Consolidated Balance Sheets(in thousands, except share and per share data) December 31,2023 December 31,2024ASSETS Current assets: Cash $20,023 $17,998 Accounts receivable, net 4,225 3,782 Inventory 20,390 13,749 Prepaid and other current assets 4,998 3,190 Total current assets 49,636 38,719 Property and equipment, net 775 685 Intangibles, net 11,320 9,757 Other non-current assets 138 381 Total assets $61,869 $49,542 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Credit facility $11,098 $6,948 Accounts payable 4,190 3,080 Seller notes 1,049 466 Accrued and other current liabilities 9,110 8,804 Total current liabilities 25,447 19,298 Other liabilities 391 227 Total liabilities 25,838 19,525 Commitments and contingencies Stockholders' equity: Common stock, $0.0001 par value, 500,000,000 shares authorized and 7,508,246 and 8,750,741 shares outstanding at December 31, 2023 and December 31, 2024, respectively(*) 9 9 Additional paid-in capital 736,675 742,591 Accumulated deficit (699,815) (711,677)Accumulated other comprehensive loss (838) (906)Total stockholders’ equity 36,031 30,017 Total liabilities and stockholders' equity $61,869 $49,542 (*) The number of shares and per share amounts have been retroactively restated to reflect the one for twelve (1 for 12) reverse stock split, which was effective on March 22, 2024. ATERIAN, INC. Consolidated Statements of Operations (in thousands, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2023 2024 2023 2024Net revenue $32,754 $24,607 $142,566 $99,045 Cost of goods sold 16,045 9,000 72,281 37,550 Gross profit 16,709 15,607 70,285 61,495 Operating expenses: Sales and distribution 20,207 13,692 81,911 55,979 Research and development 808 — 4,616 — General and administrative 3,654 3,527 20,220 17,339 Impairment loss on intangibles 283 — 39,728 — Total operating expenses 24,952 17,219 146,475 73,318 Operating loss (8,243) (1,612) (76,190) (11,823)Interest expense, net 345 209 1,421 949 Change in fair value of warrant liabilities (30) (194) (2,440) (924)Other expense, net 158 (215) 260 61 Loss before income taxes (8,716) (1,412) (75,431) (11,909)Benefit for income taxes (1,009) (113) (867) (47)Net loss $(7,707) $(1,299) $(74,564) $(11,862)Net loss per share, basic and diluted $(1.16) $(0.18) $(11.43) $(1.68)Weighted-average number of shares outstanding, basic and diluted(*) 6,622,540 7,343,880 6,524,589 7,069,404 (*) The number of shares and per share amounts have been retroactively restated to reflect the one-for-twelve (1-for-12) reverse stock split, which was effective on March 22, 2024. ATERIAN, INC. Consolidated Statement of Cash Flows (in thousands, except share and per share data) Year Ended December 31, 2023 2024OPERATING ACTIVITIES: Net loss $(74,564) $(11,862)Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 3,886 1,689 (Recovery) provision for sales returns (413) 57 Amortization of deferred financing cost and debt discounts 429 198 Stock-based compensation 8,336 7,510 Change in deferred tax expense (1,153) (5)Change in inventory provisions (3,149) (2,738)Change in fair value of warrant liabilities (2,440) (924)Impairment loss on intangibles 39,728 — Provision for barter credits 323 — Allowance for credit losses 85 16 Changes in assets and liabilities: Accounts receivable 205 427 Inventory 26,426 9,378 Prepaid and other current assets 2,597 762 Accounts payable, accrued and other liabilities (13,684) (2,343)Cash (used in) provided by operating activities (13,388) 2,165 INVESTING ACTIVITIES: Purchase of fixed assets (119) (42)Purchase of Step and Go assets (125) — Purchase of minority equity investment — (200)Cash used in investing activities (244) (242)FINANCING ACTIVITIES: Repayments on seller notes (668) (633)Borrowings from MidCap credit facilities 79,806 60,866 Repayments for MidCap credit facilities (90,190) (65,165)Insurance obligation payments (1,042) (682)Insurance financing proceeds 986 700 Cash used in financing activities (11,108) (4,914)Foreign currency effect on cash, cash equivalents, and restricted cash 306 (61)Net change in cash and restricted cash for the year (24,434) (3,052)Cash and restricted cash at beginning of year 46,629 22,195 Cash and restricted cash at end of year $22,195 $19,143 RECONCILIATION OF CASH AND RESTRICTED CASH: Cash 20,023 17,998 Restricted cash—Prepaid and other current assets 2,043 1,015 Restricted cash—Other non-current assets 129 130 TOTAL CASH AND RESTRICTED CASH $22,195 $19,143 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest $1,718 $1,141 Cash paid for taxes $94 $152 NON-CASH INVESTING AND FINANCING ACTIVITIES: Non-cash consideration paid to contractors $321 $620 Non-cash minority equity investment $— $50 Non-GAAP Financial MeasuresWe believe that our financial statements and the other financial data included in this press release have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the U.S.("GAAP”).
For example, Contribution margin does not reflect: general and administrative expense necessary to operate our business;research and development expenses necessary for the development, operation and support of our software platform;the fixed costs portion of our sales and distribution expenses including stock-based compensation expense; orchanges in fair value warrant liabilities Contribution MarginThe following table provides a reconciliation of Contribution margin to gross profit and Contribution margin as a percentage of net revenue to gross profit as a percentage of net revenue, which are the most directly comparable financial measures presented in accordance with GAAP. Three Months Ended December 31, Year Ended December 31. 2023 2024 2023 2024 (in thousands, except percentages) Gross Profit $16,709 $15,607 $70,285 $61,495 Less: Reserve on barter credits 323 — 323 — E-commerce platform commissions, online advertising, selling and logistics expenses (17,293) (10,844) (68,864) (44,553) Contribution margin $(261) $4,763 $1,744 $16,942 Gross Profit as a percentage of net revenue 51.0 % 63.4 % 49.3 % 62.1 %Contribution margin as a percentage of net revenue (0.8)% 19.4 % 1.2 % 17.1 % Adjusted EBITDA Three Months Ended December 31, Year EndedDecember 31, 2023 2024 2023 2024 (in thousands, except percentages) Net loss $(7,707) $(1,299) $(74,564) $(11,862) Add: Benefit for income taxes (1,009) (113) (867) (47) Interest expense, net 345 209 1,421 949 Depreciation and amortization 469 410 3,886 1,689 EBITDA (7,902) (793) (70,124) (9,271) Other expense, net 158 (215) 260 61 Impairment loss on intangibles 283 — 39,728 — Change in fair market value of warrant liabilities (30) (194) (2,440) (924) Reserve on barter credits 323 — 323 — Restructuring expense — — 1,633 565 Stock-based compensation expense 1,564 1,116 8,336 7,510 Adjusted EBITDA $(5,604) $(86) $(22,284) $(2,059) Net loss as a percentage of net revenue (23.5)% (5.3)% (52.3)% (12.0)%Adjusted EBITDA as a percentage of net revenue (17.1)% (0.3)% (15.6)% (2.1)% Each of our products typically goes through the Launch phase and depending on its level of success is moved to one of the other phases as further described below: i. Launch phase: During this phase, we leverage our technology to target opportunities identified using AIMEE (Artificial Intelligence Marketplace e-Commerce Engine) and other sources.
Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue should not be considered in isolation or as alternatives to net loss, loss from operations or any other measure of financial performance calculated and prescribed in accordance with GAAP.
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