) (8,103 ) Total property and equipment, net $ 2,569 $ 2,644 | Schedule of property and equipment 2022 2021 Computers, equipment and software $ 3,791 $ 2,968 Customer equipment 1,485 1,122 Furniture and fixtures 1,699 1,570 Leasehold improvements 3,772 3,769 Total property and equipment 10,747 9,429 Less accumulated amortization and depreciation (8,103 ) (6,818 ) Total property and equipment, net $ 2,644 $ 2,611 |
Debt (Tables)
Debt (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Schedule of components of long-term debt | Schedule of components of long-term debt June 30, 2023 December 31, Term loan balance $ 105,244 $ 71,000 Convertible debt balance 10,880 7,000 Related-party convertible debt balance 17,670 11,964 Less unamortized debt issuance costs (37,357 ) (6,138 ) Total borrowed 96,437 83,826 Less short-term debt obligation balance - (3,771 ) Long-term debt obligation balance $ 96,437 $ 80,055 | Schedule of components of long-term debt As of December 31, 2022 2021 Term loan balance $ 71,000 $ 77,000 Convertible debt balance 7,000 - Related-party convertible debt balance 11,964 - Less unamortized debt issuance costs and discounts (6,138 ) (3,334 ) Total borrowed 83,826 73,666 Less short-term debt obligation balance (3,771 ) (22,666 ) Long-term debt obligation balance $ 80,055 $ 51,000 |
Schedule of maturities of long-term debt | Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2023 $ - 2024 - 2025 108,543 2026 25,251 Total $ 133,794 | Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2023 $ 6,000 2024 83,964 Total $ 89,964 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | ||
Schedule of accrued expenses | Schedule of accrued expenses June 30, 2023 December 31, Accrued hauler expenses $ 44,327 $ 44,773 Accrued compensation 16,001 43,054 Accrued income taxes - 9 Accrued Mergers transaction expenses - 13,433 Other accrued expenses 5,719 6,733 Total accrued expenses $ 66,047 $ 108,002 | Schedule of Accrued expenses 2022 2021 Accrued hauler expenses $ 44,773 $ 49,607 Accrued compensation 43,054 9,656 Accrued income taxes 9 3 Accrued Mergers transaction expenses 13,433 - Other accrued expenses 6,733 6,272 Total accrued expenses $ 108,002 $ 65,538 |
Goodwill and other intangibles
Goodwill and other intangibles (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of intangible assets and goodwill | Schedule of intangible assets and goodwill June 30, 2023 Useful Life Gross Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (13,421 ) 7,555 Non-competition agreements 3 to 4 550 (550 ) - Technology 3 3,178 (2,298 ) 880 Total finite-lived intangible assets 25,432 (16,997 ) 8,435 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (16,997 ) $ 9,270 December 31, 2022 Useful Life Gross Accumulated Net Carrying Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (12,141 ) 8,835 Non-competition agreements 3 to 4 550 (550 ) - Technology 3 3,178 (1,967 ) 1,211 Total finite-lived intangible assets 25,432 (15,386 ) 10,046 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (15,386 ) $ 10,881 | Schedule of Intangible Assets and Goodwill December 31, 2022 Useful Life Gross Accumulated Amortization Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (12,141 ) 8,835 Non-competition agreements 3 to 4 550 (550 ) - Technology 3 3,178 (1,967 ) 1,211 Total finite-lived intangible assets 25,432 (15,386 ) 10,046 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (15,386 ) $ 10,881 December 31, 2021 Useful Life Gross Accumulated Amortization Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 to 8 20,976 (9,582 ) 11,394 Non-competition agreements 3 to 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, 2023 $ 1,609 2024 3,110 2025 2,559 2026 1,157 Total future amortization of intangible assets $ 8,435 | Schedule of Finite- Lived Intangible Assets, Future Amortization Expense Fiscal Years Ending December 31, 2023 $ 3,220 2024 3,110 2025 2,559 2026 1,157 Future amortization of intangible assets $ 10,046 Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized but are tested for impairment at least annually. The carrying amounts of goodwill were as follows (in thousands): Schedule of goodwill Balance at January 1, 2021 $ 32,132 Balance at December 31, 2021 $ 32,132 Balance at December 31, 2022 $ 32,132 |
Leases (Tables)
Leases (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Schedule of right-of-use assets and operating lease liabilities | Schedule of right-of-use assets and operating lease liabilities As of December 31, 2022 2021 Assets Right-of-use assets $ 2,827 $ 3,920 Liabilities Current lease liabilities 1,880 1,675 Non-current lease liabilities 1,826 3,770 Total liabilities $ 3,706 $ 5,445 | |
Schedule of operating lease expense | Schedule of operating lease expense 2022 2021 Lease expense Operating lease expense $ 1,631 $ 1,507 Short-term lease expense 419 601 Less: Sublease income (802 ) (802 ) Total lease expense $ 1,248 $ 1,306 | |
Schedule of reconciliation to the amount of the liabilities | Schedule of operating lease payments Years Ending December 31, 2023 1,151 2024 1,228 2025 151 2026 152 2027 154 Thereafter 578 Total minimum lease payments 3,414 Less: Imputed interest (640 ) Total operating lease liabilities $ 2,774 | Schedule of reconciliation to the amount of the liabilities Years Ending December 31, 2023 $ 2,276 2024 1,228 2025 151 2026 152 2027 154 Thereafter 578 Total minimum lease payments 4,539 Less: Imputed interest (833 ) Total operating lease liabilities $ 3,706 |
Members_ equity (deficit) and_2
Members’ equity (deficit) and Stockholders’ equity (deficit) (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Schedule of immediately before the Closing | Schedule of immediately before the Closing Authorized as of Held by Members as of August 15, 2022 December 31, 2021 August 15, 2022 December 31, 2021 Common units 34,438,298 34,438,298 13,452,262 9,440,108 Series A Preferred 4,834,906 4,834,906 4,834,906 4,834,906 Series B Preferred 6,820,450 6,820,450 6,774,923 6,774,923 Series C Preferred 3,142,815 3,142,815 3,141,500 3,141,500 Series D Preferred 2,816,403 2,816,403 2,787,707 2,787,707 Series E Preferred 7,451,981 7,451,981 6,530,128 6,530,128 59,504,853 59,504,853 37,521,426 33,509,272 | |
Schedule of Stockholders Equity | Schedule of stockholders equity Authorized Issued Outstanding Class A Common Stock 690,000,000 229,818,370 229,818,370 Class V Common Stock 275,000,000 35,402,821 35,402,821 Preferred Stock 10,000,000 - - Total shares as of June 30, 2023 975,000,000 265,221,191 265,221,191 The table set forth below reflects information about the Company’s equity as of December 31, 2022. Authorized Issued Outstanding Class A Common Stock 690,000,000 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 | Schedule of Stockholders Equity Authorized Issued Outstanding Class A Common Stock 690,000,000 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants | |
Schedule of Series E warrant activity | Schedule of Series E warrant activity Number Weighted Average Exercise Price Per Warrant Outstanding – January 1, 2021 1,084,725 30.00 Granted - - Exercised (1,083,008 ) 30.00 Expired (1,717 ) 30.00 Outstanding - December 31, 2021 - - Granted - - Exercised - - Expired - - Outstanding - December 31, 2022 - $ - |
Equity-based compensation (Tabl
Equity-based compensation (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Schedule Of cost of revenue, sales and marketing, product development, and general and administrative expenses | Schedule Of cost of revenue, sales and marketing, product development, and general and administrative expenses Years Ended December 31, 2022 2021 Cost of revenue $ 72 $ - Sales and marketing 23 - Product development 37 - General and administrative 100,855 7,785 Total equity-based compensation $ 100,987 $ 7,785 | |
Schedule of no incentive units | Schedule of no incentive units As of December 31, 2021 Expected dividend yield 0.00 % Risk-free interest rate 1.40 % Expected life in years 3.00 Expected volatility 48.20 % | |
Schedule Of Non vested Incentive Units | Schedule Of Non vested Incentive Units Units Outstanding - January 1, 2021 3,017,191 Granted 214,642 Forfeited/redeemed (147,183 ) Outstanding - December 31, 2021 3,084,650 Granted - Forfeited/redeemed (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 2021 and 2022 immediately prior to the consummation of the Mergers is as follows: Units Weighted Average Grant Date Fair Value Nonvested - January 1, 2021 275,446 3.91 Granted 214,642 13.40 Vested (144,695 ) 3.75 Forfeited/redeemed (147,183 ) 9.36 Nonvested - December 31, 2021 198,210 10.25 Granted - - Vested (183,711 ) 10.25 Forfeited/redeemed (14,499 ) 10.25 Nonvested – August 15, 2022 - $ - | |
Schedule of RSUs activity | Schedule of RSUs activity Units Weighted Average Grant Date Fair Value Nonvested – December 31, 2022 1,456,695 $ 1.98 Granted 15,138,947 1.05 Vested (7,626,353 ) 1.14 Forfeited/redeemed (322,010 ) 1.87 Nonvested – June 30, 2023 8,647,279 $ 1.09 | Schedule of RSUs RSUs Outstanding – August 15, 2022 (prior to the Mergers consummation) - Granted – Phantom Unit exchanges 970,389 Granted – Morris Employment Agreement 8,378,986 Granted – Partial settlement of Management Rollover Consideration 1,828,669 Granted – Non-executive employees 1,665,935 Forfeited (205,041 ) Outstanding – December 31, 2022 (subsequent to the Mergers consummation) 12,638,938 Vested – December 31, 2022 (subsequent to the Mergers consummation) 11,182,243 A summary of nonvested RSUs from immediately after the consummation of the Mergers through December 31, 2022 is as follows: Units Weighted Average Grant Date Fair Value Nonvested - August 15, 2022 (subsequent to the Mergers consummation) - - Granted 12,843,979 2.29 Vested (11,182,243 ) 2.33 Forfeited/redeemed (205,041 ) 1.98 Nonvested – December 31, 2022 1,456,695 $ 1.98 |
Loss per share (Tables)
Loss per share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Schedule of net loss per share | Schedule of net loss per share Three Months Ended June 30, Six Months Ended June 30, Numerator: Net loss $ (22,817 ) $ (32,268 ) Less: Net loss attributable to non-controlling interests (9,615 ) (15,937 ) Net loss attributable to Rubicon Technologies, Inc $ (13,202 ) $ (16,331 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 106,211,259 82,943,357 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.12 ) $ (0.20 ) | Schedule of net loss per share Numerator: Net loss for the period from August 15, 2022 through December 31, 2022 $ (52,774 ) Less: Net loss attributable to non-controlling interests for the period from August 15, 2022 through December 31, 2022 (22,621 ) Net loss for the period from August 15, 2022 through December 31, 2022 attributable to Rubicon Technologies, Inc. – Basic and diluted $ (30,153 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 49,885,394 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.60 ) |
Fair value measurements (Tables
Fair value measurements (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Schedule of assets and liabilities measured at fair value on recurring basis | Schedule of assets and liabilities measured at fair value on recurring basis As of June 30, 2023 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (29,795 ) $ - Redemption Feature Derivative - - (2,231 ) Additional Subordinated Term Loan Warrants Derivative - - (12,816 ) Earn-out liabilities - - (310 ) Total $ - $ (29,795 ) $ (7,165 ) As of December 31, 2022 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (20,890 ) $ - Redemption Feature Derivative - - (826 ) Earn-out liabilities - - (5,600 ) Total $ - $ (20,890 ) $ (6,426 ) Level 3 Rollfoward Redemption Additional Earn-out December 31, 2022 balances $ (826 ) $ - $ (5,600 ) Additions (474 ) (2,887 ) - Changes in fair value (2,198 ) - 4,820 March 31, 2023 balances (3,498 ) (2,887 ) (780 ) Additions - (9,377 ) - Changes in fair value 1,267 (1,602 ) 470 Reclassified to level 2 - 1,050 - June 30, 2023 balances $ (2,231 ) $ (12,816 ) $ (310 ) | Schedule of assets and liabilities measured at fair value on recurring basis As of December 31, 2022 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (20,890 ) $ - Redemption feature derivative - - (826 ) Earn-out liabilities - - (5,600 ) Total $ - $ (20,890 ) $ (6,426 ) As of 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 Redemption feature derivative Earn-out liabilities Warrant liabilities Deferred December 31, 2021 balances $ - $ - $ (1,380 ) $ (8,321 ) Additions (256 ) (74,100 ) - - Changes in fair value (570 ) 68,500 (1,931 ) (6,783 ) Reclassified to equity - - 3,311 15,104 December 31, 2022 balances $ (826 ) $ (5,600 ) $ - $ - |
Schedule of Redemption feature derivative fair value measurements | Schedule of Redemption feature derivative fair value measurements As of November 30, As of December 31, Price of Class A Common Stock $ 2.09 $ 1.78 Risk-free interest rate 4.56 % 4.60 % Yield 15.6 % 15.6 % Expected volatility 45.0 % 50.0 % The Company measured and recognized the fair value of the redemption feature derivative as of November 30, 2022, the First YA Convertible Debenture issuance date, and December 31, 2022 in derivative liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in loss on change in fair value of derivatives on the consolidated statement of operation for the year ended December 31, 2022. Earn-out liabilities The following table provides quantitative information of the key assumptions utilized in the earn-out liabilities fair value measurements as of measurement dates: As of August 15, As of December 31, Price of Class A Common Stock $ 10.18 $ 1.78 Risk-free interest rate 2.90 % 4.00 % Expected volatility 35.0 % 65.0 % Expected remaining term 5.0 years 4.6 years | |
Redemption Feature Derivative [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Schedule of derivative fair value measurements | Schedule of derivative fair value measurements As of June 30, 2023 As of February 3, As of December 31, Price of Class A Common Stock $ 0.37 $ 1.56 $ 1.78 Risk-free interest rate 5.41 % 4.63 % 4.60 % Yield 13.4 % 13.6 % 15.6 % Expected volatility 50.0 % 50.0 % 50.0 % | |
Earn Out Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Schedule of derivative fair value measurements | Schedule of derivative fair value measurements As of June 30, As of December 31, Price of Class A Common Stock $ 0.37 $ 1.78 Risk-free interest rate 4.30 % 4.00 % Expected volatility 75.0 % 65.0 % Expected remaining term 4.1 years 4.6 years |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of basis of assets and liabilities | Schedule of basis of assets and liabilities As of Deferred tax assets: 2022 2021 Allowance for doubtful accounts $ 66 $ 55 Accrued vacation - 21 Accrued bonuses - 137 Accruals and reserves - 21 Depreciation 14 11 Interest expense limitation 1,922 1 Investment in partnership 2,548 - Lease liability 153 221 Net operating losses 26,852 2,366 Total deferred tax assets before valuation allowance 31,555 2,833 Less: valuation allowance (29,164 ) - Total deferred tax assets after valuation allowance $ 2,391 $ 2,833 Deferred tax liabilities: Right of use asset $ (142 ) $ (206 ) Intangible assets (1,351 ) (1,831 ) Capitalized transaction costs - 53 Goodwill (1,115 ) (1,027 ) Total deferred tax liabilities $ (2,608 ) $ (3,011 ) Net deferred tax liabilities $ (217 ) (178 ) |
Schedule of income taxes consists | Schedule of income taxes consists Years Ended December 31, 2022 2021 Current: Federal $ - $ - State 37 50 Total current 37 50 Deferred: Federal 101 (1,197 ) State (62 ) (523 ) Total deferred 39 (1,720 ) Total income tax expense (benefit) $ 76 $ (1,670 ) |
Schedule of reconciliation between the federal statutory rate and the effective income tax rate | Schedule of reconciliation between the federal statutory rate and the effective income tax rate December 31, 2022 2021 Statutory U.S. federal tax rate 21.00 % 21.00 % Less: rate attributable to noncontrolling interest -17.52 % -19.27 % State income taxes (net of federal benefit) 0.17 % 0.50 % Permanent differences -2.71 % 0.00 % Effective rate change 0.01 % 0.00 % Increase in valuation allowance -0.96 % 0.00 % Other -0.02 % 0.00 % Effective income tax rate -0.03 % 2.23 % |
Stockholders_ (deficit) equity
Stockholders’ (deficit) equity (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Schedule of stockholders equity | Schedule of stockholders equity Authorized Issued Outstanding Class A Common Stock 690,000,000 229,818,370 229,818,370 Class V Common Stock 275,000,000 35,402,821 35,402,821 Preferred Stock 10,000,000 - - Total shares as of June 30, 2023 975,000,000 265,221,191 265,221,191 The table set forth below reflects information about the Company’s equity as of December 31, 2022. Authorized Issued Outstanding Class A Common Stock 690,000,000 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 | Schedule of Stockholders Equity Authorized Issued Outstanding Class A Common Stock 690,000,000 55,886,692 55,886,692 Class V Common Stock 275,000,000 115,463,646 115,463,646 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 171,350,338 171,350,338 |
Schedule of operating lease payments | Schedule of operating lease payments Years Ending December 31, 2023 1,151 2024 1,228 2025 151 2026 152 2027 154 Thereafter 578 Total minimum lease payments 3,414 Less: Imputed interest (640 ) Total operating lease liabilities $ 2,774 | Schedule of reconciliation to the amount of the liabilities Years Ending December 31, 2023 $ 2,276 2024 1,228 2025 151 2026 152 2027 154 Thereafter 578 Total minimum lease payments 4,539 Less: Imputed interest (833 ) Total operating lease liabilities $ 3,706 |
Nature of operations and summ_4
Nature of operations and summary of significant accounting policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance, December 31, 2021 | $ 56,984 | $ 43,357 |
Invoiced to customers in the current period | (50,085) | (43,513) |
Changes in estimate related to the prior period | (6,899) | 156 |
Estimated accrual related to the current period | 55,184 | 56,984 |
Balance, December 31, 2022 | $ 55,184 | $ 56,984 |
Nature of operations and summ_5
Nature of operations and summary of significant accounting policies (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance, December 31, 2021 | $ 49,607 | $ 37,429 |
Invoiced by vendors in the current period | (42,414) | (37,726) |
Changes in estimate related to the prior period | (7,193) | 297 |
Estimated accrual related to the current period | 44,773 | 49,607 |
Balance, December 31, 2022 | $ 44,773 | $ 49,607 |
Nature of operations and summ_6
Nature of operations and summary of significant accounting policies (Details 2) | 12 Months Ended |
Dec. 31, 2022 | |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Customer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Customer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
[custom:PropertyPlantAndEquipment] | Lesser of useful life or remaining lease term |
Nature of operations and summ_7
Nature of operations and summary of significant accounting policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
May 25, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 15, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 4,100,000 | $ 4,100,000 | $ 3,600,000 | $ 8,600,000 | ||||
Contract with Customer, Liability, Revenue Recognized | 4,600,000 | 4,400,000 | 4,000,000 | |||||
Deferred Offering Costs | 0 | 1,100,000 | ||||||
Other Additional Capital | 67,300,000 | 67,300,000 | 67,300,000 | 53,900,000 | ||||
Other Accrued Liabilities | 13,400,000 | |||||||
Other Expenses | $ 800,000 | 600,000 | 12,100,000 | |||||
[custom:OfferingCostsRecognized-0] | 0 | |||||||
[custom:DeferredAdvertisingCost-0] | 2,500,000 | 1,500,000 | ||||||
Goodwill, Impairment Loss | 0 | |||||||
Asset Impairment Charges | 0 | |||||||
Acquisition Costs, Period Cost | 0 | 0 | ||||||
Amortization of Acquisition Costs | 1,100,000 | $ 2,500,000 | ||||||
[custom:FairValueOfEarnoutInterests] | 5,600,000 | |||||||
Other Operating Income (Expense), Net | 5,300,000 | 68,500,000 | ||||||
[custom:UnbilledReceivables-0] | 51,300,000 | 51,300,000 | 55,200,000 | |||||
[custom:CustomerInvoice] | 53,700,000 | |||||||
Deferred Revenue | 7,400,000 | 7,400,000 | 5,900,000 | |||||
[custom:GainOnSettlement] | 6,400,000 | 7,000,000 | ||||||
[custom:FairValueOfEarnoutInterest-0] | 300,000 | 300,000 | 5,600,000 | |||||
Current Income Tax Expense (Benefit) | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Effective Income Tax Rate Reconciliation, Percent | (0.10%) | (0.10%) | (0.10%) | (0.10%) | ||||
Deferred Tax Liabilities, Net | $ 200,000 | $ 200,000 | $ 200,000 | |||||
Common Class A [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 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 | 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 | 8,900,840 | |||||
Common Class V [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Mergers (Details Narrative)
Mergers (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Aug. 15, 2022 | Apr. 24, 2023 | Oct. 19, 2022 | May 25, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | |
Business Acquisition [Line Items] | ||||||||
[custom:RsuAwardsDescription] | the Company granted certain RSU awards, valued at $3.5 million, as replacement awards for $13.9 million of the accrued management rollover consideration. The replacement awards resulted in a $10.4 million gain, which was recognized in general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2022. The remaining $33.7 million of compensation expenses related to the Rubicon Management Rollover Holders’ RSUs and DSUs have been recognized in accrued expenses on the accompanying consolidated balance sheet as of December 31, 2022. | |||||||
Share Price | $ 10.18 | $ 1.78 | $ 2.09 | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 83.50% | |||||||
Limited Partners' Contributed Capital | $ 73,800 | $ 73,800 | $ 73,800 | |||||
Business Combination, Consideration Transferred, Other | 28,900 | 28,900 | ||||||
[custom:AggregateProceedsReceivedFromPipeInvestors-0] | 121,000 | 121,000 | 121,000 | |||||
Asset Acquisition, Consideration Transferred, Transaction Cost | 67,300 | 67,300 | ||||||
Accrued Liabilities, Fair Value Disclosure | 53,900 | |||||||
Other Expenses | $ 800 | 600 | $ 12,100 | |||||
[custom:OfferingCosts] | $ 6,400 | |||||||
[custom:GainOnSettlement] | $ 6,400 | $ 7,000 | ||||||
Common Stock Class A [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:RetainedAggregateShares] | 19,846,916 | 19,846,916 | ||||||
Asset Acquisition, Consideration Transferred, Transaction Cost | $ 7,100 | |||||||
Common Stock Class B [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:RetainedAggregateShares] | 118,677,880 | |||||||
Common Stock Class V [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:RetainedAggregateShares] | 118,677,880 | |||||||
Founder Warrants [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:WarrantDescription] | 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 | |||||||
[custom:WarrantDescriptions] | 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 | |||||||
Founder Class A Shares [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | |||||||
Founder Class B Shares [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | |||||||
Class A Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:AggregateOfShares] | 7,082,616 | |||||||
Stock Issued During Period, Shares, New Issues | 160,000 | 160,000 | ||||||
Class A Common Stock [Member] | P I P E Investors [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:AggregateOfShares] | 12,100,000 | 12,100,000 | ||||||
Share Price | $ 10 | $ 10 | $ 10 | |||||
Class A Common Stock [Member] | F P A Sellers [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
[custom:AggregateOfShares] | 7,082,616 | |||||||
Class B Units [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | 880,000 | 880,000,000 | ||||||
Class A Shares [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 160,000 | 160,000 |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 11,334 | $ 10,747 | |
Less accumulated amortization and depreciation | (8,765) | (8,103) | |
Total property and equipment, net | 2,569 | 2,644 | $ 2,611 |
Total property and equipment, net | 2,569 | 2,644 | 2,611 |
Property, Plant and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 10,747 | 9,429 | |
Less accumulated amortization and depreciation | (8,103) | (6,818) | |
Total property and equipment, net | 2,644 | 2,611 | |
Total property and equipment, net | 2,644 | 2,611 | |
Property, Plant and Equipment [Member] | Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 3,914 | 3,791 | 2,968 |
Property, Plant and Equipment [Member] | Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,882 | 1,485 | 1,122 |
Property, Plant and Equipment [Member] | Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,766 | 1,699 | 1,570 |
Property, Plant and Equipment [Member] | Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 3,772 | $ 3,772 | $ 3,769 |
Property and equipment (Detai_2
Property and equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation, Depletion and Amortization | $ 300 | $ 300 | $ 700 | $ 700 | $ 1,300 | $ 1,600 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | |||
Term loan balance | $ 105,244 | $ 71,000 | $ 77,000 |
Convertible debt balance | 10,880 | 7,000 | |
Related-party convertible debt balance | 17,670 | 11,964 | |
Less unamortized debt issuance costs | (37,357) | (6,138) | (3,334) |
Total borrowed | 96,437 | 83,826 | 73,666 |
Less short-term debt obligation balance | (3,771) | (22,666) | |
Long-term debt obligation balance | 96,437 | 80,055 | 51,000 |
Total borrowed | $ 96,437 | $ 83,826 | $ 73,666 |
Debt (Details 1)
Debt (Details 1) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2023 | $ 6,000 | |
2024 | 83,964 | |
Total | $ 133,794 | $ 89,964 |
2023 | ||
2024 | ||
2025 | 108,543 | |
2026 | $ 25,251 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Jun. 07, 2023 | Feb. 07, 2023 | Feb. 02, 2023 | Feb. 02, 2023 | Dec. 14, 2018 | Dec. 16, 2022 | Nov. 30, 2022 | Nov. 18, 2022 | Dec. 22, 2021 | Mar. 29, 2019 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 20, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 02, 2022 | Nov. 23, 2022 | Mar. 24, 2021 | |
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Dec. 31, 2023 | Jun. 16, 2024 | May 30, 2024 | ||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.60% | ||||||||||||||||||||
[custom:Debt-0] | $ 5,000 | ||||||||||||||||||||
Proceeds from Issuance of Trust Preferred Securities | $ 25,000 | ||||||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | 300 | $ 1,500 | |||||||||||||||||||
Amortization of Deferred Charges | 1,300 | ||||||||||||||||||||
Debt Instrument, Face Amount | $ 11,900 | $ 7,000 | $ 60,000 | ||||||||||||||||||
[custom:EquityContribution-0] | $ 50,000 | $ 50,000 | |||||||||||||||||||
[custom:CreditFacilityReduced] | $ 20,000 | ||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 6% | 4% | |||||||||||||||||||
Proceeds from Convertible Debt | $ 10,500 | ||||||||||||||||||||
[custom:RelatedPartyNotesReceivableDiscription] | the company had received $3.5 million of the total $10.5 million net proceeds from the investors. The remaining $7.0 million was subsequently received in 2023 (see Note 23) and is recorded in related-party notes receivable on the accompanying consolidated balance sheet as of December 31, 2022. | ||||||||||||||||||||
Repayments of Bank Debt | $ 2,300 | ||||||||||||||||||||
[custom:PppLoans] | 10,800 | ||||||||||||||||||||
[custom:Refund] | $ 2,300 | ||||||||||||||||||||
[custom:GainOnForgivenessOfDebt] | $ 10,900 | ||||||||||||||||||||
Interest Expense | $ 8,119 | 3,911 | $ 15,295 | 7,686 | 16,900 | 11,500 | |||||||||||||||
Gain (Loss) on Extinguishment of Debt | (6,783) | (8,886) | 10,900 | ||||||||||||||||||
Interest Expense, Debt | 8,800 | 3,900 | 16,500 | 7,700 | |||||||||||||||||
Debt [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | 2,800 | 2,100 | |||||||||||||||||||
Amortization of Deferred Charges | 1,800 | $ 1,000 | |||||||||||||||||||
Convertible Debentures [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | May 30, 2024 | ||||||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | 1,700 | 1,700 | $ 2,500 | ||||||||||||||||||
Amortization of Deferred Charges | 500 | 1,000 | |||||||||||||||||||
Debt Instrument, Face Amount | $ 7,000 | ||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 4% | ||||||||||||||||||||
Gain (Loss) on Extinguishment of Debt | 300 | ||||||||||||||||||||
Conversion of Stock, Amount Converted | 3,300 | 5,500 | |||||||||||||||||||
Debt Instrument, Increase, Accrued Interest | $ 200 | $ 3,000 | |||||||||||||||||||
Conversion of Stock, Shares Converted | 9,766,358 | 12,616,320 | |||||||||||||||||||
Insider Convertible Debentures [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jun. 16, 2024 | ||||||||||||||||||||
Amortization of Deferred Charges | $ 200 | $ 400 | |||||||||||||||||||
Debt Instrument, Face Amount | $ 11,900 | ||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 6% | ||||||||||||||||||||
Proceeds from Convertible Debt | $ 10,500 | ||||||||||||||||||||
[custom:RelatedPartyNotesReceivableDiscription] | As of December 31, 2022, the Company had received $3.5 million of the total $10.5 million net proceeds from the investors and the remaining $7.0 million was recorded in related-party notes receivable on the accompanying condensed consolidated balance sheet as of December 31, 2022. The Company received the remaining $7.0 million in January and February 2023. Neither principal nor accrued interest of the Insider Convertible Debentures was converted to Class A Common Stock from the origination through June 30, 2023. | ||||||||||||||||||||
Debt Instrument, Increase, Accrued Interest | 200 | $ 400 | |||||||||||||||||||
Third Party Convertible Debentures [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Aug. 01, 2024 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 6% | 6% | |||||||||||||||||||
Debt Instrument, Face Amount | $ 1,400 | $ 1,400 | |||||||||||||||||||
Proceeds from Convertible Debt | $ 1,200 | ||||||||||||||||||||
N Z Superfund [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Aug. 01, 2024 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8% | 8% | |||||||||||||||||||
Amortization of Deferred Charges | 100 | 100 | |||||||||||||||||||
Debt Instrument, Face Amount | $ 5,100 | $ 5,100 | |||||||||||||||||||
Proceeds from Convertible Debt | $ 4,500 | ||||||||||||||||||||
Debt Instrument, Increase, Accrued Interest | 100 | 200 | |||||||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Long-Term Debt, Gross | $ 75,000 | $ 60,000 | |||||||||||||||||||
Debt Instrument, Maturity Date | Dec. 14, 2025 | Dec. 14, 2021 | Dec. 31, 2022 | ||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.80% | 4.50% | 5.60% | 9.70% | 6% | 9.70% | |||||||||||||||
[custom:RemainningCreditValue-0] | 5,600 | 5,600 | $ 51,800 | $ 29,900 | |||||||||||||||||
Long-Term Line of Credit | $ 51,800 | 51,800 | 5,600 | 23,000 | |||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | 900 | 100 | |||||||||||||||||||
Amortization of Deferred Charges | $ 200 | 200 | $ 500 | ||||||||||||||||||
[custom:CreditFacilityReduced] | $ 2,600 | ||||||||||||||||||||
Repayments of Debt | $ 48,600 | ||||||||||||||||||||
Extinguishment of Debt, Gain (Loss), Net of Tax | 2,600 | ||||||||||||||||||||
Term Loan Facility [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Long-Term Debt, Gross | $ 20,000 | ||||||||||||||||||||
Debt Instrument, Maturity Date | Dec. 22, 2022 | Mar. 29, 2024 | |||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 9.60% | 9.50% | 13.60% | 11.50% | |||||||||||||||||
Debt Instrument, Face Amount | $ 10,000 | ||||||||||||||||||||
Long-Term Construction Loan | $ 20,000 | ||||||||||||||||||||
Subordinated Borrowing, Interest Rate | 15% | ||||||||||||||||||||
Repayments of Debt | 40,500 | ||||||||||||||||||||
Gain (Loss) on Extinguishment of Debt | 2,500 | $ 800 | |||||||||||||||||||
Paycheck Protection Program Loan [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Long-Term Debt | $ 0 | ||||||||||||||||||||
June 2023 Revolving Credit Facility [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Long-Term Debt, Gross | $ 90,000 | ||||||||||||||||||||
Debt Instrument, Maturity Date | Jun. 07, 2026 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.25% | 9.50% | 9.50% | ||||||||||||||||||
[custom:RemainningCreditValue-0] | $ 3,000 | $ 3,000 | |||||||||||||||||||
Long-Term Line of Credit | 46,200 | 46,200 | |||||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | 2,900 | 2,900 | |||||||||||||||||||
Subordinated Term Loan [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Dec. 22, 2022 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 14% | ||||||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | 11,900 | 11,900 | |||||||||||||||||||
Amortization of Deferred Charges | $ 700 | $ 400 | $ 900 | $ 700 | |||||||||||||||||
Long-Term Construction Loan | $ 20,000 | ||||||||||||||||||||
Rodina Note [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jul. 01, 2024 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 16% | 16% | |||||||||||||||||||
Debt Instrument, Face Amount | $ 3,000 | $ 3,000 | |||||||||||||||||||
[custom:NumberOfSharesIssued] | 7,521,940 | ||||||||||||||||||||
June 2023 Term Loan [Member] | |||||||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jun. 07, 2026 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 10.25% | 18.50% | 18.50% | ||||||||||||||||||
Unamortized Loss Reacquired Debt, Noncurrent | $ 24,000 | $ 24,000 | |||||||||||||||||||
Amortization of Deferred Charges | $ 400 | ||||||||||||||||||||
Debt Instrument, Face Amount | $ 75,000 | ||||||||||||||||||||
[custom:TermDebtDescription] | The June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan are subject to certain cross-default provisions under the intercreditor agreement. In addition, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements include the consistent minimum liquidity threshold, which reduces the availability under the June 2023 Revolving Credit Facility initially by $19.0 million (the “Minimum Liquidity Threshold”). During the terms of the agreements, the Minimum Liquidity Threshold could be decreased by up to $9.0 million, which will make the Minimum Liquidity Threshold to $10.0 million, upon the Company’s achievement of certain financial conditions defined in the agreements. As of June 30, 2023, the Minimum Liquidity Threshold was $19.0 million. Furthermore, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements require the Company to maintain a $2.0 million letter of credit, which was reserved under the June 2023 Revolving Credit Facility and reduced the availability as of June 30, 2023. |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | |||
Accrued hauler expenses | $ 44,327 | $ 44,773 | $ 49,607 |
Accrued compensation | 16,001 | 43,054 | 9,656 |
Accrued income taxes | 9 | 3 | |
Accrued Mergers transaction expenses | 13,433 | ||
Other accrued expenses | 5,719 | 6,733 | 6,272 |
Total accrued expenses | 108,002 | $ 65,538 | |
Total accrued expenses | $ 66,047 | $ 108,002 |
Goodwill and other intangible_2
Goodwill and other intangibles (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 26,267 | $ 26,267 | $ 26,267 |
Accumulated Amortization | 16,997 | (15,386) | (12,104) |
Net Carrying Amount | 9,270 | 10,881 | 14,163 |
Accumulated Amortization | (16,997) | 15,386 | 12,104 |
Domain Name [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 835 | 835 | 835 |
Accumulated Amortization | |||
Net Carrying Amount | 835 | 835 | 835 |
Accumulated Amortization | |||
Finite-Lived Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 25,432 | 25,432 | 25,432 |
Accumulated Amortization | 16,997 | (15,386) | (12,104) |
Net Carrying Amount | 8,435 | 10,046 | 13,328 |
Accumulated Amortization | $ (16,997) | $ 15,386 | $ 12,104 |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years | 5 years | 5 years |
Gross Carrying Amount | $ 728 | $ 728 | $ 728 |
Accumulated Amortization | 728 | (728) | (728) |
Net Carrying Amount | |||
Accumulated Amortization | (728) | 728 | 728 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 20,976 | 20,976 | 20,976 |
Accumulated Amortization | 13,421 | (12,141) | (9,582) |
Net Carrying Amount | 7,555 | 8,835 | 11,394 |
Accumulated Amortization | $ (13,421) | $ 12,141 | $ 9,582 |
Customer Relationships [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 2 years | 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 | 8 years |
Noncompete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 550 | $ 550 | $ 550 |
Accumulated Amortization | 550 | (550) | (487) |
Net Carrying Amount | 63 | ||
Accumulated Amortization | $ (550) | $ 550 | $ 487 |
Noncompete Agreements [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | 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 | 4 years |
Technology Equipment [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years | 3 years |
Gross Carrying Amount | $ 3,178 | $ 3,178 | $ 3,178 |
Accumulated Amortization | 2,298 | (1,967) | (1,307) |
Net Carrying Amount | 880 | 1,211 | 1,871 |
Accumulated Amortization | $ (2,298) | $ 1,967 | $ 1,307 |
Goodwill and other intangible_3
Goodwill and other intangibles (Details 1) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,609 | $ 3,220 |
2024 | 3,110 | 3,110 |
2025 | 2,559 | 2,559 |
2026 | 1,157 | 1,157 |
Future amortization of intangible assets | 8,435 | 10,046 |
Balance at January 1, 2021 | 32,132 | |
Balance at December 31, 2021 | 32,132 | |
Balance at December 31, 2022 | 32,132 | |
Total future amortization of intangible assets | $ 8,435 | $ 10,046 |
Goodwill and other intangible_4
Goodwill and other intangibles (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Amortization of Intangible Assets | $ 800 | $ 800 | $ 1,600 | $ 1,700 | $ 3,300 | $ 3,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
Right-of-use assets | $ 2,205 | $ 2,827 | $ 3,920 |
Current lease liabilities | 1,871 | 1,880 | 1,675 |
Non-current lease liabilities | 903 | 1,826 | 3,770 |
Total liabilities | $ 2,774 | $ 3,706 | $ 5,445 |
Leases (Details 1)
Leases (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease expense | $ 1,631 | $ 1,507 |
Short-term lease expense | 419 | 601 |
Less: Sublease income | (802) | (802) |
Total lease expense | $ 1,248 | $ 1,306 |
Leases (Details 2)
Leases (Details 2) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
2023 | $ 2,276 | ||
2024 | 1,228 | ||
2025 | 151 | ||
2026 | 152 | ||
2027 | 154 | ||
Thereafter | 578 | ||
Total minimum lease payments | 4,539 | ||
Less: Imputed interest | (833) | ||
Total operating lease liabilities | $ 2,774 | $ 3,706 | $ 5,445 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
[custom:OperatingLeaseLiabilities-0] | $ 2,200 | $ 2,000 |
Operating Lease, Weighted Average Remaining Lease Term | 4 years 2 months 12 days | 4 years 7 months 6 days |
Lessee, Operating Lease, Discount Rate | 11.40% | 11.43% |
Stockholders' (deficit) equity
Stockholders' (deficit) equity (Details) - shares | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 15, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 59,504,853 | 59,504,853 | ||
Common stock, shares Held by Members as of | 37,521,426 | 33,509,272 | ||
Preferred stock, shares authorized | 10,000,000 | |||
Preferred stock, shares outstanding | 0 | |||
Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Total shares authorized | 975,000,000 | 975,000,000 | ||
Total shares issued | 265,221,191 | 171,350,338 | ||
Total shares outstanding | 265,221,191 | 171,350,338 | ||
Common Units [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 34,438,298 | 34,438,298 | ||
Common stock, shares Held by Members as of | 13,452,262 | 9,440,108 | ||
Series A Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 4,834,906 | 4,834,906 | ||
Common stock, shares Held by Members as of | 4,834,906 | 4,834,906 | ||
Series B Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 6,820,450 | 6,820,450 | ||
Common stock, shares Held by Members as of | 6,774,923 | 6,774,923 | ||
Series C Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 3,142,815 | 3,142,815 | ||
Common stock, shares Held by Members as of | 3,141,500 | 3,141,500 | ||
Series D Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 2,816,403 | 2,816,403 | ||
Common stock, shares Held by Members as of | 2,787,707 | 2,787,707 | ||
Series E Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 7,451,981 | 7,451,981 | ||
Common stock, shares Held by Members as of | 6,530,128 | 6,530,128 | ||
Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 690,000,000 | |||
Common stock, shares outstanding | 229,818,370 | 55,886,692 | ||
Common Class A [Member] | Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 690,000,000 | 690,000,000 | ||
Common stock, shares issued | 229,818,370 | 55,886,692 | ||
Common stock, shares outstanding | 229,818,370 | 55,886,692 | ||
Common Class V [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 275,000,000 | |||
Common stock, shares outstanding | 35,402,821 | 115,463,646 | ||
Common Class V [Member] | Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 275,000,000 | 275,000,000 | ||
Common stock, shares issued | 35,402,821 | 115,463,646 | ||
Common stock, shares outstanding | 35,402,821 | 115,463,646 | ||
Preferred Stock [Member] | Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 10,000,000 | |||
Common stock, shares issued | ||||
Common stock, shares outstanding | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, shares issued | ||||
Preferred stock, shares outstanding |
Stockholders' (deficit) equit_2
Stockholders' (deficit) equity (Details 1) - shares | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 15, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 59,504,853 | 59,504,853 | ||
Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Total shares authorized | 975,000,000 | 975,000,000 | ||
Total shares issued | 265,221,191 | 171,350,338 | ||
Total shares Outstanding | 265,221,191 | 171,350,338 | ||
Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 690,000,000 | |||
Common stock, shares Outstanding | 229,818,370 | 55,886,692 | ||
Common Class A [Member] | Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 690,000,000 | 690,000,000 | ||
Common stock, shares Issued | 229,818,370 | 55,886,692 | ||
Common stock, shares Outstanding | 229,818,370 | 55,886,692 | ||
Common Class V [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 275,000,000 | |||
Common stock, shares Outstanding | 35,402,821 | 115,463,646 | ||
Common Class V [Member] | Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 275,000,000 | 275,000,000 | ||
Common stock, shares Issued | 35,402,821 | 115,463,646 | ||
Common stock, shares Outstanding | 35,402,821 | 115,463,646 | ||
Preferred Stock [Member] | Equity [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 10,000,000 | |||
Common stock, shares Issued | ||||
Common stock, shares Outstanding |
Members_ equity (deficit) and_3
Members’ equity (deficit) and Stockholders’ equity (deficit) (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Equity [Abstract] | ||
[custom:WarrantHolders-0] | $ 32,500 | $ 32,500 |
[custom:ExchangeOfShares-0] | 1,083,008 |
Warrants (Details)
Warrants (Details) - $ / shares | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Aug. 15, 2022 | Aug. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Warrants | ||||||
Beginning Balance | 1,084,725 | 1,084,725 | ||||
Beginning Balance | $ 30 | $ 30 | ||||
Granted | ||||||
Exercised | (1,083,008) | |||||
Exercised | $ 1.98 | $ 1.87 | $ 10.25 | $ 9.36 | $ 30 | |
Expired | (1,717) | |||||
Expired | $ 30 | |||||
Granted | 15,138,947 | 214,642 | ||||
Ending Balance | ||||||
Ending Balance |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 07, 2023 | Aug. 15, 2022 | Jun. 30, 2023 | Dec. 22, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Mar. 22, 2023 | Nov. 30, 2022 | Nov. 18, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Class of Warrant or Right, Outstanding | 844,000 | |||||||||
Exercise price | $ 30 | |||||||||
[custom:WarrantHolders-0] | $ 32,500 | $ 32,500 | ||||||||
[custom:WarrantsDescription] | Company assumed a total of 30,016,851 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $11.50 per share. | |||||||||
[custom:WarrantLiabilitiesAmount-0] | 700 | $ 2,600 | 1,300 | |||||||
[custom:TermLoan-0] | 600 | 500 | ||||||||
[custom:WarrantLiabilityAmount-0] | 20,000 | $ 20,000 | ||||||||
[custom:WarrantsLiabilitiesAmount-0] | $ 900 | $ 1,000 | ||||||||
Public Warrants [Member] | IPO [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Class of Warrant or Right, Outstanding | 240,725 | |||||||||
Public Warrants [Member] | Private Placement [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Class of Warrant or Right, Outstanding | 15,812,476 | |||||||||
Private Warrants [Member] | Private Placement [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Class of Warrant or Right, Outstanding | 14,204,375 | 1,083,008 | ||||||||
Warrant [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Exercise price | $ 0.01 | |||||||||
[custom:PurchaseOfUnits-0] | 62,003 | |||||||||
Warrant agreements, description | Company concurrently entered into warrant agreements and issued the Subordinated Term Loan Warrants under the condition that if the Company did not repay the Subordinated Term Loan on or prior to the original maturity date of December 22, 2022, the lender would receive the 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, and the tenth anniversary of the issuance date. Additionally, if the Company did not repay the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would 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 (the “Additional Subordinated Term Loan Warrants”). If the Company repaid the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would automatically terminate and be voided and no Subordinated Term Loan Warrant would be exercisable. | the Company concurrently entered into warrant agreements and issued the Subordinated Term Loan Warrants under the condition that if the Company did not repay the Subordinated Term Loan on or prior to the original maturity date of December 22, 2022, the lender would receive 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, and the tenth anniversary of the issuance date. Additionally, if the Company did not repay the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would 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 repaid the Subordinated Term Loan on or prior to the maturity date, the Subordinated Term Loan Warrants would automatically terminate and be voided and no Subordinated Term Loan Warrant would be exercisable. | ||||||||
Term Loan Warrants [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
[custom:WarrantLiabilitiesAmount-0] | $ 100 | $ 100 | ||||||||
[custom:WarrantsConvertedIntoCommonStockShares] | 2,559,375 | 1,092,417 | ||||||||
[custom:WarrantsConvertedIntoCommonStockAmount] | $ 1,100 | |||||||||
Term Loan Warrants [Member] | Firstamendment [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
[custom:WarrantLiabilitiesAmount-0] | $ 250 | |||||||||
Term Loan Warrants [Member] | Secondamendment [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
[custom:WarrantLiabilitiesAmount-0] | $ 350 | |||||||||
Term Loan Warrants [Member] | Third Amendment [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
[custom:WarrantLiabilitiesAmount-0] | $ 380 | |||||||||
Y A Warrant [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
[custom:WarrantLiabilitiesAmount-0] | 20,000 | $ 20,000 | $ 20,000 | |||||||
[custom:WarrantPurchasePrice-0] | 6,000 | |||||||||
[custom:WarrantIsExercisableAmount-0] | $ 20,000 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.0001 | |||||||||
Advisor Warrant [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Class of Warrant or Right, Outstanding | 500,000 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||||||||
[custom:LossOnChangeInFairValue-0] | 100 | $ 100 | ||||||||
June 2023 Term Loan Warrants [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
[custom:WarrantsConvertedIntoCommonStockShares] | 16,972,829 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||||||||
Fair Value Adjustment of Warrants | $ 9,400 | 9,800 | ||||||||
[custom:ChangeInFairValueOfWarrants] | $ 400 |
Equity Investment Agreement (De
Equity Investment Agreement (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
May 25, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 15, 2022 | |
[custom:EquityInvestmentAgreementDescription] | the Company entered into the Rubicon Equity Investment Agreement with certain investors who are affiliated with Andres Chico (a member of the Company’s board of directors) and Jose Miguel Enrich (a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock), 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 Expenses | $ 800 | $ 600 | $ 12,100 | |
Common Class B [Member] | ||||
Shares, Issued | 880,000 | |||
Common Class A [Member] | ||||
Shares, Issued | 160,000 | |||
[custom:ForfeitureShares-0] | 160,000 |
Forward Purchase Agreement (Det
Forward Purchase Agreement (Details Narrative) | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Aug. 04, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||
[custom:ForwardPurchaseAgreementDescription] | 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. | ||
Termination Loans, Description | the FPA Sellers entered into the Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). On November 30, 2022, the Company and the FPA Sellers entered into the FPA Termination Agreement and terminated the Forward Purchase Agreement. Pursuant to the FPA Termination Agreement, (i) the Company made a one-time $6.0 million cash payment to the FPA Sellers upon execution of the FPA Termination Agreement and agreed to make a $2.0 million payment to the FPA Sellers, which can be settled in cash or shares of Class A Common Stock at the Company’s sole option, on or around the earlier of (a) May 30, 2024 (the “FPA Lock-Up Date”), and (b) six months following 90% or more of the YA Convertible Debentures is repaid or converted into shares of Class A Common Stock (the “FPA Earlier Lock-Up Date”), (ii) the FPA Sellers forfeited and returned to the Company 2,222,119 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 2,140,848 shares of Class A Common Stock the FPA Sellers retained until the earlier of (a) the FPA Lock-Up Date, and (b) the FPA Earlier Lock-Up Date. The value of 2,222,119 shares of Class A Common Stock returned by the FPA Seller and subsequently canceled by the Company was $4.6 million as of the FPA Termination Agreement execution date, which was recognized in common stock – Class A and accumulated deficit on the consolidated balance sheet. The $2.0 million obligation (the “FPA Settlement Liability”) has been included in accrued expenses on the accompanying condensed consolidated balance sheets as of June 30, 2023 and other long-term liabilities as of December 31, 2022 | the Company and the FPA Sellers entered into the FPA Termination Agreement and terminated the Forward Purchase Agreement. Pursuant to the FPA Termination Agreement, (i) the Company made a one-time $6.0 million cash payment to the FPA Sellers upon execution of the FPA Termination Agreement and agreed to make a $2.0 million payment to the FPA Sellers, which can be settled in cash or shares of Class A Common Stock at the Company’s sole option, on or around the earlier of (a) May 30, 2024 (the “FPA Lock-Up Date”), and (b) six months following 90% or more of the YA Convertible Debentures is repaid or converted into shares of Class A Common Stock (the “FPA Earlier Lock-Up Date”), (ii) the FPA Sellers forfeited and returned to the Company 2,222,119 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 2,140,848 shares of Class A Common Stock the FPA Sellers retained until the earlier of (a) the FPA Lock-Up Date, and (b) the FPA Earlier Lock-Up Date. The value of 2,222,119 shares of Class A Common Stock returned by the FPA Seller and subsequently canceled by the Company was $4.6 million as of the FPA Termination Agreement execution date, which was recognized in common stock – Class A and accumulated deficit on the consolidated balance sheet. The $2.0 million obligation has been included in other long-term liabilities on the accompanying consolidated balance sheet as of December 31, 2022. | |
Related Party [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Termination Loans, Description | Termination Agreement execution date, and recognized $16.6 million of derivative asset and $3.4 million of derivative liability on the consolidated balance sheets, respectively. The Company recorded a total of $72.1 million in losses on its consolidated statement of operations for the year ended December 31, 2022. This total loss is made up of two parts: (i) a $52.1 million loss at issuance, calculated as the difference between the amount paid to purchase the forward purchase option derivative and the fair value of this derivative on the Closing Date, and (ii) a $20.0 million loss, calculated as the difference in fair value of the forward purchase option derivative as of the Closing Date and as of the FPA Termination Agreement execution date. Upon execution of the FPA Termination Agreement, the Company also derecognized $3.4 million of the forward purchase option derivative from derivative liabilities on the consolidated balance sheet. There were no derivative assets or liabilities related to the forward purchase option derivative outstanding as of December 31, 2022 and 2021. |
Yorkville Facilities (Details N
Yorkville Facilities (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | ||||||
Aug. 31, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 16, 2022 | Nov. 30, 2022 | Aug. 15, 2022 | Mar. 24, 2021 | |
[custom:StandbyEquityPurchasesAgreementDescription] | Company entered into a Standby Equity Purchase Agreement (“SEPA”) with the Yorkville Investor, which was subsequently amended on November 30, 2022. 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, and 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. | ||||||
Debt Instrument, Face Amount | $ 11,900 | $ 7,000 | $ 60,000 | ||||
[custom:PurchasePrice-0] | 7,000 | ||||||
[custom:StandbyEquityPurchaseAgreementDescription] | Company entered into a Standby Equity Purchase Agreement (“SEPA”) with the Yorkville Investor, which was subsequently amended on November 30, 2022. 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, and 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 | ||||||
[custom:NoncurrentAsset-0] | $ 2,000 | ||||||
Yorkville Facilities [Member] | |||||||
Debt Instrument, Face Amount | $ 10,000 | $ 10,000 | |||||
[custom:PurchasePrice-0] | 10,000 | 10,000 | |||||
Long-Lived Assets | $ 2,100 | ||||||
[custom:NoncurrentAsset-0] | $ 2,100 | ||||||
Common Class A [Member] | |||||||
Shares, Issued | 160,000 | ||||||
Common Class A [Member] | Yorkville [Member] | |||||||
Shares, Issued | 200,000 |
Equity-based compensation (Deta
Equity-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Aug. 15, 2022 | Aug. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||||
Cost of revenue | $ 72 | |||||
Sales and marketing | 23 | |||||
Product development | 37 | |||||
General and administrative | 100,855 | 7,785 | ||||
Total equity-based compensation | $ 100,987 | $ 7,785 | ||||
Options outstanding, beginning balance | 3,070,151 | 1,456,695 | 3,084,650 | 3,017,191 | 3,084,650 | 3,017,191 |
Weighted average grant date fair value, beginning | $ 1.98 | $ 10.25 | $ 3.91 | $ 10.25 | $ 3.91 | |
Options granted | 15,138,947 | 214,642 | ||||
Weighted average grant date fair value, granted | 12,843,979 | 1.05 | 214,642 | |||
Options vested | (7,626,353) | |||||
Weighted average grant date fair value, vested | $ 2.33 | $ 1.14 | $ 10.25 | $ 3.75 | ||
Options forfeited/redeemed | (322,010) | (14,499) | (147,183) | |||
Weighted average grant date fair value, forfeited/redeemed | $ 1.98 | $ 1.87 | $ 10.25 | $ 9.36 | $ 30 | |
Options outstanding,ending balance | 1,456,695 | 8,647,279 | 3,070,151 | 1,456,695 | 3,084,650 | |
Weighted average grant date fair value, ending | $ 1.98 | $ 1.09 | $ 1.98 | $ 10.25 |
Equity-based compensation (De_2
Equity-based compensation (Details 1) | 7 Months Ended | 12 Months Ended | |
Aug. 15, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Expected dividend yield | 0% | ||
Risk-free interest rate | 2.90% | 4% | 1.40% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 3 years | ||
Expected volatility | 35% | 65% | 48.20% |
Equity-based compensation (De_3
Equity-based compensation (Details 2) - $ / shares | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Aug. 15, 2022 | Aug. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||||
Options outstanding, beginning balance | 3,070,151 | 1,456,695 | 3,084,650 | 3,017,191 | 3,084,650 | 3,017,191 |
Options granted | 15,138,947 | 214,642 | ||||
Options Forfeited | (322,010) | (14,499) | (147,183) | |||
Options outstanding,ending balance | 1,456,695 | 8,647,279 | 3,070,151 | 1,456,695 | 3,084,650 | |
Options vested | 1,456,695 | 8,647,279 | 3,070,151 | 1,456,695 | 3,084,650 | |
Option nonvested, beginning | 1,456,695 | 198,210 | 275,446 | 198,210 | 275,446 | |
Weighted average grant date fair value, beginning | $ 1.98 | $ 10.25 | $ 3.91 | $ 10.25 | $ 3.91 | |
Weighted Average Grant Date Fair Value, granted | 12,843,979 | 1.05 | 214,642 | |||
Weighted Average Grant Date Fair Value, granted | $ 2.29 | $ 13.40 | ||||
Vested | (11,182,243) | (183,711) | (144,695) | |||
Weighted Average Grant Date Fair Value, vested | $ 2.33 | $ 1.14 | $ 10.25 | $ 3.75 | ||
Forfeited | (205,041) | (14,499) | (147,183) | |||
Weighted Average Grant Date Fair Value, forfeited | $ 1.98 | $ 1.87 | $ 10.25 | $ 9.36 | $ 30 | |
Granted | (12,843,979) | (1.05) | (214,642) | |||
Option nonvested, ending | 1,456,695 | 1,456,695 | 198,210 | |||
Weighted average grant date fair value, ending | $ 1.98 | $ 1.09 | $ 1.98 | $ 10.25 |
Equity-based compensation (De_4
Equity-based compensation (Details 3) - $ / shares | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Aug. 15, 2022 | Aug. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Beginning Balance | 1,084,725 | 1,084,725 | ||||
Options granted | 15,138,947 | 214,642 | ||||
Forfeited | (205,041) | (14,499) | (147,183) | |||
Options Forfeited | 322,010 | 14,499 | 147,183 | |||
Option nonvested, beginning | 1,456,695 | 198,210 | 275,446 | 198,210 | 275,446 | |
Weighted average grant date fair value, beginning | $ 1.98 | $ 10.25 | $ 3.91 | $ 10.25 | $ 3.91 | |
Granted | 12,843,979 | 1.05 | 214,642 | |||
Weighted Average Grant Date Fair Value, granted | $ 2.29 | $ 13.40 | ||||
Vested | (11,182,243) | (183,711) | (144,695) | |||
Weighted Average Grant Date Fair Value, vested | $ 2.33 | $ 1.14 | $ 10.25 | $ 3.75 | ||
Weighted Average Grant Date Fair Value, forfeited | $ 1.98 | 1.87 | $ 10.25 | $ 9.36 | $ 30 | |
Option nonvested, ending | 1,456,695 | 1,456,695 | 198,210 | |||
Weighted average grant date fair value, ending | $ 1.98 | $ 1.09 | $ 1.98 | $ 10.25 | ||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Options Forfeited | 12,638,938 | |||||
Restricted Stock Units (RSUs) [Member] | Merger Consummation [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Beginning Balance | ||||||
Options vested | 11,182,243 | 11,182,243 | ||||
Restricted Stock Units (RSUs) [Member] | Phantom Unit Exchanges [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Options granted | 970,389 | |||||
Forfeited | (205,041) | |||||
Restricted Stock Units (RSUs) [Member] | Morris Employment Agreement [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Options granted | 8,378,986 | |||||
Restricted Stock Units (RSUs) [Member] | Management Rollover Consideration [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Options granted | 1,828,669 | |||||
Restricted Stock Units (RSUs) [Member] | Non Executive Employees [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Options granted | 1,665,935 |
Equity-based compensation (De_5
Equity-based compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 15, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
[custom:CostRecognizedValue-0] | $ 6,800 | $ 7,200 | |||||
[custom:ExchangeOfVestedRsus-0] | 13,987,442 | 13,987,442 | 970,389 | ||||
[custom:ExchangeOfVestedDsus-0] | 306,802 | 306,802 | 540,032 | ||||
Common Stock, Shares Authorized | 59,504,853 | 59,504,853 | |||||
Share-Based Payment Arrangement, Expense | $ 1,800 | $ 2,100 | $ 11,100 | $ 4,800 | $ 94,200 | $ 500 | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 9,400 | $ 9,400 | |||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 10 months 24 days | ||||||
Common Class A [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Common Stock, Shares Authorized | 690,000,000 | ||||||
Common Stock, Shares, Outstanding | 229,818,370 | 229,818,370 | 55,886,692 | ||||
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, Outstanding | 2,859,270 |
Employee benefits plan (Details
Employee benefits plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | ||
[custom:EmployeesContributeAmount] | $ 20,500 | $ 19,500 |
[custom:ContributeAmount] | $ 300,000 | $ 500,000 |
Loss per share (Details)
Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Net loss | $ (52,774) | |||||
Less: Net loss attributable to non-controlling interests | $ (9,615) | $ (15,937) | (22,621) | |||
Net loss for Basic and Diluted | (30,153) | |||||
Net loss | (22,817) | (27,794) | (32,268) | (52,613) | (281,771) | (73,151) |
Net loss attributable to Rubicon Technologies, Inc | $ (13,202) | $ (16,331) | $ (30,153) | |||
Weighted Average Number of Shares Outstanding, Diluted | 106,211,259 | 82,943,357 | ||||
Earnings Per Share, Diluted | $ (0.12) | $ (0.20) | ||||
Common Class A [Member] | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Weighted average shares of Basic and diluted | 49,885,394 | |||||
Net loss per share attributable to Basic and diluted | $ (0.60) |
Loss per share (Details Narrati
Loss per share (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 shares | |
Common Stock Class A [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 500,000,000 |
Public Warrants [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 15,812,500 |
Private Warrants [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 14,204,375 |
Earn Out Class A Shares [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,488,519 |
Vested R S Us [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,182,243 |
Vested D S Us [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 540,032 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Redemption Feature Derivative [Member] | ||||
Liabilities | ||||
Additions | $ (474) | |||
Changes in fair value | 1,267 | (2,198) | ||
Begiining balances | (3,498) | (826) | ||
Reclassified to level 2 | ||||
Ending balances | (2,231) | (3,498) | $ (826) | |
Earn Out Liability [Member] | ||||
Liabilities | ||||
Additions | ||||
Changes in fair value | 470 | 4,820 | ||
Begiining balances | (780) | (5,600) | ||
Reclassified to level 2 | ||||
Ending balances | (310) | (780) | (5,600) | |
Additional Subordinated Term Loan Warrants Derivative [Member] | ||||
Liabilities | ||||
Additions | (9,377) | (2,887) | ||
Changes in fair value | (1,602) | |||
Begiining balances | (2,887) | |||
Reclassified to level 2 | 1,050 | |||
Ending balances | (12,816) | (2,887) | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Liabilities | ||||
Warrant liabilities | ||||
Redemption Feature Derivative | ||||
Earn-out liabilities | ||||
Total | ||||
Deferred compensation – phantom units | ||||
Redemption feature derivative | ||||
Earn-out liabilities | ||||
Warrant liabilities | ||||
Deferred compensation - phantom units | ||||
Redemption feature derivative | ||||
Earn-out liabilities | ||||
Warrant liabilities | ||||
Additional Subordinated Term Loan Warrants Derivative | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Liabilities | ||||
Warrant liabilities | (29,795) | (20,890) | ||
Redemption Feature Derivative | ||||
Earn-out liabilities | ||||
Total | (29,795) | (20,890) | ||
Deferred compensation – phantom units | ||||
Redemption feature derivative | ||||
Earn-out liabilities | ||||
Warrant liabilities | (20,890) | |||
Deferred compensation - phantom units | ||||
Redemption feature derivative | ||||
Earn-out liabilities | ||||
Warrant liabilities | (29,795) | (20,890) | ||
Additional Subordinated Term Loan Warrants Derivative | ||||
Fair Value, Inputs, Level 3 [Member] | ||||
Liabilities | ||||
Warrant liabilities | (1,380) | |||
Redemption Feature Derivative | (2,231) | (826) | ||
Earn-out liabilities | (310) | (5,600) | ||
Total | (7,165) | (6,426) | (9,701) | |
Deferred compensation – phantom units | (8,321) | |||
Redemption feature derivative | (826) | |||
Earn-out liabilities | (5,600) | |||
Warrant liabilities | (1,380) | |||
Deferred compensation - phantom units | (8,321) | |||
Redemption feature derivative | (2,231) | (826) | ||
Earn-out liabilities | (310) | (5,600) | ||
Warrant liabilities | ||||
Additional Subordinated Term Loan Warrants Derivative | $ (12,816) | |||
Fair Value, Inputs, Level 3 [Member] | Redemption Feature Derivative [Member] | ||||
Liabilities | ||||
Redemption Feature Derivative | (826) | |||
Redemption feature derivative | (826) | |||
Additions | (256) | |||
Changes in fair value | (570) | |||
Relcassified to equity | ||||
Redemption feature derivative | (826) | |||
Fair Value, Inputs, Level 3 [Member] | Earn Out Liability [Member] | ||||
Liabilities | ||||
Earn-out liabilities | (5,600) | |||
Earn-out liabilities | (5,600) | |||
Additions | (74,100) | |||
Changes in fair value | 68,500 | |||
Relcassified to equity | ||||
Earn-out liabilities | (5,600) | |||
Fair Value, Inputs, Level 3 [Member] | Warrant Liability [Member] | ||||
Liabilities | ||||
Warrant liabilities | (1,380) | |||
Warrant liabilities | (1,380) | |||
Additions | ||||
Changes in fair value | (1,931) | |||
Relcassified to equity | 3,311 | |||
Warrant liabilities | ||||
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 |
Fair value measurements (Deta_2
Fair value measurements (Details 1) - $ / shares | 1 Months Ended | 6 Months Ended | 7 Months Ended | 11 Months Ended | 12 Months Ended | |
Feb. 03, 2023 | Jun. 30, 2023 | Aug. 15, 2022 | Nov. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Price of Class A Common Stock | $ 10.18 | $ 2.09 | $ 1.78 | |||
Risk-free interest rate | 2.90% | 4% | 1.40% | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 35% | 65% | 48.20% | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 5 years | 4 years 7 months 6 days | ||||
Redemption Feature Derivative [Member] | ||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Risk-free interest rate | 4.63% | 5.41% | 4.60% | |||
Yield | 13.60% | 13.40% | 15.60% | |||
Price of Class A Common Stock | $ 1.56 | $ 0.37 | $ 1.78 | |||
Expected volatility | 50% | 50% | 50% | |||
Fair Value Hedging [Member] | ||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Risk-free interest rate | 4.56% | 4.60% | ||||
Yield | 15.60% | 15.60% | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 45% | 50% |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Allowance for doubtful accounts | $ 66 | $ 55 |
Accrued vacation | 21 | |
Accrued bonuses | 137 | |
Accruals and reserves | 21 | |
Depreciation | 14 | 11 |
Interest expense limitation | 1,922 | 1 |
Investment in partnership | 2,548 | |
Lease liability | 153 | 221 |
Net operating losses | 26,852 | 2,366 |
Total deferred tax assets before valuation allowance | 31,555 | 2,833 |
Less: valuation allowance | (29,164) | |
Total deferred tax assets after valuation allowance | 2,391 | 2,833 |
Right of use asset | (142) | (206) |
Intangible assets | (1,351) | (1,831) |
Capitalized transaction costs | 53 | |
Goodwill | (1,115) | (1,027) |
Total deferred tax liabilities | (2,608) | (3,011) |
Net deferred tax liabilities | $ (217) | $ (178) |
Income taxes (Details 1)
Income taxes (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||||
Federal | ||||||
State | 37 | 50 | ||||
Total current | 37 | 50 | ||||
Federal | 101 | (1,197) | ||||
State | (62) | (523) | ||||
Total deferred | 39 | (1,720) | ||||
Total income tax expense (benefit) | $ (17) | $ (13) | $ (33) | $ (41) | $ 76 | $ (1,670) |
Income taxes (Details 2)
Income taxes (Details 2) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. federal tax rate | 21% | 21% |
Less: rate attributable to noncontrolling interest | (17.52%) | (19.27%) |
State income taxes (net of federal benefit) | 0.17% | 0.50% |
Permanent differences | (2.71%) | 0% |
Effective rate change | 0.01% | 0% |
Increase in valuation allowance | (0.96%) | 0% |
Other | (0.02%) | 0% |
Effective income tax rate | (0.03%) | 2.23% |
Income taxes (Details Narrative
Income taxes (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
[custom:CarrybackClaim-0] | $ 400 | $ 400 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 1,100 | 1,000 | |
Deferred Tax Liabilities, Net | $ 200 | 200 | |
Deferred Tax Assets, Valuation Allowance | 29,200 | $ 0 | |
Operating Loss Carryforwards | 107,500 | ||
[custom:RSUsGrantedAmount] | 8,200 | ||
[custom:AmountOfRolloverConsideration] | 26,800 | ||
[custom:GainOnSettlementOfIncentiveCompensations] | $ 18,600 | ||
Federal Funds Purchased [Member] | |||
Variable Interest Entity [Line Items] | |||
Operating Loss Carryforwards | 110,800 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 3,300 | ||
State Funds Purchased [Member] | |||
Variable Interest Entity [Line Items] | |||
Operating Loss Carryforwards | 3,500 | ||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 3,500 |
Related party transactions (Det
Related party transactions (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Mar. 20, 2023 | Jun. 30, 2023 | Mar. 16, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | |
Related Party Transaction [Line Items] | |||||
[custom:PurchasePrice-0] | $ 7,000 | ||||
[custom:DeferredFinanceCosts] | $ 15,000 | ||||
Sale of Stock, Number of Shares Issued in Transaction | 56,836,444 | ||||
Felipe Chico Hernandez [Member] | |||||
Related Party Transaction [Line Items] | |||||
Common Stock, Shares, Issued | 1,222,222 | ||||
[custom:PurchasePrice-0] | $ 1,100 | ||||
Palantri [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Payable and Other Accrued Liabilities | $ 4,300 | ||||
Next 12 Months [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Payable and Other Accrued Liabilities | 19,300 | ||||
Thereafter [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Payable and Other Accrued Liabilities | 15,000 | ||||
P I P E Investor [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Payable and Other Accrued Liabilities | $ 35,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Benchmark [Member] | Two Customers [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 26% | 30% | ||||
Revenue Benchmark [Member] | Two Customers [Member] | Customer Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 26% | 29% | ||||
Revenue Benchmark [Member] | One Customer [Member] | Customer Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 21% | 18% | ||||
Accounts Receivable [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 38% | 15% | ||||
Accounts Receivable [Member] | Two Customers [Member] | Customer Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 37% | |||||
Accounts Receivable [Member] | Three Customers [Member] | Customer Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 38% |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||
Cash and Cash Equivalents, at Carrying Value | $ 10,079 | $ 23,516 | $ 10,617 |
Debt Instrument, Unused Borrowing Capacity, Fee | 75,000 | ||
[custom:AdditionalFinancing-0] | 15,000 | ||
Palantir Technologies Inc [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Unused Borrowing Capacity, Fee | 11,300 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Cash and Cash Equivalents, at Carrying Value | 10,100 | ||
Accounts and Financing Receivable, after Allowance for Credit Loss | 65,900 | ||
[custom:IncreaseDecreaseInUnbilledReceivablesValue] | 55,200 | ||
[custom:BorrowAmount] | 5,600 | ||
Revolving Credit Facility [Member] | Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
[custom:BorrowAmount] | 60,000 | ||
Revolving Credit Facility [Member] | Borrowings [Member] | Yorkville Investor [Member] | |||
Line of Credit Facility [Line Items] | |||
[custom:NumberOfSharesSalesAmount] | $ 200,000 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Jul. 06, 2023 | Feb. 07, 2023 | Feb. 06, 2023 | Feb. 03, 2023 | Mar. 20, 2023 | Mar. 06, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 14, 2023 | Feb. 28, 2023 | Feb. 02, 2023 | Jan. 31, 2023 | Nov. 30, 2022 | |
Subsequent Event [Line Items] | ||||||||||||||
[custom:PurchasePrice-0] | $ 7,000 | |||||||||||||
Subsequent Event, Description | the Company granted certain RSU awards, valued at $8.2 million, as replacement awards for $26.8 million of the accrued management rollover consideration. The replacement awards resulted in a $18.6 million gain. | |||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 56,836,444 | |||||||||||||
[custom:SubscriptionFeesPaid] | $ 1,900 | |||||||||||||
Subsequent Event [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
[custom:EquityRaiseRequirement-0] | $ 25,000 | |||||||||||||
[custom:ConvertibleDebentures-0] | $ 7,000 | |||||||||||||
[custom:IssuedConvertibleDebentures-0] | $ 1,400 | |||||||||||||
[custom:NetProceeds-0] | 1,200 | |||||||||||||
[custom:TotalPrincipalAmount-0] | $ 5,100 | |||||||||||||
Shares, Issued | 3,877,750 | |||||||||||||
[custom:PurchasePrice-0] | $ 3,000 | |||||||||||||
Subsequent Event, Description | the Company entered into an amendment to the Revolving Credit Facility, which (i) increased the maximum borrowing amount under the facility from $60.0 million to $75.0 million, (ii) modified the maturity date to the earlier of (a) December 14, 2025, (b) 90 days prior to the maturity of the Term Loan and (c) the maturity of the Subordinated Term Loan, and (iii) amended the interest rate it bears to between 4.8% up to SOFR plus 4.9% determined based on certain metrics defined within the amended agreement. | the Company entered into an amendment to the Term Loan agreement, which (i) replaced LIBOR with SOFR as the reference rate utilized to determine the interest rate the Term Loan bears and (ii) required the Company to make a prepayment of $10.3 million, including $10.0 million of the principal and $0.3 million of the prepayment premium. Pursuant to the amended agreement, the Company made the $10.3 million payment to the Term Loan lender on February 7, 2023. | the Company issued the Second YA Convertible Debenture for a principal amount of $10.0 million and a purchase price of $10.0 million. The Second YA Convertible Debenture has a maturity date of May 30, 2024 and bears interest at the rate of 4.0% per annum. The interest is due and payable upon maturity. At any time, so long as the Second YA Convertible Debenture is outstanding, the Yorkville Investor may covert all or part of the principal and accrued and unpaid interest of the Second YA Convertible Debenture into shares of Class A Common Stock at 90% of the lowest daily VWAP of Class A Common Stock during the seven consecutive trading days immediately preceding each conversion date, but in no event lower than $0.25 per share. Outside of an event of default under the Second YA Convertible Debenture, the Yorkville Investor may not convert in any calendar month more than the greater of (a) 25% of the dollar trading volume of the shares of Class A Common Stock during such calendar month, or (b) $3.0 million. Upon issuance of the Second YA Convertible Debenture, the $2.1 million commitment asset included in other noncurrent assets on the accompanying consolidated balance sheet as of December 31, 2022 was derecognized and recorded as a debt discount. | the Company entered into an amended software subscription agreement with Palantir, which provides the Company with the option, in its sole discretion, to settle the $11.3 million of fees which are scheduled to become due between April 2023 and December 2023 in (i) cash or (ii) the Company’s equity or debt securities, if the Company satisfies certain conditions as defined within the amended agreement. | ||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 15,000 | |||||||||||||
Subsequent Event [Member] | N Z Superfund Convertible Debenture [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
[custom:NetProceeds-0] | 4,500 | |||||||||||||
[custom:UnpaidFees-0] | 7,100 | |||||||||||||
[custom:SettlementResultedInGain-0] | $ 600 | |||||||||||||
Subsequent Event [Member] | Second Y A Convertible Debenture [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Shares, Issued | 19,772,486 | |||||||||||||
Subsequent Event [Member] | Term Loan Lender [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
[custom:EquityRaiseRequirement-0] | $ 25,000 | |||||||||||||
Subsequent Event [Member] | P I P E Investor [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 5,193,906 | |||||||||||||
Subsequent Event [Member] | Yorkville Investor [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
[custom:ConvertibleDebentures-0] | $ 5,900 |
Fair value measurements (Deta_3
Fair value measurements (Details 2) - $ / shares | 6 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Aug. 15, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.90% | 4% | 1.40% | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 3 years | |||
Earn Out Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Price of Class A Common Stock | $ 0.37 | $ 1.78 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 4.30% | 4% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 75% | 65% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 4 years 1 month 6 days | 4 years 7 months 6 days |
Commitments and contingencies (
Commitments and contingencies (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Equity [Abstract] | |||
2023 | $ 1,151 | ||
2024 | 1,228 | ||
2025 | 151 | ||
2026 | 152 | ||
2027 | 154 | ||
Thereafter | 578 | ||
Total minimum lease payments | 3,414 | ||
Less: Imputed interest | (640) | ||
Total operating lease liabilities | $ 2,774 | $ 3,706 | $ 5,445 |
Stockholders_ (deficit) equit_2
Stockholders’ (deficit) equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
Dec. 31, 2023 | Jun. 30, 2023 | Oct. 31, 2024 | Dec. 31, 2022 | |
Class of Warrant or Right [Line Items] | ||||
[custom:NumberOfCommonStockExchanged] | 80,060,825 | |||
Sublease Income | $ 800 | |||
[custom:DueInNext12Months-0] | 16,900 | |||
[custom:SubscriptionFee] | 3,800 | |||
Subsequent Event [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Lessee, Operating Lease, Liability, to be Paid, after Rolling Year Five | $ 7,500 | |||
[custom:SubscriptionFee] | $ 7,500 | |||
Advisor Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||
Y A Warrant [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.0001 | |||
Additional Subordinated Term Loan Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
[custom:ValueOfDerivative] | $ 350 | |||
[custom:DiscountRate] | 15% |