SEC Form 10-Q filed by InterPrivate II Acquisition Corp.

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 September 30, 2023

OR

☐	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: 001-40152

GETAROUND, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	85-3122877
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
55 Green Street, San Francisco, California	94111
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: (415) 295-5725

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		GETR		The New York Stock Exchange
Warrants, each whole warrant exercisable for one share of Common stock at an exercise price of $11.50 per share*		GETR WS		The New York Stock Exchange

 

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, 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 December 13, 2023, the registrant had 93,018,237 shares of common stock, $0.0001 par value per share, outstanding.

 

* On December 13, 2023, the New York Stock Exchange (“NYSE”) filed a Form 25 Notification of Removal From Listing And Registration with respect to the registrant’s warrants stating that the NYSE had halted trading in the warrants effective as of November 28, 2023, due to the low trading price of the warrants and its intention to remove the warrants from listing and registration on NYSE on December 26, 2023.

 

 

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Table of Contents

 

		Page
	Cautionary Note Regarding Forward-Looking Statements	1
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	54
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56

 

 

 

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Cautionary Note Regarding Forward-Looking Statements

Certain statements in this quarterly report on Form 10-Q (this “report”) may constitute “forward-looking statements” for purposes of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding our and our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example, statements about:

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our 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 in the section entitled “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ

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materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

The forward-looking statements made by us in this report speak only as of the date of this report. Except to the extent required under the federal securities laws and rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), we disclaim any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.

Unless the context otherwise indicates, references in this report to the terms “Getaround,” the “Company,” “we,” “our” and “us” refer to Getaround, Inc., a Delaware corporation, and its consolidated subsidiaries.

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Getaround, Inc.

Condensed Consolidated Balance Sheets
(Unaudited)

(in thousands, except share and per share data)

 

		September 30, 2023				December 31, 2022
Assets
Current Assets
Cash and cash equivalents		$	22,164			$	64,294
Restricted cash			3,600				3,600
Accounts receivable, net			717				533
Prepaid expenses and other current assets			7,598				6,084
Total Current Assets		$	34,079			$	74,511
Property and equipment, net			9,352				10,451
Operating lease right-of-use assets, net			12,414				13,284
Goodwill			91,879				92,728
Intangible assets, net			15,552				11,028
Deferred tax assets			—				46
Other assets			3,938				3,371
Total Assets		$	167,214			$	205,419
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable		$	12,548			$	3,652
Accrued host payments and insurance fees			15,262				11,780
Operating lease liabilities, current			2,173				1,923
Notes payable, current			15,860				1,211
Warrant commitment liability			—				320
Other accrued liabilities			39,167				37,360
Deferred revenue			1,003				698
Total Current Liabilities		$	86,013			$	56,944
Notes payable			2,314				3,198
Convertible notes payable ($48,880 and $56,743 measured at fair value, respectively)			48,979				56,842
Operating lease liabilities (net of current portion)			16,030				17,715
Deferred tax liabilities			311				973
Warrant liability			78				247
Total Liabilities		$	153,725			$	135,919
Commitments and contingencies (Note 12)
Stockholders’ Equity
Common stock, $0.0001 par value, 1,000,000,000 shares authorized;    92,941,175 and 92,085,974 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		$	9			$	9
Additional paid-in capital			856,539				845,888
Stockholder notes			(8,284	)			(8,284	)
Accumulated deficit			(842,423	)			(762,009	)
Accumulated other comprehensive loss			7,648				(6,104	)
Total Stockholders’ Equity		$	13,489			$	69,500
Total Liabilities and Stockholders’ Equity		$	167,214			$	205,419

 

See accompanying notes to condensed consolidated financial statements.

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Getaround, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)

(in thousands, except per share data)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Service revenue		$	23,387			$	16,355			$	52,810			$	43,967
Lease revenue			412				383				1,129				1,058
Total Revenues		$	23,799			$	16,738			$	53,939			$	45,025
Costs and Expenses
Cost of revenue (exclusive of items shown separately below):
Service		$	1,920			$	1,439			$	4,995			$	3,754
Lease			32				33				107				90
Sales and marketing			4,118				6,577				15,486				22,736
Operations and support			16,874				14,455				45,000				39,596
Technology and product development			4,156				4,665				12,286				13,374
General and administrative			11,662				11,080				40,224				38,665
Depreciation and amortization			4,135				2,322				9,914				7,670
Total Operating Expenses		$	42,897			$	40,571			$	128,012			$	125,885
Loss from Operations		$	(19,098	)		$	(23,833	)		$	(74,073	)		$	(80,860	)
Other Income (Expense)
Convertible promissory note fair value adjustment			(8,441	)			2,140				(7,765	)			3,896
Note payable fair value adjustment			(245	)			—				(245	)			—
Warrant fair value adjustment			36				(8,804	)			209				(17,521	)
Interest income (expense), net			222				(2,660	)			506				(7,903	)
Other income (expense), net			(64	)			572				331				1,258
Total Other Income (Expense)		$	(8,492	)		$	(8,752	)		$	(6,964	)		$	(20,270	)
Loss, before Benefit for Income Taxes		$	(27,590	)		$	(32,585	)		$	(81,037	)		$	(101,130	)
Income Tax Benefit			(244	)			(166	)			(623	)			(547	)
Net Loss		$	(27,346	)		$	(32,419	)		$	(80,414	)		$	(100,583	)
Change in fair value of the convertible instrument liability			15,628				—				15,628				—
Foreign Currency Translation Loss			(2,111	)			(8,047	)			(1,876	)			(19,553	)
Comprehensive Loss		$	(13,829	)		$	(40,466	)		$	(66,662	)		$	(120,136	)
Net Loss Per Share Attributable to Stockholders (Note 16):
Basic			(0.29	)			(1.38	)			(0.87	)			(4.41	)
Diluted			(0.29	)			(1.38	)			(0.87	)			(4.41	)
Weighted average shares outstanding (Basic and Diluted)			93,205				23,503				92,708				22,792

See accompanying notes to condensed consolidated financial statements

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Getaround, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Deficit
(Unaudited)

(in thousands, except share data)

 

		Mezzanine Equity									Stockholders’ Deficit
																											Additional								Accumulated Other				Total
		Shares				Amount					Shares				Amount				Treasury Stock				Stockholder Notes				Paid-in Capital				Accumulated Deficit				Comprehensive Income				Stockholders’ Equity
Balance, December 31, 2021			40,182,816			$	410,368					25,536,563			$	1			$	(661	)		$	(14,478	)		$	237,578			$	(625,944	)		$	2,283			$	(401,221	)
Stock option exercises			—				—					56,513				—				—				—				113				—				—				113
RSU vested			—				—					259,715				—				—				—				—				—				—				—
Stock-based compensation			—				—					—				—				—				—				4,945				—				—				4,945
Exercise of Series E-3 Preferred stock warrant into 79,704 Series E-3 convertible preferred stock			79,704				408					—				—				—				—				—				—				—				—
Exercise of Series B Preferred stock warrant into 31,010 Series B Preferred stock			31,010				240					—				—				—				—				—				—				—				—
Common stock issued to extinguish the outstanding contingent compensation liability			—				—					935,005				—				—				—				4,642				—				—				4,642
Foreign currency translation loss			—				—					—				—				—				—				—				—				(19,553	)			(19,553	)
Net loss			—				—					—				—				—				—				—				(100,583	)			—				(100,583	)
Balance, September 30, 2022			40,293,530				411,016					26,787,796			$	1			$	(661	)		$	(14,478	)		$	247,278			$	(726,527	)		$	(17,270	)		$	(511,657	)

 

		Mezzanine Equity									Stockholders’ Deficit
																											Additional								Accumulated Other				Total
		Shares				Amount					Shares				Amount				Treasury Stock				Stockholder Notes				Paid-in Capital				Accumulated Deficit				Comprehensive Income				Stockholders’ Equity
Balance, June 30, 2022			40,262,520			$	410,776					26,727,174			$	1			$	(661	)		$	(14,478	)		$	245,950			$	(694,108	)		$	(9,223	)		$	(472,519	)
Stock option exercises			—				—					21,961				—				—				—				53				—				—				53
RSU vested			—				—					38,661				—				—				—				—				—				—				—
Stock-based compensation			—				—					—				—				—				—				1,275				—				—				1,275
Exercise of Series B Preferred stock warrant into 31,010 Series B Preferred stock			31,010				240					—				—				—				—				—				—				—				—
Common stock issued to extinguish the outstanding contingent compensation liability			—				—					—				—				—				—				—				—				—				—
Foreign currency translation loss			—				—					—				—				—				—				—				—				(8,047	)			(8,047	)
Net loss			—				—					—				—				—				—				—				(32,419	)			—				(32,419	)
Balance, September 30, 2022			40,293,530			$	411,016					26,787,796			$	1			$	(661	)		$	(14,478	)		$	247,278			$	(726,527	)		$	(17,270	)		$	(511,657	)

 

See accompanying notes to condensed consolidated financial statements.

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Getaround, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Deficit
(Unaudited)

(in thousands, except share data)

 

		Common Stock												Additional								Accumulated Other				Total
		Shares				Amount				Stockholder Notes				Paid-in Capital				Accumulated Deficit				Comprehensive Income				Stockholders’ Equity
Balance, December 31, 2022			92,085,974			$	9			$	(8,284	)		$	845,888			$	(762,009	)		$	(6,104	)		$	69,500
Stock-based compensation			—				—				—				9,953				—				—				9,953
RSU Vested			232,235				—				—				—				—				—				—
Issuance to bridge investors			86,300				—				—				48				—				—				48
Issuance of common stock for iHM Prepaid Ad			536,666				—				—				370				—				—				370
Issuance of warrants in connection with Mudrick Convertible Promissory notes			—				—				—				280				—				—				280
Foreign currency translation loss			—				—				—				—				—				(1,876	)			(1,876	)
Change in fair value of the convertible instrument liability			—				—				—				—				—				15,628				15,628
Net loss			—				—				—				—				(80,414	)			—				(80,414	)
Balance, September 30, 2023			92,941,175				9				(8,284	)			856,539				(842,423	)			7,648				13,489

 

		Common Stock												Additional								Accumulated Other				Total
		Shares				Amount				Stockholder Notes				Paid-in Capital				Accumulated Deficit				Comprehensive Income				Stockholders’ Equity
Balance, June 30, 2023			92,127,253			$	9			$	(8,284	)		$	852,944			$	(815,077	)		$	(5,869	)		$	23,723
Stock-based compensation			—				—				—				3,547				—				—				3,547
RSU Vested			190,956				—				—				—				—				—				—
Issuance to bridge investors			86,300				—				—				48				—				—				48
Issuance of common stock for iHM Prepaid Ad			536,666				—				—				—				—				—				—
Foreign currency translation loss			—				—				—				—				—				(2,111	)			(2,111	)
Change in fair value of the convertible instrument liability			—				—				—				—				—				15,628				15,628
Net loss			—				—				—				—				(27,346	)			—				(27,346	)
Balance, September 30, 2023			92,941,175				9				(8,284	)			856,539				(842,423	)			7,648				13,489

 

See accompanying notes to condensed consolidated financial statements.

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Getaround, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited)

(in thousands)

 

		Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
Cash Flows from Operating Activities
Net loss		$	(80,414	)		$	(100,583	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			9,914				7,670
Provision for bad debts			5,250				8,202
Stock-based compensation			9,953				4,945
Compensation expense related to shareholder settlement			48				—
Loss (gain) on extinguishment of debt			(285	)			—
Change in fair value - convertible instrument liability			7,765				(3,896	)
Change in fair value - note payable			245				—
Change in fair value – warrant liability			(209	)			17,521
Change in fair value – prepaid ad inventory			91				—
Non-cash interest expense			53				4
Non-cash lease expense			851				700
Amortization of debt issuance costs			—				599
Loss (gain) from disposal of property and equipment			(21	)			1
Loss (gain) from foreign currency remeasurement			43				(212	)
Net changes in operating assets and liabilities, net of acquisitions:
Accounts receivable			(5,441	)			(6,827	)
Prepaid expenses and other current assets			935				(1,852	)
Operating leases liabilities			(1,418	)			(1,184	)
Other assets			(1,386	)			(1,789	)
Accounts payable			8,917				5,418
Accrued host payments and insurance fees			3,717				1,727
Accrued expenses and other liabilities			(2,226	)			6,291
Deferred taxes			(663	)			(547	)
Deferred revenue			318				606
Net Cash Used in Operating Activities		$	(43,963	)		$	(63,206	)
Cash Flows from Investing Activities
Purchases of property and equipment		$	(791	)		$	(1,607	)
Capitalized software			(3,292	)			—
Proceeds from sale of property and equipment			111				—
Acquisition of Hyrecar, net of cash acquired			(7,826	)			—
Net Cash (Used in) Investing Activities		$	(11,798	)		$	(1,607	)
Cash Flows from Financing Activities
Proceeds from exercise of common stock options		$	—			$	125
Proceeds from issuance of Bridge Loans			—				31,800
Proceeds from issuance of Mudrick Bridge Note, net of issuance costs			2,988				—
Proceeds from issuance of Mudrick Super Priority Note, net of issuance costs			11,660
Repayment of PGE loan			(856	)			(240	)
Related Party advance on financing			—				4,750
Reclass of Related Party advance on financing to proceeds from issuance of Bridge Loans			—				(4,750	)
Net Cash Provided (Used in) by Financing Activities		$	13,792			$	31,685
Effect of Foreign Currency Translation on Cash			(161	)			(2,522	)
Net change in cash and cash equivalents and restricted cash and cash equivalents			(42,130	)			(35,650	)
Cash and Cash Equivalents and Restricted Cash, beginning of period			67,894				66,466
Cash and Cash Equivalents and Restricted Cash, end of period		$	25,764			$	30,816

 

 

		Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
Supplemental Schedule of Cash Flow Information
Non-cash investing and financing activities:
Issuance of Mudrick Super Priority Bridge Note to repay Mudrick Bridge Note			3,041				—
Mudrick Bridge Note repayment of principal and accrued but unpaid interest			(3,041	)			—

 

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The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown above:

 

		Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
Cash and cash equivalents		$	22,164			$	27,216
Restricted cash included in current assets			3,600				3,600
Total Cash, Cash Equivalents and Restricted Cash at the End of Period		$	25,764			$	30,816

 

See accompanying notes to condensed consolidated financial statements.

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Getaround, Inc.

 

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

 

 

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Getaround, Inc.

Notes to Consolidated Financial Statements

 

 

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Getaround, Inc.

Notes to Consolidated Financial Statements

 

 

 

 

 

 

 

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Getaround, Inc.

Notes to Consolidated Financial Statements

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition. This discussion and analysis should be read together with our consolidated financial statements and the related notes and other financial information included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “our,” “us,” the “Company” or “Getaround” refer to the business and operations of Getaround, Inc., a Delaware corporation ("Legacy Getaround") prior to the Closing and to the business and operations of Getaround following the Closing.

Overview

Getaround is a global carsharing marketplace, powered by proprietary technology designed to make sharing cars simple, digital, on-demand, and automated. We reimagined the traditional car ownership model by empowering consumers, whom we refer to as our guests, to instantly and conveniently access safe, affordable and desirable cars they need while providing earnings potential to car owners who supply them, whom we refer to as our hosts. Our marketplace is designed to allow for a fully digital and contactless experience, without guests needing to wait in line at a car rental facility, manually fill out any paperwork, or meet anyone in person to exchange keys. Since launching in 2011, we have been focused on building and innovating our digital carsharing marketplace in the United States and internationally. As of September 30, 2023, our platform supports approximately 2.0 million unique guests and has approximately 80,000 active cars in more than 1,000 cities across 8 countries worldwide, including in the United States and across Europe.

We believe booking and sharing cars should be a frictionless and hassle-free experience. Our proprietary cloud-based platform, which we call the Getaround Connect Cloud Platform, creates a digital experience that makes it easy for guests to find cars nearby, and for hosts to share their cars with guests, in both high and low population-density geographies. To date, we have facilitated approximately 7.7 million carsharing trips and our hosts have earned more than $500 million via our marketplace, leading the digital transformation of carsharing with 20 times as many connected cars on our network as compared to our closest competitor as of 2022, according to our estimates.

We have established a broad network of loyal hosts and guests on our platform. Hosts benefit from low entry costs, digital fleet management, and dynamic pricing algorithms and optimization informed through data analytics. Guests benefit from an easy-to-use platform, the ability 24/7 to book cars located nearby by the hour or day, and a contactless booking, pickup and return experience, eliminating the need for in-person interaction. We leverage our powerful technology platform, our scaled network, and the rich data captured from trips to derive insights and to innovate in order to provide hosts and guests an offering that we believe is superior.

 

Recent Developments

Acquisition of HyreCar. On May 16, 2023, we entered into a definitive agreement to acquire substantially all assets of California-based HyreCar, a premier gig carsharing marketplace, for total consideration of $8.13 million, subject to customary adjustments. The transaction is anticipated to bolster our leadership position in gig carsharing, while leveraging our technology and platform to enable further scale. We believe the acquired assets will include the most synergistic and accretive portions of HyreCar’s business, including access to thousands of cars and tens of thousands of gig drivers in a quickly-growing segment of carsharing.

Additional Financing. The information provided under the caption, "Additional Financing" in Note 18 - Subsequent Events is incorporated by reference herein.

Event of Default for Mudrick Convertible Note. The information provided under the caption, "Event of Default for Mudrick Convertible Note" in Note 18 - Subsequent Events is incorporated by reference herein.

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Our Revenue Model

We operate a carsharing marketplace and generate revenue from fees charged to guests as well as subscriptions charged to hosts. A significant majority of our revenue in any period depends on a large number of Powerhosts, which we define as any host with three or more active cars in our marketplace. Getaround prices trips dynamically on the platform, leveraging our extensive repository of connected car data from the hundreds of millions of miles driven on our platform to intelligently price the risks of the trip, the market and the guest.

Our pricing system is designed to optimize each individual transaction value by balancing supply and demand information and utilizing dynamic pricing features that depend on multiple transaction attributes, such as trip length and location. The use of dynamic pricing features varies across geographies, as slightly different strategies are appropriate for different regions. In some geographies, all pricing is dynamically priced on a per trip basis, and varies by time of day, day of week, vehicle details, geography, historical demand and supply levels, among other factors. Hosts control the pricing of this model by setting a minimum daily rate for their vehicle, as well as other inputs such as the minimum trip duration. In other geographies, hosts have the option of using our pricing system to dynamically set prices on their vehicle, or to more specifically control prices directly on a per-day basis. If they choose to set prices themselves per-day, the system still provides personalized suggestions for pricing, based on a similar set of attributes and historical data as our fully dynamic model would do. Through these processes both the fee we charge the guest for usage of the vehicle subject to a booking, or the “Trip Price,” and in certain related fees, or “Trip-related Fees,” charged to the guest are capable of being set dynamically. Our pricing system also allows hosts in any geography to significantly increase their revenue yield by varying the Trip Price according to local supply and demand dynamics while Trip-related Fees, such as the booking fee and optional protection plans, are controlled by our pricing system based on a model that determines the risk profile of a trip, according to a number of risk factors such as lead time, trip duration, and an array of other factors. In some cases, prices for Trip-related Fees are set to offset the expected increased cost to the platform from riskier trips. Additionally, our dynamic pricing may improve revenue yield by incentivizing guests to book longer trips, thereby increasing the average order value and associated service revenue and host earnings.

The subscriptions that we charge to hosts vary by geography and typically include a Connect Subscription to access our connected car technology and may also include a Parking Subscription. Fees charged to hosts are independent of booking activity.

The revenue-generating components of a booked trip within our two-sided marketplace include:

Accordingly, under our model, our revenue consists of the commission that we charge to the host and 100% of the Trip-related Fees, which are net of reimbursements that may have been passed through to the host.

The table below shows the components of an illustrative booked trip, which is typically less than one day. Gross Booking Value and Net Marketplace Value in the table below exclude subscriptions charged to hosts and also exclude reductions in revenue resulting from incentive and refund payments made to hosts and guests. See the sections titled “— Key Business Metrics” and “— Non-GAAP Financial Measures” below for more information on the calculation of these metrics. For illustration purposes, we included a common reimbursement line item for incidental charges and an example of a local sales tax (which we collect and remit to local authorities in certain jurisdictions).

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Illustrative Trip Example

 

Guest
Trip Price (dynamic)		$	100.00
Plus: Trip-related Fees (including risk-based fees)			25.00
Plus: Host reimbursements			5.00
Plus: Taxes (as applicable, pass-through)			7.50
Total (Gross Booking Value)		$	137.50
Host
Trip Price (dynamic)		$	100.00
Plus: Host reimbursements			5.00
Less: Commission paid to Getaround			(40.00	)
Total		$	65.00
Getaround
Commission paid to Getaround		$	40.00
Plus: Trip-related Fees (including risk-based fees)			25.00
Total (Net Marketplace Value)		$	65.00

 

Components of Results of Operations

Total Revenues

We have three revenue streams: Carsharing Revenue, Connect Subscription Revenue, and Parking Revenue.

We generate substantially all of our revenue from our peer-to-peer carsharing marketplace platform that connects hosts and guests. We refer to that revenue stream as “Carsharing Revenue.” Carsharing Revenue is derived from trip reservation and other trip fees collected from guests who book and rent vehicles from the hosts through our platform at a mutually agreed upon rate. Within Europe, we are an intermediary of a sale of third-party vehicle insurance coverage to the guests during the booking process. We charge a nominal amount in exchange for being the intermediary in the sales transaction. Carsharing Revenue is presented net of payments due to hosts given that we act as an intermediary in the arrangement between the host and the guest.

We generate additional revenue from hosts’ subscriptions for the use of IoT hardware devices installed in certain cars, including the Getaround Connect IoT device. We refer to that revenue stream as “Connect Subscription Revenue”.

Carsharing Revenue and Connect Subscription Revenue are presented on a combined basis as “Service revenue” in our consolidated financial statements. Carsharing revenue represents substantially all of our Service Revenue as Connect Subscription Revenue has not been material in the periods presented.

The principal drivers of fluctuations in our Service revenue from period to period are our directed revenue management efforts, such as deliberate changes in pricing and availability optimization, and to a lesser extent, changes in the relative mix of cars on our marketplace, the relative mix of customer-specific use cases at a point in time (e.g., vacation travels and local trips), the scale of different cities across North America and Europe, foreign currency exchange rates, and the local pricing optimizations performed on a per-car and per-trip basis by our dynamic pricing system.

We also generate revenue by subleasing, on a monthly basis, dedicated parking spaces to our hosts. We refer to that revenue stream as “Parking revenue” and present it as “Lease revenue” in our consolidated financial statements.

 

Our Total Revenues are presented net of incentives and refunds. Please refer to Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for additional details on our revenue recognition policy.

Costs and Expenses

Cost of Revenue (exclusive of depreciation and amortization)

Cost of Revenue includes payment-processing fees, server hosting charges, and chargebacks associated with operating our platform. Cost of revenue (exclusive of amortization and depreciation) captures the costs directly related to and necessary for realization of transactions between the hosts and the guests through Company’s marketplace platform, other than the amortization of 28 its platform technology. Cost of Revenue does not include depreciation and amortization. Cost of Revenue (exclusive of

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depreciation and amortization) may vary as a percentage of Total Revenues from year to year depending on booking activity on our marketplace.

Sales and Marketing

Sales and marketing expenses consist primarily of online digital advertising, brand advertising, out of home and outdoor advertising, market research, agency costs, trade shows and other events, public relations, and compensation and related personnel costs of our salesforce and marketing teams. We expect that our sales and marketing expense will vary from period to period as a percentage of net revenue for the foreseeable future.

Operations and Support

Operations and support expense primarily consists of trip support costs, compensation and related expenses of operations personnel, driver’s license and identity checks, parking space lease expense, onboarding expenses and other operating costs. Trip support costs consist of auto insurance, insurance claims support and customer relations costs.

We expect that our operations and support costs will continue to increase for the foreseeable future to the extent that we continue to see growth in our key business metrics. Operations and support expenses may vary as a percentage of Total Revenues from year to year.

Technology and Product Development

Technology and product development expenses consist primarily of prototypes, product testing and testing equipment, and compensation and related personnel costs associated with the development, testing and maintenance of our software, hardware, and user experience. We expect that our technology and product development expenses will vary from period to period as a percentage of Total Revenues for the foreseeable future.

 

General and Administrative

General and administrative expenses consist primarily of office space and facilities, non-auto insurance, professional services, business tools and subscriptions, bad debt and compensation and related personnel costs of our administrative teams. We expect that we will incur additional general and administrative expenses as a result of operating as a public company. We expect that our general and administrative expenses will vary as a percentage of Total Revenues from period to period over the short term and decrease as a percentage of Total Revenues over the long term.

Depreciation and Amortization

Depreciation and amortization expenses consist of the associated depreciation and amortization of computer equipment, vehicles and vehicle equipment, office furniture and equipment, leasehold improvements, and intangibles and the impairment of long-lived assets. We expect that our depreciation and amortization expenses will vary as a percentage of Total Revenues from period to period over the short term and decrease as a percentage of Total Revenues over the long term.

Convertible Promissory Note and Securities Fair Value Adjustment

Certain debt instruments issued by Getaround are carried at fair value on our balance sheet. Changes in fair value of those instruments are captured in our results of operation. Convertible promissory note and securities fair value adjustment consists of unrealized gains and losses as a result of marking our convertible promissory notes to fair market value at the end of each reporting period. We will continue to recognize changes in the fair value of such instruments until each respective instrument is exercised, repaid, or qualifies for equity classification. For additional information on securities carried at fair value and fair value measurement please refer to Note 4 - Fair Value Measurement to our consolidated financial statements included herein.

Note Payable Fair Value Adjustment

Certain debt instruments issued by Getaround are carried at fair value on our balance sheet. Changes in fair value of those instruments are captured in our results of operation. Note payable fair value adjustment consists of unrealized gains and losses as a result of marking our note payable to fair market value at the end of each reporting period. We will continue to recognize changes in the fair value of such instruments until each respective instrument is exercised, repaid, or qualifies for equity classification. For additional information on securities carried at fair value and fair value measurement please refer to Note 4 - Fair Value Measurement to our consolidated financial statements included herein.

Warrant Liability Fair Value Adjustment

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Certain warrants issued by Getaround are deemed to be a liability for accounting purposes and are therefore carried at fair value on our balance sheet. Changes in the fair value of those liabilities are captured in our results of operations. Warrant liability fair value adjustment consists of unrealized gains and losses as a result of marking our liability classified warrants to fair market value at the end of each reporting period. We will continue to recognize changes in the fair value of such warrants until each respective warrant is exercised, expired, or qualifies for equity classification. For additional information on securities carried at fair value and fair value measurement please refer to Note 4 – Fair Value Measurement to our consolidated financial statements included herein.

Interest Expense, Net

Interest expense is associated with our outstanding debt, including amortization of debt discounts and issuance costs.

Other Income (Expense), Net

Other income (expense), net consists of various, individually immaterial items that are not directly related to operations of Getaround.

 

Income Tax Benefit

Income tax benefit consists primarily of income taxes in certain foreign and state jurisdictions in which we conduct business. We maintain a full valuation allowance against our U.S. deferred tax assets because we have concluded that it is more likely than not that the deferred tax assets will not be realized.

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Results of Operations

 

Comparison of the three months ended September 30, 2023 and 2022

The results of operations presented below should be reviewed in conjunction with the unaudited interim consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

The following table summarizes our consolidated statements of operations and comprehensive loss for each of the periods presented:

 

		Three Months Ended September 30,
(In thousands)		2023				2022
Service revenue		$	23,387			$	16,355
Lease revenue			412				383
Total Revenues		$	23,799			$	16,738
Costs and Expenses
Cost of revenue (exclusive of depreciation and amortization):
Service		$	1,920			$	1,439
Lease			32				33
Sales and marketing			4,118				6,577
Operations and support			16,874				14,455
Technology and product development			4,156				4,665
General and administrative			11,662				11,080
Depreciation and amortization			4,135				2,322
Total Operating Expenses		$	42,897			$	40,571
Loss from Operations		$	(19,098	)		$	(23,833	)
Other Income (Expense)
Convertible promissory note fair value adjustment			(8,441	)			2,140
Note payable fair value adjustment			(245	)			—
Warrant fair value adjustment			36				(8,804	)
Interest income (expense), net			222				(2,660	)
Other income (expense), net			(64	)			572
Total Other Income (Expense)		$	(8,492	)		$	(8,752	)
Loss, before benefit for income taxes			(27,590	)			(32,585	)
Income Tax Benefit			(244	)			(166	)
Net Loss		$	(27,346	)		$	(32,419	)
Change in fair value of the convertible instrument liability			15,628				—
Foreign Currency Translation Loss			(2,111	)			(8,047	)
Comprehensive Loss		$	(13,829	)		$	(40,466	)

 

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The following table sets forth the components of our consolidated statements of operations and comprehensive loss for each of the periods presented as a percentage of Total Revenues:

 

		Three Months Ended September 30,
(In thousands)		2023				2022
Service revenue			98	%			98	%
Lease revenue			2	%			2	%
Total Revenue			100	%			100	%
Costs and Expenses
Cost of revenue (exclusive of depreciation and    amortization):
Service			8	%			9	%
Lease			0	%			0	%
Sales and marketing			17	%			39	%
Operations and support			71	%			86	%
Technology and product development			17	%			28	%
General and administrative			49	%			66	%
Depreciation and amortization			17	%			14	%
Total Operating Expenses			180	%			242	%
Loss from Operations			(80	)%			(142	)%
Other Income (Expense)
Convertible promissory note fair value adjustment			(35	)%			13	%
Note payable fair value adjustment			(1	)%			—	%
Warrant fair value adjustment			0	%			(53	)%
Interest income (expense), net			1	%			(16	)%
Other income (expense), net			0	%			(3	)%
Total Other Income (Expense)			(36	)%			(52	)%
Loss, before benefit for income taxes			(116	)%			(195	)%
Income Tax Benefit			(1	)%			(1	)%
Net Loss			(115	)%			(194	)%
Change in fair value of the convertible instrument liability			66	%			0	%
Foreign Currency Translation Loss			(9	)%			(48	)%
Comprehensive Loss			(58	)%			(242	)%

 

Total Revenues

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Service revenue		$	23,387			$	16,355			$	7,032				43	%
Lease revenue			412				383				29				8	%
Total revenue		$	23,799			$	16,738			$	7,061				42	%

 

For the three months ended September 30, 2023, the Company’s total revenues increased by $7.1 million, or 42%, compared to the prior year. This change was primarily driven by incremental Service revenue of $7.8 million arising from the investment in acquisition of assets of HyreCar Inc (see Note 3 — Business Combination to our consolidated financial statements included herein). Additionally overall risk and pricing strategy improvements resulted in an increase in our GBV on a per trip basis. In December 2022 we deployed a new version of our Getaround TrustScore - a proprietary next-generation artificial intelligence (AI) for risk and pricing optimization aimed to improve the trust, safety and economics of our marketplace. Getaround TrustScore combines machine learning with over a decade of data from trips taken on our platform to provide optimized pricing and security deposits for each carsharing trip. With Getaround TrustScore, we expect to be able to more accurately price risk on trips, provide upfront transparency for what guests should expect to pay while reducing our Trip support costs, inclusive of claims and insurance costs. Using this next-generation AI we expect that insurance and claims costs will be reduced by up to 50%.

Service revenue increased by $7.0 million, or 43%, driven primarily by incremental Service revenue of $7.8 million arising from the investment in acquisition of assets of HyreCar Inc (see Note 3 — Business Combination to our consolidated financial statements included herein). Furthermore, our overall risk and pricing strategy improvements resulted in an increase in our GBV on a per trip basis. Additionally, we reduced incentives to attract new customers onto the marketplace, a contra-revenue component of our Service revenue, by $2.1 million. These increases were partially offset by the temporary impact of our Getaround TrustScore. Release of the

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latest version of our TrustScore resulted in an overall reduction of rented hours and a corresponding reduction in Service revenue generated by lower trust, higher risk Guests. We expect that this reduction will be more than offset by a reduction in the claims and/or other Trip support costs in the coming period. See “Key Business Metrics” below for a discussion of GBV.

Lease revenue increased by a total of $29.0 thousand, or 8%, primarily due to Hosts’ greater utilization of parking locations within our marketplace of parking providers.

 

Cost of Revenue (exclusive of depreciation and amortization)

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Service		$	1,920			$	1,439			$	481				33	%
Lease			32				33				(1	)			(3	)%
Total cost of revenue		$	1,952			$	1,472			$	480				33	%
Percentage of total revenues			8	%			9	%

 

Total cost of revenue (exclusive of depreciation and amortization) increased $0.5 million, or 33%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. Cost of revenue varies with both the price and number of the transactions, which impact transaction processing fees, as well as with overall platform traffic, including research and development activities, on our platform that impacts the hosting charges. The overall increase is largely attributable to the augmentation of our operations in connection with the 2023 Business Combination (see Note 3 — Business Combination to our consolidated financial statements included herein).

Sales and Marketing

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Sales and marketing		$	4,118			$	6,577			$	(2,459	)			(37	)%
Percentage of total revenues			17	%			39	%

 

Sales and marketing expense decreased $2.5 million, or 37% for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The decrease was primarily attributable to a decrease of $1.5 million in advertising and related expenses, as well as to a $1.0 million decrease in compensation expense, of which $0.2 million is related to a decrease in stock-based compensation expense, as a result of the restructuring plan we commenced executing early in the year.

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Operations and Support

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Operations and support		$	16,874			$	14,455			$	2,419				17	%
Percentage of total revenues			71	%			86	%

 

Operations and support expenses increased $2.4 million, or 17%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was primarily attributable to a $1.0 million increase in compensation expense, $0.3 of which is related to an increase in stock-based compensation expense, driven primarily by acquisition of key employees of HyreCar Inc., and a $1.6 million net increase in insurance and claims expenses driven primarily by a $3.8 million of incremental claims expense arising from the addition of operations resulting from the 2023 Business Combination in which we acquired substantially all assets of HyreCar Inc.(see Note 3 — Business Combination to our consolidated financial statements included herein). The increase was partially offset by improvements in operations and support costs driven by Getaround TrustScore.

 

In December 2022 we deployed a new version of our Getaround TrustScore - a proprietary next-generation artificial intelligence for risk and pricing optimization aimed to improve the trust, safety and economics of our marketplace. Getaround TrustScore combines machine learning with over a decade of data from trips taken on our platform to provide optimized pricing and security deposits for each carsharing trip. With Getaround TrustScore, we expect to be able to more accurately price risk on trips, provide upfront transparency for what guests should expect to pay while reducing our Trip support costs, inclusive of claims and insurance costs. Using this next-generation AI we anticipate that insurance and claims costs will be reduced by up to 50%. The Getaround TrustScore has not yet been applied to trips booked through the HyreCar platform or the Getaround platform in Europe.

 

Technology and Product Development

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Technology and product development		$	4,156			$	4,665			$	(509	)			(11	)%
Percentage of total revenues			17	%			28	%

Technology and product development costs decreased $0.5 million, or 11%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The decrease was primarily driven by capitalization of value of development work in the amount of $1.0 million. This decrease was partially offset by $0.8 million increase in stock-based compensation expense.

General and Administrative

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
General and administrative		$	11,662			$	11,080			$	582				5	%
Percentage of total revenues			49	%			66	%

 

General and administrative expenses increased $0.6 million, or 5%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was largely attributable to a $2.1 million increase in compensation and related expense, inclusive of $1.4 million increase in stock-based compensation expense, primarily driven by the acquisition of certain employees of HyreCar Inc., and $0.3 million increase in excess and directors and officers insurance cost (see Note 3 — Business Combination to our consolidated financial statements included herein). The increase was partially offset by a $1.8 million reduction in bad debt driven by our risk and pricing strategy improvements through deployment of the Getaround TrustScore.

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Depreciation and Amortization

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Depreciation and amortization		$	4,135			$	2,322			$	1,813				78	%
Percentage of total revenues			17	%			14	%

Depreciation and amortization expense increased by $1.8 million, or 78%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase is primarily driven by the increase in amortization expense related to the newly acquired intangible assets as part of the Business Combination (see Note 3 — Business Combination to our consolidated financial statements included herein). This increase was partially offset by the impact of a decrease in value of the Euro as compared to the U.S. Dollar.

Convertible Promissory Note and Securities Fair Value Adjustment

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Convertible promissory note fair value adjustment		$	(8,441	)		$	2,140			$	(10,581	)			(494	)%
Percentage of total revenues			(35	)%			13	%

 

We have elected to carry some of our convertible debt at fair value, and we continue to do so, which, at times, subjects such debt to significant fair value fluctuations. The convertible promissory note and securities fair value adjustment changed by $10.6 million, or 494%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022, following the change in the fair value of the outstanding convertible promissory notes and securities. Please refer to Note 4 - Fair Value Measurements to our consolidated financial statements included elsewhere in this document for additional details on fair valuation of underlying securities.

Note Payable Fair Value Adjustment

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Note payable fair value adjustment		$	(245	)		$	—			$	(245	)			0	%
Percentage of total revenues			(1	)%			0	%

 

We have elected to carry some of our note payable at fair value, and we continue to do so, which, at times, subjects such debt to significant fair value fluctuations. The note payable fair value adjustment changed by $0.2 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022, following the change in the fair value of the note payable. Please refer to Note 4 - Fair Value Measurements to our consolidated financial statements included elsewhere in this document for additional details on fair valuation of underlying note payables.

 

Warrant Liability Fair Value Adjustment

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Warrant fair value adjustment		$	36			$	(8,804	)		$	8,840				(100	)%
Percentage of total revenues			0	%			(53	)%

 

Warrant liability fair value adjustment changed by $8.9 million, or 100%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. Change in fair value of the warrant liability fluctuates with the changes in the fair value of the underlying securities. Please refer to Note 4 – Fair Value Measurements to our consolidated financial statements included in this document for additional details on fair valuation of underlying warrants.

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Interest Expense, Net

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Interest income (expense), net		$	222			$	(2,660	)		$	2,882				(108	)%
Percentage of total revenues			1	%			(16	)%

Interest income (expense), net, changed by $2.9 million, or 108%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was primarily driven by a decrease in our long-term debt carried at cost. There was $75.0 million in notes payable issued in October of 2021 that resulted in net interest expense being recognized during the Three months ended September 30, 2022. This debt was paid off in connection with the Business Combination in December 2022.

Other Income (Expense), Net

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Other income (expense), net		$	(64	)		$	572			$	(636	)			(111	)%
Percentage of total revenues			0	%			3	%

 

Other income (expense), net changed by $0.6 million, or 111%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The decrease was primarily a result of a change in realized and unrealized foreign currency exchange gains and losses, and a mix of miscellaneous expenses unrelated to our core operations.

Income Tax Benefit

 

		Three Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Income tax benefit		$	(244	)		$	(166	)		$	(78	)			47	%
Percentage of total revenues			(1	)%			(1	)%

 

Income tax benefit increased by $0.1 million, or 47%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase is primarily attributable to our international operations.

Segment and Geographical Results of Operations

We view and operate our business as one operating segment. Refer to Note 17 — Segment and Geographical Area Information to our consolidated financial statements included elsewhere in this report for additional details on this determination.

Key Business Metrics

We use the following key business metrics to measure our performance, identify trends relevant to our business, formulate financial projections and operating plans, and make strategic decisions. As a marketplace platform we have two main key business metrics: Gross Booking Value and Trips.

Gross Booking Value

Gross Booking Value (“GBV”) represents the dollar value of all service transactions on our platform during a period, charged to both guests and hosts, net of cancellations. This includes charges for transactions resulting from all revenue generating activities, inclusive of all pass-through fees and taxes, net of lease revenue. As such, we consider GBV to be a key indicator of our market scale. Growth of GBV reflects our ability to attract and retain guests and hosts on our platform.

		Three Months Ended September 30,
(In thousands)		2023				2022
Gross Booking Value		$	69,236			$	57,426

 

For the three months ended September 30, 2023, GBV amounted to $69.2 million, an increase of $11.8 million, or 21%, from the year prior, primarily attributable to the $15.0 million of incremental GBV arising from the HyreCar acquisition and improvements in

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revenue management which generated higher GBV per Trip, partially offset by the temporary reduction in revenue driven by the launch of our Getaround TrustScore, as discussed under the Total Revenues paragraph herein.

Trips

Trips are a measure of unit transactions in our marketplace, one of the key variables impacting our service revenue. Trips represent the number of non-cancelled unique bookings that ended during the period, net of trips contributing to lease revenue. A Trip represents a single unit of transaction on our platform. We expect the number of Trips to grow as we attract prospective guests to the platform and as already existing cohorts of guests increase their activity on our platform.

		Three Months Ended September 30,
(In thousands)		2023		2022
Trips		271		267

 

For the three months ended September 30, 2023, we facilitated 271 thousand Trips, an increase of four thousand or 1% from the 267 thousand Trips during the year prior. The overall increase in Trips is largely attributable to the investment in acquisition of the assets of HyreCar Inc we made earlier in the year.

Non-GAAP Financial Measures

We use Net Marketplace Value, Trip Contribution Profit, Trip Contribution Margin and Adjusted EBITDA, each of which are non-GAAP financial measures, in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with the Getaround Board concerning our financial performance. Our definitions of these non-GAAP financial measures may differ from definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar financial measures. Furthermore, these financial measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Additionally, a limitation of NMV is that it is a measure that we have defined for internal purposes that may be unique to us, and therefore may not enhance the comparability of our results to other companies in our industry that have similar arrangements but present the impact of fees and commissions differently. Thus, these non-GAAP financial measures should be considered in addition to, and not as a substitute for, or in isolation from, financial measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view the non-GAAP financial measures in conjunction with their most directly comparable GAAP financial measures.

Net Marketplace Value

Net Marketplace Value (“NMV”) represents the dollar value of all transactions on our platform contributing to service revenue during a period, charged to both guests and hosts, net of cancellations, hosts’ earnings, incentives, and pass-throughs. NMV does not represent revenue earned by us and is not a substitute for service revenue, which consists of carsharing revenue and Connect subscription revenue recorded in accordance with GAAP. We believe that NMV is a meaningful measure of our operating performance because our ability to generate increases in NMV is strongly correlated to our ability to generate increases in total revenue. Management uses NMV as supplemental information to evaluate the global dollar value of transactions on our platform contributing to service revenue, understand our business and make operating decisions because service revenue by itself is not comparable across geographies due to the accounting treatment and contractual differences in trip insurance related charges to guests. While revenue generated in the United States includes amounts of insurance billed to the guest and recognized as Service Revenue under GAAP, revenue generated in the rest of the world excludes such amounts where guests contract directly with our insurance partners via our marketplace.

The following tables present a reconciliation of NMV from the most comparable GAAP measure, Service Revenues, for the periods presented:

		Three Months Ended September 30,
(In thousands)		2023				2022
Service Revenues		$	23,387			$	16,355
Plus: EU insurance share(1)			7,367				6,387
Net Marketplace Value		$	30,754			$	22,742

For three months ended September 30, 2023, NMV amounted to $30.8 million, an increase of $8.0 million, or 35%, from the $22.7 million for the year prior. The change was primarily driven by a $7.0 increase in Service revenue as discussed elsewhere in this document as well as by $1.0 million increase in the sale of European insurance.

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Trip Contribution Profit and Trip Contribution Margin

Trip Contribution Profit is defined as our gross profit from Service revenue adjusted for: (i) cost of Service revenue, amortization and depreciation; and (ii) trip support costs, which consist of auto insurance expenses, claims support and customer relations costs. We define Trip Contribution Margin as Trip Contribution Profit divided by Service revenue recognized during the period presented. We believe these measures are leading indicators of our ability to achieve profitability and sustain or increase it over time. Trip Contribution Profit and Trip Contribution Margin are measures we use to understand and evaluate our operating performance and trends. Trip Contribution Profit and Trip Contribution Margin have generally increased over the periods as Service revenue increased while costs considered in the calculation of Trip Contribution Profit decreased as a percentage of Total Revenues.

The following tables present a reconciliation of Trip Contribution Profit from the most comparable GAAP measure, gross profit from Service revenue, for the periods presented:

		Three Months Ended September 30,
(In thousands, except percentages)		2023				2022
Gross profit from Service revenue		$	20,422			$	14,238
Gross margin from Service revenue			87	%			87	%
Plus: Cost of Service revenue, amortization and depreciation			1,045				678
Less: Trip support costs			(9,397	)			(7,522	)
Trip Contribution Profit			12,070				7,394
Trip Contribution Margin			52	%			45	%

Our gross profit from Service revenue is calculated as follows:

		Three Months Ended September 30,
(In thousands, except percentages)		2023				2022
Service revenue		$	23,387			$	16,355
Less: Cost of Service revenue, net of amortization and    depreciation			(1,920	)			(1,439	)
Less: Cost of Service revenue, amortization and depreciation			(1,045	)			(678	)
Gross profit from Service revenue		$	20,422			$	14,238
Gross margin from Service revenue			87	%			87	%

For the three months ended September 30, 2023, Trip contribution profit amounted to $12.1 million, an increase of $4.6 million, or 61%, from the year prior. The change is primarily attributable to a $7.0 million increase in Service revenue, partially offset by a net increase in Trip support costs of $1.9 million. The net increase in Trip support costs was primarily driven by $4.3 million of incremental Trip support cost arising from the newly acquired assets of HyreCar Inc. (see Note 3 — Business Combination to our consolidated financial statements included herein), partially offset by a $2.5 million reduction in Trip support costs attributable primarily to our TrustScore.

For the three months ended September 30, 2023, our Trip Contribution Margin was 52%, an improvement from our Trip Contribution Margin of 45% in the same period the year prior. The improvement in our Trip Contribution Margin is largely attributable to an increase in Service revenue discussed in the Total Revenues section elsewhere in this document, partially offset by an increase in Trip support costs as part of the Operations and Support costs.

Adjusted EBITDA

We define Adjusted EBITDA as net income adjusted for: (i) fair value adjustment of instruments carried at fair value; (ii) interest income (expense) and other income (expense); (iii) income tax provision; (iv) gain/(loss) on extinguishment of debt; (v) depreciation and amortization; (vi) stock-based compensation expense; and (vii) certain expenses determined to be incurred outside of the regular course of business which includes: expenses associated with the termination of our leased vehicle supply arrangements, certain legal settlements and business combination-related legal fees, and investments in preparation of going public, initial implementation projects and transaction costs associated with proposed business combinations that are not subject to deferral. Adjusted EBITDA is a key performance measure that we use to assess operating performance and operating leverage of our business. As Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. Accordingly, we believe that Adjusted EBITDA provides useful to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. The items excluded from our Adjusted EBITDA calculation are either non-cash in nature, or not driven by core results of recurring operations and therefore not predictable or recurring, rendering comparisons with prior periods and competitors less meaningful.

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The following tables present a reconciliation of Adjusted EBITDA from the most comparable GAAP measure, Net Loss, for the periods presented:

		Three Months Ended September 30,
(In thousands)		2023				2022
Net Loss		$	(27,346	)		$	(32,419	)
Plus: warrant liability, convertible promissory note and securities    fair value adjustment			8,650				6,664
Plus: interest and other income (expense), net			(158	)			2,088
Minus: income tax provision			(244	)			(166	)
Plus: depreciation and amortization			4,135				2,322
Plus: stock-based compensation			3,548				1,275
Plus: expense not incurred in the regular course of business			138				391
Adjusted EBITDA			(11,277	)			(19,845	)

For the three months ended September 30, 2023, Adjusted EBITDA was a loss of $11.3 million, a favorable change by $8.6 million, or 43%, from the loss of $19.8 million from the year prior, driven primarily by a Trip contribution profit improvement of $4.6 million, a reduction in marketing expenses of $2.5 million aided by corporate overhead reduction following commencement of the restructuring announced in the first quarter of 2023.

 

Comparison of the nine months ended September 30, 2023 and 2022

The results of operations presented below should be reviewed in conjunction with the unaudited interim consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

The following table summarizes our consolidated statements of operations and comprehensive loss for each of the periods presented:

 

		Nine Months Ended September 30,
(In thousands)		2023				2022
Service revenue		$	52,810			$	43,967
Lease revenue			1,129				1,058
Total Revenues		$	53,939			$	45,025
Costs and Expenses
Cost of revenue (exclusive of depreciation and amortization):
Service		$	4,995			$	3,754
Lease			107				90
Sales and marketing			15,486				22,736
Operations and support			45,000				39,596
Technology and product development			12,286				13,374
General and administrative			40,224				38,665
Depreciation and amortization			9,914				7,670
Total Operating Expenses		$	128,012			$	125,885
Loss from Operations		$	(74,073	)		$	(80,860	)
Other Income (Expense)
Convertible promissory note fair value adjustment			(7,765	)			3,896
Note payable fair value adjustment			(245	)			—
Warrant fair value adjustment			209				(17,521	)
Interest income (expense), net			506				(7,903	)
Other income, net			331				1,258
Total Other Income (Expense)		$	(6,964	)		$	(20,270	)
Loss, before benefit for income taxes			(81,037	)			(101,130	)
Income Tax Benefit			(623	)			(547	)
Net Loss		$	(80,414	)		$	(100,583	)
Change in fair value of the convertible instrument liability		$	15,628			$	—
Foreign Currency Translation Loss			(1,876	)			(19,553	)
Comprehensive Loss		$	(66,662	)		$	(120,136	)

 

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The following table sets forth the components of our consolidated statements of operations and comprehensive loss for each of the periods presented as a percentage of Total Revenues:

 

		Nine Months Ended September 30,
(In thousands)		2023				2022
Service revenue			98	%			98	%
Lease revenue			2	%			2	%
Total Revenue			100	%			100	%
Costs and Expenses
Cost of revenue (exclusive of depreciation and    amortization):
Service			9	%			8	%
Lease			0	%			0	%
Sales and marketing			29	%			50	%
Operations and support			83	%			88	%
Technology and product development			23	%			30	%
General and administrative			75	%			86	%
Depreciation and amortization			18	%			17	%
Total Operating Expenses			237	%			280	%
Loss from Operations			(137	)%			(180	)%
Other Income (Expense)
Convertible promissory note fair value adjustment			(14	)%			9	%
Note payable fair value adjustment			0	%			—	%
Warrant fair value adjustment			0	%			(39	)%
Interest income (expense), net			1	%			(18	)%
Other income, net			1	%			3	%
Total Other Income (Expense)			(12	)%			(45	)%
Loss, before benefit for income taxes			(150	)%			(225	)%
Income Tax Benefit			(1	)%			(1	)%
Net Loss			(149	)%			(223	)%
Change in fair value of the convertible instrument liability			29	%			0	%
Foreign Currency Translation Loss			(3	)%			(43	)%
Comprehensive Loss			(124	)%			(267	)%

 

Total Revenues

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Service revenue		$	52,810			$	43,967			$	8,843				20	%
Lease revenue			1,129				1,058				71				7	%
Total revenue		$	53,939			$	45,025			$	8,914				20	%

 

For the nine months ended September 30, 2023, the Company’s total revenues increased by $8.9 million, or 20%, compared to the same period in the prior year. This change was primarily driven by incremental revenue of $12.3 million arising from the investment in acquisition of assets of HyreCar Inc (see Note 3 — Business Combination to our consolidated financial statements included herein). Additionally overall risk and pricing strategy improvements resulted in an increase in our GBV on a per trip basis. In December 2022 we deployed a new version of our Getaround TrustScore - a proprietary next-generation artificial intelligence (AI) for risk and pricing optimization aimed to improve the trust, safety and economics of our marketplace. Getaround TrustScore combines machine learning with over a decade of data from trips taken on our platform to provide optimized pricing and security deposits for each carsharing trip. With Getaround TrustScore, we expect to be able to more accurately price risk on trips, provide upfront transparency for what guests should expect to pay while reducing our Trip support costs, inclusive of claims and insurance costs. Using this next-generation AI we anticipate that insurance and claims costs will be reduced by up to 50%.

Service revenue increased by $8.8 million, or 20%, driven primarily by incremental Service revenue of $12.3 million arising from the investment in acquisition of assets of HyreCar Inc (see Note 3 — Business Combination to our consolidated financial statements included herein). Furthermore, our overall risk and pricing strategy improvements resulted in an increase in our GBV on a per trip basis. Additionally, we reduced incentives to attract new customers onto the marketplace, a contra-revenue component of our Service revenue, by $2.7 million. See “Key Business Metrics” below for a discussion of GBV.

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Lease revenue increased by a total of $71.0 thousand, or 7%, primarily due to Hosts’ greater utilization of parking locations within our marketplace of parking providers, which increased the overall number of parking spaces generating Lease revenue.

 

Cost of Revenue (exclusive of depreciation and amortization)

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Service		$	4,995			$	3,754			$	1,241				33	%
Lease			107				90				17				19	%
Total cost of revenue		$	5,102			$	3,844			$	1,258				33	%
Percentage of total revenues			9	%			9	%

 

Total cost of revenue (exclusive of depreciation and amortization) increased $1.3 million, or 33%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. Cost of revenue varies with both the price and number of the transactions, which impact transaction processing fees, as well as with overall traffic, including research and development activities, on our platform that impacts the hosting charges. The overall increase is largely attributable to the augmentation of our operations in connection with the 2023 Business Combination (see Note 3 — Business Combination to our consolidated financial statements included herein).

Sales and Marketing

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Sales and marketing		$	15,486			$	22,736			$	(7,250	)			(32	)%
Percentage of total revenues			29	%			50	%

 

Sales and marketing expense decreased $7.3 million, or 32% for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The decrease was primarily attributable to a decrease of $4.3 million in advertising and related expenses, as well as to a $3.0 million decrease in compensation expense, of which $0.6 million is related to a decrease in stock-based compensation expense, as a result of the restructuring plan we commenced executing early in the year.

 

Operations and Support

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Operations and support		$	45,000			$	39,596			$	5,404				14	%
Percentage of total revenues			83	%			88	%

 

Operations and support expenses increased $5.4 million, or 14%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was primarily attributable to a $3.5 million increase in compensation expense, $1.1 million of which is related to an increase in stock-based compensation expense, driven primarily by acquisition of key employees of HyreCar Inc., and a $2.6 million net increase in insurance and claims expenses driven primarily by a $6.5 million of incremental claims expense arising from the addition of operations resulting from the 2023 Business Combination in which we acquired substantially all assets of HyreCar Inc.(see Note 3 — Business Combination to our consolidated financial statements included herein). The increase was partially offset by improvements in operations and support costs driven by Getaround TrustScore.

 

In December 2022 we deployed a new version of our Getaround TrustScore - a proprietary next-generation artificial intelligence (AI) for risk and pricing optimization aimed to improve the trust, safety and economics of our marketplace. Getaround TrustScore combines machine learning with over a decade of data from trips taken on our platform to provide optimized pricing and security deposits for each carsharing trip. With Getaround TrustScore, we expect to be able to more accurately price risk on trips, provide upfront transparency for what guests should expect to pay while reducing our Trip support costs, inclusive of claims and insurance costs. Using this next-generation AI we anticipate that insurance and claims costs will be reduced by up to 50%. The Getaround TrustScore has not yet been applied to trips booked through the HyreCar platform or the Getaround platform in Europe.

 

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Technology and Product Development

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Technology and product development		$	12,286			$	13,374			$	(1,088	)			(8	)%
Percentage of total revenues			23	%			30	%

Technology and product development costs decreased $1.1 million, or 8%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The decrease was primarily driven by capitalization of the value of development work in the amount of $3.3 million, partially offset by $1.8 million in stock-based compensation expense.

General and Administrative

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
General and administrative		$	40,224			$	38,665			$	1,559				4	%
Percentage of total revenues			75	%			86	%

 

General and administrative expenses increased $1.6 million, or 4%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was largely attributable to a $4.9 million increase in compensation and related expense, inclusive of $2.7 million increase in stock-based compensation expense, primarily driven by the acquisition of certain employees of HyreCar Inc., and $0.8 million increase in excess and directors and officers insurance cost (see Note 3 — Business Combination to our consolidated financial statements included herein). The increase was partially offset by a $1.3 million decrease in legal professional services following the completion of the 2022 Business Combination and $1.0 million decrease in recruiting costs as we reached our hiring targets. Additionally, bad debt decreased by $3.0 million driven by our risk and pricing strategy improvements through deployment of the Getaround TrustScore.

Depreciation and Amortization

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Depreciation and amortization		$	9,914			$	7,670			$	2,244				29	%
Percentage of total revenues			18	%			17	%

 

Depreciation and amortization expense increased by $2.2 million, or 29%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase is primarily driven by the increase in amortization expense related to newly acquired intangible assets as part of the Business Combination.

Convertible Promissory Note and Securities Fair Value Adjustment

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Convertible promissory note fair value adjustment		$	(7,765	)		$	3,896			$	(11,661	)			(299	)%
Percentage of total revenues			(14	)%			9	%

 

We have elected to carry some of our convertible debt at fair value, and we continue to do so, which, at times, subjects such debt to significant fair value fluctuations. The convertible promissory note and securities fair value adjustment changed by $11.7 million, or 299%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, following the change in the fair value of the outstanding convertible promissory notes and securities. Please refer to Note 4 - Fair Value Measurements to our consolidated financial statements included elsewhere in this document for additional details on fair valuation of underlying securities.

 

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Note Payable Fair Value Adjustment

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Note payable fair value adjustment		$	(245	)		$	—			$	(245	)			0	%
Percentage of total revenues			0	%			0	%

 

We have elected to carry some of our note payable at fair value, and we continue to do so, which, at times, subjects such debt to significant fair value fluctuations. The note payable fair value adjustment changed by $0.2 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, following the change in the fair value of the note payable. Please refer to Note 4 - Fair Value Measurements to our consolidated financial statements included elsewhere in this document for additional details on fair valuation of underlying note payables.

Warrant Liability Fair Value Adjustment

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Warrant fair value adjustment		$	209			$	(17,521	)		$	17,730				(101	)%
Percentage of total revenues			0	%			(39	)%

 

Warrant liability fair value adjustment changed by $17.7 million, or 101%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. Change in fair value of the warrant liability fluctuates with the changes in the fair value of the underlying securities. Please refer to Note 4 – Fair Value Measurements to our consolidated financial statements sincluded in this document for additional details on fair valuation of underlying warrants.

Interest Expense, Net

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Interest income (expense), net		$	506			$	(7,903	)		$	8,409				(106	)%
Percentage of total revenues			1	%			(18	)%

Interest income (expense), net, changed by $8.4 million, or 106%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was primarily driven by a decrease in our long-term debt carried at historical cost. There was $75.0 million in notes payable issued in October of 2021 that resulted in net interest expense being recognized during the nine months ended September 30, 2022. This debt was paid off in connection with the Business Combination in December 2022.

Other Income (Expense), Net

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Other income, net		$	331			$	1,258			$	(927	)			(74	)%
Percentage of total revenues			1	%			3	%

 

Other income (expense), net changed by $0.9 million, or 74%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The decrease was primarily a result of a change in realized and unrealized foreign currency exchange gains and losses, and a mix of miscellaneous expenses unrelated to our core operations,

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Income Tax Benefit

 

		Nine Months Ended September 30,								Change
(In thousands, except percentages)		2023				2022				$				%
Income tax benefit		$	(623	)		$	(547	)		$	(76	)			14	%
Percentage of total revenues			(1	)%			(1	)%

 

Income tax benefit increased by $0.1 million, or 14%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase is primarily attributable to our international operations.

Segment and Geographical Results of Operations

We view and operate our business as one operating segment. Refer to Note 17 — Segment and Geographical Area Information to our consolidated financial statements included elsewhere in this prospectus for additional details on this determination.

Key Business Metrics

We use the following key business metrics to measure our performance, identify trends relevant to our business, formulate financial projections and operating plans, and make strategic decisions. As a marketplace platform we have two main key business metrics: Gross Booking Value and Trips.

Gross Booking Value

Gross Booking Value (“GBV”) represents the dollar value of all service transactions on our platform during a period, charged to both guests and hosts, net of cancellations. This includes charges for transactions resulting from all revenue generating activities, inclusive of all pass-through fees and taxes, net of lease revenue. As such, we consider GBV to be a key indicator of our market scale. Growth of GBV reflects our ability to attract and retain guests and hosts on our platform.

 

		Nine Months Ended September 30,
(In thousands)		2023				2022
Gross Booking Value		$	154,711			$	136,055

 

For the nine months ended September 30, 2023, GBV amounted to $154.7 million, an increase of $18.7 million, or 14%, from the year prior, primarily attributable to the $23.5 million of incremental GBV arising from the HyreCar acquisition and improvements in revenue management which generated higher GBV per Trip, partially offset by the temporary reduction in revenue driven by the launch of our Getaround TrustScore which reduced rented hours and, correspondingly reduced GBV generated by lower trust, higher risk guests, as discussed under the Total Revenues paragraph herein. In December 2022 we deployed a new version of our Getaround TrustScore - a proprietary next-generation artificial intelligence (AI) for risk and pricing optimization aimed to improve the trust, safety and economics of our marketplace. Getaround TrustScore combines machine learning with over a decade of data from trips taken on our platform to provide optimized pricing and security deposits for each carsharing trip.

Trips

Trips are a measure of unit transactions in our marketplace, one of the key variables impacting our service revenue. Trips represent the number of non-cancelled unique bookings that ended during the period, net of trips contributing to lease revenue. A Trip represents a single unit of transaction on our platform. We expect the number of Trips to grow as we attract prospective guests to the platform and as already existing cohorts of guests increase their activity on our platform.

 

		Nine Months Ended September 30,
(In thousands)		2023		2022
Trips		724		722

 

For the nine months ended September 30, 2023, we facilitated 724 thousand Trips, an increase of two thousand or less than 1% from the 722 thousand Trips during the same period in the year prior. The overall stagnation in Trips is largely attributable to the reduction in direct marketing investments, combined with the impact of Getaround TrustScore, which reduced the number of Trips booked by lower trust, higher risk guests, and the investment in acquisition of the assets of HyreCar Inc., which traditionally attracted Guests who booked fewer longer trips rather than more frequent shorter trips.

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Non-GAAP Financial Measures

We use Net Marketplace Value, Trip Contribution Profit, Trip Contribution Margin and Adjusted EBITDA, each of which are non-GAAP financial measures, in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with the Getaround Board concerning our financial performance. Our definitions of these non-GAAP financial measures may differ from definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar financial measures. Furthermore, these financial measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Additionally, a limitation of NMV is that it is a measure that we have defined for internal purposes that may be unique to us, and therefore may not enhance the comparability of our results to other companies in our industry that have similar arrangements but present the impact of fees and commissions differently. Thus, these non-GAAP financial measures should be considered in addition to, and not as a substitute for, or in isolation from, financial measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view the non-GAAP financial measures in conjunction with their most directly comparable GAAP financial measures.

Net Marketplace Value

Net Marketplace Value (“NMV”) represents the dollar value of all transactions on our platform contributing to service revenue during a period, charged to both guests and hosts, net of cancellations, hosts’ earnings, incentives, and pass-throughs. NMV does not represent revenue earned by us and is not a substitute for service revenue, which consists of carsharing revenue and Connect subscription revenue recorded in accordance with GAAP. We believe that NMV is a meaningful measure of our operating performance because our ability to generate increases in NMV is strongly correlated to our ability to generate increases in total revenue. Management uses NMV as supplemental information to evaluate the global dollar value of transactions on our platform contributing to service revenue, understand our business and make operating decisions because service revenue by itself is not comparable across geographies due to the accounting treatment and contractual differences in trip insurance related charges to guests. While revenue generated in the United States includes amounts of insurance billed to the guest and recognized as Service Revenue under GAAP, revenue generated in the rest of the world excludes such amounts where guests contract directly with our insurance partners via our marketplace.

The following tables present a reconciliation of NMV from the most comparable GAAP measure, Service Revenues, for the periods presented:

 

		Nine Months Ended September 30,
(In thousands)		2023				2022
Service Revenues		$	52,810			$	43,967
Plus: EU insurance share(1)			17,757				15,922
Net Marketplace Value		$	70,567			$	59,889

 

For nine months ended September 30, 2023, NMV amounted to $70.6 million, an increase of $10.7 million, or 18%, from the $59.9 million for the same period in the year prior. The change was primarily driven by a $1.8 million increase in the sale of European insurance and $8.8 million increase in Service revenue, discussed elsewhere in this analysis.

Trip Contribution Profit and Trip Contribution Margin

Trip Contribution Profit is defined as our gross profit from Service revenue adjusted for: (i) cost of Service revenue, amortization and depreciation; and (ii) trip support costs, which consist of auto insurance expenses, claims support and customer relations costs. We define Trip Contribution Margin as Trip Contribution Profit divided by Service revenue recognized during the period presented. We believe these measures are leading indicators of our ability to achieve profitability and sustain or increase it over time. Trip Contribution Profit and Trip Contribution Margin are measures we use to understand and evaluate our operating performance and trends. Trip Contribution Profit and Trip Contribution Margin have generally increased over the periods as Service revenue increased while costs considered in the calculation of Trip Contribution Profit decreased as a percentage of Total Revenues.

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The following tables present a reconciliation of Trip Contribution Profit from the most comparable GAAP measure, gross profit from Service revenue, for the periods presented:

 

		Nine Months Ended September 30,
(In thousands, except percentages)		2023				2022
Gross profit from Service revenue		$	45,014			$	38,087
Gross margin from Service revenue			85	%			87	%
Plus: Cost of Service revenue, amortization and depreciation			2,801				2,126
Less: Trip support costs			(22,981	)			(19,827	)
Trip Contribution Profit			24,834				20,386
Trip Contribution Margin			47	%			46	%

 

Our gross profit from Service revenue is calculated as follows:

 

		Nine Months Ended September 30,
(In thousands, except percentages)		2023				2022
Service revenue		$	52,810			$	43,967
Less: Cost of Service revenue, net of amortization and    depreciation			(4,995	)			(3,754	)
Less: Cost of Service revenue, amortization and depreciation			(2,801	)			(2,126	)
Gross profit from Service revenue		$	45,014			$	38,087
Gross margin from Service revenue			85	%			87	%

 

For the nine months ended September 30, 2023, Trip contribution profit amounted to $24.8 million, an increase of $4.4 million, or 22%, from the same period in the year prior. The change is attributable to a $8.8 million increase in Service revenue partially offset by $3.3 million net increase in Trip support costs primarily driven by incremental cost of operations arising from the newly acquired assets of HyreCar Inc. (see Note 3 — Business Combination to our consolidated financial statements included herein) partially offset by the beneficial impact of Getaround TrustScore, and $1.2 million increase in cost of Service revenue, as discussed elsewhere in this document.

For the nine months ended September 30, 2023, our Trip Contribution Margin was 47%, a marginal improvement compared to our Trip Contribution Margin in the same period of the year prior.

Adjusted EBITDA

We define Adjusted EBITDA as net income adjusted for: (i) fair value adjustment of instruments carried at fair value; (ii) interest income (expense) and other income (expense); (iii) income tax provision; (iv) gain/(loss) on extinguishment of debt; (v) depreciation and amortization; (vi) stock-based compensation expense; (vii) contingent compensation; and (viii) certain expenses determined to be incurred outside of the regular course of business which includes: expenses associated with the termination of our leased vehicle supply arrangements, certain legal settlements and business combination-related legal fees, and investments in preparation of going public, initial implementation projects and transaction costs associated with proposed business combinations that are not subject to deferral. Adjusted EBITDA is a key performance measure that we use to assess operating performance and operating leverage of our business. As Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. Accordingly, we believe that Adjusted EBITDA provides useful to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. The items excluded from our Adjusted EBITDA calculation are either non-cash in nature, or not driven by core results of recurring operations and therefore not predictable or recurring, rendering comparisons with prior periods and competitors less meaningful.

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The following tables present a reconciliation of Adjusted EBITDA from the most comparable GAAP measure, Net Loss, for the periods presented:

 

		Nine Months Ended September 30,
(In thousands)		2023				2022
Net Loss		$	(80,414	)		$	(100,583	)
Plus: warrant liability, convertible promissory note and securities    fair value adjustment			7,801				13,625
Plus: interest and other income (expense), net			(837	)			6,645
Minus: income tax provision			(623	)			(547	)
Plus: depreciation and amortization			9,914				7,670
Plus: stock-based compensation			9,953				4,945
Plus: contingent compensation(1)			—				1,180
Plus: expense not incurred in the regular course of business			720				1,856
Adjusted EBITDA			(53,486	)			(65,209	)

 

For the nine months ended September 30, 2023, Adjusted EBITDA was a loss of $53.5 million, a favorable change by $11.7 million, or 18%, from the loss of $65.2 million from the same period in the year prior, driven primarily by reduction in marketing expenses of $7.2 million, and improvement in Trip contribution profit of $4.3 million aided by reduction in corporate overhead following commencement of the restructuring announced in the first quarter of 2023.

 

Liquidity and Capital Resources

Our principal sources of liquidity have historically consisted of cash generated from our financing activities. As of September 30, 2023, our principal sources of liquidity were cash and cash equivalents of $22.2 million, exclusive of restricted cash of $3.6 million. Cash and cash equivalents consisted of institutional money market funds, and similar instruments that have an original maturity date of less than six months and are readily convertible into known amounts of cash. Restricted cash consists of letters of credit collateralizing lease agreements.

As noted above, Legacy Getaround consummated the Business Combination with InterPrivate II on December 8, 2022. Redemptions of Class A Common Stock prior to the 2022 Business Combination significantly reduced the proceeds from the transaction and resulted in the Company having insufficient capital to fund its business operations and continue as a going concern within at least one year from the transaction date. As a result, we have sought, and expect to continue to seek additional sources of capital in the near term.

We have incurred cumulative losses from inception through September 30, 2023 and expect to incur additional losses for the foreseeable future. Our ability to fund our operations and capital expenditures beyond our current cash, cash equivalents and marketable securities resources will depend on our ability to generate cash from operating activities which is subject to future operating performance, as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control. We expect operating losses and negative cash flows to continue for the foreseeable future as we continue to develop and promote our platform, as well as to grow our marketplace globally. Our future capital requirements depend on many factors, including our needs to support our business growth, to respond to business opportunities, challenges, or unforeseen circumstances, or for other reasons. As a result, we may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected. These matters raise substantial doubt about the ability of the Company to continue in existence as a going concern within one year after the date the financial statements are issued.

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Cash Flows

The following tables presents the summary cash flow information for the periods indicated:

 

		Nine Months Ended September 30,
(In thousands)		2023				2022
Net cash provided by (used in):
Operating activities		$	(43,963	)		$	(63,206	)
Investing activities			(11,798	)			(1,607	)
Financing activities			13,792				31,685
Net (decrease) increase in cash			(41,969	)			(33,128	)
Effect of foreign currency translation on cash, cash equivalents    and restricted cash			(161	)			(2,522	)
Net change in cash, cash equivalents and restricted cash and    cash equivalents		$	(42,130	)		$	(35,650	)

 

Operating Activities

During the nine months ended September 30, 2023 and 2022, cash flows used in operating activities were $44.0 million and were $63.2 million, respectively. Comparability of operating cash flows between comparable periods was impacted by changes in working capital primarily driven by following factors: (i) sales volumes and timing of collections, (ii) volume of purchases and timing of payments, (iii) timing and volume of payments related to the cash portion of the contingent compensation liability incurred in connection with the 2019 Acquisition, and (iv) fluctuations in liability from obligation to remit insurance fees collected on behalf of an insurance company in Europe due to the timing of payments.

Investing Activities

During the nine months ended September 30, 2023, cash flows used in investing activities amounted to $11.8 million, consisting of $0.8 million in purchases of property and equipment, $3.3 million of capitalized software, and $7.8 million related to the acquisition of Hyrecar, partially offset by $0.1 million from proceeds from the sale of property and equipment.

 

Net cash used in investing activities during the nine months ended September 30, 2022 amounted to $1.6 million, consisting of $1.6 million in purchases of property and equipment.

 

Financing Activities

Net cash provided by financing activities was $13.8 million during the nine months ended September 30, 2023 consisting of $3.0 million in proceeds from issuance of the Mudrick Bridge Note and $11.7 million in proceeds from issuance of the Mudrick Super Priority Note.

Net cash provided by financing activities was $31.7 million for the nine months ended September 30, 2022, primarily consisting of $31.8 million from proceeds from the issuance of Bridge Loans and $0.1 million form proceeds from the exercise of common stock options, partially offset by $0.2 million repayment of the PGE Loan.

Contractual Obligations and Commitment

Contractual obligations are cash amounts that we are obligated to pay as part of certain contracts that we have entered into during the normal course of business. Below is a table that shows our contractual obligations as of September 30, 2023:

 

		Payments Due by Period
(In thousands)		Total				Less than 1 Year				1-3 years				3-5 years				More than 5 years
Long Term Debt(1)		$	193,174			$	15,020			$	2,248			$	175,906			$	—
Operating Lease(2)			24,923				1,021				8,423				8,819				6,660
Total Contractual Obligations		$	218,097			$	16,041			$	10,671			$	184,725			$	6,660

 

The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a material penalty are not included in the table above.

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Contingencies

We are involved in claims, lawsuits, indirect tax matters, and proceedings arising from the ordinary course of our business. Legal fees and other expenses associated with such actions are expensed as incurred. We record a provision for a liability when we determine that a loss-related matter is both probable and reasonably estimable. We disclose material contingencies when we believe that a loss is not probable but reasonably possible and can be reasonably estimated. These claims, suits, and proceedings are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. Determining both probability and the estimated amount is inherently uncertain and requires making numerous judgments, assumptions, and estimates. Many of these legal and tax contingencies can take years to resolve. Should any of these estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows.

 

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures of contingencies at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimates and assumptions on an ongoing basis. Estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from these estimates.

For a description of our significant accounting policies (See Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in this report).

The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our financials are described below.

Fair Value Measurements

We measure fair value based on the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. We use significant unobservable inputs to estimate the fair value of certain assets and liabilities.

Company Valuation and Fair Value Calculation of Convertible Redeemable Preferred Stock Warrants & Common Stock Warrant Liability, and Convertible Promissory Notes

In the absence of a public trading market, prior to the closing of the Business Combination the fair value of our common stock was determined by the Getaround Board. The Getaround Board considers numerous objective and subjective factors to determine the fair value of our common stock at each meeting in which awards are approved. The factors considered include, but are not limited to:

The fair value of our common stock was determined with an option pricing method (“OPM”) that utilizes both income and market approaches, which are probability weighted depending on the scenario of (i) a consummation of a business combination transaction with a special purpose acquisition company or (ii) remaining private.

The valuation methodology utilized under the remain private scenario was determined by first valuing our total equity, as of the end of each reporting period. This value was determined utilizing both income and market approaches which were weighted equally in the valuation. The income approach was applied through the use of a discounted cash flow analysis and the market approach was applied through the use of guideline public company multiples that were used to value our company under certain scenarios.

In determining the value under the consummation of a business combination transaction with a special purpose acquisition company scenario, we utilized the preliminary terms of the letter of intent with such special purpose acquisition company. In addition,

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as the letter of intent provides shareholders the right to receive an earnout, we determined the probability-weighted value per share associated with the earnout by utilizing a Monte Carlo simulation to determine the probability of achieving the earnout and its fair value.

The fair value of our redeemable convertible preferred and common stock warrants is estimated based on the probability weighted average values from (i) a Black-Scholes calculation and (ii) the fair value calculated from the Company Valuation OPM under the scenario of remaining private. The value from the Black-Scholes calculation reflects the value in an initial public offering scenario with the contractual term of the warrants, which is weighted by an estimated probability of a potential initial public offering at the applicable valuation. The value from the OPM reflects the value in an alternative exit scenario at which point the warrants were expected to be exercised. The OPM value was weighted by an estimated probability of a potential alternative exit event at the applicable valuation date.

The significant unobservable inputs into the valuation model used to estimate the fair value of the redeemable convertible preferred and common stock warrants include:

In determining the fair value of the Mudrick Convertible Notes, the Company used a Monte Carlo simulation or a scenario-based method. The valuation method utilized implied negotiated discount rates and market yield factors that are unobservable inputs.

An increase or decrease in any of the unobservable inputs in isolation could result in a material increase or decrease in the estimated fair value. In the future, depending on the weight of evidence and valuation approaches used, these or other inputs may have a more significant impact on the estimated fair value.

Stock-Based Compensation

We measure compensation expense for all stock-based payment awards, including stock options and restricted stock units granted to employees, directors and nonemployees based on the estimated fair value of the awards on the date of grant. The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model. The determination of the grant date fair value using an option-pricing model is affected by our estimated common stock fair value, as well as assumptions regarding a number of other complex and subjective variables. These variables include our expected stock price volatility over the expected term of the award, actual and projected employee stock option exercise behaviors, risk-free interest rate for the expected term of the award and expected dividends. Stock-based compensation is recognized on a straight-line basis over the requisite service period. These amounts are reduced by forfeitures as the forfeitures occur.

 

Recent Accounting Pronouncements

For information on recently issued accounting pronouncements (See Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements included herein).

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk as compared to the disclosures in Part II, Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on November 16, 2023.

Item 4. Controls and Procedures

There have been no material changes in our controls and procedures as compared to the disclosures in Part II, Item 9A in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on November 16, 2023.

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PART II - Other information

Item 1. Legal Proceedings

For a discussion of legal proceedings, see “Note 12: Commitments and Contingencies” of the notes to the condensed consolidated financial statements in this Form 10-Q.

 

 

Item 1A. Risk Factors

Getaround TrustScore,uses certain elements of Artificial Intelligence, or "AI", which presents certain privacy and security risks that could materially impact our business and our results of operations. The application of existing and new privacy and data security laws, rules or regulations to our use of AI may limit or curtail such use, lead to increased costs of compliance with such rules, new consumer rights which our platform and technology cannot provide on a cost-effective basis, or subject us to material fines and penalties. For example, regulators in the EU have proposed stringent AI regulations, and other jurisdictions will likely do the same, including in the US. If we cannot comply with such laws, rules and regulations on a cost-effective basis our business may be harmed.

Our business is subject to numerous other risks and uncertainties, including those described in Part I. Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, under the section entitled “Risk Factors,” that represent challenges that we face in connection with the successful implementation of our strategy and growth of our business. You should carefully consider the Risk Factors, together with all of the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

The occurrence of one or more of the events or circumstances described in the Risk Factors, alone or in combination with other events or circumstances, may adversely affect our ability to realize the anticipated benefits of the Business Combination and may harm our business.

Other than the risks set forth in this Item 1A, there have been no material changes to the Risk Factors described in Part I. Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

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.

Item 5. Other Information

None.

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Item 6. Exhibits.

 

Exhibit No.	Description
10.1	Promissory "Bridge" Note issued by the Company to Mudrick Capital Management L.P. on August 7, 2023
10.2	Subscription Agreement, dated as of September 8, 2023, by and between the Company and Mudrick Capital Management L.P. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-40152) filed with the SEC on September 12, 2023).
10.2(a)	Form of Super Priority Notes due August 7, 2024 (incorporated by reference to Exhibit 10.1(a) to the Registrant’s Current Report on Form 8-K (File No. 001-40152) filed with the SEC on September 12, 2023).
10.4	First Supplemental Indenture dated September 7, 2023 by and between the Company, Getaround Operations LLC, and U.S. Bank Trust Company, National Association, as trustee,
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the Quarterly Report on Form 10-Q of Getaround, Inc. for the quarter ended September 30, 2023, formatted in inline XBRL: (i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) Unaudited Condensed Consolidated Statements of Cash Flows and (v) Notes to the Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

__________

 

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	GETAROUND, INC.
Date: December 15, 2023	/s/ Sam Zaid
	Name: Sam Zaid
	Title: Chief Executive Officer (Principal Executive Officer)

 

Date: December 15, 2023	/s/ Tom Alderman
	Name: Tom Alderman
	Title: Chief Financial Officer
	(Principal Financial Officer)

 

 

 

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