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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended June 30, 2021

OR

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: 001-40326

 

TuSimple Holdings Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

86-2341575

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

TuSimple Holdings Inc.

9191 Towne Centre Drive

Suite 600

San Diego, CA

92122

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (619) 916-3144

 

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, par value $0.0001 per share  

 

 

TSP  

 

 

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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, smaller reporting company, or an emerging growth company. See the 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 July 31, 2021, the number of shares of the registrant’s Class A common stock outstanding was 185,040,398 and the number of shares of the registrant’s Class B common stock outstanding was 24,000,000.

 

 

 

 


 

Table of Contents

 

 

 

Page

 

Information Regarding Forward-Looking Statements

ii

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Comprehensive Loss

3

 

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

4

 

Condensed Consolidated Statements of Cash Flows

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

56

Item 6.

Exhibits

58

 

Signatures

59

 


i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” or the negative version of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

 

our future performance, including our revenue, cost of revenue, and operating expenses;

 

the sufficiency of our cash and cash equivalents to meet our operating requirements;

 

our ability to scale our Autonomous Freight Network, which we refer to as our AFN;

 

our ability to attract new users to services provided on our AFN;

 

our ability to increase reservations for our purpose-built L4 autonomous semi-trucks;

 

our ability to convert reservations for our purpose-built L4 autonomous semi-trucks into purchases;

 

our ability to fulfill all reservations for our purpose-built L4 autonomous semi-trucks according to each customer’s delivery schedule;

 

our ability to effectively manage our growth and future expenses;

 

the estimated timing for when additional routes will be available;

 

our ability to compete in a market that is rapidly evolving and subject to technological developments;

 

our estimated total addressable market, the market for autonomous truck and freight transport solutions, and our market position;

 

our ability to successfully collaborate with business partners;

 

our ability to obtain, maintain, protect, and enforce our intellectual property;

 

our ability to comply with modified or new laws and regulations applicable to our business or industry;

 

our ability to attract and retain employees with the technical skills we require and other key personnel;

 

our ability to successfully complete our driver-out pilot programs;

 

our anticipated investments in research and development and sales and marketing, and the effect of these investments on our results of operations;

 

the increased expenses associated with being a public company; and

 

the potential impact of the COVID-19 pandemic on our, and our partners’, business and results of operations, and on the global economy generally.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

ii


Except as required by applicable law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by applicable law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 

 

iii


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

TuSimple Holdings Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)

 

 

 

December 31,

 

 

June 30,

 

 

 

2020

 

 

2021

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

310,815

 

 

$

1,489,829

 

Accounts receivable, net

 

 

1,144

 

 

 

1,274

 

Prepaid expenses and other current assets

 

 

3,816

 

 

 

15,781

 

Amounts due from related parties

 

 

3,708

 

 

 

 

Total current assets

 

 

319,483

 

 

 

1,506,884

 

Property and equipment, net

 

 

22,116

 

 

 

25,435

 

Other assets

 

 

4,986

 

 

 

5,879

 

Total assets

 

$

346,585

 

 

$

1,538,198

 

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND

   STOCKHOLDER’S EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,542

 

 

$

5,074

 

Amounts due to related parties

 

 

4,360

 

 

 

 

Amounts due to joint development partners

 

 

1,355

 

 

 

6,654

 

Accrued expenses and other current liabilities

 

 

22,961

 

 

 

25,122

 

Short-term debt

 

 

4,623

 

 

 

509

 

Warrants liability

 

 

42,452

 

 

 

 

Capital lease liabilities, current

 

 

805

 

 

 

851

 

Total current liabilities

 

 

81,098

 

 

 

38,210

 

Capital lease liabilities, noncurrent

 

 

3,767

 

 

 

3,345

 

Other liabilities

 

 

2,402

 

 

 

3,673

 

Total liabilities

 

 

87,267

 

 

 

45,228

 

Commitments and contingencies (Note 4)

 

 

 

 

 

 

 

 

Redeemable convertible preferred stock, $0.0001 par value; 138,102,770 and zero shares

   authorized as of December 31, 2020 and June 30, 2021; 102,074,703 and zero

   shares issued and outstanding as of December 31, 2020 and June 30, 2021,

   respectively; aggregate liquidation preference of $598,842 and $0 as of

   December 31, 2020 and June 30, 2021, respectively

 

 

664,791

 

 

 

 

Stockholders' equity (deficit):

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 361,897,230 and 4,876,000,000 Class A shares

   authorized as of December 31, 2020 and June 30, 2021; 60,543,337 and

   185,040,398 shares issued and outstanding as of December 31, 2020 and

   June 30, 2021, respectively; zero and 24,000,000 Class B shares authorized as of

   December 31, 2020 and June 30, 2021; zero and 24,000,000 shares issued

   and outstanding as of December 31, 2020 and June 30, 2021, respectively

 

 

6

 

 

 

21

 

Additional paid-in-capital

 

 

 

 

 

2,399,981

 

Accumulated other comprehensive loss

 

 

(301

)

 

 

(165

)

Accumulated deficit

 

 

(405,178

)

 

 

(906,867

)

Total stockholders’ equity (deficit)

 

 

(405,473

)

 

 

1,492,970

 

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 

$

346,585

 

 

$

1,538,198

 

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

1


TuSimple Holdings Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

Revenue

 

$

263

 

 

$

1,482

 

 

$

522

 

 

$

2,426

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

857

 

 

 

2,982

 

 

 

1,628

 

 

 

5,228

 

Research and development

 

 

21,979

 

 

 

75,891

 

 

 

40,161

 

 

 

117,325

 

Sales and marketing

 

 

243

 

 

 

1,041

 

 

 

680

 

 

 

1,719

 

General and administrative

 

 

5,207

 

 

 

42,425

 

 

 

11,933

 

 

 

57,649

 

Total costs and expenses

 

 

28,286

 

 

 

122,339

 

 

 

54,402

 

 

 

181,921

 

Loss from operations

 

 

(28,023

)

 

 

(120,857

)

 

 

(53,880

)

 

 

(179,495

)

Change in fair value of warrants liability

 

 

 

 

 

 

 

 

 

 

 

(326,900

)

Gain on loan extinguishment

 

 

 

 

 

4,183

 

 

 

 

 

 

4,183

 

Other income (expense), net

 

 

(61

)

 

 

145

 

 

 

35

 

 

 

523

 

Loss before provision for income taxes

 

 

(28,084

)

 

 

(116,529

)

 

 

(53,845

)

 

 

(501,689

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(28,084

)

 

 

(116,529

)

 

 

(53,845

)

 

 

(501,689

)

Accretion of redeemable convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

(4,135

)

Net loss attributable to common stockholders

 

$

(28,084

)

 

$

(116,529

)

 

$

(53,845

)

 

$

(505,824

)

Net loss per share attributable to common stockholders, basic and

   diluted

 

$

(0.49

)

 

$

(0.64

)

 

$

(0.94

)

 

$

(4.15

)

Weighted-average shares used in computing net loss per share

   attributable to common stockholders, basic and diluted

 

 

57,401,912

 

 

 

182,382,800

 

 

 

57,068,132

 

 

 

121,800,404

 

 

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

2


TuSimple Holdings Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

Net loss

 

$

(28,084

)

 

$

(116,529

)

 

$

(53,845

)

 

$

(501,689

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

188

 

 

 

(775

)

 

 

190

 

 

 

136

 

Comprehensive loss

 

$

(27,896

)

 

$

(117,304

)

 

$

(53,655

)

 

$

(501,553

)

 

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

 

 

3


 

TuSimple Holdings Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

(unaudited)

 

 

 

Redeemable Convertible

Preferred Stock

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Total

TuSimple

Holdings Inc.

Stockholders’

Deficit

 

 

Noncontrolling

Interests

 

 

Total

Stockholders’

Deficit

 

Balance as of December 31, 2019

 

 

74,939,388

 

 

$

293,736

 

 

 

 

56,516,425

 

 

$

6

 

 

$

 

 

$

(658

)

 

$

(218,718

)

 

$

(219,370

)

 

$

(44

)

 

$

(219,414

)

Issuance of common stock from exercise of options

 

 

 

 

 

 

 

 

 

2,125,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,227

 

 

 

 

 

 

 

 

 

1,227

 

 

 

 

 

 

1,227

 

Acquisition of noncontrolling interest in subsidiary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(44

)

 

 

 

 

 

(44

)

 

 

44

 

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

2

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,761

)

 

 

(25,761

)

 

 

 

 

 

(25,761

)

Balance as of March 31, 2020

 

 

74,939,388

 

 

$

293,736

 

 

 

 

58,641,425

 

 

$

6

 

 

$

1,227

 

 

$

(700

)

 

$

(244,479

)

 

$

(243,946

)

 

$

 

 

$

(243,946

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

453

 

 

 

 

 

 

 

 

 

453

 

 

 

 

 

 

453

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

188

 

 

 

 

 

 

188

 

 

 

 

 

 

188

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,084

)

 

 

(28,084

)

 

 

 

 

 

(28,084

)

Balance as of June 30, 2020

 

 

74,939,388

 

 

$

293,736

 

 

 

 

58,641,425

 

 

$

6

 

 

$

1,680

 

 

$

(512

)

 

$

(272,563

)

 

$

(271,389

)

 

$

 

 

$

(271,389

)

 

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

4


TuSimple Holdings Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

(unaudited)

 

 

 

Redeemable Convertible

Preferred Stock

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Additional Paid-in Capital

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Accumulated Deficit

 

 

Total Stockholders’ Equity (Deficit)

 

Balance as of December 31, 2020

 

 

102,074,703

 

 

$

664,791

 

 

 

 

60,543,337

 

 

$

6

 

 

$

 

 

$

(301

)

 

$

(405,178

)

 

$

(405,473

)

Issuance of Series E redeemable convertible preferred stock, net of issuance costs

 

 

4,650,999

 

 

 

61,631

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series E redeemable convertible preferred stock from the exercise of warrants

 

 

9,477,073

 

 

 

379,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series E-2 redeemable convertible preferred stock from the exercise of warrants

 

 

4,331,644

 

 

 

173,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock from exercise of options

 

 

 

 

 

 

 

 

 

60,616

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

21

 

Accretion of redeemable convertible preferred stock to redemption value

 

 

 

 

 

4,135

 

 

 

 

 

 

 

 

 

 

(4,135

)

 

 

 

 

 

 

 

 

(4,135

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,289

 

 

 

 

 

 

 

 

 

6,289

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

911

 

 

 

 

 

 

911

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(385,160

)

 

 

(385,160

)

Balance as of March 31, 2021

 

 

120,534,419

 

 

$

1,282,916

 

 

 

 

60,603,953

 

 

$

6

 

 

$

2,176

 

 

$

610

 

 

$

(790,338

)

 

$

(787,546

)

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

21

 

Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering

 

 

(120,534,419

)

 

 

(1,282,916

)

 

 

 

120,534,419

 

 

 

12

 

 

 

1,282,904

 

 

 

 

 

 

 

 

 

1,282,916

 

Issuance of common stock in connection with initial public offering, net of offering costs

 

 

 

 

 

 

 

 

 

27,027,027

 

 

 

3

 

 

 

1,027,371

 

 

 

 

 

 

 

 

 

1,027,374

 

Issuance of common stock related to private placement

 

 

 

 

 

 

 

 

 

874,999

 

 

 

 

 

 

35,000

 

 

 

 

 

 

 

 

 

35,000

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

52,509