Getaround(GETR) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited financial statements for H1 2023 show decreased assets, increased liabilities, reduced equity, a net loss of $53.1 million, and a going concern uncertainty Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2023, reflects a significant decrease in cash and total assets, alongside an increase in total liabilities, leading to a substantial drop in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $24,658 | $64,294 | | Total Current Assets | $36,942 | $74,511 | | Total Assets | $175,491 | $205,419 | | Liabilities & Equity | | | | Total Current Liabilities | $75,632 | $56,944 | | Total Liabilities | $151,768 | $135,919 | | Total Stockholders' Equity | $23,723 | $69,500 | Condensed Consolidated Statements of Operations and Comprehensive Loss For H1 2023, revenues grew to $30.1 million and the net loss narrowed to $53.1 million from $68.2 million in the prior year period Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $18,620 | $15,792 | $30,140 | $28,287 | | Loss from Operations | $(28,680) | $(30,538) | $(54,975) | $(57,027) | | Net Loss | $(30,269) | $(39,419) | $(53,068) | $(68,164) | | Net Loss Per Share (Basic & Diluted) | $(0.33) | $(1.75) | $(0.57) | $(3.04) | Condensed Consolidated Statements of Cash Flows For H1 2023, net cash used in operating activities improved to $28.6 million, while investing activities used $10.5 million, resulting in a $39.6 million decrease in cash Cash Flow Summary (in thousands) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(28,614) | $(36,635) | | Net Cash Used in Investing Activities | $(10,547) | $(1,092) | | Net Cash Provided by (Used in) Financing Activities | $(650) | $29,642 | | Net change in cash and restricted cash | $(39,636) | $(10,126) | | Cash, Cash Equivalents and Restricted Cash, end of period | $28,258 | $56,339 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail significant events including the HyreCar acquisition, a going concern warning, debt defaults, and subsequent financing activities - The company's ability to continue as a going concern is in substantial doubt due to a history of losses and negative cash flows[34][36] - On May 16, 2023, the company acquired substantially all assets of HyreCar Inc for an aggregate purchase price of $8.13 million[43][44] - The company received default notices for failure to timely file reports as required by the indenture for the Mudrick Convertible Notes[89][139][140] - Subsequent to the quarter end, the company entered into new promissory note agreements and defaulted on lease payments for its San Francisco headquarters[141][143][150] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses an 18% Q2 revenue increase driven by the HyreCar acquisition, improved Adjusted EBITDA loss, and significant liquidity challenges raising going concern doubts Results of Operations Q2 2023 revenues rose 18% to $18.6 million due to the HyreCar acquisition, while net loss improved, reflecting reduced marketing spend and lower interest expense Revenue Comparison (in thousands) | Period | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $18,620 | $15,792 | $2,828 | 18% | | Six Months Ended June 30 | $30,140 | $28,287 | $1,853 | 7% | - The increase in revenue was primarily driven by incremental service revenue of $4.4 million from the acquisition of HyreCar assets[187][223] - Sales and marketing expenses decreased by $1.5 million (16%) in Q2 2023 and $4.8 million (30%) in H1 2023, reflecting a cost control strategy and restructuring[191][227] - Operations and support expenses increased by $1.9 million (14%) in Q2 2023, largely due to incremental costs from the HyreCar business combination[192] Key Business Metrics and Non-GAAP Financial Measures In Q2 2023, Gross Booking Value grew 15% to $53.6 million and Adjusted EBITDA loss improved, though the number of trips slightly decreased Key Business Metrics (Q2) | Metric | Q2 2023 | Q2 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Booking Value (in thousands) | $53,561 | $46,450 | 15% | | Trips (in thousands) | 257 | 261 | -1% | Non-GAAP Financial Measures (Q2, in thousands) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Marketplace Value (NMV) | $24,306 | $20,997 | | Trip Contribution Profit | $7,885 | $6,879 | | Adjusted EBITDA | $(22,353) | $(24,306) | Liquidity and Capital Resources The company's critical liquidity position, with only $24.7 million in cash, raises substantial doubt about its ability to continue as a going concern - Principal sources of liquidity are cash and cash equivalents, which stood at $24.7 million as of June 30, 2023[258] - The company has insufficient capital to fund its business operations, raising substantial doubt about its ability to continue as a going concern within one year[259][261] Contractual Obligations as of June 30, 2023 (in thousands) | Obligation Type | Total | Less than 1 Year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Long Term Debt | $178,808 | $573 | $2,306 | $175,929 | $0 | | Operating Lease | $25,985 | $2,044 | $8,429 | $8,825 | $6,687 | | Total | $204,793 | $2,617 | $10,735 | $184,754 | $6,687 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its market risk compared to its most recent Annual Report on Form 10-K - There have been no material changes in market risk since the last Annual Report on Form 10-K[284] Item 4. Controls and Procedures The company reports no material changes in its internal controls and procedures since its last Annual Report - There have been no material changes in controls and procedures since the last Annual Report on Form 10-K[285] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company accrued $1.6 million for various pending claims and legal actions as of June 30, 2023 - For details on legal proceedings, the report refers to Note 12 in the financial statements[288] - As of June 30, 2023, the company had accrued $1.6 million for various pending claims and legal actions[114] Item 1A. Risk Factors The company states there have been no material changes to the risk factors previously disclosed in its Annual Report - There have been no material changes to the Risk Factors described in the Annual Report on Form 10-K for the year ended December 31, 2022[290] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - The company reports 'None' for this item[290] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities, though defaults on reporting covenants are noted elsewhere - The company reports 'None' for this item, however, defaults related to reporting covenants on the Mudrick Convertible Notes are disclosed elsewhere in the report[291][139] Item 5. Other Information The company reported no other material information for this item - The company reports 'None' for this item[293] Item 6. Exhibits This section lists exhibits filed with the report, including the HyreCar Asset Purchase Agreement and officer certifications - Exhibits filed include the Asset Purchase Agreement with HyreCar Inc. and required certifications by the Principal Executive Officer and Principal Financial Officer[295]