Delaware | 001-38818 | 83-2456129 | ||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Class A common stock, par value $0.0001 per share | LOTZ | The Nasdaq Global Market | ||||||||||||
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | LOTZW | The Nasdaq Global Market |
Exhibit No. | Exhibit Title | |||||||
99.1 |
CARLOTZ, INC. | ||||||||
Dated: November 8, 2022 | By: | /s/ Lev Peker | ||||||
Name: | Lev Peker | |||||||
Title: | Chief Executive Officer |
September 30, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 84,809 | $ | 75,029 | |||||||
Restricted cash | 4,049 | 4,336 | |||||||||
Marketable securities – at fair value | 28,125 | 116,589 | |||||||||
Accounts receivable, net | 4,786 | 8,206 | |||||||||
Inventories | 13,062 | 40,985 | |||||||||
Other current assets | 4,349 | 4,705 | |||||||||
Operating and finance lease assets, property, and equipment held for sale | 20,860 | — | |||||||||
Total Current Assets | 160,040 | 249,850 | |||||||||
Marketable securities – at fair value | 760 | 1,941 | |||||||||
Property and equipment, net | 7,118 | 22,628 | |||||||||
Capitalized website and internal-use software costs, net | 12,725 | 13,716 | |||||||||
Operating lease assets | 22,092 | — | |||||||||
Finance lease assets, net | 4,459 | — | |||||||||
Lease vehicles, net | 2,869 | 1,596 | |||||||||
Other assets | 474 | 558 | |||||||||
Total Assets | $ | 210,537 | $ | 290,289 | |||||||
Liabilities and Stockholders’ Equity (Deficit) | |||||||||||
Current Liabilities: | |||||||||||
Current portion of finance lease liabilities | $ | 116 | $ | 509 | |||||||
Floor plan notes payable | 5,433 | 27,815 | |||||||||
Accounts payable | 2,236 | 6,352 | |||||||||
Accrued expenses | 11,215 | 14,428 | |||||||||
Current portion of operating lease liabilities | 4,600 | — | |||||||||
Other current liabilities | 593 | 754 | |||||||||
Operating and finance lease liabilities associated with assets held for sale | 22,294 | — | |||||||||
Total Current Liabilities | 46,487 | 49,858 | |||||||||
Finance lease liabilities, less current portion | 6,083 | 12,206 | |||||||||
Operating lease liabilities, less current portion | 22,384 | — | |||||||||
Earnout shares liability | 722 | 7,679 | |||||||||
Merger warrants liability | 675 | 6,291 | |||||||||
Other liabilities | 417 | 744 | |||||||||
Total Liabilities | 76,768 | 76,778 | |||||||||
Commitments and Contingencies (Note 15) | — | — | |||||||||
Stockholders’ Equity (Deficit): | |||||||||||
Common stock, $0.0001 par value; 500,000,000 authorized shares, 114,879,689 and 113,996,401 shares issued and outstanding at September 30, 2022 and December 31, 2021 | 11 | 11 | |||||||||
Additional paid-in capital | 291,827 | 287,509 | |||||||||
Accumulated deficit | (157,956) | (73,916) | |||||||||
Accumulated other comprehensive (loss) | (113) | (93) | |||||||||
Total Stockholders’ Equity (Deficit) | 133,769 | 213,511 | |||||||||
Total Liabilities and Stockholders’ Equity (Deficit) | $ | 210,537 | $ | 290,289 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Retail vehicle sales | $ | 32,545 | $ | 56,284 | $ | 142,344 | $ | 150,897 | |||||||||||||||
Wholesale vehicle sales | 16,357 | 8,989 | 38,880 | 18,217 | |||||||||||||||||||
Finance and insurance, net | 1,691 | 2,639 | 8,591 | 5,973 | |||||||||||||||||||
Lease income, net | 245 | 129 | 528 | 334 | |||||||||||||||||||
Total Revenues | 50,838 | 68,041 | 190,343 | 175,421 | |||||||||||||||||||
Cost of sales (exclusive of depreciation) | 51,429 | 66,017 | 187,375 | 167,207 | |||||||||||||||||||
Gross Profit | (591) | 2,024 | 2,968 | 8,214 | |||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||
Selling, general and administrative | 19,334 | 24,780 | 74,017 | 63,039 | |||||||||||||||||||
Stock-based compensation expense | 1,409 | 3,447 | 4,234 | 49,114 | |||||||||||||||||||
Depreciation and amortization expense | 2,025 | 1,214 | 6,173 | 1,692 | |||||||||||||||||||
Management fee expense – related party | — | — | — | 2 | |||||||||||||||||||
Impairment expense | 420 | — | 1,143 | — | |||||||||||||||||||
Restructuring expenses | 1,885 | — | 12,616 | — | |||||||||||||||||||
Total Operating Expenses | 25,073 | 29,441 | 98,183 | 113,847 | |||||||||||||||||||
Loss from Operations | (25,664) | (27,417) | (95,215) | (105,633) | |||||||||||||||||||
Interest expense | 302 | 650 | 1,512 | 1,009 | |||||||||||||||||||
Other Income, net | |||||||||||||||||||||||
Change in fair value of Merger warrants liability | 803 | 12,111 | 5,616 | 24,794 | |||||||||||||||||||
Change in fair value of earnout shares | 341 | 12,565 | 6,957 | 56,621 | |||||||||||||||||||
Other income (expense) | 523 | (85) | 113 | (476) | |||||||||||||||||||
Total Other Income, net | 1,667 | 24,591 | 12,686 | 80,939 | |||||||||||||||||||
Loss Before Income Tax Expense | (24,299) | (3,476) | (84,041) | (25,703) | |||||||||||||||||||
Income tax expense | — | — | — | — | |||||||||||||||||||
Net Loss | $ | (24,299) | $ | (3,476) | $ | (84,041) | $ | (25,703) | |||||||||||||||
Net Loss per Share, basic and diluted | $ | (0.21) | $ | (0.03) | $ | (0.74) | $ | (0.23) | |||||||||||||||
Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | 114,705,449 | 113,707,013 | 114,334,960 | 109,447,939 | |||||||||||||||||||
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash Flow from Operating Activities | |||||||||||
Net loss | $ | (84,041) | $ | (25,703) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
Depreciation and amortization – property, equipment, ROU assets and capitalized software | 8,532 | 1,623 | |||||||||
Impairment expense | 1,143 | — | |||||||||
Non-cash restructuring expenses | 10,387 | — | |||||||||
Gain on lease assignment | (236) | — | |||||||||
Amortization and accretion - marketable securities | 752 | 1,712 | |||||||||
Depreciation – lease vehicles | 360 | 69 | |||||||||
Provision for doubtful accounts | 656 | 85 | |||||||||
Stock-based compensation expense | 4,234 | 49,114 | |||||||||
Change in fair value of Merger warrants liability | (5,616) | (24,794) | |||||||||
Change in fair value of earnout shares | (6,957) | (56,621) | |||||||||
Unpaid interest expense on capital lease obligations | — | 199 | |||||||||
Change in Operating Assets and Liabilities: | |||||||||||
Accounts receivable | 2,764 | (4,786) | |||||||||
Inventories | 27,923 | (46,774) | |||||||||
Other current assets | 356 | (8,414) | |||||||||
Other assets | 84 | (4,267) | |||||||||
Accounts payable | (4,116) | 3,541 | |||||||||
Accrued expenses | (2,237) | 5,441 | |||||||||
Accrued expenses – related party | — | (229) | |||||||||
Other current liabilities | (161) | 382 | |||||||||
Other liabilities | (327) | (753) | |||||||||
Net Cash Used in Operating Activities | (46,500) | (110,175) | |||||||||
Cash Flows from Investing Activities | |||||||||||
Purchase of property and equipment | (5,642) | (6,766) | |||||||||
Capitalized website and internal-use software costs | (2,958) | (11,511) | |||||||||
Purchase of marketable securities | (63,858) | (359,381) | |||||||||
Proceeds from sales of marketable securities | 152,758 | 212,823 | |||||||||
Purchase of lease vehicles | (1,633) | (939) | |||||||||
Net Cash (Used in) Provided by Investing Activities | 78,667 | (165,774) | |||||||||
Cash Flows from Financing Activities | |||||||||||
Payments made on finance leases | (376) | (51) | |||||||||
Advance from holder of marketable securities | — | 4,722 |
Repayment of advance from marketable securities | — | (4,722) | |||||||||
PIPE issuance | — | 125,000 | |||||||||
Merger financing | — | 309,999 | |||||||||
Payment made on accrued dividends | — | (4,853) | |||||||||
Payments to existing shareholders of Former CarLotz | — | (62,693) | |||||||||
Transaction costs and advisory fees | — | (47,579) | |||||||||
Payments made on cash considerations associated with stock options | — | (2,465) | |||||||||
Repayment of Paycheck Protection Program loan | — | (1,749) | |||||||||
Payments made on note payable | — | (3,000) | |||||||||
Payments on floor plan notes payable | (102,592) | (109,034) | |||||||||
Borrowings on floor plan notes payable | 80,211 | 127,279 | |||||||||
Employee stock option exercise | 91 | — | |||||||||
Payments made for tax on equity award transactions | (8) | — | |||||||||
Net Cash (Used in) Provided by Financing Activities | (22,674) | 330,854 | |||||||||
Net Change in Cash and Cash Equivalents Including Restricted Cash | 9,493 | 54,905 | |||||||||
Cash and cash equivalents and restricted cash, beginning | 79,365 | 2,813 | |||||||||
Cash and cash equivalents and restricted cash, ending | $ | 88,858 | $ | 57,718 | |||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||
Cash paid for interest | $ | 1,589 | $ | 1,000 | |||||||
Supplementary Schedule of Non-cash Investing and Financing Activities: | |||||||||||
Transfer from lease vehicles to inventory | $ | — | $ | 166 | |||||||
KAR/AFC exercise of stock warrants | — | (144) | |||||||||
KAR/AFC conversion of notes payable | — | (3,625) | |||||||||
Convertible redeemable preferred stock tranche obligation expiration | — | (2,832) | |||||||||
Capitalized website and internal use software costs accrued | — | (1,898) | |||||||||
Purchases of property under capital lease obligation | (247) | (7,651) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
($ in thousands, except per unit metrics) | ($ in thousands, except per unit metrics) | ||||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
Retail vehicle sales | $ | 32,545 | $ | 56,284 | (42.2) | % | $ | 142,344 | $ | 150,897 | (5.7) | % | |||||||||||||||||||||||
Wholesale vehicle sales | 16,357 | 8,989 | 82.0 | % | 38,880 | 18,217 | 113.4 | % | |||||||||||||||||||||||||||
Finance and insurance, net | 1,691 | 2,639 | (35.9) | % | 8,591 | 5,973 | 43.8 | % | |||||||||||||||||||||||||||
Lease income, net | 245 | 129 | 89.9 | % | 528 | 334 | 58.1 | % | |||||||||||||||||||||||||||
Total revenues | 50,838 | 68,041 | (25.3) | % | 190,343 | 175,421 | 8.5 | % | |||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Retail vehicle cost of sales | 32,141 | 56,584 | (43.2) | % | 144,058 | 147,142 | (2.1) | % | |||||||||||||||||||||||||||
Wholesale vehicle cost of sales | 19,288 | 9,433 | 104.5 | % | 43,317 | 20,065 | 115.9 | % | |||||||||||||||||||||||||||
Total cost of sales | $ | 51,429 | $ | 66,017 | (22.1) | % | $ | 187,375 | $ | 167,207 | 12.1 | % | |||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||
Retail vehicle gross profit (loss) | $ | 404 | $ | (300) | 234.7 | % | $ | (1,714) | $ | 3,755 | (145.6) | % | |||||||||||||||||||||||
Wholesale vehicle gross profit (loss) | (2,931) | (444) | (560.1) | % | (4,437) | (1,848) | (140.1) | % | |||||||||||||||||||||||||||
Finance and insurance gross profit | 1,691 | 2,639 | (35.9) | % | 8,591 | 5,973 | 43.8 | % | |||||||||||||||||||||||||||
Lease income, net | 245 | 129 | 89.9 | % | 528 | 334 | 58.1 | % | |||||||||||||||||||||||||||
Total gross profit | $ | (591) | $ | 2,024 | (129.2) | % | $ | 2,968 | $ | 8,214 | (63.9) | % | |||||||||||||||||||||||
Retail gross profit per unit(1): | |||||||||||||||||||||||||||||||||||
Retail vehicle gross profit (loss) | 404 | (300) | 234.7 | % | (1,714) | 3,755 | (145.6) | % | |||||||||||||||||||||||||||
Finance and insurance gross profit | 1,691 | 2,639 | (35.9) | % | 8,591 | 5,973 | 43.8 | % | |||||||||||||||||||||||||||
Total retail vehicle and finance and insurance gross profit | 2,095 | 2,339 | (10.4) | % | 6,877 | 9,728 | (29.3) | % | |||||||||||||||||||||||||||
Retail vehicle unit sales | 1,375 | 2,490 | (44.8) | % | 6,066 | 7,053 | (14.0) | % | |||||||||||||||||||||||||||
Retail vehicle gross profit per unit | $ | 1,524 | $ | 939 | 62.3 | % | $ | 1,134 | $ | 1,379 | (17.8) | % | |||||||||||||||||||||||
Wholesale gross profit per unit(2): | |||||||||||||||||||||||||||||||||||
Wholesale vehicle gross profit (loss) | (2,931) | (444) | (560.1) | % | (4,437) | (1,848) | (140.1) | % | |||||||||||||||||||||||||||
Wholesale vehicle unit sales | 1,042 | 614 | 69.7 | % | 2,312 | 1,451 | 59.3 | % | |||||||||||||||||||||||||||
Wholesale vehicle gross profit per unit | $ | (2,813) | $ | (723) | (289.1) | % | $ | (1,919) | $ | (1,274) | (50.6) | % | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||
Net Loss | $ | (24,299) | $ | (3,476) | $ | (84,041) | $ | (25,703) | |||||||||||||||
Adjusted to exclude the following: | |||||||||||||||||||||||
Interest expense | 302 | 650 | 1,512 | 1,009 | |||||||||||||||||||
Income tax expense | — | — | — | — | |||||||||||||||||||
Depreciation and amortization expense | 2,025 | 1,214 | 6,173 | 1,692 | |||||||||||||||||||
EBITDA | $ | (21,972) | $ | (1,612) | $ | (76,356) | $ | (23,002) | |||||||||||||||
Other expense | (523) | 85 | (113) | 476 | |||||||||||||||||||
Stock compensation expense | 1,409 | 3,447 | 4,234 | 49,114 | |||||||||||||||||||
Management fee expense - related party | — | — | — | 2 | |||||||||||||||||||
Change in fair value of warrants liability | (803) | (12,111) | (5,616) | (24,794) | |||||||||||||||||||
Change in fair value of earnout provision | (341) | (12,565) | (6,957) | (56,621) | |||||||||||||||||||
Restructuring expense1 | 1,885 | — | 13,626 | — | |||||||||||||||||||
Shift Merger2 | 4,044 | — | 4,044 | — | |||||||||||||||||||
Adjusted EBITDA | $ | (16,301) | $ | (22,756) | $ | (67,138) | $ | (54,825) |