xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
¨TRANSITION REPORT PURSUANT TO SECTION 13 2021
For the transition period from to
Commission File No. 001-38818
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
Delaware | 83-2456129 | ||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| |||||||||||
| 611 Bainbridge Street, Suite 100 | Richmond | Virginia | 23224 | ||||||||
| (Address of | |||||||||||
| 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 | ||||||||
| Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share | LOTZW | The Nasdaq | ||||||||
| Large accelerated filer | ¨ | Accelerated filer | x | ||||||||||||||
¨ | Smaller reporting company | ☐ | |||||||||||||||
| Emerging growth company | x | ||||||||||||||||
Act
☐As of August 14, 2020, there were 30,557,322
ACAMAR PARTNERS ACQUISITION CORP.
Quarterly Report on Form 10-Q
ACAMAR PARTNERS ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 590,796 | $ | 1,600,833 | ||||
| Prepaid income taxes | — | 120,579 | ||||||
| Prepaid expenses | 62,083 | 96,208 | ||||||
| Total Current Assets | 652,879 | 1,817,620 | ||||||
| Cash and marketable securities held in Trust Account | 311,111,933 | 309,840,375 | ||||||
| Total Assets | $ | 311,764,812 | $ | 311,657,995 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accrued expenses | $ | 64,775 | $ | 214,813 | ||||
| Income taxes payable | 100,807 | — | ||||||
| Total Current Liabilities | 165,582 | 214,813 | ||||||
| Deferred underwriting fee payable | 10,695,063 | 10,695,063 | ||||||
| Total Liabilities | 10,860,645 | 10,909,876 | ||||||
| Commitments and Contingencies | ||||||||
| Common stock subject to possible redemption, 29,590,416 and 29,574,811 shares as of June 30, 2020 and December 31, 2019, respectively (at $10.00 per share) | 295,904,160 | 295,748,110 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $0.0001 par value; 5,000,000 shares authorized, none issued and outstanding | — | — | ||||||
| Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 966,906 and 982,511 shares issued and outstanding (excluding 29,590,416 and 29,574,811 subject to possible redemption) as of June 30, 2020 and December 31, 2019, respectively | 97 | 98 | ||||||
| Class B common stock, $0.0001 par value; 15,000,000 shares authorized; 7,639,330 shares issued and outstanding at June 30, 2020 and December 31, 2019 | 764 | 764 | ||||||
| Additional paid-in capital | 1,367,646 | 1,523,695 | ||||||
| Retained earnings | 3,631,500 | 3,475,452 | ||||||
| Total Stockholders’ Equity | 5,000,007 | 5,000,009 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 311,764,812 | $ | 311,657,995 | ||||
The accompanying
| June 30, 2021 | December 31, 2020 | ||||||||||
| Assets | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 83,576 | $ | 2,208 | |||||||
| Restricted cash | 226 | 605 | |||||||||
| Marketable securities – at fair value | 175,424 | 1,032 | |||||||||
| Accounts receivable, net | 5,411 | 4,132 | |||||||||
| Inventories | 47,469 | 11,202 | |||||||||
| Other current assets | 6,253 | 6,679 | |||||||||
| Total Current Assets | 318,359 | 25,858 | |||||||||
| Marketable securities – at fair value | 3,481 | 0 | |||||||||
| Property and equipment, net | 11,662 | 1,868 | |||||||||
| Capitalized website and internal-use software costs, net | 9,898 | 0 | |||||||||
| Lease vehicles, net | 337 | 173 | |||||||||
| Other assets | 4,390 | 299 | |||||||||
| Total Assets | $ | 348,127 | $ | 28,198 | |||||||
| Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) | |||||||||||
| Current Liabilities: | |||||||||||
| Long-term debt, current | $ | 212 | $ | 6,370 | |||||||
| Floor plan notes payable | 29,427 | 6,039 | |||||||||
| Accounts payable | 8,782 | 6,283 | |||||||||
| Accrued transaction expenses | 0 | 6,052 | |||||||||
| Accrued expenses | 13,238 | 3,563 | |||||||||
| Accrued expenses – related party | 0 | 5,082 | |||||||||
| Other current liabilities | 5,425 | 256 | |||||||||
| Total Current Liabilities | 57,084 | 33,645 | |||||||||
| Long-term debt, less current portion | 7,579 | 2,999 | |||||||||
| Redeemable convertible preferred stock tranche obligation | 0 | 2,832 | |||||||||
| Earnout shares liability | 30,228 | 0 | |||||||||
| Merger warrants liability | 26,341 | 0 | |||||||||
| Other liabilities | 1,232 | 1,959 | |||||||||
| Total Liabilities | 122,464 | 41,435 | |||||||||
| Commitments and Contingencies (Note 15) | 0 | 0 | |||||||||
| Redeemable Convertible Preferred Stock: | |||||||||||
| Series A Preferred Stock, $0.001 stated value; authorized 3,052,127 shares; after recapitalization there are no preferred shares issued or outstanding at June 30, 2021 and December 31, 2020 | 0 | 0 | |||||||||
| Stockholders’ Equity (Deficit): | |||||||||||
| Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,670,060 and 58,621,042 shares issued and outstanding at June 30, 2021 and December 31, 2020 | 11 | 6 | |||||||||
| Additional paid-in capital | 281,976 | 20,779 | |||||||||
| Accumulated deficit | (56,264) | (34,037) | |||||||||
| Accumulated other comprehensive income (loss) | (60) | 15 | |||||||||
| Treasury stock, $0.001 par value; after recapitalization there are no treasury shares issued or outstanding at June 30, 2021 and December 31, 2020 | 0 | 0 | |||||||||
| Total Stockholders’ Equity (Deficit) | 225,663 | (13,237) | |||||||||
| Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | $ | 348,127 | $ | 28,198 | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Retail vehicle sales | $ | 44,230 | $ | 23,652 | $ | 94,613 | $ | 44,694 | |||||||||||||||
| Wholesale vehicle sales | 4,660 | 1,725 | 9,228 | 5,036 | |||||||||||||||||||
| Finance and insurance, net | 1,780 | 895 | 3,334 | 1,787 | |||||||||||||||||||
| Lease income, net | 98 | 127 | 205 | 272 | |||||||||||||||||||
| Total Revenues | 50,768 | 26,399 | 107,380 | 51,789 | |||||||||||||||||||
| Cost of sales (exclusive of depreciation) | 46,586 | 23,670 | 101,190 | 46,588 | |||||||||||||||||||
| Gross Profit | 4,182 | 2,729 | 6,190 | 5,201 | |||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 19,386 | 3,073 | 38,259 | 6,989 | |||||||||||||||||||
| Stock-based compensation expense | 3,704 | 3 | 45,667 | 37 | |||||||||||||||||||
| Depreciation and amortization expense | 95 | 91 | 478 | 191 | |||||||||||||||||||
| Management fee expense – related party | 0 | 70 | 2 | 132 | |||||||||||||||||||
| Total Operating Expenses | 23,185 | 3,237 | 84,406 | 7,349�� | |||||||||||||||||||
| Loss from Operations | (19,003) | (508) | (78,216) | (2,148) | |||||||||||||||||||
| Interest expense | 184 | 107 | 359 | 256 | |||||||||||||||||||
| Other Income, net | |||||||||||||||||||||||
| Change in fair value of Merger warrants liability | 325 | 0 | 12,683 | 0 | |||||||||||||||||||
| Change in fair value of redeemable convertible preferred stock tranche obligation | 0 | 345 | 0 | 629 | |||||||||||||||||||
| Change in fair value of earnout provision | 12,210 | 0 | 44,056 | 0 | |||||||||||||||||||
| Other income (expense) | (553) | 61 | (391) | 64 | |||||||||||||||||||
| Total Other Income, net | 11,982 | 406 | 56,348 | 693 | |||||||||||||||||||
| Loss Before Income Tax Expense | (7,205) | (209) | (22,227) | (1,711) | |||||||||||||||||||
| Income tax expense | 0 | 4 | 0 | 9 | |||||||||||||||||||
| Net Loss | $ | (7,205) | $ | (213) | $ | (22,227) | $ | (1,720) | |||||||||||||||
| Net Loss per Share, basic and diluted | $ | (0.06) | $ | 0.00 | $ | (0.21) | $ | (0.03) | |||||||||||||||
| Weighted-average Shares used in Computing Net Loss per Share, basic and diluted | 113,670,060 | 58,621,041 | 107,279,227 | 58,621,041 | |||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net loss | $ | (7,205) | $ | (213) | $ | (22,227) | $ | (1,720) | |||||||||||||||
| Other Comprehensive Income (Loss), net of tax: | |||||||||||||||||||||||
| Unrealized gains (losses) on marketable securities arising during the period | 61 | 10 | (70) | 17 | |||||||||||||||||||
| Tax effect | 0 | (4) | 0 | (4) | |||||||||||||||||||
| Unrealized gains (losses) on marketable securities arising during the period, net of tax | 61 | 6 | (70) | 13 | |||||||||||||||||||
| Reclassification adjustment for realized losses | (5) | 0 | (5) | (3) | |||||||||||||||||||
| Tax effect | 0 | 1 | 0 | 1 | |||||||||||||||||||
| Reclassification adjustment for realized losses, net of tax | (5) | 1 | (5) | (2) | |||||||||||||||||||
| Other Comprehensive Income (Loss), net of tax | 56 | 7 | (75) | 11 | |||||||||||||||||||
| Total Comprehensive Income (Loss) | $ | (7,149) | $ | (206) | $ | (22,302) | $ | (1,709) | |||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2020 | 2,034,751 | $ | 17,560 | 37,881,435 | $ | 4 | $ | 3,221 | $ | (34,037) | $ | 15 | $ | (30,797) | ||||||||||||||||||||||||||||||||||||
| Retroactive application of recapitalization | (2,034,751) | (17,560) | 20,739,607 | 2 | 17,558 | 0 | 0 | 17,560 | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted balance, beginning of period | 0 | 0 | 58,621,042 | 6 | 20,779 | (34,037) | 15 | (13,237) | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (15,022) | — | (15,022) | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | (131) | (131) | ||||||||||||||||||||||||||||||||||||||||||
| Accrued dividends on redeemable convertible preferred stock | — | — | — | — | (19) | — | — | (19) | ||||||||||||||||||||||||||||||||||||||||||
| PIPE issuance | — | — | 12,500,000 | 1 | 124,999 | — | — | 125,000 | ||||||||||||||||||||||||||||||||||||||||||
| Merger financing | — | — | 38,194,390 | 4 | 309,995 | — | — | 309,999 | ||||||||||||||||||||||||||||||||||||||||||
| Consideration to existing shareholders of Former CarLotz, net of accrued dividends | — | — | — | — | (62,693) | — | — | (62,693) | ||||||||||||||||||||||||||||||||||||||||||
| Transaction costs and advisory fees | — | — | — | — | (47,579) | — | — | (47,579) | ||||||||||||||||||||||||||||||||||||||||||
| Settlement of redeemable convertible preferred stock tranche obligation | — | — | — | — | 2,832 | — | — | 2,832 | ||||||||||||||||||||||||||||||||||||||||||
| Cashless exercise of options | — | — | 54,717 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Cash consideration paid to Former Carlotz optionholders | — | — | — | — | (2,465) | — | — | (2,465) | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 41,963 | — | — | 41,963 | ||||||||||||||||||||||||||||||||||||||||||
| Earnout liability | — | — | — | — | (74,284) | — | — | (74,284) | ||||||||||||||||||||||||||||||||||||||||||
| Merger warrants liability | — | — | — | — | (39,025) | — | — | (39,025) | ||||||||||||||||||||||||||||||||||||||||||
| KAR/AFC note payable conversion | — | — | 3,546,984 | — | 3,625 | — | — | 3,625 | ||||||||||||||||||||||||||||||||||||||||||
| KAR/AFC warrant exercise | — | — | 752,927 | — | 144 | — | — | 144 | ||||||||||||||||||||||||||||||||||||||||||
| Balance March 31, 2021 | 0 | $ | 0 | 113,670,060 | $ | 11 | $ | 278,272 | $ | (49,059) | $ | (116) | $ | 229,108 | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (7,205) | — | (7,205) | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 56 | 56 | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 3,704 | — | — | 3,704 | ||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2021 | 0 | $ | 0 | 113,670,060 | $ | 11 | $ | 281,976 | $ | (56,264) | $ | (60) | $ | 225,663 | ||||||||||||||||||||||||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance January 1, 2020 | 2,034,751 | $ | 17,560 | 37,881,435 | $ | 4 | $ | 5,060 | $ | (27,485) | $ | — | $ | (22,421) | ||||||||||||||||||||||||||||||||||||
| Retroactive application of recapitalization | (2,034,751) | (17,560) | 20,739,607 | 2 | 17,558 | 0 | — | 17,560 | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted balance, beginning of period | 0 | 0 | 58,621,042 | 6 | 22,618 | (27,485) | — | (4,861) | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (1,507) | — | (1,507) | ||||||||||||||||||||||||||||||||||||||||||
| Redeemable convertible preferred stock issuance | — | — | — | — | — | — | 4 | 4 | ||||||||||||||||||||||||||||||||||||||||||
| Accrued dividends on redeemable convertible preferred stock | — | — | — | — | (456) | — | — | (456) | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 34 | — | — | 34 | ||||||||||||||||||||||||||||||||||||||||||
| Balance March 31, 2020 | 0 | $ | 0 | 58,621,042 | $ | 6 | $ | 22,196 | $ | (28,992) | $ | 4 | $ | (6,786) | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (213) | — | (213) | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 7 | 7 | ||||||||||||||||||||||||||||||||||||||||||
| Accrued dividends on redeemable convertible preferred stock | — | — | — | — | (466) | — | — | (466) | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 3 | — | — | 3 | ||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2020 | 0 | $ | 0 | 58,621,042 | $ | 6 | $ | 21,733 | $ | (29,205) | $ | 11 | $ | (7,455) | ||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Cash Flow from Operating Activities | |||||||||||
| Net loss | $ | (22,227) | $ | (1,720) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
| Depreciation – property and equipment | 448 | 101 | |||||||||
| Amortization and accretion - marketable securities | 788 | 0 | |||||||||
| Depreciation – lease vehicles | 30 | 90 | |||||||||
| Loss on marketable securities | 0 | (3) | |||||||||
| Provision for doubtful accounts | 0 | 6 | |||||||||
| Stock-based compensation expense | 45,667 | 37 | |||||||||
| Change in fair value of Merger warrants liability | (12,683) | 0 | |||||||||
| Change in fair value of historic warrants liability | 0 | (31) | |||||||||
| Change in fair value of earnout shares | (44,056) | 0 | |||||||||
| Change in fair value of debt issuance costs and stock warrant | 0 | 12 | |||||||||
| Change in fair value of redeemable convertible preferred stock tranche obligation | 0 | (629) | |||||||||
| Change in Operating Assets and Liabilities: | |||||||||||
| Accounts receivable | (1,279) | (336) | |||||||||
| Inventories | (36,117) | 5,064 | |||||||||
| Other current assets | (5,466) | (39) | |||||||||
| Other assets | (4,091) | 5 | |||||||||
| Accounts payable | 2,499 | 719 | |||||||||
| Accrued expenses | 6,187 | 1,048 | |||||||||
| Accrued expenses – related party | (229) | 13 | |||||||||
| Other current liabilities | 447 | 117 | |||||||||
| Other liabilities | (582) | 248 | |||||||||
| Net Cash (Used in)/Provided by Operating Activities | (70,664) | 4,702 | |||||||||
| Cash Flows from Investing Activities | |||||||||||
| Purchase of property and equipment | (3,548) | (14) | |||||||||
| Capitalized website and internal-use software costs | (6,601) | 0 | |||||||||
| Purchase of marketable securities | (307,560) | (711) | |||||||||
| Proceeds from sales of marketable securities | 128,954 | 21 | |||||||||
| Purchase of lease vehicles | (344) | (87) | |||||||||
| Net Cash Used in Investing Activities | (189,099) | (791) | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| Payments made on long-term debt | (18) | (5) | |||||||||
| Advance from holder of marketable securities | 4,722 | 0 | |||||||||
| PIPE issuance | 125,000 | 0 | |||||||||
| Merger financing | 309,999 | 0 | |||||||||
| Payment made on accrued dividends | (4,853) | 0 | |||||||||
| Payments to existing shareholders of Former CarLotz | (62,693) | 0 | |||||||||
| Transaction costs and advisory fees | (47,579) | 0 | |||||||||
| Payments made on cash considerations associated with stock options | (2,465) | 0 | |||||||||
| Repayment of Paycheck Protection Program loan | (1,749) | 0 | |||||||||
| Payments made on note payable | (3,000) | 0 | |||||||||
| Borrowings on long-term debt | 0 | 2,249 | |||||||||
| Payments on floor plan notes payable | (29,056) | (13,394) | |||||||||
| Borrowings on floor plan notes payable | 52,444 | 8,598 | |||||||||
| Net Cash Provided by/( Used in) Financing Activities | 340,752 | (2,552) | |||||||||
| Net Change in Cash and Cash Equivalents Including Restricted Cash | 80,989 | 1,359 | |||||||||
| Cash and cash equivalents and restricted cash, beginning | 2,813 | 4,102 | |||||||||
| Cash and cash equivalents and restricted cash, ending | $ | 83,802 | $ | 5,461 | |||||||
| Supplemental Disclosure of Cash Flow Information | |||||||||||
| Cash paid for interest | $ | 490 | $ | 307 | |||||||
| Supplementary Schedule of Non-cash Investing and Financing Activities: | |||||||||||
| Transfer from lease vehicles to inventory | $ | 150 | $ | 199 | |||||||
| Redeemable convertible preferred stock distributions accrued | 0 | 923 | |||||||||
| Issuance of common stock warrants | 0 | 15 | |||||||||
| KAR/AFC exercise of stock warrants | (144) | 0 | |||||||||
| KAR/AFC conversion of notes payable | (3,625) | 0 | |||||||||
| Convertible redeemable preferred stock tranche obligation expiration | (2,832) | 0 | |||||||||
| Capitalized website and internal use software costs accrued | (3,488) | 0 | |||||||||
| Purchases of property under capital lease obligation | (6,504) | 0 | |||||||||
ACAMAR PARTNERS ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Operating costs | $ | 253,693 | $ | 271,121 | $ | 1,189,698 | $ | 390,221 | ||||||||
| Loss from operations | (253,693 | ) | (271,121 | ) | (1,189,698 | ) | (390,221 | ) | ||||||||
| Other income: | ||||||||||||||||
| Interest earned on marketable securities held in Trust Account | 491,146 | 1,808,625 | 1,677,132 | 2,460,117 | ||||||||||||
| Income before provision for income taxes | 237,453 | 1,537,504 | 487,434 | 2,069,896 | ||||||||||||
| Provision for income taxes | (92,641 | ) | (369,677 | ) | (331,386 | ) | (495,904 | ) | ||||||||
| Net income | $ | 144,812 | $ | 1,167,827 | $ | 156,048 | $ | 1,573,992 | ||||||||
| Weighted average shares outstanding of Class A redeemable common stock | 30,557,322 | 30,501,590 | 30,557,322 | 30,364,057 | ||||||||||||
| Basic and diluted net income per share, Class A | $ | 0.01 | $ | 0.05 | $ | 0.04 | $ | 0.06 | ||||||||
| Weighted average shares outstanding of Class B non-redeemable common stock (1) | 7,639,330 | 7,625,397 | 7,639,330 | 7,591,014 | ||||||||||||
| Basic and diluted net loss per share, Class B | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.14 | ) | $ | (0.04 | ) | ||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
ACAMAR PARTNERS ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
THREE AND SIX MONTHS ENDED JUNE 30, 2020
Class A | Class B | Additional Paid-in | Retained | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||
| Balance – January 1, 2020 | 982,511 | $ | 98 | 7,639,330 | $ | 764 | $ | 1,523,695 | $ | 3,475,452 | $ | 5,000,009 | ||||||||||||||||
| Change in value of common stock subject to possible redemption | (1,124 | ) | — | — | — | (11,240 | ) | — | (11,240 | ) | ||||||||||||||||||
| Net income | — | — | — | — | — | 11,236 | 11,236 | |||||||||||||||||||||
| Balance – March 31, 2020 | 981,387 | 98 | 7,639,330 | 764 | 1,512,455 | 3,486,688 | 5,000,005 | |||||||||||||||||||||
| Change in value of common stock subject to possible redemption | (14,481 | ) | (1 | ) | — | — | (144,809 | ) | — | (144,810 | ) | |||||||||||||||||
| Net income | — | — | — | — | — | 144,812 | 144,812 | |||||||||||||||||||||
| Balance – June 30, 2020 | 966,906 | $ | 97 | 7,639,330 | $ | 764 | $ | 1,367,646 | $ | 3,631,500 | $ | 5,000,007 | ||||||||||||||||
THREE AND SIX MONTHS ENDED JUNE 30, 2019
| Common Stock Class A | Class B | Additional Paid-in | (Accumulated Deficit) Retained | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||
| Balance – January 1, 2019 | — | $ | — | 8,625,000 | $ | 863 | $ | 24,137 | $ | (2,750 | ) | $ | 22,250 | |||||||||||||||
| Sale of 30,000,000 Units, net of underwriting discount and offering costs | 30,000,000 | 3,000 | — | — | 282,866,510 | — | 282,869,510 | |||||||||||||||||||||
| Sale of 6,000,000 Private Placement Warrants | — | — | — | — | 9,000,000 | — | 9,000,000 | |||||||||||||||||||||
| Common stock subject to possible redemption | (28,729,792 | ) | (2,873 | ) | — | — | (287,295,047 | ) | — | (287,297,920 | ) | |||||||||||||||||
| Net income | — | — | — | — | — | 406,165 | 406,165 | |||||||||||||||||||||
| Balance – March 31, 2019 | 1,270,208 | 127 | 8,625,000 | 863 | 4,595,600 | 403,415 | 5,000,005 | |||||||||||||||||||||
| Sale of 557,322 Units, net of underwriting discount and offering costs | 557,322 | 56 | — | — | 5,266,636 | — | 5,266,692 | |||||||||||||||||||||
| Sale of 74,310 Private Placement Warrants | — | — | — | — | 111,465 | — | 111,465 | |||||||||||||||||||||
| Forfeiture of Class B common stock by Sponsor | — | — | (985,670 | ) | (99 | ) | 99 | — | — | |||||||||||||||||||
| Change in value of common stock subject to possible redemption | (654,598 | ) | (66 | ) | — | — | (6,545,914 | ) | — | (6,545,980 | ) | |||||||||||||||||
| Net income | — | — | — | — | — | 1,167,827 | 1,167,827 | |||||||||||||||||||||
| Balance – June 30, 2019 | 1,172,932 | $ | 117 | 7,639,330 | $ | 764 | $ | 3,427,886 | $ | 1,571,242 | $ | 5,000,009 | ||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
ACAMAR PARTNERS ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | 156,048 | $ | 1,573,992 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Interest earned on marketable securities held in Trust Account | (1,677,132 | ) | (2,460,117 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid income taxes | 120,579 | — | ||||||
| Prepaid expenses | 34,125 | (126,049 | ) | |||||
| Accrued expenses | (150,038 | ) | (155,958 | ) | ||||
| Income taxes payable | 100,807 | 102,576 | ||||||
| Net cash used in operating activities | (1,415,611 | ) | (1,065,556 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Investment of cash into Trust Account | — | (305,573,220 | ) | |||||
| Cash withdrawn from Trust Account for franchise and income taxes | 405,574 | 629,822 | ||||||
| Net cash provided by (used in) investing activities | 405,574 | (304,943,398 | ) | |||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from sale of Units, net of underwriting discounts paid | — | 299,461,755 | ||||||
| Proceeds from sale of Private Placement Warrants | — | 9,111,465 | ||||||
| Repayment of advances from related party | — | (77,389 | ) | |||||
| Proceeds from promissory note – related party | — | 79,500 | ||||||
| Repayment of promissory note – related party | — | (400,000 | ) | |||||
| Payment of offering costs | — | (222,351 | ) | |||||
| Net cash provided by financing activities | — | 307,952,980 | ||||||
| Net Change in Cash | (1,010,037 | ) | 1,944,026 | |||||
| Cash – Beginning of period | 1,600,833 | 12,000 | ||||||
| Cash – End of period | $ | 590,796 | $ | 1,956,026 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for income taxes | $ | 110,000 | $ | 621,953 | ||||
| Non-cash investing and financing activities: | ||||||||
| Initial classification of common stock subject to possible redemption | $ | — | $ | 292,267,800 | ||||
| Change in value of common stock subject to possible redemption | $ | 156,050 | $ | 1,576,100 | ||||
| Deferred underwriting fee payable | $ | — | $ | 10,695,063 | ||||
| Payment of offering costs through promissory note and advances | $ | — | $ | 114,135 | ||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Acamar Partners Acquisition Corp. (the “Company”) was incorporated in Delaware on November 7, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
Although the Company is not limitedMerger referred to a particular industry or sector for purposes of consummating a Business Combination, the Company intendsbelow;
As of June 30, 2020, the Company had not commenced any operations. All activity through June 30, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s Initial Public Offering was declared effective on February 21, 2019. On February 26, 2019, the Company consummated the Initial Public Offering of 30,000,000 units (“Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $300,000,000, which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,000,000 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrants in a private placement“Acamar Sponsor” are to Acamar Partners Sponsor I LLC, a Delaware limited liability company (the “Sponsor”LLC; and
FollowingMerger Sub merged with and into Former CarLotz, with Former CarLotz surviving as the closingsurviving company and as a wholly owned subsidiary of the Initial Public Offering on February 26, 2019,Company.
On April 9, 2019,Company and Former CarLotz following the Merger on January 21, 2021, (iii) the assets and liabilities of Former CarLotz at their historical cost and (iv) the Company’s equity structure for all periods presented. The recapitalization of the number of shares of common stock attributable to the purchase of Former CarLotz in connection with the underwriters’ electionMerger is reflected retroactively to partially exercise their optionthe earliest period presented and will be utilized for calculating earnings per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Merger transaction consistent with the treatment of the transaction as a reverse recapitalization of Former CarLotz.
Offering costs amounted to $17,437,018, consisting of $6,111,465 of underwriting fees, $10,695,063 of deferred underwriting fees and $630,490 of other offering costs. As of June 30, 2020, cash of $590,796 was held outside of the Trust Account (as defined below) and is available for working capital purposes.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete a Business Combination with one or more target businesses that together have a fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earnedMerger, based on the Trust Account) at the time of the agreement to enter intoCompany’s business activities, it was a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register“shell company” as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company will provide its holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transactions is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor, officers and directors (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to an aggregate of 10% or more of the Public Shares, without the prior consent of the Company.
The Initial Stockholders have agreed (a) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) that would modify the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
The Company will have until February 26, 2021 to complete a Business Combination (the “Combination Period”). However, if the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders or any of their respective affiliates acquire Public Shares after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, except as to any claims by a third party that executed a waiver of any and all rights to funds held in the Trust Account (whether or not such waiver is enforceable) and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern
In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern,” the Company has until February 26, 2021 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 26, 2021.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unauditedinterim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles generally accepted in(U.S. GAAP) and applicable rules and regulations of the United States of AmericaU.S. Securities and Exchange Commission (“GAAP”SEC”) forregarding interim financial reporting. Certain information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Certain information or footnotenote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to thesuch rules and regulations of the SEC forregulations. Therefore, these interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensedconsolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes of Former CarLotz as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 (audited consolidated financial statements) filed as Exhibit 99.1 to the Company’s AnnualCurrent Report on Form 10-K for the year ended December 31, 2019 as8-K/A filed with the SEC on March 27, 2020, which contains the audited financial statements and notes thereto.15, 2021. The financial informationcondensed consolidated balance sheet as of December 31, 2019 is2020, included herein, was derived from the audited consolidated financial statements presented inof Former CarLotz as of that date filed as Exhibit 99.1 to the Company’s AnnualCurrent Report on Form 10-K8-K/A filed with the SEC on March 15, 2021.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a)
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison ofdetailed discussion about the Company’s significant accounting policies and for further information on accounting updates adopted in the prior year, see Note 2 to the audited consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of usingstatements.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Use of Estimates
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Companythis standard did not have a material impact on the consolidated financial statements or related disclosures because the Company does not currently have any cash equivalentsindirect interests through related parties under common control for which it receives decision making fees.
Common Stock Subject16, 2020, by and among the Company, Merger Sub and Former CarLotz.
the terms of the Merger Agreement, a business combination between the Company and Former CarLotz was effected through the merger of Merger Sub with and into Former CarLotz with Former CarLotz surviving as the surviving company.
| Recapitalization | |||||
| Cash - Acamar Partners’ trust and cash | $ | 309,999 | |||
| Cash - PIPE | 125,000 | ||||
| Less: consideration delivered to existing shareholders of Former CarLotz | (62,693) | ||||
| Less: consideration to pay accrued dividends | (4,853) | ||||
| Less: transaction costs and advisory fees paid | (47,579) | ||||
| Less: payments on cash considerations associated with stock options | (2,465) | ||||
| Net contributions from Merger and PIPE financing | 317,409 | ||||
| Liabilities relieved: preferred stock obligation | 2,832 | ||||
| Liabilities relieved: KAR/AFC note payable | 3,625 | ||||
| Liabilities relieved: historic warrant liability | 144 | ||||
| Less: earnout shares liability | (74,285) | ||||
| Less: Merger warrants liability | (39,024) | ||||
| June 30, 2021 | |||||
| Stock warrants outstanding - Public | 10,185,774 | ||||
| Stock warrants outstanding - Private | 6,074,310 | ||||
| Stock warrants cancelled | — | ||||
| Stock warrants exercised | — | ||||
| Stock warrants outstanding | 16,260,084 | ||||
| Six Months Ended June 30, 2021 | |||||||||||||||||
| Vehicle Sales | Fleet Management | Total | |||||||||||||||
| Retail vehicle sales | $ | 94,613 | $ | — | $ | 94,613 | |||||||||||
| Wholesale vehicle sales | 9,228 | — | 9,228 | ||||||||||||||
| Finance and insurance, net | 3,334 | — | 3,334 | ||||||||||||||
| Lease income, net | — | 205 | 205 | ||||||||||||||
| Total Revenues | $ | 107,175 | $ | 205 | $ | 107,380 | |||||||||||
| Six Months Ended June 30, 2020 | |||||||||||||||||
| Vehicle Sales | Fleet Management | Total | |||||||||||||||
| Retail vehicle sales | $ | 44,694 | $ | — | $ | 44,694 | |||||||||||
| Wholesale vehicle sales | 5,036 | — | 5,036 | ||||||||||||||
| Finance and insurance, net | 1,787 | — | 1,787 | ||||||||||||||
| Lease income, net | — | 272 | 272 | ||||||||||||||
| Total Revenues | $ | 51,517 | $ | 272 | $ | 51,789 | |||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Retail vehicles: | |||||||||||||||||||||||
| Retail vehicle sales | $ | 44,230 | $ | 23,652 | $ | 94,613 | $ | 44,694 | |||||||||||||||
| Retail vehicle cost of sales | 41,641 | 21,991 | 90,558 | 41,546 | |||||||||||||||||||
| Gross Profit – Retail Vehicles | $ | 2,589 | $ | 1,661 | $ | 4,055 | $ | 3,148 | |||||||||||||||
| Wholesale vehicles: | |||||||||||||||||||||||
| Wholesale vehicle sales | $ | 4,660 | $ | 1,725 | $ | 9,228 | $ | 5,036 | |||||||||||||||
| Wholesale vehicle cost of sales | 4,945 | 1,679 | 10,632 | 5,042 | |||||||||||||||||||
| Gross Profit – Wholesale Vehicles | $ | (285) | $ | 46 | $ | (1,404) | $ | (6) | |||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||
Amortized Cost/ Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| U.S. Treasuries | $ | 180 | $ | 3 | $ | 0 | $ | 183 | |||||||||||||||
| Corporate bonds | 50,546 | 6 | (57) | 50,495 | |||||||||||||||||||
| Municipal bonds | 56,323 | 7 | (15) | 56,315 | |||||||||||||||||||
| Commercial paper | 69,469 | 0 | 0 | 69,469 | |||||||||||||||||||
| Foreign governments | 1,927 | 0 | (4) | 1,923 | |||||||||||||||||||
| Total Fixed Maturity Debt Securities | $ | 178,445 | $ | 16 | $ | (76) | $ | 178,385 | |||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||
Amortized Cost/ Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| U.S. Treasuries | $ | 240 | $ | 6 | $ | 0 | $ | 246 | |||||||||||||||
| Corporate bonds | 261 | 5 | (1) | 265 | |||||||||||||||||||
| U.S. states, territories and political subdivisions | 141 | 5 | 0 | 146 | |||||||||||||||||||
| Total Fixed Maturity Debt Securities | $ | 642 | $ | 16 | $ | (1) | $ | 657 | |||||||||||||||
Offering Costs
Offering costs consistfixed maturity debt securities as of legal, accounting, underwriting feesJune 30, 2021 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Amortized Cost | Fair Value | ||||||||||
| Due in one year or less | $ | 173,660 | $ | 173,603 | |||||||
| Due after one year through five years | 4,537 | 4,531 | |||||||||
| Due after five years through ten years | 248 | 251 | |||||||||
| Total | $ | 178,445 | $ | 178,385 | |||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
| Corporate bonds | $ | 49,253 | $ | (56) | $ | 59 | $ | (1) | $ | 49,312 | $ | (57) | |||||||||||||||||||||||
| Municipal bonds | 33,813 | (15) | 0 | 0 | 33,813 | (15) | |||||||||||||||||||||||||||||
| Foreign governments | 1,922 | (4) | 0 | 0 | 1,922 | (4) | |||||||||||||||||||||||||||||
| Total Fixed Maturity Debt Securities | $ | 84,988 | $ | (75) | $ | 59 | $ | (1) | $ | 85,047 | $ | (76) | |||||||||||||||||||||||
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable incomeCondensed Consolidated Financial Statements
| December 31, 2020 | |||||||||||||||||||||||||||||||||||
| Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
| Corporate bonds | $ | 39 | $ | (1) | $ | 0 | $ | 0 | $ | 39 | $ | (1) | |||||||||||||||||||||||
| Total Fixed Maturity Debt Securities | $ | 39 | $ | (1) | $ | 0 | $ | 0 | $ | 39 | $ | (1) | |||||||||||||||||||||||
| June 30, 2021 | |||||||||||
| Cost | Fair Value | ||||||||||
| Equity securities | $ | 432 | $ | 520 | |||||||
| December 31, 2020 | |||||||||||
| Cost | Fair Value | ||||||||||
| Equity securities | $ | 335 | $ | 375 | |||||||
The Company’s currently taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three and six months ended June 30, 2021 and 2020 consisted of the following:
| June 30, 2021 | |||||||||||||||||||||||
| Proceeds | Gross Realized Gains | Gross Realized Losses | Net Realized Gain | ||||||||||||||||||||
| Fixed maturity debt securities | $ | 128,954 | $ | 7 | $ | (2) | $ | 5 | |||||||||||||||
| Equity securities | 0 | 0 | 0 | 0 | |||||||||||||||||||
| Total Marketable Securities | $ | 128,954 | $ | 7 | $ | (2) | $ | 5 | |||||||||||||||
| June 30, 2020 | |||||||||||||||||||||||
| Proceeds | Gross Realized Gains | Gross Realized Losses | Net Realized Gain | ||||||||||||||||||||
| Fixed maturity debt securities | $ | 15 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||
| Equity securities | 6 | 3 | 0 | 3 | |||||||||||||||||||
| Total Marketable Securities | $ | 21 | $ | 3 | $ | 0 | $ | 3 | |||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 26 | $ | 0 | $ | 0 | $ | 26 | |||||||||||||||
| Equity securities | 520 | 0 | 0 | 520 | |||||||||||||||||||
| Fixed maturity debt securities, including cash equivalents | 0 | 205,043 | 0 | 205,043 | |||||||||||||||||||
| Total Assets | $ | 546 | $ | 205,043 | $ | 0 | $ | 205,589 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Merger warrants liability | 16,501 | 9,840 | 0 | 26,341 | |||||||||||||||||||
| Earnout shares | 0 | 0 | 30,228 | 30,228 | |||||||||||||||||||
| Total Liabilities | $ | 16,501 | $ | 9,840 | $ | 30,228 | $ | 56,569 | |||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 405 | $ | 0 | $ | 0 | $ | 405 | |||||||||||||||
| Equity securities | 375 | 0 | 0 | 375 | |||||||||||||||||||
| Fixed maturity debt securities | 246 | 411 | 0 | 657 | |||||||||||||||||||
| Total Assets | $ | 1,026 | $ | 411 | $ | 0 | $ | 1,437 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Redeemable convertible preferred stock tranche obligation | $ | 0 | $ | 0 | $ | 2,832 | $ | 2,832 | |||||||||||||||
| Historic warrants liability | 0 | 0 | 144 | 144 | |||||||||||||||||||
| Total Liabilities | $ | 0 | $ | 0 | $ | 2,976 | $ | 2,976 | |||||||||||||||
| January 1, 2021 | Issuances | Settlements | Change in fair value | June 30, 2021 | |||||||||||||||||||||||||
| Redeemable convertible preferred stock tranche obligation | $ | 2,832 | $ | 0 | $ | (2,832) | $ | 0 | $ | 0 | |||||||||||||||||||
| Historic warrants liability | 144 | 0 | (144) | 0 | 0 | ||||||||||||||||||||||||
| Earnout shares | 0 | 74,284 | 0 | (44,056) | 30,228 | ||||||||||||||||||||||||
| Total | $ | 2,976 | $ | 74,284 | $ | (2,976) | $ | (44,056) | $ | 30,228 | |||||||||||||||||||
| January 1, 2020 | Issuances | Settlements | Change in fair value | June 30, 2020 | |||||||||||||||||||||||||
| Redeemable convertible preferred stock tranche obligation | $ | 3,755 | $ | 0 | $ | 0 | $ | (284) | $ | 3,471 | |||||||||||||||||||
| Historic warrants liability | 115 | 0 | 0 | (13) | 102 | ||||||||||||||||||||||||
| Total | $ | 3,870 | $ | 0 | $ | 0 | $ | (297) | $ | 3,573 | |||||||||||||||||||
| June 30, 2021 | January 21, 2021 | ||||||||||
| Expected volatility | 85.00 | % | 80.00 | % | |||||||
| Starting stock price | $5.46 | $11.31 | |||||||||
| Expected term (in years) | 4.6 years | 5 years | |||||||||
| Risk-free interest rate | 0.79 | % | 0.45 | % | |||||||
| Earnout hurdle | $12.50-$15.00 | $12.50-$15.00 | |||||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Contracts in transit | $ | 4,939 | $ | 3,321 | |||||||
| Trade | 295 | 240 | |||||||||
| Finance commission | 244 | 132 | |||||||||
| Other | 0 | 506 | |||||||||
| Total | 5,478 | 4,199 | |||||||||
| Allowance for doubtful accounts | (67) | (67) | |||||||||
| Total Accounts Receivable, net | $ | 5,411 | $ | 4,132 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Used vehicles | $ | 47,454 | $ | 11,202 | |||||||
| Parts | 15 | 0 | |||||||||
| Total | $ | 47,469 | $ | 11,202 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Capital lease assets | $ | 7,809 | $ | 1,305 | |||||||
| Leasehold improvements | 1,361 | 702 | |||||||||
| Furniture, fixtures and equipment | 3,649 | 760 | |||||||||
| Corporate vehicles | 143 | 143 | |||||||||
| Total property and equipment | 12,962 | 2,910 | |||||||||
| Less: accumulated depreciation | (1,300) | (1,042) | |||||||||
| Property and Equipment, net | $ | 11,662 | $ | 1,868 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Other Current Assets: | |||||||||||
| Lease receivable, net | $ | 23 | $ | 36 | |||||||
| Deferred acquisition costs | 45 | 72 | |||||||||
| Prepaid expenses | 4,957 | 679 | |||||||||
| Interest receivable | 1,228 | 0 | |||||||||
| Deferred transaction costs | 0 | 5,892 | |||||||||
| Total Other Current Assets | $ | 6,253 | $ | 6,679 | |||||||
| Other Assets: | |||||||||||
| Lease receivable, net | $ | 16 | $ | 16 | |||||||
| Deferred acquisition costs | 64 | 48 | |||||||||
| Security deposits | 4,310 | 235 | |||||||||
| Total Other Assets | $ | 4,390 | $ | 299 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Capital lease obligation | 7,791 | 1,305 | |||||||||
| Promissory note | 0 | 2,990 | |||||||||
| Convertible notes payable, net | 0 | 3,325 | |||||||||
| Paycheck Protection Program loan | 0 | 1,749 | |||||||||
| 7,791 | 9,369 | ||||||||||
| Current portion of long-term debt | (212) | (6,370) | |||||||||
| Long-term Debt | $ | 7,579 | $ | 2,999 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| License and title fees | $ | 797 | $ | 785 | |||||||
| Payroll and bonuses | 2,200 | 837 | |||||||||
| Deferred rent | 535 | 199 | |||||||||
| Technology | 5,007 | 0 | |||||||||
| Other | 4,699 | 1,742 | |||||||||
| Total Accrued Expenses | $ | 13,238 | $ | 3,563 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Other Liabilities, Current | |||||||||||
| Unearned insurance premiums | $ | 703 | $ | 256 | |||||||
| Other payables - marketable securities | 4,722 | 0 | |||||||||
| Other Liabilities, Current | $ | 5,425 | $ | 256 | |||||||
| Other Liabilities | |||||||||||
| Unearned insurance premiums | 1,106 | 1,680 | |||||||||
| Other long-term liabilities | 126 | 135 | |||||||||
| Historic warrants liability | — | 144 | |||||||||
| Other Liabilities, Long-term | $ | 1,232 | $ | 1,959 | |||||||
| Total Per Year | Total Capital Leases | ||||||||||
| 2021 (remaining) | $ | 1,719 | $ | 269 | |||||||
| 2022 | 4,298 | 1,037 | |||||||||
| 2023 | 4,161 | 1,048 | |||||||||
| 2024 | 3,184 | 1,058 | |||||||||
| 2025 | 2,976 | 1,069 | |||||||||
| Thereafter | 9,168 | 10,643 | |||||||||
| Total | $ | 25,506 | $ | 15,124 | |||||||
| Less: amount representing interest | (7,333) | ||||||||||
| Present value of minimum lease payments | 7,791 | ||||||||||
| Less: current obligation | (212) | ||||||||||
| Long-term obligations under capital lease | $ | 7,579 | |||||||||
Payments Due to Third-Parties | Future Receipts | ||||||||||
| 2021 (remaining) | $ | 964 | $ | 1,164 | |||||||
| 2022 | 1,713 | 2,048 | |||||||||
| 2023 | 1,089 | 1,286 | |||||||||
| 2024 | 664 | 779 | |||||||||
| 2025 | 293 | 340 | |||||||||
| Total | $ | 4,723 | $ | 5,617 | |||||||
| Number of Stock Options | Weighted Average Exercise Price | ||||||||||
| Balance (December 31, 2020) | 1,571,205 | $0.59 | |||||||||
| Granted | 0 | 0 | |||||||||
| Exercised | (56,059) | 0.24 | |||||||||
| Forfeited | 0 | 0 | |||||||||
| Balance (June 30, 2021) | 1,515,146 | 0.58 | |||||||||
| Vested (as of June 30, 2021) | 1,515,146 | $0.58 | |||||||||
| Number of Stock Options | Weighted Average Exercise Price | ||||||||||
| Balance (December 31, 2019) | 1,571,205 | $0.59 | |||||||||
| Granted | 0 | 0 | |||||||||
| Forfeited | 0 | 0 | |||||||||
| Balance (June 30, 2020) | 1,571,205 | 0.59 | |||||||||
| Vested (as of June 30, 2020) | 1,482,528 | $0.59 | |||||||||
Number of Stock Options | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||||||||
| Outstanding | 1,515,146 | 1.17 years | $0.58 | ||||||||||||||
| Exercisable | 1,515,146 | 1.17 years | $0.58 | ||||||||||||||
| Number of Units | Weighted Averaged Exercise Price | ||||||||||
| Balance (December 31, 2020) | 3,961,658 | $ | 0.92 | ||||||||
| Granted | 0 | 0 | |||||||||
| Forfeited | 0 | 0 | |||||||||
| Balance (June 30, 2021) | 3,961,658 | $ | 0.92 | ||||||||
| Vested (as of June 30, 2021) | 3,538,672 | $ | 0.92 | ||||||||
| Number of Units | Weighted Averaged Exercise Price | ||||||||||
| Balance (December 31, 2019) | 2,845,557 | $ | 0.96 | ||||||||
| Granted | 509,635 | 0.96 | |||||||||
| Forfeited | 0 | 0 | |||||||||
| Balance (June 30, 2020) | 3,355,192 | $ | 0.96 | ||||||||
Number of Stock Options | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||||||||
| Outstanding | 3,961,658 | 8.06 years | $0.92 | ||||||||||||||
| Exercisable | 3,538,672 | 7.93 years | $0.92 | ||||||||||||||
| Balance (Expected volatility) | 80.00 | % | |||
| Expected dividend yield | 0 | % | |||
| Expected term (in years) | 3.6 - 4.8 years | ||||
| Risk-free interest rate | 0.32% - 0.45% | ||||
| Balance (Number of Units | Weighted Averaged Exercise Price | ||||||||||
| Balance (December 31, 2020) | 0 | $ | 0 | ||||||||
| Granted | 1,426,514 | 11.34 | |||||||||
| Forfeited | 0 | 0 | |||||||||
| Balance (June 30, 2021) | 1,426,514 | $ | 11.34 | ||||||||
| Exercisable | 0 | $ | 0 | ||||||||
| Balance (Expected volatility) | 80.00 | % | |||
| Expected dividend yield | 0 | % | |||
| Expected term (in years) | 6.25 years | ||||
| Risk-free interest rate | 0.62% - 0.79% | ||||
| Balance (Number of Units | Weighted Average Grant Date Fair Value | ||||||||||
| Balance (December 31, 2020) | 0 | $ | 0 | ||||||||
| Granted | 616,224 | 5.97 | |||||||||
| Vested | 0 | 0 | |||||||||
| Forfeited | (1,044) | 0 | |||||||||
| Balance (June 30, 2021) | 615,180 | $ | 5.97 | ||||||||
| Number of Units | Weighted Average grant date fair value | ||||||||||
| Balance (December 31, 2020) | 0 | $ | 0 | ||||||||
| Granted | 640,421 | 10.70 | |||||||||
| Forfeited | 0 | 0 | |||||||||
| Balance (June 30, 2021) | 640,421 | $ | 10.70 | ||||||||
| Expected volatility | 80.00 | % | |||
| Starting stock price | $ | 11.31 | |||
| Expected term (in years) | 5 years | ||||
| Risk-free interest rate | 0.45 | % | |||
| Earnout hurdle | $12.50-$15.00 | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net Loss | $ | (7,205) | $ | (213) | $ | (22,227) | $ | (1,720) | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares outstanding, basic and diluted | 113,670,060 | 58,621,041 | 107,279,227 | 58,621,041 | |||||||||||||||||||
| Net Loss per Share Attributable to Common Stockholders, basic and diluted | $ | (0.06) | $ | 0.00 | $ | (0.21) | $ | (0.03) | |||||||||||||||
| 2021 | 2020 | ||||||||||
| Public warrants | 10,185,774 | 0 | |||||||||
| Private warrants | 6,074,310 | 0 | |||||||||
| Earnout RSUs | 640,421 | 0 | |||||||||
| Earnout shares | 6,945,732 | 0 | |||||||||
| Convertible notes payable | 0 | 3,452,002 | |||||||||
| Historic warrants | 0 | 776,143 | |||||||||
| Stock options outstanding to purchase shares of common stock | 6,903,318 | 4,926,397 | |||||||||
| Unvested RSUs | 615,180 | 0 | |||||||||
| Total | 31,364,735 | 9,154,542 | |||||||||
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 16,260,084 shares of Class A common stock in the calculation of diluted income (loss) per share, since the exercisecurrent strength of the warrants are contingent uponwholesale market for vehicles. The corporate vehicle sourcing partner that paused its consignments represented 32% of the occurrence of future events andvehicles the inclusion of such warrants would be anti-dilutive under the treasury stock method.
The Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account of $491,146 and $1,808,625Company sold for the three months ended June 30, 20202021 and 2019, respectively (net48% of applicable franchise and income taxes of $142,641 and $419,677 for the three months ended June 30, 2020 and 2019, respectively) byvehicles the weighted average number of shares of Class A redeemable common stock outstanding for the periods. Net income per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account of $1,677,132 and $2,460,117Company sold for the six months ended June 30, 2020 and 2019, respectively (net of applicable franchise and income taxes of $431,536 and $596,436 for2021. The Company primarily replaced the six monthssupply by sourcing vehicles at auction as well as some increased supply from other vehicle sourcing partners.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in acondensed consolidated financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2020 and December 31, 2019,statements, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair value of financial instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recently issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 30,557,322 Units at a purchase price of $10.00 per Unit, inclusive of 557,322 Units sold to the underwriters on April 9, 2019 upon the underwriters’ election to partially exercise their option to purchase additional Units. Each Unit consists of one share of Class A common stock and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 4. RELATED PARTY TRANSACTIONS
Founder Shares
On November 15, 2018, the Sponsor purchased 8,625,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. The Founder Shares will automatically convert into Class A common stock upon consummation of a Business Combination on a one-for-one basis, subject to certain adjustments, as described in Note 6.
The Founder Shares included an aggregate of up to 1,125,000 shares subject to forfeiture to the extent that the underwriters’ option to purchase additional Units was not exercised in full or in part, so that the Initial Stockholders would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering). On April 9, 2019, as a result of the underwriters’ election to partially exercise their option to purchase additional Units, 985,670 Founder Shares were forfeited and 139,330 Founder Shares are no longer subject to forfeiture, resulting in an aggregate of 7,639,330 Founder Shares issued and outstanding.
The Initial Stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private Placement
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,000,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $9,000,000. On April 9, 2019, in connection with the underwriters’ election to partially exercise their option to purchase additional Units, the Company sold an additional 74,310 Private Placement Warrants to the Sponsor, at a price of $1.50 per Private Placement Warrant, generating gross proceeds of $111,465. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
Advance from Related Party
The Sponsor advanced the Company an aggregate of $77,389 to cover expenses related to the Initial Public Offering. The advances were non-interest bearing and due on demand. The advances were repaid on February 27, 2019.
Promissory Note – Related Party
On November 19, 2018, the Sponsor agreed to loan the Company an aggregate of up to $400,000 to cover expenses related to the Initial Public Offering (the “Promissory Note”). The Promissory Note was non-interest bearing and payable on the earlier of June 30, 2019 or the completion of the Initial Public Offering. The borrowings outstanding under the Promissory Note of $400,000 were repaid on February 27, 2019.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Related Party Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Units sold in the Initial Public Offering except that the warrants underlying such units would be identical to the Private Placement Warrants. As of June 30, 2020 and December 31, 2019, the Company had no outstanding balance under the Working Capital Loans.
Administrative Support Agreement
The Company entered into an agreement whereby, commencing on the February 21, 2019 through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company agreed to pay an affiliate of the Sponsor a total of $37,000 per month for office space, administrative support and salaries to be paid to employees of such affiliate for due diligence and related services in connection with the Company’s search for a target company (although no salaries or fees will be paid from the monthly fee to members of the Company’s management team). For each of the three months June 30, 2020 and 2019, the Company incurred $111,000 in fees for these services. For the six months ended June 30, 2020 and 2019, the Company incurred $222,000 and $148,000 in fees for these services, respectively. At June 30, 2020 and December 31, 2019, $32,000 and $0, respectively, are included in accrued expenses in the accompanying condensed balance sheets.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
Pursuant to a registration rights agreement entered into on February 21, 2019, the holders of the Founder Shares, Private Placement Warrants and securities that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of working capital loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Underwriting Agreement
In connection with the closing of the Initial Public Offering and the option to purchase additional Units, the underwriters were paid a cash underwriting discount of $0.20 per Unit, or $6,111,465 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $10,695,063 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Of such amount, up to approximately $0.10 per Unit, or up to $3,055,732, may be paid to third parties not participating in the Initial Public Offering (but who are members of FINRA) that assist the Company in consummating a Business Combination. The election to make such payments to third parties will be solely at the discretion of the Company, and such third parties will be selected by the Company in its sole discretion.
NOTE 6. STOCKHOLDERS' EQUITY
Preferred Stock — The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.
Class A Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At June 30, 2020 and December 31, 2019, there were 966,906 and 982,511 of Class A common stock issued or outstanding, excluding 29,590,416 and 29,574,811 shares of Class A common stock subject to possible redemption, respectively.
Class B Common Stock — The Company is authorized to issue 15,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At June 30, 2020 and December 31, 2019, there were 7,639,330 shares of Class B common stock issued and outstanding.
Holders of Class B common stock will have the right to elect all of the Company’s directors prior to a Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement securities issued upon conversion of loans made to the Company. Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, the Company will use its reasonable best efforts to file with the SEC, and within 60 business days following a Business Combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its reasonable best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.
In addition, if the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “newly issued price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price.
Redemptions of Warrants for Cash — Once the warrants become exercisable, the Company may redeem the Public Warrants:
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants for Shares of Class A Common Stock — Commencing ninety days after the warrants become exercisable, the Company may redeem the outstanding warrants (including both Public Warrants and Private Placement Warrants):
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
If the Company calls the Public Warrants for redemption for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable for cash so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 7. FAIR VALUE MEASUREMENTS
The Company classifies its U. S. Treasury and equivalent securities as held-to-maturity in accordance with ASC 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts.
At June 30, 2020 and December 31, 2019, assets held in the Trust Account were comprised of $267,507 and $152,096 in cash and cash equivalents and $310,844,426 and $309,688,279, respectively, in U.S. Treasury Bills, which are held at amortized cost. Through June 30, 2020, the Company withdrew $1,669,976 of interest earned on the Trust Account to pay for its franchise and income tax obligations, of which $405,574 was withdrawn during the six months ended June 30, 2020.
The gross holding losses and fair value of held-to-maturity securities at June 30, 2020 and December 31, 2019 are as follows:
| Held-To-Maturity | Amortized Cost | Gross Holding Gain | Fair Value | |||||||||||
| June 30, 2020 | U.S. Treasury Securities (Matures on 9/10/2020) | $ | 310,844,426 | $ | 7,122 | $ | 310,851,548 | |||||||
| December 31, 2019 | U.S. Treasury Securities (Matured on 2/6/2020) | $ | 309,688,279 | $ | 2,018 | $ | 309,690,297 | |||||||
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 8. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred afterfor potential recognition or disclosure through August 9, 2021, the balance sheet date up to the date that the financial statements were available to be issued. Based upon this review,
used vehicles with the ability to easily access the retail sales channel request for payment. Upon any event of default (including, without limitation, our obligation to pay upon demand any outstanding liabilities of the Ally Facility), the Lender may, at its option and without notice to us, exercise its right to demand immediate payment of all liabilities and other indebtedness and amounts owed to the Lender and its affiliates by us and our affiliates. property and equipment and lease vehicles of $0.1 million and $0.1 million, respectively. $129.0 million. $(0.1) million. needs. As of June 30, ITEMMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSReferences in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Acamar Partners Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor” refer to Acamar Partners Sponsor I LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Special Note Regarding Forward-Looking StatementsThis Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations” regardingOperationsCompany’sunaudited condensed consolidated financial position, business strategystatements and notes thereto contained herein and the consolidated financial statements and notes thereto for the year ended December 31, 2020 contained in our Current Report on Form 8-K/A filed with the SEC on March 15, 2021. Unless the context otherwise requires, references to “we”, “us”, “our” and the “Company” are intended to mean the business and operations of CarLotz, Inc. and its consolidated subsidiaries.objectivesprospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of our management forteam. Although we believe our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. Words such as “expect,These statements may be preceded by, followed by or include the words “believes,” “believe,“estimates,” “anticipate,“expects,” “intend,“projects,” “estimate,“forecasts,” “seek”“may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Such statements, including statements regarding our ability to: execute our geographic expansion policy; manage our business through the COVID-19 pandemic; achieve our expected revenue growth and variationseffectively manage growth; achieve and similar wordsmaintain profitability in the future; innovate and expressionsexpand our technological leadership; invest in additional reconditioning capacity; further penetrate existing accounts and key vehicle channels; add new corporate vehicle sourcing partners; increase our service offerings and price optimization; effectively promote our brand and increase brand awareness; expand our product offerings and introduce additional products and services; enhance future operating and financial results; acquire and protect intellectual property; attract, train and retain key personnel, including sales and customer service personnel; acquire and integrate other companies and technologies; remediate material weakness in internal control over financial reporting; comply with laws and regulations applicable to our business; and successfully defend litigation are intended to identify such forward-looking statements. Such forward-looking statements relate to future events ornot guarantees of future performance but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or resultsand are subject to differ materially from the events, performancerisks and results discussed in the forward-looking statements. For information identifying important factorsuncertainties that could cause actual results or other outcomes to differ materially from those anticipatedexpressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the forward-looking statements, please refer to the Risk Factors section of the Company’sentitled “Risk Factors” in this Quarterly Report on Form 10-Q and Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 20192020, filed on March 15, 2021, and those described from time to time in our future reports filed with the U.S. SecuritiesSEC. Many of these risk factors are outside of our control, and Exchange Commission (the “SEC”).as such, they involve risks which are not currently known that could cause actual results to differ materially from those discussed or implied herein. The Company’s securities filings can be accessed on the EDGAR sectionforward-looking statements in this document are made as of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligationdate on which they are made and we do not undertake to update or revise anyour forward-looking statements whether asstatements.resultleading consignment-to-retail used vehicle marketplace that provides our corporate vehicle sourcing partners and retail sellers of new information, future events or otherwise.Overviewblank check company formed under the laws of the State of Delaware on November 7, 2018 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more target businesses. We intendhassle-free selling experience that allows them to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering andstay fully informed by tracking the sale of the Private Placement Warrants,process through our capital stock, debteasy to navigate online portal. We offer our retail customers a hassle-free vehicle buying experience. Buyers can browse our inventory online through our website or a combination of cash, stock and debt.The issuance of additional shares ofat our stock in a Business Combination:·may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock;·may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;·could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;·may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and·may adversely affect prevailing market prices for our Class A common stock and/or warrants.Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:·default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;·acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;·our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;·our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;·our inability to pay dividends on our common stock;·using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;·limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;·increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and·limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.Results of OperationsWe have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to June 30, 2020 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),locations as well as select from our fully integrated financing and insurance products with ease.due diligence expensesresale. Our hubs are more than just locations to buy, sell and repair vehicles and are crucial to the information and data-analytics that we make available to our corporate vehicle sourcing partners and retail customers.connection with completingthe consignment, reconditioning and sales process. For our retail buyers, we have developed a fully digital, end-to-end e-commerce platform that includes every step in the vehicle selection, financing and check-out process. To supplement these systems, we have developed custom-built data analytics tools that provide real time information to our corporate vehicle sourcing partners, retail sellers, retail buyers and ourselves. For our retail buyers, we offer a fully digital and hassle-free process that offers our full range of services, as we continue to expand our technological solutions. Our strategy is to roll out a fully integrated mobile application while continuing to expand our digital car buying platform.Combination.ForUpdateThree Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Retail vehicles sold 2,009 1,376 4,563 2,829 Number of hubs 15 8 15 8 Average monthly unique visitors 177,377 52,236 178,080 57,346 Vehicles available for sale 1,431 819 1,431 819 Retail gross profit per unit $ 2,175 $ 1,858 $ 1,619 $ 1,744 Percentage of unit sales via consignment 60 % 60 % 72 % 55 % $144,812,Salesconsistedis: the lesser of 15 years or the underlying lease terms for leasehold improvements, one to five years for equipment, furniture and fixtures, and five years for corporate vehicles. Expenditures for maintenance, repairs and minor renewals are charged to expense as incurred. Major remodels and improvements are capitalized. Depreciation on vehicles leased to B2B customers is calculated using the straight-line over the estimated useful life.heldfloor plan interest incurred on borrowings to finance the acquisition of used vehicle inventory under the Company’s former $12 million revolving floor plan facility with Automotive Finance Corporation and floor plan interest incurred on borrowings to finance the acquisition of used vehicle inventory under the Company’s current $40 million revolving floor plan facility with Ally.Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 ($ in thousands) Revenues: Retail vehicle sales $ 44,230 $ 23,652 $ 94,613 $ 44,694 Wholesale vehicle sales 4,660 1,725 9,228 5,036 Finance and insurance, net 1,780 895 3,334 1,787 Lease income, net 98 127 205 272 Total Revenues 50,768 26,399 107,380 51,789 Cost of sales (exclusive of depreciation) 46,586 23,670 101,190 46,588 Gross Profit 4,182 2,729 6,190 5,201 Selling, general and administrative 19,386 3,073 38,259 6,989 Stock based compensation expense 3,704 3 45,667 37 Depreciation expense 95 91 478 191 Management fee expense – related party — 70 2 132 Total Operating Expenses 23,185 3,237 84,406 7,349 Loss from Operations (19,003) (508) (78,216) (2,148) Interest expense 184 107 359 256 Other Income (Expense), net Change in fair value of Merger warrants liability 325 — 12,683 — Change in fair value of redeemable convertible preferred stock tranche obligation — 345 — 629 Change in fair value of earnout provision 12,210 — 44,056 — Other (expense) income (553) 61 (391) 64 Total Other Income (Expense), net 11,982 406 56,348 693 Loss Before Income Tax Expense (7,205) (209) (22,227) (1,711) Income tax expense — 4 — 9 Net Loss $ (7,205) $ (213) $ (22,227) $ (1,720) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 Change 2021 2020 Change ($ in thousands, except per unit metrics) ($ in thousands, except per unit metrics) Revenue: Retail vehicle sales $ 44,230 $ 23,652 87.0 % $ 94,613 $ 44,694 111.7 % Wholesale vehicle sales 4,660 1,725 170.1 % 9,228 5,036 83.2 % Finance and insurance, net 1,780 895 98.9 % 3,334 1,787 86.6 % Lease income, net 98 127 (22.8) % 205 272 (24.6) % Total revenues 50,768 26,399 92.3 % 107,380 51,789 107.3 % Cost of sales: Retail vehicle cost of sales $ 41,641 $ 21,991 89.4 % $ 90,558 $ 41,546 118.0 % Wholesale vehicle cost of sales 4,945 1,679 194.5 % 10,632 5,042 110.9 % Total cost of sales $ 46,586 $ 23,670 96.8 % $ 101,190 $ 46,588 117.2 % Gross profit: Retail vehicle gross profit $ 2,589 $ 1,661 55.9 % $ 4,055 $ 3,148 28.8 % Wholesale vehicle gross profit (285) 46 719.6 % (1,404) (6) (23,300.0) % Finance and insurance gross profit 1,780 895 98.9 % 3,334 1,787 86.6 % Lease income, net 98 127 (22.8) % 205 272 (24.6) % Total gross profit $ 4,182 $ 2,729 53.2 % $ 6,190 $ 5,201 19.0 % Retail vehicles gross profit 2,589 1,661 55.9 % 4,055 3,148 28.8 % Finance and insurance gross profit 1,780 895 98.9 % 3,334 1,787 86.6 % Total retail vehicles and finance and insurance gross profit 4,369 2,556 70.9 % 7,389 4,935 49.7 % Retail vehicles unit sales 2,009 1,376 46.0 % 4,563 2,829 61.3 % Retail vehicles gross profit per unit $ 2,175 $ 1,858 17.1 % $ 1,619 $ 1,744 (7.2) % Trust Accountperiod.$491,146,$4,757, to $21,393 during the three months ended June 30, 2021. The average sale price has increased consistent with macroeconomic trends in the used car industry and as a result of selling a higher percentage of higher priced vehicles. Same-hub unit sales were up 41%, with the balance of the increase in unit sales coming from hubs we have opened in 2021.Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 ($ in thousands) ($ in thousands) $ 5,907 $ 1,409 $ 12,763 $ 3,527 Marketing 3,906 399 6,432 940 Technology 2,453 118 5,378 276 7,120 1,147 13,686 2,246 Total selling, general and administrative expenses $ 19,386 $ 3,073 $ 38,259 $ 6,989 costscosts. Our hubs$253,693our business over the next couple years. In such a case, we would need to revise our expansion strategy or engage in equity or debt financings to secure additional funds in order to fund our continued expansion or we would need to slow or postpone the expansion to preserve cash. We may also require additional funds to the extent our plans change, if we elect to acquire complementary businesses or due to unforeseen circumstances. However, additional funds may not be available when we need them on terms that are acceptable to us, or at all.provisionUtah chartered state bank (“Ally Bank”), and Ally Financial, Inc., a Delaware corporation (“Ally” and, together with Ally Bank, the “Lender”), pursuant to which the Lender may provide up to $30 million in financing, or such lesser sum which may be advanced to or on behalf of us from time to time, as part of our floorplan vehicle financing program. In June, the Company expanded the floor plan credit facility by $10 million to a total of $40 million. As of June 30, 2021, we had $29.4 million principal outstanding under the Ally Facility, primarily from increased sourcing through vehicle purchases.income taxeseach vehicle financed under the Ally Facility as and when such vehicle is sold, leased, consigned, gifted, exchanged, transferred, or otherwise disposed of. Interest under the Ally Facility is due and payable upon demand, but, in general, in no event later than 60 days from the date of $92,641.Six Months Ended June 30, 2021 2020 ($ in thousands) Cash Flow Data: Net cash provided by (used in) operating activities $ (70,664) $ 4,702 Net cash provided by (used in) investing activities (189,099) (791) Net cash provided by (used in) financing activities 340,752 (2,552) we had net incomecash provided by operating activities was $4.7 million, primarily driven by net changes in our operating assets and liabilities of $156,048, which consisted of interest income on marketable securities held in the Trust Account of $1,677,132,$6.8 million, partially offset by a net loss of $(1.7) million and non-cash charges with a $(0.4) million impact on operating costscash flows. The changes in operating assets and liabilities were primarily driven by a decrease in inventories of $1,189,698$5.1 million, an increase of accounts payable $0.7 million and a provision for income taxesan increase in accrued expenses of $331,386.For the three months ended June 30, 2019, we had net income of $1,167,827, which consisted of interest income on marketable securities held in the Trust Account of $1,808,625,$1.0 million, partially offset by operating costsan increase in accounts receivable of $271,121$(0.3) million. The non-cash adjustments primarily relate to an increase in fair value of the preferred stock tranche obligation of $(0.6) million offset by depreciation and a provision for income taxesamortization expense of $369,677.2019, we had2021, net incomecash used in investing activities was $(188.9) million, primarily driven by purchases of $1,573,992, which consisted of interest income on marketable securities held inof $(307.6) million, the Trust Accountpurchase of $2,460,117,property and equipment of $(3.7) million and capitalized software costs of $(6.6) million, partially offset by operating costsproceeds from sales and maturities of $390,221 and a provision for income taxesmarketable securities of $495,904.Liquidity and Capital ResourcesUntil the consummation of the Initial Public Offering, the Company’s only source of liquidity was an initial purchase of Class B common stock by the Sponsor and an advance and loans from our Sponsor.On February 26, 2019, we consummated the Initial Public Offering of 30,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $300,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,000,000 Private Placement Warrants to the Sponsor at a price of $1.50 per unit, generating gross proceeds of $9,000,000.On April 9, 2019, in connection with the underwriters’ election to partially exercise of their option to purchase additional Units, we consummated the sale of an additional 557,322 Units and the sale of an additional 74,310 Private Placement Warrants, generating total gross proceeds of $5,684,685.Following the Initial Public Offering, including the exercise of the option to purchase additional Units and the sale of the Private Placement Warrants, a total of $305,573,220 was placed in the Trust Account. We incurred $17,437,018 in transaction costs, including $6,111,465 of underwriting fees, $10,695,063 of deferred underwriting fees and $630,490 of other costs, inclusive of $111,465 in cash underwriting fees and $195,063 of additional deferred underwriting fees incurred upon the underwriters’ election to partially exercise their option to purchase additional Units on April 9, 2019.operatinginvesting activities of $(0.8) million was $1,415,611, resulting primarily from net incomedriven by purchases of $156,048 and interest earned on marketable securities held inof $(0.7) million and the Trust Accountpurchase of $1,677,132. Changes in operating assets and liabilities provided $105,473lease vehicles of cash from operating activities.2019,2021, net cash used in operatingprovided by financing activities was $1,065,556, resulting$340.8 million, primarily driven by the issuance of common stock to the PIPE investors and Former CarLotz shareholders of $435.0 million, an advance from net incomethe holder of $1,573,992 and interest earned on marketable securities held inof $4.7 million, and borrowings on the Trust Accountfloor plan facility of $2,460,117. Changes in operating assets$52.4 million, partially offset by the payments made to existing shareholders of Former CarLotz as part of the Merger of $(62.7) million, transaction costs and liabilities used $179,431advisory fees of $(47.6) million, payments on floor plan notes payable of $(29.1) million, payments made on accrued dividends of $(4.9) million, repayment of debt of $(4.7) million and the payment of cash from operating activities.Asconsideration on options of June 30, 2020, we had cash and marketable securities held in the Trust Account of $311,111,933. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through June 30, 2020, we withdrew approximately $1,670,000 of interest earned on the Trust Account to pay for our franchise and income tax obligations, of which approximately $406,000 was withdrawn during$(2.5) million.2020. We intend to use substantially all2020, net cash used in financing activities was $(2.6) million, primarily driven by repayment of the funds held in the Trust Account, including any amounts representing interest earnedfloor plan note payable of $(13.4) million, partially offset by borrowings on the Trust Account (which interest shall be netfloor plan facility of taxes payable$8.6 million and less deferred underwriting commissions) to completelong-term debt borrowings of $2.2 million.Business Combination. To the extent that ourliquidity and capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.2020, we had $590,796 of cash held outside of2021 our contractual obligations were as follows:Payments Due by Period Total Less than 1 Year 1 – 3 Years 3 – 5 Years More than 5 years ($ in thousands) $ 29,427 $ 29,427 $ — $ — $ — Operating lease obligations 25,506 1,719 8,459 6,160 9,168 Total $ 54,933 $ 31,146 $ 8,459 $ 6,160 $ 9,168 Trust Account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination, and to pay taxes to the extent the interest earned on the Trust Account is not sufficient to pay our taxes. A portion of these funds will also be used to pay our obligations pursuant to the administrative services agreement described below.In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $2,000,000 of such loans may be convertible into units identical to the Placement Units, at a price of $10.00 per unit at the option of the lender.We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actualprincipal amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.Going ConcernWe have until February 26, 2021 to consummate a Business Combination. It is uncertain that we will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after February 26, 2021.Off-Balance Sheet Financing ArrangementsWe have no obligations, assets or liabilities, which would be considered off-balance sheet arrangementsoutstanding as of June 30, 2020. 2021. Due to the uncertainty of forecasting the timing of expected variable interest rate payments, interest payment amounts are not included in the table. Borrowings under the floor plan facility are payable when the underlying vehicle is sold, which is expected to be less than one year.doare not participate in transactions that create relationships with unconsolidated entitiesa party to any off-balance sheet arrangements, including guarantee contracts, retained or financial partnerships, often referred to ascontingent interests, certain derivative instruments and variable interest entities which wouldthat either have, been established for the purpose of facilitating off-balance sheet arrangements. Weor are reasonably likely to have, not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debta current or commitments of other entities, or purchased any non-financial assets.Contractual ObligationsWe do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $37,000 for office space, administrative support and salaries to be paid to employees of such affiliate for due diligence and related services in connection with the Company’s search for a target company (although no salaries or fees will be paid from the monthly fee to members of the Company’s management team). We began incurring these fees on February 21, 2019 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and the Company’s liquidation.The underwriters are entitled to a deferred fee of $0.35 per Unit, or $10,695,063 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement. Of such amount, up to approximately $0.10 per Unit, or up to $3,055,732, may be paid to third parties not participating in Initial Public Offering (but who are members of FINRA) that assist us in consummating a Business Combination. The election to make such payments to third parties will be solely at our discretion, and such third parties will be selected by us in its sole discretion.Critical Accounting PoliciesThe preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.Recent Accounting StandardsManagement does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have afuture material effect on our condensedconsolidated financial statements.
Quantitative and Qualitative Disclosures about Market RiskITEMQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK2020, we were not2021, cash and cash equivalents consisted of bank deposits, money market placements and debt securities that have a remaining maturity of three months or less at the date of purchase. any market or interest rate risk. Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amountsTo date, fluctuations in the Trust Account,interest income have not been significant. Our surplus cash has been invested in money market fund accounts, interest-bearing savings accounts and U.S. government treasury bills, notesdebt securities as well as corporate debt securities from time to time. We have not entered into investments for trading or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in US treasuries.speculative purposes. Due to the short-termconservative nature of theseour investment portfolio, which is predicated on capital preservation of investments with short-term maturities, we do not believe there willan immediate one percentage point change in interest rates would have a material effect on the fair market value of our portfolio, and therefore, we do not expect our operating results or cash flows to be no associated materialsignificantly affected by changes in market interest rates.risk.of 1% applicable to our outstanding indebtedness would have an immaterial financial impact. As of June 30, 2021, we had total outstanding debt of $29.4 million under the floor plan facility.
Controls and Procedures not effective as of June 30, 2021 due to the existence of a material weakness in internal control over financial reporting that was identified in connection with the audits of our consolidated financial statements as of December 31, 2019 and 2018 and for the years in the three year period ended December 31, 2019, and which is still being remediated.ITEMCONTROLS AND PROCEDURESourCompany reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.Evaluation of Disclosure Controls and Procedures2020.2021. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e)13a-15(e) and 15d-15 (e)15d-15(e) under the Exchange Act) were effective.During the most recently completed fiscal quarter,has beenwere no changechanges in our internal control over financial reporting that hasoccurred during the six months ended June 30, 2021 that have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.
ITEMLEGAL PROCEEDINGS.None.
ITEMRISK FACTORS.As ofRisk Factorsdate of this Quarterly Report, except asother information set forth below, there have been no material changes toin this report, readers should carefully consider the additional risk factors disclosedincluded below as well as the factors discussed in Part I, “Item 1A. Risk Factors” in our final prospectusAnnual Report on Form 10-K for the year ended December 31, 2020, which could materially affect our Initial Public Offering filed withbusiness, financial condition or future results. The risks described in our most recent Annual Report on Form 10-K are not the SEC on February 22, 2019. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.only risks we face. Additional risk factorsrisks and uncertainties not presentlycurrently known to us or that we currently deem to be immaterial also may also impairmaterially adversely affect our business, financial condition or resultsoperating results. The impact of operations. WeCOVID-19 may disclose changes to such risk factors or disclose additional risk factors from time to timeimplicate and exacerbate other risks discussed in Part I, “Item 1A. Risk Factors” in our future filings withAnnual Report on Form 10-K for the SEC.The securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholdersfiscal year ended December 31, 2020, including but not limited to risks relating to general economic conditions. This situation continues to evolve and additional impacts may be less than $10.00 per share.The proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the eventarise that we are unablenot currently aware of. Due to complete our initial business combination or make certain amendments to our Amended and Restated Certificate of Incorporation, our public stockholders are entitled to receive their pro-rata sharethe unprecedented nature of the proceeds held in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by public stockholders.Our search for a business combination,COVID-19 pandemic and any target business with whichresponses thereto, we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak.In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout other partscannot identify all of the world, includingrisks we face from the United States. On January 30, 2020,pandemic and its aftermath.World Health Organization declared the outbreakrisks of ownership of a vehicle. While purchasing a vehicle can provide an opportunity for us to retain higher profits than when selling on behalf of a vehicle consignor, it also exposes us to all of the coronavirus disease (COVID-19)risks of vehicle ownership. For purchased vehicles, we are not able to enter into any risk sharing arrangement with a “Public Health Emergencyvehicle consignor or to share any of International Concern.” On January 31, 2020, U.S. Healththe cost of preparing the vehicle for sale, whether directly or through fees deducted from the sale proceeds that we deliver to a vehicle consignor. Purchasing vehicles increases the amount of our assets represented by inventory at a given time, which may constrain the amount of inventory we can hold at a given time. In general, competitively sourced vehicles are obtained at a higher purchase price than non-competitively sourced vehicles, increasing the chance of selling at a loss and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” COVID-19 has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide. The business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore,lower retail unit sales, especially during periods when we may be unableforced to completebe less selective in our purchases to maintain a business combination if continued concerns relatingsufficient level and variety of inventory. Sourcing vehicles via competitive purchase in general is likely to COVID-19 restrict travel, limitresult in lower gross profit and GPU as compared to sourcing vehicles non-competitively as we are likely to pay a higher price for the abilitysame vehicle, which also results in increased interest expense due to have meetings with potential investors or the target company’s personnel, vendorshigher borrowings under our floorplan facility.services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.None.ITEM 3. DEFAULTS UPON SENIOR SECURITIES.None.ITEM 4. MINE SAFETY DISCLOSURES.Not applicable.None.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| Description | ||||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 10.1 | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1* | ||||||||
| 32.2* | ||||||||
| 101.INS* | XBRL Instance Document | |||||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | XBRL Taxonomy Extension | |||||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
authorized.authorized on August 9, 2021.ACAMAR PARTNERS ACQUISITION CORP.CarLotz, Inc. Date: August 14, 2020By: /s/ Luis Ignacio Solorzano AizpuruTHOMAS W. STOLTZName:Luis Ignacio Solorzano AizpuruThomas W. StoltzTitle:Chief Executive Officer and Director(Principal Executive Officer)Date: August 14, 2020/s/ Joseba Asier Picaza UcarName:Joseba Asier Picaza UcarTitle:Chief Financial Officer and Secretary(Duly Authorized Officer and Principal Financial and Accounting Officer)