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UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarter ended September 30, 2023

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

 

Commission file number: 001-39136

 

micromobility.com, Inc.
(Exact Name of Registrant as Specified in Its Charter) 

 

 

Delaware   84-3015108

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

500 Broome St., New York, NY 10013

(Address of principal executive offices)

 

(917) 675-7157

(Issuer’s telephone number)

 

(Former name or former address, if changed since last report.)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
Class A Common Stock, $0.00001 par value   MCOM   The Nasdaq Stock Market LLC
Redeemable warrants, each warrant exercisable for one share of Class A Common Stock   MCOMW   The Nasdaq Stock Market LLC

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No  

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  

 

As of November 14, 2023, 285,526,127 shares of Class A common stock, par value $0.00001.

 

 

 
 

 

 

MICROMOBILITY.COM, INC.

 

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2023

 

TABLE OF CONTENTS

 

  Page   
Part I. Financial Information  
Item 1. Unaudited Financial Statements 1
Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022 1
Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2023 and 2022 (unaudited) 2
Condensed Consolidated Statements Changes in Convertible Preferred Stock and Stockholders’ Deficit for the nine months ended September 30, 2023 and 2022 (unaudited) 3
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited) 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk 28
Item 4. Controls and Procedures 28
Part II. Other Information  
Item 1. Legal Proceedings 31
Item 1A. Risk Factors 31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31
Item 3. Defaults Upon Senior Securities 31
Item 4. Mine Safety Disclosures 31
Item 5. Other Information 31
Item 6. Exhibits 32
Part III. Signatures 33

 

 

 
 

Forward-Looking Statements 

This Quarterly Report of micromobility.com (“we,” “us,” “our,” “micromobility” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and delivery of products in the future; projected costs; expected production capacity; expectations regarding demand and acceptance of our products; estimated costs of machinery to equip a new production facility; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; trends relating to our industry; plans relating to our electric vehicles (“EVs”); and plans and intentions to regain compliance with the listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), including, among other things, through a reverse stock split.

We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional Factors that could contribute to such differences include, but are not limited to:

general economic and business conditions, including changes in interest rates;
prices of other competitors services, costs associated with manufacturing e-scooters and similar devices and other economic conditions;
the effect of an outbreak of disease or similar public health threat, such as the COVID-19 pandemic, on the Company’s business (natural phenomena, including the lingering effects of the COVID-19 pandemic);
the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise;
the ability of our information technology systems or information security systems to operate effectively;
actions by government authorities, including changes in government regulation;
uncertainties associated with legal proceedings;
changes in the size of the micromobility market;

 

ii

 
 

 

 

future decisions by management in response to changing conditions;
the Company’s ability to execute prospective business plans;
misjudgments in the course of preparing forward-looking statements;
the Company’s ability to raise sufficient funds to carry out its proposed business plan;
inability to keep up with advances in micromobility and related battery technology;
inability to design, develop, market and sell new e-scooters and similar devices and services that address additional market opportunities to generate revenue and positive cash flows;
dependency on certain key personnel and any inability to retain and attract qualified personnel;
inability to succeed in establishing, maintaining and strengthening the micromobility.com brand;
disruption of supply or shortage of raw materials;
the unavailability, reduction or elimination of government and economic incentives;
failure to manage future growth effectively; and
the other risks and uncertainties detailed from time to time in our filings with the Security and Exchange Commission (“SEC”), including but not limited to those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K as amended for the year ended December 31, 2022, filed with the SEC on March 28, 2023 (the “Form 10-K”).

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to our Company or persons acting on our Company’s behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.

 

iii

 

 
 

 

 

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)

 

         
   September 30,   December 31, 
   2023   2022 
ASSETS          
Current assets:          
Cash and cash equivalents  $962   $429 
Accounts receivables     797    1,345 
VAT receivables   926    3,054 
Prepaid and other current assets   1,343    6,417 
Total current assets   4,028    11,245 
Goodwill         13,826 
Property, equipment and deposits, net   2,883    9,237 
Right of use assets   1,726    2,872 
Other assets   794    3,974 
TOTAL ASSETS  $9,432   $41,154 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Current liabilities:          
Accounts payable  $12,134   $14,359 
Accounts payable related to media rights   10,922    7,732 
Accrued expenses and other current liabilities   7,331    8,885 
Deferred revenues   1,542    3,047 
Operating lease liabilities   965    1,463 
Finance lease liabilities   245    2,002 
Short term financial liabilities, net   21,938    33,244 
Total current Liabilities   55,078    70,732 
Other non-current liabilities   137    362 
Operating lease liabilities   1,136    1,719 
Finance lease liabilities   29    71 
Non-current financial liabilities, net   5,290    7,174 
TOTAL LIABILITIES   61,670    80,058 
Commitments and contingencies   Note 10       
           
CONVERTIBLE PREFERRED STOCK          
Series A Convertible Preferred Stock, $0.0001 par value; 8,000,000 shares authorized at September 30, 2023; none issued and outstanding at September 30, 2023 and 6,751,823 issued and outstanding at December 31, 2022.  $     $945 
           
STOCKHOLDERS’ DEFICIT          
Preferred stock, $0.00001 par value; 100,000,000 shares authorized; none issued and outstanding            
Class A Common stock, $0.00001 par value; 900,000,000 shares authorized and; 225,726,127 and 3,264,576 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.   202,199    152,996 
Class B Common stock, $0.00001 par value; 0 shares authorized and outstanding as of September 30, 2023 and; 14,225,898 shares authorized and;  284,518 shares issued and outstanding at December 31, 2022, respectively.            
Accumulated other comprehensive loss   (1,245)   (2,904)
Accumulated deficit   (253,192)   (189,942)
Total Stockholders’ deficit   (52,238)   (39,850)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $9,432    41,154 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

1 
 

 

 

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 September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Revenue  $1,554   $3,675   $8,968   $11,345 
Operating expenses:                    
Cost of revenue   3,254    8,346    26,843    29,952 
General and administrative   4,814    5,418    16,285    18,402 
Sales and marketing   527    1,719    2,690    7,560 
Research and development   480    650    2,089    2,033 
Impairment of assets         10,390    16,444    10,390 
Total operating expenses   9,074    26,523    64,352    68,337 
                     
Loss from operations   (7,520)   (22,848)   (55,384)   (56,992)
                     
Non-operating income (expenses), net                    
Interest expense, net   (1,067)   (1,482)   (4,633)   (4,974)
Gain (loss) on extinguishment of financial debts               431    (2,065)
Change in fair value of warrant liabilities   (4)   63    53    1,449 
SEPA financial   expenses, net   (1,137)         (3,840)      
Other income (expenses), net   262    (289)   171    (1,100)
Total non-operating income (expenses), net   (1,946)   (1,708)   (7,818)   (6,690)
                     
Income Taxes   (10)   (6)   (48)   (18)
Net loss  $(9,477)  $(24,562)  $(63,249)  $(63,700)
                     
Net loss per share attributable to common stockholders, basic and diluted  $(0.06)  $(22.57)  $(1.01)  $(79.39)
                     
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted   159,395,919    1,088,117    62,833,179    802,337 
                     
Net loss   (9,477)   (24,562)   (63,249)   (63,700)
                     
Other comprehensive (loss) income, net of tax:                    
Changes in foreign currency translation adjustments   908    (554)   1,659    (1,083)
                     
Net loss and comprehensive income  $(8,569)  $(25,116)  $(61,590)  $(64,783)

 

The accompanying notes are an integral part of these condensed consolidated financial statements. 

 

2 
 

 

 

 

 Micromobility.com, Inc.

(Formerly Helbiz, Inc.)

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three and nine months ended  September 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 July 1, 2023  49,041,609   $188,038    284,518   $     $(243,715)  $(2,153)  $(57,830)
Issuance of common shares – for Advance Notices under SEPA   176,400,000    14,432    —                        14,432 
Class B Common Shares conversion into Class A Common Shares 284,518          (284,518)                        
Share based compensation   —      (271)   —                        (271)
Changes in currency translation adjustment   —            —                  908    908 
Net loss   —            —            (9,477)         (9,477)
Balance as of September 30, 2023   225,726,127   $202,199         $     $(253,192)  $(1,245)  $(52,238)

    

   

                                     
   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)  $     $945    3,264,576   $152,996    284,518   $     $(189,942)  $(2,904)   (39,850)
Issuance of common shares – for Advance Notices under SEPA               221,658,102    46,164    —                        46,164 
Issuance of common shares – for Conversion of Convertible Notes               103,689    1,296    —                        1,296 
Issuance of common stock – for Conversion of Series A Convertible Preferred Stocks         (945)   135,645    945    —                        945 
Issuance of common shares – for purchasing Intangible Assets               6,869    50    —                        50 
Issuance of common shares – for settlement of Payroll liabilities               55,515    182    —                        182 
Issuance of common shares - for Settlement of Account payables               101,000    151    —                        151 
Issuance of warrants - for Settlement of Account payables               —      69    —                        69 
Share based compensation               116,213    345    —                        345 
Class B Common Shares conversion into Class A Common Shares               284,518          (284,518)                        
Changes in currency translation adjustment               —            —                  1,659    1,659 
Net loss               —            —            (63,249)         (63,249)
Balance as of September 30, 2023  $     $      225,726,127    202,199         $     $(253,192)  $(1,245)  $(52,238)

 

 

 

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 nine months  ended September 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 June 30, 2022 (Retroactive application of the reverse split ratio 1:50)   527,865   $114,888    284,518   $     $(147,003)  $(1,150)  $(33,267)
Issuance of common shares – for conversion of 2021 Convertible Notes   425,807    14,704    —                        14,704 
Issuance of Warrants - in conjunction with Convertible Notes issuance   —      188    —                        188 
Issuance of common shares – to legal advisors for Convertible Note issuance   5,000    155    —                        155 
Issuance of common shares - for Settlement of Account Payables   24,615    720    —                        720 
Issuance of common shares - for Settlement of CEO Promissory Note and CEO Deferred Salaries   8,136    304    —                        304 
Share based compensation   7,745    722    —                        722 
Changes in currency translation adjustment   —            —                  (554)   (554)
Net loss   —            —            (24,562)         (24,562)
Balance as of September 30, 2022   999,165   $131,680    284,518   $     $(171,567)  $(1,704)  $(41,590)

 

 

 

                                    
   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)   325,784   $101,454    284,518   $     $(108,682)  $(621)  $(7,849)
ASU No. 2020-06 - modified retrospective method   —      (4,187)   —            816          (3,371)
Issuance of common shares – for Conversion of 2021 Convertible Notes   618,799    29,030    —                        29,030 
Issuance of Warrants - in conjunction with Convertible Notes issuance   —      790    —                        790 
Issuance of common shares – Commitment shares for Convertible Notes issuance   3,000    399    —                        399 
Issuance of common shares – to legal advisors for Convertible Note issuance   9,000    451    —                        451 
Issuance of common shares - for Settlement of Account Payables   25,158    768    —                        768 
Share based compensation   9,288    2,671    —                        2,670 
Issuance of common shares - for Settlement of CEO Promissory Note and CEO Deferred Salaries   8,136    304    —                        304 
Changes in currency translation adjustment   —            —                  (1,083)   (1,083)
Net Loss   —            —            (63,700)         (63,700)
Balance as of September 30, 2022   999,165   $131,680    284,518   $     $(171,567)  $(1,704)  $(41,590)

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

4 
 

 

 

Micromobility.com, Inc.

(Formerly Helbiz, Inc.)

Condensed Consolidated Statements of Cash Flows

(in thousands, except share and per share data)

(unaudited)

         
   Nine months ended September 30, 
   2023   2022 
Operating activities          
Net loss  $(63,249)  $(63,700)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Impairment losses   16,444    10,390 
Depreciation and amortization   4,712    4,386 
Loss on disposal of assets   3,065    189 
Non-cash interest expenses and amortization of debt discount   1,592    3,977 
Amortization of Right-of-use assets   1,177       
Share-based compensation   345    2,705 
(Gain) or Loss on extinguishment of debts   (431)   2,065 
Change in fair value of warrant liabilities   (55)   (1,551)
Changes in operating assets and liabilities:            
Accounts receivables   548    (972
Prepaid and other assets   6,276    1,673 
Security deposits   141    584 
Accounts payables   1,266    2,255 
Accrued expenses and other current liabilities   (2,795)   2,094 
Other non-current liabilities   (225)   (17)
Net cash used in operating activities   (31,189)   (35,876)
           
Investing activities          
Purchase of property, equipment, and vehicle deposits   (769)   (3,391)
Purchase of intangible assets   (235)   (221)
Deposit for Wheels Lab, Inc merger         (2,600)
Net cash used in investing activities   (1,004)   (6,212)
           
Financing activities          
Proceeds from issuance of financial liabilities  , net   6,213    27,145 
Repayment of financial liabilities   (21,253)   (3,040)
Proceeds from issuance of financial liabilities, due to related party - Officer         380 
Repayment of financial liabilities, to related party – Officer         (120)
Proceeds from sale of Class A common shares, net   46,164       
Net cash provided by financing activities   31,124    24,365 
           
           
Increase (decrease) in cash and cash equivalents, and restricted cash   (1,069)   (17,723)
Effect of exchange rate changes   1,585    95 
Net increase (decrease) in cash and cash equivalents, and restricted cash   516    (17,628)
Cash and cash equivalents, and restricted cash, beginning of year   737    21,253 
Cash and cash equivalents, and restricted cash, end of year  $1,253   $3,624 
           
RECONCILIATION OF CASH, CASH EQUIVALENT AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET          
Cash and cash equivalents   962    3,334 
Restricted cash, included in Current assets   156    151 
Restricted cash, included in Other assets, non-current   135    140 
Supplemental disclosure of cash flow information          
Cash paid for:          
Interest  $2,919   $995 
Income taxes, net of refunds  $48   $16 
Non-cash investing & financing activities          
Issuance of common shares – for Conversion of Convertible Notes   1,296    29,030 
Issuance of common shares – for conversion of Series A Preferred Shares   945       
Issuance of common shares - for Settlement of Payroll Liabilities   182       
Issuance of warrants - for Settlement of Account payables     69    767 
Issuance of common shares – for purchasing Intangible Assets   50       
Derecognition of Beneficial conversion features (BCF) - Adoption of ASU 2020-06         3,371 
Purchase of vehicles with financing agreement         3,328 
Issuance of common shares – Commitment shares and share based compensation for Convertible Notes issuance         850 
Issuance of Warrants - in conjunction with Convertible Notes issuance         790 
Issuance of common shares - for Settlement of CEO Promissory Note and CEO Deferred Salaries         304 

 

 

 The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

5 
 

 

  

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.

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. 

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.

 

6 
 

 

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.

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.

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 nine months ended on September 30, 2023 and on September 30, 2022.

                 
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Mobility Revenues (ASC 842)  $1,247   $2,463   $4,519   $6,758 
    Media Revenues (ASC 606)   241    1,083    3,849    4,225 
Other Revenues (ASC 606)   66    129    600    362 
Total Revenues  $1,554   $3,675   $8,968   $11,345 

 

The table below shows the Deferred revenues roll-forward from January 1, 2023 to September 30, 2023.

                                                                       
Deferred Income   January 1, 2023     FX Rate adj     Additions     HY 2023 Revenue     June 30, 2023     FX Rate adj     Additions     Q3 2023 Revenue     September 30, 2023  
                                                       
Mobility   $ 1,775       3       965       (1,051 )     1,692       (26     567       (691 )     1,542  
Media     1,272       15       2,320       (3,607 )                                               
Total   $ 3,047     $ 18     $ 3,285     $ (4,658 )   $ 1,692     $ (26 )   $ 567     $ (691 )   $ 1,542  

Deferred revenues related to prepaid customer wallets will be recorded as Mobility Revenues when riders take a ride.

As of September 30, 2023, Media Deferred Income was zero as a result of the early termination of the agreements entered into with LNPB (Lega Nazionale Professionisti Serie B) for the commercialization of media rights. In detail, on June 15, 2023 and June 28, 2023, the Company received communications from the main live content provider, LNPB, notifying the early termination of the agreements related to the commercialization and broadcast of the Italian Serie B content.

5. Property, equipment and vehicle deposits, net

Property, equipment and vehicle deposits, net consist of the following:

        
   September 30,   December 31, 
   2023   2022 
Sharing electric vehicles  $14,850   $15,128 
Of which under finance lease agreements   2,424    3,260 
Furniture, fixtures, and equipment   1,571    1,411 
Of which under finance lease agreements   177    177 
Computers and software   1,045    1,045 
Leasehold improvements   1,250    714 
Total property and equipment, gross   18,716    18,298 
Less: accumulated depreciation   (15,833)   (12,136)
Total property and equipment, net  $2,883   $6,162 
Vehicle deposits         3,075 
Total property, equipment and vehicle deposits  , net  $2,883   $9,237 

 

 

7 
 

 

The following table summarizes the loss on disposal and depreciation expenses recorded in the condensed consolidated statement of operations for the three and nine months ended on September 30, 2023, and 2022. 

        
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Cost of revenues  $974   $1,354   $6,673   $3,293 
      Of which write-off    23          3,055       
Research & Development   15    9    44   $18 
General & administrative   99   $107    312   $328 
Total depreciation and loss on disposal expenses  $1,088   $1,470   $7,029   $3,639 

6. Impairment of assets

 During the nine months ended September 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 $13,826 and Intangible assets of $2,619, which are included within Impairment of assets in the condensed consolidated statements of operations.

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 September 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 nine months ended September 30, 2023.

     
  

Nine months

ended

September 30,

 
   2023 
Goodwill  $13,826 
Intangible assets, net   2,618 
Total Impairment of assets  $16,444 

7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

         
   September 30,   December 31, 
   2023   2022 
Legal contingencies – refer to Note 10 Commitments and Contingencies    $1,994   $2,710 
Payroll liabilities   2,612    2,693 
Accrued expenses   2,285    2,369 
Sales tax payables   440    1,113 
Total accrued expenses and other current liabilities  $7,331   $8,885 

 

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 associated with the Wheels Labs, Inc (“Wheels”) acquisition.

8 
 

8. Current and Non-current financial liabilities, net

The Company's Financial liabilities consisted of the following:

                               
    Weighted Average Interest Rate     Maturity Date     September 30, 2023     December 31, 2022  
Convertible debts, net     15 %     2023/2024         1,911       14,372  
Secured loan, net     13 %     2023       14,894       14,224  
Unsecured loans, net     8 %     Various       9,768       10,935  
Warrants liabilities     N/A       —         31       84  
Other financial liabilities     N/A       Various       624       802  
Total Financial Liabilities, net                     27,228       40,418  
Of which classified as Current Financial Liabilities, net                     21,938       33,244  
Of which classified as Non-Current Financial Liabilities, net                     5,290       7,174  

The table below shows the amounts recorded as Interest expense, net on the statements of operations for the three and nine months ended on September 30, 2023 and September 30, 2022:

                    
   Three Months Ended September 30,   Nine Months  Ended September 30, 
   2023   2022   2023   2022 
Convertible debts  $383   $717   $2,359   $2,911 
Secured loan   536    537    1,675    1,510 
Unsecured loans   147    228    588    553 
Other interest (income) expenses               11       
Total Interest expenses, net  $1,067   $1,482   $4,633   $4,974 

 

As of September 30, 2023, the Company categorized as convertible debts the following instruments issued to YA II, Ltd. (the “Note Holder”):

a) a convertible promissory note issued on March 8, 2023, under a Standby Equity Purchase Agreement (“January 2023 SEPA”) dated January 24, 2023 (“2023 SEPA March Convertible note”). At inception, the convertible promissory note fair value has been approximated with its principal amount, $4,500 due to the short term, and:

b) a convertible promissory note issued on August 25, 2023, under a Standby Equity Purchase Agreement (“March 2023 SEPA”) dated March 8, 2023 (“2023 SEPA August Convertible note”). At inception, the convertible promissory note fair value has been approximated with its principal amount, $1,200 due to the short term.   

2023 SEPA March Convertible Note

The 2023 SEPA March Convertible Note had a principal amount of $4,500 with 10% issuance discount, a maturity date of October 31, 2023, a 5% annual interest rate and a 15% annual default interest rate. The 2023 SEPA March Convertible Note shall be convertible into shares of the Company’s Class A common shares at a fixed conversion price   of $25.

 The Company has the option to repay the 2023 SEPA March Convertible Note through the following or a combination of the two:

 

  repay in cash on or before the maturity date,

 

  repay 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 March 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.

 

During the nine months ended September 30, 2023, the Company partially repaid in cash the 2023 SEPA March Convertible Note   for a cumulative payment of $3,865 (of which $3,681 was principal, and $184 was accumulated interest).

As a result of the above repayments, on September 30, 2023, the Company has $837 as outstanding principal and accumulated interest.

2023 SEPA August Convertible Note

The 2023 SEPA August Convertible Note had a principal amount of $1,200 with 10% issuance discount, a maturity date of January 24, 2024, a 5% annual interest rate and a 15% annual default interest rate. The 2023 SEPA August Convertible Note shall be convertible into shares of the Company’s Class A common shares at a Fixed Conversion Price of $0.25.  

 The Company has the option to repay the 2023 SEPA August Convertible Note through the same two options available for the 2023 SEPA March Convertible Note.   

 

9 
 

2022 Convertible debts 

As a result of the below conversion and repayments, on September 30, 2023, the Company has no outstanding principal or accumulated interest under the 2022 Convertible Notes .

Repayments

During the nine months ended September 30, 2023, the Company repaid in cash the 2022 Convertible Notes   for a cumulative payment of $10,563 (of which $9,250 was principal, $295 was accumulated interest, and $1,018 was redemption premium interest).

Conversion into Class A Common Shares

During the nine months ended September 30, 2023, the Company issued 103,689 Class A Common Shares in satisfaction of conversion requests of $1,296 in principal and interest.    

2022 SEPA Convertible Note  

During the nine months ended September 30, 2023, the Company completed the repayment of the 2022 SEPA Convertible Note by cash payments amounting to $4,210.

9. Leases

 

Operating leases

During the nine months ended September 30, 2023, the Company entered into a 5-years lease agreement for a store located at 500 Broome Street, New York, NY; the cumulative lease commitment for the 5-year term is $865. At inception, the Company recorded $674 as ROU assets (Right Of Use assets) and the operating lease liability, using an internal   borrowing rate of 14%. 

The table below presents the impact on the condensed consolidated statement of operations related to the operating leases for the three and nine months ended September 30, 2023, including expenses related to lease agreements with an initial term of 12 months or less. Amounts presented for the three and nine months ended September 30, 2022, have been recorded under ASC 840.

                 
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Cost of revenues  $287   $432   $1,068   $1,241 
General and administrative  $231   $271   $787   $867 
Total Operating lease expenses  $518   $703   $1,855   $2,108 

Finance leases

The table below presents the impact on the condensed consolidated statement of operations related to the finance leases for the three and nine months ended September 30, 2023, and 2022.

                
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Cost of revenues  $219   $524   $1,195   $1,076 
Research & Development  $15   $9   $44   $18 
Total Operating expenses related to finance leases  $234   $533   $1,239   $1,094 

 

 

10 
 

 

10. 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 September 30, 2023 and December 31, 2022, the Company concluded that certain losses on litigations were probable and reasonably   estimable; as a result, the Company recorded $1,994 and $2,710, respectively, as accruals for legal contingencies, included in Other Current liabilities.

 

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 $548 to $3,100   which represents the range between the amount already settled with the counterparts and the amount claimed deducting insurance coverage.

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 0 to $200.

11. Standby Equity Purchase Agreements

During the nine months ended September 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 nine months ended September 30, 2023, and 2022.

                
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
SEPAs transaction costs  $     $     $(1,611)  $   
Other SEPA financial income (expenses), net  $(1,137)  $     $(2,229)  $   
Total SEPA financial income (expenses), net  $(1,137)  $     $(3,840)  $   

 

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 $20,000 of its shares of Class A Common Stock at any time during the 24 months. To request a purchase, the Company would submit an advance notice to YA II PN, Ltd. specifying the number of shares it intends to sell.

   

At inception the Company recorded as SEPA transaction costs $592 for Commitment fees and legal fees.

During the nine months ended September 30, 2023, the Company delivered multiple advance notices for the sale of 35,661,584 Class A Common Shares, resulting in cumulative gross proceeds of $19,628.  As a result, on September 30, 2023, $372 remained available under the January 2023 SEPA.

11 
 

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 $50,000 of its shares of Class A Common Stock at any time during the 24 months. To request a purchase, the Company would submit an advance notice to YA II PN, Ltd. specifying the number of shares it intends to sell. The advance notice would state that the shares would be purchased at either:

 

  (i) 95.0% of the Option 1 Market Price, which is the lowest VWAP (the daily volume weighted average price of Company’s Class A common stock for the applicable date) in each of the three consecutive trading days commencing on the trading day following the Company’s submission of an advance notice, or

 

  (ii) 92.0% of the Option 2 Market Price, which is the VWAP of the pricing period set out in the advance notice and consented to by YA II PN, Ltd.

 

At inception the Company did not identify any day one impact for the SEPA agreement except for $750 as Commitment fees to be paid to YA II PN, Ltd and legal fees amounted to $269. The mentioned legal and Commitment fees have been recorded as SEPA transaction costs.

During the nine months ended September 30, 2023, the Company delivered multiple advance notices for the sale of 184,800,000 Class A Common Shares, resulting in cumulative gross proceeds of $14,200. As a result, on September 30, 2023, $35,800 remained available under the March 2023 SEPA.

12. 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 nine months ended September 30, 2023 and 2022.

                 
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Cost of revenue   (3)   2    0    14 
Research and development   7    35    31    133 
Sales and marketing   6    110    31    281 
SEPA financial expenses               186       
General and administrative   (47)   610    348    2,277 
Total Share based compensation expenses, net   (37)   757    596    2,705 
Of which related to shares not issued for services   rendered during the period, accrued as Account payables   233    34    251    34 

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 members 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 1,200,000 shares of the Company’s Class A common stock for issuance under the 2023 Plan, no equity incentives have been issued as of September 30, 2023, under the 2023 Plan.

13. Net Loss Per Share - Dilutive outstanding shares 

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

September 30,

  

Nine months ended

September 30,

 
   2023   2022   2023   2022 
2020 Equity Incentive Plan   141,740    147,097    141,740    147,097 
Convertible Notes *   4,887,830    1,492,759    4,887,830    1,492,759 
2020 CEO Performance Award – Common Stock Purchase Option   12,000    12,000    12,000    12,000 
2021 Omnibus Plan – Common Stock Purchase Option   4,125    6,625    4,125    6,625 
Common Stocks to be issued outside equity incentive Plans   4,261,578    1,995    4,261,578    1,995 
Common Stock Purchase Warrants     396,052    236,728    396,052    236,728 
Total number of Common Shares not included in the EPS Basic and diluted   9,703,325    1,897,204    9,703,325    1,897,204 

 

* The number of Common Shares presented is based on the principal plus accumulated interests outstanding as of 9.30.2023 divided by the related Floor Prices.

 

12 
 

14. 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

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Revenue                
Mobility   1,247    2,463    4,519    6,758 
Media   241    1,083    3,849    4,225 
All Other   65    129    600    362 
Total Revenue  $1,554   $3,675   $8,968   $11,345 
                     
Cost of revenue                    
    Mobility   (2,657)   (5,223)   (14,484)   (14,879)
Media   (96)   (2,690)   (10,002)   (13,640)
All Other   (501)   (433)   (2,356)   (1,432)
Total Cost of revenue  $(3,254)  $(8,346)  $(26,843)  $(29,952)
                     
Reconciling Items:                    
Impairment of assets         (10,390)   (16,444)   (10,390)
General and administrative   (4,814)   (5,418)   (16,285)   (18,402)
Sales and marketing   (527)   (1,719)   (2,690)   (7,560)
Research and development   (480)   (650)   (2,089)   (2,033)
Loss from operations  $(7,520)  $(22,848)  $(55,384)  $(56,992)

 

 Revenue by geography is based on where a trip was completed, or media content occurred. The following table sets forth revenue by geographic area for the three and nine months ended September 30, 2023 and 2022.

 

                 
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Revenue                
Italy   1,169    3,023    7,066    9,683 
United States   385    652    1,902    1,662 
Total Revenue  $1,554    3,675    8,968    11,345 

 

Long-lived assets, net includes property and equipment, intangible assets, goodwill, and other assets. The following table sets forth long-lived assets, net by geographic area as of September 30, 2023 and December 31, 2022.

 

        
   September 30,   December 31, 
Non-Current Assets  2023   2022 
Italy  $1,363   $5,575 
United States   3,564    23,669 
All other countries   475    665 
Total Non-Current Assets  $5,403   $29,909 

 

13 
 

 

 15. Related Party Transactions   

CEO conversion of deferred salaries

During the nine months ended September 30, 2023, our majority shareholder and CEO converted a portion of his deferred salaries, totaling $78, into 13,000 Class A Common Shares.

Board member conversion of deferred salaries

During the nine months ended September 30, 2023, board members   converted a portion of their deferred salaries, totaling $69, into 159,324 Warrants to purchase Class A Common Shares with a strike price of $1.16 and 5-years from issuance as expiration date.

During the nine months ended September 30, 2023, a   board member who served as consultant before joining the Board converted portion of his previous invoices, totaling $90, into 59,524 Class A Common Shares, generating a gain for the Company amounted to $25.

CEO Purchase of Series B Preferred Stock

On March 13, 2023, the Company issued 3,000 Series B Preferred Stock to the Company’s CEO for an aggregate purchase price of $0.5. Series B had no voting rights, except that each share of Series B was entitled to 80,000 votes at a shareholder meeting on whether to enact a reverse stock split. Holder of the Company’s Series B was required to vote any proposal for a reverse stock split on a “mirrored” basis. This meant that the Series B holder was required to cast their votes “For” and “Against” each such proposal in the same proportions as the holders of Company’s Class A Common shares eligible and voting at the Special Meeting cast their votes, in the aggregate. On March 30, 2023, the Company’s Series B Preferred Stock have been redeemed following the stockholder meeting for $0.01 per share. As of March 31, 2023, there were 0 shares of Series B Preferred Stock issued and outstanding.

Conversion of Class B Common Shares

On August 12, 2023, the 284,518 shares of Class B common stock automatically converted into 284,518 shares of Class A common stock. On August 12, 2021, the Company issued the Class B Common Shares to the Company’s CEO, with the clause of an automatic conversion into Class A Common Shares on the second anniversary of the issuance (August 12, 2023).

Related party shipping  

During the nine months ended September 30, 2023, the Company recorded as Cost of Revenues $56 for shipping services provided by a related party. The service provider is a Company whose CEO is a parent of the CEO of micromobility.com.    

16. Subsequent Events  

Nasdaq delisting letters  

On October 31, 2023, the Company received an additional written notice of determination of delisting (the “Notice”) from the Staff notifying the Company that, based on the market value of the Company’s class A common stock, par value $0.00001 per share (the “Common Stock”), the Company did not comply with the market value of listed securities requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(1) (the “Rule”). The Rule requires listed securities to maintain a market value of listed securities of not less than $35 million (the “Market Value of Listed Securities Requirement”), and Nasdaq Listing Rule 5810(c)(3)(C) provides that a failure to meet the Market Value of Listed Securities Requirement exists if the deficiency continues for a period of 30 consecutive trading days. The Notice stated that the Company’s failure to satisfy the Market Value of Listed Securities Requirement served as an additional basis for delisting the Company’s listed securities.

 

On November 6, 2023, the Company received an additional written notice of determination of delisting from the Staff notifying the Company that, based on the composition of its board of directors, the Company did not comply with the audit committee requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5605(c)(2) (the “Board Rule”). The Board Rule requires a listed company to maintain an audit committee of the board of directors that is comprised of at least three independent directors, as defined in Nasdaq Listing Rule 5605(a)(2) (together with the Board Rule, the "Board Independence Rule"). This notice stated that the Company’s failure to satisfy the Board Independence Rule serves as an additional basis for delisting the Company’s listed securities. The Company provided a response to Nasdaq on November 7, 2023.

 

On November 9, 2023, the Company received a determination from the Nasdaq Stock Market granting the Company’s request for the continued listing of its common stock on Nasdaq, subject to the Company evidencing compliance with all applicable criteria for initial listing on The Nasdaq Capital Market, and certain other interim conditions. The Company is diligently working to timely evidence compliance with the terms of the Panel’s decision, and to that effect on November 13, 2023, the Company received shareholder approval for the implementation of a reverse stock split (effective December 4, 2023) and satisfaction of Nasdaq continued listing rules including the bid price, and market value of listed securities rules by December 29, 2023. Additionally, the Company is working to satisfy audit committee rule by December 1, 2023, pursuant to the Panel’s decision. Further, the Panel also advised it reserves the right to reconsider the terms of the foregoing based on any event, condition or circumstance that exists or develops that would, in the opinion of the Panel, make continued listing of the Company’s securities on the Nasdaq Capital Market inadvisable or unwarranted.

 

Shareholder Meeting

 

On November 13, 2023, the Company’s shareholders approved: (i) a 1:150 reverse split of the Company’s Common Stock, effective December 4, 2023 and (ii) an increase in the authorized shares of the Company’s Common Stock from 300,000,000 to 1,000,000,000, effective on that day

 

 

14 
 

 

2023 SEPA Convertible Notes repayment

From October 1, 2023, to date, the Company delivered Advance Notices under the March 2023 SEPA, for the sale of 59,800,000 Class A Common Shares, resulting in cumulative gross proceeds of $2,480 of which $1,240 was used for repaying 2023 SEPA Convertible Notes. 

2023 SEPA October Convertible Note

On October 26, 2023, the Company issued a convertible promissory note, under the March 2023 SEPA.  The Note had a principal amount of $1,500 with 15% issuance discount, a maturity date of February 29, 2024, a 5% annual interest rate and a 15% annual default interest rate. The Note shall be convertible into shares of the Company’s Class A common shares at a fixed conversion price of $0.25.  

 The Company has the option to repay convertible promissory note the through the same two options available for the 2023 SEPA March and August Convertible Notes.   

 

2023 SEPA November Convertible Note

On November 13, 2023, the Company issued a convertible promissory note, under the March 2023 SEPA.  The Note had a principal amount of $4,000 with 15% issuance discount, a maturity date of March 31, 2024, a 5% annual interest rate and a 15% annual default interest rate. The Note shall be convertible into shares of the Company’s Class A common shares at a fixed conversion price of $0.25.  

 The Company has the option to repay the convertible promissory note sthrough the same two options available for the 2023 SEPA March and August Convertible Notes.   

 .

15 
 

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes. Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties and assumptions. You should read the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

The following discussion refers to the financial results of micromobility.com, Inc. for the nine months ended September 30, 2023, and 2022. For purposes of this following discussion the terms “we”, ‘our” or “us” or “the Company” and similar references refer to micromobility.com, Inc. and our affiliates. Except for per share data and as otherwise indicated, all dollar amounts set out herein are in thousands.

Overview

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 headquarter in New York, New York. The Company is an intra-urban transportation company that seeks to help urban areas reduce their dependence 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 a second business line: (i) the acquisition, commercialization and distribution of media content including live sport events.

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

On March 30, 2023, the Company held a special meeting of stockholders at which the Company’s stockholders approved a proposal to amend the Company’s restated certificate of Incorporation to effect a reverse stock split of the Company’s common stock (the “Reverse Stock Split”).

On March 30, 2023, the Company’s Board of Directors approved a one-for-fifty (1:50) reverse split of the Company’s issued and outstanding shares of common stock and a change in name from “Helbiz, Inc.” to “micromobility.com, Inc.” (the “Company Name Change”). On March 30, 2023, the Company filed with the Secretary of State of the State of Delaware a certificate of amendment to its Restated Certificate of Incorporation to effect the Reverse Stock Split and the Company Name Change. The Reverse Stock Split became effective on March 30, 2023.

As a result of the effectiveness of the Reverse Stock Split, every fifty shares of the Company’s issued and outstanding common stock were automatically combined, converted and changed into one share of the Company’s common stock, without any change in the number of authorized shares or the par value per share. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, restricted stock units and warrants to purchase shares of common stock and the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans. No fractional shares have been issued in connection with the Reverse Stock Split, any fractional shares resultant from the Reverse Stock Split have been rounded up to the next whole share.

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.

During the three months ended September 30, 2023, the Company decided to close the business line related to the food delivery services, which was in a start-up phase.

On November 13, 2023, the Company held a special meeting of stockholders at which the Company’s stockholders approved a proposal to amend the Company’s restated certificate of Incorporation to (i) authorize a reverse stock split of the Company’s common stock at a ratio to be determined by the Company’s Board of Directors (the “Board”) within a range of one-for-fifty (1:50) and one-for-two-hundred (1:200) (or any number in between), with the exact ratio to be determined by the Board in its sole discretion (the “Reverse Stock Split Proposal”), and (ii) authorize the increase the number of authorized shares of capital stock of the Company from four hundred million shares (consisting of 300,000,000 shares of Common Stock and 100,000,000 shares of preferred stock) to one billion shares (consisting of 900,000,000 shares of Common Stock and 100,000,000 shares of preferred stock) (the “Authorized Increase Proposal”), and (iii) authorize the removal of the class B common stock, par value $0.00001 per share from the authorized capital stock of the Company (“Class B Removal Proposal”).

On November 13, 2023, upon the adoption of the Reverse Stock Split Proposal, the Board approval for a one-for-one-hundred-fifty (1:150) reverse split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”) became effective which is approved to occur on December 4, 2023, or soon thereafter. On November 13, 2023, the Company filed with the Secretary of State of the State of Delaware a certificate of amendment to its Restated Certificate of Incorporation (the “Certificate of Amendment”) to effect the Reverse Stock Split Proposal, Authorized Increase Proposal, and Class B Removal Proposal. The Reverse Stock Split Proposal is to become effective as of 12:00 a.m. Eastern Time on December 4, 2023, or soon thereafter and the Company’s common stock is expected to begin trading on a split-adjusted basis when the Nasdaq Stock Market opens on December 4, 2023, or soon thereafter.

The Reverse Stock Split Proposal is scheduled to occur on December 4, 2023, or soon thereafter, however if the Reverse Stock Split Proposal was effectiveness as of the date of this report, the Reverse Stock Split Proposal would reduce the number of shares of common stock issued and outstanding from approximately 285 million to approximately 1.9 million. Due to the Authorized Increase Proposal, the authorized number of shares of common stock has increased from 300 million to 900 million as of November 13, 2023.

 

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Consolidated Results of Operations

The following tables set forth our results of operations for the periods presented and as a percentage of our net revenue for those periods. Percentages presented in the following tables may not sum due to rounding.

Comparison of the Three and Nine Months ended September 30, 2023 and 2022

The following table summarizes our consolidated results of operations for the three and nine months ended September 30, 2023, and for the three and nine months ended September 30, 2022, respectively:

 

   Three Months Ended September 30,   Nine Months  Ended September 30, 
   2023   2022   2023   2022 
Revenue  $1,554   $3,675   $8,968   $11,345 
Operating expenses:                    
Cost of revenue   3,254    8,346    26,843    29,952 
General and administrative   4,814    5,418    16,285    18,402 
Sales and marketing   527    1,719    2,690    7,560 
Research and development   480    650    2,089    2,033 
Impairment of assets   —      10,390    16,444    10,390 
Total operating expenses   9,074    26,523    64,352    68,337 
                     
Loss from operations   (7,520)   (22,848)   (55,384)   (56,992)
Total non-operating income (expenses), net   (1,946)   (1,708)   (7,818)   (6,690)
    Income Taxes   (10)   (6)   (48)   (18)
Net loss  $(9,477)  $(24,562)  $(63,249)  $(63,700)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Revenue   100%   100%   100%   100%
Operating expenses:                    
Cost of revenue (1)   209%   227%   299%   264%
General and administrative (1)   310%   147%   182%   162%
Sales and marketing (1)   34%   47%   30%   67%
Research and development (1)   31%   18%   23%   18%
Impairment of assets   —  %   283%   183%   92%
Total operating expenses   584%   722%   718%   602%
                     
Loss from operations   (484)%   (622)%   (618)%   (502)%
Total non-operating income (expenses), net   (125)%   (46)%   (87)%   (59)%
    Income Taxes   (1)%   (0)%   (1)%   (0)%
Net loss  $(610)%  $(668)%  $(705)%  $(561)%

 

  (1) Includes stock-based compensation for employees and services received, as follows

  

                 
 Stock-based Compensation  Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
Cost of revenue   (3)   2    0    14 
Research and development   7    35    31    133 
Sales and marketing   6    110    31    281 
SEPA financial expenses   —      —      186    —   
General and administrative   (47)   610    348    2,277 
Total Share based compensation expenses, net   (37)   757    596    2,705 

 

 

 

17 
 

 

Net Revenues

 

   Three Months Ended September 30,       Nine Months Ended September 30,     
   2023   2022   % Change   2023   2022   % Change 
Mobility Revenues  $1,247   $2,463    (49)%  $4,519   $6,758