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			—			—