shcr-20240630

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 June 30, 2024


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	x
Non-accelerated filer	o	Smaller reporting company	o
		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 August 5, 2024, there were 370,930,658 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 June 30, 2024 and December 31, 2023 (unaudited)	1
	Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023 (unaudited)	2
	Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2024 and 2023 (unaudited)	3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

Part II. Other Information
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41
Signatures		43

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 June 30, 2024		As of December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	85,151	$	128,187
Accounts receivable, net (net of allowance for doubtful accounts of $8,091 and $8,544, respectively)	130,519		128,173
Other receivables	2,773		2,262
Prepaid expenses	8,727		6,007
Other current assets	2,644		3,178
Total current assets	229,814		267,807
Property and equipment, net	2,218		3,375
Other long-term assets	13,043		13,863
Intangible assets, net	123,308		136,552
Goodwill	191,819		192,037
Total assets	$	560,202	$	613,634
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	48,102	$	45,388
Accrued expenses and other current liabilities (Note 3)	60,461		65,706
Deferred revenue	5,365		5,517
Total current liabilities	113,928		116,611
Warrant liabilities	1,398		403
Long-term debt	—		519
Other long-term liabilities	7,069		8,032
Total liabilities	122,395		125,565
Commitments and contingencies (Note 7)
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 June 30, 2024 and December 31, 2023	58,205		58,205
Stockholders’ equity:
Common stock $0.0001 par value; 600,000,000 and 600,000,000 shares authorized; 367,662,956 and 353,430,357 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	37		35
Additional paid-in capital	1,185,003		1,157,737
Accumulated other comprehensive loss	(2,645)		(2,263)
Accumulated deficit	(802,497)		(725,373)
Total Sharecare, Inc. stockholders’ equity	379,898		430,136
Noncontrolling interest in subsidiaries	(296)		(272)
Total stockholders’ equity	379,602		429,864
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$	560,202	$	613,634

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	94,265	$	110,353	$	185,126	$	226,648
Costs and operating expenses:
Costs of revenue	51,150		62,948		102,270		130,840
Sales and marketing	13,586		14,959		27,144		30,309
Product and technology	14,714		17,035		29,258		37,843
General and administrative	39,688		35,371		74,595		69,490
Depreciation and amortization	16,280		14,184		29,611		28,965
Total costs and operating expenses	135,418		144,497		262,878		297,447
Loss from operations	(41,153)		(34,144)		(77,752)		(70,799)
Other income (expense):
Interest income	1,023		1,646		2,297		3,326
Interest expense	(312)		(453)		(528)		(882)
Other expense	(1,542)		(2,631)		(1,176)		(2,201)
Total other (expense) income	(831)		(1,438)		593		243
Loss before income tax expense	(41,984)		(35,582)		(77,159)		(70,556)
Income tax expense	(37)		(65)		(6)		(96)
Net loss	(42,021)		(35,647)		(77,165)		(70,652)
Net income (loss) attributable to noncontrolling interest in subsidiaries	16		(504)		(41)		(850)
Net loss attributable to Sharecare, Inc.	$	(42,037)	$	(35,143)	$	(77,124)	$	(69,802)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.12)	$	(0.10)	$	(0.22)	$	(0.20)
Weighted-average common shares outstanding, basic and diluted	360,401,283		354,049,808		357,315,727		353,490,234

Net loss	$	(42,021)	$	(35,647)	$	(77,165)	$	(70,652)
Other comprehensive loss adjustments:
Foreign currency translation	(83)		189		(365)		496
Comprehensive loss	(42,104)		(35,458)		(77,530)		(70,156)
Comprehensive income (loss) attributable to noncontrolling interest in subsidiaries	27		(489)		(24)		(778)
Comprehensive loss attributable to Sharecare, Inc.	$	(42,131)	$	(34,969)	$	(77,506)	$	(69,378)

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

Table of Contents

SHARECARE, INC.

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

(Unaudited)

(In thousands, except share amounts)


	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Noncontrolling Interest		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance at December 31, 2023	5,000,000	$	58,205	353,430,357	$	35	$	1,157,737	$	(2,263)	$	(725,373)	$	(272)	$	429,864
Stock options exercised	—	—		40,278	—		24		—		—		—		24
Common stock issued upon vesting of restricted stock units	—	—		7,674,863	1		(1)		—		—		—		—
Issuance of warrants in connection with debt and revenue arrangements	—	—		—	—		27		—		—		—		27
Share-based compensation	—	—		—	—		13,866		—		—		—		13,866
Net loss attributable to noncontrolling interest in subsidiaries	—	—		—	—		—		—		—		(57)		(57)
Currency translation adjustment	—	—		—	—		—		(288)		—		6		(282)
Common stock repurchased related to tax withholding for exercised employee stock options and vested restricted stock units	—	—		(2,573,225)	—		(2,784)		—		—		—		(2,784)
Net loss attributable to Sharecare, Inc.	—	—		—	—		—		—		(35,087)		—		(35,087)
Balance at March 31, 2024	5,000,000	$	58,205	358,572,273	$	36	$	1,168,869	$	(2,551)	$	(760,460)	$	(323)	$	405,571
Stock options exercised	—

SEC Form 10-Q filed by Sharecare Inc.