Urgent.ly Inc. [ULY] Filings

10-Q 1 uly-20240630.htm 10-Q 10-Q

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 June 30, 2024


☐	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: 001-41841

URGENT.LY INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	46-2848640
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8609 Westwood Center Drive, Suite 810 Vienna, VA	22182
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (571) 350-3600

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 $0.001 per share

     ULY

     NASDAQ

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 August 9, 2024, the registrant had 13,426,251 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Unaudited Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II.	OTHER INFORMATION	27

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
Signatures		29

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains or may contain “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking terms such as “may,” “will,” “could,” “should,” “would,” “plan,” “potential,” “intend,” “anticipate,” “project,” “predict,” “target,” “believe,” “continue,” “estimate” or “expect” or the negative of these words or other words, terms and phrases of similar nature are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements contained in this Quarterly Report on Form 10-Q include statements related to:

•

our ability to acquire and retain new Customer Partners (as defined below), and to do so in a cost-effective manner;

•

our competitive position in the mobility assistance industry and our ability to maintain and grow our market position against current and future competitors;

•

technological advances in the mobility assistance industry and the impact of artificial intelligence (“AI”);

•

our history of losses and expectations regarding operating losses for the foreseeable future;

•

our need for additional capital, and the availability of such additional capital on acceptable terms or at all;

•

our substantial dependence on a limited number of Customer Partners;

•

our failure or the failure of our third-party service providers to protect our website, networks and systems against cybersecurity incidents, or otherwise to protect our confidential information or that of the vehicle owners and operators who are the end users of our platform (our “Consumers”), Customer Partners and the mobile repair, towing and maintenance service professionals participating on our platform (our “Service Providers”);

•

our reliance on Amazon Web Services to deliver our platform to Consumers;

•

Customer Partners’ willingness to renew their service contracts with us;

•

Customer Partners’ willingness to expand their use of our platform beyond their current roadside solutions;

•

optimizing and operating our network of Service Providers;

•

our ability to continue as a going concern;

•

our ability to develop and maintain an effective system of internal controls and procedures and accurately report our financial results in a timely manner;

•

the sustainability of our recent growth rates and future growth;

•

our ability to address the service requirements of current and future Consumers;

•

our expansion into new roadside assistance solutions, Customer Partners and Service Providers, technologies and geographic regions;

•

expectations regarding our future prospects in light of our limited operating history and evolving business model;

•

the length and variability of our sales cycle with regard to Customer Partners;

•

our expectations regarding our pricing model for our platform’s offerings;

•

our ability or the ability of Service Providers to meet labor needs;

•

adverse economic conditions or reduced automotive usage;

•

our ability to hire and retain highly skilled and key personnel;

•

our ability to accurately forecast demand for mobility assistance services and appropriately plan our expenses in the future;

•

expectations regarding the impact of weather events, natural disasters and other events beyond our control, including Hamas’ attack against Israel and the ensuing war, on our business;

•

our ability to comply with the terms of our existing credit facilities and any new debt obligations;

•

our history of defaulting on certain financial, reporting and other covenants under our Structural Loan Agreement and the Highbridge Loan Agreement (together, the “Loan Agreements”) and our ability to obtain compliance waivers with respect to such covenant defaults in the future;

•

our reliance on unpatented proprietary technology, trade secrets, processes and know-how;

•

our ability to protect our intellectual property rights;

•

our ability to comply with laws and regulations relating to privacy, data protection, cybersecurity, advertising, and consumer protection;

•

our ability to integrate successfully and realize the anticipated benefits of the Merger (as defined below);

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”);

•

our ability to maintain the listing of our common stock on the Nasdaq Stock Market LLC (“Nasdaq”); and

•

our becoming a reporting company by means other than a traditional underwritten initial public offering, which could cause our stockholders to face additional risks and uncertainties.

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

You should not rely upon forward-looking statements as predictions of future events. 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 outcomes of the events described in these forward-looking statements are subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2024 (the “Annual Report”) and in other filings we may make from time to time with the SEC. 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 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 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 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. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

URGENT.LY INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and par value data)

(unaudited)


	June 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	24,483		$	37,699
Restricted cash		315			557
Short-term deposits		—			10,539
Marketable securities		4,511			20,816
Accounts receivable, net of allowance for expected losses of $835 and $27 in 2024 and 2023, respectively		25,026			33,905
Prepaid expenses and other current assets		2,895			4,349
Total current assets		57,230			107,865
Right-of-use assets		2,118			2,437
Property and equipment, net of accumulated depreciation of $913 and $938 in 2024 and 2023, respectively		455			871
Capitalized software costs, net of accumulated amortization of $170 and $887 in 2024 and 2023, respectively		2,495			—
Intangible assets, net		7,578			9,283
Other non-current assets		968			738
Total assets	$	70,844		$	121,194

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	3,459		$	4,478
Accrued expenses		25,179			22,274
Deferred revenue, current		446			456
Current lease liabilities		664			710
Current portion of long-term debt, net		53,272			3,193
Total current liabilities		83,020			31,111
Long-term lease liabilities		1,733			2,045
Long-term debt, net		—			66,076
Other long-term liabilities		39			12,358
Total liabilities		84,792			111,590
Stockholders’ equity (deficit):
Common stock, par value $0.001; 1,000,000,000 shares authorized, 13,422,996 and 13,311,927 issued and outstanding in 2024 and 2023, respectively		13			13
Additional paid-in capital		165,934			164,920
Accumulated deficit		(179,451	)		(154,769	)
Accumulated other comprehensive loss		(444	)		(560	)
Total stockholders’ equity (deficit)		(13,948	)		9,604
Total liabilities and stockholders’ equity (deficit)	$	70,844		$	121,194

See accompanying notes to the unaudited condensed consolidated financial statements.

URGENT.LY INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue	$	34,537		$	43,977		$	74,629		$	93,555
Cost of revenue (excluding depreciation and amortization)		27,207			34,717			57,948			75,036
Gross profit		7,330			9,260			16,681			18,519
Operating expenses:
Research and development		3,797			3,668			8,040			7,410
Sales and marketing		1,616			875			3,635			1,947
Operations and support		3,572			6,046			7,893			13,247
General and administrative		5,581			4,757			11,595			12,237
Depreciation and amortization		1,104			62			2,206			134
Total operating expenses		15,670			15,408			33,369			34,975
Operating loss		(8,340	)		(6,148	)		(16,688	)		(16,456	)
Other income (expense), net:
Interest expense		(3,681	)		(13,219	)		(7,833	)		(24,170	)
Interest income		336			—			699			—
Change in fair value of derivative liability		—			7,138			—			7,027
Change in fair value of warrant liability		—			1,927			—			5,560
Change in fair value of contingent purchase consideration		102			—			923			—
Warrant expense		—			(1,047	)		—			(1,047	)
Gain (loss) on debt extinguishment		—			4,913			(1,405	)		4,913
Other income (expense)		26			16			(229	)		5
Total other expense, net		(3,217	)		(272	)		(7,845	)		(7,712	)
Loss before income taxes		(11,557	)		(6,420	)		(24,533	)		(24,168	)
Provision for income taxes		110			—			149			—
Net loss attributable to common stockholders		(11,667	)		(6,420	)		(24,682	)		(24,168	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(34	)		—			98			—
Unrealized gains on marketable securities		8			—			18			—
Other comprehensive income (loss)		(26	)		—			116			—
Comprehensive loss	$	(11,693	)	$	(6,420	)	$	(24,566	)	$	(24,168	)

Loss per share attributable to common stockholders:
Basic and diluted	$	(0.87	)	$	(41.48	)	$	(1.84	)	$	(156.14	)

Weighted average shares outstanding:
Basic and diluted		13,421,520			154,786			13,390,418			154,786

See accompanying notes to the unaudited condensed consolidated financial statements.

URGENT.LY INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share data)

(unaudited)


															Accumulated
	Redeemable Convertible								Additional						Other			Total
	Preferred Stock Series C				Common Stock				Paid-In			Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Loss			Equity (Deficit)
Balance, December 31, 2023		—	$	—		13,311,927	$	13	$	164,920		$	(154,769	)	$	(560	)	$	9,604
Vesting of stock-based awards, net of shares withheld for taxes		—		—		102,258		—		(142	)		—			—			(142	)
Stock-based compensation expense		—		—		—		—		718			—			—			718
Comprehensive income (loss)		—		—		—		—		—			(13,015	)		142			(12,873	)
Balance, March 31, 2024		—		—		13,414,185		13		165,496			(167,784	)		(418	)		(2,693	)
Vesting of stock-based awards		—		—		8,811		—		—			—			—			—
Stock-based compensation expense		—		—		—		—		438			—			—			438
Comprehensive loss		—		—		—		—		—			(11,667	)		(26	)		(11,693	)
Balance, June 30, 2024		—	$	—		13,422,996	$	13	$	165,934		$	(179,451	)	$	(444	)	$	(13,948	)

Balance, December 31, 2022		157,395	$	46,334		154,786	$	—	$	48,327		$	(229,498	)	$	—		$	(181,171	)
Stock-based compensation expense		—		—		—		—		77			—			—			77
Comprehensive loss		—		—		—		—		—			(17,748	)		—			(17,748	)
Balance, March 31, 2023		157,395		46,334		154,786		—		48,404			(247,246	)		—			(198,842	)
Stock-based compensation expense		—		—		—		—		76			—			—			76
Comprehensive loss		—		—		—		—		—			(6,420	)		—			(6,420	)
Balance, June 30, 2023		157,395	$	46,334		154,786	$	—	$	48,480		$	(253,666	)	$	—		$	(205,186	)

See accompanying notes to the unaudited condensed consolidated financial statements.

URGENT.LY INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(24,682	)	$	(24,168	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,206			134
Amortization of right-of-use assets		319			337
Amortization of costs to obtain contracts		43			46
Amortization of costs to fulfill contracts		40			23
Amortization of deferred financing fees		325			700
Stock-based compensation		1,156			153
Bad debt expense		735			200
Foreign currency gain		(50	)		—
Interest receivable on investments		(596	)		—
Loss (gain) on debt extinguishment		1,405			(4,913	)
Loss on disposal of property, equipment and software		195			—
Change in fair value of derivative, warrant, and contingent consideration liabilities		(923	)		(12,587	)
Warrant expense		—			1,047
Noncash interest expense		3,700			19,477
Changes in operating assets and liabilities:
Accounts receivable		8,142			4,901
Prepaid expenses and other current assets		1,547			1,029
Other assets		(314	)		1
Accounts payable		(1,015	)		1,832
Accrued expenses		332			8,700
Deferred revenue		(8	)		(282	)
Lease liabilities		(358	)		(364	)
Long-term liabilities		(12,319	)		(5,020	)
Net cash used in operating activities		(20,120	)		(8,754	)
Cash flows from investing activities:
Purchases of property, equipment and software		(116	)		(61	)
Investment in capitalized software		(2,665	)		—
Proceeds from short-term deposits and sale of marketable securities		27,459			—
Net cash provided by (used in) investing activities		24,678			(61	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		—			10,000
Repayment of term loan		(17,500	)		—
Payments of deferred financing fees		(566	)		(291	)
Proceeds from issuance of convertible notes payable		—			4,696
Net cash provided by (used in) financing activities		(18,066	)		14,405
Effect of exchange rate changes on cash, cash equivalents and restricted cash		50			—
Net increase (decrease) in cash, cash equivalents and restricted cash		(13,458	)		5,590
Cash, cash equivalents and restricted cash, beginning of period		38,256			7,407
Cash, cash equivalents and restricted cash, end of period	$	24,798		$	12,997


Supplemental disclosure of cash flow information:
Cash paid for interest	$	3,697	$	3,998
Cash paid for income taxes	$	258	$	—
Supplemental noncash investing and financing activities:
Derivative liability resulting from term loan amendment	$	—	$	773
Derivative liability resulting from issuance of convertible notes	$	—	$	55

See accompanying notes to the unaudited condensed consolidated financial statements.

URGENT.LY INC.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

1. Organization

Urgent.ly Inc. (collectively along with other wholly-owned subsidiaries, “Urgent.ly” or the “Company”), headquartered in Vienna, Virginia, was incorporated in the State of Delaware in May 2013. Urgent.ly is a leading connected mobility assistance software platform that matches vehicle owners and operators with service professionals who deliver traditional roadside assistance, proactive maintenance and repair services.

On July 28, 2023, the Company amended its Certificate of Incorporation to effect a 1-for-90 reverse stock split of its common stock (“Common Stock”) and Series C preferred stock. The Company has adjusted all periods presented for the effects of the stock split.

Liquidity Risk and Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business.

The Company has a history of recurring operating losses and has required debt and equity financing to finance its operations. The Company reported an accumulated deficit of $179,451 as of June 30, 2024 and an operating loss of $16,688 for the six months ended June 30, 2024.

Liquidity risk is the risk that suitable sources of funding for the Company’s business activities may not be available. The Company has a planning and budgeting process to monitor operating cash requirements including amounts projected for capital expenditures which are adjusted as input variables change. These variables include, but are not limited to, operating cash flows and the availability of other sources of debt and capital. As these variables change, the Company may be required to seek funding through additional equity issuances and/or additional debt financings.

The Company completed its acquisition of Otonomo Technologies Ltd. (“Otonomo”) on October 19, 2023. The transaction consisted of the acquisition of the Otonomo business, employees, revenue contracts, technology and net assets, including approximately $100,000 of cash, cash equivalents, and short-term investments, net of estimated transaction costs. The additional cash is expected to fund strategic growth initiatives and daily operations for the combined Company, and to pay down debt as required. Although a portion of this cash is available to the Company, as the Company continues to assess its capital asset plans related to the current outstanding debt, the Company believes that its cash, cash equivalents and marketable securities of $29,309 at June 30, 2024 may not be sufficient to fund operations beyond twelve months from the date of issuance of these condensed consolidated financial statements. This has led management to conclude that substantial doubt about the Company’s ability to continue as a going concern exists.

In the event the Company is unable to successfully raise additional equity or debt or refinance its existing debt during the next twelve months from the date of issuance of the condensed consolidated financial statements, the Company will not have sufficient cash flows and liquidity to finance its business operations as currently contemplated. The condensed consolidated financial statements do not include any adjustments of the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

Restructuring

In the first quarter of 2024, the Company undertook actions to eliminate redundant employees primarily in Israel and the United States in an effort to reduce operating expenses, resulting in a decrease of 25 employees, or 7% of the Company’s total employees as of December 31, 2023. During the second quarter of 2024, the Company continued actions to eliminate redundant employees resulting in a decrease of an additional 48 employees, or approximately 15% of the Company’s total employees as of March 31, 2024. These actions resulted in restructuring charges totaling $425 and $1,124 for the three and six months ended June 30, 2024, respectively.

2. Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies from its audited consolidated financial statements for the year ended December 31, 2023 included in its Annual Report.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Urgent.ly Inc. and its wholly-owned subsidiaries Roadside Innovation Inc., Roadside Innovation (Arkansas) Inc., and Urgently Canada Technologies ULC for all periods, and Otonomo Technologies Ltd. and its wholly-owned subsidiaries for periods subsequent to the Merger on October 19, 2023. All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of June 30, 2024 and the condensed consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023 are unaudited. These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements.

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments, including normal recurring adjustments, necessary for the fair presentation of its financial position as of June 30, 2024 and its results of operations, changes in redeemable convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2024. The condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements for the year ended December 31, 2023 included in the Annual Report but does not contain all of the footnote disclosures from the annual financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the fiscal years ended December 31, 2023, 2022 and 2021 included in the Annual Report.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk

Financial instruments that subject the Company to credit risk consist primarily of cash, cash equivalents, restricted cash and accounts receivable. The Company places its cash, cash equivalents and restricted cash in an accredited financial institution and the balances are above federally insured limits. Management monitors the creditworthiness of its customers and believes that it has adequately provided for any exposure to potential credit losses.

During the three months ended June 30, 2024 and 2023, 48% and 67% of revenue was earned from two and three customers, respectively. During the six months ended June 30, 2024 and 2023, 45% and 63% of revenue was earned from two and three customers, respectively. At June 30, 2024 and December 31, 2023, 50% and 56% of accounts receivable was due from three customers.

Capitalized Software

The Company incurred costs to develop, modify, or implement software for internal use as it delivers on significant contracts for which its product offering has expanded. The Company’s objective is to enhance the functionality of the platform to accommodate multiple client applications and interfaces across different customer systems with varying degrees of complexity. Costs incurred for computer software developed or obtained for internal use are capitalized for application development activities and expensed as incurred for preliminary project activities and post-implementation activities. Capitalized costs include external direct costs of materials and services consumed in developing or obtaining internal-use software, payroll and payroll-related costs for employees who are directly associated with the internal-use software project, and interest costs incurred, when material, while developing internal-use software. Capitalized costs are amortized over the estimated useful asset life of three years. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs for maintenance and training are expensed as incurred.

Modification of Debt Instruments

Modifications or exchanges of debt, which are not considered a troubled debt restructuring, are considered extinguishments if the terms of the new debt and the original instrument are substantially different. The instruments are considered substantially different when the present value of the cash flows under the terms of the new debt instrument are at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. If the original and new debt instruments are substantially different, the original debt is derecognized and the new debt is initially recorded at fair value, with the difference recognized as an extinguishment gain or loss. During the six months ended June 30, 2024, the Company amended its term loans (see Note 8).

Segment Reporting

The Company has determined that its Chief Executive Officer is its chief operating decision maker. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis for the purpose of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment: Mobility Assistance Services. The Mobility Assistance Services segment includes all products, services and software used to generate revenue under the Company’s commercial agreements.

New Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The guidance is effective for the fiscal year ending December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for annual periods beginning after December 15, 2024, and the adoption of this standard is not anticipated to have a significant impact on the Company’s consolidated financial statements other than adding new disclosures, which the Company is currently evaluating.

3. Business Combinations

On October 19, 2023, the Company completed the acquisition of Otonomo Technologies Ltd. (“Otonomo”) in accordance with the terms of the Merger Agreement, by and among the Company, Otonomo, and U.O Odyssey Merger Sub Ltd., a company organized under the laws of the State of Israel and a direct wholly owned subsidiary of the Company (“Merger Sub”), pursuant to which and subject to the terms and conditions thereof, Merger Sub merged with and into Otonomo, with Otonomo surviving as a direct wholly owned subsidiary of the Company to continue to be governed by Israeli law (the “Merger”).

Otonomo provides an automotive data service platform enabling car manufacturers, drivers, insurance carriers and service providers to be part of a connected ecosystem as well as mobility intelligence which transforms vast amounts of anonymized data and activity signals into actionable, impactful, and valuable insights.

Otonomo contributed revenues of $3,305 and a net loss of $2,394 to the Company for the period from January 1, 2024 through June 30, 2024. Unaudited pro forma results of operations for the three and six months ended June 30, 2024 and 2023 are included below as if the acquisition of Otonomo occurred on January 1, 2023. This summary of the unaudited pro forma results of operations is not necessarily indicative of what the Company’s results of operations would have been had Otonomo been acquired at the beginning of 2023, nor does it purport to represent results of operations for any future periods.


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenues	$	34,537		$	45,603		$	74,629		$	97,020
Net loss		(11,667	)		(13,713	)		(24,682	)		(71,576	)

Approximately $34,207 of non-recurring acquisition-related costs are reflected in pro forma net loss for the six months ended June 30, 2023 in the table above.

4. Revenue

The Company generates substantially all its revenues from roadside assistance services (“RAS”) initiated through its software platform primarily in the United States and Canada. The Company’s platform enables its customers (“Customer Partners”) to outsource delivery for all or portions of their roadside assistance programs. The Company manages the RAS process after receiving the initial distress call or web-based request through final disposition. The Company also offers RAS directly to motorists via pay-per-use or direct membership offerings. In addition, revenue is earned from platform license fees, whether delivered via cloud or traditional license delivery, professional services, and memberships.

The Company’s policies for recognizing revenues have not changed from those described in the Annual Report. In summary:

The Company recognizes revenue when there is evidence of a contract, probable collection of the consideration to which the Company expects to be entitled to receive, and completion of the performance obligations. The Company recognizes revenue on a gross basis (as the principal) or net basis (as the agent) depending on the nature of the Company’s role with respect to the Customer Partner to deliver roadside assistance services.

The Company has applied the right to invoice practical expedient to all its RAS, membership, and software licensing arrangements and, therefore, recognizes revenue over time for the amount it invoices its Customer Partner.

The Company recognizes revenues derived from professional services on a straight-line basis over the term of the agreements. Efforts to deliver on the performance obligations are expensed evenly throughout the performance period.

For further details regarding revenue recognition, see Note 4 “Revenue” to the audited consolidated financial statements in the Annual Report.

Cost of revenue, exclusive of depreciation and amortization, consists primarily of fees paid to Service Providers. Other costs included in cost of revenue are specifically the technology hosting and platform-related costs, certain personnel costs related to direct call center support to Consumers as part of platform authentication, and amortization of costs to fulfill.

Revenue on a disaggregated basis is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Full-service outsourcing—flat rate	$	32,712	$	43,815	$	70,861	$	92,503
Full-service outsourcing—claim cost pass-through		2		1		6		4
Membership		104		76		249		849
Software licensing arrangements		1,580		28		3,202		129
Professional services		139		57		311		70
	$	34,537	$	43,977	$	74,629	$	93,555

Contract Assets

The Company capitalizes costs to obtain contracts with Customer Partners, primarily employee sales commissions. Sales commissions relating to revenues recognized over a period longer than one year are considered incremental and recoverable costs of obtaining a contract and are deferred as other non-current assets and are amortized on a straight-line basis over the initial contract term. Commission expenses are included in sales and marketing expense in the consolidated statements of operations and comprehensive loss.

Capitalized contract costs associated with the costs to fulfill certain contracts are deferred as other non-current assets and are amortized, on a straight-line basis, over the expected period of benefit for contracts with an amortization period that exceeds one year. Amortization cost is included in cost of revenue in the consolidated statements of operations and comprehensive loss. The expected period of benefit is determined using the initial contract term.


	2024			2023
Contract assets as of January 1	$	233		$	370
Additional contract costs to fulfill		571			—
Amortization of contract costs to obtain		(43	)		(46	)
Amortization of contract costs to fulfill		(40	)		(23	)
Contract assets as of June 30	$	721		$	301

5. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value. Fair value is determined based on the exit price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy:


Level 1 -	Quoted prices in active markets for identical assets or liabilities.

Level 2 -	Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 -	Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The Company’s population of financial assets and liabilities subject to fair value measurements on a recurring basis is as follows:


	Fair Value as of June 30, 2024
Recurring fair value measurements	Level 1		Level 2		Level 3			Total
Money market funds	$	16,490	$	—	$	—		$	16,490
Corporate bonds (1)		—		4,470		—			4,470
Contingent purchase consideration (2)		—		—		(3,694	)		(3,694	)
	$	16,490	$	4,470	$	(3,694	)	$	17,266


	Fair Value as of December 31, 2023
Recurring fair value measurements	Level 1		Level 2		Level 3			Total
Money market funds	$	6,920	$	—	$	—		$	6,920
Corporate bonds		—		9,154		—			9,154
Commercial paper		—		2,488		—			2,488
U.S. government agency securities		—		2,175		—			2,175
Contingent purchase consideration		—		—		(4,617	)		(4,617	)
	$	6,920	$	13,817	$	(4,617	)	$	16,120

(1) The following table summarizes the composition of marketable securities as of June 30, 2024:


	Amortized Cost		Unrealized Gain (Loss)		Fair Value
Available-for-sale debt securities: Corporate bonds	$	4,469	$	1	$	4,470

The following table summarizes the fair value and amortized cost of the available-for-sale debt securities by contractual maturity as of June 30, 2024:


	Amortized Cost		Fair Value
Due within one year	$	4,469	$	4,470

(2) Contingent purchase consideration represents a liability recorded at fair value in connection with the Merger, and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent purchase consideration was estimated based on the fair value of the Company’s shares issuable on a contingent basis.

The following table sets forth a summary of the changes in the fair value of the contingent purchase consideration:


Fair value at January 1, 2024	$	4,617
Change in fair value		(923	)
Fair value as of June 30, 2024	$	3,694

The carrying values for cash, cash equivalents, accounts receivable, accounts payable and long-term debt approximated fair value as of June 30, 2024 and December 31, 2023.

6. Intangible Assets

Intangible assets consist of the following as of the periods presented:


	Life (in years)	June 30, 2024							December 31, 2023
		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Acquired technology	2-4	$	10,074	$	(2,527	)	$	7,547	$	10,134	$	(882	)	$	9,252
Domain name	Indefinite		31		—			31		31		—			31
		$	10,105	$	(2,527	)	$	7,578	$	10,165	$	(882	)	$	9,283

Amortization expense was $852 and $0 for the three months ended June 30, 2024 and 2023, respectively, and $1,705 and $0 for the six months ended June 30, 2024 and 2023, respectively.

The following table sets forth the remaining estimated amortization expense for intangible assets for the next five years:


For the year ending December 31,
2024	$	1,705
2025		3,037
2026		1,560
2027		1,245
2028		—
	$	7,547

7. Accrued Expenses

Accrued expenses consist of the following as of the periods presented:


	June 30, 2024		December 31, 2023
Accrued service provider costs	$	4,060	$	4,988
Accrued compensation		1,151		4,888
Accrued interest		1,225		907
Accrued contract labor		744		548
Contingent purchase consideration		3,694		4,617
Accrued lender fees		9,310		—
Accrued VAT and income taxes

Urgent.ly Inc. [ULY] Filings
10-Q	[2024-08-13]
10-Q	[2024-05-14]
10-K	[2024-03-29]
10-Q	[2023-11-14]
10-Q	[2023-10-18]
S-1	[2023-07-27]