Actual results may differ from these estimates under different assumptions and conditions. Wholesale vehicle gross profit (loss) improved by $0.2million, or 23.3%, to $(0.8) million during 2019, from $(1.0) million in 2018. Customers also frequently trade-in their existing vehicle to apply toward the transaction price of a used vehicle, for which we generate revenue on the sale of a used vehicle to the customer trading-in their vehicle and on the traded-in vehicle when it is sold to a new owner. The changes in operating assets and liabilities are primarily driven by a decrease in inventories of $2.9million, an increase in accounts payable of $1.4million, an increase in accrued expenses of $0.5million and an increase in other current and noncurrent liabilities of $0.8million, partially offset by an increase in accounts receivable of $0.8million. CarLotz, Inc. Fourth Quarter Unit Sales of 1,815, Ahead of Expectations, Fourth Quarter Revenue Growth of 40% to $37.0 million, Ahead of Expectations. Completed and filed returns with tax departments at local, state and federal levels. In December 2019, we entered into a note purchase agreement with Automotive Finance Corporation (AFC) under which AFC agreed to purchase up to $5.0 million in notes, with the initial tranche equal to $3.0 million issued at closing and two additional tranches of at least $1.0 million on or prior to September 20, 2021, of which $0.5 million was issued prior to the completion of the Merger. CarLotz is not your traditional dealership. I called a head to to set an appointment to test drive the vehicle I was interested in. CarLotz is not your traditional dealership. We recognize equity-based compensation on a straight-line basis over the awards requisite service period, which is generally the vesting period of the award, less actual forfeitures. CarLotz is a leading consignment-to-retail used vehicle marketplace that provides our corporate vehicle sourcing partners and retail sellers of used vehicles with the ability to easily access the retail sales channel while simultaneously providing buyers with prices that are, on average, below those of traditional dealerships. As we further develop the CarLotz brand, we believe our enhanced platform will support increased revenue from product sales and optimized vehicle pricing. In fact, the company says its sellers typically see a $2,000-$5,000 benefit from using their services. We currently have a three-day, 500 mile return policy. Wholesale vehicle sales revenue increased by $1.5 million, or 18.1%, to $10.0million during 2020, from $8.5million in 2019. Our corporate vehicle sourcing partners include fleet leasing companies, rental car companies, banks, captive finance companies, third-party remarketers, wholesalers, corporations managing their own fleets and OEMs. We are taking steps to match our intake of vehicles under this arrangement to our sales and reconditioning capacity and expect that we will begin to mitigate these expenses beginning in the second quarter and improving throughout 2021. Many of our existing sourcing partners still sell less than 5% of their volumes through the retail channel. These vehicles sold to wholesalers are primarily acquired from customers who trade-in their existing vehicles as part of a retail vehicle sale as described above or, from consignors, which do not meet our quality standards, or which remain unsold at the end of the consignment period. They are not measurements of our financial performance under GAAP and should not be considered as substitutes for net income (loss) or any other performance measures derived in accordance with GAAP. Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period, and gross profit for wholesale vehicles, which is divided by the total number of wholesale vehicles sold in the period. Your return must be postmarked within 30 days of the date you received the item. The discussion should be read in conjunction with the consolidated financial statements and notes to be contained in our Annual Report on Form 10-K. For the year ended December31, 2019, net cash used in investing activities was $0.5million, driven by $0.2million of purchases of property and equipment and $0.3million of purchases of leased vehicles. This increase was driven by the hiring of corporate personnel to support hub growth and some compliance costs associated with preparing to go public, Net Loss attributable to common shareholders was $(4.8) million, or $(1.30) per diluted share, in the fourth quarter 2020 versus $(4.6) million, or $(1.23) per diluted share in the prior year period, Adjusted EBITDA was $(3.9) million compared to $(2.6) million in the fourth quarter of 2019, Net revenues exceeded expectations and increased 16% to $118.6 million from $102.5 million in 2019. The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of CarLotz Group, Inc.( f/k/a CarLotz, Inc.) (Former CarLotz). Advances under the Ally Facility will bear interest at a per annum rate designated from time to time by the Lender and will be determined using a 365/360 simple interest method of calculation, unless expressly prohibited by law. Sales (434) 201-7457. Equity awards are measured based on the fair value of the award at the grant date. Highlights of Fourth Quarter 2020 Financial Results. The Company specializes in the buying and selling of used cars, trucks, sedans, SUVs, vans, wagon . The differences related primarily to depreciable assets (use of different depreciation methods and lives for financial statement and income tax purposes), contract expenses and certain accrued expenses. We sell vehicles through wholesalers, primarily at auction. The transaction price for used vehicles is a fixed amount as set forth in the customer contract. Lease income, net was $0.5million during 2020, as compared to $0.5million during 2019. When a retail vehicle customer requests a vehicle lease, we obtain an operating lease from a third party lessor and then enter into a corresponding lease with our customer. SG&A expenses decreased by $0.7million, or (4.1)%, to $17.6million during 2020, from $18.3million in 2019. All of these initiatives are designed to lower reconditioning costs per unit and thereby improve per unit economics. Major renewals and betterments are capitalized. Lack of training. For the year ended December31, 2020, net cash provided by financing activities was $4.5million, primarily driven by $5.3million in proceeds from borrowings on long-term debt and $24.2 million in proceeds from borrowings under the AFC Facility, partially offset by repayment of borrowings under the AFC Facility of $25.0million. We satisfy our performance obligation and recognize revenue for wholesale vehicle sales at a point in time when the vehicle is sold at auction or directly to a wholesaler. This button displays the currently selected search type. CarLotz sells used vehicles to retail customers through its hubs in various cities throughout the continental U.S. Revenue from retail vehicle sales is recognized when the title to the vehicle passes to the customer, at which point the customer controls the vehicle. Cost of sales increased by $13.6million, or 14.5%, to $107.4million during 2020, from $93.8million in 2019. Sign up today for your free Reader Account! Under this fee arrangement, vehicles are returned to the corporate vehicle sourcing partner from consignment if the vehicle has not been sold through our retail channel within a specified time period. Sources of liquidity and Debt Obligations. For our corporate vehicle sourcing partners, we have developed proprietary technology that integrates with their internal systems and supports every step in the consignment, reconditioning and sales process. For the year ended December31, 2020, net cash used in investing activities was $1.2million, driven by $1.0million of purchases of marketable securities and $0.2 million of purchases of property and equipment. The company was founded by Michael W. Bor in 2011 and is headquartered in Richmond, VA. We believe that we can benefit from significant untapped volume with existing corporate vehicle sourcing partners and that our growing footprint will allow us to better serve our national accounts. The increase was primarily due to an increase in wholesale vehicle unit sales as we sold 1,159 wholesale vehicles in 2019, compared to 610 wholesale vehicles in 2018, as well as an increase in average sale price of $2,125. Moreover, we cannot assure you that we will not identify additional material weaknesses in our internal control over financial reporting in the future. C.J. All other such services are provided by third-party vendors with whom we have agreements giving us the right to offer such services directly. We actively monitor attractive markets to enter, with a focus on highly concentrated or growing demographic areas and attractive start-up costs. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. And that's just the start. CarLotz, Inc. Our proprietary Retail Remarketing technology provides our corporate vehicle sourcing partners with real-time performance metrics and data analytics along with custom business intelligence reporting that enables price and vehicle triage optimization between the wholesale and retail channel. We are excited to have executed a merger with Acamar Partners Acquisition Corp. in January that resulted in our debut as a public company, and we have established the foundation required to continue to build and grow through 2021 and beyond., Highlights of Fiscal Year 2020 Financial Results. All inventories, which are comprised of vehicles and parts held, for sale are reported at the lower of cost of net realizable value. For equity and liability awards earned based on performance or upon occurrence of a contingent event, when and if the awards will be earned is estimated. We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingent interests, certain derivative instruments and variable interest entities that either have, or are reasonably likely to have, a current or future material effect on our consolidated financial statements. Accordingly, we recognize commission revenue at the time of sale. Due to the uncertainty of forecasting the timing of expected variable interest rate payments, interest payment amounts are not included in the table. For the year ended December31, 2019, net cash provided by financing activities was $8.5million, primarily driven by $8.0million in proceeds from the issuance of redeemable convertible preferred stock, $39.8million in proceeds from borrowings under the AFC Facility and $3.0million of borrowings on long-term debt, partially offset by repayment of borrowings under the AFC Facility of $41.7million. The following table reconciles EBITDA and Adjusted EBITDA to net loss attributable to common stockholders for the periods presented: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. For our retail buyers, we have developed a fully digital, end-to-end e-commerce platform that includes every step in the vehicle selection, financing and check-out process. Extended warranties sold beginning January1, 2019 are serviced by a company owned by a significant shareholder of the Company. Redeemable convertible preferred stock tranche obligation, SeriesA Preferred Stock $0.001 stated value; authorized 3,052,127 shares; issued and outstanding 2,034,751 shares; aggregate liquidation preference of approximately $37,114 and $34,300 as of December31, 2020 and 2019, respectively, Common stock, $0.001 par value; authorized 7,600,000 shares, issued 3,869,118 shares, and outstanding 3,716,526 shares, Treasury stock, $0.001 par value; 152,592 shares, Cost of sales (exclusive of depreciation), Change in fair value of warrants liability, Change in fair value of redeemable convertible preferred stock tranche obligation, Redeemable convertible preferred stock dividends (undeclared and cumulative), Adjustments to reconcile net loss to net cash used in operating activities, Loss on disposition of property and equipment, Accrued expenses and transaction expenses, Cash related to consolidation of Orange Grove, Proceeds from sales of marketable securities, Issuance of redeemable convertible preferred stock, net, Cash and cash equivalents and restricted cash, beginning, Cash and cash equivalents and restricted cash, ending, Purchases of property under capital lease obligations, Transfer from property and equipment to inventory, Transfer from lease vehicles to inventory, Redeemable convertible preferred stock distributions accrued, Purchase of property and equipment with long-term debt, Promissory note based on consolidation of Orange Grove, Settlement of redeemable convertible preferred stock tranche obligation, Total retail vehicles and finance and insurance gross profit.
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