wejo-20220331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ 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 001-41091

Wejo Group Limited

(Exact name of registrant as specified in its charter)

Bermuda

98-1611674

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Canon’s Court

22 Victoria Street

Hamilton HM12, Bermuda

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

+44 8002 343065

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 Shares, $0.001 par value

WEJO

NASDAQ Stock Market LLC

Warrants, each whole warrant exercisable for one share of common shares at an exercise price of $11.50 per share

WEJOW

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 ☐ No

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-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

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	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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. ☐

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

As of May 13, 2022, there were 94,666,196 common shares, $0.001 par value per share, outstanding.

_________________________________________________________________________________________

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	TABLE OF CONTENTS


	PART I FINANCIAL INFORMATION	Page
Item 1.	F inancial Statements	4
	Condensed Consolidated Balance Sheets (unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)	5
	Condensed Consolidated Statements of Shareholders’ Deficit (unaudited)	6
	Condensed Consolidated Statements of Cash Flows (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2 3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

	PART II OTHER INFORMATION
Item 1.	Legal Proceedings.	35
Item 1A.	Risk Factors.	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	35
Item 3.	Defaults Upon Senior Securities.	35
Item 4.	Mine-Safety Disclosure.	35
Item 5.	Other Information.	35
Item 6.	Exhibits.	35

Signatures		36

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that are based on current expectations, estimates, forecasts and projections about us, the industry in which we operate and other matters, as well as management’s beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report on Form 10-Q and these forward-looking statements reflect management’s expectations regarding our future growth, results of operations, operational and financial performance and business prospects and opportunities. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.

Forward-looking statements speak only as of the date they are made. These cautionary statements are being made pursuant to federal securities laws with the intention of obtaining the benefits of the “safe harbor” provisions 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”). Readers are cautioned against relying on forward-looking statements, and Wejo Group Limited (“Wejo,” “we,” “our,” “us,” or the “Company”) assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. The Company does not give any assurance that it will achieve its expectations.

Forward-looking statements include, but are not limited to, statements regarding the Company’s expectations, hopes, beliefs, intentions or strategies regarding the future including, without limitation, statements regarding: (i) the size, demands and growth potential of the markets for the Company’s products and services and the Company’s ability to serve those market; (ii) the degree of market acceptance and adoption of the Company’s products and services; (iii) the Company’s ability to develop innovative products and services and compete with other companies engaged in the automotive technology industry; and (iv) the Company’s ability to attract and retain customers. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. The Company does not give any assurance that the Company will achieve its expectations. Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:

•The projected financial information, anticipated growth rate and market opportunity of the Company;

•The ability to obtain or maintain the listing of the Company’s common shares and Company warrants on the NASDAQ Stock Market LLC (“NASDAQ”);

•The Company’s public securities’ potential liquidity and trading;

•The Company’s ability to raise financing in the future and access to facilities;

•The Company’s success in retaining or recruiting, or changes required in, our officers, key employees or directors;

•The impact of the regulatory environment and complexities with compliance related to such environment, including compliance with restrictions imposed by federal law and data/privacy law in “internet of things” milieu;

•The impact of war, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience; and

•Factors relating to the business, operations and financial performance of the Company and its subsidiaries.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described within the risk factors disclosed in Part I, Item 1A in the Company’s Comprehensive Annual Report on Form 10-K/A for the fiscal year ended December 31, 2021. You should carefully consider the risks and uncertainties described in this Quarterly Report as they identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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PART 1. Financial Information

Item 1. Financial Statements

Wejo Group Limited

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash	$	39,731	$	67,322
Accounts receivable, net	2,068		1,416
Forward Purchase Agreement	28,907		45,611
Prepaid expenses and other current assets	15,793		17,518
Total current assets	86,499		131,867
Property and equipment, net	645		651
Operating lease right-of-use asset	3,260		—
Intangible assets, net	8,859		9,489
Other assets	471		—
Total assets	$	99,734	$	142,007
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable, including due to related party of $1,130 and $1,464, respectively	$	18,666	$	15,433
Accrued expenses and other current liabilities	17,258		21,089
Current portion of operating lease liability	644		—
Income tax payable	378		282
Total current liabilities	36,946		36,804
Non-current liabilities:
Long term portion of operating lease liability	2,618		—
Long term debt, net of unamortized debt discount and debt issuance costs	34,948		33,705
Public Warrants	6,717		12,650
Exchangeable right liability	4,174		11,154

Total liabilities	85,403		94,313
Commitments and contingencies
Shareholders’ equity
Common shares, $0.001 par value, 634,000,000 shares authorized; 94,666,196 and 93,950,205 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	95		94
Additional paid in capital	419,299		415,304
Accumulated deficit	(410,293)		(369,951)
Accumulated other comprehensive income	5,230		2,247
Total shareholders’ equity	14,331		47,694
Total liabilities and shareholders’ equity	$	99,734	$	142,007

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

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Wejo Group Limited

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended March 31,
	2022		2021
Revenue, net	$	568	$	305
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	1,317		353
Technology and development	7,297		2,482
Sales and marketing	5,214		2,454
General and administrative	17,729		2,932
Depreciation and amortization	1,098		1,025
Total costs and operating expenses	32,655		9,246
Loss from operations	(32,087)		(8,941)
Loss on issuance of convertible loan notes	—		(33,301)

Loss on fair value of derivative liability	—		(56,902)
Gain on fair value of public warrant liabilities	5,933		—
Loss on fair value of Forward Purchase Agreement	(16,704)		—
Gain on fair value of exchangeable right liability	6,980		—


Loss on fair value of Advanced Subscription Agreements, including related party of nil and $(407), respectively	—		(1,272)
Interest expense	(1,243)		(1,862)
Other expense, net	(3,125)		(79)
Loss before income taxes	(40,246)		(102,357)
Income tax expense	(96)		—
Net loss	(40,342)		(102,357)
Other comprehensive loss:
Foreign currency exchange translation adjustment	2,983		(571)
Total comprehensive loss	$	(37,359)	$	(102,928)
Net loss per common share - basic and diluted	$	(0.43)	$	(2.81)
Weighted-average basic and diluted common shares	94,300,245		36,463,696

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

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Wejo Group Limited

Condensed Consolidated Statements of Shareholders' Equity (Deficit)

(unaudited)

(in thousands, except share amounts)


	Common Shares			Additional Paid in Capital		Other Comprehensive Income (Loss)		Accumulated Deficit		Total Shareholders' Equity (Deficit)
	Shares	Value
Balance at December 31, 2021	93,950,205	$	94	$	415,304	$	2,247	$	(369,951)	$	47,694
Issuance of common shares	715,991	1		2,999		—		—		3,000
Share-based compensation expense	—	—		996		—		—		996
Unrealized gain on foreign currency translation	—	—		—		2,983		—		2,983
Net loss	—	—		—		—		(40,342)		(40,342)
Balance at March 31, 2022	94,666,196	$	95	$	419,299	$	5,230	$	(410,293)	$	14,331

Balance at December 31, 2020	36,463,696	$	36	$	105,835	$	(294)	$	(152,173)	$	(46,596)
Debt discount related to beneficial conversion feature of convertible loan notes	—	—		19,645		—		—		19,645
Unrealized loss on foreign currency translation	—	—		—		(571)		—		(571)
Net loss	—	—		—		—		(102,357)		(102,357)
Balance at March 31, 2021	36,463,696	$	36	$	125,480	$	(865)	$	(254,530)	$	(129,879)

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

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Wejo Group Limited

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2022		2021
Operating activities
Net loss	$	(40,342)	$	(102,357)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	1,243		801
Loss on issuance of convertible loans	—		33,301
Depreciation and amortization	1,098		1,025
Non-cash share-based compensation expense	996		—
Non-cash expense settled by issuance of commitment shares	3,000		—
Non-cash lease expense	156		—
Non-cash loss (gain) on foreign currency remeasurement	4,174		(80)
Loss on fair value of Advanced Subscription Agreements	—		1,272
Loss in fair value of derivative liability	—		56,902
Gain on fair value of warrant liabilities	(5,933)		—
Loss on fair value of Forward Purchase Agreement	16,704		—
Gain on fair value of exchangeable right liability	(6,980)		—
Changes in operating assets and liabilities:
Accounts receivable	(656)		52
Prepaid expenses and other current assets	1,332		3,154
Accounts payable	3,839		1,442
Operating lease liability	(155)		—
Other assets	(480)		—

Accrued expenses and other liabilities	(1,407)		(4,119)
Income tax provision	96		—
Net cash used in operating activities	(23,315)		(8,607)
Investing activities
Purchases of property and equipment	(145)		(126)
Development of internal software	(662)		(316)
Net cash used in investing activities	(807)		(442)
Financing activities
Proceeds from issuance of convertible loans	—		16,115
Payment of issuance costs of convertible loans	—		(998)
Payment of transaction costs	(2,085)		—

Repayment of other loan	—		(84)
Proceeds from issuance of related party debt	—		17
Payment of deferred financing costs	—		(100)



Net cash (used in) provided by financing activities	(2,085)		14,950
Effect of exchange rate changes on cash	(1,384)		145

SEC Form 10-Q filed by Wejo Group Limited