shcr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-Q

_____________________________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 001-39535

SHARECARE, INC.

(Exact name of registrant as specified in its charter)


Delaware						85-1365053
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

255 East Paces Ferry Road NE, Suite 700 Atlanta, Georgia						30305
(Address of Principal Executive Offices)						(Zip Code)

(404) 671-4000

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	SHCR	The Nasdaq Stock Market LLC
Warrants, each warrant exercisable for one share of common stock, each at an exercise price of $11.50 per share	SHCRW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of May 9, 2022, there were 350,270,350 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

Table of Contents

Sharecare, Inc.

Table of Contents


		Page
Part I. Financial Information
Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (unaudited)	1
	Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2022 and 2021 (unaudited)	2
	Consolidated Statements of Redeemable Noncontrolling Interest, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 and 2021 (unaudited)	3
	Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32

Part II. Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
Signatures		35

Table of Contents

Part I - Financial Information

ITEM 1. FINANCIAL STATEMENTS

SHARECARE, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)


	As of March 31, 2022		As of December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	253,306	$	271,105
Accounts receivable, net (net of allowance for doubtful accounts of $6,740 and $6,212, respectively)	95,252		103,256
Other receivables	2,866		5,327
Prepaid expenses	11,659		8,819
Other current assets	2,579		2,459
Total current assets	365,662		390,966
Property and equipment, net	4,404		4,534
Other long-term assets	19,963		12,173
Intangible assets, net	157,160		155,086
Goodwill	192,041		192,442
Total assets	$	739,230	$	755,201
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	27,320	$	27,155
Accrued expenses and other current liabilities (Note 4)	54,699		51,653
Deferred revenue	12,503		11,655
Contract liabilities, current	3,061		4,597
Debt, current (Note 8)	584		—
Total current liabilities	98,167		95,060
Contract liabilities, noncurrent	1,099		1,745
Warrant liabilities	5,229		10,820
Long-term debt (Note 8)	—		419
Other long-term liabilities	13,725		24,116
Total liabilities	118,220		132,160
Commitments and contingencies (Note 11)
Series A redeemable convertible preferred stock, $0.0001 par value; 5,000,000 shares authorized; 5,000,000 shares issued and outstanding, aggregate liquidation preference of $50,000 as of March 31, 2022 and December 31, 2021	58,205		58,205
Stockholders’ equity:
Common stock $0.0001 par value; 600,000,000 and 600,000,000 shares authorized; 349,082,480 and 345,788,707 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	35		35
Additional paid-in capital	1,078,201		1,042,164
Accumulated other comprehensive loss	(2,130)		(2,061)
Accumulated deficit	(515,314)		(477,113)
Total Sharecare stockholders’ equity	560,792		563,025
Noncontrolling interest in subsidiaries	2,013		1,811
Total stockholders’ equity	562,805		564,836
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$	739,230	$	755,201

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

SHARECARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2022		2021
Revenue	$	100,710	$	90,202
Costs and operating expenses:
Costs of revenue (exclusive of depreciation and amortization below)	51,492		44,394
Sales and marketing	14,511		11,510
Product and technology	19,420		20,454
General and administrative	55,998		19,554
Depreciation and amortization	9,878		6,683
Total costs and operating expenses	151,299		102,595
Loss from operations	(50,589)		(12,393)
Other income (expense):
Interest income	29		8
Interest expense	(492)		(7,010)
Other income (expense)	12,845		(11,878)
Total other income (expense)	12,382		(18,880)
Loss before income tax expense	(38,207)		(31,273)
Income tax expense	(92)		(85)
Net loss	(38,299)		(31,358)
Net loss attributable to noncontrolling interest in subsidiaries	(98)		(106)
Net loss attributable to Sharecare, Inc.	$	(38,201)	$	(31,252)

Net loss per share attributable to common stockholders, basic and diluted (1)	$	(0.11)	$	(0.14)
Weighted-average common shares outstanding, basic and diluted (1)	344,891,335		223,191,871

Net loss	$	(38,299)	$	(31,358)
Other comprehensive loss adjustments:
Foreign currency translation	231		(960)
Comprehensive loss	(38,068)		(32,318)
Comprehensive income (loss) attributable to noncontrolling interest in subsidiaries	202		(257)
Comprehensive loss attributable to Sharecare, Inc.	$	(38,270)	$	(32,061)

(1) Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

SHARECARE, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(In thousands, except share amounts)


	Redeemable Noncontrolling Interest	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Noncontrolling Interest		Total Stockholders’ Equity (Deficit)
		Shares	Amount		Shares	Amount
Balance at December 31. 2021	—	5,000,000	$	58,205	345,788,707	$	35	$	1,042,164	$	(2,061)	$	(477,113)	$	1,811	$	564,836
Stock options exercised	—	—	—		2,414,986	—		2,337								2,337
Common stock issued upon vesting of restricted stock units	—	—	—		73,617	—		—		—		—		—		—
Issuance of warrants in connection with debt and revenue arrangements	—	—	—		–	—		19		—		—		—		19
Issuance of stock for WhitehatAI earnout	—	—	—		132,587	—		—		—		—		—		—
Issuance of stock for Doc.ai escrow shares	—	—	—		677,680	—		—		—		—		—		—
Share-based compensation	—	—	—		–	—		33,681		—		—		—		33,681
Net income (loss) attributable to noncontrolling interest in subsidiaries	—	—	—		–	—		—		—		—		(98)		(98)
Currency translation adjustment	—	—	—		–	—		—		(69)		—		300		231
Net income (loss) attributable to Sharecare, Inc.	—	—	—		–	—		—		—		(38,201)		—		(38,201)
Other	—	—	—		(5,097)	—		—		—		—		—		—
Balance at March 31. 2022	—	5,000,000	$	58,205	349,082,480	$	35	$	1,078,201	$	(2,130)

SEC Form 10-Q filed by Sharecare Inc.