UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
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MICROMOBILITY.COM, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023
TABLE OF CONTENTS
| 1 |
PART 1 – FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
Micromobility.com, Inc.
(Formerly Helbiz, Inc.)
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivables | ||||||||
| VAT receivables | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Goodwill | ||||||||
| Property, equipment and deposits, net | ||||||||
| Intangible assets, net | ||||||||
| Right of use assets | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable related to media rights | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Deferred revenues | ||||||||
| Operating lease liabilities | ||||||||
| Finance lease liabilities | ||||||||
| Short term financial liabilities, net | ||||||||
| Total current Liabilities | ||||||||
| Other non-current liabilities | ||||||||
| Operating lease liabilities | ||||||||
| Finance lease liabilities | ||||||||
| Non-current financial liabilities, net | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies | Note
| |||||||
| CONVERTIBLE PREFERRED STOCK | ||||||||
| Series A Convertible Preferred Stock, $ par value; shares authorized at June 30, 2023; issued and outstanding at June 30, 2023 and issued and outstanding at December 31, 2022. | $ | $ | ||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ par value; shares authorized; issued and outstanding | ||||||||
| Class A Common stock, $ par value; shares authorized and; and shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively. | ||||||||
| Class B Common stock, $ par value; shares authorized and; shares issued and outstanding at June 30, 2023 and December 31, 2022. | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 2 |
Micromobility.com, Inc.
(Formerly Helbiz, Inc.)
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Research and development | ||||||||||||||||
| Impairment of assets | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non-operating income (expenses), net | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain (loss) on extinguishment of financial debts | ( | ) | ( | ) | ||||||||||||
| Change in fair value of warrant liabilities | ||||||||||||||||
| SEPA financial income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Other income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Total non-operating income (expenses), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive (loss) income, net of tax: | ||||||||||||||||
| Changes in foreign currency translation adjustments | ( | ) | ( | ) | ||||||||||||
| Net loss and comprehensive income, excluded Deemed Dividends and Deemed Dividends equivalents | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
Micromobility.com, Inc.
(Formerly Helbiz, Inc.)
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three and six months ended June 30, 2023
(in thousands, except share and per share data)
(unaudited)
| Class A Common Stock | Class B Common Stock | Accumulated | Accumulated Other Comprehensive (Loss) | TOTAL STOCKHOLDERS’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Deficit | Income | DEFICIT | ||||||||||||||||||||||
| Balance as of April 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Issuance of common shares – for Advance Notices under SEPA | — | |||||||||||||||||||||||||||
| Issuance of common shares - for Settlement of Payroll Liabilities | — | |||||||||||||||||||||||||||
| Issuance of warrants - for Settlement of Account payables | — | — | ||||||||||||||||||||||||||
| Issuance of common shares - for Settlement of Account Payables | — | |||||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||||||
| Changes in currency translation adjustment | — | — | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| 4 |
| SERIES B –PREFERRED | SERIES A – CONVERTIBLE PREFERRED | Class A Common Stock | Class B Common Stock | Accumulated | Accumulated Other Comprehensive | TOTAL STOCKHOLDERS’ | ||||||||||||||||||||||||||||||
| STOCK | STOCK | Shares | Amount | Shares | Amount | Deficit | (Loss) Income | DEFICIT | ||||||||||||||||||||||||||||
| Balance as of January 1, 2023 (Retroactive application of the reverse split ratio 1:50) | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of common shares – for Advance Notices under SEPA | — | |||||||||||||||||||||||||||||||||||
| Issuance of common shares – for Conversion of Convertible Notes | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock – for Conversion of Series A Convertible Preferred Stocks | ( | ) | — | |||||||||||||||||||||||||||||||||
| Issuance of common shares – for purchasing Intangible Assets | — | |||||||||||||||||||||||||||||||||||
| Issuance of common shares – for settlement of Payroll liabilities | — | |||||||||||||||||||||||||||||||||||
| Issuance of common shares - for Settlement of Account payables | — | |||||||||||||||||||||||||||||||||||
| Issuance of warrants - for Settlement of Account payables | — | — | ||||||||||||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||||||||||||||
| Issuance of Series B Preferred Stock | — | — | ||||||||||||||||||||||||||||||||||
| Redemption of Series B Preferred Stock | ( | ) | — | — | ( | ) | ||||||||||||||||||||||||||||||
| Changes in currency translation adjustment | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
Micromobility.com, Inc.
(Formerly Helbiz, Inc.)
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three and six months ended June 30, 2022
(in thousands, except share and per share data)
(unaudited)
| Class A Common Stock | Class B Common Stock | Accumulated | Accumulated Other Comprehensive (Loss) | TOTAL STOCKHOLDERS’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Deficit | Income | DEFICIT | ||||||||||||||||||||||
| Balance as of April 1, 2022 (Retroactive application of the reverse split ratio 1:50) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Issuance of Warrants - in conjunction with Convertible Notes issuance | — | — | ||||||||||||||||||||||||||
| Issuance of common shares – Commitment shares for Convertible Notes issuance | — | |||||||||||||||||||||||||||
| Issuance of common shares – to legal advisors for Convertible Note issuance | — | |||||||||||||||||||||||||||
| Issuance of common shares – for Conversion of 2021 Convertible Notes | — | |||||||||||||||||||||||||||
| Issuance of common shares - for Settlement of Account Payable | — | |||||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||||||
| Changes in currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of June 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
| Class A Common Stock | Class B Common Stock | Accumulated | Accumulated Other Comprehensive (Loss) | TOTAL STOCKHOLDERS’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Deficit | Income | DEFICIT | ||||||||||||||||||||||
| Balance as of January 1, 2022 (Retroactive application of the reverse split ratio 1:50) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| ASU No. 2020-06 - modified retrospective method | — | ( | ) | — | ( | ) | ||||||||||||||||||||||
| Issuance of common shares – for Conversion of 2021 Convertible Notes | — | |||||||||||||||||||||||||||
| Issuance of Warrants - in conjunction with Convertible Notes issuance | — | — | ||||||||||||||||||||||||||
| Issuance of common shares – Commitment shares for Convertible Notes issuance | — | |||||||||||||||||||||||||||
| Issuance of common shares – to legal advisors for Convertible Note issuance | — | |||||||||||||||||||||||||||
| Issuance of common shares - for Settlement of Account Payable | — | |||||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||||||
| Changes in currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net Loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of June 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
Micromobility.com, Inc.
(Formerly Helbiz, Inc.)
Condensed Consolidated Statements of Cash Flows
(in thousands, except share and per share data)
(unaudited)
| Six months ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Impairment losses | ||||||||
| Depreciation and amortization | ||||||||
| Loss on disposal of assets | ||||||||
| Non-cash interest expenses and amortization of debt discount | ||||||||
| Amortization of Right-of-use assets | ||||||||
| Share-based compensation | ||||||||
| (Gain) or Loss on extinguishment of debts | ( | ) | ||||||
| Change in fair value of warrant liabilities | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivables | ( | ) | ||||||
| Prepaid and other assets | ||||||||
| Security deposits | ( | ) | ||||||
| Accounts payables | ||||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Other non-current liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities | ||||||||
| Purchase of property, equipment, and vehicle deposits | ( | ) | ( | ) | ||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Deposit for Letter of Intent | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of financial liabilities, net | ||||||||
| Repayment of financial liabilities | ( | ) | ( | ) | ||||
| Proceeds from issuance of financial liabilities, due to related party - Officer | ||||||||
| Proceeds from sale of Class A common shares, net | ||||||||
| Net cash provided by financing activities | ||||||||
| Increase (decrease) in cash and cash equivalents, and restricted cash | ( | ) | ( | ) | ||||
| Effect of exchange rate changes | ||||||||
| Net increase (decrease) in cash and cash equivalents, and restricted cash | ( | ) | ||||||
| Cash and cash equivalents, and restricted cash, beginning of year | ||||||||
| Cash and cash equivalents, and restricted cash, end of year | $ | $ | ||||||
| RECONCILIATION OF CASH, CASH EQUIVALENT AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash, included in Current assets | ||||||||
| Restricted cash, included in Other assets, non-current | ||||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes, net of refunds | $ | $ | ||||||
| Non-cash investing & financing activities | ||||||||
| Issuance of common shares – for Conversion of Convertible Notes | ||||||||
| Issuance of common shares – for conversion of Series A Preferred Shares | ||||||||
| Issuance of common shares - for Settlement of Payroll Liabilities | ||||||||
| Issuance of common shares - for Settlement of Account payables | ||||||||
| Issuance of warrants - for Settlement of Account payables | ||||||||
| Issuance of common shares – for purchasing Intangible Assets | ||||||||
| Derecognition of Beneficial conversion features (BCF) - Adoption of ASU 2020-06 | ||||||||
| Purchase of vehicles with financing agreement | ||||||||
| Issuance of common shares – Commitment shares and share based compensation for Convertible Notes issuance | ||||||||
| Issuance of Warrants - in conjunction with Convertible Notes issuance | ||||||||
| Prepaid expenses related to D&O insurance, included in Account payable | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
Micromobility.com, Inc.
(Formerly Helbiz, Inc.)
Notes to Condensed Consolidated Financial Statements
(in thousands, except share and per share data)
(Unaudited)
1. Description of Business and Basis of Presentation
Description of Business
micromobility.com, Inc. (formerly known as Helbiz, Inc., and, together with its subsidiaries, “micromobility.com” or the “Company”) was incorporated in the state of Delaware in October 2015 with its headquarters in New York, New York. The Company is an intra-urban transportation company that seeks to help urban areas reduce their dependency on individually owned cars by offering affordable, accessible, and sustainable forms of personal transportation, specifically addressing first and last mile transport.
Founded on proprietary technology platforms, the Company’s core business is the offering of electric vehicles in the sharing environment. Through its Mobility App, the Company offers an intra-urban transportation solution that allows users to instantly rent electric vehicles. Additionally, the Company is operating two other business lines: (i) the acquisition and broadcasting of media content including live sport event, and (ii) food delivery services.
The Company currently has a strategic footprint with offices in New York, Los Angeles, Milan, and Belgrade, with additional operational teams around the world. The Company currently has electric vehicles operating in the United States and Europe.
Recent events
A reverse
stock split of
The Company’s Board of Directors also approved a change in name from “Helbiz, Inc.” to “micromobility.com, Inc.” (the “Company Name Change”).
On June 15, 2023 and June 28, 2023, the Company received communications from the main live content provider, LNPB (Lega Nazionale Professionisti Serie B), notifying the early termination of the agreements related to the commercialization and broadcast of the Italian Serie B content.
| 9 |
Basis of Presentation
These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
The Company uses the U.S. dollar as the functional currency. For foreign subsidiaries where the U.S. dollar is the functional currency, gains, and losses from remeasurement of foreign currency balances into U.S. dollars are included in the condensed consolidated statements of operations. For the foreign subsidiary where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. dollars are recorded to a separate component of accumulated other comprehensive loss.
The condensed consolidated balance sheet as of December 31, 2022, included herein was derived from the audited financial statements as of that date. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of, and for the year ended, December 31, 2022, included in our Annual Report on Form 10-K.
The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period.
2. Going Concern and Management’s Plans
The Company has experienced recurring operating losses and negative cash flows from operating activities since its inception. To date, these operating losses have been funded primarily from outside sources of invested capital. The Company had, and expects to continue to have, an ongoing need to raise additional cash from outside sources to fund its expansion plan and related operations. Successful transition to attaining profitable operations depends upon achieving a level of revenues adequate to support the Company’s cost structure. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.
The Company plans to continue to fund its operations and expansion plan through debt and equity financing. Debt or equity financing may not be available on a timely basis on terms acceptable to the Company, or at all.
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and, as such, the financial statements do not include any adjustments relating to the recoverability and classification of recorded amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
3. Summary of Significant Accounting Policies and Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP generally requires management to make estimates and assumptions that affect the reported amount of certain assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and liabilities. Specific accounts that require management estimates include determination of fair values of warrant and financial instruments, purchase price allocation for business combinations, useful lives of intangible assets, property and equipment and valuation allowance for deferred income taxes.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
| 10 |
Recent Accounting Pronouncements Adopted
In June 2016, the FASB issued ASU 2016-13—Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires an entity to use a current expected credit loss methodology to measure impairments of certain financial assets and to recognize an allowance for its estimate of lifetime expected credit losses. The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Effective January 1, 2023, we adopted ASU 2016-13 on a prospective basis. The impact of adoption of this standard on our condensed consolidated financial statements was not material.
4. Revenue Recognition
The table below shows the revenues breakdown for the three and six months ended on June 30, 2023 and on June 30, 2022.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Mobility Revenues (ASC 842) | $ | $ | $ | $ | ||||||||||||
| Pay per ride | ||||||||||||||||
| Mobility Subscriptions | ||||||||||||||||
| Partnerships fees | $ | |||||||||||||||
| Media Revenues (ASC 606) | $ | $ | $ | $ | ||||||||||||
| Commercialization of Media rights (B2B) | ||||||||||||||||
| Advertising fees | ||||||||||||||||
| Live subscriptions (B2C) | ||||||||||||||||
| Other Revenues (ASC 606) | $ | $ | $ | $ | ||||||||||||
| Total Revenues | $ | $ | $ | $ | ||||||||||||
The table below shows the Deferred revenues roll-forward from January 1, 2023 to June 30, 2023.
| Deferred Income | January 1, 2023 | FX Rate adj | Additions | Q1 2023 Revenue | March 31, 2023 | FX Rate adj | Additions | Q2 2023 Revenue | June 30, 2023 | |||||||||||||||||||||||||||
| Mobility | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Media | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
Deferred revenues related to prepaid customer wallets will be recorded as Mobility Revenues when riders take a ride.
As of June 30, 2023, Media Deferred Income was zero as a result of the early termination of the agreements entered into with LNPB for the commercialization of media rights.
| 11 |
5. Prepaid and other current assets
Prepaid and other current assets consist of the following:
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Restricted cash | $ | $ | ||||||
| Prepaid media rights | ||||||||
| Prepaid insurances | ||||||||
| Security deposits for leasing vehicles | ||||||||
| Prepaid expenses | ||||||||
| Total prepaid and other current assets | $ | $ | ||||||
6. Property, equipment and vehicle deposits, net
Property and equipment consist of the following:
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Sharing electric vehicles | $ | $ | ||||||
| Of which under finance lease agreements | ||||||||
| Furniture, fixtures, and equipment | ||||||||
| Of which under finance lease agreements | ||||||||
| Computers and software | ||||||||
| Leasehold improvements | ||||||||
| Total property and equipment, gross | ||||||||
| Less: accumulated depreciation | ( |
) | ( |
) | ||||
| Total property and equipment, net | $ | $ | ||||||
| Vehicle deposits | ||||||||
| Total property, equipment and deposits, net | $ | $ | ||||||
| 12 |
The following table summarizes the loss on disposal and depreciation expenses recorded in the condensed consolidated statement of operations for the three and six months ended on June 30, 2023, and 2022.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cost of revenues | $ | $ | $ | $ | ||||||||||||
| Of which write-off of vehicle deposits | ||||||||||||||||
| Research & Development | $ | |||||||||||||||
| General & administrative | $ | $ | ||||||||||||||
| Total depreciation and loss on disposal expenses | $ | $ | $ | $ | ||||||||||||
7. Impairment of assets
During
the three months ended June 30, 2023, the Company identified impairment indicators which indicate that the fair values of Mobility assets
were below their carrying values. The decline in the Company’s market capitalization was the main impairment indicator. The Company
completed a quantitative impairment test for the Mobility reporting unit, comparing the estimated fair value of the reporting unit to
its carrying value, including goodwill and intangible assets. As a result, the Company impaired the net carrying value of Goodwill of
$
As part of the Company’s impairment analysis, the fair value of the reporting unit was determined using the income approach. The determination of the fair value of the Company’s reporting units requires management to make a number of estimates and assumptions, which include, but are not limited to: the projected future business and financial performance of the Company’s reporting unit; forecasts of revenue, operating income, depreciation, amortization, and capital expenditures; discount rates; terminal growth rates; and consideration of the impact of the current adverse macroeconomic environment. In detail, for the June 30, 2023 impairment testing, as compared to December 31, 2022 testing, the Company reduced the estimated future cash flows used in the impairment assessment, including revenues, margin, and capital expenditures to reflect the Company’s best estimates at this time. The updates to the estimated future cash flows each had a significant impact to the estimated fair value of the reporting unit. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates.
The table below shows the Impairment of assets composition for the three and six months ended June 30, 2023.
Three months ended June 30, | Six months ended June 30, | |||||||
| 2023 | 2023 | |||||||
| Goodwill | $ | $ | ||||||
| Intangible assets, net | ||||||||
| Total Impairment of assets | $ | $ | ||||||
8. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following:
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Legal contingencies – refer to Note 11 Commitments and Contingencies | $ | $ | ||||||
| Payroll liabilities | ||||||||
| Accrued expenses | ||||||||
| Sales tax payables | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
Payroll liabilities and Accrued expenses presented in the table above are related to the normal course of business, while Sales tax payables and Legal contingencies are mainly related to liabilities arising from prior periods by Wheels Labs, Inc. (“Wheels”), an entity that we acquired in November 2022.
| 13 |
9. Current and Non-current financial liabilities, net
The Company's Financial liabilities consisted of the following:
| Weighted Average Interest Rate | Maturity Date | June 30, 2023 | December 31, 2022 | |||||||||||||
| Convertible debts, net | % | |||||||||||||||
| Secured loan, net | % | |||||||||||||||
| Unsecured loans, net | % | |||||||||||||||
| Warrants liabilities | N/A | — | ||||||||||||||
| Other financial liabilities | N/A | |||||||||||||||
| Total Financial Liabilities, net | ||||||||||||||||
| Of which classified as Current Financial Liabilities, net | ||||||||||||||||
| Of which classified as Non-Current Financial Liabilities, net | ||||||||||||||||
The table below shows the amounts recorded as Interest expense, net on the statements of operations for the three and six months ended on June 30, 2023 and June 30, 2022:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Convertible debts | $ | $ | $ | $ | ||||||||||||
| Secured loan | ||||||||||||||||
| Unsecured loans | ||||||||||||||||
| Other interest (income) expenses | ||||||||||||||||
| Total Interest expenses, net | $ | $ | $ | $ | ||||||||||||
As of June 30, 2023, the Company categorized as convertible debts the following instruments issued to YA II, Ltd. (the “Note Holder”): a) one convertible note issued in 2022 (“2022 Convertible debts”) under a Securities Purchase Agreement and b) a convertible promissory note issued on March 8, 2023 under a Standby Equity Purchase Agreement (“January 2023 SEPA”) dated January 24, 2023 (“2023 SEPA Convertible note”).
| 14 |
2022 Convertible debts
As a result of the below
conversion and repayments, on June 30, 2023, the Company had $
Repayments
During the six months ended
June 30, 2023, the Company partially repaid in cash the 2022 Convertible Notes for a cumulative payment of $
Conversion into Class A Common Shares
During the six months ended June 30, 2023, the Company issued Class A Common Shares in satisfaction of conversion requests of $ in principal and interest.
2022 SEPA Convertible Note
On December 1, 2022, the
Company issued a Convertible Promissory Note (“2022 SEPA Convertible Note”) to the Note Holder pursuant to the SEPA dated
October 31, 2022. The 2022 SEPA Convertible Note had a principal amount of $
As a result of the mentioned
re-payments on June 30, 2023, the Company has
2023 SEPA Convertible Note
On March 8, 2023, the Company
issued a Convertible Promissory Note (“2023 SEPA Convertible Note”) to the Note Holder pursuant to the SEPA dated January
24, 2023. The 2023 SEPA Convertible Note had a principal amount of $
The Company has the option to repay the 2023 SEPA Convertible Note through the following or a combination of the two:
| - | repay in cash the 2023 SEPA Convertible Note on or before the Maturity date, |
| - | repay the 2023 SEPA Convertible Note by submitting one or a series of Advance Notices under the SEPA entered in January 2023, on or before the Maturity date. If any time during while the 2023 SEPA Convertible Note is outstanding, the Company delivers an Advance Notice under the January 2023 SEPA, at least one half of the proceeds of any such Advance Notice shall be used as an Advance Repayment or for the repayment of other amounts due from the Company to the Holder, unless waived by the Note Holder. |
The Company has also the option to redeem the 2023 SEPA Convertible Note (“redemption option”), provided that the trading price of the Company’s Class A Common Shares is less than the fixed Conversion Price of $.
| 15 |
10. Leases
Operating leases
During the six months ended
June 30, 2023, the Company entered into a
The table below presents the impact on the condensed consolidated statement of operations related to the operating leases for the three and six months ended June 30, 2023, including expenses related to lease agreements with an initial term of 12 months or less. Amounts presented for the three and six months ended June 30, 2022, have been recorded under ASC 840.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cost of revenues | $ | $ | $ | $ | ||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Total Operating lease expenses | $ | $ | $ | $ | ||||||||||||
Finance leases
The table below presents the impact on the condensed consolidated statement of operations related to the finance leases for the three and six months ended June 30, 2023 and 2022.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cost of revenues | $ | $ | $ | $ | ||||||||||||
| Research & Development | $ | $ | $ | $ | ||||||||||||
| Total Operating expenses related to finance leases | $ | $ | $ | $ | ||||||||||||
| Interest expenses | ||||||||||||||||
| Gain (loss) on extinguishment of financial debts | ||||||||||||||||
| Total Non - Operating expenses related to finance leases | ||||||||||||||||
| 16 |
11. Commitments and Contingencies
Litigation
The Company is from time to time involved in legal proceedings, claims, and regulatory matters, indirect tax examinations or government inquiries and investigations that may arise in the ordinary course of business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages.
The Company records a liability when the Company believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the consolidated financial statements. The Company reviews the developments in contingencies that could affect the amount of the provisions that have been previously recorded. The Company adjusts provisions and changes to disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of any potential losses and many of the legal proceedings are early in the discovery stage and unresolved.
As of June 30, 2023 and December 31, 2022, the Company concluded
that certain losses on litigations were probable and reasonable estimable; as a result, the Company recorded $
Wheels has been named
in various lawsuits related to the use of Wheels’s vehicles in US cities and in certain matters involving California Labor Code
violations and the classification of individuals as independent contractors rather than employees. The range of loss for the Wheels legal
contingencies accrued is between $
The Company is also
involved in certain claims where the losses are not considered to be reasonably estimable or possible; for these claims the range of potential
loss is between
| 17 |
12. Standby Equity Purchase Agreements
During the six months ended June 30, 2023, the Company entered into two Standby Equity Purchase Agreements (“2023 SEPAs”) with an investor. The 2023 SEPAs terms and conditions represent: i) at inception - a purchased put option on the Company’s Class A common shares and, ii) upon delivery of an Advance Notice - a forward contract on the Company’s Class A common shares. Neither the purchased put option nor the forward contract qualify for equity classification.
As a result of the above classification of the 2023 SEPAs, at inception the Company expensed as SEPA’s transactions costs the legal and commitment fees that exceeded the fair value of the purchased put options. The settlement of forward contracts initiated by the Company were recorded as other SEPA financial income (expense), net.
The table below presents the impact on the condensed consolidated statement of operations related to the 2023 SEPAs for the three and six months ended June 30, 2023 and 2022.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| SEPAs transaction costs | $ | $ | $ | ( |
) | $ | ||||||||||
| Other SEPA financial income (expenses), net | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Total SEPA financial income (expenses), net | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
January 2023 SEPA
On January 24, 2023, the Company
entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd. Pursuant to the SEPA, the Company has the right,
but not the obligation, to sell to Yorkville up to $
At inception the Company
recorded as SEPA transaction costs $
During
the six months ended June 30, 2023, the Company delivered multiple Advance Notices for the sale of Class A Common Shares, resulting
in cumulative gross proceeds of $
March 2023 SEPA
On March 8, 2023, the Company
entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd. Pursuant to the SEPA, the Company has the right,
but not the obligation, to sell to Yorkville up to $
| (i) |
| (ii) |
At inception the Company
did not identify any day one impact for the SEPA agreement except for $
During
the six months ended June 30, 2023, the Company delivered multiple Advance Notices for the sale of Class A Common Shares, resulting
in cumulative gross proceeds of $
| 18 |
13. Share based compensation expenses
Stock-based compensation expense is allocated based on (i) the cost center to which the award holder belongs, for employees, and (ii) the service rendered to the Company, for third-party consultants. The following table summarizes total stock-based compensation expense by account for the three and six months ended June 30, 2023 and 2022.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cost of revenue | ||||||||||||||||
| Research and development | ( | ) | ||||||||||||||
| Sales and marketing | ( | ) | ||||||||||||||
| SEPA financial expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Share based compensation expenses, net | ||||||||||||||||
| Of which related to shares not issued for services rendered during the period, accrued as Account payables | ||||||||||||||||
2023 Omnibus Incentive Plan
The Company adopted the 2023 Omnibus Incentive Plan (the “2023 Plan”) under which the Company may issue equity incentives to selected employees, officers, and director of the Company. The 2023 Plan permits the grant of Incentive Stock Options, Non-statutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.
Under the 2023 Plan, stock options are to be granted at a price that is not less than 100% of the fair value of the underlying common stock at the date of grant. Awards for employee vest 25% on the first anniversary of the date of grant and ratably each month over the ensuing 36-month period. Awards for independent board member vest ratably each quarter over the ensuing 4-quarter period. The maximum term for stock options granted under the 2023 Plan might not exceed ten years from the date of grant.
Upon original approval, the Company reserved shares of the Company’s Class A common stock for issuance under the 2023 Plan, no equity incentives have been issued as of June 30, 2023, under the 2023 Plan.
The following potentially dilutive outstanding shares (considering a retroactive application of the conversion ratio) were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period.
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| 2020 Equity Incentive Plan | ||||||||||||||||
| Public Warrants | ||||||||||||||||
| Convertible Notes * | ||||||||||||||||
| Convertible Notes Warrants | ||||||||||||||||
| GRNV Sponsor Private Warrants | ||||||||||||||||
| Class B Common Shares - Held in escrow for indemnification purpose | ||||||||||||||||
| 2020 CEO Performance Award | ||||||||||||||||
| 2021 Omnibus Plan | ||||||||||||||||
| Common Stocks to be issued outside equity incentive Plans | ||||||||||||||||
| Warrants issued to Bod members | ||||||||||||||||
| Total number of Common Shares not included in the EPS Basic and diluted | ||||||||||||||||
| * |
| 19 |
15. Segment and geographic information
The following table provides information about our segments and a reconciliation of the total segment Revenue and Cost of revenue to loss from operations.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | ||||||||||||||||
| Mobility | ||||||||||||||||
| Media | ||||||||||||||||
| All Other | ||||||||||||||||
| Total Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Mobility | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Media | ( | ) | ( | |||||||||||||