Company Quick10K Filing
Mohawk Group
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 18 $132
S-1 2019-12-10 Public Filing
10-Q 2019-11-05 Quarter: 2019-09-30
10-Q 2019-08-01 Quarter: 2019-06-30
S-1 2019-05-10 Public Filing
8-K 2020-03-05 Earnings, Exhibits
8-K 2020-02-19 Officers, Exhibits
8-K 2020-01-13 Earnings, Regulation FD, Exhibits
8-K 2019-11-05 Earnings, Exhibits
8-K 2019-08-23 Officers
8-K 2019-08-01 Earnings, Exhibits
8-K 2019-06-14 Amend Bylaw, Other Events, Exhibits
MWK 2019-09-30
Part I-Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part Ii-Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.1 mwk-ex101_58.htm
EX-10.2 mwk-ex102_61.htm
EX-31.1 mwk-ex311_57.htm
EX-31.2 mwk-ex312_59.htm
EX-32.1 mwk-ex321_60.htm

Mohawk Group Earnings 2019-09-30

MWK 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
CALL 135 144 95 80 52 6 13 73 64% 5.6 5%
FSAC 135 471 26 0 0 -4 -5 132 -26.8 -1%
JRSS 135 54 30 23 0 3 6 133 0% 23.1 5%
FXC 129 116 0 2 0 1 1 -24 0% -23.9 1%
MWK 136 73 53 71 29 -19 -17 127 41% -7.6 -26%
LTDH 131 0 1 0 -0 -0 -0 131 -27% -587.9 -294%
RSSV 1 19 9 35 2 1 1 1 5% 1.2 3%
GST 129 335 448 83 0 -82 -11 485 0% -45.1 -24%
CTGO 129 8 0 0 0 -7 -7 121 -16.5 -96%
EMMA 128 71 95 13 12 -47 -29 165 96% -5.7 -66%

10-Q 1 mwk-10q_20190930.htm 10-Q mwk-10q_20190930.htm

 

 

 

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, 2019

OR

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

 

Commission File Number: 001-38937

 

Mohawk Group Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

83-1739858

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer
Identification Number)

 

37 East 18th Street, 7th Floor

New York, NY

 

10003

(Address of principal executive offices)

 

(Zip Code)

 

(347) 676-1681

(Registrant’s telephone number, including area code)

 

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, $0.0001 par value per share

 

MWK

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      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 November 5, 2019, the registrant had 17,710,659 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 

 


 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Comprehensive Loss

3

 

Condensed Consolidated Statements of Stockholder’s Equity

4

 

Condensed Consolidated Statements of Cash Flows

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

Item 4.

Controls and Procedures

36

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

68

Item 3.

Defaults Upon Senior Securities

68

Item 4.

Mine Safety Disclosures

68

Item 5.

Other Information

68

Item 6.

Exhibits

69

Signatures

70

 

i


 

Special Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

 

our future financial performance, including our revenue, costs of goods sold and operating expenses;

 

our ability to achieve and grow profitability;

 

the sufficiency of our cash to meet our liquidity needs and to execute our growth strategies;

 

our ability to maintain the security and availability of our technology platform, including our AIMEE (Artificial Intelligence Mohawk e-Commerce Engine) software platform;

 

our ability to successfully launch new products;

 

our ability to identify and complete merger and acquisition transactions;

 

our predictions about industry and market trends;

 

our ability to successfully expand internationally;

 

our ability to effectively manage our growth and future expenses;

 

our estimated total addressable market;

 

our ability to maintain, protect and enhance our intellectual property, including our AIMEE software platform;

 

our ability to comply with modified or new laws and regulations applying to our business;

 

the attraction and retention of qualified employees and key personnel;

 

our ability to successfully defend litigation brought against us; and

 

the increased expenses and obligations associated with being a public company.

We caution you that the foregoing list may not contain all the forward-looking statements made in this Quarterly Report on Form 10-Q.

We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section of this Quarterly Report on Form 10-Q entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected, or that the plans, intentions or expectations disclosed, in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, other strategic transactions or investments we may make or enter into.

 

 

 

ii


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

MOHAWK GROUP HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

 

 

 

December 31, 2018

 

 

September 30, 2019

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash

 

$

20,029

 

 

$

35,686

 

Accounts receivable—net

 

 

1,403

 

 

 

3,152

 

Inventory

 

 

30,552

 

 

 

25,908

 

Prepaid and other current assets

 

 

5,418

 

 

 

6,736

 

Total current assets

 

 

57,402

 

 

 

71,482

 

PROPERTY AND EQUIPMENT—net

 

 

268

 

 

 

140

 

GOODWILL AND OTHER INTANGIBLES—net

 

 

 

 

 

1,071

 

OTHER NON-CURRENT ASSETS

 

 

337

 

 

 

135

 

TOTAL ASSETS

 

$

58,007

 

 

$

72,828

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Credit facility

 

$

14,451

 

 

$

13,640

 

Accounts payable

 

 

15,404

 

 

 

15,453

 

Accrued and other current liabilities

 

 

9,708

 

 

 

10,880

 

Total current liabilities

 

 

39,563

 

 

 

39,973

 

OTHER LIABILITIES

 

 

26

 

 

 

8

 

TERM LOANS

 

 

13,049

 

 

 

13,339

 

Total liabilities

 

 

52,638

 

 

 

53,320

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Common stock, par value $0.0001 per share—500,000,000 shares authorized and

   11,534,190 shares outstanding at December 31, 2018; 500,000,000 shares authorized

   and 17,710,659 shares outstanding at September 30, 2019

 

 

1

 

 

 

2

 

Additional paid-in capital

 

 

76,348

 

 

 

117,791

 

Accumulated deficit

 

 

(71,020

)

 

 

(98,351

)

Accumulated other comprehensive income

 

 

40

 

 

 

66

 

Total stockholders’ equity

 

 

5,369

 

 

 

19,508

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

58,007

 

 

$

72,828

 

 

See notes to condensed consolidated financial statements.

1


 

MOHAWK GROUP HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

NET REVENUE

 

$

24,672

 

 

$

40,603

 

 

$

53,576

 

 

$

88,817

 

COST OF GOODS SOLD

 

 

14,262

 

 

 

23,076

 

 

 

35,919

 

 

 

52,859

 

GROSS PROFIT

 

 

10,410

 

 

 

17,527

 

 

 

17,657

 

 

 

35,958

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and distribution

 

 

11,560

 

 

 

17,307

 

 

 

28,516

 

 

 

38,409

 

Research and development

 

 

790

 

 

 

2,634

 

 

 

2,810

 

 

 

5,657

 

General and administrative

 

 

2,767

 

 

 

7,999

 

 

 

8,103

 

 

 

15,779

 

TOTAL OPERATING EXPENSES:

 

 

15,117

 

 

 

27,940

 

 

 

39,429

 

 

 

59,845

 

OPERATING LOSS

 

 

(4,707

)

 

 

(10,413

)

 

 

(21,772

)

 

 

(23,887

)

INTEREST EXPENSE—net

 

 

439

 

 

 

875

 

 

 

1,503

 

 

 

3,368

 

OTHER EXPENSE (INCOME)—net

 

 

(19

)

 

 

21

 

 

 

(45

)

 

 

53

 

LOSS BEFORE INCOME TAXES

 

 

(5,127

)

 

 

(11,309

)

 

 

(23,230

)

 

 

(27,308

)

PROVISION FOR INCOME TAXES

 

 

 

 

 

8

 

 

 

3

 

 

 

23

 

NET LOSS

 

$

(5,127

)

 

$

(11,317

)

 

$

(23,233

)

 

$

(27,331

)

Net loss per share, basic and diluted

 

$

(0.49

)

 

$

(0.75

)

 

$

(2.40

)

 

$

(2.11

)

Weighted-average number of shares outstanding, basic and diluted

 

 

10,532,926

 

 

 

15,134,422

 

 

 

9,687,078

 

 

 

12,971,641

 

 

See notes to condensed consolidated financial statements.

2


 

MOHAWK GROUP HOLDINGS, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(in thousands)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

NET LOSS

 

$

(5,127

)

 

$

(11,317

)

 

$

(23,233

)

 

$

(27,331

)

OTHER COMPREHENSIVE INCOME (LOSS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(19

)

 

 

13

 

 

 

57

 

 

 

26

 

Other comprehensive income (loss)

 

 

(19

)

 

 

13

 

 

 

57

 

 

 

26

 

COMPREHENSIVE LOSS

 

$

(5,146

)

 

$

(11,304

)

 

$

(23,176

)

 

$

(27,305

)

 

 

3


 

MOHAWK GROUP HOLDINGS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share and per share data)

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income/(Loss)

 

 

(Deficit)

 

BALANCE—July 1, 2018

 

 

10,117,017

 

 

$

1

 

 

$

68,741

 

 

$

(57,303

)

 

$

33

 

 

$

11,472

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(5,127

)

 

 

 

 

 

(5,127

)

Issuance of 5,992,750 shares of series C preferred

   stock in April 2018 which converted at 0.2564

   per share into 1,536,602 shares of common

   stock as part of the Merger (see Note 1)

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

(17

)

Issuance of 1,915,916 shares of series C-1

   preferred stock in September 2018 which

   converted at 0.2564 per share into 491,260

   shares of common stock as part of the Merger

   (see Note 1)

 

 

491,260

 

 

 

 

 

 

6,417

 

 

 

 

 

 

 

 

 

6,417

 

Issuance of common stock as part of the Merger

   (see Note 1)

 

 

897,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock to holders of series B

   preferred stock for anti-dilution rights as part of

   the Merger (see Note 1)

 

 

28,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

141

 

 

 

 

 

 

 

 

 

141

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19

)

 

 

(19

)

BALANCE—September 30, 2018

 

 

11,534,190

 

 

$

1

 

 

$

75,282

 

 

$

(62,430

)

 

$

14

 

 

$

12,867

 

 

 

 

 

Three Months Ended September 30, 2019

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income/(Loss)

 

 

(Deficit)

 

BALANCE—July 1, 2019

 

 

17,625,241

 

 

$

2

 

 

$

110,094

 

 

$

(87,034

)

 

$

53

 

 

$

23,115

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,317

)

 

 

 

 

 

(11,317

)

Issuance costs from Initial Public Offering

 

 

 

 

 

 

 

 

 

(21

)

 

 

 

 

 

 

 

 

(21

)

Issuance of 84,975 share of restricted common

   stock in August 2019 (see Note 7)

 

 

84,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,716

 

 

 

 

 

 

 

 

 

7,716

 

Exercise of stock options

 

 

443

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

13

 

BALANCE—September 30, 2019

 

 

17,710,659

 

 

$

2

 

 

$

117,791

 

 

$

(98,351

)

 

$

66

 

 

$

19,508

 

4


 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income/(Loss)

 

 

(Deficit)

 

BALANCE—January 1, 2018

 

 

8,575,950

 

 

$

1

 

 

$

47,393

 

 

$

(39,197

)

 

$

(43

)

 

$

8,154

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(23,233

)

 

 

 

 

 

(23,233

)

Issuance of 5,992,750 shares of series C preferred

   stock in April 2018 which converted at 0.2564

   per share into 1,536,602 shares of common

   stock as part of the Merger (see Note 1)

 

 

1,536,602

 

 

 

 

 

 

20,972

 

 

 

 

 

 

 

 

 

20,972

 

Issuance of 1,915,916 shares of series C-1

   preferred stock in September 2018 which

   converted at 0.2564 per share into 491,260

   shares of common stock as part of the Merger

   (see Note 1)

 

 

491,260

 

 

 

 

 

 

6,417

 

 

 

 

 

 

 

 

 

6,417

 

Issuance of common stock as part of the Merger

   (see Note 1)

 

 

897,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock to holders of series B

   preferred stock for anti-dilution rights as part of

   the Merger (see Note 1)

 

 

28,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

482

 

 

 

 

 

 

 

 

 

482

 

Exercise of stock options

 

 

4,465

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

18

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

57

 

 

 

57

 

BALANCE—September 30, 2018

 

 

11,534,190

 

 

$

1

 

 

$

75,282

 

 

$

(62,430

)

 

$

14

 

 

$

12,867

 

 

 

 

Nine Months Ended September 30, 2019

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income/(Loss)

 

 

(Deficit)

 

BALANCE—January 1, 2019

 

 

11,534,190

 

 

$

1

 

 

$

76,348

 

 

$

(71,020

)

 

$

40

 

 

$

5,369

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(27,331

)

 

 

 

 

 

(27,331

)

Issuance of 2,406,618 shares of restricted common

   stock on March 20, 2019 (see Note 7)

 

 

2,406,618

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 88,548 shares of restricted common

   stock on May 17, 2019 and forfeiture of 69,141

   shares of restricted common stock (see Note 7)

 

 

19,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 64,982 shares of restricted common

   stock on June 12, 2019 (see Note 7)

 

 

64,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 3,600,000 shares of common stock

   on June 14, 2019 (see Note 1)

 

 

3,600,000

 

 

 

1

 

 

 

29,606

 

 

 

 

 

 

 

 

 

29,607

 

Issuance of 84,975 share of restricted common

   stock in August 2019 (see Note 7)

 

 

84,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

11,835

 

 

 

 

 

 

 

 

 

11,835

 

Exercise of stock options

 

 

487

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

 

 

26

 

BALANCE—September 30, 2019

 

 

17,710,659

 

 

$

2

 

 

$

117,791

 

 

$

(98,351

)

 

$

66

 

 

$

19,508

 

 

See notes to condensed consolidated financial statements.

5


 

MOHAWK GROUP HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2019

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(23,233

)

 

$

(27,331

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

188

 

 

 

136

 

Provision for sales returns

 

 

128

 

 

 

236

 

Amortization of deferred financing costs and debt discounts

 

 

337

 

 

 

914

 

Stock-based compensation

 

 

482

 

 

 

11,835

 

Other

 

 

62

 

 

 

101

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

48

 

 

 

(1,784

)

Inventory

 

 

(515

)

 

 

4,944

 

Prepaid and other current assets

 

 

(2,757

)

 

 

(2,307

)

Accounts payable, accrued and other liabilities

 

 

5,731

 

 

 

110

 

Cash used in operating activities

 

 

(19,529

)

 

 

(13,146

)

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of fixed assets

 

 

(25

)

 

 

(48

)

Purchase of Aussie Health Co. assets

 

 

 

 

 

(1,105

)

Proceeds on sale of fixed assets

 

 

35

 

 

 

6

 

Cash provided by (used in) investing activities

 

 

10

 

 

 

(1,147

)

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

 

 

 

2

 

Proceeds from issuance of Series C preferred stock - converted to common stock

 

 

23,061

 

 

 

 

Proceeds from issuance of Series C-1 preferred stock - converted to common stock

 

 

8,364

 

 

 

 

Proceeds from Initial Public Offering

 

 

 

 

 

36,000

 

Proceeds received from exercise of stock options

 

 

18

 

 

 

 

Issuance costs of Series C preferred stock -  converted to common stock

 

 

(3,000

)

 

 

 

Issuance costs of Series C-1 preferred stock - converted to common stock

 

 

(1,036

)

 

 

 

Issuance costs from initial public offering

 

 

 

 

 

(5,446

)

Borrowings from Mid Cap credit facility

 

 

37,048

 

 

 

69,740

 

Repayments from Mid Cap credit facility

 

 

(32,519

)

 

 

(71,082

)

Repayments from Mid Cap term loan

 

 

(1,344

)

 

 

 

Debt issuance costs from Mid Cap credit facility

 

 

(369

)

 

 

(581

)

Debt issuance costs from Horizon term loan

 

 

 

 

 

(900

)

Deferred offering costs

 

 

(17

)

 

 

 

Insurance financing proceeds

 

 

 

 

 

3,833

 

Insurance obligation payments

 

 

 

 

 

(1,818

)

Capital lease financing proceeds

 

 

20

 

 

 

 

Capital lease obligation payments

 

 

(40

)

 

 

(42

)

Cash provided by financing activities

 

 

30,186

 

 

 

29,706

 

EFFECT OF EXCHANGE RATE ON CASH

 

 

 

 

 

1

 

NET CHANGE IN CASH AND RESTRICTED CASH FOR PERIOD

 

 

10,667

 

 

 

15,414

 

CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

 

5,797

 

 

 

20,708

 

CASH AND RESTRICTED CASH AT END OF PERIOD

 

$

16,464

 

 

$

36,122

 

RECONCILIATION OF CASH AND RESTRICTED CASH

 

 

 

 

 

 

 

 

CASH

 

$

15,785

 

 

$

35,686

 

RESTRICTED CASH—Prepaid and other assets

 

 

550

 

 

 

307

 

RESTRICTED CASH—Other non-current assets

 

 

129

 

 

 

129

 

TOTAL CASH AND RESTRICTED CASH

 

$

16,464

 

 

$

36,122

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

1,112

 

 

$

2,467

 

Cash paid for taxes

 

$

3

 

 

$

15

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital lease

 

$

25

 

 

$

 

Note payable on acquisition

 

 

 

 

 

$

195

 

 

See notes to condensed consolidated financial statements.

6


 

Mohawk Group Holdings, Inc.

Notes to condensed consolidated financial statements

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 and 2019 (Unaudited)

(In thousands, except share and per share data)

1.

ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Mohawk Group Holdings, Inc. and subsidiaries (“Mohawk” or the “Company”) is a rapidly growing technology-enabled consumer products company that uses machine learning and data analytics to design, develop, market and sell products. Mohawk predominately operates through online retail channels such as Amazon and Walmart.

Headquartered in New York, Mohawk’s offices can be found in China, Philippines, Israel, Poland, and the United States.

 

Merger—On September 4, 2018, pursuant to an Agreement and Plan of Merger and Reorganization among the Company, MGH Merger Sub, Inc. and Mohawk Group, Inc. (“MGI”), as amended by Amendment No. 1 dated as of April 1, 2018 (the “Merger Agreement”), MGI merged with Merger Sub, Inc., with MGI remaining as the surviving entity and becoming a wholly-owned operating subsidiary of the Company (the “Merger”). The Merger was a reverse recapitalization for financial reporting purposes.  The Merger is reflected in the financial statements and financial disclosures as if the Merger was effective on January 1, 2017. Operations prior to the Merger are the historical operations of MGI.

 

Under the Merger Agreement, all outstanding shares of common stock, shares of preferred stock and warrants, excluding MGI’s Series C preferred stock (“Series C”) and warrants to purchase shares of Series C, converted to shares of common stock of the Company at a ratio of 1 to 0.3131 (the “Conversion”). All outstanding Series C converted on a 1 to 0.2564 basis to shares of common stock of the Company and all outstanding warrants to purchase shares of Series C converted to warrants to purchase shares of common stock of the Company on a 1 to 0.2564 basis. At the time of the merger, the Company had 0.9 million shares outstanding held by certain Series C holders.

Initial Public Offering—On June 14, 2019, the Company completed its initial public offering (“IPO”), selling 3,600,000 shares of common stock at a public offering price of $10.00 per share. Net proceeds to the Company from the offering were approximately $29.6 million