Exhibit 99.2
MARTI TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS FOR THE PERIOD
JANUARY 1 - JUNE 30, 2024 and 2023
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE INTERIM PERIOD JANUARY 1 - JUNE 30, 2024 AND 2023
(Amounts expressed in US$ unless otherwise indicated)
CONTENTS | PAGE | ||
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS | 1 | ||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | 2 | ||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | 3 | ||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 4 | ||
EXPLANATORY NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 5-15 | ||
NOTE 1 | DESCRIPTION OF BUSINESS | 5 | |
NOTE 2 | BASIS OF PRESENTATION AND GOING CONCERN | 5-7 | |
NOTE 3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 8-10 | |
NOTE 4 | PROPERTY, EQUIPMENT AND DEPOSITS | 10 | |
NOTE 5 | CASH AND CASH EQUIVALENTS | 10-11 | |
NOTE 6 | REVENUE INFORMATION | 11-12 | |
NOTE 7 | OPERATING EXPENSES | 12-13 | |
NOTE 8 | INCOME TAXES | 13 | |
NOTE 9 | COMMITMENTS AND CONTINGENCIES | 13 | |
NOTE 10 | IMMATERIAL ERROR CORRECTION | 14 | |
NOTE 11 | SUBSEQUENT EVENTS | 14-15 |
i
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2024 AND DECEMBER 31, 2023
(Amounts expressed in US$ unless otherwise stated)
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | ||||||||
Accounts receivable, net | ||||||||
Inventories | ||||||||
Operating lease right of use assets | ||||||||
Other current assets | ||||||||
- VAT receivables | ||||||||
- Other | ||||||||
Total current assets | ||||||||
Non-current assets | ||||||||
Property, equipment and deposits, net | ||||||||
Operating lease right of use assets | ||||||||
Intangible assets | ||||||||
Total non-current assets | ||||||||
Total assets | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Short-term financial liabilities, net | ||||||||
Accounts payable | ||||||||
Operating lease liabilities | ||||||||
Deferred revenue | ||||||||
Accrued expenses and other current liabilities | ||||||||
Total current liabilities | ||||||||
Non-current liabilities | ||||||||
Long-term financial liabilities, net | ||||||||
Operating lease liabilities | ||||||||
Other non-current liabilities | ||||||||
Total non-current liabilities | ||||||||
Total liabilities | ||||||||
Stockholders’ equity | ||||||||
Common stock | ||||||||
Share premium | ||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Accumulated deficit | ( | ) | ( | ) | ||||
Total stockholders’ equity | ( | ) | ( | ) | ||||
Total liabilities and stockholders’ equity |
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
1
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
UNAUDITED
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE INTERIM PERIOD JANUARY 1 - JUNE 30
(Amounts expressed in US$ unless otherwise stated)
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
Revenue | ||||||||
Operating expenses: | ||||||||
Cost of revenue | ( | ) | ( | ) | ||||
General and administrative expenses | ( | ) | ( | ) | ||||
Selling and marketing expenses | ( | ) | ( | ) | ||||
Research and development expenses | ( | ) | ( | ) | ||||
Other expenses | ( | ) | ( | ) | ||||
Other income | ||||||||
Total operating expenses | ( | ) | ( | ) | ||||
Loss from operations | ( | ) | ( | ) | ||||
Financial expense | ( | ) | ( | ) | ||||
Financial income | ||||||||
Loss before income tax expense | ( | ) | ( | ) | ||||
Income tax expense | ||||||||
Net loss | ( | ) | ( | ) | ||||
Net loss attributable to stockholders | ( | ) | ( | ) | ||||
Net loss per share | ||||||||
( | ) | ( | ) | |||||
Other comprehensive loss | ||||||||
Total comprehensive loss | ( | ) | ( | ) |
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
2
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
UNAUDITED
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE INTERIM PERIOD JANUARY 1 - JUNE 30
(Amounts expressed in US$ unless otherwise stated)
Common stock | Share | Accumulated other comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||
Shares | Amount | Premium | loss | deficit | equity | |||||||||||||||||||
January 1, 2023 (recast) | ( | ) | ( | ) | ||||||||||||||||||||
Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||
Stock-based compensation | - | |||||||||||||||||||||||
Exercise of stock-based options | ||||||||||||||||||||||||
June 30, 2023 (recast) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
January 1, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||
Exercise of warrant | - | ( | ) | ( | ) | |||||||||||||||||||
Stock-based compensation | - | |||||||||||||||||||||||
Exercise of shared-based awards * | ||||||||||||||||||||||||
Convertible notes converted into shares* | ||||||||||||||||||||||||
June 30, 2024 | ( | ) | ( | ) | ( | ) |
* |
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
3
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
OPERATING ACTIVITIES | ||||||||
Loss before tax | ( | ) | ( | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation of property and equipment | ||||||||
Amortization of intangible assets | ||||||||
Loss on disposal of assets | ||||||||
Stock-based compensation, net of forfeitures | ||||||||
Interest expense, net | ||||||||
Foreign exchange (gain)/ loss, net | ( | ) | ||||||
Other non-cash | ||||||||
Changes in operating assets and liabilities: | ||||||||
Account receivable | ( | ) | ( | ) | ||||
Inventory | ( | ) | ||||||
Other assets and prepayments | ( | ) | ||||||
Accounts payable | ( | ) | ( | ) | ||||
Deferred revenue | ( | ) | ||||||
Other liabilities | ||||||||
A. Net cash used in operating activities | ( | ) | ( | ) | ||||
INVESTING ACTIVITIES | ||||||||
Purchases of vehicles | ( | ) | ||||||
Purchases of other property and equipment | ( | ) | ( | ) | ||||
Proceeds from disposal of property, plant and equipment | ||||||||
Purchases of intangible assets | ( | ) | ( | ) | ||||
B. Net cash used in investing activities | ( | ) | ( | ) | ||||
FINANCING ACTIVITIES | ||||||||
Proceeds from issuance of pre-funded convertible notes | ||||||||
Proceeds from issuance of convertible notes | ||||||||
Repayment of convertible notes | ( | ) | ||||||
Repayment of term loans | ( | ) | ( | ) | ||||
Interest paid | ( | ) | ( | ) | ||||
Payments on warrants | ( | ) | ||||||
C. Net cash generated from financing activities | ||||||||
D. Decrease in cash and cash equivalents (A+B+C) | ( | ) | ( | ) | ||||
E. Cash and cash equivalents at beginning of the period | ||||||||
Cash and cash equivalents at ending of the period (D+E) |
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
4
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
1 | DESCRIPTION OF BUSINESS |
Marti Technologies, Inc. (“Marti”
or “Company”) formerly known as Galata Acquisition Corp. is an exempted company limited by shares, incorporated under the
laws of the Cayman Islands on
Marti is a mobility provider engaged in delivering technology enabled transportation solutions via electric scooters, electric bikes and electric mopeds for urban areas. In addition, The Company operates a ride-hailing service that matches riders with car and motorcycle drivers. Founded on a proprietary technology platform, the Company currently offers electric moped, electric bike, and electric scooter rental services serviced by proprietary software systems and Internet of Things (“IoT”) infrastructure across Turkiye via its mobile application.
As of June 30, 2024, the Company operates through its subsidiary Marti Ileri Teknoloji Anonim Şirketi (“Marti Ileri”) and Marti Technologies I Inc. a Delaware corporation (“Marti Delaware”). The Company together with its consolidated subsidiaries will be referred to as the “Group” hereafter.
DeSPAC Transaction:
On August 1, 2022, Galata Acquisition Corp, (NYSE:
GLTA) a special purpose acquisition company led by Callaway Capital with US$
On July 10, 2023, Galata Acquisition Corp (“Galata”) consummated the previously announced business combination pursuant to the business combination agreement, dated as of July 29, 2022, by and among Marti, Galata Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of Galata and and Marti Delaware.
The business combination agreement provided that the parties thereto would enter into a business combination transaction pursuant to which, among other things, Galata Merger Sub Inc. merged with and into Marti Delaware surviving the deSPAC as a wholly owned subsidiary of Marti, and as a result of the merger, as of the end of the day immediately preceding the Closing date of July 10, 2023, Marti became a U.S. corporation for U.S. federal income tax purposes in a transaction that qualifies as a “reorganization”.
2 | BASIS OF PRESENTATION AND GOING CONCERN |
2.1 | Basis of presentation |
These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly- owned subsidiaries.
All inter-company balances and transactions have been eliminated. The Group uses the U.S dollar (“US$”) as its functional currency. The unaudited interim condensed consolidated financial statements have been presented in US$.
5
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
2 | BASIS OF PRESENTATION AND GOING CONCERN (continued) |
2.1 | Basis of presentation (continued) |
Hyperinflationary accounting
Marti İleri used Turkish Lira
(“TL”) as functional currency until the end of February 2022. Since the cumulative three-year inflation rate has risen
to above
Consequently, Marti İleri whose functional currency was TL until the end of February 2022, has remeasured its financial statements prospectively into new functional currency - US$ which is the non-highly inflationary currency in accordance with ASC 830-10-45-11 and ASC 830-10-45-12. According to ASC 830-10-45-9, ASC 830-10-45-10 and ASC 830-10-45-17, at the application date (March 1, 2022), the opening balances of non-monetary items are remeasured in US$ (new functional currency for Marti İleri) which is the functional currency of Marti Delaware. Subsequently, non-monetary items are accounted for as if they had always been assets and liabilities in US$. Monetary items are treated in the same manner as any other foreign currency monetary items. Subsequently, monetary items are remeasured into US$ using exchange rates as at balance sheet date. Differences arising from the remeasurement of monetary items are recognized in profit or loss.
2.2 | Going concern |
The Group has experienced recurring operating losses from operating activities since its inception and a deficit on its stockholders’ equity. To date, these operating losses have been funded primarily by stockholders. The Group had, and continues to have, an ongoing need to raise additional cash from outside sources to fund its expansion plans and related operations.
These unaudited interim condensed consolidated
financial statements have been prepared in accordance with the going concern principle. The Group management has assessed the going concern
assumptions of the Group during the preparation of these unaudited interim condensed consolidated financial statements. The Group had
net losses of US$
Callaway Subscription Agreement
On May 4, 2023 (prior to the closing of the business
combination), Galata Acquisition Corp. (now known as the Company) and Callaway Capital Management LLC (“Callaway”) entered
into a convertible note subscription agreement, as amended on January 10, 2024 (the “Callaway Subscription Agreement”). Callaway
is an affiliate of Daniel Freifeld, a director of the Company. Pursuant to the terms of the Callaway Subscription Agreement, Callaway
or its designee has the option (the “Callaway Option”) (but not the obligation) to subscribe for up to US$
On September 23, 2024, the Company and Callaway agreed upon a form of convertible note subscription agreement (the “Amended and Restated Subscription Agreement”) to, among other things, reflect the agreements between the Company and Callaway set forth in the Commitment Letter Amendment (as defined below) with the intent that further subscriptions subject to the Callaway Option would be pursuant to such form.
Callaway Commitment Letter
On March 22, 2024, Callaway provided a commitment
letter to the Company (the “Commitment Letter”) in order to evidence its commitment to (i) subscribe for the Convertibles
Notes in an aggregate principal amount of US$
6
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
2 | BASIS OF PRESENTATION AND GOING CONCERN (continued) |
2.2 | Going concern (continued) |
On September 19, 2024, the Company and Callaway
entered into an amendment to the Commitment Letter (the “Commitment Letter Amendment”) whereby (i) Callaway agreed to further
exercise, or to cause its designees to further exercise, the Callaway Option in the aggregate amount of US$
Following the full satisfaction of the Amended
Commitment Amount, the Company and Callaway both acknowledge and agree that the remaining amount of the Callaway Option is US$
Additional Subscriptions
On March 22, 2024, Marti and 405 MSTV I, L.P.
(an existing investor in the Convertible Notes, “MSTV”) entered into a convertible note subscription agreement whereby MSTV
subscribed for an aggregate principal amount of US$
On September 23, 2024, the Company, Callaway,
as a commitment party, and MSTV and New Holland Tactical Alpha Fund LP, as subscribers (collectively, the “Subscribers”) entered
into a subscription agreement on the form of the Amended and Restated Subscription Agreement pursuant to which the Subscribers subscribed
for an aggregate principal amount of US$
Management believes there are no events or conditions that give rise to doubt about the ability of the Group to continue as a going concern for twelve months after the release of the unaudited interim condensed consolidated financial statements. The assessment includes knowledge of the Group’s subsequent financial position, the estimated economic outlook and identified risks and uncertainties in relation thereto. Furthermore, the review of the strategic plan and budget, including expected developments in liquidity were considered. In addition, the Group’s management prepared alternative scenarios to assess the ability of the Group to continue its operations in case no additional funding is obtained except for Callaway’s available loan commitment.
Management of the Group has concluded that adequate resources and liquidity are available to meet the cash flow requirements for the next twelve months after the release of these unaudited interim condensed consolidated financial statements, and it is reasonable to apply the going concern basis as the underlying assumption for the unaudited interim condensed consolidated financial statements.
2.3 | Comparative financial information |
In order to determine the financial status and performance trends, the unaudited interim condensed consolidated financial statements of the Group have been prepared in comparison with the unaudited interim condensed consolidated financial statements of previous periods. The Group prepared its unaudited interim condensed consolidated balance sheet as of June 30, 2024 in comparison with the consolidated balance sheet prepared as of December 31, 2023; and prepared unaudited interim condensed consolidated statements of operations and comprehensive loss, unaudited interim condensed consolidated statements of changes in equity and unaudited interim condensed consolidated statements of cash flows between January 1 and June 30, 2024 in comparison with January 1 and June 30, 2023.
These unaudited interim condensed consolidated financial statements of the Group do not include all the information required for full annual financial statements and should therefore be read together with the year-end consolidated financial statements dated December 31, 2023.
7
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3.1 | Recently issued accounting standards |
As an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, the Group has elected to use the extended transition period for complying with any new or revised financial accounting standards.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU modifies the disclosure or presentation requirements of a variety of Topics in the Codification to align with the SEC’s regulations. The ASU also makes those requirements applicable to entities that were not previously subject to the SEC’s requirements. The ASU is effective for the Company two years after the effective date to remove the related disclosure from Regulation S-X or S-K. As of the date these financial statements have been made available for issuance, the SEC has not yet removed any related disclosure. The Group does not expect the adoption of ASU 2023-06 to have a material effect on its consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will add required disclosures of significant expenses for each reportable segment, as well as certain other disclosures to help investors understand how the chief operating decision maker (“CODM”) evaluates segment expenses and operating results. The new standard will also allow disclosure of multiple measures of segment profitability, if those measures are used to allocate resources and assess performance. The amendments will be effective for public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Group is currently evaluating the impact of this accounting standard update on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company’s annual reporting periods beginning after December 15, 2025. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Group is currently evaluating the effect that adoption of ASU 2023-09 will have on its consolidated financial statements.
3.2 | Business Combinations |
Reverse recapitalization
On July 10, 2023, Galata Acquisition Corp (Galata) and Marti Technologies Inc. (Marti Delaware) came together via a SPAC merger which has been accounted for as a reverse recapitalization. Marti Delaware’s assets and liabilities were maintained at historical cost, together with entries for the value of Galata’s net assets, and no goodwill or intangibles were recorded.
Accordingly, share capital, APIC and share premium for periods prior to the reverse recapitalization have been retrospectively adjusted.
8
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
3.3 | Operating segments |
The Group comprises of the following main operating segments: Two-wheeled electric vehicle rentals and ride-hailing. The Group’s ride-hailing operating segment consists of a service which matches riders with drivers traveling in the same direction to share car and motorcycle rides. The Group’s two-wheeled electric vehicle rentals operating segment consists of its electric scooter, electric bike, and electric moped rental services.
The Group is organised and managed on the basis of these operating segments. Being the reportable operating segments for the Group, they form the focus of the Group’s internal reporting systems and they are the basis used by the Chief Operating Decision Maker Oğuz Alper Öktem who is also the CEO of the Group, and management for assessing the performance of the Group and allocating resources within the business.
The ride-hailing service which was launched in October 2022, offers car and motorcycle ride-hailing options that connects riders with drivers traveling in the same direction. Riders and drivers agree on the price of the ride, though the Group currently does not enable payment over its mobile app or charge a fee for this service. With this addition, the Group is aligning the services to cater to a broader and more diverse customer base and better meet customer demand for both four-and two-wheeled vehicles. In the second half of 2024, the Group is planning to continue to invest in growing the ride-hailing business.
These operating segments offer different products and services and are managed separately because they require different technology and marketing strategies and are affected by different economic conditions.
Information regarding the results of each reportable operating segment is included below. Performance is measured based on an operating segment’s revenue, cost of revenue, selling and marketing expenses, general and administrative expenses, other expenses , and segment profit/(loss) before income tax expense as included in the internal management reports that are reviewed by the Group’s Chief Operating Decision Maker (CODM) and management. Segment profit/(loss) before income tax expense is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain operating segments relative to other entities that operate within these industries. The Group does not allocate assets to its reportable segments at this time, and no such information is provided to the CODM.
January 1 – June 30, 2024 | ||||||||||||||||
Ride-hailing | Two-wheeled electric vehicle rentals | Unallocated | Total | |||||||||||||
Revenue | ||||||||||||||||
Cost of revenue | ( | ) | ( | ) | ||||||||||||
General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Research and development expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Other expense | ( | ) | ( | ) | ( | ) | ||||||||||
Other income | ||||||||||||||||
Financial income | ||||||||||||||||
Financial expense | ( | ) | ( | ) | ||||||||||||
Loss before income tax expense | ( | ) | ( | ) | ( | ) | ( | ) |
9
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (continued) |
3.3 | Operating segments (continued) |
January 1 – June 30, 2023 | ||||||||||||||||
Ride-hailing | Two-wheeled electric vehicle rentals | Unallocated | Total | |||||||||||||
Revenue | ||||||||||||||||
Cost of revenue | ( | ) | ( | ) | ||||||||||||
General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||||||
Research and development expenses | ( | ) | ( | ) | ||||||||||||
Other expense | ( | ) | ( | ) | ||||||||||||
Other income | ||||||||||||||||
Financial income | ||||||||||||||||
Financial expense | ( | ) | ( | ) | ||||||||||||
Loss before income tax expense | ( | ) | ( | ) | ( | ) | ( | ) |
4 | PROPERTY, EQUIPMENT AND DEPOSITS |
June 30, 2024 | December 31, 2023 | |||||||
Rental vehicles | ||||||||
Furniture and fixtures | ||||||||
Leasehold improvements | ||||||||
Less: Accumulated depreciation | ( | ) | ( | ) | ||||
Total property and equipment, net | ||||||||
Vehicle deposits | ||||||||
Total property, equipment and deposits, net |
June 30, 2024 | June 30, 2023 | |||||||
Cost of revenues | ||||||||
General and administrative expenses | ||||||||
Total depreciation |
5 | CASH AND CASH EQUIVALENTS |
June 30, 2024 | December 31, 2023 | |||||||
Cash at banks | ||||||||
- Time deposit | ||||||||
- Demand deposit | ||||||||
Other liquid assets | ||||||||
Total |
10
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
5 | CASH AND CASH EQUIVALENTS (continued) |
Currency | Maturity | Interest rate % | June 30, 2024 | |||||||
US$ | ||||||||||
US$ | ||||||||||
TL | ||||||||||
TL | ||||||||||
TL | ||||||||||
Total |
Currency | Maturity | Interest rate % | December 31, 2023 | |||||||
US$ | ||||||||||
TL | ||||||||||
TL | ||||||||||
TL | ||||||||||
TL | ||||||||||
TL | ||||||||||
Total |
Due to the loan agreement with PFG dated January 20, 2021, the Group shall maintain a certain amount of cash, in demand or time deposit accounts over which PFG has a priority security interest.
6 | REVENUE INFORMATION |
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
Rental revenues | ||||||||
Reservation revenue | ||||||||
Other revenue | ||||||||
Gross revenue | ||||||||
Sales refunds | ( | ) | ( | ) | ||||
Sales discount | ( | ) | ( | ) | ||||
Net revenue |
The Group has determined that collectability is
not probable for revenue amounting to US$
Deferred revenue
June 30, 2024 | December 31, 2023 | |||||||
Wallet | ||||||||
Other | ||||||||
Total |
11
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
6 | REVENUE INFORMATION (continued) |
January 1, 2024 | Additions | 2024 Revenue | FX rate Adj | June 30, 2024 | ||||||||||||||||
Deferred revenue | ( | ) | ( | ) | ||||||||||||||||
Total | ( | ) | ( | ) | ||||||||||||||||
January 1, 2023 | Additions | 2023 Revenue | FX rate Adj | June 30, 2023 | ||||||||||||||||
Deferred revenue | ( | ) | ( | ) | ||||||||||||||||
Total | ( | ) | ( | ) |
7 | OPERATING EXPENSES |
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
Cost of revenues | ||||||||
General and administrative expenses | ||||||||
Selling and marketing expenses | ||||||||
Research and development expenses | ||||||||
Total |
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
Depreciation expense | ||||||||
Personnel expenses | ||||||||
Operating lease expense | ||||||||
Rental vehicle maintenance and repair expenses | ||||||||
Data cost expenses | ||||||||
Commission expenses | ||||||||
Amortization expense | ||||||||
Fuel expenses | ||||||||
Other | ||||||||
Total |
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
Personnel expenses | ||||||||
Consulting and legal expenses | ||||||||
Office expenses | ||||||||
Depreciation expense | ||||||||
Travelling expenses | ||||||||
Other | ||||||||
Total |
12
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
7 | OPERATING EXPENSES (continued) |
January 1 - | January 1 - | |||||||
June 30, 2024 | June 30, 2023 | |||||||
Social media expense | ||||||||
Advertising consulting expense | ||||||||
Promotion expense | ||||||||
Other | ||||||||
Total |
8 | INCOME TAXES |
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to stockholders.
The United States of America
Pursuant to Section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), even though the Company is an exempted company incorporated with limited liability under the laws of the Cayman Islands, the Company will be treated as a U.S. domestic corporation for all purposes of the Code. The Company will therefore be taxed as a U.S. domestic corporation for U.S. federal income tax purposes. As a result, the Company will be subject to U.S. federal income tax on its worldwide income.
The federal income tax rate for corporations is
Turkiye
The Turkish subsidary is subject to Turkiye corporate
income tax. In connection with legislation passed in July 2023, the corporate income tax increased to
Income withholding tax
There is no tax expense recognized as the Group’s
effective tax rate is
9 | COMMITMENTS AND CONTINGENCIES |
In December 2023, the Group
Management voluntarily decided to amend the import tax product codes under the higher import tax product code for scooters. As a result,
a voluntary disclosure application has been submitted to Customs Office to retrospectively add US$
The Group management has
subsequent to the reporting date settled the case for US$
13
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
10 | IMMATERIAL ERROR CORRECTION |
The Group has identified an immaterial error in the previously issued unaudited interim condensed consolidated financial statements, specifically related to the failure to accrue interest on certain prefunded notes for the period from January 1 to June 30, 2023. This error was discovered during the preparation of the Interim Report while conducting a comparative analysis with the unaudited interim condensed consolidated financial statements for the period from January 1 to June 30, 2023. The error was related to timing of recognition and hence it does not impact the consolidated financial statements for the year ended December 31, 2023.
After evaluating the qualitative and quantitative impacts of this adjustment, the Group has concluded that the effects on the unaudited interim condensed consolidated financial statements for prior periods are not material and there is no impact on the current period’s unaudited interim condensed consolidated financial statements. The error has been rectified through a revision of the affected financial statement line items for the six months ended June 30, 2023. Accordingly, retained earnings as of June 30, 2023 and net loss for the six months ended June 30, 2023, have been revised to reflect the correct amounts. The error has no impact on the reported cash flows.
January 1 - | Revised January 1 - | |||||||||||
June 30, 2023 | Adjustments | June 30, 2023 | ||||||||||
Loss from operations | ( | ) | ( | ) | ||||||||
Financial expense | ( | ) | ( | ) | ( | ) | ||||||
Loss before income tax expense | ( | ) | ( | ) | ( | ) | ||||||
Net loss | ( | ) | ( | ) | ( | ) | ||||||
Net loss attributable to stockholders | ( | ) | ( | ) | ( | ) | ||||||
Net loss per share | ||||||||||||
( | ) | ( | ) | ( | ) |
11 | SUBSEQUENT EVENTS |
On February 3, 2023, Istanbul Otomobilciler Esnaf Odasi (ITEO), an Istanbul-based association of taxi owners, filed a lawsuit before the Commercial Court against the Group regarding (i) recently launched ride-hailing service and (ii) e-moped services, on the basis that both services constitute unfair competition. The plaintiff also sought injunctive relief from the court preventing third party access to these services through the website or mobile application.
There was a preliminary injunctive relief decision regarding the ride-hailing service as of March 6, 2023, which the Group successfully appealed at the Commercial Court.
The injunctive relief decision was removed as of June 20, 2023. The Group continued to operate ride-hailing services without interruption between March 6, 2023, and June 20, 2023.
On July 19, 2024, after hearing the full case, the court made its decision and partially accepted the plaintiff’s case. It accepted the plaintiff’s claim that ride-hailing services constitutes unfair competition, and rejected their claim that the Group’s e-moped services constitutes unfair competition. The court also wrote in its preliminary write-up that access to the Group’s ride-hailing services should be prevented without impeding access to any of the Group’s other transportation services. The Group received the long form write-up on September 23, 2024 and will once again appeal the decision at the Commercial Court.
14
MARTI TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
FOR THE INTERIM PERIOD JANUARY 1 – JUNE 30
(Amounts expressed in US$ unless otherwise stated)
11 | SUBSEQUENT EVENTS (continued) |
The Turkish Commercial Code does not allow associations such as ITEO to request any peculiar/non-peculiar compensation from the Group. Hence, there is no material contingent liability of the Group vis a vis ITEO itself expected at the end of the Lawsuit. On the other hand, individual members of the association (i.e. taxi drivers) may file individual lawsuits against the Group, requesting compensation due to moral or pecuniary losses suffered as a result of unfair competition. For such a case to be considered, potential plaintiffs would need to provably demonstrate the actual monetary losses they suffered as a result of the Group’s ride-hailing services.
As of the date of this report, there is no injunctive relief in place for any of the Group’s services.
On September 19, 2024, the Company and Callaway
entered into the Commitment Letter Amendment whereby (i) Callaway agreed to further exercise, or to cause its designees to further exercise,
the Callaway Option in the aggregate amount of US$
Following the full satisfaction of the Amended
Commitment Amount, the Company and Callaway both acknowledge and agree that the remaining amount of the Callaway Option is US$
On September 23, 2024, the Company and Callaway agreed upon a form of Amended and Restated Subscription Agreement to, among other things, reflect the agreements between the Company and Callaway set forth in the Commitment Letter Amendment with the intent that further subscriptions subject to the Callaway Option would be pursuant to such form.
On September 23, 2024, the Company, Callaway,
as a commitment party, and MSTV and New Holland Tactical Alpha Fund LP, as subscribers (collectively, the “Subscribers”) entered
into a subscription agreement on the form of the Amended and Restated Subscription Agreement pursuant to which the Subscribers subscribed
for an aggregate principal amount of US$
15