Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 13, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40910 | |
Entity Registrant Name | Rubicon Technologies, Inc. | |
Entity Central Index Key | 0001862068 | |
Entity Tax Identification Number | 88-3703651 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 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 | |
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | RBT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Common Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 37,419,939 | |
Common Class V [Member] | ||
Entity Common Stock, Shares Outstanding | 4,425,388 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 13,433 | $ 10,079 |
Accounts receivable, net | 59,600 | 65,923 |
Contract assets | 68,629 | 55,184 |
Prepaid expenses | 19,532 | 10,466 |
Other current assets | 4,168 | 2,109 |
Related-party notes receivable | 7,020 | |
Total Current Assets | 165,362 | 150,781 |
Property and equipment, net | 1,633 | 2,644 |
Operating right-of-use assets | 792 | 2,827 |
Other noncurrent assets | 2,043 | 4,764 |
Goodwill | 32,132 | 32,132 |
Intangible assets, net | 8,465 | 10,881 |
Total Assets | 210,427 | 204,029 |
Current Liabilities: | ||
Accounts payable | 52,965 | 75,113 |
Line of credit | 65,477 | 51,823 |
Accrued expenses | 83,666 | 108,002 |
Contract liabilities | 6,524 | 5,888 |
Operating lease liabilities, current | 925 | 1,880 |
Warrant liabilities | 26,502 | 20,890 |
Derivative liabilities | 8,428 | |
Debt obligations, net of deferred debt charges | 3,771 | |
Total Current Liabilities | 244,487 | 267,367 |
Long-Term Liabilities: | ||
Deferred income taxes | 239 | 217 |
Operating lease liabilities, noncurrent | 60 | 1,826 |
Debt obligations, net of deferred debt charges | 76,818 | 69,458 |
Related-party debt obligations, net of deferred debt charges | 15,794 | 10,597 |
Derivative liabilities | 5,536 | 826 |
Earn-out liabilities | 160 | 5,600 |
Other long-term liabilities | 2,590 | |
Total Long-Term Liabilities | 98,607 | 91,114 |
Total Liabilities | 343,094 | 358,481 |
Stockholders’ (Deficit) Equity: | ||
Preferred stock – par value of $0.0001 per share, 10,000,000 shares authorized, 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | ||
Additional paid-in capital | 118,884 | 34,659 |
Accumulated deficit | (381,845) | (337,860) |
Total stockholders’ deficit attributable to Rubicon Technologies, Inc. | (262,958) | (303,199) |
Noncontrolling interests | 130,291 | 148,747 |
Total Stockholders’ Deficit | (132,667) | (154,452) |
Total Liabilities and Stockholders’ (Deficit) Equity | 210,427 | 204,029 |
Common Class A [Member] | ||
Stockholders’ (Deficit) Equity: | ||
Common stock value | 3 | 1 |
Common Class V [Member] | ||
Stockholders’ (Deficit) Equity: | ||
Common stock value | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 690,000,000 | 690,000,000 |
Common stock, shares issued | 34,803,951 | 6,985,869 |
Common stock, shares outstanding | 34,803,951 | 6,985,869 |
Common Class V [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 275,000,000 | 275,000,000 |
Common stock, shares issued | 4,425,388 | 14,432,992 |
Common stock, shares outstanding | 4,425,388 | 14,432,992 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Service | $ 159,119 | $ 162,789 | $ 486,125 | $ 437,755 |
Recyclable commodity | 12,138 | 22,194 | 40,794 | 71,640 |
Total revenue | 171,257 | 184,983 | 526,919 | 509,395 |
Cost of revenue (exclusive of amortization and depreciation): | ||||
Service | 147,018 | 157,504 | 455,213 | 423,382 |
Recyclable commodity | 10,272 | 20,234 | 35,427 | 65,856 |
Total cost of revenue (exclusive of amortization and depreciation) | 157,290 | 177,738 | 490,640 | 489,238 |
Sales and marketing | 2,903 | 4,840 | 8,924 | 13,336 |
Product development | 8,309 | 9,803 | 23,625 | 28,336 |
General and administrative | 13,803 | 186,640 | 45,882 | 212,520 |
Gain on settlement of incentive compensation | (18,622) | |||
Amortization and depreciation | 1,277 | 1,439 | 3,982 | 4,331 |
Total Costs and Expenses | 183,582 | 380,460 | 554,431 | 747,761 |
Loss from Operations | (12,325) | (195,477) | (27,512) | (238,366) |
Other Income (Expense): | ||||
Interest earned | 5 | 1 | 11 | 1 |
Gain (loss) on change in fair value of warrant liabilities | 3,354 | 74 | 2,885 | (436) |
Gain on change in fair value of earnout liabilities | 150 | 67,100 | 5,440 | 67,100 |
Loss on change in fair value of derivatives | (1,245) | (76,919) | (3,778) | (76,919) |
Excess fair value over the consideration received for SAFE | (800) | |||
Gain on service fee settlements in connection with the Mergers | 6,996 | |||
Loss on extinguishment of debt obligations | (9,348) | (18,234) | ||
Interest expense | (9,179) | (4,578) | (24,474) | (12,264) |
Related party interest expense | (453) | (1,707) | ||
Other expense | (1,116) | (1,307) | (2,019) | (1,994) |
Total Other Income (Expense) | (17,832) | (15,629) | (34,880) | (25,312) |
Loss Before Income Taxes | (30,157) | (211,106) | (62,392) | (263,678) |
Income tax expense | 16 | 19 | 49 | 60 |
Net Loss | (30,173) | (211,125) | (62,441) | (263,738) |
Net loss attributable to Holdings LLC unitholders prior to the Mergers | (176,384) | (228,997) | ||
Net loss attributable to noncontrolling interests | (2,519) | (16,933) | (18,456) | (16,933) |
Net Loss Attributable to Class A Common Stockholders | $ (27,654) | $ (17,808) | $ (43,985) | $ (17,808) |
Net loss per Class A Common share - basic | $ (0.85) | $ (2.93) | $ (2.47) | $ (2.93) |
Net loss per Class A Common share - diluted | $ (0.85) | $ (2.93) | $ (2.47) | $ (2.93) |
Weighted average shares outstanding, basic | 32,381,649 | 6,083,847 | 17,786,466 | 6,083,847 |
Weighted average shares outstanding, diluted | 32,381,649 | 6,083,847 | 17,786,466 | 6,083,847 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (UNAUDITED) - USD ($) $ in Thousands | Common Stock [Member] | Common Stock Class A [Member] | Common Stock Class V [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ (61,304) | $ (61,304) | ||||||
Beginning balance, shares at Dec. 31, 2021 | 4,188,659 | |||||||
Compensation costs related to incentive units | $ 184 | 184 | ||||||
Net loss | (52,613) | (52,613) | ||||||
Ending balance, value at Jun. 30, 2022 | $ (113,733) | (113,733) | ||||||
Ending balance, shares at Jun. 30, 2022 | 4,188,659 | |||||||
Compensation costs related to incentive units | $ 46 | 46 | ||||||
Net loss | (176,384) | (176,384) | ||||||
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 | 383,769 | |||||||
Exchange of liability classified warrants | $ 1,717 | 1,717 | ||||||
Exchange of liability classified warrants, shares | 7,751 | |||||||
Reclassification of SAFE | $ 8,800 | 8,800 | ||||||
Reclassification of SAFE, shares | 110,000 | |||||||
Phantom units rollover | 15,104 | 15,104 | ||||||
Reverse recapitalization | $ 238,226 | (180,630) | (57,596) | |||||
Reverse recapitalization, shares | (4,690,179) | |||||||
Issuance of common stock upon the Mergers - Class A and Class V | $ 1 | $ 1 | 1 | 3 | ||||
Issuance of common stock upon the Mergers - Class A and Class V, shares | 5,787,501 | 14,834,735 | ||||||
Establishment of earn-out liabilities | (1) | (74,099) | (74,100) | |||||
Establishment of noncontrolling interests | (177,698) | 177,698 | ||||||
Equity-based compensation | 10,913 | 10,913 | ||||||
Issuance of common stock in connection with SEPA – Class A | 892 | 892 | ||||||
Issuance of common stock in connection with SEPA - Class A, shares | 25,000 | |||||||
Exchange of Class V Common Stock to Class A Common Stock | ||||||||
Exchange of Class V Common Stock to Class A Common Stock, shares | 401,780 | (401,780) | ||||||
Net loss | (17,808) | (16,933) | (34,741) | |||||
Ending balance, value at Sep. 30, 2022 | $ 1 | $ 1 | 11,805 | (327,201) | 160,765 | (154,629) | ||
Ending balance, shares at Sep. 30, 2022 | 6,214,281 | 14,432,955 | ||||||
Beginning balance, value at Dec. 31, 2022 | $ 1 | $ 1 | 34,659 | (337,860) | 148,747 | (154,452) | ||
Beginning balance, shares at Dec. 31, 2022 | 6,985,869 | 14,432,992 | ||||||
Equity-based compensation | 11,105 | 11,105 | ||||||
Issuance of common stock for services rendered | 10,245 | 10,245 | ||||||
Issuance of common stock for services rendered, shares | 1,164,757 | |||||||
Issuance of equity-classified warrants | 945 | 945 | ||||||
Issuance of common stock for vested RSUs | ||||||||
Issuance of common stock for vested RSUs, shares | 463,961 | |||||||
Issuance of common stock for vested DSUs | ||||||||
Issuance of common stock for vested DSUs, shares | 10,603 | |||||||
RSUs withheld to pay taxes | (1,067) | (1,067) | ||||||
Conversion of debt obligations to common stock | 10,846 | 10,846 | ||||||
Conversion of debt obligations to common stock, shares | 2,517,284 | |||||||
Proceeds from issuance of common stock | $ 1 | 24,766 | 24,767 | |||||
Proceeds from issuance of common stock, shares | 7,257,334 | |||||||
Exercise and conversion of liability classified warrants | 1,073 | 1,073 | ||||||
Exercise and conversion of liability classified warrants, shares | 319,922 | |||||||
Exchange of Class V Common Stock to Class A Common Stock | $ 1 | $ (1) | ||||||
Exchange of Class V Common Stock to Class A Common Stock, shares | 10,007,604 | (10,007,604) | ||||||
Common stock issuance costs | (32) | (32) | ||||||
Net loss | (16,331) | (15,937) | (32,268) | |||||
Ending balance, value at Jun. 30, 2023 | $ 3 | 92,540 | (354,191) | 132,810 | (128,838) | |||
Ending balance, shares at Jun. 30, 2023 | 28,727,334 | 4,425,388 | ||||||
Equity-based compensation | 2,134 | 2,134 | ||||||
Issuance of common stock for services rendered | 2,055 | 2,055 | ||||||
Issuance of common stock for services rendered, shares | 711,566 | |||||||
Issuance of equity-classified warrants | 1,682 | 1,682 | ||||||
Issuance of common stock for vested RSUs | ||||||||
Issuance of common stock for vested RSUs, shares | 1,139,775 | |||||||
Issuance of common stock for vested DSUs | ||||||||
Issuance of common stock for vested DSUs, shares | 4,602 | |||||||
Conversion of debt obligations to common stock | 19,334 | 19,334 | ||||||
Conversion of debt obligations to common stock, shares | 3,900,321 | |||||||
Exercise and conversion of liability classified warrants | 1,139 | 1,139 | ||||||
Exercise and conversion of liability classified warrants, shares | 291,143 | |||||||
Shares added for fractional shares pursuant to reverse stock split | ||||||||
Shares added for fractional shares pursuant to reverse stock split, shares | 29,210 | |||||||
Net loss | (27,654) | (2,519) | (30,173) | |||||
Ending balance, value at Sep. 30, 2023 | $ 3 | $ 118,884 | $ (381,845) | $ 130,291 | $ (132,667) | |||
Ending balance, shares at Sep. 30, 2023 | 34,803,951 | 4,425,388 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (62,441) | $ (263,738) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Loss on disposal of property and equipment | 777 | 23 |
Gain on lease agreement amendment | (220) | |
Amortization and depreciation | 3,982 | 4,026 |
Amortization of deferred debt charges | 6,392 | 2,378 |
Amortization of related party debt discount and issuance costs | 586 | |
Paid-in-kind interest capitalized to principal of debt obligations | 6,733 | |
Paid-in-kind interest capitalized to principal of related party debt obligations | 1,012 | |
Bad debt reserve | 2,065 | (2,366) |
(Gain) Loss on change in fair value of warrants | (2,885) | 436 |
Loss on change in fair value of derivatives | 3,778 | 76,919 |
Gain on change in fair value of earn-out liabilities | (5,440) | (67,100) |
Loss on extinguishment of debt obligations | 18,234 | |
Excess fair value over the consideration received for SAFE | 800 | |
SEPA commitment fee settled in Class A Common Stock | 892 | |
Equity-based compensation | 13,239 | 88,546 |
Phantom unit expense | 6,783 | |
Deferred compensation expense | 1,250 | |
Settlement of accrued incentive compensation | (26,826) | |
Service fees settled in common stock | 5,863 | |
Gain on service fee settlement in connection with the Mergers | (6,996) | |
Deferred income taxes | 22 | 41 |
Change in operating assets and liabilities: | ||
Accounts receivable | 4,258 | (13,636) |
Contract assets | (13,445) | (5,821) |
Prepaid expenses | (6,731) | (5,528) |
Other current assets | (2,122) | (131) |
Operating right-of-use assets | 868 | 801 |
Other noncurrent assets | 140 | 355 |
Accounts payable | (22,148) | 10,967 |
Accrued expenses | 17,033 | 52,450 |
Contract liabilities | 636 | (142) |
Operating lease liabilities | (1,335) | (1,273) |
Other liabilities | (1,602) | 150 |
Net cash flows from operating activities | (66,573) | (112,918) |
Cash flows from investing activities: | ||
Property and equipment purchases | (750) | (1,150) |
Forward purchase option derivative purchase | (68,715) | |
Net cash flows from investing activities | (750) | (69,865) |
Cash flows from financing activities: | ||
Net borrowings on line of credit | 13,653 | 179 |
Proceeds from debt obligations | 86,226 | |
Repayments of debt obligations | (53,500) | (4,500) |
Proceeds from related party debt obligations | 14,520 | |
Financing costs paid | (13,891) | (2,000) |
Proceeds from issuance of common stock | 24,767 | |
Proceeds from SAFE | 8,000 | |
Proceeds from the Mergers | 196,778 | |
Equity issuance costs | (31) | (21,827) |
RSUs withheld to pay taxes | (1,067) | |
Net cash flows from financing activities | 70,677 | 176,630 |
Net change in cash and cash equivalents | 3,354 | (6,153) |
Cash, beginning of period | 10,079 | 10,617 |
Cash, end of period | 13,433 | 4,464 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 9,934 | 9,023 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Exchange of warrant liability for Class A and Class V Common Stock | 2,250 | 1,716 |
Conversion of SAFE for Class B Units | 8,000 | |
Establishment of earn-out liabilities | 74,100 | |
Equity issuance costs accrued but not paid | 44,235 | |
Fair value of derivatives issued as deferred debt charges | 12,739 | |
Conversions of debt obligations to common stock | 17,000 | |
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 deferred debt charges | $ 2,062 |
Nature of operations and summar
Nature of operations and summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2023 | |
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 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. Reverse Stock Split 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 (“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 Segments Use of Estimates Emerging Growth Company Revenue Recognition Service Revenue: Service revenues are primarily derived from long-term contracts with waste generator customers including multiple promises delivered through the Company’s digital marketplace platform. The promises include waste removal, consultation services, billing administration and consolidation, cost savings analyses, and vendor procurement and performance management, each of which constitutes an input to the combined service managed through the digital platform. The digital platform and services are highly interdependent, and accordingly, each contractual promise is not considered a distinct performance obligation in the context of the contract and is combined into a single performance obligation. In general, fees are invoiced, and revenue is recognized over time as control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing the service. The Company invoices for certain services prior to performance. These advance invoices are included in contract liabilities and recognized as revenue in the period service is provided. Service revenues also include software-as-a-service subscription, maintenance, equipment and other professional services, which represent separate performance obligations. Once the performance obligations and the transaction price are determined, including an estimate of any variable consideration, the Company then allocates the transaction price to each performance obligation in the contract using a relative standalone selling price method. The Company determines standalone selling price based on the price at which the good or service is sold separately. Recyclable Commodity Revenue: The Company recognizes recyclable commodity revenue through the 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 September 30, 2023 and December 31, 2022 was insignificant. Cost of Revenue, exclusive of amortization and depreciation 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 Accounts Receivable and Contract Balances 4.6 3.6 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 September 30, 2023 and December 31, 2022, the Company had unbilled receivables of $ 68.6 55.2 55.2 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 monthly basis. As of September 30, 2023 and December 31, 2022, the Company had deferred revenue balances of $ 6.5 5.9 5.5 Accrued Hauler Expenses Fair Value Measurements Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as 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 15 for further information regarding fair value measurements. Offering Costs 0 67.3 7.0 No Customer Acquisition Costs Warrants Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded in liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a component of other income (expense) on the consolidated statement of operations. As of September 30, 2023, the Company has both liability-classified and equity-classified warrants outstanding. See Note 9 for further information. Earn-out Liabilities 186,064 1,112,605 0.0001 (1) 50% of the Earn-Out Interests if the volume weighted average price (the “VWAP”) of the Class A Common Stock equals or exceeds $112.00 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 $128.00 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 September 30, 2023 and December 31, 2022, the Earn-Out Interests had a fair value of $ 0.2 5.6 5.4 Noncontrolling Interest 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 12.1% and 35.9% of Holdings LLC’s net loss during the three and nine months ended September 30, 2023, respectively, was allocated to noncontrolling interests (“NCI”). Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes Income Taxes; Interim Reporting ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. 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 September 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 0 0.1 0.0 0 0 0.1 0.0 During the nine months ended September 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 0.2 Tax Receivable Agreement Obligation The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows: a. recognizes a contingent liability for the TRA obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that the Company will pay; b. records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange; c. to the extent the Company estimates that the full benefit represented by the deferred tax asset will not be fully realized based on an analysis that will consider, among other things, the expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance; and d. the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss. A TRA liability is determined and recorded under ASC 450, “ Contingencies Earnings (Loss) Per Share (“EPS”) Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 14 for additional information on dilutive securities. Prior to the Mergers, the membership structure of Holdings LLC included units 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 Stock-Based Compensation The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. |
Recent accounting pronouncement
Recent accounting pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
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 |
Mergers
Mergers | 9 Months Ended |
Sep. 30, 2023 | |
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 $92.00 (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 $92.00 pursuant to the Warrant Agreement - The Company was issued Class A Units in Holdings LLC (“Class A Units”) and all preferred units, common units, and incentive units of Holdings LLC (including such convertible instruments, the “Rubicon Interests”) outstanding 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 1,512,500 80.00 - Certain investors (the “FPA Sellers”) purchased, and the Company issued and sold to such FPA Sellers, an aggregate of 885,327 - The Company (a) caused to be issued to certain investors 110,000 20,000 20,000 - Blocked Unitholders and Rubicon Continuing Unitholders retained aggregate 2,480,865 14,834,735 - The Company and Holdings LLC entered into the Tax Receivable Agreement with the TRA Holders. See Note 1 for further information. - The Company contributed approximately $ 73.8 28.9 121.0 - The Company incurred $ 67.3 7.0 0.6 6.4 6.4 |
Property and equipment
Property and equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Note 4— Property and equipment Property and equipment, net is comprised of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of property and equipment September 30, 2023 December 31, Computers, equipment and software $ 2,311 $ 3,791 Customer equipment 1,973 1,485 Furniture and fixtures 210 1,699 Leasehold improvements 1,441 3,772 Total property and equipment 5,935 10,747 Less accumulated amortization and depreciation (4,302 ) (8,103 ) Total property and equipment, net $ 1,633 $ 2,644 Property and equipment amortization and depreciation expense for the three months ended September 30, 2023 and 2022 was $ 0.3 0.3 1.0 1.0 During the three months ended September 30, 2023, the Company terminated an office lease agreement and entered into an amended agreement for another office lease agreement, which in total, contributed to a decrease of $1.6 million in computers, equipment and software, $1.6 million in furniture and fixtures, $2.3 million in leasehold improvements and $4.8 million in accumulated amortization and depreciation, resulting in a $0.8 million of loss on disposals, which was recognized in other expense on the accompanying condensed consolidated statements of operations for the three months and nine months ended September 30, 2023. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 5— Debt Revolving Credit Facilities Revolving Credit Facility 60.0 December 31, 2023 5.60% 9.7% 75.0 4.8% December 14, 2025 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 borrowed 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 2.6 As of December 31, 2022, the Company’s total outstanding borrowings under the Line of Credit were $ 51.8 5.6 June 2023 Revolving Credit Facility 90.0 June 7, 2026 4.25% 9.7% 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 borrowed 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 September 22, 2023, an 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) issued a standby letter of credit in the amount of $15.0 million (the “September 2023 Rodina Letter of Credit”) to the lender of the June 2023 Revolving Credit Facility on behalf of the Company, which increased the Company’s borrowing base collateral under the facility by $ 15.0 As of September 30, 2023, the Company’s total outstanding borrowings under the Line of Credit were $ 65.5 1.4 15.0 The Company capitalized $ 2.9 0.2 0.4 Term Loan Facilities Term Loan 20.0 9.5% 13.6% March 29, 2024 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% 10.0 0.8 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 Subordinated Term Loan 20.0 December 22, 2022 14.0% On December 12, 2022, the Subordinated Term Loan Warrants were exercised and converted into Class A Common Stock. On December 30, 2022, the Company entered into an agreement with the lender of the Subordinated Term Loan, pursuant to which the Company agreed to compensate, in cash or shares of Class A Common Stock, the lender for the calculated amount between (a) the closing share price of Class A Common Stock on the business day immediately prior to the lender’s exercise of the Subordinated Term Loan Warrants on December 12, 2022 multiplied by the number of shares of Class A Common Stock issued for such exercise (the “December 2022 Warrant Shares”) and (b) the closing share price of Class A Common Stock on the business day immediately prior to the lender’s sale of the December 2022 Warrant Shares multiplied by the number of the December 2022 Warrant Shares sold by the lender (the “Subordinated Term Loan Warrants Make-Whole Agreement”). The Subordinated Term Loan Warrants Make-Whole Agreement expires on December 12, 2027. 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 amendments to the Subordinated Term Loan Warrants agreements (see Note 9 for further information regarding the Subordinated Term Loan Warrants and the Subordinated Term Loan Warrants Make-Whole Agreement). 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% is to be paid in cash and 4% is to 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 0.7 0.4 1.8 1.1 Rodina Note 3.0 July 1, 2024 16.0% 940,243 June 2023 Term Loan 75.0 10.25% 16.8% The Company capitalized $ 24.0 1.8 2.2 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 covenants, which reduce the available borrowing base collateral under the June 2023 Revolving Credit Facility initially by $19.0 million (the “Minimum Excess Availability Reserve”). During the terms of the agreements, the Minimum Excess Availability Reserve could be decreased by up to $9.0 million, which will make the Minimum Excess Availability Reserve $10.0 million, upon the Company’s achievement of certain financial conditions defined in the agreements. As of September 30, 2023, the Minimum Excess Availability Reserve was $19.0 million. Furthermore, the June 2023 Revolving Credit Facility, the June 2023 Convertible Debentures YA Convertible Debentures 7.0 4.0% 1.7 2.5 0.2 1.3 0 5.9 2,471,561 11.5 0.3 4,048,601 7.6 10.6 On August 8, 2023, the Yorkville Investor assigned the YA Convertible Debentures to certain existing investors of the Company affiliated with Andres Chico and 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 extended the maturity date to December 1, 2026. On August 25, 2023, the assignees converted all of the remaining principal of $ 5.6 1,428,760 0.9 Insider Convertible Debentures 11.9 10.5 June 16, 2024 6.0% 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. The amendment extended the maturity date to December 1, 2026. In accordance with ASC 470-50, Debt – Modifications and Extinguishments On September 15, 2023, the Company entered into an amendment to the Insider Convertible Debentures held by three entities affiliated with Andres Chico and Jose Miguel Enrich. The amendment lowered the conversion price of these three debentures to $10.00 per share of Class A Common Stock. In accordance with ASC 470-50, Debt – Modifications and Extinguishments 0.2 0.5 0.1 0.4 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 September 30, 2023. Third Party Convertible Debentures 1.4 1.2 August 1, 2024 6.0% 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. The amendment extended the maturity date to December 1, 2026. In accordance with ASC 470-50, Debt – Modifications and Extinguishments 0.1 0.5 NZ Superfund Convertible Debentures 5.1 4.5 August 1, 2024 8.0% 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 0.2 0.4 0.1 Components of the Company’s debt obligations were as follows (in thousands): Schedule of components of long-term debt September 30, 2023 December 31, Term loan balance $ 108,483 $ 71,000 Convertible debt balance 1,446 7,000 Related-party convertible debt balance 18,041 11,964 Less unamortized deferred debt charges (35,358 ) (6,138 ) Total borrowed 92,612 83,826 Less short-term debt obligation balance - (3,771 ) Long-term debt obligation balance $ 92,612 $ 80,055 At September 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 108,483 2026 19,487 Total $ 127,970 The total interest expense related to the Revolving Credit Facilities, Term Loan Facilities, and Convertible Debentures was $ 9.6 4.6 26.2 12.3 |
Accrued expenses
Accrued expenses | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Note 6— Accrued expenses Accrued expenses consist of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of accrued expenses September 30, 2023 December 31, Accrued hauler expenses $ 63,049 $ 44,773 Accrued compensation 15,026 43,054 Accrued income taxes - 9 Accrued Mergers transaction expenses - 13,433 FPA Settlement Liability (as defined in Note 10) 2,000 - Other accrued expenses 3,591 6,733 Total accrued expenses $ 83,666 $ 108,002 During the nine months ended September 30, 2023, the Company granted certain RSU awards, valued at $ 8.2 26.8 18.6 |
Goodwill and other intangibles
Goodwill and other intangibles | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangibles | Note 7— Goodwill and other intangibles There were no additions to goodwill during the nine months ended September 30, 2023 or the year ended December 31, 2022. No impairment of goodwill was identified for the three or nine months ended September 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 September 30, 2023 Useful Life Gross Accumulated Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (14,061 ) 6,915 Non-competition agreements 3 4 550 (550 ) - Technology 3 3,178 (2,298 ) 715 Total finite-lived intangible assets 25,432 (17,802 ) 7,630 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (17,802 ) $ 8,465 December 31, 2022 Useful Life Gross Accumulated Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (12,141 ) 8,835 Non-competition agreements 3 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 0.8 2.4 2.5 Schedule of finite- lived intangible assets, future amortization expense Fiscal Years Ending December 31, 2023 $ 804 2024 3,110 2025 2,559 2026 1,157 Total future amortization of intangible assets $ 7,630 |
Stockholders_ (deficit) equity
Stockholders’ (deficit) equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders’ (deficit) equity | Note 8— Stockholders’ (deficit) equity The table set forth below reflects information about the Company’s equity as of September 30, 2023. Schedule of stockholders equity Authorized Issued Outstanding Class A Common Stock 690,000,000 34,803,951 34,803,951 Class V Common Stock 275,000,000 4,425,388 4,425,388 Preferred Stock 10,000,000 - - Total shares as of September 30, 2023 975,000,000 39,229,339 39,229,339 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 6,985,869 6,985,869 Class V Common Stock 275,000,000 14,432,992 14,432,992 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 21,418,861 21,418,861 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 nine months ended September 30, 2023, 10,007,604 |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2023 | |
Warrants | |
Warrants | Note 9— Warrants Public Warrants and Private Warrants Company assumed a total of 3,752,107 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $92.00 per share. 1,976,560 1,775,547 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 September 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 $0.08 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 $144.00 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. Rodina Warrant Derivatives and Hedging – Contracts in an Entity’s Own Equity 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 shares of Class A Common Stock worth $2.0 million at the exercise price of $0.08 per share at any time after the original 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 original 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 original 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 shares 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 0.25 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 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 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 12, 2022, the outstanding Subordinated Term Loan Warrants in amount of $ 2.6 On December 30, 2022, the Company entered into the Subordinated Term Loan Warrants Make-Whole Agreement. In June 2023, the outstanding Additional Subordinated Term Loan Warrants in amount of $ 1.1 319,923 1.2 291,145 Pursuant to ASC 815, the Company determined that the Additional Subordinated Term Loan Warrants and the Subordinated Term Loan Warrants Make-Whole Agreement are derivatives. These derivatives, referred to throughout as the “Additional Subordinated Term Loan Warrants Derivative” and the “Subordinated Term Loan Warrants Make-Whole Derivative”, respectively, are recorded in derivative liabilities on the accompanying condensed consolidated balance sheet as of September 30, 2023. The Company performed fair value measurements for the Additional Subordinated Term Loan Warrants Derivative and the Subordinated Term Loan Warrants Make-Whole Derivative, which are described in Note 15. The fair value of the Additional Subordinated Term Loan Warrants Derivative and the Subordinated Term Loan Warrants Make-Whole Derivative are remeasured at each reporting period. On November 30, 2022, the Company issued a pre-funded warrant for a purchase price of $ 6.0 20.0 0.0008 20.0 20.0 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 62,500 0.01 , 0.1 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 holders the right to purchase up to 2,121,605 0.08 9.4 9.8 6.5 3.3 2.9 |
Forward Purchase Agreement
Forward Purchase Agreement | 9 Months Ended |
Sep. 30, 2023 | |
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 277.765 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 267,606 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. As more than 90% of the YA Convertible Debentures were converted into shares of Class A Common Stock on August 25, 2023, the FPA Earlier Lock-Up Date was set as February 25, 2024. The value of 277,765 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 September 30, 2023 and other long-term liabilities as of December 31, 2022 |
Yorkville Facilities
Yorkville Facilities | 9 Months Ended |
Sep. 30, 2023 | |
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 had 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 were to 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 was not permitted to 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, were at the Company’s option, and the Company was 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 25,000 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. On August 18, 2023, the SEPA was terminated with no further obligations to the Company or the Yorkville Investor. The Company did not sell any shares of Class A Common Stock under the SEPA from the origination through the termination of the facility. Securities Purchase Agreement 7.0 7.0 2.0 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 10.0 2.1 In accordance with ASC 815, the Company has determined that certain redemption feature within the YA Convertible Debentures was an embedded derivative. This derivative, referred to throughout as the “Redemption Feature Derivative” was recorded in derivative liabilities on the accompanying condensed consolidated balance sheets as of December 31, 2022 and derecognized upon full settlement of the YA Convertible Debentures on August 25, 2023. The Company performed fair value measurements for this derivative as of the YA Convertible Debentures issuance dates, December 31, 2022 and August 25, 2023 which is described further in Note 15. The fair value of the Redemption Feature Derivative was remeasured each reporting period. |
Cantor Sales Agreement
Cantor Sales Agreement | 9 Months Ended |
Sep. 30, 2023 | |
Cantor Sales Agreement | |
Cantor Sales Agreement | Note 12— Cantor Sales Agreement On September 5, 2023, the Company entered into a Controlled Equity Offering Sales Agreement (the “Cantor Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) pursuant to which the Company may offer and sell, from time to time through Cantor, shares of Class A Common Stock for aggregate gross proceeds up to $ 50.0 |
Equity-based compensation
Equity-based compensation | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity-based compensation | Note 13— Equity-based compensation During the three and nine months ended September 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, 3,625,000 357,409 The following represents a summary of the Company’s RSU activity and related information during the nine months ended September 30, 2023: Schedule of RSUs activity Units Weighted Average Grant Date Fair Value Nonvested – December 31, 2022 182,086 $ 15.84 Granted 2,016,639 8.10 Vested (986,461 ) 8.98 Forfeited/redeemed (45,256 ) 15.09 Nonvested – September 30, 2023 1,167,008 $ 8.30 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 $ 2.1 90.6 13.2 95.3 Some of RSUs settled during the nine months ended September 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 September 30, 2023, there were 642,418 38,350 As of September 30, 2023, the total unrecognized compensation cost related to outstanding RSUs was $ 5.1 0.6 |
Loss per share
Loss per share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Loss per share | Note 14— Loss per share Basic net loss per share of Class A Common Stock is computed by dividing net loss attributable to the Company by the weighted average number of shares of Class A Common Stock outstanding during the three and nine months ended September 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 nine months ended September 30, 2023 are as follows (amounts in thousands, except for share and per share amounts): Schedule of net loss per share Three Months Ended September 30, Nine Months Ended September 30, Numerator: Net loss $ (30,173 ) $ (62,441 ) Less: Net loss attributable to noncontrolling interests (2,519 ) (18,456 ) Net loss attributable to Rubicon Technologies, Inc $ (27,654 ) $ (43,985 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 32,381,649 17,786,466 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.85 ) $ (2.47 ) The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for period from August 15, 2022 (the Closing Date) to September 30, 2022 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss for the period from August 15, 2022 through September 30, 2022 $ (34,741 ) Less: Net loss attributable to noncontrolling interests for the period from August 15, 2022 through September 30, 2022 (16,933 ) Net loss for the period from August 15, 2022 through September 30, 2022 attributable to Rubicon Technologies, Inc. – Basic and diluted $ (17,808 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 6,083,847 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (2.93 ) 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, YA Warrant and Rodina Warrant. - Earn-Out Interests. - RSUs and DSUs. - Exchangeable Class V Common Stock. - Potential settlements in Class A Common Stock of the Insider Convertible Debentures, the Third Party Convertible Debentures, the NZ Superfund Convertible Debentures, the June 2023 Term Loan, the FPA Settlement Liability, the Subordinated Term Loan Warrants Make-Whole Agreement and portion of fees for the PIPE Software Services Subscription (as defined in Note 16). |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 15— Fair value measurements The following tables summarize the Company’s financial assets and liabilities measured at fair value on recurring basis by level within the fair value hierarchy as of the dates indicated (in thousands): Schedule of assets and liabilities measured at fair value on recurring basis As of September 30, 2023 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (26,502 ) $ - Additional Subordinated Term Loan Warrants Derivative - - (12,058 ) Subordinated Term Loan Warrants Make-Whole Derivative - - (1,906 ) Earn-out liabilities - - (160 ) Total $ - $ (26,502 ) $ (14,124 ) As of December 31, 2022 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (20,890 ) $ - Redemption Feature Derivative - - (826 ) Subordinated Term Loan Warrants Make-Whole Derivative - - - Earn-out liabilities - - (5,600 ) Total $ - $ (20,890 ) $ (6,426 ) Level 3 Rollfoward Redemption Additional Subordinated Subordinated Earn-out December 31, 2022 balances $ (826 ) $ - $ - $ (5,600 ) Additions (474 ) (12,264 ) - - Changes in fair value (931 ) (1,602 ) - 5,290 Reclassified to level 2 - 1,050 - June 30, 2023 balances (2,231 ) (12,816 ) - (310 ) Changes in fair value 1,103 (442 ) (1,906 ) 150 Reclassified to level 2 - 1,200 - - Reclassified to equity 1,128 - - - September 30, 2023 balances $ - $ (12,058 ) $ (1,906 ) $ (160 ) 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 0.08 0.0008 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 September 30, 2023 As of February 3, As of December 31, Price of Class A Common Stock $ - $ 1.56 $ 1.78 Risk-free interest rate - % 4.63 % 4.60 % Yield - % 13.6 % 15.6 % Expected volatility - % 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. On various dates through August 25, 2023, all of the YA Convertible Debentures were converted to Class A Common Stock, and upon the final conversion on August 25, 2023, the Company derecognized the remaining Redemption Feature Derivative. 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, June 30, 2023 and August 25, 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 15.0% Subordinated Term Loan Warrants Make-Whole Derivative The following table provides quantitative information of the key assumptions utilized in the Subordinated Term Loan Warrants Make-Whole Derivative fair value measurements as of measurement dates: Schedule of derivative fair value measurements As of September 30, 2023 As of December 31, Price of Class A Common Stock $ 2.08 $ 14.24 Strike Price of Class A Common Stock $ 18.96 $ 18.96 Risk-free interest rate 4.70 % 4.00 % Expected volatility 85.0 % 65.0 % Expiration Date December 12, 2027 December 12, 2027 The Company measured and recognized fair value for the Subordinated Term Loan Warrants Make-Whole Derivative as of the execution date of the Subordinated Term Loan Warrants Make-Whole Agreement and at the end of each reporting period 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 September 30, As of December 31, Price of Class A Common Stock $ 2.08 $ 1.78 Risk-free interest rate 4.70 % 4.00 % Expected volatility 85.0 % 65.0 % Expected remaining term 3.9 4.6 The Company measured and recognized the fair value of the Earn-Out Interests as of the end of each reporting period 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 consolidated statements of operations. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 16— Commitments and contingencies Legal Matters In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company makes a provision for 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 in 2024. While each of the leases includes renewal options, the Company has only included the base lease term in its calculation of lease assets and liabilities as it is not reasonably certain to utilize the renewal options. The Company does not have any finance leases. The following table presents information regarding the maturities of the undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented on the September 30, 2023 condensed consolidated balance sheet (in thousands). Schedule of operating lease payments Years Ending December 31, 2023 309 2024 790 Total minimum lease payments 1,099 Less: Imputed interest (114 ) Total operating lease liabilities $ 985 During the three months ended September 30, 2023, the Company terminated the lease agreement for one of its office facilities and entered into an amendment to another lease agreement. As a result, the Company derecognized $1.2 million of operating right-of-use assets and $1.4 million of operating lease liabilities on the consolidated balance sheet, with a gain of $0.2 million recorded in other income (expense) on the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2023. Operating lease amounts above do not include sublease income. The Company has a sublease agreement with a third party and expects to receive sublease income of approximately $ 0.6 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, June 27, 2023 and September 30, 2023. The term of the amended agreement is through December 31, 2024. As of September 30, 2023, $ 19.8 3.8 5.6 16.0 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 17— 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 The Rodina Note Conversion Agreement May 2023 Financing Commitment May 2023 PIPE Subscription Agreements 7,104,556 Rodina Warrant 498,119 September 2023 Rodina Letter of Credit 15.0 |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 18— Concentrations During the three months ended September 30, 2023, the Company had two customers who individually accounted for 10% or more of the Company's total revenue and together accounted for approximately 33% 20% 25% 27% 40% 38% |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2023 | |
Liquidity | |
Liquidity | Note 19— Liquidity During the three and nine months ended September 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 September 30, 2023. However, the Company has an option to settle all of the warrant liabilities and derivative liabilities under current liabilities on the accompanying condensed consolidated balance sheets in Class A Common Stock. To address liquidity needs, the Company entered into various financial arrangements during the nine months ended September 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, the Cantor Sales Agreement and full conversions of the Rodina Note and the YA Convertible Debentures to Class A Common Stock. 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 | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 20— Subsequent events On October 2, 2023, the Company issued 1,802,885 3.8 On October 16, 2023, the NYSE notified the Company, and publicly announced, that the NYSE has determined to (a) commence proceedings to delist the Public Warrants and (b) immediately suspend trading of the Public Warrants due to “abnormally low” trading price levels pursuant to Section 802.01D of the NYSE Listed Company Manual. The Company did not appeal the NYSE’s determination. On October 31, 2023, the NYSE issued a notification to the SEC of its intention to remove the Public Warrants from listing and registration on the NYSE on November 13, 2023, pursuant to the provisions of Rule 12d2-2(b) under the Exchange Act. |
Nature of operations and summ_2
Nature of operations and summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business 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. |
Reverse Stock Split | Reverse Stock Split |
Mergers | Mergers In connection with the Mergers, the Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by Rubicon Technologies Holdings, LLC (“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 | Basis of Presentation and Consolidation |
Segments | Segments |
Use of Estimates | Use of Estimates |
Emerging Growth Company | Emerging Growth Company |
Revenue Recognition | Revenue Recognition Service Revenue: Service revenues are primarily derived from long-term contracts with waste generator customers including multiple promises delivered through the Company’s digital marketplace platform. The promises include waste removal, consultation services, billing administration and consolidation, cost savings analyses, and vendor procurement and performance management, each of which constitutes an input to the combined service managed through the digital platform. The digital platform and services are highly interdependent, and accordingly, each contractual promise is not considered a distinct performance obligation in the context of the contract and is combined into a single performance obligation. In general, fees are invoiced, and revenue is recognized over time as control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing the service. The Company invoices for certain services prior to performance. These advance invoices are included in contract liabilities and recognized as revenue in the period service is provided. Service revenues also include software-as-a-service subscription, maintenance, equipment and other professional services, which represent separate performance obligations. Once the performance obligations and the transaction price are determined, including an estimate of any variable consideration, the Company then allocates the transaction price to each performance obligation in the contract using a relative standalone selling price method. The Company determines standalone selling price based on the price at which the good or service is sold separately. Recyclable Commodity Revenue: The Company recognizes recyclable commodity revenue through the 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 September 30, 2023 and December 31, 2022 was insignificant. |
Cost of Revenue, exclusive of amortization and depreciation | Cost of Revenue, exclusive of amortization and depreciation Cost of recyclable commodity revenues primarily consists of expenses related to 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 | Cash and Cash Equivalents |
Accounts Receivable and Contract Balances | Accounts Receivable and Contract Balances 4.6 3.6 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 September 30, 2023 and December 31, 2022, the Company had unbilled receivables of $ 68.6 55.2 55.2 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 monthly basis. As of September 30, 2023 and December 31, 2022, the Company had deferred revenue balances of $ 6.5 5.9 5.5 |
Accrued Hauler Expenses | Accrued Hauler Expenses |
Fair Value Measurements | Fair Value Measurements Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as 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 15 for further information regarding fair value measurements. |
Offering Costs | Offering Costs 0 67.3 7.0 No |
Customer Acquisition Costs | Customer Acquisition Costs |
Warrants | Warrants Distinguishing Liabilities from Equity Derivatives and Hedging 0.0001 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded in liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a component of other income (expense) on the consolidated statement of operations. As of September 30, 2023, the Company has both liability-classified and equity-classified warrants outstanding. See Note 9 for further information. |
Earn-out Liabilities | Earn-out Liabilities 186,064 1,112,605 0.0001 (1) 50% of the Earn-Out Interests if the volume weighted average price (the “VWAP”) of the Class A Common Stock equals or exceeds $112.00 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 $128.00 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 September 30, 2023 and December 31, 2022, the Earn-Out Interests had a fair value of $ 0.2 5.6 5.4 |
Noncontrolling Interest | Noncontrolling Interest 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 12.1% and 35.9% of Holdings LLC’s net loss during the three and nine months ended September 30, 2023, respectively, was allocated to noncontrolling interests (“NCI”). |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes Income Taxes; Interim Reporting ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. 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 September 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 0 0.1 0.0 0 0 0.1 0.0 During the nine months ended September 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 0.2 |
Tax Receivable Agreement Obligation | Tax Receivable Agreement Obligation The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows: a. recognizes a contingent liability for the TRA obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that the Company will pay; b. records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange; c. to the extent the Company estimates that the full benefit represented by the deferred tax asset will not be fully realized based on an analysis that will consider, among other things, the expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance; and d. the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss. A TRA liability is determined and recorded under ASC 450, “ Contingencies |
Earnings (Loss) Per Share (“EPS”) | Earnings (Loss) Per Share (“EPS”) Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 14 for additional information on dilutive securities. Prior to the Mergers, the membership structure of Holdings LLC included units 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 | Derivative Financial Instruments |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. |
Property and equipment (Tables)
Property and equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment September 30, 2023 December 31, Computers, equipment and software $ 2,311 $ 3,791 Customer equipment 1,973 1,485 Furniture and fixtures 210 1,699 Leasehold improvements 1,441 3,772 Total property and equipment 5,935 10,747 Less accumulated amortization and depreciation (4,302 ) (8,103 ) Total property and equipment, net $ 1,633 $ 2,644 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of components of long-term debt | Schedule of components of long-term debt September 30, 2023 December 31, Term loan balance $ 108,483 $ 71,000 Convertible debt balance 1,446 7,000 Related-party convertible debt balance 18,041 11,964 Less unamortized deferred debt charges (35,358 ) (6,138 ) Total borrowed 92,612 83,826 Less short-term debt obligation balance - (3,771 ) Long-term debt obligation balance $ 92,612 $ 80,055 |
Schedule of maturities of long-term debt | Schedule of maturities of long-term debt Fiscal Years Ending December 31, 2023 $ - 2024 - 2025 108,483 2026 19,487 Total $ 127,970 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Schedule of accrued expenses September 30, 2023 December 31, Accrued hauler expenses $ 63,049 $ 44,773 Accrued compensation 15,026 43,054 Accrued income taxes - 9 Accrued Mergers transaction expenses - 13,433 FPA Settlement Liability (as defined in Note 10) 2,000 - Other accrued expenses 3,591 6,733 Total accrued expenses $ 83,666 $ 108,002 |
Goodwill and other intangibles
Goodwill and other intangibles (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets and goodwill | Schedule of intangible assets and goodwill September 30, 2023 Useful Life Gross Accumulated Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (14,061 ) 6,915 Non-competition agreements 3 4 550 (550 ) - Technology 3 3,178 (2,298 ) 715 Total finite-lived intangible assets 25,432 (17,802 ) 7,630 Domain Name Indefinite 835 - 835 Total intangible assets $ 26,267 $ (17,802 ) $ 8,465 December 31, 2022 Useful Life Gross Accumulated Net Trade Name 5 $ 728 $ (728 ) $ - Customer and hauler relationships 2 8 20,976 (12,141 ) 8,835 Non-competition agreements 3 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 finite- lived intangible assets, future amortization expense | Schedule of finite- lived intangible assets, future amortization expense Fiscal Years Ending December 31, 2023 $ 804 2024 3,110 2025 2,559 2026 1,157 Total future amortization of intangible assets $ 7,630 |
Stockholders_ (deficit) equity
Stockholders’ (deficit) equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of stockholders equity | Schedule of stockholders equity Authorized Issued Outstanding Class A Common Stock 690,000,000 34,803,951 34,803,951 Class V Common Stock 275,000,000 4,425,388 4,425,388 Preferred Stock 10,000,000 - - Total shares as of September 30, 2023 975,000,000 39,229,339 39,229,339 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 6,985,869 6,985,869 Class V Common Stock 275,000,000 14,432,992 14,432,992 Preferred Stock 10,000,000 - - Total shares as of December 31, 2022 975,000,000 21,418,861 21,418,861 |
Equity-based compensation (Tabl
Equity-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of RSUs activity | Schedule of RSUs activity Units Weighted Average Grant Date Fair Value Nonvested – December 31, 2022 182,086 $ 15.84 Granted 2,016,639 8.10 Vested (986,461 ) 8.98 Forfeited/redeemed (45,256 ) 15.09 Nonvested – September 30, 2023 1,167,008 $ 8.30 |
Loss per share (Tables)
Loss per share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per share | Schedule of net loss per share Three Months Ended September 30, Nine Months Ended September 30, Numerator: Net loss $ (30,173 ) $ (62,441 ) Less: Net loss attributable to noncontrolling interests (2,519 ) (18,456 ) Net loss attributable to Rubicon Technologies, Inc $ (27,654 ) $ (43,985 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 32,381,649 17,786,466 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (0.85 ) $ (2.47 ) The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for period from August 15, 2022 (the Closing Date) to September 30, 2022 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss for the period from August 15, 2022 through September 30, 2022 $ (34,741 ) Less: Net loss attributable to noncontrolling interests for the period from August 15, 2022 through September 30, 2022 (16,933 ) Net loss for the period from August 15, 2022 through September 30, 2022 attributable to Rubicon Technologies, Inc. – Basic and diluted $ (17,808 ) Denominator: Weighted average shares of Class A Common Stock outstanding – Basic and diluted 6,083,847 Net loss per share attributable to Class A Common Stock – Basic and diluted $ (2.93 ) |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (26,502 ) $ - Additional Subordinated Term Loan Warrants Derivative - - (12,058 ) Subordinated Term Loan Warrants Make-Whole Derivative - - (1,906 ) Earn-out liabilities - - (160 ) Total $ - $ (26,502 ) $ (14,124 ) As of December 31, 2022 Liabilities Level 1 Level 2 Level 3 Warrant liabilities $ - $ (20,890 ) $ - Redemption Feature Derivative - - (826 ) Subordinated Term Loan Warrants Make-Whole Derivative - - - Earn-out liabilities - - (5,600 ) Total $ - $ (20,890 ) $ (6,426 ) Level 3 Rollfoward Redemption Additional Subordinated Subordinated Earn-out December 31, 2022 balances $ (826 ) $ - $ - $ (5,600 ) Additions (474 ) (12,264 ) - - Changes in fair value (931 ) (1,602 ) - 5,290 Reclassified to level 2 - 1,050 - June 30, 2023 balances (2,231 ) (12,816 ) - (310 ) Changes in fair value 1,103 (442 ) (1,906 ) 150 Reclassified to level 2 - 1,200 - - Reclassified to equity 1,128 - - - September 30, 2023 balances $ - $ (12,058 ) $ (1,906 ) $ (160 ) |
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 September 30, 2023 As of February 3, As of December 31, Price of Class A Common Stock $ - $ 1.56 $ 1.78 Risk-free interest rate - % 4.63 % 4.60 % Yield - % 13.6 % 15.6 % Expected volatility - % 50.0 % 50.0 % |
Subordinated Term Loan Warrants Makewhole 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 September 30, 2023 As of December 31, Price of Class A Common Stock $ 2.08 $ 14.24 Strike Price of Class A Common Stock $ 18.96 $ 18.96 Risk-free interest rate 4.70 % 4.00 % Expected volatility 85.0 % 65.0 % Expiration Date December 12, 2027 December 12, 2027 |
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 September 30, As of December 31, Price of Class A Common Stock $ 2.08 $ 1.78 Risk-free interest rate 4.70 % 4.00 % Expected volatility 85.0 % 65.0 % Expected remaining term 3.9 4.6 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating lease payments | Schedule of operating lease payments Years Ending December 31, 2023 309 2024 790 Total minimum lease payments 1,099 Less: Imputed interest (114 ) Total operating lease liabilities $ 985 |
Nature of operations and summ_3
Nature of operations and summary of significant accounting policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 24, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Allowance for doubtful accounts | $ 4,600 | $ 4,600 | $ 3,600 | |||
Unbilled receivables | 68,600 | 68,600 | 55,200 | |||
Customer invoice | 55,200 | |||||
Deferred revenue | 6,500 | 6,500 | 5,900 | |||
Contract liability recognized | 5,500 | |||||
Deferred offering costs capitalized | 0 | 0 | 0 | |||
Additional paid-in capital | 67,300 | 67,300 | ||||
Gain on settlement | $ 6,400 | 0 | 7,000 | |||
Fair value of Earn-out Interests | 200 | 200 | 5,600 | |||
Other income (expense) | 5,400 | |||||
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | |||
Effective tax rate | 0.10% | 0% | 0.10% | 0% | ||
Net deferred tax liability | $ 200 | $ 200 | $ 200 | |||
Common Class A [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Class A [Member] | Merger Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued | 186,064 | 186,064 | ||||
Common Class B [Member] | Merger Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued | 1,112,605 | 1,112,605 | ||||
Common Class V [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Mergers (Details Narrative)
Mergers (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Aug. 15, 2022 | Apr. 24, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Business Acquisition [Line Items] | ||||
Contributed capital | $ 73,800 | $ 73,800 | ||
Cash consideration | 28,900 | |||
Aggregate proceeds received from the PIPE Investors | 121,000 | 121,000 | ||
Transaction costs | 67,300 | |||
Other expense | 600 | |||
Gain on settlement | $ 6,400 | $ 0 | $ 7,000 | |
Offering costs recognized | $ 6,400 | |||
Common Stock Class A [Member] | ||||
Business Acquisition [Line Items] | ||||
Retained aggregate shares | 2,480,865 | |||
Transaction costs | $ 7,000 | |||
Common Stock Class V [Member] | ||||
Business Acquisition [Line Items] | ||||
Retained aggregate shares | 14,834,735 | |||
Class A Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of shares newly issued | 20,000 | |||
Class B Units [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of shares newly issued | 110,000 | |||
Class A Shares [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of shares forfeited | 20,000 | |||
Founder Warrants [Member] | ||||
Business Acquisition [Line Items] | ||||
Warrant, description | each representing a right to acquire one Founder Class A Share for $92.00 (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 $92.00 pursuant to the Warrant Agreement | |||
PIPE Investors [Member] | Class A Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Aggregate of shares | 1,512,500 | |||
Share Price | $ 80 | $ 80 | ||
FPA Sellers [Member] | Class A Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Aggregate of shares | 885,327 |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 5,935 | $ 10,747 |
Less accumulated amortization and depreciation | (4,302) | (8,103) |
Total property and equipment, net | 1,633 | 2,644 |
Property, Plant and Equipment [Member] | Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,311 | 3,791 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,973 | 1,485 |
Property, Plant and Equipment [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 210 | 1,699 |
Property, Plant and Equipment [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,441 | $ 3,772 |
Property and equipment (Detai_2
Property and equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Amortization and depreciation expense | $ 300 | $ 300 | $ 1 | $ 1 |
Lease agreement description | Company terminated an office lease agreement and entered into an amended agreement for another office lease agreement, which in total, contributed to a decrease of $1.6 million in computers, equipment and software, $1.6 million in furniture and fixtures, $2.3 million in leasehold improvements and $4.8 million in accumulated amortization and depreciation, resulting in a $0.8 million of loss on disposals, which was recognized in other expense on the accompanying condensed consolidated statements of operations for the three months and nine months ended September 30, 2023. |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Term loan balance | $ 108,483 | $ 71,000 |
Convertible debt balance | 1,446 | 7,000 |
Related-party convertible debt balance | 18,041 | 11,964 |
Less unamortized deferred debt charges | (35,358) | (6,138) |
Total borrowed | 92,612 | 83,826 |
Less short-term debt obligation balance | (3,771) | |
Long-term debt obligation balance | $ 92,612 | $ 80,055 |
Debt (Details 1)
Debt (Details 1) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 | |
2024 | |
2025 | 108,483 |
2026 | 19,487 |
Total | $ 127,970 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||||
Jun. 07, 2023 | Feb. 07, 2023 | Feb. 02, 2023 | Feb. 02, 2023 | Dec. 14, 2018 | Aug. 25, 2023 | Dec. 16, 2022 | Nov. 30, 2022 | Dec. 22, 2021 | Mar. 29, 2019 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 20, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 22, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||||||||||||||||
Principal amount | $ 7,000 | ||||||||||||||||
Loss on extinguishments of debt | $ (9,348) | $ (18,234) | |||||||||||||||
Interest expense | 9,600 | 4,600 | 26,200 | 12,300 | |||||||||||||
Convertible Debentures [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Loss on extinguishment of debt | 7,600 | 10,600 | |||||||||||||||
Deferred debt charges | 1,700 | 1,700 | $ 2,500 | ||||||||||||||
Amortization of deferred debt charges | 200 | 1,300 | |||||||||||||||
Principal amount | $ 7,000 | ||||||||||||||||
Interest rate | 4% | ||||||||||||||||
Accrued interest to principal | 300 | ||||||||||||||||
Principal converted into shares | $ 5,900 | $ 11,500 | |||||||||||||||
Convertible debentures share | 2,471,561 | 4,048,601 | |||||||||||||||
Y A Convertible Debentures [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Loss on extinguishment of debt | $ 900 | ||||||||||||||||
Accrued interest to principal | $ 0 | ||||||||||||||||
Principal converted into shares | $ 5,600 | ||||||||||||||||
Convertible debentures share | 1,428,760 | ||||||||||||||||
Insider Convertible Debentures [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Maturity date | Jun. 16, 2024 | ||||||||||||||||
Amortization of deferred debt charges | $ 100 | 400 | |||||||||||||||
Principal amount | $ 11,900 | ||||||||||||||||
Interest rate | 6% | ||||||||||||||||
Accrued interest to principal | 200 | $ 500 | |||||||||||||||
Net proceeds | $ 10,500 | ||||||||||||||||
Related party notes receivable discription | 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 September 30, 2023. | ||||||||||||||||
Changes in fair value | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Maturity date | Aug. 01, 2024 | ||||||||||||||||
Interest rate effective percentage | 6% | 6% | |||||||||||||||
Amortization of deferred debt charges | $ 500 | ||||||||||||||||
Principal amount | $ 1,400 | $ 1,400 | |||||||||||||||
Accrued interest to principal | 100 | ||||||||||||||||
Net proceeds | $ 1,200 | ||||||||||||||||
NZ Superfund [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Maturity date | Aug. 01, 2024 | ||||||||||||||||
Interest rate effective percentage | 8% | 8% | |||||||||||||||
Amortization of deferred debt charges | 100 | ||||||||||||||||
Principal amount | $ 5,100 | $ 5,100 | |||||||||||||||
Accrued interest to principal | 200 | 400 | |||||||||||||||
Net proceeds | $ 4,500 | ||||||||||||||||
Rodina [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Line of credit | $ 15,000 | ||||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Long-term debt, gross | $ 75,000 | $ 60,000 | |||||||||||||||
Maturity date | Dec. 14, 2025 | Dec. 31, 2023 | |||||||||||||||
Interest rate effective percentage | 4.80% | 5.60% | 9.70% | ||||||||||||||
Repayments of debt | $ 48,600 | ||||||||||||||||
Loss on extinguishment of debt | 2,600 | ||||||||||||||||
Line of credit | 51,800 | 51,800 | |||||||||||||||
Remainning credit value | $ 5,600 | 5,600 | |||||||||||||||
Amortization of deferred debt charges | $ 400 | ||||||||||||||||
June 2023 Revolving Credit Facility [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Long-term debt, gross | $ 90,000 | ||||||||||||||||
Maturity date | Jun. 07, 2026 | ||||||||||||||||
Interest rate effective percentage | 4.25% | 9.70% | 9.70% | ||||||||||||||
Line of credit | $ 65,500 | $ 65,500 | |||||||||||||||
Remainning credit value | 1,400 | 1,400 | |||||||||||||||
Borrowing base collateral | 15,000 | ||||||||||||||||
Deferred debt charges | 2,900 | 2,900 | |||||||||||||||
Amortization of deferred debt charges | 200 | ||||||||||||||||
Term Loan Facility [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Long-term debt, gross | $ 20,000 | ||||||||||||||||
Maturity date | Mar. 29, 2024 | ||||||||||||||||
Interest rate effective percentage | 9.60% | 9.50% | 13.60% | ||||||||||||||
Principal amount | $ 10,000 | ||||||||||||||||
Loss on extinguishments of debt | $ 2,500 | $ 800 | |||||||||||||||
Subordinated Term Loan [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Maturity date | Dec. 22, 2022 | ||||||||||||||||
Interest rate effective percentage | 14% | ||||||||||||||||
Deferred debt charges | 11,900 | 11,900 | |||||||||||||||
Amortization of deferred debt charges | $ 700 | $ 400 | $ 1,800 | $ 1,100 | |||||||||||||
Long-term construction loan | $ 20,000 | ||||||||||||||||
Private Warrants [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Maturity date | Jul. 01, 2024 | ||||||||||||||||
Interest rate effective percentage | 16% | 16% | |||||||||||||||
Principal amount | $ 3,000 | $ 3,000 | |||||||||||||||
Number of shares issued | 940,243 | ||||||||||||||||
June 2023 Term Loan [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Interest rate effective percentage | 10.25% | 16.80% | 16.80% | ||||||||||||||
Deferred debt charges | $ 24,000 | $ 24,000 | |||||||||||||||
Amortization of deferred debt charges | $ 1,800 | $ 2,200 | |||||||||||||||
Principal amount | $ 75,000 | ||||||||||||||||
Term debt description | 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 covenants, which reduce the available borrowing base collateral under the June 2023 Revolving Credit Facility initially by $19.0 million (the “Minimum Excess Availability Reserve”). During the terms of the agreements, the Minimum Excess Availability Reserve could be decreased by up to $9.0 million, which will make the Minimum Excess Availability Reserve $10.0 million, upon the Company’s achievement of certain financial conditions defined in the agreements. As of September 30, 2023, the Minimum Excess Availability Reserve was $19.0 million. Furthermore, the June 2023 Revolving Credit Facility, the June 2023 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued hauler expenses | $ 63,049 | $ 44,773 |
Accrued compensation | 15,026 | 43,054 |
Accrued income taxes | 9 | |
Accrued Mergers transaction expenses | 13,433 | |
FPA Settlement Liability (as defined in Note 10) | 2,000 | |
Other accrued expenses | 3,591 | 6,733 |
Total accrued expenses | $ 83,666 | $ 108,002 |
Accrued expenses (Details Narra
Accrued expenses (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Payables and Accruals [Abstract] | |
RSUs granted amount | $ 8,200 |
Amount of rollover consideration | 26,800 |
Gain on settlement of incentive compensation | $ 18,600 |
Goodwill and other intangible_2
Goodwill and other intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 26,267 | $ 26,267 |
Accumulated Amortization | (17,802) | (15,386) |
Net Carrying Amount | 8,465 | 10,881 |
Domain Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 835 | 835 |
Accumulated Amortization | ||
Net Carrying Amount | 835 | 835 |
Finite-Lived Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 25,432 | 25,432 |
Accumulated Amortization | (17,802) | (15,386) |
Net Carrying Amount | $ 7,630 | $ 10,046 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | 5 years |
Gross Carrying Amount | $ 728 | $ 728 |
Accumulated Amortization | (728) | (728) |
Net Carrying Amount | ||
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,976 | 20,976 |
Accumulated Amortization | (14,061) | (12,141) |
Net Carrying Amount | $ 6,915 | $ 8,835 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | 2 years |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 8 years | 8 years |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 550 | $ 550 |
Accumulated Amortization | (550) | (550) |
Net Carrying Amount | ||
Noncompete Agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Noncompete Agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | 4 years |
Technology Equipment [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Gross Carrying Amount | $ 3,178 | $ 3,178 |
Accumulated Amortization | (2,298) | (1,967) |
Net Carrying Amount | $ 715 | $ 1,211 |
Goodwill and other intangible_3
Goodwill and other intangibles (Details 1) $ in Thousands | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 804 |
2024 | 3,110 |
2025 | 2,559 |
2026 | 1,157 |
Total future amortization of intangible assets | $ 7,630 |
Goodwill and other intangible_4
Goodwill and other intangibles (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 800 | $ 800 | $ 2,400 | $ 2,500 |
Stockholders' (deficit) equity
Stockholders' (deficit) equity (Details) - shares | Sep. 30, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Equity [Member] | ||
Class of Stock [Line Items] | ||
Total shares authorized | 975,000,000 | 975,000,000 |
Total shares issued | 39,229,339 | 21,418,861 |
Total shares outstanding | 39,229,339 | 21,418,861 |
Common Class A [Member] | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 690,000,000 | 690,000,000 |
Common stock, shares issued | 34,803,951 | 6,985,869 |
Common stock, shares outstanding | 34,803,951 | 6,985,869 |
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 | 34,803,951 | 6,985,869 |
Common stock, shares outstanding | 34,803,951 | 6,985,869 |
Common Class V [Member] | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 275,000,000 | 275,000,000 |
Common stock, shares issued | 4,425,388 | 14,432,992 |
Common stock, shares outstanding | 4,425,388 | 14,432,992 |
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 | 4,425,388 | 14,432,992 |
Common stock, shares outstanding | 4,425,388 | 14,432,992 |
Preferred Stock [Member] | Equity [Member] | ||
Class of Stock [Line Items] | ||
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 Narrative) | 9 Months Ended |
Sep. 30, 2023 shares | |
Equity [Abstract] | |
Number of common stock exchanged | 10,007,604 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jun. 07, 2023 | Aug. 15, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 22, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | Mar. 22, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | Nov. 18, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrants, description | Company assumed a total of 3,752,107 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $92.00 per share. | ||||||||||
Warrant liabilities | $ 2,600 | ||||||||||
Public Warrants [Member] | Private Placement [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Outstanding warrants | 1,976,560 | ||||||||||
Private Warrants [Member] | Private Placement [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Outstanding warrants | 1,775,547 | ||||||||||
Warrant [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
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 shares of Class A Common Stock worth $2.0 million at the exercise price of $0.08 per share at any time after the original 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 original 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 original 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] | |||||||||||
Warrants converted into common stock, amount | $ 1,200 | $ 1,100 | $ 2,600 | ||||||||
Warrants converted into common stock, shares | 291,145 | 319,923 | |||||||||
Term Loan Warrants [Member] | Firstamendment [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrant liabilities | $ 250 | ||||||||||
Term Loan Warrants [Member] | Second Amendment [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrant liabilities | $ 350 | ||||||||||
Term Loan Warrants [Member] | Additions | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrant liabilities | $ 380 | ||||||||||
YA Warrant [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrant liabilities | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | |||||||
Warrant purchase price | $ 6,000 | ||||||||||
Warrant is exercisable amount | $ 20,000 | ||||||||||
Warrant exercise price | $ 0.0008 | ||||||||||
Advisor Warrant [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Outstanding warrants | 62,500 | ||||||||||
Warrant exercise price | $ 0.08 | ||||||||||
Loss on change in fair value | 100 | 100 | 100 | ||||||||
June 2023 Term Loan Warrants [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrants converted into common stock, shares | 2,121,605 | ||||||||||
Warrant exercise price | $ 0.01 | ||||||||||
Fair value of warrants | $ 9,400 | $ 6,500 | $ 9,800 | ||||||||
Change in fair value of warrants | $ 3,300 | $ 2,900 |
Forward Purchase Agreement (Det
Forward Purchase Agreement (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 | |
Forward Purchase Agreement | |
Termination Agreement | 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 277.765 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 267,606 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. As more than 90% of the YA Convertible Debentures were converted into shares of Class A Common Stock on August 25, 2023, the FPA Earlier Lock-Up Date was set as February 25, 2024. The value of 277,765 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 $2.0 million obligation (the “FPA Settlement Liability”) has been included in accrued expenses on the accompanying condensed consolidated balance sheets as of September 30, 2023 and other long-term liabilities as of December 31, 2022 |
Yorkville Facilities (Details N
Yorkville Facilities (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | ||
Aug. 31, 2022 | Sep. 30, 2023 | Nov. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Standby equity purchase agreement, description | 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 had 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 were to 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 was not permitted to beneficially own greater than 9.99% of the outstanding shares of Class A Common Stock | ||
Principal Amount | $ 7,000 | ||
Purchase price | 7,000 | ||
Noncurrent assets | $ 2,000 | ||
Yorkville [Member] | Common Class A [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Shares, Issued | 25,000 | ||
Yorkville Facilities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Principal Amount | $ 10,000 | ||
Purchase price | 10,000 | ||
Noncurrent assets | $ 2,100 |
Cantor Sales Agreement (Details
Cantor Sales Agreement (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 05, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Proceeds from common stock | $ 24,767 | ||
Cantor Sales Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Proceeds from common stock | $ 50,000 |
Equity-based compensation (Deta
Equity-based compensation (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Equity [Abstract] | |
Options outstanding, beginning balance | 182,086 |
Weighted average grant date fair value, beginning | $ / shares | $ 15.84 |
Options granted | 2,016,639 |
Weighted average grant date fair value, granted | 8.10 |
Options vested | (986,461) |
Weighted average grant date fair value, vested | $ / shares | $ 8.98 |
Options forfeited/redeemed | (45,256) |
Weighted average grant date fair value, forfeited/redeemed | $ / shares | $ 15.09 |
Options outstanding,ending balance | 1,167,008 |
Weighted average grant date fair value, ending | $ / shares | $ 8.30 |
Equity-based compensation (De_2
Equity-based compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Aug. 15, 2022 | |
Class of Stock [Line Items] | ||||||
Equity compensation costs | $ 2,100 | $ 90,600 | $ 13,200 | $ 95,300 | ||
Exchange of vested RSUs | 642,418 | 642,418 | ||||
Exchange of vested DSUs | 38,350 | 38,350 | ||||
Unrecognized compensation | $ 5,100 | $ 5,100 | ||||
Weighted-average period | 7 months 6 days | |||||
Common Class A [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized | 690,000,000 | 690,000,000 | 690,000,000 | |||
Common stock, shares issued | 34,803,951 | 34,803,951 | 6,985,869 | |||
Common stock, shares outstanding | 34,803,951 | 34,803,951 | 6,985,869 | |||
2022 Plan [Member] | Common Class A [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized | 3,625,000 | |||||
Common stock, shares issued | 357,409 | |||||
Common stock, shares outstanding | 357,409 |
Loss per share (Details)
Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net loss | $ (30,173) | $ (211,125) | $ (62,441) | $ (263,738) | |
Less: Net loss attributable to non-controlling interests | (2,519) | (16,933) | (18,456) | (16,933) | |
Net loss attributable to Rubicon Technologies, Inc | $ (27,654) | $ (17,808) | $ (43,985) | $ (17,808) | |
Weighted average shares outstanding, basic | 32,381,649 | 6,083,847 | 17,786,466 | 6,083,847 | |
Weighted average shares outstanding, diluted | 32,381,649 | 6,083,847 | 17,786,466 | 6,083,847 | |
Net loss per Class A Common share - basic | $ (0.85) | $ (2.93) | $ (2.47) | $ (2.93) | |
Net loss per Class A Common share - diluted | $ (0.85) | $ (2.93) | $ (2.47) | $ (2.93) | |
Common Class A [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net loss | $ (34,741) | ||||
Less: Net loss attributable to non-controlling interests | (16,933) | ||||
Net loss attributable to Rubicon Technologies, Inc | $ (17,808) | ||||
Weighted average shares outstanding, basic | 6,083,847 | ||||
Weighted average shares outstanding, diluted | 6,083,847 | ||||
Net loss per Class A Common share - basic | $ (2.93) | ||||
Net loss per Class A Common share - diluted | $ (2.93) |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Redemption Feature Derivative [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Begiining balances | $ (2,231) | $ (826) | |
Additions | (474) | ||
Changes in fair value | 1,103 | (931) | |
Reclassified to level 2 | |||
Reclassified to equity | 1,128 | ||
Ending balances | (2,231) | ||
Additional Subordinated Term Loan Warrants Derivative [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Begiining balances | (12,816) | ||
Additions | (12,264) | ||
Changes in fair value | (442) | (1,602) | |
Reclassified to level 2 | 1,200 | 1,050 | |
Reclassified to equity | |||
Ending balances | (12,058) | (12,816) | |
Subordinated Term Loan Warrants Makewhole Derivative [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Begiining balances | |||
Additions | |||
Changes in fair value | (1,906) | ||
Reclassified to level 2 | |||
Reclassified to equity | |||
Ending balances | (1,906) | ||
Earn Out Liability [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Begiining balances | (310) | (5,600) | |
Additions | |||
Changes in fair value | 150 | 5,290 | |
Reclassified to level 2 | |||
Reclassified to equity | |||
Ending balances | (160) | $ (310) | |
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | |||
Redemption Feature Derivative | |||
Additional Subordinated Term Loan Warrants Derivative | |||
Subordinated Term Loan Warrants Make-Whole Derivative | |||
Earn-out liabilities | |||
Total | |||
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | (26,502) | (20,890) | |
Redemption Feature Derivative | |||
Additional Subordinated Term Loan Warrants Derivative | |||
Subordinated Term Loan Warrants Make-Whole Derivative | |||
Earn-out liabilities | |||
Total | (26,502) | (20,890) | |
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | |||
Redemption Feature Derivative | (826) | ||
Additional Subordinated Term Loan Warrants Derivative | (12,058) | ||
Subordinated Term Loan Warrants Make-Whole Derivative | (1,906) | ||
Earn-out liabilities | (160) | (5,600) | |
Total | $ (14,124) | $ (6,426) |
Fair value measurements (Deta_2
Fair value measurements (Details 1) - Redemption Feature Derivative [Member] - $ / shares | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Feb. 03, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Price of Class A Common Stock | $ 1.56 | $ 1.78 | |
Risk-free interest rate | 4.63% | (0.00%) | 4.60% |
Yield | 13.60% | (0.00%) | 15.60% |
Expected volatility | 50% | (0.00%) | 50% |
Fair value measurements (Deta_3
Fair value measurements (Details 2) - Subordinated Term Loan Warrants Makewhole Derivative [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Price of Class A Common Stock | $ 2.08 | $ 14.24 |
Strike Price of Class A Common Stock | $ 18.96 | $ 18.96 |
Risk-free interest rate | 4.70% | 4% |
Expected volatility | 85% | 65% |
Expiration Date | December 12, 2027 | December 12, 2027 |
Fair value measurements (Deta_4
Fair value measurements (Details 3) - Earn Out Liability [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Price of Class A Common Stock | $ 2.08 | $ 1.78 |
Risk-free interest rate | 4.70% | 4% |
Expected volatility | 85% | 65% |
Expected remaining term | 3 years 10 months 24 days | 4 years 7 months 6 days |
Fair value measurements (Deta_5
Fair value measurements (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Advisor Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise prices | $ 0.08 | $ 0.08 |
YA Warrant [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise prices | $ 0.0008 | $ 0.0008 |
Additional Subordinated Term Loan Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Value of derivative | $ 350 | |
Discount rate | 15% |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 309 |
2024 | 790 |
Total minimum lease payments | 1,099 |
Less: Imputed interest | (114) |
Total operating lease liabilities | $ 985 |
Commitments and contingencies_3
Commitments and contingencies (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2024 | Sep. 30, 2023 | Oct. 31, 2024 | |
Finite-Lived Intangible Assets [Line Items] | |||
Lease agreement description | Company terminated an office lease agreement and entered into an amended agreement for another office lease agreement, which in total, contributed to a decrease of $1.6 million in computers, equipment and software, $1.6 million in furniture and fixtures, $2.3 million in leasehold improvements and $4.8 million in accumulated amortization and depreciation, resulting in a $0.8 million of loss on disposals, which was recognized in other expense on the accompanying condensed consolidated statements of operations for the three months and nine months ended September 30, 2023. | ||
Sublease income | $ 600 | ||
Due in the next 12 months | 19,800 | ||
Subscription fee | $ 5,600 | ||
Subsequent Event [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Thereafter | $ 3,800 | ||
Subscription fee | $ 16,000 | ||
Lease Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lease agreement description | Company terminated the lease agreement for one of its office facilities and entered into an amendment to another lease agreement. As a result, the Company derecognized $1.2 million of operating right-of-use assets and $1.4 million of operating lease liabilities on the consolidated balance sheet, with a gain of $0.2 million recorded in other income (expense) on the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2023. |
Related party transactions (Det
Related party transactions (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Sep. 15, 2023 | Mar. 20, 2023 | Sep. 30, 2023 | Sep. 22, 2023 | Mar. 16, 2023 | Nov. 30, 2022 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||
Purchase price | $ 7,000 | |||||
Deferred Finance Costs | $ 15,000 | |||||
Number of shares issued | 7,104,556 | |||||
Rodina [Member] | ||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||
Letter of Credit | $ 15,000 | |||||
Rodina Warrant [Member] | ||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||
Number of warrants granted | 498,119 | |||||
Felipe Chico Hernandez [Member] | ||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||
Common stock shares issued | 1,222,222 | |||||
Purchase price | $ 1,100 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Two Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 33% | ||||
Revenue Benchmark [Member] | Total shares issued | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 20% | ||||
Revenue Benchmark [Member] | Two Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 25% | 27% | |||
Accounts Receivable [Member] | Two Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 40% | ||||
Accounts Receivable [Member] | Three Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 38% |
Subsequent events (Details Narr
Subsequent events (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Oct. 02, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Subsequent Event [Line Items] | |||
Number of shares issued | 7,104,556 | ||
Payment of subscription fee | $ 3,800 | ||
Subsequent Event [Member] | PIPE Investor [Member] | |||
Subsequent Event [Line Items] | |||
Number of shares issued | 1,802,885 |