SAN FRANCISCO, Calif., Nov. 08, 2022 (GLOBE NEWSWIRE) -- Embark Technology, Inc. (Nasdaq: EMBK) (“Embark”), a leading developer of autonomous technology for the trucking industry, today announced financial results for the quarter ended September 30, 2022 and provided a business update.
“We are proud of the consistent expansion of the Embark Coverage Map culminating with the recent launch of the Coast-to-Coast backbone covering nine transfer point sites and opening 9.5B miles of annual freight to our carrier partners, representing 28% of shipping volumes in the Sunbelt,” said Alex Rodrigues, CEO of Embark. “As we close out 2022, we expect to deliver the first Embark-equipped TTP truck to Knight-Swift as they prepare to operate AV trucks within their fleet with their own staff in 2023. Embark has made significant progress on our technical capability roadmap this year, and we are on track to complete our evasive maneuvers milestone next month, clearing another critical hurdle to commercial deployment of Embark Driver.”
Key Company Highlights
Third Quarter 2022 Financial Highlights
For a reconciliation of a non-GAAP figure to the applicable GAAP figure please see the table captioned “Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.
Webcast and Conference Call Information
The Company will discuss these results and other related matters at 5:30 a.m. Pacific Standard Time on November 8, 2022 in a live webcast, which will also be archived for replay on the Company’s website at https://investors.embarktrucks.com/. The Company will post the earnings press release and earnings presentation under the “Quarterly Results” section on the Investor Relations website. This press release is being furnished as a Current Report on Form 8-K with the Securities and Exchange Commission, and will be available at www.sec.gov.
About Embark
Embark Technology, Inc. (Nasdaq: EMBK) is an autonomous vehicle company building the software powering autonomous trucks, focused on improving the safety, efficiency, and sustainability of the approximately $730 billion a year U.S. highway truck freight market. Headquartered in San Francisco, CA since its founding in 2016, Embark is America’s longest-running self-driving truck program and partners with some of the largest shippers and carriers in the nation.
Embark’s mission is to realize a world where consumers pay less for the things they need, drivers stay close to the homes they cherish, and roads are safer for the people we love. To learn more about Embark, visit embarktrucks.com.
Contacts
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Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Embark’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Embark’s expectations with respect to future performance. These forward-looking statements also involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Factors that may cause such differences include, but are not limited to: (1) ability to expand into new markets; (2) changes in the applicable laws or regulations; (3) the possibility that Embark may be adversely affected by other economic, business, and/or competitive factors; (4) the impact of the global COVID-19 pandemic; (5) funding requirements for R&D and commercialization activities; and (6) other risks and uncertainties separately provided to you and indicated from time to time as described in filings and potential filings by Embark with the U.S. Securities and Exchange Commission (the “SEC”), including those discussed in the Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 21, 2022, Form S-1 filed on June 1, 2022, and other documents filed with the SEC from time to time. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Embark cautions that the foregoing list of factors is not exhaustive and not to place undue reliance upon any forward-looking statements, including projections, which speak only as of the date made. Embark undertakes no obligation to and accepts no obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
| Embark Technology, Inc. Consolidated Condensed Balance Sheets (in thousands) (unaudited) | |||||||
| September 30, 2022 | December 31, 2021 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 191,040 | $ | 264,615 | |||
| Restricted cash, short-term | 65 | 130 | |||||
| Prepaid expenses and other current assets | 9,416 | 12,746 | |||||
| Total current assets | 200,521 | 277,491 | |||||
| Restricted cash, long-term | 812 | 275 | |||||
| Property, equipment and software, net | 17,686 | 9,637 | |||||
| Operating lease right-of-use assets | 22,941 | — | |||||
| Other assets | 6,365 | 3,596 | |||||
| Total assets | $ | 248,325 | $ | 290,999 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 2,758 | $ | 2,497 | |||
| Accrued expenses and other current liabilities | 9,226 | 3,142 | |||||
| Current portion of operating lease liabilities | 3,251 | — | |||||
| Short-term notes payable | 492 | 358 | |||||
| Total current liabilities | 15,727 | 5,997 | |||||
| Long-term notes payable | 1,421 | 722 | |||||
| Warrant liability | 1,621 | 49,419 | |||||
| Non-current portion of operating lease liabilities | 20,090 | — | |||||
| Other long-term liability | 110 | 50 | |||||
| Long-term deferred rent | — | 177 | |||||
| Total liabilities | $ | 38,969 | $ | 56,365 | |||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Class A common stock | 2 | 36 | |||||
| Class B common stock | — | 9 | |||||
| Additional paid-in capital | 460,440 | 417,492 | |||||
| Accumulated deficit | (251,086 | ) | (182,903 | ) | |||
| Total stockholders’ equity | 209,356 | 234,634 | |||||
| Total liabilities and stockholders’ equity | $ | 248,325 | $ | 290,999 | |||
| Embark Technology, Inc. Consolidated Condensed Statement of Operations (in thousands, except share and per share data) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | $ | 21,691 | $ | 11,481 | $ | 59,427 | $ | 26,823 | |||||||
| General and administrative | 16,050 | 4,593 | 56,741 | 11,585 | |||||||||||
| Total operating expenses | 37,741 | 16,074 | 116,168 | 38,408 | |||||||||||
| Loss from operations | (37,741 | ) | (16,074 | ) | (116,168 | ) | (38,408 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Change in the fair value of derivative liability | — | (1,010 | ) | — | (5,783 | ) | |||||||||
| Change in fair value of warrant liability | 1,390 | — | 47,799 | — | |||||||||||
| Other income (expense) | 181 | 12 | (413 | ) | 18 | ||||||||||
| Interest income | 758 | 13 | 931 | 83 | |||||||||||
| Interest expense | — | (2,058 | ) | (332 | ) | (3,735 | ) | ||||||||
| Loss before provision for income taxes | (35,412 | ) | (19,117 | ) | (68,183 | ) | (47,825 | ) | |||||||
| Net loss | $ | (35,412 | ) | $ | (19,117 | ) | $ | (68,183 | ) | $ | (47,825 | ) | |||
| Net loss attributable to common stockholders, basic and diluted | $ | (35,412 | ) | $ | (19,117 | ) | $ | (68,183 | ) | $ | (47,825 | ) | |||
| Net loss per share attributable to common stockholders: | |||||||||||||||
| Basic and diluted, Class A and Class B | $ | (1.53 | ) | $ | (2.69 | ) | $ | (2.98 | ) | $ | (6.73 | ) | |||
| Weighted-average shares used in computing net loss per share attributable to common stockholders: | |||||||||||||||
| Basic and diluted | 23,145,180 | 7,111,106 | 22,880,503 | 7,111,106 | |||||||||||
| Embark Technology, Inc. Consolidated Condensed Statements of Cash Flows (in thousands) (unaudited) | |||||||
| Nine Months Ended September 30, | |||||||
| 2022 | 2021 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (68,183 | ) | $ | (47,825 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization | 1,438 | 756 | |||||
| Amortization expense - right-of-use assets - operating leases | 1,841 | — | |||||
| Stock-based compensation, net of amounts capitalized | 39,942 | 1,661 | |||||
| Issuance of warrants for services | — | 1,775 | |||||
| Change in fair value of warrants | (47,799 | ) | — | ||||
| Net amortization of premiums and accretion of discounts on investments | — | 265 | |||||
| Loss on sale of property, equipment and software | (147 | ) | — | ||||
| Amortization of debt discount | — | 3,735 | |||||
| Change in the fair value of derivative liability | — | 5,783 | |||||
| Issuance of common stock for services | 666 | — | |||||
| Changes in operating assets and liabilities: | |||||||
| Prepaid expenses and other current assets | 3,144 | (911 | ) | ||||
| Other assets | (2,769 | ) | (3,229 | ) | |||
| Accounts payable | 1,055 | 2,759 | |||||
| Other long-term liabilities | 60 | 49 | |||||
| Accrued expenses and other current liabilities | 4,482 | 2,324 | |||||
| Net cash used in operating activities | (66,270 | ) | (32,858 | ) | |||
| Cash flows from investing activities | |||||||
| Maturities of investments | — | 48,239 | |||||
| Purchase of property, equipment and software | (8,201 | ) | (2,380 | ) | |||
| Proceeds from sale of property, equipment and software | 399 | — | |||||
| Deposit for purchase of trucks | — | (400 | ) | ||||
| Refund of deposit for trucks | — | 47 | |||||
| Net cash provided by (used in) investing activities | (7,802 | ) | 45,506 | ||||
| Cash flows from financing activities | |||||||
| Cash proceeds received from convertible note payable | — | 25,001 | |||||
| Payment towards notes payable | (346 | ) | (140 | ) | |||
| Proceeds from exercise of stock options | 1,319 | 149 | |||||
| Repurchase of early exercised stock options | (4 | ) | — | ||||
| Deferred offering costs | — | (827 | ) | ||||
| Net cash provided by financing activities | 969 | 24,183 | |||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (73,103 | ) | 36,831 | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 265,020 | 11,460 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 191,917 | $ | 48,291 | |||
| Supplemental disclosures of cash flow information: | |||||||
| Cash paid during the year for interest | $ | 18 | $ | — | |||
| Supplemental schedule of noncash investing and financing activities | |||||||
| Acquisition of property, equipment and software in accounts payable | $ | 1,038 | $ | 71 | |||
| Acquisition of trucks by assuming notes payable | $ | 1,420 | $ | 278 | |||
| Right-of-use assets obtained in exchange for lease obligations | $ | 24,782 | $ | — | |||
| Deferred offering costs in accrued liability | $ | — | $ | 3,275 | |||
| Stock-based compensation capitalized into internally developed software | $ | 1,144 | $ | 160 | |||
| Vesting of early exercised stock options | $ | 43 | $ | 39 | |||
| Issuance of common stock for services | $ | 666 | $ | — | |||
| Reconciliation of GAAP and Non-GAAP Results Embark Technology, Inc. Reconciliation of Adjusted EBITDA (in thousands) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net loss | $ | (35,412 | ) | $ | (19,117 | ) | $ | (68,183 | ) | $ | (47,825 | ) | |||
| Interest income and expense, net | (758 | ) | 2,045 | (599 | ) | 3,652 | |||||||||
| Depreciation and amortization | 604 | 282 | 1,438 | 756 | |||||||||||
| Amortization on right-of-use assets -operating leases | 837 | — | 1,841 | — | |||||||||||
| EBITDA | $ | (34,729 | ) | $ | (16,790 | ) | $ | (65,503 | ) | $ | (43,417 | ) | |||
| Stock-based compensation expense(1) | 10,919 | 562 | 39,942 | 1,661 | |||||||||||
| Change in fair value of warrant liabilities(2) | (1,390 | ) | — | (47,799 | ) | — | |||||||||
| Change in the fair value of derivative liability | — | 1,010 | — | 5,783 | |||||||||||
| One-time adjustment(3) | 480 | 1,000 | 914 | 1,000 | |||||||||||
| Upfront CEF commitment fee (noncash)(4) | — | — | 666 | — | |||||||||||
| Adjusted EBITDA | $ | (24,720 | ) | $ | (14,218 | ) | $ | (71,780 | ) | $ | (34,973 | ) | |||
(1) Reflects, for the periods presented, stock-based compensation expense related to the issuance of stock options, Restricted Stock Units (RSUs) including performance-based restricted stock units (PSUs) and Common Stock Units (CSUs) to Embark employees and non-employees.
(2) Reflects the decrease in the fair values of Embark's warrants.
(3) Professional service fees incurred in connection with business combination in 2021 and committed equity financing in 2022.
(4) Upfront commitment fee incurred in connection with committed equity facility (“CEF”) in 2022.
| Embark Technology, Inc. Free Cash Flow (in thousands) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net cash used in operating activities (GAAP) | $ | (26,004 | ) | $ | (12,773 | ) | $ | (66,270 | ) | $ | (32,857 | ) | |||
| Capital expenditures including truck deposits, net of returns | (3,399 | ) | (833 | ) | (7,802 | ) | (2,733 | ) | |||||||
| Free cash flow (Non GAAP) | $ | (29,403 | ) | $ | (13,606 | ) | $ | (74,072 | ) | $ | (35,590 | ) | |||
| Last Trade: | US$2.88 |
| Daily Volume: | 0 |
| Market Cap: | US$57.660M |
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