LiveWire (US:LVWR)2023-03-06 14:00Financial Position and Performance - The historical financial information does not reflect the company's financial position as an independent entity, and costs may increase due to the transition to a public company[237]. - LiveWire Group, Inc. reported a net revenue of $46.833 million for the year ended 2022, an increase of 30.8% compared to $35.806 million in 2021[430]. - The total costs and expenses for 2022 were $131.788 million, up from $103.988 million in 2021, resulting in an operating loss of $84.955 million[430]. - The net loss for 2022 was $78.938 million, compared to a net loss of $68.292 million in 2021, reflecting a year-over-year increase of 15.5% in losses[430]. - LiveWire's comprehensive income included a net other comprehensive income of $236,000 for the year ended December 31, 2020[438]. - The Company reported a loss before income taxes of $(78,971) thousand for 2022, compared to $(68,154) thousand in 2021[497]. - The Company reported a net loss of $78,938 thousand for the year ended December 31, 2022, compared to a net loss of $68,292 thousand in 2021, reflecting an increase in losses of approximately 10%[506]. - Basic and diluted earnings per share for 2022 were both $(0.46), compared to $(0.42) in 2021, indicating a decline in earnings per share[506]. Compliance and Regulatory Risks - The company is subject to various privacy and consumer protection laws, which may increase compliance costs and liabilities[245]. - The California Consumer Privacy Act (CCPA) and other state privacy laws impose new obligations that could materially affect the company's operations and financial condition[249]. - Compliance with GDPR and UK GDPR could result in fines up to €20 million/£17.5 million or 4% of total global annual turnover[256]. - Regulatory framework for data privacy is evolving, which may lead to increased compliance costs and operational modifications[259]. - Non-compliance with anti-corruption and economic sanctions laws could lead to significant penalties and adversely affect the company's reputation and financial condition[284]. - Compliance with changing regulations could be burdensome and expensive, adversely affecting the company's business and financial condition[277]. Operational and Market Risks - The company may face increased litigation risks due to its relationship with H-D, which could negatively impact financial results[240]. - H-D's majority ownership may affect the company's ability to maintain relationships with key suppliers, potentially impacting electric vehicle production[243]. - The company faces risks from geopolitical events affecting strategic partnerships, particularly with vendors in Taiwan[283]. - The company is investing in international expansion programs to increase its global presence, although success is not guaranteed[306]. - The majority of LiveWire's sales are currently in the U.S., but the company plans to expand internationally, increasing exposure to currency rate risk[420]. Costs and Expenditures - The company anticipates increased legal, accounting, and compliance costs due to public company reporting requirements, which may materially increase general and administrative expenses[327]. - Increased environmental and safety regulations may lead to higher costs and cash expenditures for compliance[275]. - The imposition of a carbon tax or cap-and-trade system could increase electricity costs, affecting electric vehicle operations[279]. - The company is subject to significant expenses and management attention due to obligations associated with being a public company, which may divert focus from business operations[326]. Assets and Liquidity - As of December 31, 2022, LiveWire's cash and cash equivalents totaled $265.24 million[416]. - Cash and cash equivalents increased significantly to $265.240 million in 2022 from $2.668 million in 2021, indicating a substantial improvement in liquidity[433]. - The company had total assets of $351.805 million as of December 31, 2022, compared to $61.952 million in 2021, marking a growth of 467.5%[433]. - The Company expects the total amount of unrecognized tax benefits related to continuing operations to reduce to zero during the fiscal year ending December 31, 2023[503]. Business Combination and Financing - The company completed a business combination on September 26, 2022, resulting in the issuance of 202,402,888 shares of Common Stock[452]. - The Business Combination on September 26, 2022, resulted in net proceeds of approximately $293.7 million, including a $100 million PIPE investment from H-D and another $100 million from KYMCO[487]. - The Company incurred transaction costs of $20.1 million related to the Business Combination, which were deducted from the net cash proceeds[487]. - LiveWire received $100 million from Kwang Yang Motor Co., Ltd. and other investors through PIPE investments, with shares priced at $10.00 each[449][450]. Research and Development - Research and development expenses were $35,612 thousand in 2022, a slight increase from $35,308 thousand in 2021, and significantly higher than $23,036 thousand in 2020[468]. Inventory and Accounts Receivable - Total inventories, net, increased to $29,215 thousand as of December 31, 2022, from $16,797 thousand in 2021, representing a growth of approximately 74%[508]. - The allowance for doubtful accounts was $211 thousand as of December 31, 2022, compared to $66 thousand in 2021, indicating a rise in expected credit losses[461]. - As of December 31, 2022, 36.2% of net accounts receivable was due from the KTM customer group, driven by sales through the STACYC segment[460].