SEC Filing | Sonder Holdings Inc.

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sond-20220630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2022


☐			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 001-39907

___________________________________

Sonder Holdings Inc.

___________________________________

(Exact name of registrant as specified in its charter)


Delaware			85-2097088
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
101 15th Street San Francisco, California			94103
(Address of principal executive offices)			(Zip Code)

(617) 300-0956

(Registrant’s telephone number, including area code)

___________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	SOND	The Nasdaq Stock Exchange LLC
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	SONDW	The Nasdaq Stock Exchange LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (Check one):


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 ☒

The registrant had 217,458,738 shares of common stock outstanding as of August 9, 2022.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

• our plans to achieve positive quarterly Free Cash Flow within 2023 without additional fundraising and to target “capital light” lease signings, as part of our Cash Flow Positive Plan announced on June 9, 2022;

• our financial, operating and growth forecasts and projections;

• expectations for our business, revenue, expenses, operating results, and financial condition;

• our ability to achieve or maintain profitability in the future;

• trends in the travel and hospitality industries, including the anticipated timing and nature of any travel recovery;

• our pricing and revenue management strategies, pricing and occupancy forecasts and anticipated trends, and expectations about demand elasticity;

• our expectations concerning future transaction structures and the anticipated rent, rent abatement, capital expenditure provisions, and other terms of our future leases;

• potential ancillary revenue opportunities and our ability to improve our revenue management capabilities;

• anticipated capital expenditure obligations, including expectations for real estate owners’ funding of capital expenditures and other pre-opening costs at our leased properties;

• the expected adequacy of our capital resources, and the anticipated use of proceeds from any financings;

• trends in corporate travel and the potential for additional group and corporate travel revenue;

• anticipated occupancy rates;

• our expectations about extended stay bookings and our guests’ average length of stay (LOS);

• our ability to anticipate and satisfy guest demands, including through the introduction of new features, amenities or services;

• expectations about our geographic market mix and product mix between hotels and apartments, and their impact on our financial results;

• our plans to roll out additional features, amenities and technologies, and our beliefs about the positive impact of our technology investments on our brand and financial results;

• our future competitive advantages and anticipated differentiation in cost structure and guest experience compared to other accommodation providers;

• expectations for increased cost efficiencies and technological improvements;

• expectations and plans for expanding in existing and new markets and accommodation categories;

• the anticipated growth in our portfolio of Live Units and Contracted Units, including the anticipated scope and timing of any removals of units from our portfolio;

• expectations about our relationships with third-party distribution channels and indirect channels, and the percentage of future revenue attributable to bookings through indirect channels;

• anticipated seasonality and other variations in our results of operations from period-to-period, including statements about anticipated RevPARs in specified quarters;

• the anticipated effects of the COVID-19 pandemic or other public health crises on our business, operating results and financial condition;

• our ability to continue meeting the listing standards of Nasdaq;

• our assessments and beliefs regarding the timing and outcome of pending legal proceedings and any liability that we may incur as a result of those proceedings;

• our assessments and estimates that determine our effective tax rate and regarding any tax-related audits or other tax proceedings; and

• other expectations, beliefs, plans, strategies, anticipated developments, and other matters that are not historical facts.

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, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

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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.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. 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.

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SUMMARY OF RISK FACTORS

Below is a summary of the principal factors that could materially harm our business, operating results and/or financial condition, impair our future prospects or cause the price of our publicly traded securities to decline. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (the “SEC”) before making an investment decision regarding our securities.

• Our actual results may differ materially from our forecasts and projections.

• Our plan to reach positive quarterly Free Cash Flow within 2023 without additional fundraising may be unsuccessful, and restructuring initiatives may not provide the expected benefits and could adversely affect us.

• Our results could be negatively affected by changes in travel, hospitality, real estate and vacation markets.

• We may be unable to negotiate satisfactory leases or other arrangements to operate new properties, onboard new properties in a timely manner, or renew or replace existing properties on satisfactory terms or at all.

• Delays in real estate development and construction projects could adversely affect our ability to generate revenue from the related leased buildings.

• Newly leased properties may generate revenue later than we estimated, and may be more difficult or expensive to integrate into our operations than expected.

• Our limited operating history and evolving business make it difficult to evaluate our future prospects and challenges.

• We may be unable to effectively manage our growth.

• Costs relating to the opening, operation and maintenance of our leased properties could be higher than expected.

• We depend on landlords to deliver properties in a suitable condition and to manage and maintain them.

• Our long-term and fixed-cost leases limit our flexibility.

• Under certain circumstances, our leases may be subject to termination prior to the scheduled expiration of the term, which can be disruptive and costly.

• The COVID-19 pandemic and efforts to reduce its spread have had, and will likely continue to have, a negative impact on us.

• We may be unable to attract new guests or generate repeat bookings.

• We may be unable to introduce upgraded amenities, services or features for our guests in a timely and cost-efficient manner.

• We operate in the highly competitive hospitality market.

• We use third-party distribution channels to market our units, which have historically accounted for a substantial percentage of our bookings.

• Our results of operations vary from period-to-period, and historical performance may not be indicative of future performance.

• Our long-term success depends, in part, on our ability to expand internationally, and our business is susceptible to risks associated with international operations.

• Our business depends on our reputation and the strength of our brand, and any deterioration could adversely impact our market share, revenues, business, financial condition, or results of operations.

• Claims, lawsuits, and other proceedings could adversely affect our business and financial condition.

• We may be subject to liability or reputational damage for guests’ activities or other incidents at our properties.

• We are subject to claims and liabilities associated with potential health and safety issues and hazardous substances at properties.

• We must attract and retain sufficient, highly skilled personnel and are subject to risks associated with the employment of hospitality personnel, including unionized labor.

• We have identified and may in the future identify material weaknesses in our internal control over financial reporting or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated financial statements.

• We rely on third parties for important services and technologies, and their availability and performance are uncertain.

• Our processing, storage, use and disclosure of personal data expose us to risks of internal or external security breaches and could give rise to liabilities and/or damage to reputation.

• Failure to comply with privacy, data protection, consumer protection, marketing and advertising laws could adversely affect us.

•We face risks related to our intellectual property.

• Our business is highly regulated across multiple jurisdictions, including evolving and sometimes uncertain short-term rental regulations and tax laws, which may limit our growth or otherwise negatively affect us.

• We may require additional capital, which might not be available in a timely manner or on favorable terms.

• We may fail to continue to meet Nasdaq’s listing standards.

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•Our indebtedness and credit facilities contain financial covenants and other restrictions that may limit our operational and financial flexibility or otherwise adversely affect us.

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TABLE OF CONTENTS


			Page
Part I - Financial Information
Item 1. Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			38
Item 3. Quantitative and Qualitative Disclosures About Market Risk			61
Item 4. Controls and Procedures			62

Part II - Other Information
Item 1. Legal Proceedings			63
Item 1A. Risk Factors			63
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			95
Item 3. Defaults Upon Senior Securities			95
Item 4. Mine Safety Disclosures			95
Item 5. Other Information			95
Item 6. Exhibits			96
Signatures			98

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Part I - Financial Information

Item 1. Financial Statements

SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for number of shares and par value information)

(unaudited)


	June 30, 2022		December 31, 2021
Assets
Current assets
Cash	$	359,500	$	69,726
Restricted cash	1,244		215
Accounts receivable, net of allowance of $255 and $4,127 at June 30, 2022 and December 31, 2021 respectively	7,307		4,638
Prepaid rent	2,316		2,957
Prepaid expenses	9,854		5,029
Other current assets	18,996		16,416
Total current assets	399,217		98,981
Property and equipment, net	35,605		27,461
Operating lease right-of-use assets	1,109,208		—
Other non-current assets	15,384		22,037
Total assets	$	1,559,414	$	148,479
Liabilities, mezzanine equity and stockholders’ equity (deficit)
Current liabilities
Accounts payable	$	15,423	$	19,096
Accrued liabilities	25,780		19,557
Sales tax payable	12,533		8,412
Deferred revenue	37,749		18,811
Current portion of long-term debt	—		13,116
Convertible notes	—		184,636
Current operating lease liabilities	152,064		—
Total current liabilities	243,549		263,628
Non-current operating lease liabilities	1,050,285		—
Deferred rent	—		66,132
Long-term debt, net	161,285		10,736
Other non-current liabilities	2,033		3,906
Total liabilities	1,457,152		344,402
Commitments and contingencies (Note 8)
Mezzanine equity:
Redeemable convertible preferred stock	—		518,750
Exchangeable preferred stock	—		49,733
Total mezzanine equity	—		568,483
Stockholders’ equity (deficit):
Common stock	20		1
Additional paid-in capital	924,054		43,106
Cumulative translation adjustment	14,383		7,299
Accumulated deficit	(836,195)		(814,812)
Total stockholders’ equity (deficit)	102,262		(764,406)
Total liabilities, mezzanine equity and stockholders’ equity (deficit)	$	1,559,414	$	148,479

See Notes to Condensed Consolidated Financial Statements.

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SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except number of shares and per share information)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	121,322	$	47,269	$	201,788	$	78,827
Cost of revenue (excluding depreciation and amortization)	79,187		43,745		153,083		82,950
Operations and support	54,003		34,889		102,270		60,312
General and administrative	31,277		24,615		68,258		56,764
Research and development	8,088		4,066		15,713		7,385
Sales and marketing	12,414		4,888		21,875		7,399
Restructuring and other charges	4,033		—		4,033		—
Total costs and expenses	189,002		112,203		365,232		214,810
Loss from operations	(67,680)		(64,934)		(163,444)		(135,983)
Interest expense, net and other expense (income), net:
Interest expense, net	4,382		12,522		12,584		16,349
Change in fair value of SPAC Warrants	(11,310)		—		(37,634)		—
Change in fair value of Earn Out liability	(23,345)		—		(96,522)		—
Change in fair value of share-settled redemption feature and gain on conversion of Convertible Notes	—		—		(29,512)		—
Other expense (income), net	6,251		(3,577)		8,875		65
Total interest expense, net and other expense (income), net	(24,022)		8,945		(142,209)		16,414
Loss before income taxes	(43,658)		(73,879)		(21,235)		(152,397)
Provision for income taxes	117		70		148		93
Net loss	$	(43,775)	$	(73,949)	$	(21,383)	$	(152,490)
Less: Net loss attributable to convertible preferred stock and exchangeable preferred stockholders	—		—		1,180		—
Net loss attributable to common stockholders	$	(43,775)	$	(73,949)	$	(20,203)	$	(152,490)
Net loss per share, basic and diluted	$	(0.20)	$	(6.41)	$	(0.10)	$	(13.74)
Weighted average shares outstanding of common stock, basic and diluted	215,085,516		11,538,790		197,658,542		11,099,760
Other comprehensive loss:
Net loss	$	(43,775)	$	(73,949)	$	(21,383)	$	(152,490)
Change in foreign currency translation adjustment	5,085		1,689		7,084		2,834
Comprehensive loss	$	(38,690)	$	(72,260)	$	(14,299)	$	(149,656)

See Notes to Condensed Consolidated Financial Statements.

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SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND

STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except number of shares and par amount information)

(unaudited)


	Three Months Ended June 30, 2022
	Common Stock			Post-Combination Exchangeable Common Shares				Additional Paid-in Capital		Accumulated Translation Adjustment		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Par Amount		Shares	Amount
Balances as of March 31, 2022	184,678,577	$	20	32,296,539	$	—		$	918,369	$	9,298	$	(792,420)	$	135,267
Exercise of common stock options	375.891	—		—	—			574		—		—		574
Vesting of restricted stock units	29,742	—		—	—			57		—		—		57
Conversion of Exchangeable stock	4,259,343	—		(4,259,343)	—			—		—		—		—
Stock-based compensation	—	—		—	—			5,054		—		—		5,054
Components of comprehensive loss:
Net Loss	—	—		—	—		—	—		—		(43,775)		(43,775)
Change in Cumulative Translation Adjustment	—	—		—	—		—	—		5,085		—		5,085
Balances as of June 30, 2022	189,343,553	$	20	28,037,196	$	—		$	924,054	$	14,383	$	(836,195)	$	102,262
Note: Amounts may not recalculate due to rounding

See Notes to Condensed Consolidated Financial Statements.

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SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND

STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except number of shares and par amount information)

(unaudited)


	Three Months Ended June 30, 2021
	Redeemable Convertible Preferred Stock			Exchangeable Preferred Stock			Common Stock			Exchangeable AA Stock			Post-Combination Exchangeable Common Shares			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount		Shares	Par Amount		Shares	Amount		Shares	Amount
Balances as of March 31, 2021	111,257,435	518,750		18,474,628	49,733		10,908,802	1		13,859,669	—		—	—		28,797		6,811		(598,966)		(563,357)
Issuance of common stock upon exercise of stock options	—	—		—	—		938,128	—		—	—		—	—		1,377		—		—		1,377
Issuance of common stock upon exercise of common stock warrants	—	—		—	—		82,352	—		—	—		—	—		120		—		—		120
Stock-based compensation	—	—		—	—		—	—		—	—		—	—		2,448		—		—		2,448
Net loss	—	—		—	—		—	—		—	—		—	—				—		(73,949)		(73,949)
Other comprehensive income	—	—		—	—		—	—		—	—		—	—		—		1,689		—		1,689
Balances as of June 30, 2021	111,257,435	$	518,750	18,474,628	$	49,733	11,929,282	$	1	13,859,669	$	—	—	$	—	$	32,742	$	8,500	$	(672,915)	$	(631,672)
Note: Amounts may not recalculate due to rounding

See Notes to Condensed Consolidated Financial Statements.

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SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND

STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except number of shares and par amount information)

(unaudited)


	Six Months Ended June 30, 2022
	Redeemable Convertible Preferred Stock			Exchangeable Preferred Stock			Common Stock			Exchangeable AA Stock			Post-Combination Exchangeable Common Shares			Additional Paid-in Capital		Accumulated Translation Adjustment		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount		Shares	Par Amount		Shares	Amount		Shares	Amount
Balances as of December 31, 2021	75,767,082	$	518,750	12,570,228	$	49,733	8,684,246	$	1	9,421,190	$	—	—	$	—	$	43,106	$	7,299	$	(814,812)	$	(764,406)
Retroactive adjustment to reflect the exchange ratio due to Business Combination	35,504,342	—		5,890,381	—		4,067,416	—		4,414,740	—		—	—		—		—		—		—
Balances as of December 31, 2021, as converted	111,271,424	518,750		18,460,609	49,733		12,751,662	1		13,835,930	—		—	—		43,106		7,299		(814,812)		(764,406)
Exercise of common stock options	—	—		—	—		738,834	—		—	—		—	—		1,447		—		—		1,447
Vesting of restricted stock units							29,742									57						57
Conversion of Sonder Legacy Warrants from liabilities to equity	—	—		—	—		—	—		—	—		—	—		2,111		—		—		2,111
CEO promissory note settlement	—	—		—	—		(2,725,631)	—		—	—		—	—		—		—		—		—
Conversion of Sonder Legacy Warrants	—	—		—	—		155,239	—		—	—		—	—		1,243		—		—		1,243
Conversion of Convertible Note	—	—		—	—		19,017,105	1		—	—		—	—		159,172		—		—		159,173
Conversion of Preferred stock	(111,271,424)	(518,750)		—	—		111,271,424	11		—	—		—	—		518,750		—		—		518,761
Conversion of Exchangeable stock	—	—		(18,460,609)	(49,733)		4,259,343	—		(13,835,930)	—		28,037,196	—		49,733		—		—		49,733
Issuance of common stock in connection with Business Combination and PIPE offering	—	—		—	—		43,845,835	7		—	—		—	—		267,355		—		—		267,362
Assumption of SPAC Warrants upon Business Combination																(38,135)						(38,135)
Earn Out liability recognized upon consummation of the merger	—	—		—	—		—	—		—	—		—	—		(98,117)		—		—		(98,117)
Issuance of Delayed Draw Warrants	—	—		—	—		—	—		—	—		—	—		5,598		—		—		5,598
Stock-based compensation	—	—		—	—		—	—		—	—		—	—		11,734		—		—		11,734
Components of comprehensive loss:
Net Loss	—	—		—	—		—	—		—	—		—	—		—		—		(21,383)		(21,383)
Change in Cumulative Translation Adjustment	—	—		—	—		—	—		—	—		—	—		—		7,084		—		7,084
Balances as of June 30, 2022	—	—		—	—		189,343,553	20		—	—		28,037,196	—		924,054		14,383		(836,195)		102,262
Note: Amounts may not recalculate due to rounding

See Notes to Condensed Consolidated Financial Statements.

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SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND

STOCKHOLDERS’ EQUITY (DEFICIT), continued

(In thousands, except number of shares and par amount information)

(unaudited)


	Six Months Ended June 30, 2021
	Convertible Preferred Stock			Exchangeable Preferred Stock			Common Stock			Exchangeable AA Stock			Post-Combination Exchangeable Common Shares			Additional Paid-in Capital		Accumulated Translation Adjustment		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount		Shares	Amount		Shares	Par Amount		Shares	Amount		Shares	Amount
Balances as of December 31, 2020	75,664,679	$	517,730	12,579,755	$	49,733	7,169,758	$	1	9,437,358	$	—	—	$	—	$	13,898	$	5,666	$	(520,425)	$	(500,860)
Retroactive adjustment to reflect the exchange ratio due to Business Combination	35,456,366	—		5,894,873	—		3,359,582	—		4,422,311	—		—	—		—		—		—		—
Balances as of December 31, 2020, as converted	111,121,045	517,730		18,474,628	49,733		10,529,340	1		13,859,669	—		—	—		13,898		5,666		(520,425)		(500,860)
Issuance of Series E Convertible Preferred Stock, net of issuance costs	136,390	1,020		—	—		—	—		—	—		—	—		—		—		—		—
Issuance of common stock upon exercise of stock options	—	—		—	—		1,317,590	—		—	—		—	—		2,123		—		—		2,123
Issuance of common stock upon exercise of common stock warrants	—	—		—	—		82,352	—		—	—		—	—		120		—		—		120
Stock-based compensation	—	—		—	—		—	—		—	—		—	—		16,601		—		—		16,601
Components of comprehensive loss:
Net loss	—	—		—	—		—	—		—	—		—	—		—		—		(152,490)		(152,490)
Other comprehensive income	—	—		—	—		—	—		—	—		—	—		—		2,834		—		2,834
Balances as of June 30, 2021	111,257,435	518,750		18,474,628	49,733		11,929,282	1		13,859,669	—		—	—		32,742		8,500		(672,915)		(631,672)
Note: Amounts may not recalculate due to rounding

See Notes to Condensed Consolidated Financial Statements.

Table of Contents`

SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(21,383)	$	(152,490)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	11,626		8,332
Share-based compensation	11,734		16,601
Bad debt expense	191		88
Write-off of capital assets	373		658
Amortization of operating lease right-of-use assets	70,228		—
Write-off of debt issuance costs	362		—
Straight-line rent	—		6,199
Unrealized loss on foreign currency transactions	6,458		2,921
Amortization of debt issuance costs	9,040		1,012
Amortization of debt discounts	(2,640)		11,977
Change in fair value of share-settled redemption feature and gain on conversion of Convertible Notes	(29,512)		—
Change in fair value of derivative instruments	—		(4,100)
Change in fair value of warrants	—		1,286
Change in fair value of SPAC Warrants	(37,634)		—
Change in fair value of Earn Out liability	(96,522)		—
Other adjustments to net loss	249		—
Changes in operating assets and liabilities:
Accounts receivable	(2,941)		(164)
Prepaid rent	598		(852)
Prepaid expenses	(4,877)		(945)
Other current assets	(2,948)		(701)
Other non-current assets	6,265		(6,988)
Accounts payable	(22,382)		(856)
Accrued liabilities	11,148		6,801
Sales tax payable	4,251		1,982
Deferred revenue	19,089		12,722
Operating lease assets and operating lease liabilities, net	(24,862)		—
Other current liabilities	1,212		13
Other non-current liabilities	1,262		251
Net cash used in operating activities	(91,615)		(96,253)

Table of Contents`

SONDER HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

(In thousands)

(unaudited)


	Six Months Ended June 30,
	2022		2021
Cash flows from investing activities
Purchase of property and equipment	(16,145)		(4,476)
Capitalization of internal-use software	(2,236)		(2,424)
Net cash used in investing activities	(18,381)		(6,900)
Cash flows from financing activities
Proceeds from Delayed Draw Notes, net of issuance costs of $5,775	159,225		—

Repayment of debt	(24,680)		(6,900)
Debt extinguishment costs	(3,065)		—
Proceeds from Business Combination and PIPE offering	325,928		162,366
Issuance costs of common stock	(58,555)		—
Proceeds from exercise of stock options	1,447		2,123
Proceeds from exercise of common stock warrants	—		120
Issuance of redeemable convertible preferred stock	—		1,020
Net cash provided by financing activities	400,300		158,729
Effects of foreign exchange on cash	499		(258)
Net change in cash and restricted cash	290,803		55,318
Cash and restricted cash at the beginning of period	69,941		123,108
Cash and restricted cash at end of period	$	360,744	$