HUCK 10-Q

Huckleberry.ai, Inc. (HUCK)

10-Q 2022-12-09 For: 2022-10-31

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Added on April 09, 2026

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(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2022
OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			Page
PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements (unaudited)			1
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Loss			3
Condensed Consolidated Statements of Stockholders' Deficit			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
















Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26











Item 3. Quantitative and Qualitative Disclosures about Market Risk			41
Item 4. Controls and Procedures			42
PART II. OTHER INFORMATION			43
Item 1. Legal Proceedings			43
Item 1A. Risk Factors			43

Item 6. Exhibits			75
Signatures			76


	As of January 31,		As of October 31,
	2022		2022
Assets
Current assets:
Cash, cash equivalents, and restricted cash	$	83,561	$	71,082

Accounts receivable, net of allowances of $3,793 and $2,166 as of January 31, 2022 and October 31, 2022, respectively	64,149		53,314
Contract acquisition costs, net	15,417		15,146
Prepaid expenses and other current assets	9,975		7,457
Total current assets	173,102		146,999
Property and equipment, net	17,584		19,834
Right-of-use assets	16,392		14,871
Contract acquisition costs, noncurrent, net	23,177		21,390
Intangible assets, net	2,875		2,814
Goodwill	9,478		9,478
Other assets	1,981		1,945
Total assets	$	244,589	$	217,331
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	4,770	$	17,843
Accrued expenses and other current liabilities	59,976		45,928
Lease liabilities	3,439		4,062
Deferred revenue	168,335		157,915
Total current liabilities	236,520		225,748
Lease liabilities, noncurrent	16,757		15,239
Deferred revenue, noncurrent	2,420		3,100
Other liabilities, noncurrent	10,882		11,945
Long-term debt	103,988		107,424
Total liabilities	370,567		363,456
Commitments and contingencies (Note 12)
Stockholders' deficit:
Preferred stock, $0.001 par value per share; 10,000 shares authorized as of January 31, 2022 and October 31, 2022; no shares issued and outstanding as of January 31, 2022 and October 31, 2022	—		—
Class A common stock, $0.001 par value per share; 3,264 shares authorized as of January 31, 2022 and October 31, 2022; 3,264 shares issued and outstanding as of January 31, 2022 and October 31, 2022	3		3
Class B common stock, $0.001 par value per share; 500,000 shares authorized as of January 31, 2022 and October 31, 2022; 29,730 and 31,281 shares issued and outstanding as of January 31, 2022 and October 31, 2022, respectively	30		31
Additional paid-in capital	1,098,084		1,165,522
Accumulated other comprehensive income (loss)	388		(1,460)
Accumulated deficit	(1,224,483)		(1,310,221)
Total stockholders' deficit	(125,978)		(146,125)
Total liabilities and stockholders' deficit	$	244,589	$	217,331


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2022		2021		2022
Revenue:
Subscription	$	56,621	$	69,041	$	163,399	$	201,022
Professional services and other	8,460		9,985		24,569		27,999
Total revenue	65,081		79,026		187,968		229,021
Cost of revenue:
Subscription	10,514		11,342		29,590		32,721
Professional services and other	6,630		7,572		19,030		22,167
Total cost of revenue	17,144		18,914		48,620		54,888
Gross profit	47,937		60,112		139,348		174,133
Operating expenses:
Sales and marketing	37,503		41,012		104,335		131,299
Research and development	21,984		24,583		57,511		73,108
General and administrative	13,430		13,029		36,032		42,514
Total operating expenses	72,917		78,624		197,878		246,921
Loss from operations	(24,980)		(18,512)		(58,530)		(72,788)
Other expense, net	(3,471)		(5,032)		(10,238)		(12,383)
Loss before income taxes	(28,451)		(23,544)		(68,768)		(85,171)
Provision for income taxes	62		167		89		567
Net loss	$	(28,513)	$	(23,711)	$	(68,857)	$	(85,738)
Net loss per share, basic and diluted	$	(0.88)	$	(0.69)	$	(2.17)	$	(2.53)
Weighted-average number of shares used in computing net loss per share, basic and diluted	32,363		34,392		31,758		33,893


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2022		2021		2022
Net loss	$	(28,513)	$	(23,711)	$	(68,857)	$	(85,738)
Foreign currency translation adjustments	(80)		(759)		(230)		(1,848)

Comprehensive loss	$	(28,593)	$	(24,470)	$	(69,087)	$	(87,586)


Delaware (State or Other Jurisdiction of Incorporation or Organization)						27-3687433 (I.R.S. Employer Identification Number)


	Nine Months Ended October 31, 2021
	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Deficit
	Shares	Amount		Shares	Amount
Balance as of January 31, 2021	3,263,659	$	3	27,271,435	$	27	$	1,038,006	$	877	$	(1,122,372)	$	(83,459)
Vesting of restricted stock units	—	—		703,571	1		—		—		—		1
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(94,435)	—		(6,244)		—		—		(6,244)
Issuance of common stock under employee stock purchase plan	—	—		505,020	—		4,133		—		—		4,133
Exercise of stock options	—	—		31,188	—		654		—		—		654
Stock-based compensation expense	—	—		—	—		10,074		—		—		10,074
Other comprehensive loss	—	—		—	—		—		(4)		—		(4)
Net loss	—	—		—	—		—		—		(18,104)		(18,104)
Balance as of April 30, 2021	3,263,659	3		28,416,779	28		1,046,623		873		(1,140,476)		(92,949)
Vesting of restricted stock units	—	—		286,617	1		—		—		—		1
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(16,612)			(1,334)		—		—		(1,334)
Exercise of stock options	—	—		107,804	—		2,509		—		—		2,509
Stock-based compensation expense	—	—		—	—		12,621		—		—		12,621
Exercise of common stock warrants	—	—		100,000	—		—		—		—		—
Other comprehensive loss	—	—		—	—		—		(146)		—		(146)
Net loss	—	—		—	—		—		—		(22,240)		(22,240)
Balance as of July 31, 2021	3,263,659	3		28,894,588	29		1,060,419		727		(1,162,716)		(101,538)
Vesting of restricted stock units	—	—		363,635	—		—		—		—		—
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(16,613)			(1,280)		—		—		(1,280)
Exercise of stock options	—	—		104,166	—		745		—		—		745
Stock-based compensation expense	—	—		—	—		18,109		—		—		18,109
Other comprehensive loss	—	—		—	—		—		(80)		—		(80)
Net loss	—	—		—	—		—		—		(28,513)		(28,513)
Balance as of October 31, 2021	3,263,659	$	3	29,345,776	$	29	$	1,077,993	$	647	$	(1,191,229)	$	(112,557)


	Nine Months Ended October 31, 2022
	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Deficit
	Shares	Amount		Shares	Amount
Balance as of January 31, 2022	3,263,659	$	3	29,729,822	$	30	$	1,098,084	$	388	$	(1,224,483)	$	(125,978)
Vesting of restricted stock units	—	—		527,423	—		—		—		—		—
Issuance of common stock under employee stock purchase plan	—	—		164,959	—		1,563		—		—		1,563
Exercise of stock options	—	—		37,727	—		724		—		—		724
Stock-based compensation expense	—	—		—	—		25,328		—		—		25,328
Other comprehensive loss	—	—		—	—		—		(703)		—		(703)
Net loss	—	—		—	—		—		—		(32,888)		(32,888)
Balance as of April 30, 2022	3,263,659	3		30,459,931	30		1,125,699		(315)		(1,257,371)		(131,954)
Vesting of restricted stock units	—	—		533,234	1		—		—		—		1
Exercise of stock options	—	—		4,605	—		81		—		—		81
Stock-based compensation expense	—	—		—	—		20,451		—		—		20,451
Other comprehensive loss	—	—		—	—		—		(386)		—		(386)
Net loss	—	—		—	—		—		—		(29,139)		(29,139)
Balance as of July 31, 2022	3,263,659	3		30,997,770	31		1,146,231		(701)		(1,286,510)		(140,946)
Vesting of restricted stock units	—	—		278,480	—		—		—		—		—
Exercise of stock options	—	—		5,057	—		56		—		—		56
Stock-based compensation expense	—	—		—	—		19,235		—		—		19,235
Other comprehensive loss	—	—		—	—		—		(759)		—		(759)
Net loss	—	—		—	—		—		—		(23,711)		(23,711)
Balance as of October 31, 2022	3,263,659	$	3	31,281,307	$	31	$	1,165,522	$	(1,460)	$	(1,310,221)	$	(146,125)


Computer equipment and software			2-3 years
Furniture, vehicles and office equipment			3 years
Leasehold improvements			Shorter of remaining lease term or estimated useful life


	January 31, 2022
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash	$	42,500	$	—	$	—	$	42,500
Cash equivalents:
Money market funds	25,878		—		—		25,878
Certificates of deposit	15,183		—		—		15,183




Total cash and cash equivalents	$	83,561	$	—	$	—	$	83,561


	October 31, 2022
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash	$	43,544	$	—	$	—	$	43,544
Cash equivalents:
Money market funds	8,518		—		—		8,518
Certificates of deposit	15,320		—		—		15,320




Restricted cash (1)	3,700		—		—		3,700
Total cash, cash equivalents, and restricted cash	$	71,082	$	—	$	—	$	71,082


	January 31, 2022
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	25,878	$	—	$	—	$	25,878
Certificates of deposit	—		15,183		—		15,183




Total cash equivalents	$	25,878	$	15,183	$	—	$	41,061


			As of October 31, 2022
Weighted average remaining lease term (years)			4.3
Weighted average discount rate			10.0%


Year Ending January 31:
2023(1)	$	1,232
2024(1)	5,056
2025	5,111
2026	5,207
2027	5,348
Thereafter	1,797
Total lease payments	23,751
Less imputed interest	(4,450)
Present value of lease liabilities	$	19,301


Balance as of January 31, 2022	$	170,755
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(148,087)
Increase due to billings excluding amounts recognized as revenue during the period	138,347
Balance as of October 31, 2022	$	161,015


	As of January 31,		As of October 31,
	2022		2022
Intellectual property excluding patents	$	2,458	$	2,458

Patents	950		950
	3,408		3,408
Less accumulated amortization	(533)		(594)
	$	2,875	$	2,814


	As of January 31,		As of October 31,
	2022		2022
Principal	$	110,599	$	112,705
Less: unamortized debt issuance costs	(6,611)		(5,281)
Net carrying amount	$	103,988	$	107,424


	Shares Subject to Outstanding Options	Weighted- Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 2022	963,288	$	26.16	2.9	$	20,166

Exercised	(47,389)	18.17

Expired	(8,990)	37.61
Outstanding as of October 31, 2022	906,909	$	26.47	2.1	$	77
Vested and exercisable at October 31, 2022	904,304	$	26.45	2.1	$	77


	Number of Shares	Weighted- Average Grant Date Fair Value
Outstanding as of January 31, 2022	4,338,619	$	55.40
Granted	2,005,478	43.25
Vested	(1,339,137)	51.82
Canceled	(1,008,921)	53.35
Outstanding as of October 31, 2022	3,996,039	$	51.01