LiveWire Group Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
LVWR$0.55+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-06.
0001898795-24-000131
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001898795-24-000263
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 111 current paragraphs.
54 unchanged; 20 reworded; 31 added; 8 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 6 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
For the three months ended June 30, 2024, the Electric Motorcycles segment operating loss was $26,796 thousand, compared to an operating loss of $31,898 thousand for the three months ended June 30, 2023, and was an operating loss of $55,803 thousand for the six months ended June 30, 2024 compared to an operating loss of $56,667 thousand for the six months ended June 30, 2023. Refer to the Electric Motorcycles segment analysis below for further discussion on the decrease in operating loss of $5,102 thousand and $864 thousand for three and six months ended June 30, 2024, respectively.
Current report
Recent Developments
Current report
Under this plan, the Company recorded $2,544 thousand of expense in the three months ended June 30, 2024 related to employee termination benefits and other costs, of which $554 thousand was paid in cash during the three months ended June 30, 2024 and the remainder is expected to be paid out over the next twelve months. The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the three and six months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Current report
Cost of goods sold for the three months ended June 30, 2024 decreased by $336 thousand, or 5.5%, to $5,756 thousand from $6,092 thousand for the three months ended June 30, 2023. Cost of sales for the three months ended June 30, 2024 decreased over the three months ended June 30, 2023 due to the non-recurrence of a $3,717 thousand provision for a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement recorded in the three months ended June 30, 2023. This decrease was offset by increases resulting from increased sales units as discussed above, net realizable value adjustments of$435 thousand, and increased depreciation expense of $415 thousand.
Current report
Selling, administrative and engineering expense for the three months ended June 30, 2024 decreased by $3,098 thousand, or 11.7%, to $23,470 thousand from $26,568 thousand for the three months ended June 30, 2023. The decrease was due to a reduction in product development expenses of $2,836 thousand in the current year as 2023 included increased expenses related to the initial development of the S2 platform. Additionally, the Company continues to focus on cost reduction activities in 2024 resulting in decreases of approximately $988 thousand from reductions in software licensing fees, personnel costs, insurance premiums, legal fees and travel expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. These decreases were offset by an increase in depreciation expense of $1,391 thousand, including $386 thousand related to accelerated depreciation on leasehold improvements related to LiveWire Labs resulting from the planned move from Mountain View, California to Milwaukee, Wisconsin. As discussed above, related to the planned move of LiveWire Labs as well as the Company’s plan to streamline headcount, the Company recorded $2,544 thousand of expense in the three months ended June 30, 2024 related to employee termination benefits and other costs, The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the three months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Current report
Results of Operations
Current report
The following table presents consolidated results of operations for the six months ended June 30, 2024 and June 30, 2023 (in thousands):
Current report
*nm - not meaningful
Current report
Operating Income (Loss)
Current report
The Company reported an operating loss of $58,587 thousand for the six months ended June 30, 2024 compared to an operating loss of $56,891 thousand for the six months ended June 30, 2023. The Electric Motorcycles segment reported an operating loss of $55,803 thousand for the six months ended June 30, 2024, as compared to an operating loss of $56,667 thousand for the six months ended June 30, 2023. The STACYC segment reported an operating loss of $2,784 thousand for the six months ended June 30, 2024, compared to an operating loss of $224 thousand for the six months ended June 30, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Current report
Interest Income (Expense)
Current report
Interest income for the six months ended June 30, 2024 was $3,612 thousand compared to interest income of $5,446 thousand for the six months ended June 30, 2023. The change was primarily driven by interest income earned on money market fund investments entered into using funds from the Business Combination. The Company had an investment of $105,000 thousand in money market funds as of June 30, 2024 and $213,000 thousand as of June 30, 2023.
Current report
Income Tax (Benefit) Provision
Current report
Electric Motorcycles
Current report
The following table presents consolidated results of operations for the Electric Motorcycles segment for the six months ended June 30, 2024 and six months ended June 30, 2023 (in thousands):
Current report
Revenue
Current report
Cost of goods sold for the six months ended June 30, 2024 increased by $3,695 thousand, or 43.3%, to $12,227 thousand from $8,532 thousand for the six months ended June 30, 2023. The increase was primarily due to higher shipments of electric motorcycles, in alignment with the increased revenue described above, increased net realizable value adjustments of$2,138 thousand, and increased depreciation expense of$1,200 thousand. These increases were offset by the non-recurrence of a $3,717 thousand provision for a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement recorded in the three months ended June 30, 2023.
Current report
Selling, administrative and engineering expense for the six months ended June 30, 2024 decreased by $3,129 thousand, or 6.2%, to $47,250 thousand from $50,379 thousand for the six months ended June 30, 2023. The decrease was due to a decrease in product development expense of $4,968 thousand in the current year as 2023 included increased expenses related to the initial development of the S2 platform. Additionally, the Company continues to focus on cost reduction activities in 2024 resulting in decreases of approximately $1,276 thousand from reductions in software licensing fees, insurance premiums, and legal fees. These decreases were offset by an increase in personnel costs in the first part of 2024 of $932 thousand and an increase in depreciation expense of $2,092 thousand, including $462 thousand related to accelerated depreciation on leasehold improvements related to LiveWire Labs resulting from the planned move from Mountain View, California to Milwaukee, Wisconsin. As discussed above, related to the planned move of LiveWire Labs as well as the Company’s plan to streamline headcount, the Company recorded $2,544 thousand of expense in the six months ended June 30, 2024 related to employee termination benefits and other costs, The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the six months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Current report
STACYC
Current report
The following table presents consolidated results of operations for the STACYC segment for the six months ended June 30, 2024 and six months ended June 30, 2023 (in thousands):
Current report
Revenue
Current report
Cost of goods sold for the six months ended June 30, 2024 decreased by $2,823 thousand, or 35.6%, to $5,109 thousand from $7,932 thousand for the six months ended June 30, 2023. The decrease was primarily due to lower shipment volumes, in alignment with the decreased revenue described above.
Current report
Selling, administrative and engineering expense for the six months ended June 30, 2024 increased by $592 thousand, or 12.2%, to $5,428 thousand from $4,836 thousand for the six months ended June 30, 2023. The increase was primarily due to increased research and development costs related to new product development of $411 thousand, increased personnel costs of $316 thousand, offset by decreased marketing expense of $259 thousand in the six months ended June 30, 2024.
Current report
Under this plan, the Company recorded $2,544 thousand of expense in the three and six months ended June 30, 2024 related to employee termination benefits and other costs, of which $554 thousand was paid in cash during the three and six months ended June 30, 2024 and the remainder is expected to be paid out over the next twelve months. The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the three and six months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Current report
Critical Accounting Policies and Estimates
Current report
There have been no changes to the LiveWire’s critical accounting policies and estimates from those described under "Critical Accounting Policies and Estimates" in the Management's Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report on Form 10-K for the year ended December 31, 2023.
Current report
Emerging Growth Company Status
Current report
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.
Current report
LiveWire is an “emerging growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare LiveWire’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.
Current report
New Accounting Standards Issued But Not Yet Adopted
Current report
For a discussion of recent accounting pronouncements, see Note 2, New Accounting Standards, in the consolidated financial statements.
Removed paragraphs (8)
Previous report
For the three months ended March 31, 2024, the Electric Motorcycles segment operating loss was $29,007 thousand, compared to an operating loss of $24,769 thousand for the three months ended March 31, 2023. The increase in operating loss of $4,238 thousand resulted from a decrease in revenue due to product mix and a revised structure around our retail partners in the first quarter of 2024, which introduced new incentives, and an increase in cost of sales resulting from increased net realizable value adjustments, volumes and depreciation expense. Refer to the Electric Motorcycles segment analysis below for further discussion.
Previous report
Cost of Goods Sold
Previous report
Cost of goods sold for the three months ended March 31, 2024 increased by $4,031 thousand, or 165.2%, to $6,471 thousand from $2,440 thousand for the three months ended March 31, 2023. The increase was primarily due to increased net realizable value adjustments of $1,703 thousand, increased depreciation expense of $784 thousand, and the impact of increased volumes in the first quarter 2024 as compared to the first quarter 2023.
Previous report
Selling, Administrative and Engineering Expense
Previous report
Selling, administrative and engineering expense for the three months ended March 31, 2024 remained relatively flat compared to prior year, decreasing by $31 thousand, or 0.1%, to $23,780 thousand from $23,811 thousand for the three months ended March 31, 2023.
Previous report
Cost of Goods Sold
Previous report
Selling, Administrative and Engineering Expense
Previous report
Under this plan, the Company expects to incur one-time relocation costs of $1.0 million to $1.5 million and one-time termination benefit costs of $2.0 million to $3.5 million related to the Electric Motorcycles segment and expects the vast majority to be cash charges. The Company expects to complete this plan by the end of September 2024.
Reworded paragraphs (20)
Previous wording
Electric motorcycles are sold at wholesale to a network of independent retail partners, at retail through a Company-owned dealership, through online sales and direct to customers through select international partners. Electric balance bikes are sold at wholesale to independent dealers and independent distributors, as well as direct to customers online. As discussed below, on September 26, 2022 as part of the Business Combination, the Company, which included LiveWire branded electric motorcycles and STACYC, became a separate, publicly traded company.
Current wording
Electric motorcycles are sold at wholesale to a network of independent retail partners, at retail through a Company-owned dealership, through online sales and through select international partners. Electric balance bikes are sold at wholesale to independent dealers and independent distributors, as well as direct to customers online. As discussed below, on September 26, 2022 as part of the Business Combination, the Company, which included LiveWire branded electric motorcycles and STACYC, became a separate, publicly traded company.
Previous wording
For the three months ended March 31, 2024, the Company’s net loss was $23,644 thousand compared to $21,147 thousand for the three months ended March 31, 2023. The Company’s net losses reflect the early-stage nature of the Company’s business. The increase in net losses of $2,497 thousand in 2024 reflect the segment results discussed below and a decrease of $676 thousand in interest income, offset by an increase of $3,690 thousand of non-operating income related to the decrease in fair value of the outstanding warrants as of March 31, 2024 as compared to prior year.
Current wording
For the three months ended June 30, 2024, the Company’s net loss was $24,805 thousand compared to $40,732 thousand for the three months ended June 30, 2023, and was $48,449 thousand for the six months ended June 30, 2024 compared to $61,879 thousand for the six months ended June 30, 2023. The Company’s net losses reflect the early-stage nature of the Company’s business. The decrease in net losses of $15,927 thousand and $13,430 thousand for three and six months ended June 30, 2024, respectively, reflect the segment results discussed below and a decrease of $1,158 thousand and $1,834 thousand in interest income were offset by an increase of $13,230 thousand and $16,920 thousand of non-operating income related to the decrease in fair value of the outstanding warrants for three and six months ended June 30, 2024, respectively, as compared to prior year.
Previous wording
For the three months ended March 31, 2024, the STACYC segment operating loss was $1,415 thousand, as compared to an operating loss of $138 thousand for the three months ended March 31, 2023. The increase in operating loss of $1,277 thousand was primarily related to a decrease in volumes to our independent distributors. Refer to the STACYC segment analysis below for further discussion.
Current wording
For the three months ended June 30, 2024, the STACYC segment operating loss was $1,369 thousand, as compared to an operating loss of $86 thousand for the three months ended June 30, 2023, and was an operating loss of $2,784 thousand for the six months ended June 30, 2024 compared to operating loss of $224 thousand for the six months ended June 30, 2023. Refer to the STACYC segment analysis below for further discussion on the increase in operating loss of $1,283 thousand and $2,560 thousand for three and six months ended June 30, 2024, respectively.
Previous wording
For 2024, LiveWire's focus continues to be on our investment into product development, product innovation, and future additional models on the S2 platform, as well as market expansion and continued cost improvements. LiveWire plans to continue to expand globally in 2024 with the focus on our priority markets in Europe.
Current wording
For 2024, LiveWire's focus continues to be on cost improvements, future additional models on the S2 platform and product innovation and development. LiveWire plans to continue to expand globally in 2024 with the focus on our priority markets in Europe.
Previous wording
The Electric Motorcycles independent retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles. As of March 31, 2024 and December 31, 2023, this total includes 3 and 4 partners, respectively, that were actively working to complete the licensing required to sell LiveWire motorcycles as of the end of the period. LiveWire intends to grow this network as it expands its distribution capabilities.
Current wording
The Electric Motorcycles independent retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles. As of June 30, 2024 and December 31, 2023, this total includes 1 and 4 partners, respectively, that were actively working to complete the licensing required to sell LiveWire motorcycles as of the end of the period. LiveWire intends to grow this network as it expands its distribution capabilities.
Previous wording
The Company reported an operating loss of $30,422 thousand for the three months ended March 31, 2024 compared to an operating loss of $24,907 thousand for the three months ended March 31, 2023. The Electric Motorcycles segment reported an operating loss of $29,007 thousand for the three months ended March 31, 2024, as compared to an operating loss of $24,769 thousand for the three months ended March 31, 2023. The STACYC segment reported operating loss of $1,415 thousand for the three months ended March 31, 2024, compared to operating loss of $138 thousand for the three months ended March 31, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Current wording
The Company reported an operating loss of $28,165 thousand for the three months ended June 30, 2024 compared to an operating loss of $31,984 thousand for the three months ended June 30, 2023. The Electric Motorcycles segment reported an operating loss of $26,796 thousand for the three months ended June 30, 2024, as compared to an operating loss of $31,898 thousand for the three months ended June 30, 2023. The STACYC segment reported operating loss of $1,369 thousand for the three months ended June 30, 2024, compared to operating loss of $86 thousand for the three months ended June 30, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Previous wording
Interest income for the three months ended March 31, 2024 was $2,016 thousand, as compared to interest income of $2,692 thousand for the three months ended March 31, 2023. The decrease was primarily driven by the decrease in the balance ofmoney market funds at March 31, 2024 as compared to the prior year. The Company had investments of $135,000 thousand and $232,000 thousand in money market funds as of March 31, 2024 and March 31, 2023, respectively.
Current wording
Interest income for the three months ended June 30, 2024 was $1,596 thousand, as compared to interest income of $2,754 thousand for the three months ended June 30, 2023. The decrease was primarily driven by the decrease in the balance ofmoney market funds at June 30, 2024 as compared to the prior year. The Company had investments of $105,000 thousand and $213,000 thousand in money market funds as of June 30, 2024 and June 30, 2023, respectively.
Previous wording
Change in fair value of warrant liabilities for the three months ended March 31, 2024 was income of $4,758 thousand, as compared to income of $1,068 thousand for the three months ended March 31, 2023. The income recognized was due to the decrease in the estimated fair value of the warrants during the three months ended March 31, 2024 and 2023 due to fluctuations in the market price of the warrants. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Current wording
Change in fair value of warrant liabilities for the three months ended June 30, 2024 was income of $1,792 thousand, as compared to expense of $11,438 thousand for the three months ended June 30, 2023. The income recognized was due to the decrease in the estimated fair value of the warrants during the three months ended June 30, 2024 and the expense recognized for the three months ended June 30, 2023 was due to the increase in estimated fair value due to fluctuations in the market price of the warrants. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Previous wording
The income tax benefit for the three months ended March 31, 2024 was $4 thousand, as compared to income tax benefit of zero for the three months ended March 31, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss in the U.S. to be benefited in future periods.
Current wording
The income tax provision for the three months ended June 30, 2024 was $28 thousand, as compared to $64 thousand for the three months ended June 30, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss in the U.S. to be benefited in future periods.
Previous wording
Revenue for the three months ended March 31, 2024 decreased by $238 thousand, or 16.1%, to $1,244 thousand from $1,482 thousand for the three months ended March 31, 2023. Unit sales increased by 86% driven by more products in the market, including the new S2 Mulholland model launched in the first quarter of 2024. The Company has three bikes in market at March 31, 2024 as compared to one bike in market at March 31, 2023. The impact on revenue of the increased unit sales in the first quarter 2024 was offset by a reduction in revenue of $688 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $498 thousand resulting from the impact of new incentives associated with a revised strategy with our retail partners implemented in the first quarter of 2024.
Current wording
Revenue for the three months ended June 30, 2024 increased by $1,668 thousand, or 218.9%, to $2,430 thousand from $762 thousand for the three months ended June 30, 2023. Unit sales increased by 378.8% from 33 units in 2023 to 158 units in 2024 driven by more products in the market, including the new S2 Mulholland model launched in the first quarter of 2024. The Company has three bikes in market at June 30, 2024 as compared to one bike in market at June 30, 2023. The impact on revenue of the increased unit sales in the three months ended June 30, 2024 was offset by a reduction in revenue of $729 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $276 thousand resulting from the impact of new incentives associated with a revised strategy with our retail partners implemented in the second quarter of 2024 and other incentives, including additional incentives announced in the second quarter of 2024.
Previous wording
Revenue for the three months ended March 31, 2024 decreased by $2,546 thousand, or 40.5%, to $3,734 thousand from $6,280 thousand for the three months ended March 31, 2023. The decrease in revenue of $2,546 thousand was driven by a $2,678 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors and a $214 thousand reduction due to pricing in the three months ended March 31, 2024. This decrease was offset by a $346 thousand increase in parts, accessories and apparel revenue due primarily to increased battery and replacement part sales in the three months ended March 31, 2024.
Current wording
Revenue for the three months ended June 30, 2024 decreased by $2,245 thousand, or 35.8%, to $4,019 thousand from $6,264 thousand for the three months ended June 30, 2023. The decrease in revenue of $2,245 thousand was driven by a $2,201 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors and a $151 thousand reduction due to pricing in the three months ended June 30, 2024. This decrease was offset by a $107 thousand increase in parts, accessories and apparel revenue due primarily to increased battery and replacement part sales in the three months ended June 30, 2024.
Previous wording
Cost of goods sold for the three months ended March 31, 2024 decreased by $1,424 thousand, or 35.1%, to $2,634 thousand from $4,058 thousand for the three months ended March 31, 2023. The decrease was primarily due to lower volumes in alignment with the decreased revenue described above.
Current wording
Cost of goods sold for the three months ended June 30, 2024 decreased by $1,399 thousand, or 36.1%, to $2,475 thousand from $3,874 thousand for the three months ended June 30, 2023. The decrease was primarily due to lower volumes in alignment with the decreased revenue described above.
Previous wording
Selling, administrative and engineering expense for the three months ended March 31, 2024 increased by $155 thousand, or 6.6%, to $2,515 thousand from $2,360 thousand for the three months ended March 31, 2023. The increase was primarily due to increased research and development costs relating to new product development of $156 thousand, increased personnel costs of $131 thousand, offset by decreased marketing expense of $132 thousand in the first quarter of 2024.
Current wording
Selling, administrative and engineering expense for the three months ended June 30, 2024 increased by $437 thousand, or 17.6%, to $2,913 thousand from $2,476 thousand for the three months ended June 30, 2023. The increase was primarily due to increased research and development costs relating to new product development of $255 thousand, increased personnel costs of $187 thousand, offset by decreased marketing expense of $128 thousand in the three months ended June 30, 2024.
Previous wording
As of March 31, 2024 and December 31, 2023, LiveWire’s cash and cash equivalents were $141,033 thousand and $167,904 thousand, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, LiveWire’s cash and cash equivalents were $113,011 thousand and $167,904 thousand, respectively.
Previous wording
In the event of the exercise of any of Warrants for cash, LiveWire will receive the proceeds from such exercise. Assuming the exercise in full of all of Warrants for cash, LiveWire would receive an aggregate of approximately $349.2 million, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. To the extent any of the Warrants are exercised on a “cashless basis,” LiveWire will not receive any proceeds upon such exercise. LiveWire expects to use any proceeds it receives from Warrant exercises for general corporate and working capital purposes, which would increase its liquidity. LiveWire believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds LiveWire would receive, is dependent upon the trading price of its Common Stock. As of March 31, 2024, the reported sales price of Common Stock was $7.23 per share. If the trading price of Common Stock is less than the $11.50 exercise price per share of the Warrants, LiveWire expects that warrant holders will not exercise their Warrants. There is no guarantee the Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless and LiveWire may receive no proceeds from the exercise of Warrants. As a result, LiveWire does not expect to rely on the cash exercise of Warrants to fund its operations and LiveWire does not believe that it needs such proceeds to support working capital and capital expenditure requirements for the next twelve months. LiveWire will continue to evaluate the probability of Warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrants in its future liquidity projections. LiveWire instead currently expects to rely on the sources of funding described below, if available on reasonable terms or at all.
Current wording
In the event of the exercise of any of Warrants for cash, LiveWire will receive the proceeds from such exercise. Assuming the exercise in full of all of Warrants for cash, LiveWire would receive an aggregate of approximately $349.2 million, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. To the extent any of the Warrants are exercised on a “cashless basis,” LiveWire will not receive any proceeds upon such exercise. LiveWire expects to use any proceeds it receives from Warrant exercises for general corporate and working capital purposes, which would increase its liquidity. LiveWire believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds LiveWire would receive, is dependent upon the trading price of its Common Stock. As of June 30, 2024, the reported sales price of Common Stock was $7.66 per share. If the trading price of Common Stock is less than the $11.50 exercise price per share of the Warrants, LiveWire expects that warrant holders will not exercise their Warrants. There is no guarantee the Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless and LiveWire may receive no proceeds from the exercise of Warrants. As a result, LiveWire does not expect to rely on the cash exercise of Warrants to fund its operations and LiveWire does not believe that it needs such proceeds to support working capital and capital expenditure requirements for the next twelve months. LiveWire will continue to evaluate the probability of Warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrants in its future liquidity projections. LiveWire instead currently expects to rely on the sources of funding described below, if available on reasonable terms or at all.
Previous wording
The following table presents condensed highlights from the Company’s Consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 (in thousands):
Current wording
The following table presents condensed highlights from the Company’s consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 (in thousands):
Previous wording
The overall decrease in cash during the three months ended March 31, 2024 was due primarily to cash used for operating activities, as described below.
Current wording
The overall decrease in cash during the six months ended June 30, 2024 was due primarily to cash used for operating activities, as described below.
Previous wording
The Company had negative cash flow from operating activities during the three months ended March 31, 2024 and 2023. Net cash used by operating activities decreased by $1,624 thousand to $22,926 thousand for the three months ended March 31, 2024 compared to $24,550 thousand for the three months ended March 31, 2023. The decrease in negative cash flow from operating activities was primarily driven by favorable changes in Accounts receivable, net, Account receivable from related party, and Accounts payable to related party offset by unfavorable changes in other working capital amounts, including Inventories, Other current assets, and Accounts payable and accrued liabilities, and the increase in net loss of $2,497 thousand.
Current wording
The Company had negative cash flow from operating activities during the six months ended June 30, 2024 and 2023. Net cash used by operating activities increased by $7,691 thousand to $48,886 thousand for the six months ended June 30, 2024 compared to $41,195 thousand for the six months ended June 30, 2023. The increase in negative cash flow from operating activities was primarily driven by unfavorable changes in Accounts payable to related party and Accounts payable and accrued liabilities offset by favorable changes in Accounts receivable, net and Account receivable from related party.
Previous wording
Net cash used by investing activities decreased by $1,409 thousand to $3,239 thousand for the three months ended March 31, 2024 compared to $4,648 thousand for the three months ended March 31, 2023. The decrease was due to higher capital expenditures in 2023 related to investments to support future product development activities.
Current wording
Net cash used by investing activities decreased by $3,095 thousand to $5,080 thousand for the six months ended June 30, 2024 compared to $8,175 thousand for the six months ended June 30, 2023. The decrease was due to higher capital expenditures in 2023 related to investments to support future product development activities.
Previous wording
Net cash used by financing activities decreased by $706 thousand to $706 thousand for the three months ended March 31, 2024 compared to zero for the three months ended March 31, 2023. The $706 thousand cash outflow related to the repurchase of common stock to satisfy withholding taxes in connection with the vesting of restricted stock.
Current wording
Net cash used by financing activities was $927 thousand for the six months ended June 30, 2024 compared to an inflow of $2 thousand for the six months ended June 30, 2023. The $927 thousand cash outflow related to the repurchase of common stock to satisfy withholding taxes in connection with the vesting of restricted stock.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Change in Fair Value of Warrant Liabilities
Current report — wording carried from elsewhere
Change in fair value of warrant liabilities for the six months ended June 30, 2024 was income of $6,550 thousand, as compared to an expense of $10,370 thousand for the six months ended June 30, 2023. The income recognized was due to the decrease in the estimated fair value of the warrants during the six months ended June 30, 2024 and the expense recognized for the six months ended June 30, 2023 was due to the increase in estimated fair value due to fluctuations in the market price of the warrants. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Current report — wording carried from elsewhere
The income tax provision for the six months ended June 30, 2024 was $24 thousand, as compared to $64 thousand for the six months ended June 30, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss to be benefited in future periods.
Current report — wording carried from elsewhere
Revenue for the six months ended June 30, 2024 increased by $1,430 thousand, or 63.7%, to $3,674 thousand from $2,244 thousand for the six months ended June 30, 2023. Unit sales increased by 186.5% from 96 units in 2023 to 275 units in 2024 driven by more products in the market, including the new S2 Mulholland model launched in the first quarter of 2024. The Company has three bikes in the market at June 30, 2024 as compared to one bike in the market at June 30, 2023. The impact on revenue of the increased unit sales for the six months ended June 30, 2024 was offset by a reduction in revenue of $1,523 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $854 thousand resulting from the impact of new incentives associated with the revised strategy with our retail partners implemented in 2024 and other incentives, including additional incentives announced in the second quarter of 2024.
Current report — wording carried from elsewhere
Revenue for the six months ended June 30, 2024 decreased by $4,791 thousand, or 38.2%, to $7,753 thousand from $12,544 thousand for the six months ended June 30, 2023. The decrease in revenue of $4,791 thousand was driven by a $4,827 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors and a $417 thousand reduction due to pricing in the six months ended June 30, 2024. This decrease was offset by a $453 thousand increase in parts, accessories and apparel revenue due primarily to increased battery and replacement part sales in the six months ended June 30, 2024.
Current report — wording carried from elsewhere
On April 24, 2024, the Company announced a plan to both relocate the operations of LiveWire Labs, the Company’s west coast product development facility, from Mountain View, California to Milwaukee, Wisconsin and streamline headcount at the Company. The Company believes this plan will enable synergies and optimize efficiencies in product development and simplify the Company’s overall path to future profitability.