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Full Year Net Revenue Grew 56.2% to $114.5 Million

NEW YORK, March 05, 2020 (GLOBE NEWSWIRE) — Mohawk Group Holdings, Inc. (NASDAQ: MWK) (“Mohawk”) today announced results for the fourth quarter and full year ended December 31, 2019. 

Fourth Quarter and Full Year Highlights

  • 18 new products launched in the fourth quarter, bringing 2019 full year to 32 new products launched, which have achieved, or are expected to achieve, more than $0.5 million in net revenue per year, compared to 11 in the full year 2018.
  • Full year net revenue grew 56.2% year over year to $114.5 million, and fourth quarter net revenue grew 30.1% to $25.6 million, compared to $19.7 million in the fourth quarter of 2019.
  • Full year gross margin improved to 39.4% versus 35.4% in 2018.
  • 2019 operating loss of $(38.9) million increased from $(29.4) million in 2018.
  • 2019 contribution margin grew to 2.2% from (10.6)% in 2018, reflecting both higher sustain revenues and margin expansion.
  • Excluding non-cash stock-based compensation of $19.2 million, fixed operating expenses for the full year remained essentially flat.
  • 2019 net loss of $(43.4) million increased from $(31.8) million in 2018.
  • 2019 Adjusted EBITDA improved to $(19.5) million from $(28.6) million in 2018.
  • Total cash balance at December 31, 2019 was $30.4 million.

Yaniv Sarig, Co-Founder and Chief Executive Officer, commented, “We are pleased with our fourth quarter results and our strong finish to the year. 2019 marked a year of progress on our strategic priorities that included 32 new products launched, product category expansion and the growth of our AIMEE software platform.  These activities fueled top-line growth of over 56% with improved Adjusted EBITDA for the year while we also continued to invest for the future.”

“Looking ahead, we believe that our differentiated A.I. driven business model provides Mohawk with a tremendous amount of opportunity to grow market share in existing and new categories and to generate meaningful profitability and increased shareholder value over the long-term.”

Outlook
For 2020, the Company currently expects net revenue to be in the range of $160.0 million to $170.0 million driven primarily by continued growth of its existing product portfolio and the positive contribution from new products launched in 2020. This outlook incorporates potential inventory constraints for existing products and potential delays in new product launches primarily in the second half of the year due to the impact from the COVID-19.  The Company expects positive Adjusted EBITDA for the three months ended September 30, 2020.

Non-GAAP Financial Measures

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the “Non-GAAP Financial Measures and Reconciliations” section below.

Webcast and Conference Call Information

Mohawk will host a live conference call to discuss financial results today, March 5, 2020, at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 295-1077 (domestic) or (470) 495-9485 (international) at 5:00 p.m. ET and provide the Conference ID: 7480377. The conference call will also be available to interested parties through a live webcast at https://ir.mohawkgp.com/investor-relations. Please visit the website at least 15 minutes prior to the start of the call to register and download any necessary software.

About Mohawk Group Holdings, Inc.
Mohawk Group Holdings, Inc. and subsidiaries (“Mohawk”) is a rapidly growing technology-enabled consumer products company that uses machine learning, natural language processing, and data analytics to design, develop, market and sell products. Mohawk predominately operates through online retail channels such as Amazon and Walmart. Mohawk has incubated and grouped four owned and operated brands: hOme Labs, Vremi, Xtava and RIF6. Mohawk sells products in multiple categories, including home and kitchen appliances, kitchenware, environmental appliances (i.e., dehumidifiers and air conditioners), beauty related products and, to a lesser extent, consumer electronics. Mohawk was founded on the premise that if a company selling consumer packaged goods was founded today, it would apply artificial intelligence and machine learning, the synthesis of massive quantities of data and the use of social proof to validate high caliber product offerings as opposed to over-reliance on brand value and other traditional marketing tactics.

Forward Looking Statements

All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our expected 2020 net revenue and Adjusted EBITDA, our business model and our technology platform, including our ability to disrupt the consumer products industry, our ability to grow market share in existing and new product categories; and our ability to generate profitability and shareholder value. These forward-looking statements are based on management’s current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to the impact of COVID-19, our cash flows and revenue growth rate; our supply chain, sourcing, manufacturing, warehousing and fulfillment; international tariffs and trade measures; inventory management, product liability claims, recalls or other safety concerns, reliance on third party online marketplaces, seasonal and quarterly variations in our revenue; acquisitions of other companies and technologies and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), all of which you may obtain for free on the SEC’s website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Investor Contacts:
Ilya Grozovsky, Mohawk Group
[email protected]
917-905-1699

Brendon Frey, ICR
[email protected]
203-682-8200

Media Contact:
Jessica Liddell, ICR
203-682-8200
[email protected]

MOHAWK GROUP HOLDINGS, INC.
Condensed Consolidated Statements of Operations 
(Unaudited) 
(in thousands, except share and per share data)

             
    Three Months Ended December 31,     Year-Ended December 31,  
    2018     2019     2018     2019  
NET REVENUE   $ 19,703     $ 25,634     $ 73,279     $ 114,451  
COST OF GOODS SOLD     11,377       16,552       47,296       69,411  
GROSS PROFIT     8,326       9,082       25,983       45,040  
OPERATING EXPENSES:                                
Research and development     845       2,476       3,655       8,133  
Sales and distribution     11,951       13,616       40,467       52,025  
General and administrative     3,187       8,003       11,290       23,782  
TOTAL OPERATING EXPENSES:     15,983       24,095       55,412       83,940  
OPERATING LOSS     (7,657 )     (15,013 )     (29,429 )     (38,900 )
INTEREST EXPENSE—net     850       1,018       2,353       4,386  
OTHER EXPENSE (INCOME)—net     31       (12 )     (14 )     41  
LOSS BEFORE INCOME TAXES     (8,538 )     (16,019 )     (31,768 )     (43,327 )
PROVISION FOR INCOME TAXES     52       6       55       29  
NET LOSS   $ (8,590 )   $ (16,025 )   $ (31,823 )   $ (43,356 )
Net loss per share, basic and diluted   $ (0.85 )   $ (1.06 )   $ (3.13 )   $ (3.21 )
Weighted-average number of shares outstanding, basic and diluted     10,160,879       15,134,677       10,160,879       13,516,844  

    Three Months Ended  
    31-Mar-19     30-Jun-19     30-Sep-19     31-Dec-19  
NET REVENUE   $ 17,846     $ 30,368     $ 40,603     $ 25,634  
COST OF GOODS SOLD     11,175       18,608       23,076       16,552  
GROSS PROFIT     6,671       11,760       17,527       9,082  
OPERATING EXPENSES:                                
Research and development     1,163       1,860       2,634       2,476  
Sales and distribution     9,274       11,828       17,307       13,616  
General and administrative     3,366       4,414       7,999       8,003  
TOTAL OPERATING EXPENSES:     13,803       18,102       27,940       24,095  
OPERATING LOSS     (7,132 )     (6,342 )     (10,413 )     (15,013 )
INTEREST EXPENSE—net     1,212       1,281       875       1,018  
OTHER EXPENSE (INCOME)—net     45       (13 )     21       (12 )
LOSS BEFORE INCOME TAXES     (8,389 )     (7,610 )     (11,309 )     (16,019 )
PROVISION FOR INCOME TAXES           15       8       6  
NET LOSS   $ (8,389 )   $ (7,625 )   $ (11,317 )   $ (16,025 )
Net loss per share, basic and diluted   $ (0.73 )   $ (0.62 )   $ (0.75 )   $ (1.06 )
Weighted-average number of shares outstanding, basic and diluted     11,534,190       12,206,747       15,134,422       15,134,677  
                                 

MOHAWK GROUP HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(Unaudited) (in thousands, except share and per share data)

             
    December 31,
2018
    December 31,
2019
 
ASSETS                
CURRENT ASSETS:                
Cash   $ 20,029     $ 30,353  
Accounts receivable—net     1,403       1,059  
Inventory     30,552       36,212  
Prepaid and other current assets     5,418       5,395  
Total current assets     57,402       73,019  
PROPERTY AND EQUIPMENT—net     268       175  
GOODWILL AND OTHER INTANGIBLES—net           1,055  
OTHER NON-CURRENT ASSETS     337       175  
TOTAL ASSETS   $ 58,007     $ 74,424  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
CURRENT LIABILITIES:                
Credit facility   $ 14,451     $ 21,657  
Accounts payable     15,404       21,064  
Term loan           3,000  
Accrued and other current liabilities     9,708       7,505  
Total current liabilities     39,563       53,226  
OTHER LIABILITIES     26       4  
TERM LOANS     13,049       10,467  
Total liabilities     52,638       63,697  
COMMITMENTS AND CONTINGENCIES                
STOCKHOLDERS’ EQUITY:                
Common stock, par value $0.0001 per share—500,000,000 shares authorized and 11,534,190 shares outstanding at December 31, 2018; 500,000,000 shares authorized and 17,736,649 shares outstanding at December 31, 2019     1       2  
Additional paid-in capital     76,348       125,044  
Accumulated deficit     (71,020 )     (114,376 )
Accumulated other comprehensive income     40       57  
Total stockholders’ equity     5,369       10,727  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 58,007     $ 74,424  
                 

MOHAWK GROUP HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (in thousands)

       
    Year-Ended December 31,  
    2018     2019  
OPERATING ACTIVITIES:                
Net loss   $ (31,823 )   $ (43,356 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     253       183  
Provision for sales returns     78       134  
Amortization of deferred financing cost and debt discounts     667       1,218  
Stock-based compensation     619       19,248  
Allowance for doubtful accounts           35  
Other     90       59  
Loss on early extinguishment on Midcap term loan     97        
Changes in assets and liabilities:                
Accounts receivable     (70 )     309  
Inventory     (9,974 )     (5,360 )
Prepaid and other current assets     (1,153 )     (1,004 )
Accounts payable, accrued and other liabilities     10,871       3,263  
 Cash used in operating activities     (30,345 )     (25,271 )
INVESTING ACTIVITIES:                
Purchase of fixed assets     (61 )     (114 )
Cash consideration for acquisition of Aussie Health           (1,105 )
Proceeds on sale of fixed assets     35       6  
 Cash used in investing activities     (26 )     (1,213 )
FINANCING ACTIVITIES:                
Proceeds from Initial Public Offering           36,000  
Issuance costs from Initial Public Offering           (5,446 )
Borrowings from Mid Cap credit facility     62,665       98,663  
Repayments from Mid Cap credit facility     (50,784 )     (92,165 )
Debt issuance costs from Mid Cap credit facility     (926 )     (581 )
Debt issuance costs from Horizon term loan     (215 )     (900 )
Insurance financing proceeds           3,833  
Insurance obligation payments           (2,783 )
Capital lease obligation payments     (54 )     (55 )
Capital lease financing proceeds     20        
Proceeds from issuance of Series C stock     23,969        
Proceeds from issuance of Series C-1 stock     7,660        
Issuance costs of Series C stock     (2,997 )      
Issuance costs of Series C-1 stock     (1,243 )      
Proceeds from exercise of stock options     18        
Repayments from Mid Cap term loan     (6,776 )      
Prepayment penalty incurred with the Midcap term loan extinguishment     (97 )      
Borrowings from Horizon term loan     15,000        
Deferred offering costs     (947 )      
 Cash provided by financing activities     45,293       36,566  
EFFECT OF EXCHANGE RATE ON CASH     (11 )     (1 )
NET CHANGE IN CASH AND RESTRICTED CASH FOR THE YEAR     14,911       10,081  
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR     5,797       20,708  
CASH AND RESTRICTED CASH AT END OF YEAR   $ 20,708     $ 30,789  
RECONCILIATION OF CASH AND RESTRICTED CASH                
CASH   $ 20,029       30,353  
RESTRICTED CASH—Prepaid and other current assets     550       307  
RESTRICTED CASH—Other non-current assets     129       129  
TOTAL CASH AND RESTRICTED CASH   $ 20,708     $ 30,789  

Non-GAAP Financial Measures and Reconciliations

The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with U.S. GAAP. The non-GAAP financial measures presented exclude the items described below. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results. Furthermore, management also believes that these items are not indicative of the Company’s on-going core operating performance. These non-GAAP financial measures have certain limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP.

Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies.

The Company has presented the following non-GAAP measures to assist investors in understanding the Company’s core net operating results on an on-going basis: (i) Contribution margin; (ii) Contribution margin as a percentage of net revenue; (iii) Adjusted EBITDA; and (iv) Adjusted EBITDA as a percentage of net revenue and (v) cash burn. These non-GAAP financial measures may also assist investors in making comparisons of the Company’s core operating results with those of other companies.

As used herein, Contribution margin represents operating loss plus general and administrative expenses, research and development expenses and fixed sales and distribution expenses including stock-based compensation. As used herein, Contribution margin as a percentage of net revenue represents Contribution margin divided by net revenue. As used herein, EBITDA represents net loss plus depreciation and amortization, interest expense, net and income tax expense. As used herein, Adjusted EBITDA represents EBITDA plus stock-based compensation expense and other expense, net.  As used herein, Adjusted EBITDA as a percentage of net revenue represents Adjusted EBITDA divided by net revenue. Contribution margin, EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to loss from operations or net loss, as determined under GAAP.

We present Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue because we believe each of these measures provides an additional metric to evaluate our operations and, when considered with both our GAAP results and the reconciliation to net loss, provides useful supplemental information for investors. We use Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue, together with financial measures prepared in accordance with GAAP, such as sales and gross margins, to assess our historical and prospective operating performance, to provide meaningful comparisons of operating performance across periods, to enhance our understanding of our operating performance and to compare our performance to that of our peers and competitors.

We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue are useful to investors in assessing the operating performance of our business without the effect of non-cash items, while Contribution margin and Contribution margin as a percentage of net revenue are useful to investors in assessing the operating performance of our products as they represent our operating results without the effects of fixed costs and non-cash items.  Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue, should not be considered in isolation or as alternatives to net loss, loss from operations or any other measure of financial performance calculated and prescribed in accordance with GAAP. Neither EBITDA, Adjusted EBITDA nor Adjusted EBITDA as a percentage of net revenue should be considered a measure of discretionary cash available to us to invest in the growth of our business. Our Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue may not be comparable to similar titled measures in other organizations because other organizations may not calculate Contribution margin, EBITDA, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue in the same manner as we do. Our presentation of Contribution margin and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from such terms or by unusual or non-recurring items.

We recognize that both EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue, have limitations as analytical financial measures. For example, neither EBITDA nor Adjusted EBITDA reflects:

  • our capital expenditures or future requirements for capital expenditures or merger and acquisitions;
  • the interest expense or the cash requirements necessary to service interest expense or principal payments, associated with indebtedness;
  • depreciation and amortization, which are non-cash charges, although the assets being depreciated and amortized will likely have to be replaced in the future, or any cash requirements for the replacement of assets; or
  • changes in cash requirements for our working capital needs.

Additionally, Adjusted EBITDA excludes non-cash expense for stock-based compensation, which is and will remain a key element of our overall long-term incentive compensation package.

The following table represents a reconciliation of EBITDA and Adjusted EBITDA to net loss, which is the most directly comparable financial measure presented in accordance with GAAP (in thousands):

                                 
    Three Months Ended
December 31,
    Year-Ended
December 31,
 
    2018     2019     2018     2019  
                                 
Net loss   $ (8,590 )   $ (16,025 )   $ (31,823 )   $ (43,356 )
Add (deduct)                                
Provision for income taxes     52       6       55       29  
Interest expense, net     850       1,018       2,353       4,386  
Depreciation and amortization     65       47       253       183  
EBITDA     (7,623 )     (14,954 )     (29,162 )     (38,758 )
Other expense (income), net     31       (12 )     (14 )     41  
Stock-based compensation     138       7,412       619       19,248  
Adjusted EBITDA   $ (7,454 )   $ (7,554 )   $ (28,557 )   $ (19,469 )
Adjusted EBITDA as a percentage of net revenue     (37.8 )%     (29.5 )%     (39.0 )%     (17.0 )%

    Three Months Ended  
    March 31,
2019
    June 30,
2019
    September 30,
2019
    December 31,
2019
 
                                 
Net loss   $ (8,389 )   $ (7,625 )   $ (11,317 )   $ (16,025 )
Add (deduct)                                
Provision for income taxes           15       8       6  
Interest expense, net     1,212       1,281       875       1,018  
Depreciation and amortization     55       40       41       47  
EBITDA     (7,122 )     (6,289 )     (10,393 )     (14,954 )
Other expense (income), net     45       (13 )     21       (12 )
Stock-based compensation     1,500       2,619       7,716       7,412  
Adjusted EBITDA   $ (5,577 )   $ (3,683 )   $ (2,656 )   $ (7,554 )
Adjusted EBITDA as a percentage of net revenue     (31.3 )%     (12.1 )%     (6.5 )%     (29.5 )%
                                 

We also recognize that Contribution margin and Contribution margin as a percentage of net revenue have limitations as analytical financial measures. For example, Contribution margin does not reflect:

  • general and administrative expenses necessary to operate our business;
  • research and development expenses necessary for the development, operation and support of our software platform; or
  • the fixed costs portion of our sales and distribution expenses including stock-based compensation expense

The following table provides a reconciliation of Contribution Margin to operating loss, which is the most directly comparable financial measure presented in accordance with GAAP (in thousands):

    Three Months Ended  December 31,     Year-Ended December 31,  
    2018     2019     2018     2019  
                                 
Operating loss   $ (7,657 )   $ (15,013 )   $ (29,429 )     (38,900 )
Add                                
General and administrative expenses     3,187       8,003       11,290       23,782  
Research and development expenses     845       2,476       3,655       8,133  
Sales and distribution fixed expenses, including stock-based compensation expense within sales and distribution expense     2,642       2,852       6,695       9,475  
Contribution margin   $ (983 )   $ (1,682 )   $ (7,789 )   $ 2,490  
Contribution margin as a percentage of net revenue     (5.0 )%     (6.6 )%     (10.6 )%     2.2 %

    Three Months Ended
    March 31, 2019     June 30, 2019     September 30, 2019     December 31, 2019  
             
Operating loss   $ (7,132 )   $ (6,342 )   $ (10,413 )     (15,013 )
Add                                
General and administrative expenses     3,366       4,414       7,999       8,003  
Research and development expenses     1,163       1,860       2,634       2,476  
Sales and distribution fixed expenses, including stock-based compensation expense within sales and distribution expense     1,807       1,804       3,010       2,852  
Contribution margin   $ (794 )   $ 1,736     $ 3,230     $ (1,682 )
Contribution margin as a percentage of net revenue     (4.5 )%     5.7 %     8.0 %     (6.6 )%

  We believe each of our products goes through three core phases as follows:

  1. Launch phase: During this phase, we leverage our technology to target opportunities identified using AIMEE. During this period of time, and due to the combination of discounts and investment in marketing, our net margin for a product could be as low as negative 35%. In general, a product may stay in the launch phase on average for 3 months.
  2. Sustain phase: Our goal is for every product we launch to enter the sustain phase and become profitable, with a target average of positive 10% net margin (i.e. contribution margin). Over time, our products benefit from economies of scale stemming from purchasing power both with manufacturers and with fulfillment providers.
  3. Liquidate phase: If a product does not enter the sustain phase or if the customer satisfaction of the product (i.e., ratings) are not satisfactory, then it will go to the liquidate phase and we will sell the remaining inventory.

The following table breaks out our quarterly results of operations by our product phases including our SaaS business line:

    Three Months Ended March 31, 2019 (in thousands)
    Sustain     Launch     SaaS     Liquidate
/Other
    Fixed
Costs
    Stock-based
compensation
expense
    Total
NET REVENUE   $ 13,296     $ 2,602     $ 630     $ 1,318     $     $     $ 17,846
COST OF GOODS SOLD     8,322       1,743             1,110                   11,175
GROSS PROFIT     4,974       859       630       208                   6,671
OPERATING EXPENSES:                                                      
Sales and distribution expense     5,077       1,343       166       880       1,420       388       9,274
Research and development expense                             1,002       161       1,163
General and administrative expense                             2,415       951       3,366

    Three Months Ended June 30, 2019  (in thousands)
    Sustain     Launch     SaaS     Liquidate
/Other
    Fixed
Costs
    Stock-based
compensation
expense
    Total
NET REVENUE   $ 27,464     $ 1,405     $ 425     $ 1,074     $     $     $ 30,368
COST OF GOODS SOLD     16,810       932             866                   18,608
GROSS PROFIT     10,654       473       425       208                   11,760
OPERATING EXPENSES:                                                      
Sales and distribution expense     8,651       590       110       673       1,276       528       11,828
Research and development expense                             1,470       390       1,860
General and administrative expense                             2,713       1,701       4,414

    Three Months Ended September 31, 2019  (in thousands)
    Sustain     Launch     SaaS     Liquidate
/Other
    Fixed
Costs
    Stock-based
compensation
expense
    Total
NET REVENUE   $ 36,162     $ 2,771     $ 316     $ 1,354     $     $     $ 40,603
COST OF GOODS SOLD     21,801       1,983             (708 )                 23,076
GROSS PROFIT     14,361       788       316       2,062                   17,527
OPERATING EXPENSES:                                                      
Sales and distribution expense     11,249       1,637       138       1,273       1,393       1,617       17,307
Research and development expense                             1,307       1,327       2,634
General and administrative expense                             3,227       4,772       7,999

    Three Months Ended December 31, 2019  (in thousands)
    Sustain     Launch     SaaS     Liquidate
/Other
    Fixed
Costs
    Stock-based
compensation
expense
    Total
NET REVENUE   $ 20,326     $ 3,026     $ 310     $ 1,972     $     $     $ 25,634
COST OF GOODS SOLD     11,945       1,821             2,786                   16,552
GROSS PROFIT     8,381       1,205       310       (814 )                 9,082
OPERATING EXPENSES:                                                      
Sales and distribution expense     7,096       1,635       141       1,892       1,208       1,644       13,616
Research and development expense                             1,172       1,304       2,476
General and administrative expense                             3,542       4,461       8,003

    Year-Ended December 31, 2019
    Sustain     Launch     SaaS     Liquidation
/Other
    Fixed
Costs
    Stock based
compensation
expense
    Total
NET REVENUE   $ 97,248     $ 9,804     $ 1,681     $ 5,718     $     $     $ 114,451
COST OF GOODS SOLD     58,878       6,479             4,054                   69,411
GROSS PROFIT   $ 38,370     $ 3,325     $ 1,681     $ 1,664     $     $     $ 45,040
                                                       
OPERATING EXPENSES:                                                      
Sales and distribution expenses     32,073       5,205       555       4,717       5,298       4,177       52,025
Research and development                             4,951       3,182       8,133
General and administrative                             11,897       11,885       23,782
                                                       

Quarterly Condensed Statement of Cash Flows Information

The following table provides summarized quarterly information from our condensed statement of cash flows for 2019:

    Three Months Ended  
    March 31,
2019
    June 30,
2019
    September 30,
2019
    December 31,
2019
 
Operating activities:                                
Net loss   $ (8,389 )   $ (7,625 )   $ (11,317 )   $ (16,025 )
Total adjustments to reconcile net loss to net cash used in operating activities     1,879       3,219       8,124       7,655  
Cash (used in) provided by working capital (changes in assets and liabilities)     (5,413 )     41       6,337       (3,754 )
Cash used in operating activities     (11,923 )     (4,365 )     3,144       (12,124 )
                                 
Cash used in investing activities     (10 )     (11 )     (1,126 )     (66 )
                                 
Financing activities:                                
Proceeds from initial public offering, less issuance costs         30,902       (348 )      
Net proceeds from (payments to) MidCap Credit Facility     5,520       (1,617 )     (5,244 )     7,839  
All other financing activities     (893 )     1,652       (266 )     (980 )
Cash provided by (used in) financing activities     4,627       30,937       (5,858 )     6,859  
Effect of exchange rate on cash   1     0       (1 )     (1 )
Net change in cash and restricted cash for period   $ (7,305 )   $ 26,561     $ (3,841 )   $ (5,332 )

As used herein, cash burn represents the change of the net change in cash balance at each of the balance sheet period adjusted for certain one-time items like the initial public offering and excluding changes in restricted cash. We use cash burn to provide an additional metric to evaluate our cash flows from our business operations. We believe cash burn is useful to investors to evaluate the cash operating performance of our business without the effect of certain one-time items (i.e., the initial public offering).   Our method for calculating cash burn may not be used by other organizations and therefore our cash burn amount may not be directly comparable to the cash burn disclosed by other organizations. The following table provides a reconciliation of cash burn to the net change in cash and restricted cash for period, which is the most directly comparable financial measure presented in accordance with GAAP:

    Three Months Ended  
    March 31,
2019
    June 30,
2019
    September 30,
2019
    December 31,
2019
 
                                 
Net change in cash and restricted cash for period   $ (7,305 )   $ 26,561     $ (3,841 )   $ (5,332 )
Less:                                
Proceeds from initial public offering, less issuance costs         (30,902 )   348     0  
Net cash impact from mergers and acquisition activity             1,105     0  
Changes in restricted cash   250             0  
Cash burn   $ (7,055 )   $ (4,341 )   $ (2,388 )   $ (5,332 )