Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-40910

Rubicon Technologies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		88-3703651
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification Number)

950 E Paces Ferry Rd NE Suite 810
Atlanta, GA		30326
(Address of Principal Executive Offices)		(Zip Code)

(844) 479-1507

(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
Class A common stock, par value $0.0001 per share		RBT		New York Stock Exchange

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 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 ☒

As of May 20, 2024, 54,761,991 shares of Class A Common Stock, par value $0.0001 per share, and 1,074,899 shares of Class V Common Stock, par value $0.0001 per share, were issued and outstanding.

Table of Contents

		Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements		1
Item 2. Management’s Discussion and Analysis of Financial Condition and Result of Operations		38
Item 3. Quantitative and Qualitative Disclosures About Market Risk		56
Item 4. Controls and Procedures		56

PART II - OTHER INFORMATION

Item 1. Legal Proceedings		58
Item 1A. Risk Factors		58
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		58
Item 3. Defaults Upon Senior Securities		58
Item 4. Mine Safety Disclosures		58
Item 5. Other Information		58
Item 6. Exhibits		59

Signatures		60

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

RUBICON TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)


	March 31,			December 31,
	2024			2023
ASSETS
Current Assets:
Cash and cash equivalents	$	13,846		$	18,695
Accounts receivable, net		52,049			62,930
Contract assets, net		59,574			75,567
Prepaid expenses		20,172			13,197
Current assets of discontinued operations		6,338			5,257
Other current assets		3,915			3,742
Total Current Assets		155,894			179,388

Property and equipment, net		525			632
Operating right-of-use assets		331			567
Other noncurrent assets		1,912			2,114
Goodwill		19,872			19,872
Intangible assets, net		6,472			7,111
Noncurrent assets of discontinued operations		13,321			13,603
Total Assets	$	198,327		$	223,287

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current Liabilities:
Accounts payable	$	75,799		$	65,465
Line of credit		71,978			71,121
Accrued expenses		55,260			76,645
Contract liabilities		1,415			1,499
Operating lease liabilities, current		398			725
Warrant liabilities		2,697			26,493
Derivative liabilities		10,349			9,375
Current liabilities of discontinued operations		8,117			6,216
Total Current Liabilities		226,013			257,539

Long-Term Liabilities:
Deferred income taxes		202			197
Debt obligations, net of deferred debt charges		85,621			81,001
Related-party debt obligations, net of deferred debt charges		16,824			16,302
Derivative liabilities		1,564			3,683
Earn-out liabilities		31			142
Other long-term liabilities		3,015			3,395
Total Long-Term Liabilities		107,257			104,720
Total Liabilities		333,270			362,259

Commitments and Contingencies (Note 16)

Stockholders’ (Deficit) Equity:
Common stock – Class A, par value of $0.0001 per share, 690,000,000 shares authorized, 52,406,059 and 39,643,584 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		5			4
Common stock – Class V, par value of $0.0001 per share, 275,000,000 shares authorized, 1,074,899 and 4,425,388 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		-			-
Preferred stock – par value of $0.0001 per share, 10,000,000 shares authorized, 0 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		-			-
Additional paid-in capital		267,772			221,986
Accumulated deficit		(410,475	)		(394,804	)
Total stockholders’ deficit attributable to Rubicon Technologies, Inc.		(142,698	)		(172,814	)
Noncontrolling interests		7,755			33,842
Total Stockholders’ Deficit		(134,943	)		(138,972	)
Total Liabilities and Stockholders’ (Deficit) Equity	$	198,327		$	223,287

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

RUBICON TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)


	Three Months Ended March 31,
	2024			2023
Revenue:
Service	$	147,252		$	164,324
Recyclable commodity		15,810			14,733
Total revenue		163,062			179,057

Costs and Expenses:
Cost of revenue (exclusive of amortization and depreciation):
Service		140,347			157,514
Recyclable commodity		14,055			13,187
Total cost of revenue (exclusive of amortization and depreciation)		154,402			170,701
Sales and marketing		1,688			2,445
Product development		6,625			7,441
General and administrative		13,086			18,188
Gain on settlement of incentive compensation		-			(18,622	)
Amortization and depreciation		931			1,113
Total Costs and Expenses		176,732			181,266
Loss from Operations		(13,670	)		(2,209	)

Other Income (Expense):
Interest earned		32			1
Gain (loss) on change in fair value of warrant liabilities		10,577			(55	)
Gain on change in fair value of earnout liabilities		111			4,820
Loss on change in fair value of derivatives		(1,299	)		(2,198	)
Gain on service fee settlements in connection with the Mergers		-			632
Loss on extinguishment of debt obligations		-			(2,103	)
Interest expense		(10,750	)		(7,176	)
Related party interest expense		(522	)		(593	)
Other expense		(951	)		(421	)
Total other income (expense)		(2,802	)		(7,093	)
Loss from continuing operations before income taxes		(16,472	)		(9,302	)

Income tax expense		12			16
Net loss from continuing operations		(16,484	)		(9,318	)
Discontinued operations:
Loss from discontinued operations before income taxes		(669	)		(133	)
Income tax expense		-			-
Net loss from discontinued operations		(669	)		(133	)
Net loss	$	(17,153	)	$	(9,451	)
Net loss from continuing operations attributable to noncontrolling interests		(1,437	)		(6,234	)
Net loss from continuing operations attributable to Class A common stockholders	$	(15,047	)	$	(3,084	)
Net loss from discontinued operations attributable to noncontrolling interests		(45	)		(88	)
Net loss from discontinued operations attributable to Class A common stockholders	$	(624	)	$	(45	)

Net loss from continuing operations per Class A Common share – basic and diluted	$	(0.33	)	$	(0.41	)
Net loss from discontinued operations per Class A Common share – basic and diluted	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding – basic and diluted		46,068,599			7,427,116

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

RUBICON TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY (UNAUDITED)

(in thousands, except shares and units data)


	Common Stock –					Common Stock –									Additional					Non
	Class A					Class V					Preferred Stock				Paid-in		Accumulated			controlling			Total
	Shares			Amount		Shares			Amount		Shares		Amount		Capital		Deficit			Interest			Deficit
Balance, December 31, 2023		39,643,584		$	4		4,425,388		$	-		-	$	-	$	221,986	$	(394,804	)	$	33,842		$	(138,972	)

Equity-based compensation		-			-		-			-		-		-		563		-			-			563

Issuance of common stock for services rendered		2,246,182			-		-			-		-		-		3,750		-			-			3,750

RSU Settlement		(32,446	)		-		-			-		-		-		-		-			-			-

Issuance of common stock for the FPA Termination Agreement Settlement		1,656,727			-		-			-		-		-		2,000		-			-			2,000

Exchange of Class V Common Stock to Class A Common Stock		3,350,489			-		(3,350,489	)		-		-		-		24,605		-			(24,605	)		-

Exercise and conversion of liability classified warrants		3,831,232			1		-			-		-		-		4,023		-			-			4,024

Reclassification of liability classified warrants to equity		-			-		-			-		-		-		10,845		-			-			10,845

Exercise and conversion of equity classified warrants		1,710,291			-		-			-		-		-		-		-			-			-

Net loss		-			-		-			-		-		-		-		(15,671	)		(1,482	)		(17,153	)

Balance, March 31, 2024		52,406,059		$	5		1,074,899		$	-		-	$	-	$	267,772	$	(410,475	)	$	7,755		$	(134,943	)

	Common Stock –				Common Stock –								Additional						Non
	Class A				Class V				Preferred Stock				Paid-in			Accumulated			controlling			Total
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Interest			Deficit
Balance, December 31, 2022		6,985,869	$	1		14,432,992	$	1		-	$	-	$	34,659		$	(337,860	)	$	148,747		$	(154,452	)

Equity-based compensation		-		-		-		-		-		-		9,302			-			-			9,302

Issuance of common stock for services rendered		1,164,757		-		-		-		-		-		10,245			-			-			10,245

Issuance of equity-classified warrants		-		-		-		-		-		-		945			-			-			945

Issuance of common stock for vested RSUs		463,961		-		-		-		-		-		-			-			-			-

RSUs withheld to pay taxes		-		-		-		-		-		-		(1,067	)		-			-			(1,067	)

Conversion of debt obligations to common stock		356,246		-		-		-		-		-		3,130			-			-			3,130

Proceeds from issuance of common stock		152,778		-		-		-		-		-		1,100			-			-			1,100

Net loss		-		-		-		-		-		-		-			(3,129	)		(6,322	)		(9,451	)

Balance, March 31, 2023		9,123,611	$	1		14,432,992	$	1		-	$	-	$	58,314		$	(340,989	)	$	142,425		$	(140,248	)

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

RUBICON TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(17,153	)	$	(9,451	)
Net loss from discontinued operations		669			133
Adjustments to reconcile net loss to net cash flows from operating activities:
Loss on disposal of property and equipment		-			5
Amortization and depreciation		931			1,113
Amortization of deferred debt charges		3,808			1,237
Amortization of related party deferred debt charges		132			265
Paid-in-kind interest capitalized to principal of debt obligations		961			1,014
Paid-in-kind interest capitalized to principal of related party debt obligations		390			328
Allowances for accounts receivables and contract assets		598			745
(Gain) Loss on change in fair value of warrant liabilities		(10,577	)		55
Loss on change in fair value of derivatives		1,299			2,198
Gain on change in fair value of earn-out liabilities		(111	)		(4,820	)
Loss on extinguishment of debt obligations		-			2,103
Equity-based compensation		563			9,302
Settlement of accrued incentive compensation		-			(26,826	)
Service fees settled in common stock		3,750			3,808
Gain on service fee settlement in connection with the Mergers		-			(632	)
Deferred income taxes		5			12
Change in operating assets and liabilities:
Accounts receivable		10,284			(2,161	)
Contract assets		15,994			2,076
Prepaid expenses		(7,123	)		235
Other current assets		(202	)		(426	)
Operating right-of-use assets		235			304
Other noncurrent assets		71			(120	)
Accounts payable		9,541			7,061
Accrued expenses		(19,383	)		875
Contract liabilities		(84	)		(272	)
Operating lease liabilities		(327	)		(454	)
Other liabilities		(383	)		180
Net cash flows from operating activities – continuing operations		(6,112	)		(12,113	)
Net cash flows from operating activities – discontinued operations		432			(303	)
Net cash flows from operating activities		(5,680	)		(12,416	)
Cash flows from investing activities:
Property and equipment purchases		(26	)		(325	)
Net cash flows from investing activities		(26	)		(325	)

Cash flows from financing activities:
Net borrowings on Revolving Credit Facility		-			201
Net borrowings on June 2023 Revolving Credit Facility		857			-
Proceeds from debt obligations		-			11,226
Repayments of debt obligations		-			(11,500	)
Proceeds from related party debt obligations		-			14,520
Financing costs paid		-			(1,275	)
Proceeds from issuance of common stock		-			1,100
RSUs withheld to pay taxes		-			(1,067	)
Net cash flows from financing activities		857			13,205

Net change in cash and cash equivalents		(4,849	)		464
Cash and cash equivalents, beginning of period		18,695			10,079
Cash and cash equivalents, end of period	$	13,846		$	10,543
Less: cash and cash equivalents of discontinued operations	$	-		$	-
Cash and cash equivalents of discontinued operations at end of period	$	13,846		$	10,543

Supplemental disclosure of cash flow information:
Cash paid for interest	$	5,393		$	3,648

Supplemental disclosures of non-cash investing and financing activities:
Exchange of warrant liability for common stock	$	4,219		$	-
Reclassification of liability classified warrants to equity	$	10,845		$	-
Settlement of the FPA Termination Agreement in common stock	$	2,000		$	-
Issuance of common stock for services rendered		3,750
Fair value of derivatives issued as debt discount	$	-		$	475
Fair value of derivatives issued as debt issuance cost	$	-		$	2,887
Conversions of debt obligations to common stock	$	-		$	2,250
Equity issuance costs settled with common stock	$	-		$	7,069
Loan commitment asset reclassed to deferred debt discount	$	-		$	2,062

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

RUBICON TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1—Nature of operations and summary of significant accounting policies

Description of Business – Rubicon Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.”

Rubicon is a digital marketplace for waste and recycling services and provides cloud-based waste and recycling solutions to businesses and governments. Rubicon’s sustainable waste and recycling solutions provide comprehensive management of customers’ waste streams through a platform that powers a modern, digital experience and delivers data-driven insights and transparency for the customers and hauling and recycling partners.

Rubicon also provides consultation and management services to customers for waste removal, waste management, logistics, and recycling solutions. Consultation and management services include planning, consolidation of billing and administration, cost savings analyses, and vendor performance monitoring and management. The combination of Rubicon’s technology and services provides a holistic audit of customer waste streams. Rubicon also provides logistics services and markets and resells recyclable commodities.

Reverse Stock Split – On September 26, 2023, the Company effected a reverse stock split of its outstanding shares of voting common stock at a ratio of one-for-eight (1:8) pursuant to a Certificate of Amendment to its Certificate of Incorporation filed with the Secretary of State of the State of Delaware. The reverse stock split was reflected on the New York Stock Exchange (the “NYSE”) beginning with the opening of trading on September 27, 2023. Pursuant to the reverse stock split, every eight shares of the Company’s issued and outstanding shares of common stock were automatically combined into one issued and outstanding share of common stock, without any change in the number of authorized shares or the par value per share of the common stock. No fractional shares were issued in connection with the reverse stock split. Any stockholder who would otherwise be entitled to receive a fractional share instead became entitled to receive one whole share of common stock in lieu of such fractional share. Equitable adjustments corresponding to the reverse stock split ratio were made to all (i) issued and outstanding shares of all other classes of stock of the Company, (ii) the exercise prices of and number of shares of common stock underlying the Company’s public and private warrants, (iii) the number of shares of common stock underlying the Company’s outstanding equity awards, and (iv) the number of shares of common stock issuable under the Company’s equity incentive plan. All share and per share amounts of the common stock included in the accompanying condensed consolidated financial statements and these notes to the condensed consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split for all periods presented, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.

Mergers – Rubicon Technologies, Inc. was initially incorporated in the Cayman Islands on April 26, 2021 as a special purposes acquisition company under the name “Founder SPAC” (“Founder”). Founder was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On August 15, 2022 (the “Closing Date”), Founder consummated the mergers (the “Mergers”), pursuant to that certain Agreement and Plan of Merger, dated December 15, 2021 (the “Merger Agreement”) (the “Closing”).

In connection with the Mergers, the Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by Rubicon Technologies Holdings, LLC (“Holdings LLC”) and continue to operate through Rubicon Technologies Holdings, LLC and its subsidiaries, and Rubicon Technologies, Inc.’s material assets are the equity interests of Rubicon Technologies Holdings, LLC indirectly held by it. Pursuant to the Merger Agreement, the Mergers were accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) (the “Reverse Recapitalization”). Under this method of accounting, Founder was treated as the acquired company and Holdings LLC was treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Holdings LLC issuing stock for the net assets of Founder, accompanied by a recapitalization. Thus, the accompanying condensed consolidated financial statements reflect (i) the historical operating results of Holdings LLC prior to the Mergers; (ii) the results of Rubicon Technologies, Inc. following the Mergers; and (iii) the acquired assets and liabilities of Founder stated at historical cost, with no goodwill or other intangible assets recorded. See Note 3 for additional information regarding Mergers

During the first quarter of 2024, the Company’s Board of Directors ("Board") approved a plan to sell the Software-as-a-Service business (the “SaaS Business”). On May 7, 2024, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) and sold the SaaS Business. As a result, the financial results of the SaaS Business were reflected in the accompanying condensed consolidated statements of operations, retrospectively, as discontinued operations beginning on January 1, 2023; and the related assets and liabilities associated with the discontinued operations in the accompanying condensed consolidated balance sheets are classified, retrospectively, as discontinued operations as of December 31, 2023. See Note 4 for additional information.

Basis of Presentation and Consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to U.S. generally accepted accounting principles (“U.S. GAAP) and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of the interim periods presented, under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The Company’s condensed consolidated financial statements include the accounts of Rubicon Technologies, Inc., and subsidiaries. The Company’s condensed consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2024. Certain information and note disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes prepared in accordance with U.S. GAAP have been condensed in, or omitted from, these interim financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024.

Liquidity and going concern consideration – For the three months ended March 31, 2024, and in each fiscal period since the Company’s inception, it has incurred losses from operations and generated negative cash flows from operating activities. The Company also has negative working capital and stockholders’ deficit as of March 31, 2024.

As of March 31, 2024, cash and cash equivalents totaled $13.8 13,846 million, accounts receivable totaled $52.0 52,049 million and unbilled accounts receivable totaled $60.0 million. Availability under the June 2023 Revolving Credit Facility (as defined in Note 6), which provided the ability to borrow up to $90.0 million, was $-0-, while the June 2023 Revolving Credit Facility is scheduled to mature on March 9, 2025. Pursuant to the Cantor Sales Agreement, the Company may offer and sell up to $50.0 million of shares of Class A Common Stock through Cantor. However, it is uncertain how quickly Cantor will be able to sell such shares of Class A Common Stock at the price the Company requests to deliver additional liquidity to the Company.

The Company currently projects that it will not have sufficient cash on hand or available liquidity under existing arrangements to meet the Company’s projected liquidity needs for the next 12 months. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.

To address liquidity needs, the Company has been working to execute various initiatives to modify its operations to reduce spending and improve cash flow. Initiatives the Company has undertaken in recent periods include (i) increased focus on operational efficiencies and cost reduction measures, (ii) eliminating redundancies that have been the byproduct of the Company’s recent growth and expansion, (iii) evaluating the Company’s portfolio and less profitable accounts to better ensure the Company is deploying resources efficiently, and (iv) exercising strict capital discipline for future investments, such as requiring investments to meet minimum hurdle rates. Additionally, on May 7, 2024, the Company completed the sale of its SaaS Business and entered into the Rodina SPA (as defined in Note 20) which provided the Company with additional cash (see Note 3 and Note 20 for further information).

The Company believes that additional capital will be needed to provide sufficient liquidity to meet the Company’s known liquidity needs for the next 12 months given that the June 2023 Revolving Credit Facility is scheduled to mature and the borrowings under the facility will become due and payable on the maturity date. However, while management believes the Company will be able to obtain additional capital through debt and equity financing, including sales of Class A Common Stock under the Cantor Sales Agreement, to the extent necessary, the Company has obtained no firm commitment from current or prospective investors to date and no assurance can be provided that such additional financing will be obtained at the level acceptable to the Company within the necessary timeframe, if at all. Failure to secure sufficient additional funding in a timely manner or at all will impact the Company’s liquidity, including its ability to service its debt and other liabilities, and may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact additional operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and could force the Company to limit its business activities or discontinue its operations entirely.

The accompanying consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the accompanying consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Segments – The Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM role is fulfilled by the Executive Leadership Team (“ELT”), who allocates resources and assesses performance based upon consolidated financial information.

Use of Estimates – The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of any contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Emerging Growth Company – The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company did not opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, will be required to adopt the new or revised standard at the time the new or revised standard becomes applicable to private companies. The effective dates shown in Note 2 below reflect the election to use the extended transition period.

Revenue Recognition – The Company recognizes service revenue over time, consistent with efforts performed and when the customer simultaneously receives and consumes the benefits provided by the Company’s services. The Company recognizes recyclable commodity revenue at the point in time when the ownership, risks, and rewards transfer. The Company derives its revenue from waste removal, waste management and consultation services, software subscriptions, and the sale of recyclable commodities.

Service Revenue:

Service revenues are primarily derived from long-term contracts with waste generator customers including multiple promises delivered through the Company’s digital marketplace platform. The promises include waste removal, consultation services, billing administration and consolidation, cost savings analyses, and vendor procurement and performance management, each of which constitutes an input to the combined service managed through the digital platform. The digital platform and services are highly interdependent, and accordingly, each contractual promise is not considered a distinct performance obligation in the context of the contract and is combined into a single performance obligation. In general, fees are invoiced, and revenue is recognized over time as control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing the service. The Company invoices for certain services prior to performance. These advance invoices are included in contract liabilities and recognized as revenue in the period service is provided.

Service revenues also include software-as-a-service subscription, maintenance, equipment and other professional services, which represent separate performance obligations. Once the performance obligations and the transaction price are determined, including an estimate of any variable consideration, the Company then allocates the transaction price to each performance obligation in the contract using a relative standalone selling price method. The Company determines standalone selling price based on the price at which the good or service is sold separately. The Company invoices for certain services prior to performance. These advance invoices are included in contract liabilities and recognized as revenue in the period service is provided.

Recyclable Commodity Revenue:

The Company recognizes recyclable commodity revenue through the sales of old corrugated cardboard (OCC), old newsprint (ONP), aluminum, glass, pallets, and other recyclable materials at market prices. The Company purchases recyclable commodities from certain waste generator customers and sells the recyclable materials to recycling and processing facilities. Revenue recognized under these agreements is variable in nature based on the market, type and volume or weight of the materials sold. The amount of revenue recognized is based on commodity prices at the time of sale, which are unknown at contract inception. Fees are billed, and revenue is recognized at a point in time when control is transferred to the recycling and processing facilities.

Management reviews contracts and agreements the Company has with its waste generator customers and hauling and recycling partners and performs an evaluation to consider the most appropriate manner in accordance with ASC 606-10, Revenue Recognition: Principal Agent Considerations, by which revenue is presented on the condensed consolidated statements of operations.

Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether the Company controls the service provided to the end-user and is the principal in the transaction (gross), or the Company arranges for other parties to provide the service to the end-user and is the agent in the transaction (net). Management has concluded that the Company is the principal in most arrangements as it controls the waste removal service and is the primary obligor in the transactions.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) which we recognize revenue at the amount to which the Company has the right to invoice for services performed and (iii) variable consideration which is allocated entirely to a wholly unsatisfied performance obligation. After applying these optional exemptions, the aggregate amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations as of March 31, 2024 and December 31, 2023 was insignificant.

Cost of Revenue, exclusive of amortization and depreciation – Cost of service revenues primarily consists of expenses related to delivering the Company’s service and providing support, including third-party hauler costs, costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and employee-related costs, such as salaries and benefits.

Cost of recyclable commodity revenues primarily consists of expenses related to purchases of OCC, ONP, aluminum, glass, pallets and other recyclable materials, and any associated transportation fees.

The Company recognizes the cost of revenue exclusive of any amortization or depreciation expenses, which are recognized in amortization and depreciation expenses on the condensed consolidated statements of operations.

Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times exceed the Federal Deposit Insurance Corporation insurance limits.

Accounts Receivable and Contract Balances – Accounts receivable consist of trade accounts receivable for services provided to customers. Accounts receivable is stated at the amount the Company expects to collect. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses and allowance for unbilled receivables based upon the Company’s assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Past-due balances and other higher-risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. As of March 31, 2024 and December 31, 2023, the allowances for accounts receivable and contract assets were $3.2 million and $2.7 million, respectively.

In cases where customers pay for services in arrears, the Company accrues revenue in advance of billings as long as the criteria for revenue recognition are met, thus creating a contract asset (unbilled receivable). As of March 31, 2024 and December 31, 2023, the Company’s continuing operations had unbilled receivables of $59.6 million and $75.6 million, respectively. These unbilled balances were the result of services provided in the period, but not yet billed to the customer. During the three months ended March 31, 2024, the Company invoiced its customers $70.1 million pertaining to contract assets for services delivered prior to December 31, 2023. As further described in Note 4, $0.6 million and $1.1 million of contract assets were classified to current assets of discontinued operations on the accompanying condensed balance sheets as of March 31, 2024 and December 31, 2023, respectively.

Contract liabilities (deferred revenue) consist of amounts collected prior to having satisfied the performance obligation. The Company periodically invoices customers for recurring front load services in advance monthly basis. As of March 31, 2024 and December 31, 2023, the Company’s continuing operations had deferred revenue balances of $1.4 million and $1.5 million, respectively. During the three months ended March 31, 2024, the Company recognized $1.5 million of revenue that was included in the contract liabilities balance as of December 31, 2023. As further described in Note 4, $7.2 million and $5.9 million of contract liabilities were classified to current liabilities held for sale on the accompanying condensed balance sheets as of March 31, 2024 and December 31, 2023, respectively.

Accrued Hauler Expenses – The Company recognizes hauler costs and the cost of recyclable products when services are performed. Accounting for accrued hauler costs and the cost of recyclable commodities requires estimates and assumptions regarding the quantity of waste collected by the vendors and the frequencies of the collections. The Company estimates quantities and frequencies using historical transaction and market data based on the waste stream composition, equipment type, and equipment size. Accrued hauler expenses are presented within accrued expenses on the condensed consolidated balance sheets.

Fair Value Measurements – In accordance with U.S. GAAP, the Company groups its financial assets and financial liabilities at fair value in three levels, based on the markets in which the financial assets and financial liabilities are traded, and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the NYSE.

Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities.

Level 3 – Valuations for financial assets and financial liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models, and similar techniques and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such financial assets or financial liabilities.

See Note 16 for further information regarding fair value measurements.

Offering Costs – Offering costs, consisting of legal, accounting, printer, filing and advisory fees related to the Mergers, were deferred and offset against proceeds from the Mergers and additional paid-in capital upon consummation of the Mergers. Deferred offering costs capitalized as of March 31, 2024 and December 31, 2023 were $-0-. The total amount of the offering costs recognized as offset against additional paid-in capital at the Closing was $67.3 million, which were settled subsequently, resulting in a gain of $0.6 million which is recognized as component of other income (expense) on accompanying condensed consolidated statement of operations for the three months ended March 31, 2023. No such settlement occurred during the three months ended March 31, 2024.

Customer Acquisition Costs – The Company makes certain expenditures related to acquiring contracts for future services. These expenditures are capitalized and amortized in proportion to the expected future revenue from the customer, which in most cases results in straight-line amortization over the estimated life of the customer. Amortization of these customer acquisition costs is presented within amortization and depreciation on the condensed consolidated statements of operations.

Warrants – The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”), among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded in liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a component of other income (expense) on the consolidated statement of operations.

As of March 31, 2024, the Company has both liability-classified and equity-classified warrants outstanding. See Note 10 for further information.

Earn-out Liabilities – Pursuant to the Merger Agreement, (i) Blocked Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 186,064 shares of Class A Common Stock (the “Earn-Out Class A Shares”) and (ii) Rubicon Continuing Unitholders (as defined in Note 3) immediately before the Closing received a right to receive a pro rata portion of 1,112,605 Class B Units (as defined in Note 3) (“Earn-Out Units”) and an equivalent number of shares of the Company’s Class V common stock, par value $0.0001 (“Class V Common Stock”) (“Earn-Out Class V Shares”, and together with Earn-Out Class A Shares and Earn-Out Units, “Earn-Out Interests”), in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing (the “Earn-Out Period”), as set forth below upon satisfaction of any of the following conditions (each, an “Earn-Out Condition”).

(1)

50% of the Earn-Out Interests if the volume weighted average price (the “VWAP”) of the Class A Common Stock equals or exceeds $112.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for twenty (20) of thirty (30) consecutive trading days during the Earn-Out Period; and

(2)

50% of the Earn-Out Interests if the VWAP of the Class A Common Stock equals or exceeds $128.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for twenty (20) of any thirty (30) consecutive trading days during the Earn-Out Period.

Earn-Out Interests were classified as liability transactions at initial issuance, which offset against additional paid-in capital as of the Closing. At each period end, Earn-Out Interests are remeasured to their fair value, with the changes during that period recognized as a component of other income (expense) on the consolidated statement of operations. Upon issuance and release of the shares after each Earn-Out Condition is met, the related Earn-Out Interests will be remeasured to their fair value at that time with the changes recognized as a component of other income (expense), and such Earn-Out Interests will be reclassed to stockholders’ (deficit) equity on the consolidated balance sheet. As of March 31, 2024 and December 31, 2023, the Earn-Out Interests had a fair value of $-0- million and $0.1 million, respectively, with the changes in the fair value of $0.1 million recognized as a gain on change in fair value of earn-out liabilities under other income (expense) within the accompanying condensed consolidated statements of operations.

Noncontrolling Interest – Noncontrolling interest represents the Company’s noncontrolling interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company.

Shares of Class V Common Stock are exchangeable into an equal number of Class A Common Stock. Shares of Class V Common Stock are non-economic voting shares in Rubicon Technologies, Inc., where shares of Class V Common Stock each have one vote per share.

The financial results of Holdings LLC were consolidated into Rubicon Technologies, Inc. and 6.8% and 66.1% of Holdings LLC’s net loss during the three months ended March 31, 2024 and 2023 was allocated to noncontrolling interests (“NCI”), respectively.

Income Taxes – Rubicon Technologies, Inc. is a corporation and is subject to U.S. federal as well as state income taxes including the income or loss allocated from its investment in Rubicon Technologies Holdings, LLC. Rubicon Technologies Holdings, LLC is taxed as a partnership for which the taxable income or loss is allocated to its members. Certain of the Rubicon Technologies Holdings, LLC operating subsidiaries are considered taxable corporations for U.S. income tax purposes. Prior to the Mergers, Holdings LLC was not subject to U.S. federal and certain state income taxes at the entity level.

The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes (“ASC Topic 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company calculates the interim tax provision in accordance with the provisions of ASC Subtopic 740-270, Income Taxes; Interim Reporting. For interim periods, the Company estimates the annual effective income tax rate (“AETR”) and applies the estimated rate to the year-to-date income or loss before income taxes.

ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of March 31, 2024 or December 31, 2023, the Company has no tax positions that met this threshold and, therefore, has not recognized such benefits. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimates will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense.

The Company’s income tax expense was $-0- million and $-0- million for the three months ended March 31, 2024 and 2023, respectively, with an effective tax rate of (0.1)% and (0.2)%, respectively. The provision for income taxes differs from the amount that would result from applying statutory rates primarily due to loss attributable to noncontrolling interest and differences in the deductibility of certain book and tax expenses, including the changes in fair value of earn-out liabilities, warrant liabilities and derivatives, and changes in the deferred tax valuation allowance.

During the three months ended March 31, 2024 and the year ended December 31, 2023, the Company recorded a full valuation allowance against its deferred tax assets. The Company intends to maintain this position until there is sufficient evidence to support the reversal of all or some portion of the allowance. The Company also has certain assets with indefinite lives for which the basis is different for book and tax. As a result, the Company is in a net deferred tax liability position of $0.2 million and $0.2 million as of March 31, 2024 and December 31, 2023, respectively.

Tax Receivable Agreement Obligation – The Company and Holdings LLC entered into a Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with Rubicon Continuing Unitholders (as defined in Note 3) and Blocked Unitholders (as defined in Note 3) (together, the “TRA Holders”). Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to the TRA Holders 85% of certain of the Company’s realized (or in certain cases deemed realized) tax savings as a result of certain tax benefits related to the transactions contemplated by the Merger Agreement and future exchanges of Class B Units for Class A Common Stock or cash. The actual tax benefit, as well as the amount and timing of any payments under the TRA, will vary depending on a number of factors, including the price of Class A Common Stock at the time of the exchange; the timing of future exchanges; the extent to which exchanges are taxable; the amount and timing of the utilization of tax attributes; the amount, timing and character of the Company’s income; the U.S. federal, state and local tax rates then applicable; the depreciation and amortization periods that apply to the increases in tax basis; the timing and amount of any earlier payments that the Company may have made under the TRA; and the portion of the Company’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis.

The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows:

recognizes a contingent liability for the TRA obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that the Company will pay;

records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange;

to the extent the Company estimates that the full benefit represented by the deferred tax asset will not be fully realized based on an analysis that will consider, among other things, the expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance; and

the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss.

A TRA liability is determined and recorded under ASC 450, “Contingencies”, as a contingent liability; therefore, the Company is required to evaluate whether the liability is both probable and the amount can be estimated. Since the TRA liability is payable upon cash tax savings and the Company has not determined that positive future taxable income is probable based on the Company’s historical loss position and other factors that make it difficult to rely on forecasts, the Company has not recorded the TRA liability as of March 31, 2024 or December 31, 2023. The Company will evaluate this on a quarterly basis, which may result in an adjustment in future periods.

Earnings (Loss) Per Share (“EPS”) – Basic income (loss) per share is computed by dividing net income (loss) attributable to Rubicon Technologies, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period.

Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 15 for additional information on dilutive securities.

Prior to the Mergers, the membership structure of Holdings LLC included units with liquidation preferences. The Company analyzed the calculation of loss per unit for periods prior to the Mergers and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. As a result, loss per share information has not been presented for periods prior to the Closing.

Derivative Financial Instruments – From time to time, the Company utilizes derivative instruments as part of our overall strategy. The Company’s derivative instruments are recorded at fair value on the consolidated balance sheets. These derivative instruments have not been designated as hedges; therefore, both realized and unrealized gains and losses are recognized in earnings. For the purposes of cash flow presentation, realized and unrealized gains or losses are included under cash flows from operating activities. Upfront cash payments received upon the issuance of derivative instruments are included within cash flows from financing activities, while the prepayments made upon the issuance of derivative instruments are included within cash flows from investing activities within the consolidated statements of cash flows.

Stock-Based Compensation – The Company measures fair value of employee stock-based compensation awards on the date of grant and uses the straight-line attribution method to recognize the related expense over the requisite service period, and accounts for forfeitures as they occur. The fair value of equity-classified restricted stock units and performance-based restricted stock units is equal to the market price of Class A Common Stock on the date of grant. The liability-classified restricted stock units are recognized at their fair value that is equal to the market price of Class A Common Stock on the date of grant and remeasured to the market price of Class A Common Stock at each period-end with related changes in the fair value recognized in general and administrative expense on the consolidated statements of operations.

The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable.

Note 2—Recent accounting pronouncements

Accounting pronouncements issued, but not adopted as of March 31, 2024

In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosure of significant segment expenses on an annual and interim basis. This ASU will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, this ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact this ASU will have on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU will be effective for the annual periods beginning the year ended December 31, 2026. Early adoption is permitted. Upon adoption, this ASU can be applied prospectively or retrospectively. The Company is currently evaluating the impact this ASU will have on the Company’s consolidated financial statements.

Note 3—Mergers

As further discussed in Note 1, on August 15, 2022, the Mergers were consummated pursuant to the Merger Agreement. In connection with the Closing, the following occurred in addition to the disclosures in Note 1:

(a) Each then-issued and outstanding Class A ordinary share, par value $0.0001 per share, of Founder (“Founder Class A Shares”) automatically converted into one share of Class A Common Stock, (b) each then-issued and outstanding Class B ordinary share, par value $0.0001 per share, of Founder (“Founder Class B Shares” and, together with Founder Class A Shares, “Founder Ordinary Shares”), converted into one share of Class A Common Stock, pursuant to the Sponsor Agreement, dated December 15, 2021, by and among Founder, Founder SPAC Sponsor LLC (“Sponsor”), Holdings LLC, and certain insiders of Founder, (c) each then-issued and outstanding public warrant of Founder, each representing a right to acquire one Founder Class A Share for $92.00 (a “Founder Public Warrant”), converted automatically, on a one-for-one basis, into a public warrant of the Company (a “Public Warrant”) that represents a right to acquire one share of Class A Common Stock for $92.00 pursuant to the Warrant Agreement, dated October 14, 2021, by and between Founder and Continental Stock Transfer and Trust Company (as amended, the “Warrant Agreement”), (d) each then-issued and outstanding private placement warrant of Founder, each representing a right to acquire one Founder Class A Share for $92.00 (a “Founder Private Placement Warrant”), converted automatically, on a one-for-one basis, into a private placement warrant of the Company (the “Private Warrant” and together with the Public Warrants, the “IPO Warrants”) that represents a right to acquire one share of Class A Common Stock for $92.00 pursuant to the Warrant Agreement, and (e) each then-issued and outstanding unit of Founder, each representing a Founder Class A Share and one-half of a Founder Public Warrant (a “Founder Unit”), that had not been previously separated into the underlying Founder Class A Share and one-half of one Founder Public Warrant upon the request of the holder thereof, was separated and automatically converted into one share of Class A Common Stock and one-half of one Public Warrant. No fractional Public Warrants were issued upon separation of the Founder Units.

The Company was issued Class A Units in Holdings LLC (“Class A Units”) and all preferred units, common units, and incentive units of Holdings LLC (including such convertible instruments, the “Rubicon Interests”) outstanding were automatically recapitalized into Class A Units and Class B Units of Holdings LLC (“Class B Units”), as authorized by the Eighth Amended and Restated Limited Liability Company Agreement of Holdings LLC (“A&R LLCA”) that was adopted on the Closing Date. On the Closing Date, (a) holders of the Rubicon Interests immediately before the Closing, other than Boom Clover Business Limited, NZSF Frontier Investments Inc., and PLC Blocker A LLC (collectively, the “Blocked Unitholders”), were issued Class B Units (the “Rubicon Continuing Unitholders”), (b) the Rubicon Continuing Unitholders were issued a number of shares of Class V Common Stock equal to the number of Class B Units issued to the Rubicon Continuing Unitholders, (c) the Blocked Unitholders were issued shares of Class A Common Stock, and (d) following the adoption of the equity incentive award plan of Rubicon adopted at the Closing (the “2022 Plan”) and the effectiveness of a registration statement on Form S-8 filed on October 19, 2022, holders of phantom units of Holdings LLC immediately prior to the Closing (“Rubicon Phantom Unitholders”) and those current and former directors, officers and employees of Holdings LLC entitled to certain cash bonuses (the “Rubicon Management Rollover Holders”) are to receive restricted stock units (“RSUs”) and deferred stock units (“DSUs”), and such RSUs and DSUs will vest into shares of Class A Common Stock. In addition to the securities issuable at the Closing and the RSUs and DSUs, certain of the Rubicon Management Rollover Holders received one-time cash payments (the “Cash Transaction Bonuses”). In addition, pursuant to the Merger Agreement, (i) the Blocked Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Class A Shares and (ii) the Rubicon Continuing Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Units and an equivalent number of shares of Class V Common Stock, in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing, as discussed in greater detail in Note 1.

Certain investors (the “PIPE Investors”) purchased, and the Company sold to such PIPE Investors an aggregate of 1,512,500 shares of Class A Common Stock at a price of $80.00 per share pursuant to and as set forth in the subscription agreements against payment by such PIPE Investors of the respective amounts set forth therein.

Certain investors (the “FPA Sellers”) purchased, and the Company issued and sold to such FPA Sellers, an aggregate of 885,327 shares of Class A Common Stock pursuant to and as set forth in the Forward Purchase Agreement entered into between Founder and ACM ARRT F LLC (“ACM Seller”) on August 4, 2022, against payment by such FPA Sellers of the respective amounts set forth therein. The Forward Purchase Agreement was subsequently terminated on November 30, 2022. See Note 11 for further information.

The Company (a) caused to be issued to certain investors 110,000 Class B Units pursuant to the Merger Agreement, (b) issued 20,000 shares of Class A Common Stock to certain investors, and (c) Sponsor forfeited 20,000 shares of Class A Common Stock.

Blocked Unitholders and Rubicon Continuing Unitholders retained aggregate 2,480,865 shares of Class A Common Stock and 14,834,735 shares of Class V Common Stock at the Closing.

The Company and Holdings LLC entered into the Tax Receivable Agreement with the TRA Holders. See Note 1 for further information.

The Company contributed approximately $73.8 million of cash to Rubicon Technologies Holdings, LLC, representing the net amount held in the Company’s trust account following the redemption of Class A Common Stock originally sold in Founder’s initial public offering, less (a) cash consideration of $28.9 million paid to Holdings LLC’s certain management members, plus (b) $121.0 million in aggregate proceeds received from the PIPE Investors, less (c) the aggregate amount of transaction expenses incurred by the parties to the Merger Agreement and (d) payment to the FPA Sellers pursuant to the Forward Purchase Agreement.

The Company incurred $67.3 million in transaction costs relating to the Mergers. The Company settled $7.0 million of transaction costs by issuing Class A Common Stock on February 6, 2023, which resulted in a gain of $0.6 million and was recognized as a component of other income (expense) on the accompanying condensed consolidated statement of operations for the three months ended March 31, 2023. No such settlement occurred during the three months ended March 31, 2024.

Note 4— Discontinued operations of the SaaS Business

During the three months ended March 31, 2024, the Company commenced a strategic evaluation of its SaaS Business. As of March 31, 2024, the Company had committed to a plan to sell the business within one year and was actively marketing it in its current condition. The SaaS Business met the held for sale criteria and represented a strategic shift in the Company’s operations. As a result, the SaaS Business have been presented as discontinued operations and, as such, have been excluded from both continuing operations for all periods and the notes to the condensed consolidated financial statements have been adjusted on a retrospective basis. On May 7, 2024, the Company entered into an agreement to sell the SaaS Business to an entity affiliated with Andres Chico, chairman of the Company’s board of directors, and Jose Miguel Enrich, a beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock, for a purchase price of $68.2 million. The agreement also provides a potential earn-out payment to the Company of $12.5 million if the SaaS Business sales achieves a certain annual recurring revenue target on or prior to December 31, 2024.

The Company only has one reporting unit. The SaaS Business met the criteria for classification as held for sale and discontinued operations, therefore, goodwill is allocated to noncurrent assets of discontinued operations on the accompanying balance sheets as of March 31, 2024 and December 31, 2023 based on the relative fair value of the SaaS Business and the remaining business.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of SaaS Business:


Assets and Liabilities of Discontinued Operations	March 31, 2024		December 31, 2023
Accounts receivable, net	$	5,339	$	4,047
Contract assets, net		632		1,054
Prepaid expenses		79		108
Other current assets		288		48
Current assets of discontinued operations		6,338		5,257
Property and equipment, net		676		793
Goodwill		12,260		12,260
Intangible assets, net		385		550
Total assets of discontinued operations	$	19,659	$	18,860

Accrued expenses	$	919	$	356
Contract liabilities		7,198		5,860
Current liabilities of discontinued operations	$	8,117	$	6,216

The results of operations are recorded as net loss from discontinued operations, net of tax on the accompanying condensed consolidated statements of operations for all periods presented. The following table presents the aggregate results of discontinued operations of the SaaS Business:


Results of Discontinued Operations	March 31, 2024			March 31, 2023
Revenue: Service	$	3,013		$	2,041
Cost of revenue (exclusive of amortization and depreciation): Service		1,000			487
Sales and marketing		1,500			829
Product development		700			651
General and administrative		200			(41	)
Amortization and depreciation		282			248
Total costs and expense		3,682			2,174
Loss before income taxes		(669	)		(133	)
Income taxes expenses (benefits)		-			-
Net loss from discontinued operations, net of taxes	$	(669	)	$	(133	)

Note 5—Property and equipment

Property and equipment, net is comprised of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Schedule of property and equipment
	March 31,			December 31,
	2024			2023
Property and equipment of continuing operations:
Computers, equipment and software	$	2,349		$	2,324
Furniture and fixtures		210			210
Leasehold improvements		1,441			1,441
Total property and equipment		4,000			3,975
Less accumulated amortization and depreciation		(3,475	)		(3,343	)
Total property and equipment, net	$	525		$	632

Property and equipment of discontinued operations:
Customer equipment	$	1,891		$	1,891
Less accumulated amortization and depreciation		(1,215)			(1,098)
Total property and equipment, net	$	676		$	793

Property and equipment amortization and depreciation expense of continuing operations for the three months ended March 31, 2024 and 2023 was $0.1 million and $0.1 million, respectively. As further described in Note 4, $1.9 million of customer equipment and $1.2 million of related accumulated depreciation were classified to noncurrent assets of discontinued operations on the accompanying condensed consolidated balance sheet as of March 31, 2024, while $1.9 million of customer equipment and $1.1 million of related accumulated depreciation were classified to noncurrent assets of discontinued operations on the accompanying condensed consolidated balance sheet as of December 31, 2023.

Note 6—Debt

Revolving Credit Facilities

Revolving Credit Facility – On December 14, 2018, the Company entered into a $60.0 million “Revolving Credit Facility” secured by all assets of the Company including accounts receivable, intellectual property, and general intangibles. The Revolving Credit Facility’s maturity was December 14, 2023 and bore an interest rate of SOFR plus 5.60%. On February 7, 2023, the Company entered into an amendment to the Revolving Credit Facility, which (i) increased the maximum borrowing amount under the facility from $60.0 million to $75.0 million and (ii) amended the interest rate it bears to between 4.8% up to SOFR plus 4.9% determined based on certain metrics defined within the amended agreement. On March 22, 2023, the Company amended the Revolving Credit Facility, which (i) the Company and the lender modified its maturity date to the earlier of (a) December 14, 2025, (b) the maturity of the Term Loan (as defined below) and (c) the maturity of the Subordinated Term Loan (as defined below) and (ii) the lender consented to an amendment to the Subordinated Term Loan agreement. The borrowing capacity was calculated based on qualified billed and unbilled receivables. The fee on the average daily balance of unused loan commitments was 0.70%. Interest and fees were payable monthly with principal due upon maturity. In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that these Revolving Credit Facility amendments were debt modifications.

The Revolving Credit Facility required a lockbox arrangement, which provided for receipts to be swept daily to reduce borrowings outstanding at the discretion of the lender. This arrangement, combined with the existence of the subjective acceleration clause in the “Line of Credit” agreement, necessitated the Line of Credit be classified as a current liability on the consolidated balance sheets. The acceleration clause allowed for amounts borrowed under the facility to become immediately due in the event of a material adverse change in the Company’s business condition (financial or otherwise), operations, properties or prospects, change of management, or change in control.

On June 7, 2023, the Company fully prepaid the borrowing under the Revolving Credit Facility in the amount of $48.6 million and terminated the facility. As a result, the Company recorded $2.6 million of a loss on extinguishment of debt obligations on the statement of operations for the year ended December 31, 2023.

June 2023 Revolving Credit Facility – On June 7, 2023, the Company entered into a $90.0 million “June 2023 Revolving Credit Facility” secured by the Company’s accounts receivable, all contracts and contract rights and general intangibles, with a maturity date of the earlier of (i) June 7, 2026 or (ii) 90 days prior to the maturity date of the June 2023 Term Loan (defined below) (the “Springing Maturity”). The June 2023 Revolving Credit Facility bears an interest rate of SOFR plus 4.25% (or 3.95% if the Company meets certain conditions defined in the agreement) (9.7% as of March 31, 2024). The borrowing capacity is calculated based on the Company’s borrowing base collateral as defined in the June 2023 Revolving Credit Facility agreement, which is comprised of qualified billed and unbilled receivables and the September 2023 Rodina Letter of Credit (as defined below). The fee on the average daily balance of unused loan commitments is 0.5%. Interest and fees are payable monthly in arrears on the first day of each month.

The June 2023 Revolving Credit Facility requires a lockbox arrangement, which provides for receipts to be swept daily to reduce borrowings outstanding at the discretion of the lender. This arrangement, combined with the existence of the subjective acceleration clause in the Line of Credit agreement, necessitates the Line of Credit be classified as a current liability on the consolidated balance sheets. The acceleration clause allows for amounts borrowed under the facility to become immediately due in the event of a material adverse change in the Company’s business condition (financial or otherwise), operations, properties or prospects, change of management, or change in control.

On September 22, 2023, an entity affiliated with Andres Chico and Jose Miguel Enrich issued a standby letter of credit in the amount of $15.0 million (the “September 2023 Rodina Letter of Credit”) to the lender of the June 2023 Revolving Credit Facility on behalf of the Company, which increased the Company’s borrowing base collateral under the facility by $15.0 million. The expiration date of the September 2023 Rodina Letter of Credit is September 30, 2024 with an automatic renewal option for one additional year through September 30, 2025.

On December 5, 2023, the Company entered into an amendment to the June 2023 Revolving Credit Facility. The amendment temporally modified the calculation methodology of the borrowing base collateral, resulting in its increase by $5.0 million through January 15, 2024, which was subsequently extended to March 15, 2024 with an option to be further extended to June 15, 2024. To date, the modified calculation methodology of the borrowing base has been extended on a month-to-month basis.

As of March 31, 2024, the Company’s total outstanding borrowings under the Line of Credit were $72.0 million and no amount remained available to draw, after accounting for the borrowing base collateral increases discussed above. The June 2023 Revolving Credit Facility is subject to certain financial covenants. As of March 31, 2024, the Company was in compliance with these financial covenants.

The Company capitalized $2.9 million in deferred debt charges related to the June 2023 Revolving Credit Facility during the year ended December 31, 2023, which has been recorded to prepaid expenses on the accompanying condensed consolidated balance sheet and are amortized over the remaining term of the June 2023 Revolving Credit Facility. The deferred debt charges balances as of March 31, 2024 and December 31, 2023 were $2.1 million and $2.3 million, respectively. Amortization of deferred debt charges related to the June 2023 Revolving Credit Facility were $0.2 million for the three months ended March 31, 2024.

Term Loan Facilities

Term Loan – On March 29, 2019, the Company entered into a $20.0 million “Term Loan” agreement secured by a second lien on all assets of the Company including accounts receivable, intellectual property and general intangibles. The Term Loan was subsequently upsized to $60.0 million and bore an interest rate of LIBOR plus 9.5% with a maturity date of the earlier of March 29, 2024, or the maturity date of the Revolving Credit Facility.

On November 18, 2022, the Company entered into an amendment to the Term Loan agreement, in which the lender consented to the amendments to the Revolving Credit Facility agreement and the Subordinated Term Loan (as defined below) agreement. Per the amended Term Loan agreement, an additional fee was incurred in the amount of $2.0 million, out of which $1.0 million became due in cash and the other $1.0 million was accrued to the principal balance of the Term Loan as the Company did not repay the Term Loan in full on or before March 27, 2023. Furthermore, beginning on April 3, 2023, an additional $0.15 million fee accrued to the principal balance of the Term Loan each week thereafter until the Term Loan was fully repaid.

On February 7, 2023, the Company entered into an amendment to the Term Loan agreement, which (i) amended the interest rate the Term Loan bears to SOFR plus 9.6% and (ii) required the Company to make a prepayment of $10.3 million, including $10.0 million of the principal and $0.3 million of the prepayment premium. Pursuant to the amended agreement, the Company made a $10.3 million payment to the Term Loan lender on February 7, 2023 and recorded $0.8 million as a loss on extinguishments of debt obligations on the accompanying consolidated statements of operations.

On May 19, 2023, the Company entered into an amendment to the Term Loan agreement, which extended the maturity date to May 23, 2024.

In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that these Term Loan amendments were debt modifications.

On June 7, 2023, the Company fully prepaid the borrowing under the Term Loan in the amount of $40.5 million and terminated the facility. As a result, the Company recorded $2.5 million of a loss on extinguishment of debt obligations on the statement of operations for the year ended December 31, 2023.

Subordinated Term Loan – On December 22, 2021, the Company entered into a $20.0 million “Subordinated Term Loan” agreement secured by a third lien on all assets of the Company including accounts receivable, intellectual property and general intangibles. The Subordinated Term Loan was originally scheduled to mature on December 22, 2022, bore an interest rate of 15.0% through the original maturity and 14.0% thereafter. Pursuant to the Subordinated Term Loan agreement, the Company entered into warrant agreements and issued common unit purchase warrants (the “Subordinated Term Loan Warrants”).

On December 12, 2022, the Subordinated Term Loan Warrants were exercised and converted into Class A Common Stock. On December 30, 2022, the Company entered into an agreement with the lender of the Subordinated Term Loan, pursuant to which the Company agreed to compensate, in cash or shares of Class A Common Stock, the lender for the calculated amount between (a) the closing share price of Class A Common Stock on the business day immediately prior to the lender’s exercise of the Subordinated Term Loan Warrants on December 12, 2022 multiplied by the number of shares of Class A Common Stock issued for such exercise (the “December 2022 Warrant Shares”) and (b) the closing share price of Class A Common Stock on the business day immediately prior to the lender’s sale of the December 2022 Warrant Shares multiplied by the number of the December 2022 Warrant Shares sold by the lender (the “Subordinated Term Loan Warrants Make-Whole Agreement”). The Subordinated Term Loan Warrants Make-Whole Agreement expires on December 12, 2027.

The maturity of the Subordinated Term Loan was subsequently extended to December 31, 2023 with the amendment entered into on November 18, 2022. On March 22, 2023, the Company entered into an amendment to the Subordinated Term Loan agreement, modifying its maturity date to March 29, 2024, which was subsequently amended to May 23, 2024 with an amendment entered into on May 19, 2023. Concurrently, the Company entered into amendments to the Subordinated Term Loan Warrants agreements (see Note 10 for further information regarding the Subordinated Term Loan Warrants and the Subordinated Term Loan Warrants Make-Whole Agreement).

On June 7, 2023, the Company entered into an amendment to the Subordinated Term Loan agreement, which modified (a) its maturity to the earlier of (i) the scheduled maturity date (June 7, 2025, which the Company has an option to extend to June 7, 2026 upon achievement of certain conditions) and (ii) the maturity date of the June 2023 Revolving Credit Facility, unless the Springing Maturity applies, and (b) the interest rate the Subordinated Term Loan bears to 15%, of which 11% is to be paid in cash and 4% is to be paid in kind by capitalizing such interest accrued to the principal each month in arrears. Any accrued, capitalized and uncapitalized paid-in-kind interest charges will be due and payable in cash at maturity. Concurrently, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements (see Note 10 for further information regarding the Subordinated Term Loan Warrants).

In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that these Subordinated Term Loan amendments were debt modifications.

The Company capitalized $12.5 million in deferred debt charges related to the Subordinated Term Loan during the year ended December 31, 2023. Balance of deferred debt charges as of March 31, 2024 and December 31, 2023 was $9.2 million and $10.3 million, respectively. Amortization of deferred debt charges related to the Subordinated Term Loan agreement was $1.1 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively.

June 2023 Term Loan – On June 7, 2023, the Company entered into a $75.0 million “June 2023 Term Loan” agreement secured by the Company’s intellectual property, with a maturity date of the earlier of (i) the scheduled maturity date (June 7, 2025, which the Company has an option to extend to June 7, 2026 upon achievement of certain conditions) and (ii) the maturity date of the June 2023 Revolving Credit Facility, unless the Springing Maturity applies. The June 2023 Term Loan bears an interest rate of the prime rate plus a margin of 8.75% or 8.25% if the Company meets certain conditions defined in the agreement. The Company had the option to pay the interest in kind each month in arrears by capitalizing such interest which accrues through August 31, 2023 as additional principal, and in such instance, the margin applicable for the interest rate was 10.25%. The Company elected to pay the interest accrued through August 31, 2023 in kind. The Company also has the option to pay in kind any excess interest over 13.5% after paying the first 13.5% in cash from September 1, 2023 through the maturity, and the Company elected to pay such excess interest in kind since September 2023. As of March 31, 2024, the applicable interest rate of the June 2023 Term Loan was 16.8%. At the time of any repayment of the June 2023 Term Loan, the Company is required to pay a fee in the amount of 12.0% of the principal repaid. Such repayment fee amount has been accrued as additional principal on the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023. Beginning on October 7, 2023 until the June 2023 Term Loan is fully repaid, the lender has the option to elect to convert the outstanding principal into Class A Common Stock. The aggregate number of shares delivered to the lender cannot result in the lender’s ownership exceeding (i) 19.99% of the number shares of Class A Common Stock issued and outstanding or (ii) $10.0 million. Concurrently, the Company entered into warrant agreements and issued common stock purchase warrants (the “June 2023 Term Loan Warrants”) (see Note 10 for further information regarding the June 2023 Term Loan Warrants).

The Company capitalized $24.0 million in deferred debt charges related to the June 2023 Term Loan during the year ended December 31, 2023. Amortization of deferred debt charges related to the June 2023 Term Loan agreement was $2.6 million for the three months ended March 31, 2024.

The June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan are subject to certain cross-default provisions under the intercreditor agreement. In addition, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements include covenants, which reduce the available borrowing base collateral under the June 2023 Revolving Credit Facility initially by $19.0 million (the “Minimum Excess Availability Reserve”). During the terms of the agreements, the Minimum Excess Availability Reserve could be decreased by up to $9.0 million, which will make the Minimum Excess Availability Reserve $10.0 million, upon the Company’s achievement of certain financial conditions defined in the agreements. As of March 31, 2024, the Minimum Excess Availability Reserve was $19.0 million. Furthermore, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements require the Company to maintain a $2.0 million letter of credit. This letter of credit could be eliminated upon the Company’s achievement of certain financial conditions defined in the agreements.

Convertible Debentures

YA Convertible Debentures – As part of the security purchase agreement (the “YA SPA”) (see Note 12), the Company issued convertible debentures (collectively, the “YA Convertible Debentures”) to YA II PN, Ltd. (the “Yorkville Investor”) on November 30, 2022 (the “First YA Convertible Debenture”) and on February 3, 2023 (the “Second YA Convertible Debenture”). The principal amount of the First YA Convertible Debenture was $7.0 million for a purchase price of $7.0 million, and the principal amount of the Second YA Convertible Debenture was $10.0 million for a purchase price of $10.0 million. The YA Convertible Debentures had a maturity date of May 30, 2024 and bore interest at the rate of 4.0% per annum. The interest was due and payable upon maturity. At any time, so long as the YA Convertible Debentures are outstanding, the Yorkville Investor may convert all or part of the principal and accrued and unpaid interest of the YA Convertible Debentures into shares of Class A Common Stock at 90% of the lowest daily VWAP of Class A Common Stock during the seven consecutive trading days immediately preceding each conversion date, but in no event lower than $2.00 per share. Outside of an event of default under the YA Convertible Debentures, the Yorkville Investor may not convert in any calendar month more than the greater of (a) 25.0% of the dollar trading volume of the shares of Class A Common Stock during such calendar month, or (b) $3.0 million. The Company capitalized $1.7 million and $2.5 million in deferred debt charges related to the First YA Convertible Debenture and the Second YA Convertible Debenture for their originations, respectively.

During the three months ended March 31, 2023, the Yorkville Investor converted $2.3 million of the principal and $0.1 million of the accrued interest of the YA Convertible Debentures to 2,849,962 shares of Class A Common Stock. The Company recorded $1.3 million in loss on extinguishment of debt obligations on the accompanying condensed consolidated statements of operations for the three months ended March 31, 2023.

On August 8, 2023, the Yorkville Investor assigned the YA Convertible Debentures to certain existing investors of the Company affiliated with Andres Chico and Jose Miguel Enrich. Pursuant to the assignment agreement, the assignees assumed all of the Yorkville Investor’s duties, liabilities and obligations under the YA Convertible Debentures and the Yorkville Investor was discharged of all of such duties, liabilities and obligations. Subsequently, the Company and the assignees entered into an amendment to the debentures which extended the maturity date to December 1, 2026. On August 25, 2023, the assignees converted all of the remaining principal of $5.6 million and an insignificant amount of accrued and unpaid interest of the YA Convertible Debentures to 1,428,760 shares of Class A Common Stock for the final settlement of the YA Convertible Debentures.

Insider Convertible Debentures – On December 16, 2022, the Company issued convertible debentures to certain members of the Company’s management team and board of directors, and certain other existing investors of the Company for a total principal amount of $11.9 million and the total net proceeds of $10.5 million (the “Insider Convertible Debentures”). The Insider Convertible Debentures had a maturity date of June 16, 2024 and accrue interest at the rate of 6.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Insider Convertible Debentures are outstanding, each of the holders may convert all or part of the principal and accrued and unpaid interest of their Insider Convertible Debentures they hold into shares of Class A Common Stock at a conversion price of $16.96 per share.

On June 2, 2023, the Company entered into an amendment to the Insider Convertible Debentures, with the exception of the three debentures, for which the amendment was executed on July 11, 2023. The amendment extended the maturity date to December 1, 2026. In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that the amendment was a debt modification.

On September 15, 2023, the Company entered into an amendment to the Insider Convertible Debentures held by three entities affiliated with Andres Chico and Jose Miguel Enrich. The amendment lowered the conversion price of these three debentures to $10.00 per share of Class A Common Stock. In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that the amendment was a debt extinguishment. Accordingly, as of the amendment date, the Company (i) derecognized the net carrying amount of these three Insider Convertible Debentures of $7.6 million and the remaining capitalized deferred debt charges of $0.6 million, (ii) recognized the three Insider Convertible Debentures at their fair value of $6.7 million and the debt discount of $1.5 million on consolidated balance sheet and (iii) recognized $0.9 million of loss on debt extinguishment on the consolidated statement of operations. Concurrently, the Company issued a warrant to an entity affiliated with Andres Chico and Jose Miguel Enrich which granted the right to purchase 498,119 shares of Class A Common Stock (the “Rodina Warrant”) (See Note 10 for further information regarding the Rodina Warrant).

The Company recorded the principal of the Insider Convertible Debentures, including interest incurred between the origination through March 31, 2024, which the Company elected to capitalize to the principal, in related-party debt obligations, net of deferred debt charges on the accompanying condensed consolidated balance sheet as of March 31, 2024. The Company capitalized $0.2 million and $0.1 million of accrued interest to the principal of the Insider Convertible Debentures during the three months ended March 31, 2024 and 2023, respectively. Amortization of deferred debt charges related to the Insider Convertible Debentures was $0.1 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively. Neither principal nor accrued interest of the Insider Convertible Debentures was converted to Class A Common Stock from the origination through March 31, 2024.

Third Party Convertible Debentures – On February 1, 2023, the Company issued convertible debentures to certain third parties for a total principal amount of $1.4 million and a total net proceeds of $1.2 million (the “Third Party Convertible Debentures”). The Third Party Convertible Debentures had a maturity date of August 1, 2024 and accrue interest at the rate of 6.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Third Party Convertible Debentures are outstanding, each of the holders may convert all or part of the principal and accrued and unpaid interest of their Third Party Convertible Debentures they hold into shares of Class A Common Stock at a conversion price of $15.52 per share.

On June 2, 2023, the Company entered into an amendment to the Third Party Convertible Debentures, with the exception of the three debentures, for which the amendment was executed on July 31, 2023. The amendment extended the maturity date to December 1, 2026. In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that the amendment was a debt modification. The Company recorded the principal of the Third Party Convertible Debentures, including interest incurred between the origination through March 31, 2024 which the Company elected to capitalize to the principal, in debt obligations, net of deferred debt charges on the accompanying condensed consolidated balance sheet as of March 31, 2024. The Company capitalized insignificant amount of accrued interest to the principal of the Third Party Convertible Debentures during the three months ended March 31, 2024. Amortization of deferred debt charges related to the Third Party Convertible Debentures was insignificant for the three ended March 31, 2024. Neither principal nor accrued interest of the Third Party Convertible Debentures was converted from the origination through March 31, 2024.

NZ Superfund Convertible Debenture – On February 1, 2023, the Company issued a convertible debenture to Guardians of New Zealand Superannuation (the “NZ Superfund”), a then beneficial owner of greater than 10% of the issued and outstanding Class A Common Stock and Class V Common Stock, for a total principal amount of $5.1 million and the total net proceeds of $4.5 million (the “NZ Superfund Convertible Debenture”). The NZ Superfund Convertible Debenture had a maturity date of August 1, 2024 and accrued interest at the rate of 8.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at the option of the Company, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the NZ Superfund Convertible Debenture is outstanding, the NZ Superfund may convert all or part of the principal and accrued and unpaid interest of the NZ Superfund Convertible Debenture it holds into shares of Class A Common Stock at a conversion price of $15.52.

On June 2, 2023, the Company entered into an amendment to the NZ Superfund Convertible Debenture, which extended the maturity date to December 1, 2026 and modified the interest rate it bears to 14.0%. In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that the amendment was a debt modification. The Company recorded the principal of the NZ Superfund Convertible Debenture, including interest incurred between the origination through March 31, 2024 which the Company elected to capitalize to the principal, in related party debt obligations, net of deferred debt charges on the accompanying condensed consolidated balance sheet as of March 31, 2024. The Company capitalized $0.2 million and $0.1 million of accrued interest to the principal of the NZ Superfund Convertible Debenture during the three months ended March 31, 2024 and 2023, respectively. Amortization of deferred debt charges related to the NZ Superfund Convertible Debenture was insignificant and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Neither principal nor accrued interest of the NZ Superfund Convertible Debenture was converted from the origination through March 31, 2024.

Components of the Company’s debt obligations were as follows (in thousands):


	March 31,			December 31,
	2024			2023
Term loan balance	$	110,361		$	109,422
Convertible debt balance		1,489			1,467
Related-party convertible debt balance		18,814			18,424
Less unamortized deferred debt charges		(28,219	)		(32,010	)
Total borrowed		102,445			97,303
Less short-term debt obligation balance		-			-
Long-term debt obligation balance	$	102,445		$	97,303

At March 31, 2024, the future aggregate maturities of long-term debt for the remainder of 2024 and subsequent periods are as follows (in thousands):


Fiscal Years Ending December 31,
2024	$	-
2025		110,361
2026		20,303
Total	$	130,664

The total interest expense related to the Revolving Credit Facilities, Term Loan Facilities, and Convertible Debentures was $10.9 million and $7.8 million for the three months ended March 31, 2024 and 2023, respectively.

Note 7—Accrued expenses

Accrued expenses consist of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Schedule of accrued expenses
	March 31,		December 31,
	2024		2023
Accrued expenses of continuing operations:
Accrued hauler expenses	$	45,866	$	63,367
Accrued compensation		6,111		4,221
FPA Settlement Liability (as defined in Note 11)		-		2,000
Other accrued expenses		3,283		7,057
Total accrued expenses	$	55,260	$	76,645

Accrued expenses of discontinued operations:
Accrued expenses	$	919	$	356

During the three months ended March 31, 2023, the Company granted certain RSU awards, valued at $8.2 million, as replacement awards for $26.8 million of the accrued management rollover consideration. The replacement awards resulted in a $18.6 million gain, which was included in gain on settlement of incentive compensation on the accompanying condensed consolidated statement of operations for the three months ended March 31, 2023. No such RSU awards were granted during the three months ended March 31, 2024.

During the year ended December 31, 2023, the Company settled with certain Rubicon Management Rollover Holders on a portion of the accrued management rollover consideration and the Company agreed to make quarterly cash payments to these Rubicon Management Rollover Holders through December 31, 2026. As a result, the Company recognized related liabilities of $2.1 million and $2.2 million in accrued expenses and $3.0 million and $3.4 million in other long-term liabilities on the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. See Note 17 for further information.

As further described in Note 4, $0.9 million of accrued expenses was classified to current liabilities held for sale on the accompanying condensed consolidated balance sheet as of March 31, 2024 while $0.4 million of accrued expenses were classified to current liabilities of discontinued operations on the accompanying condensed consolidated balance sheet as of December 31, 2023.

Note 8—Goodwill and other intangibles

There were no additions to goodwill during the three months ended March 31, 2024 or the year ended December 31, 2023. No impairment of goodwill was identified for the three or three months ended March 31, 2024 or the year ended December 31, 2023. As of March 31, 2024, the Company allocated $12.3 million of goodwill to the SaaS Business as discontinued operations based on the relative fair value of the SaaS Business and the remaining business retained by the Company.

Intangible assets consisted of the following (in thousands, except years):


	March 31, 2024
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets of continuing operations:
Trade Name	5	$	728	$	(728	)	$	-
Customer and hauler relationships	2 to 8		20,976		(15,340	)		5,636
Non-competition agreements	3 to 4		550		(550	)		-
Technology	3		1,197		(1,197	)		-
Total finite-lived intangible assets			23,451		(17,815	)		5,636
Domain Name	Indefinite		836		-			836
Total intangible assets		$	24,287	$	(17,815	)	$	6,472

Intangible assets of discontinued operations:
Technology	3	$	1,981	$	(1,596	)	$	385
Total intangible assets of discontinued operations		$	1,981	$	(1,596	)	$	385

	December 31, 2023
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets of continuing operations:
Trade Name	5	$	728	$	(728	)	$	-
Customer and hauler relationships	2 to 8		20,976		(14,700	)		6,276
Non-competition agreements	3 to 4		550		(550	)		-
Technology	3		1,197		(1,197	)		-
Total finite-lived intangible assets			23,451		(17,175	)		6,276
Domain Name	Indefinite		835		-			835
Total intangible assets		$	24,286	$	(17,175	)	$	7,111

Intangible assets of discontinued operations:
Technology	3	$	1,981	$	(1,431	)	$	550
Total intangible assets of discontinued operations		$	1,981	$	(1,431	)	$	550

Amortization expense for intangible assets of continuing operations was $0.6 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively. Amortization expense for intangible assets of discontinued operations was $0.2 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively. Future amortization expense for continuing operations for the remainder of 2024 and subsequent years is as follows (in thousands):


Fiscal Years Ending December 31,
2024	$	(1,920	)
2025		(2,559	)
2026		(1,157	)
Total future amortization of intangible assets	$	(5,636	)

As further described in Note 4, $2.0 million of technology intangible assets, $1.6 million of related accumulated amortization and $12.3 million of goodwill were reallocated to noncurrent assets of discontinued operations on the accompanying condensed consolidated balance sheet as of March 31, 2024, while $2.0 million of technology intangible assets, $1.4 million of related accumulated amortization and $12.3 million of goodwill were reallocated to noncurrent assets of discontinued operations on the accompanying condensed consolidated balance sheet as of December 31, 2023.

Note 9—Stockholders’ (deficit) equity

The table set forth below reflects information about the Company’s equity as of March 31, 2024.

Schedule of stockholders equity
	Authorized		Issued		Outstanding
Class A Common Stock		690,000,000		52,406,059		52,406,059
Class V Common Stock		275,000,000		1,074,899		1,074,899
Preferred Stock		10,000,000		-		-
Total shares as of March 31, 2024		975,000,000		53,480,958		53,480,958

The table set forth below reflects information about the Company’s equity as of December 31, 2023.

	Authorized		Issued		Outstanding
Class A Common Stock		690,000,000		39,643,584		39,643,584
Class V Common Stock		275,000,000		4,425,388		4,425,388
Preferred Stock		10,000,000		-		-
Total shares as of December 31, 2023		975,000,000		44,068,972		44,068,972

Each share of Class A Common Stock and Class V Common Stock entitles the holder one vote per share. Only holders of Class A Common Stock have the right to receive dividend distributions. In the event of liquidation, dissolution or winding up of the affairs of the Company, only holders of Class A Common Stock have the right to receive liquidation proceeds, while the holders of Class V Common Stock are entitled to only the par value of their shares. The holders of Class V Common Stock have the right to exchange Class V Common Stock for an equal number of shares of Class A Common Stock. The Company’s board of directors has discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

During the three months ended March 31, 2024, 3,350,489 shares of Class V Common Stock were exchanged to the equal number of shares of Class A Common Stock.

Note 10—Warrants

Public Warrants and Private Warrants – In connection with the Closing, on August 15, 2022, the Company assumed a total of 3,752,107 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $92.00 per share. Of these warrants, the 1,976,560 Public Warrants were originally issued in Founder’s initial public offering (the “IPO”) and 1,775,547 Private Warrants were originally issued in a private placement in connection with the IPO. In accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity, the Company concluded that the IPO Warrants are not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity. The IPO Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the IPO Warrants. The IPO Warrants became exercisable on September 14, 2022, 30 days after the Closing and no IPO Warrants has been exercised through March 31, 2024. The IPO Warrants will expire five years from the Closing or earlier upon redemption.

The Company may redeem the IPO Warrants:

in whole and not in part;

at a price of $0.08 per warrant;

upon not less than 30 days’ prior written notice to each IPO Warrant holder and

if and only if, the last reported price of the Class A Common Stock equals or exceeds $144.00 per share for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the IPO Warrant holders.

Rodina Warrant – On September 15, 2023, the Company issued the Rodina Warrant, which granted the holder the right to purchase 498,119 shares of Class A Common Stock at the exercise price of $0.08 per share any time prior to September 15, 2026. In accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity, the Company concluded that the Rodina Warrant is not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity. Accordingly, the Rodina Warrant was recognized at its fair value of $1.7 million in additional paid-in capital on the consolidated balance sheet upon issuance. The Rodina Warrant has not been exercised and remains outstanding as of March 31, 2024.

Subordinated Term Loan Warrants – Pursuant to the Subordinated Term Loan agreement entered on December 22, 2021 (see Note 6), the Company concurrently entered into warrant agreements and issued the Subordinated Term Loan Warrants under the condition that if the Company did not repay the Subordinated Term Loan on or prior to the original maturity date of December 22, 2022, the lender would receive the right to purchase up to the number of shares of Class A Common Stock worth $2.0 million at the exercise price of $0.08 per share at any time after the original maturity date prior to the earlier of the date principal and interest on all outstanding term loans under this Subordinated Term Loan agreement are repaid, and the tenth anniversary of the issuance date. Additionally, if the Company did not repay the Subordinated Term Loan on or prior to the original maturity date, the Subordinated Term Loan Warrants would be exercisable for additional $0.2 million of Class A Common Stock each additional full calendar month after the maturity date until the Company fully repays the principal and interest in cash (the “Additional Subordinated Term Loan Warrants”). If the Company repaid the Subordinated Term Loan on or prior to the original maturity date, the Subordinated Term Loan Warrants would automatically terminate and be voided, and no Subordinated Term Loan Warrant would be exercisable.

On November 18, 2022, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which (i) increased the number of shares of Class A Common Stock the lender has the right to purchase with the Subordinated Term Loan Warrants to such number of Class A Common Stock worth $2.6 million, (ii) caused the Subordinated Term Loan Warrants to be immediately exercisable upon execution of the amended Subordinated Term Loan Warrants agreements, and (iii) increased the value of Class A Common Stock the Additional Subordinated Term Loan Warrants would earn each additional full calendar month after March 22, 2023 to $0.25 million until the Company repays the Subordinated Term Loan in full.

On March 22, 2023, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which increased the value of Class A Common Stock the Additional Subordinated Term Loan Warrants earn each additional full calendar month after March 22, 2023 to $0.35 million until the Company repays the Subordinated Term Loan in full.

On June 7, 2023, the Company entered into an amendment to the Subordinated Term Loan Warrants agreements, which amended the value of Class A Common Stock the Additional Subordinated Term Loan Warrants earn for the full calendar month starting June 23, 2023 to $0.38 million and such amount to increase by $25,000 each additional full calendar month thereafter until the Company repays the Subordinated Term Loan in full.

The Company determined that the Subordinated Term Loan Warrants required liability classification pursuant to ASC 480. As such, the outstanding Subordinated Term Loan Warrants were recognized as warrant liabilities on the consolidated balance sheets, measured at their inception date fair value and subsequently remeasured at each reporting period with changes in fair value being recorded as a component of other income (expense) on the consolidated statements of operations. On December 12, 2022, the outstanding Subordinated Term Loan Warrants in amount of $2.6 million were converted to 136,553 shares of Class A Common Stock and reclassified from liability to stockholders’ (deficit) equity.

On December 30, 2022, the Company entered into the Subordinated Term Loan Warrants Make-Whole Agreement. During the year ended December 31, 2023, the Additional Subordinated Term Loan Warrants in amount of $3.7 million were exercised and converted to 1,355,045 shares of Class A Common Stock and reclassified from liability to stockholders’ (deficit) equity. During the three months ended March 31, 2024, the Additional Subordinated Term Loan Warrants in amount of $1.1 million were exercised and converted to 1,436,726 shares of Class A Common Stock and reclassified from liability to stockholders’ (deficit) equity. As of March 31, 2024, $0.5 million of the Subordinated Term Loan Warrants were outstanding and recorded in warrant liabilities on the accompanying condensed consolidated balance sheet. As of December 31, 2023, no Subordinated Term Loan Warrants were outstanding.

Pursuant to ASC 815, the Company determined that the Additional Subordinated Term Loan Warrants and the Subordinated Term Loan Warrants Make-Whole Agreement are derivatives. These derivatives, referred to throughout as the “Additional Subordinated Term Loan Warrants Derivative” and the “Subordinated Term Loan Warrants Make-Whole Derivative”, respectively, are recorded in derivative liabilities on the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023. The Company performed fair value measurements for the Additional Subordinated Term Loan Warrants Derivative and the Subordinated Term Loan Warrants Make-Whole Derivative, which are described in Note 17. The fair value of the Additional Subordinated Term Loan Warrants Derivative and the Subordinated Term Loan Warrants Make-Whole Derivative are remeasured at each reporting period.

YA Warrant – On November 30, 2022, the Company issued a pre-funded warrant for a purchase price of $6.0 million which was paid by the Yorkville Investor upon issuance (the “YA Warrant”). The YA Warrant is exercisable into $20.0 million of shares of Class A Common Stock at an exercise price of $0.0008 per share any time on or after the earlier of (i) August 30, 2023, and (ii) the date upon which all of the YA Convertible Debentures have been fully repaid by the Company or fully converted into shares of Class A Common Stock. On August 25, 2023 (the “Market Price Set Date”), the YA Convertible Debentures were converted into shares of Class A Common Stock for the full settlements, and the YA Warrant became exercisable at the conversion price of $4.52 per share. The conversion price is to be adjusted to the lowest of (a) the “3-month Reset Price”, which is the average of the daily VWAPs of Class A Common Stock per share during the three consecutive trading days immediately following the 3-month anniversary of the Market Price Set Date, or (b) the “6-month Reset Price”, which is the average of the daily VWAPs of Class A Common Stock per share during the three consecutive trading days immediately following the 6-month anniversary of the Market Price Set Date, in case (a) or (b) is lower than $4.52 per share. The 3-month Reset Price was set at $2.80 per share in November 2023 and the 6-month Reset Price was set at $0.76 per share in February 2024.

The Company determined that the YA Warrant required liability classification pursuant to ASC 480 until the 6-month Reset Price was set on February 28, 2024. While the YA Warrant was liability classified, the outstanding YA Warrant was recognized as warrant liability on the consolidated balance sheets, measured at its inception date fair value and subsequently remeasured at each reporting period with changes being recorded as a component of other income (expense) on the consolidated statements of operations. During the year ended December 31, 2023, the Company issued 499,975 shares of Class A Common Stock for partial exercise of the YA Warrant. The Company measured the fair value of the YA Warrant as of December 31, 2023 and recognized $18.6 million of warrant liability on the accompanying condensed consolidated balance sheets. During the three months ended March 31, 2024, the Company issued 4,104,797 shares of Class A Common Stock for partial exercise of the YA Warrant. On February 28, 2024, the Company remeasured the YA Warrant immediately before the 6-month Reset Price was set, which was valued at $15.5 million and immediately after at $10.8 million. The Company recorded a gain of $4.7 million for the three months ended March 31, 2024 as a component of other income (expense) on the condensed consolidated statement of operations. The Company reclassified the warrant liability of $10.8 million to stockholders’ (deficit) equity on February 28 2024.

Advisor Warrant – Pursuant to the YA SPA executed with the Yorkville Investor on November 30, 2022 (See Note 12), the Company committed to issue a warrant to an advisor for certain professional services provided in connection with the issuance of the facilities (the “Advisor Warrant”). The Advisor Warrant granted the right to purchase up to 62,500 shares of Class A Common Stock at the exercise price of $0.08 any time prior to November 30, 2025. The Advisor Warrant was issued on January 16, 2023. Prior to the issuance of the Advisor Warrant, pursuant to ASC 480, the Company recorded the related obligation as warrant liability on the consolidated balance sheets at its fair value as of the date the obligation incurred and subsequently remeasured at each reporting period with changes in fair value being recorded as a component of other income (expense) on the consolidated statements of operations. Upon issuance of the Advisor Warrant on January 16, 2023, the Company remeasured the fair value of the Advisor Warrant and recognized $0.1 million of loss on change in fair value of the Advisor Warrant as a component of other income (expense) on the accompanying condensed consolidated statement of operations for the three months ended March 31, 2023, and the remeasured Advisory Warrant was reclassified to stockholders’ (deficit) equity on the issuance date. Since the issuance through March 31, 2024, the Advisor Warrant was not exercised.

June 2023 Term Loan Warrants – Pursuant to the June 2023 Term Loan agreement entered into on June 7, 2023 (see Note 6), the Company concurrently entered into warrant agreements and issued the June 2023 Term Loan Warrants, which granted the holders the right to purchase up to 2,121,605 shares of Class A Common Stock (the June 2023 Term Loan Warrants Shares) at the exercise price of $0.08 any time before June 7, 2033. If at any time on or before December 7, 2024, the Company issues additional shares of common stock (excluding any shares of common stock or securities convertible into or exchangeable for shares of common stock under the Company’s equity incentive plans existing as of the issue date), the number of the June 2023 Term Loan Warrants Shares issuable upon exercise immediately prior to such common stock issuance will be proportionately increased such that the percentage represented by the June 2023 Term Loan Warrants Shares in the Company’s diluted common stock outstanding will remain the same. Additionally, the holders of the June 2023 Term Loan Warrants have the right to purchase up to the pro rata portion of any new common stock issuance by the Company up to $20.0 million in the aggregate, other than any issuance in connection with (i) any grant pursuant to any stock option agreement, employee stock purchase plan, or similar equity-based plan or compensation agreement, (ii) the conversion or exchange of any securities into shares of the Company’s common stock, or the exercise of any option, warrant, or other right to acquire such shares, (iii) any acquisition by the Company of the stock, assets, properties, or business, (iv) any merger, consolidation, or other business combination involving the Company, or any other transaction or series of transactions resulting in a change of control of the Company and (v) any stock split, stock dividend, or similar recapitalization transaction. The Company determined that the June 2023 Term Loan Warrants did not qualify for equity classification in accordance with ASC 815. As such, the June 2023 Term Loan Warrants were recognized as warrant liability on the consolidated balance sheets, measured at its inception date fair value and subsequently remeasured at each reporting period with changes in fair value being recorded as a component of other income (expense) on the consolidated statements of operations. The Company measured the fair value of the June 2023 Term Loan Warrants as of March 31, 2024 and December 31, 2023, and recognized $2.2 million and $7.9 million of warrant liability on the accompanying condensed consolidated balance sheets, respectively, with the change in fair value of $5.7 million recognized as a component of other income (expense) on the accompanying condensed consolidated statements of operations for the three months ended March 31, 2024. Since the issuance through March 31, 2024, none of the June 2023 Term Loan Warrants were exercised.

Note 11—Forward Purchase Agreement

On August 4, 2022, the Company and the FPA Sellers entered into the Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). On November 30, 2022, the Company and the FPA Sellers entered into the FPA Termination Agreement and terminated the Forward Purchase Agreement. Pursuant to the FPA Termination Agreement, (i) the Company made a one-time $6.0 million cash payment to the FPA Sellers upon execution of the FPA Termination Agreement and agreed to make a $2.0 million payment to the FPA Sellers, which can be settled in cash or shares of Class A Common Stock at the Company’s sole option, on or around the earlier of (a) May 30, 2024 (the “FPA Lock-Up Date”), and (b) six months following 90% or more of the YA Convertible Debentures is repaid or converted into shares of Class A Common Stock (the “FPA Earlier Lock-Up Date”), (ii) the FPA Sellers forfeited and returned to the Company 277,765 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 267,606 shares of Class A Common Stock the FPA Sellers retained until the earlier of (a) the FPA Lock-Up Date, and (b) the FPA Earlier Lock-Up Date. As more than 90% of the YA Convertible Debentures were converted into shares of Class A Common Stock on August 25, 2023, the FPA Earlier Lock-Up Date was set as February 25, 2024. The value of 277,765 shares of Class A Common Stock returned by the FPA Seller and subsequently canceled by the Company was $4.6 million as of the FPA Termination Agreement execution date, which was recognized in common stock – Class A and accumulated deficit on the consolidated balance sheet. The $2.0 million obligation (the “FPA Settlement Liability”) was included in accrued expenses on the accompanying condensed consolidated balance sheet as of December 31, 2023 and settled by issuance of 1,656,727 shares of Class A Common Stock in February 2024 and $0.8 million cash payment made by the Company in March 2024.

Note 12—Yorkville SPA

Securities Purchase Agreement – On November 30, 2022, the Company entered into the YA SPA with the Yorkville Investor, where by the Company agreed to issue and sell to the Yorkville Investor (i) convertible debentures (the “YA Convertible Debentures”) in the aggregate principal amount of up to $17.0 million, which were convertible into shares of Class A Common Stock (as converted, the “YA Conversion Shares”), and (ii) the YA Warrant, which is exercisable into $20.0 million of shares of Class A Common Stock. Upon execution of the YA SPA, the Company (i) issued and sold to the Yorkville Investor (a) the First YA Convertible Debenture in the principal amount of $7.0 million for a purchase price of $7.0 million, and (b) the YA Warrant for a pre-funded purchase price of $6.0 million, and (ii) paid the Yorkville Investor a cash commitment fee in the amount of $2.0 million, with such amount being deducted from the proceed of the First YA Convertible Debenture, netting to $11.0 million in total proceeds. The Company issued the YA Warrant to utilize the proceed to fund the cost of the FPA Termination Agreement. See Note 6 for additional information regarding the First YA Convertible Debenture and Note 10 regarding the YA Warrant.

Pursuant to execution of the YA SPA, the Company made a $0.4 million payment in cash and committed to issue the Advisor Warrant for certain professional services provided by a third party professional service firm in connection with the issuance of the facilities. The Advisor Warrant was issued on January 16, 2023. See Note 10 for additional information regarding the Advisor Warrant. The cash payment and the Advisor Warrant were recognized as debt issuance cost upon execution of the YA SPA, YA Convertible Debentures and YA Warrant.

Pursuant to the YA SPA, the Yorkville Investor committed to purchasing a YA Convertible Debenture in the principal amount of $10.0 million for a purchase price of $10.0 million upon the Company satisfying certain conditions, including, among others, the Company’s registration statement is declared effective by the SEC for the underlying securities of the First YA Convertible Debenture and YA Warrant. Accordingly, as of the YA SPA execution date, the Company recognized a commitment asset in the amount of $2.1 million, which was included in other noncurrent assets on the consolidated balance sheet as of December 31, 2022. The Second YA Convertible Debenture was issued and sold to the Yorkville Investor on February 3, 2023 and the commitment asset was reclassified to debt discount upon issuance of the Second YA Convertible Debenture. See Note 6 for additional information regarding the Second YA Convertible Debenture.

Note 13—Cantor Sales Agreement

On September 5, 2023, the Company entered into a Controlled Equity Offering Sales Agreement (the “Cantor Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) pursuant to which the Company may offer and sell, from time to time through Cantor, shares of Class A Common Stock for aggregate gross proceeds up to $50.0 million. Pursuant to the Cantor Sales Agreement, Cantor may sell shares of Class A Common Stock in sales deemed to be “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act. The Company has no obligation to sell any shares of Class A Common Stock under the Cantor Sales Agreement. Cantor will act as sales agent and use commercially reasonable efforts to sell on the Company’s behalf all of the shares of Class A Common Stock requested to be sold by the Company. Under the terms of the Cantor Sales Agreement, the Company has agreed to pay Cantor a commission equal to 3.0% of the aggregate gross proceeds from any shares of Class A Common Stock sold pursuant to the Cantor Sales Agreement. The Cantor Sales Agreement will remain in effect until the aggregate gross proceeds of the Company’s sales of shares of Class A Common Stock reach $50.0 million in total unless early terminated under the terms of the Cantor Sales Agreement. The Company did not sell any shares of Class A Common Stock under the Cantor Sales Agreement through March 31, 2024.

Note 14—Equity-based compensation

During the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation related to the 2022 Plans (as defined below).

The 2022 Equity Incentive Plan (the “2022 Plan”), which became effective on August 15, 2022 in connection with the Closing, provides for the grant to certain employees, officers, non-employee directors and other services providers of options, stock appreciation rights, RSUs, restricted stock and other stock-based awards, any of which may be performance-based, and for incentive bonuses, which may be paid in cash, Common Stock or a combination thereof, as determined by the Company’s Compensation Committee. Under the 2022 Plan, 3,982,409 shares of Class A Common Stock were authorized to be issued. Upon approval by the Company’s board of directors, additional 2,055,769 shares of Class A Common Stock became available for issuance on January 1, 2023 under the 2022 Plan as a result of the plan’s evergreen provision.

The following represents a summary of the Company’s RSU activity and related information during the three months ended March 31, 2024:

Schedule of RSUs activity
	Units			Weighted Average Grant Date Fair Value
Nonvested – December 31, 2023		518,625		$	10.02
Granted		-			-
Vested		(198,789	)		9.88
Forfeited/redeemed		(5,794	)		15.84
Nonvested – March 31, 2024		314,042		$	10.00

The remaining RSUs will vest over the requisite service periods ranging from six to thirty-six months from the grant date.

The Company recognized $0.6 million and $9.3 million in total equity compensation costs for the three months ended March 31, 2024 and 2023, respectively.

Some of RSUs settled during the three months ended March 31, 2023 were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately $1.1 million and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payments to the taxing authorities for employees’ tax obligations pertaining to the withheld shares were $1.0 million. As of March 31, 2024, there were 206,906 vested RSUs and 17,331 vested DSUs remaining which are expected to be settled in shares of Class A Common Stock.

As of March 31, 2024, the total unrecognized compensation cost related to outstanding RSUs was $3.2 million, which the Company expects to recognize over a weighted-average period of 1.1 years.

Note 15—Loss per share

Basic net loss per share of Class A Common Stock is computed by dividing net loss attributable to the Company by the weighted average number of shares of Class A Common Stock outstanding during the three months ended March 31, 2024. Diluted net loss per share of Class A Common Stock is computed by dividing net loss attributable to the Company, adjusted for the assumed exchange of all potentially dilutive securities, by weighted average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares.

The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for the three months ended March 31, 2024 are as follows (amounts in thousands, except for share and per share amounts):

Schedule of net loss per share
	Three Months Ended March 31, 2024
Numerator:
Net loss from continuing operations	$	(16,484	)
Less: Net loss from continuing operations attributable to noncontrolling interests		(1,437	)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	$	(15,047	)

Net loss from discontinued operations	$	(669	)
Less: Net loss from discontinued operations attributable to noncontrolling interests		(45	)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$	(624	)

Denominator:
Weighted average shares of Class A Common Stock outstanding – Basic and diluted		46,068,599

Net loss from continuing operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.33	)
Net loss from discontinued operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.01	)

The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for the three months ended March 31, 2023 are as follows (amounts in thousands, except for share and per share amounts):


	Three Months Ended March 31, 2023
Numerator:
Net loss from continuing operations	$	(9,318	)
Less: Net loss from continuing operations attributable to noncontrolling interests		(6,234	)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	$	(3,084	)

Net loss from discontinued operations	$	(133	)
Less: Net loss from discontinued operations attributable to noncontrolling interests		(88	)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$	(45	)

Denominator:
Weighted average shares of Class A Common Stock outstanding – Basic and diluted		7,427,116

Net loss from continuing operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.42	)
Net loss from discontinued operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.01	)

The Company’s potentially dilutive securities below were excluded from the computation of diluted loss per share as their effect would be anti-dilutive:

IPO Warrants, Additional Subordinated Term Loan Warrants, Advisor Warrant, June 2023 Term Loan Warrants, YA Warrant and Rodina Warrant.

Earn-Out Interests.

RSUs and DSUs.

Exchangeable Class V Common Stock.

Potential settlements in Class A Common Stock of the Insider Convertible Debentures, the Third Party Convertible Debentures, the NZ Superfund Convertible Debentures, the June 2023 Term Loan, the Subordinated Term Loan Warrants Make-Whole Agreement and portion of fees for the PIPE Software Services Subscription (as defined in Note 18).

Note 16—Fair value measurements

The following tables summarize the Company’s financial assets and liabilities measured at fair value on recurring basis by level within the fair value hierarchy as of the dates indicated (in thousands):


	As of March 31, 2024
Liabilities	Level 1		Level 2			Level 3
Warrant liabilities	$	-	$	(2,697	)	$	-
Additional Subordinated Term Loan Warrants Derivative		-		-			(2,151	)
Subordinated Term Loan Warrants Make-Whole Derivative		-		-			(9,762	)
Total	$	-	$	(2,697	)	$	(11,913	)

	As of December 31, 2023
Liabilities	Level 1		Level 2			Level 3
Warrant liabilities	$	-	$	(26,493	)	$	-
Additional Subordinated Term Loan Warrants Derivative		-		-			(2,013	)
Subordinated Term Loan Warrants Make-Whole Derivative		-		-			(11,045	)
Total	$	-	$	(26,493	)	$	(13,058	)

Level 3 Rollfoward	Additional Subordinated Term Loan Warrants Derivative			Subordinated Term Loan Warrants Make-Whole Derivative
December 31, 2023 balances	$	(11,045	)	$	(2,013	)
Additions		-			-
Changes in fair value		(367	)		(138	)
Reclassified to level 2		1,650			-
March 31, 2024 balances	$	(9,762	)	$	(2,151	)

The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and contract assets and liabilities, approximate fair value due to their short-term maturities and are excluded from the fair value table above.

Warrant liabilities – The warrant liabilities were classified to level 2 as of March 31, 2024. The outstanding warrants which were classified as warrant liabilities as of March 31, 2024 were the June 2023 Term Loan Warrants and the Subordinated Term Loan Warrant. The sole underlying asset of the outstanding warrant liabilities as of March 31, 2024 was Class A Common Stock, which is an observable input, however the value of the warrants themselves were not directly or indirectly observable. The fair value of the warrant liabilities were determined based on price of the underlying share and the terms of each warrant, specifically whether each warrant is exercisable for a fixed number of shares of Class A Common Stock, hence the value of the total shares a warrant is exercisable for is variable, or a fixed value of shares of Class A Common Stock thus the number of the total shares a warrant is exercisable for is variable. The exercise prices of the liability-classified warrants which were outstanding as of March 31, 2024 were minimal ($0.08 per Class A Common Stock share) and did not have significant impact to the fair value measurements of these warrants. See Note 10 for further information regarding the warrant liabilities.

Additional Subordinated Term Loan Warrants Derivative – The Additional Subordinated Term Loan Warrants Derivative’s fair value was estimated using a discounted cashflow/expected present value method. The value the Additional Subordinated Term Loan Warrants earn was $0.35 million for each additional full calendar month after March 22, 2023 through June 22, 2023, and starting June 23, 2023, the value the Additional Subordinated Term Loan Warrants earn increases by $25,000 for each additional full calendar month thereafter until the Company repays the Subordinated Term Loan in full. The key assumption utilized was the probability of the Subordinated Term Loan remaining unpaid through its maturity, which the Company determined to be approximately 75% as of March 22, 2023, which was the execution date of the second amendment to the Subordinated Term Loan, and approximately 100% as of March 31, 2024. As of March 31, 2024, the Company applied a discount rate of 15.0% to calculate the present value of the Additional Subordinated Term Loan Warrants Derivative. The Company measured and recognized fair value for the Additional Subordinated Term Loan Warrants Derivative at the end of each reporting period in derivative liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in loss on change in fair value of derivatives as a component of other income (expense) on the consolidated statements of operations.

Subordinated Term Loan Warrants Make-Whole Derivative – The Subordinated Term Loan Warrants Make-Whole Derivative’s fair value was estimated using Black Scholes Merton model. The value the Subordinated Term Loan Warrants Make-Whole Agreement is primarily based on the make-whole provision amount between (a) the closing share price of Class A Common Stock on the business day immediately prior to the lender’s exercise of the Subordinated Term Loan Warrants on December 12, 2022 multiplied by the number of the December 2022 Warrant Shares and (b) the closing share price of Class A Common Stock on the business day immediately prior to the lender’s sale of the December 2022 Warrant Shares multiplied by the number of the December 2022 Warrant Shares sold by the lender.

The following table provides quantitative information of the key assumptions utilized in the Subordinated Term Loan Warrants Make-Whole Derivative fair value measurements as of measurement dates:


	As of			As of
	March 31,			December 31,
	2024			2023
Price of Class A Common Stock	$	0.40		$	1.85
Strike Price of Class A Common Stock	$	18.96		$	18.96
Risk-free interest rate		4.35	%		3.90	%
Expected volatility		90.0	%		85.0	%
Expiration Date		December 12, 2027			December 12, 2027

The Company measured and recognized fair value for the Subordinated Term Loan Warrants Make-Whole Derivative at the end of each reporting period in derivative liabilities on the consolidated balance sheets, with the respective fair value adjustment recorded in loss on change in fair value of derivatives as a component of other income (expense) on the consolidated statements of operations.

Note 17—Commitments and contingencies

Legal Matters

In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims.

On March 22, 2024, a lawsuit was filed against the Company by Cass Information Systems, Inc. (“Cass”) in the Circuit Court of St. Louis County, Missouri (Cass Information Systems, Inc. v. Rubicon Technologies, Inc.) alleging the Company’s nonpayment of $14.3 million in total of reimbursements of vendor invoices prepaid by Cass and certain fees for Cass’ services. The Company subsequently filed a response by disputing Cass’ allegations.

The Company makes a provision for liabilities relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate.

In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on the Company’s consolidated statements of operations, cash flows or balance sheets. However, depending on the nature and timing of any such dispute or other contingency, an unfavorable resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both.

Management Rollover Settlement

As further described in Note 7, during the year ended December 31, 2023, the Company settled with certain Rubicon Management Rollover Holders a portion of the accrued management rollover consideration and the Company agreed to make quarterly cash payments to these Rubicon Management Rollover Holders through December 31, 2026, of which $2.8 million is coming due in the next 12 months of March 31, 2024 and $3.6 million thereafter.

Leases

The Company leases its office facilities under operating lease agreements expiring in 2024. While each of the leases includes renewal options, the Company has only included the base lease term in its calculation of lease assets and liabilities as it is not reasonably certain to utilize the renewal options. The Company does not have any finance leases.

The following table presents information regarding the maturities of the undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented on the accompanying condensed consolidated balance sheet as of March 31, 2024 (in thousands).

Schedule of operating lease payments
Years Ending December 31,
2024	$	424
Total minimum lease payments		424
Less: Imputed interest		(26	)
Total operating lease liabilities	$	398

Operating lease amounts above do not include sublease income. The Company has a sublease agreement with a third party and expects to receive sublease income of approximately $0.1 million through May 2024.

Note 18—Related party transactions

PIPE Software services subscription – The Company entered into a software services subscription agreement with Palantir Technologies Inc., a PIPE Investor (the “PIPE Software Services Subscription”), including related support and update services on September 22, 2021. The Company subsequently amended the agreement on December 15, 2021, March 6, 2023, March 28, 2023, June 27, 2023, and September 30, 2023. The term of the amended agreement is through December 31, 2024. As of March 31, 2024, $15.0 million will become due in the next 12 months. The amended agreement provides the Company with the option, in its sole discretion, to settle the $7.5 million subscription fees which are scheduled to become due through June 2024 in cash or Class A Common Stock. Pursuant to the amended agreement entered into on September 30, 2023, for each payment for December 2023, March 2024 and June 2024 the Company makes in Class A Common Stock, the Company has an option to repurchase such Class A Common Stock at a price equal to 130% of the per share price applicable for each such payment during the 18-month period following such shares of Class A Common Stock become tradable by the PIPE Investor. During the three months ended March 31, 2024, the Company issued 2,246,182 shares of Common Stock to the PIPE Investor to settle $3.8 million of the fee for the subscription from October 1, 2023 to December 31, 2023.

Convertible debentures – On December 16, 2022, the Company issued the Insider Convertible Debentures, which were subsequently amended, with certain members of the Company’s management team and board of directors, and certain other existing investors of the Company.

On February 1, 2023, the Company issued the NZ Superfund Convertible Debenture, which was subsequently amended, with NZ Superfund.

See Note 6 for further information regarding these convertible debentures.

Rodina Warrant – On September 15, 2023, the Company issued a warrant to an entity affiliated with Andres Chico and Jose Miguel Enrich which granted the right to purchase 498,119 shares of Class A Common Stock. See Note 10 for further information regarding the Rodina Warrant.

September 2023 Rodina Letter of Credit – On September 22, 2023, an entity affiliated with Andres Chico and Jose Miguel Enrich issued a standby letter of credit in the amount of $15.0 million to the lender of the June 2023 Revolving Credit Facility on behalf of the Company, which increased the Company’s borrowing capacity under the facility by $15.0 million. The expiration date of this September 2023 Rodina Letter of Credit is September 30, 2024 with an automatic renewal option for one additional year through September 30, 2025. See Note 6 for further information regarding the September 2023 Rodina Letter of Credit.

Rodina Sponsor Capital Contribution Agreement – On January 24, 2024, the Company entered into a sponsor capital contribution agreement with an entity affiliated with Andres Chico and Jose Miguel Enrich, pursuant to which the entity agreed to make a cash contribution to the Company equal to the lesser of (i) $5.0 million or (ii) the amount necessary to cause the Company’s available funds equal to $16.0 million, in case the temporally modified calculation methodology of the borrowing base collateral which went effective with the amendment to the June 2023 Revolving Credit Facility entered into on December 5, 2023 is extended to June 15, 2024. If the entity makes any contributions pursuant to the sponsor capital contribution agreement, the Company will issue a number of Class A Common Stock shares at similar value to the entity’s contribution in exchange.

Sale of the SaaS Business – As further disclosed under Note 4 and Note 20, on May 7, 2024, the Company entered into an agreement with an entity affiliated with Andres Chico and Jose Miguel Enrich, to sell the SaaS Business for a purchase price of $68.2 million. The agreement also provides a potential earn-out payment to the Company of $12.5 million if the SaaS Business sales achieves a certain annual recurring revenue target on or prior to December 31, 2024.

Rodina Securities Purchase Agreement – As further disclosed under Note 4 and Note 20, on May 7, 2024, the Company entered into a Securities Purchase Agreement (the “Rodina SPA”) with an entity affiliated Andres Chico and Jose Miguel Enrich. Pursuant to the Rodina SPA, the Company issued and sold 20,000 shares of Rubicon’s Series A Convertible Perpetual Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) for an aggregate purchase price of $20.0 million.

Note 19—Concentrations

During the three months ended March 31, 2024, the Company had two customers who individually accounted for 10% or more of the Company’s total revenue and together accounted for approximately 36% of the Company’s total revenue. During the three months ended March 31, 2023, the Company had one customer who individually accounted for 10% or more of the Company’s total revenue for approximately 16% of the total revenue. As of March 31, 2024, the Company had three customers who individually accounted for 10% or more of the Company’s total accounts receivable and contract assets, and together for approximately 52% of the total accounts receivable and contract assets, while as of December 31, 2023, the Company had three customers who individually accounted for 10% or more of the Company’s total accounts receivable and contract assets and together for approximately 58% of the total accounts receivable and contract assets.

Note 20—Subsequent events

As disclosed under Note 4, on May 7, 2024, the Company entered into an agreement with an entity affiliated with Andres Chico and Jose Miguel Enrich to sell the SaaS Business for a purchase price of $68.2 million and closed the transaction. The agreement also provides a potential earn-out payment to the Company of $12.5 million if the SaaS Business sales achieves a certain annual recurring revenue target on or prior to December 31, 2024.

On May 7, 2024, the Company entered into the Rodina SPA with an entity affiliated with Andres Chico and Jose Miguel Enrich. Pursuant to the Rodina SPA, the Company issued and sold 20,000 shares of Rubicon’s Series A Convertible Perpetual Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) for an aggregate purchase price of $20.0 million. The Preferred Stock is entitled to receive, whether or not declared, dividends at the rate of 8.0% per annum of the stated value per share of the Preferred Stock. On the second anniversary of the closing date and each anniversary thereafter, the dividend rate on the Preferred Stock will increase by 1.0% per annum, up to a maximum dividend rate not to exceed 11.0% per annum. Each holder of the Preferred Stock has the right, at its option, to convert its Preferred Stock, in whole or in part, into shares of Class A Common Stock. The conversion price is $0.35 per share. As the issuance, the Preferred Stock was convertible into 57,142,857 shares of Class A Common Stock. The Preferred Stock will rank senior to Class A Common Stock and any other capital stock of Rubicon, with respect to dividend rights and rights upon voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Company. The Preferred Stock will vote on an as-converted basis with Class A and Class V Common Stock. The issuance of the Rodina SPA met change in control provisions in the Company’s certain agreements. The Company is currently evaluating any potential impact this matter may have. In relation to this matter, the Company received waivers from the lenders of the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan.

On May 7, 2024, the Company entered into an amendment to the June 2023 Revolving Credit Facility. Pursuant to the amendment, (i) the lender consented to the SaaS Business sale and (ii) the Company agreed to make a partial prepayment of $11.4 million upon close of the sale of SaaS Business sale. Concurrently, the Company executed a side letter with the lender of the June 2023 Revolving Credit Facility, which included additional non-financial covenants for certain time-based milestones in relation to potential transactions the Company may enter into in future periods, including an agreement of a sale of all or substantially all of the Company’s assets or a merger. If any of the milestones are not met and such failure is not cured by the Company in accordance with such terms, the June 2023 Revolving Credit Facility will become due in full within ten months of May 7, 2024.

On May 7, 2024, the Company entered into an amendment to the June 2023 Term Loan agreement. Pursuant to the amendment, the lender consented to the sale of SaaS Business and (ii) the Company agreed to make a partial prepayment of $45.6 million upon close of the SaaS Business sale. Concurrently, the Company executed a side letter with the lender of the June 2023 Term Loan, which included additional non-financial covenants for certain time-based milestones in relation to potential transactions the Company may enter into in future periods, including an agreement of a sale of all or substantially all of the Company’s assets or a merger. If any of the milestones are not met and such failure is not cured by the Company in accordance with such terms, the June 2023 Term Loan will become due in full within ten months of May 7, 2024.

On May 7, 2024, the Company entered into an amendment to the Subordinated Term Loan agreement. Pursuant to the amendment, the lender consented to the sale of the SaaS Business. Concurrently, the Company executed a side letter with the lender of the Subordinated Term Loan, which included additional non-financial covenants for certain time-based milestones in relation to potential transactions the Company may enter into in future periods, including an agreement of a sale of all or substantially all of the Company’s assets or a merger. If any of the milestones are not met and such failure is not cured by the Company in accordance with such terms, the Subordinated Term Loan will become due in full within ten months of May 7, 2024.

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

The following discussion and analysis of the financial condition and results of operations of Rubicon Technologies, Inc., a Delaware corporation (“Rubicon,” “we,” “us,” and “our”), should be read together with our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, the risks and uncertainties discussed herein and under the caption “Cautionary Note Regarding Forward-Looking Statements” in this report. We assume no obligation to update any of these forward-looking statements except as required by law.

Overview

We are a digital marketplace for waste and recycling services. Underpinning this marketplace is a cutting-edge, modular platform that powers a modern, digital experience and delivers data-driven insights and transparency for our customers and hauling and recycling partners. We provide our waste generator customers with a platform that delivers pricing transparency, self-service capabilities, and a seamless customer experience while helping them achieve their environmental goals; we enhance our hauling and recycling partners’ economic opportunities and help them optimize their businesses; and we help governments provide more advanced waste and recycling services that allow them to serve their local communities more effectively.

Over the past decade, this value proposition has allowed us to scale our platform considerably. Our digital marketplace now serves over 8,000 customers, including numerous large, blue-chip customers such as Apple, Dollar General, Starbucks, Walmart, Chipotle, and FedEx, and encompasses over 8,000 hauling and recycling partners across North America. We have also deployed our technology in over 100 municipalities in the United States and operate in 20 countries. Furthermore, we have secured a robust portfolio of intellectual property, having been awarded more than 60 patents and 15 trademarks.

We operate as one segment. See Note 1 – Nature of operations and summary of significant accounting policies, to our unaudited interim condensed consolidated financial statements included elsewhere in this report for our discussion about segments.

Recent Developments

Rodina Sponsor Capital Contribution Agreement

On January 24, 2024, we entered into a sponsor capital contribution agreement with an entity affiliated with Andres Chico and Jose Miguel Enrich. See “Contractual Obligations” and “Liquidity and Capital Resources—Other Financing Arrangements” below.

Discontinued Operations

As disclosed in Note 4 – Discontinued operations of SaaS Business and Note 20 – Subsequent events, to our unaudited interim condensed consolidated financial statements included elsewhere in this report, on May 7, 2024, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) to sell the SaaS Business to an entity affiliated with Andres Chico and Jose Miguel Enrich, for a purchase price of $68.2 million. The agreement also provides a potential earn-out payment to us of $12.5 million if the SaaS Business sales achieves a certain annual recurring revenue target on or prior to December 31, 2024.

Rodina Security Purchase Agreement

On May 7, 2024, we entered into a Securities Purchase Agreement (the “Rodina SPA”) with an entity affiliated with Andres Chico and Jose Miguel Enrich. Pursuant to the Rodina SPA, we agreed to issue and sell 20,000 shares of Rubicon’s Series A Convertible Perpetual Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) for an aggregate purchase price of $20.0 million. See “Liquidity and Capital Resources—Other Financing Arrangements” below.

Amendment to the June 2023 Revolving Credit Facility

On May 7, 2024, we entered into an amendment to the June 2023 Revolving Credit Facility. Pursuant to the amendment, (i) the lender consented to the SaaS Business sale and (ii) we agreed to make a partial prepayment of $11.4 million upon close of the SaaS Business sale, which was completed on May 7, 2024. See “Liquidity and Capital Resources—Debt” below.

Amendment to the June 2023 Term Loan

On May 7, 2024, we entered into an amendment to the June 2023 Term Loan agreement. Pursuant to the amendment, (i) the lender consented to the SaaS Business sale and (ii) we agreed to make a partial prepayment of $45.6 million upon close of the SaaS Business sale, which was completed on May 7, 2024. See “Liquidity and Capital Resources—Debt” below.

Amendment to the Subordinated Term Loan

On May 7, 2024, we entered into an amendment to the Subordinated Term Loan agreement. Pursuant to the amendment, (i) the lender consented to the SaaS Business sale, which was completed on May 7, 2024. See “Liquidity and Capital Resources—Debt” below.

Key Factors Affecting Our Performance

Financial results from our operations and the growth and future success of our business are dependent upon many factors. While each of these factors presents significant opportunities for us, they also pose challenges that we must successfully address to sustain and grow our business. See also “—Key Metrics and Non-GAAP Financial Measures” below for a discussion of key business and non-GAAP metrics that we use to help manage and evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

Industry trends and customers preference

The waste and recycling industry is highly regulated and complex, and public policy is increasingly focused on improving diversion from landfills and reducing emissions. Current policies tend to encourage and reward reductions in carbon dioxide emissions, and many major cities in the United States have promulgated climate action plans committing to achieve emissions reductions. Additionally, the waste generators’ awareness of benefits achieved by improved diversion from landfills has been increasing, which we believe is and will continue to drive preference for recycling over landfills. We view these trends as an opportunity to accelerate the growth of our business, including our revenue and profitability.

Commodity nature of our recycling program

Through our recycling program, we market a variety of materials, including fibers such as old corrugated cardboard (“OCC”), old newsprint (“ONP”), aluminum, glass, pallets and other materials. Currently, OCC is the most significant material in our recycling program. Our recyclable commodity revenue is influenced by fluctuations in prices of the recyclable commodities. Periods of increasing prices generally provide the opportunity for higher revenue while periods of declining prices may result in declines in sales. For the reporting periods, the trend of the recyclable commodity prices was generally upward and contributed to higher recyclable commodity revenue in recent periods. For the three months ended March 31, 2024 and 2023, our recyclable commodity revenue was $15.8 million and $14.7 million, respectively.

We may use a number of strategies to mitigate impacts from recyclable commodity price fluctuations, including, entering into purchase contracts indexed to the recyclable commodity price such that we mitigate the variability in cash flows generated from the sales of recycled materials at floating prices. We do not use financial instruments for trading purposes and are not a party to any leveraged derivatives. As of March 31, 2024, we were not a party to any recyclable commodity hedging agreements.

Investment in products

We are actively investing in our business to support future growth and we expect this investment to continue. We have built a leading cloud-based digital marketplace that provides a transformational customer experience through an easy-to-use interface, where customers can manage services, track invoices, and view environmental outcomes. We believe that our platform is highly differentiated, and we expect to continue to invest in product development to further develop and enhance our platform’s features and functionality to further extend the adoption of our platform. While we continue to invest in product development, we are focusing on operational efficiencies and cost reduction measures, such as rationalizing redundancies across the organization. For the three months ended March 31, 2024 and 2023, our product development cost was $7.3 million and $8.1 million, respectively. We expect product development costs to decrease as a percentage of total revenues in the next 12 months.

Components of Results of Operations

Revenue

We generate our revenue from waste removal, waste management and consultation services, platform subscriptions, and the sale of recyclable commodities.

Service revenue:

Service revenues are comprised of waste removal and consultation services provided to customers for waste, recycling and logistics solutions. Services include planning, consolidation of billing and administration, cost savings analyses, vendor procurement and performance management, and a suite of solutions providing insights into the customers’ waste streams.

Recyclable commodity revenue:

We recognize recyclable commodity revenue through the sale of old corrugated cardboard (“OCC”), old newsprint (ONP), aluminum, glass, pallets and other recyclable materials.

Cost of revenue, exclusive of amortization and depreciation

Cost of service revenues primarily consists of expenses related to delivering our service and providing support, including third-party hauler costs, costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and employee-related costs such as salaries and benefits. Cost of recyclable commodity revenues is comprised of expenses related to purchases of recyclable materials and any associated transportation fees.

As part of our services, we work with our customers to locate opportunities to reduce waste volume and service frequency with the intention to reduce costs for the customers which in turn leads to reduced costs for us. We are typically entitled to bill for a portion of such savings the customers realize as a result of our services in accordance with the terms of our customer contracts.

Sales and marketing

Sales and marketing expenses consist primarily of compensation costs, including salaries, bonuses, benefits and other incentives to our sales and marketing personnel, advertising expenses, digital marketing expenses, sales commissions and other promotional expenditures.

Product development

Product development expenses consist primarily of compensation costs, including salaries, bonuses and other benefits to our product development team, contract labor expenses and fees for software licenses, consulting, legal, and other services.

General and administrative

General and administrative expenses consist primarily of compensation and benefits related costs, including equity-based compensation expense for our general corporate functions. General and administrative costs also consist of third-party professional service fees for external legal, accounting, and other consulting services, insurance charges, hosting fees and overhead costs.

We expect that general and administrative expenses will decrease as a percentage of total revenues over the next several years as a result of our increased focus on operational efficiencies, planned cost reduction measures across the organization and the sale of our SaaS Business. We are working to eliminate redundancies across the organization, which were a byproduct of our growth and expansion phase the past few years.

Gain on settlement of incentive compensation

Gain on settlement of incentive compensation consists of a gain from settlements of the management rollover bonuses in connection with the Mergers.

Amortization and depreciation

Amortization and depreciation consist of depreciation and amortization expenses associated with our property and equipment, acquired intangible assets and customer acquisition costs.

Interest expense

Interest expense consists primarily of interest expense associated with our outstanding debt, including accretion of debt issuance costs.

Results of Operations

The following tables show our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.

Comparison of the three months ended March 31, 2024 and 2023

	Three Months Ended
	March 31,
	2024			2023			Change $			Change %
	(in thousands, except changes in percentage)
Revenue
Service	$	147,252		$	164,324		$	(17,072	)		(10.4	)%
Recyclable commodity		15,810			14,733			1,077			7.3	%
Total revenue		163,062			179,057			(15,995	)		(8.9	)%
Costs and expenses:
Cost of revenue (exclusive of amortization and depreciation)
Service		140,347			157,514			(17,167	)		(10.9	)%
Recyclable commodity		14,055			13,187			868			6.6	%
Total cost of revenue (exclusive of amortization and depreciation)		154,402			170,701			(16,299	)		(9.5	)%
Sales and marketing		1,688			2,445			757	)		(31.0	)%
Product development		6,625			7,441			(816	)		(11.0	)%
General and administrative		13,086			18,188			(5,102	)		(28.1	)%
Gain on settlement of incentive compensation		-			(18,622	)		18,622			(100.0	)%
Amortization and depreciation		931			1,113			(182	)		(16.4	)%
Total costs and expenses		176,732			181,266			(4,534	)		(2.5	)%
Loss from operations		(13,670	)		(2,209	)		(11,461	)		NM
Other income (expense):
Interest earned		32			1			31			NM
Gain (loss) on change in fair value of warrant liabilities		10,577			(55	)		10,632			NM
Gain on change in fair value of earn-out liabilities		111			4,820			(4,709	)		(97.7	)%
Loss on change in fair value of derivatives		(1,299	)		(2,198	)		899			(40.9	)%
Gain on service fee settlements in connection with the Mergers		-			632			(632	)		(100.0	)%
Loss on extinguishment of debt obligations		-			(2,103	)		2,103			(100.0	)%
Interest expense		(10,750	)		(7,176	)		(3,574	)		49.8	%
Related party interest expense		(522	)		(593	)		71			(12.0	)%
Other expense		(951	)		(421	)		(530	)		125.9	%
Total other income (expense)		(2,802	)		(7,093	)		4,291			(60.5	)%
Loss from continuing operations before income taxes		(16,472	)		(9,302	)		(7,170	)		77.1	%
Income tax expense		12			16			(4	)		(25.0	)%
Net loss from continuing operations	$	(16,484	)	$	(9,318	)	$	(7,166	)		76.9	%
Discontinued operations:
Loss from discontinued operations before income taxes		(669	)		(133	)		(536	)		NM
Income tax expense		-			-			-			NM
Net loss from discontinued operations		(669	)		(133	)		(536	)		NM

Net loss	$	(17,153	)	$	(9,451	)	$	(7,702	)		81.5	%

Net loss from continuing operations attributable to noncontrolling interests		(1,437	)		(6,234	)		4,797			(76.9	)%
Net Loss from continuing operations attributable to Class A common stockholders	$	(15,047	)	$	(3,084	)	$	(11,963	)		NM
Net loss from discontinued operations attributable to noncontrolling interests		(45	)		(88	)		43			(48.9	)%
Net loss from discontinued operations attributable to Class A common stockholders	$	(624	)	$	(45	)	$	(579	)		NM

NM – not meaningful

Revenue

Total revenue from continuing operations decreased by $16.0 million, or 8.9%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Service revenue decreased by $17.1 million, or 10.4%, primarily due to the loss of revenue from canceled customer contracts in the amount of $34.9 million, which was partially offset by increased services and volume with existing customers in the amount of $12.2 million, additional revenue from new customers of $3.4 million and higher prices charged to existing customers in the amount of $2.2 million.

Revenue from sales of recyclable commodities increased by $1.1 million, or 7.3%, primarily due to a $4.9 million increase driven by higher sales prices of recyclable commodities, especially in OCC, partially offset by a $3.8 million decrease related to canceled customers and a decrease in volume for the remaining customers.

Total revenue from discontinued operations increased by $1.0 million to $3.0 million from $2.0 million, or 47.6%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase is primarily due to additional revenue from new customers.

Cost of revenue, exclusive of amortization and depreciation

Total cost of revenue from continuing operations decreased by $16.3 million, or 9.5%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Cost of service revenue decreased by $17.2 million, or 10.9%, primarily due to a $32.7 million decrease in hauling-related costs, as we did not incur costs associated with canceled customer contracts, and a $0.5 million decrease in the customer operations costs driven by lower workforce costs. The decrease in cost of service revenue was partially offset by service expansion and higher volumes from existing and new customers which increased by $7.0 million and $3.7 million, respectively, and an increase of $5.6 million driven by higher vendor prices.

Cost of recyclable commodity revenue increased by $0.9 million, or 6.6%, primarily due to a $4.9 million increase in the cost of recyclable commodities sold, mainly driven by increase in the price of OCC, partially offset by a decrease in volume of $3.5 million related to canceled customers, and a decrease in volume of $0.6 million for the remaining customers.

Total cost of revenue from discontinued operations increased by $0.5 million to $1.0 million from $0.5 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase is primarily due to costs incurred for the new customers.

Sales and marketing

Sales and marketing expenses from continuing operations for the three months ended March 31, 2024 decreased $0.8 million, or 31.0% compared to the three months ended March 31, 2023. The decrease was primarily attributable to a decrease in marketing content activities by $0.1 million, a decrease in consulting services costs by $0.1 million, and a decrease in stock based compensation expense by $0.2 million.

Sales and marketing expenses from discontinued operations increased by $0.7 million to $1.5 million from $0.8 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase is primarily due to larger spending on marketing and demand generation activities.

Product development

Product development expenses from continuing operations decreased by $0.8 million, or 11%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily attributable to lower workforce related costs of $0.4 million due to lower headcount from the product development group and lower software development costs of $0.2 million as the result of the ongoing cost saving initiatives.

Product development expenses from discontinued operations for the three months ended March 31, 2024 were $0.7 million and relatively unchanged compared to the three months ended March 31, 2023 of $0.7 million.

General and administrative

General and administrative expenses from continuing operations decreased by $5.1 million, or 28.1%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily attributable to a lower severance costs by $3.6 million mainly due to the departure of executives during the three months ended March 31, 2023 that did not repeat in 2024, a decrease in payroll-related cost by $0.8 million due to lower headcount, as well as a decrease in legal service costs by $0.6 million.

General and administrative expenses from discontinued operations for the three months ended March 31, 2024 were $0.2 million and relatively unchanged compared to the three months ended March 31, 2023 of $0.1 million.

Gain on settlement of incentive compensation

Gain on settlement of incentive compensation decreased by $18.6 million, or 100%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The $18.6 million gain on settlement of incentive compensation for the three months ended March 31, 2023 was entirely attributable to replacing the accrued management rollover consideration valued at $26.8 million with RSU awards which were valued at $8.2 million during the period, which did not repeat in 2024.

Amortization and depreciation

Amortization and depreciation expenses from continuing operations decreased by $0.2 million, or 16.4%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily attributable to a decrease of $0.2 million in depreciation expense due to fewer assets to be depreciated after the termination of our Kentucky office lease and the downsizing of our Atlanta office lease during the second half of 2023.

Amortization and depreciation expenses from discontinued operations for the three months ended March 31, 2024 were $0.3 million and relatively unchanged compared to the three months ended March 31, 2023 of $0.2 million.

Other income (expense)

Other expense decreased by $4.3 million, or 60.5%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily attributable to a $10.6 million increase in gain on change in fair value of warrants liabilities and a $2.1 million decrease in loss on extinguishment of debt obligations, offset by a $4.7 million decrease in gain on change in fair value of earn-out liabilities and a $3.5 million increase in interest expense, including related party interest expense, due to higher borrowings under the revolving line of credit, term loan facilities and convertible notes as well as higher interest rates under revolving credit facility and term loan facilities for the three months ended March 31, 2024.

Income tax expense

Income tax expense for the three months ended March 31, 2024 were relatively unchanged compared to the three months ended March 31, 2023.

Key Metrics and Non-GAAP Financial Measures

In addition to the measures presented in our unaudited interim condensed consolidated financial statements, we use the following key business and non-GAAP metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. Key metrics and non-GAAP financial measures presented below include the results from both the continuing and discontinued operations. See Note 4 – Discontinued operations of the SaaS Business, to our unaudited interim condensed consolidated financial statements included elsewhere in this report for the further information regarding the discontinued operations.

Revenue net retention

We believe our ability to retain customers is an indicator of the stability of our revenue base and the long-term value of our customer relationships. We calculate revenue net retention as a year-over-year comparison that measures the percentage of revenue recognized in the current quarter from customers retained from the corresponding quarter in the prior year. We believe that our revenue net retention rate is an important metric to measure overall client satisfaction and the general quality of our service offerings as it is a composition of revenue expansion or contraction within our customer accounts.

Our revenue net retention rate was 90.0% and 110.1% as of March 31, 2024 and 2023, respectively.

Adjusted gross profit and adjusted gross profit margin

Adjusted gross profit is a non-GAAP financial measure which is calculated by adding back amortization and depreciation for revenue generating activities and platform support costs to GAAP gross profit, the most comparable GAAP measurement. Adjusted gross profit margin is calculated as adjusted gross profit divided by total GAAP revenue.

We believe adjusted gross profit and adjusted gross profit margin are important measures and useful to investors because they show the progress in scaling our digital platform by quantifying the markup and margin, we charge our customers that are incremental to our marketplace vendor costs. These measures demonstrate this progress because changes in these measures are driven primarily by our ability to optimize services for our customers, improve our hauling and recycling partners’ efficiency and achieve economies of scale on both sides of the marketplace. Our management team uses these non-GAAP measures as one of the means to evaluate the profitability of our customer accounts, exclusive of certain costs that are generally fixed in nature, and to assess how successful we are in achieving our pricing strategies. However, it is important to note that other companies, including companies in our industry, may calculate and use these measures differently or not at all, which may reduce their usefulness as a comparative measure. Further, these measures should not be read in isolation from or without reference to our results prepared in accordance with GAAP.

The following table shows the calculation of GAAP gross profit and a reconciliation of (i) GAAP gross profit to non-GAAP adjusted gross profit and GAAP gross profit margin to non-GAAP adjusted gross profit margin, (ii) amortization and depreciation for revenue generating activities to total amortization and depreciation and (iii) platform support costs to total cost of revenue (exclusive of amortization and depreciation) for each of the periods presented:

	Three Months Ended
	March 31,
	2024			2023
	(in thousands, except percentages)
Total revenue	$	166,075		$	181,098
Less: total cost of revenue (exclusive of amortization and depreciation)		155,402			171,188
Less: amortization and depreciation for revenue generating activities		573			574
Gross profit	$	10,100		$	9,336
Gross profit margin		6.1	%		5.2	%

Gross profit	$	10,100		$	9,336
Add: amortization and depreciation for revenue generating activities		573			574
Add: platform support costs⁽¹⁾		6,430			6,236
Adjusted gross profit	$	17,103		$	16,146
Adjusted gross profit margin		10.3	%		8.9	%

Amortization and depreciation for revenue generating activities	$	573		$	574
Amortization and depreciation for sales, marketing, general and administrative activities		640			787
Total amortization and depreciation	$	1,213		$	1,361

Platform support costs⁽¹⁾	$	6,430		$	6,236
Marketplace vendor costs⁽²⁾		148,972			164,952
Total cost of revenue (exclusive of amortization and depreciation)	$	155,402		$	171,188

⁽¹⁾	We define platform support costs as costs to operate our revenue generating platforms that do not directly correlate with volume of sales transactions procured through our digital marketplace. Such costs include employee costs, data costs, platform hosting costs and other overhead costs.
⁽²⁾	We define marketplace vendor costs as direct costs charged by our hauling and recycling partners for services procured through our digital marketplace.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure and GAAP net loss is its most comparable GAAP measurement. We define adjusted EBITDA as GAAP net loss adjusted to exclude interest expense and income, income tax expense and benefit, amortization and depreciation, gain or loss on extinguishment of debt obligations, equity-based compensation, gain or loss on change in fair value of warrant liabilities, gain or loss on change in fair value of earn-out liabilities, gain or loss on change in fair value of derivatives, executive severance charges, gain or loss on settlement of the management rollover bonuses, gain or loss on service fee settlements in connection with the Mergers, other non-operating income and expenses, and unique non-recurring income and expenses.

We have included adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses. Further, we believe it is helpful in highlighting trends in our operating results because it allows for more consistent comparisons of financial performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management, as well as items that may differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. It is also often used by analysts, investors and other interested parties in evaluating and comparing our results to other companies within our industry. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of net loss or our other results as reported under GAAP. Some of these limitations are:

●

adjusted EBITDA does not reflect our cash expenditures, future requirements for capital expenditures, or contractual commitments;

●

adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

●

adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;

●

although amortization and depreciation are non-cash charges, the assets being amortized and depreciated will often have to be replaced in the future and adjusted EBITDA does not reflect any cash requirements for such replacements;

●

adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items for which we may make adjustments in historical periods; and

●

other companies in our industry may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to adjusted EBITDA for each of the periods presented:

	Three Months Ended
	March 31,
	2024			2023
	(in thousands, except percentages)
Total revenue	$	166,075		$	181,098

Net loss	$	(17,153	)	$	(9,451	)
Adjustments:
Interest expense		10,750			7,176
Related party interest expense		522			593
Interest earned		(111	)		(1	)
Income tax expense		12			16
Amortization and depreciation		1,213			1,361
Loss on extinguishment of debt obligations		-			2,103
Equity-based compensation		563			9,302
(Gain) loss on change in fair value of warrant liabilities		(10,577	)		55
Gain on change in fair value of earn-out liabilities		(32	)		(4,820	)
Loss on change in fair value of derivatives		1,299			2,198
Executive severance charges		1,532			4,553
Gain on settlement of Management Rollover Bonuses		-			(26,826	)
Gain on service fee settlements in connection with the Mergers		-			(632	)
Other expenses⁽³⁾		951			421
Adjusted EBITDA	$	(11,031	)	$	(13,952	)
Net loss as a percentage of total revenue		(10.3	)%		(5.2	)%
Adjusted EBITDA as a percentage of total revenue		(6.6	)%		(7.7	)%

⁽³⁾	Other expenses primarily consist of foreign currency exchange gains and losses, taxes, penalties, fees for certain financing arrangements and gains and losses on sale of property and equipment.

Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows in the short- and long-term to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions and investments, and other commitments and contractual obligations. We consider liquidity in terms of cash flows from operations and other sources, and their sufficiency to fund our operating and investing activities.

Our principal sources of liquidity have been borrowings under our credit facilities, proceeds from the issuance of equity and warrant exercises and cash generated by operating activities. Our primary cash needs are for day-to-day operations, to fund working capital requirements, to fund our growth strategy, and to service our debt obligations.

Our principal uses of cash in recent periods have been funding operations and servicing debts. Our long-term future capital requirements will depend on many factors, including revenue growth rate, achieving higher profitability on our revenue contracts, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support investments, including research and development efforts and the continuing market adoption of our products.

During the three months ended March 31, 2024, and in each fiscal year since the Company’s inception, we have incurred losses from operations and generated negative cash flows from operating activities. We also have negative working capital and stockholders’ deficit as of March 31, 2024. Our total current liabilities as of March 31, 2024 were $226.0 million.

As of March 31, 2023, cash and cash equivalents totaled $13.8 million, accounts receivable totaled $52.0 million and unbilled accounts receivable totaled $60.0 million. Availability under our June 2023 Revolving Credit Facility, which provided the ability to borrow up to $90.0 million, was $-0-. Our outstanding indebtedness includes the June 2023 Revolving Credit Facility, the June 2023 Term Loan, the Subordinated Term Loan and the convertible debentures, under which the principal of $72.0 million, $89.5 million, $20.9 million and $20.3 million, respectively, were outstanding as of March 31, 2024. Pursuant to the Cantor Sales Agreement, we may offer and sell up to $50.0 million of shares of Class A Common Stock through Cantor. However, it is uncertain how quickly Cantor will be able to sell such shares of Class A Common Stock at the price that we requests to deliver additional liquidity to the Company.

We currently project that we will not have sufficient cash on hand or available liquidity under existing arrangements to meet our projected liquidity needs for the next 12 months. As a result, there is substantial doubt about our ability to continue as a going concern.

To address liquidity needs, we have executed various initiatives to modify our operations to reduce spending and improve cash flow. Initiatives we have undertaken in recent periods include (i) increased focus on operational efficiencies and cost reduction measures, (ii) eliminating redundancies that have been the byproduct of our recent growth and expansion, (iii) evaluating our portfolio and less profitable accounts to better ensure we are deploying resources efficiently, and (iv) exercising strict capital discipline for future investments, such as requiring investments to meet minimum hurdle rates. Additionally, on May 7, 2024, we have completed the sale of certain assets and entered into the Rodina SPA which provided the Company with additional cash, a portion of which were used to make partial payments to the June 2023 Revolving Credit Facility and the June 2023 Term Loan.

We believe that additional capital will be needed to provide sufficient liquidity to meet the Company’s known liquidity needs for the next 12 months given that the June 2023 Revolving Credit Facility is scheduled to mature and the borrowings under the facility will become due and payable on the maturity date. However, while we believe the Company will be able to obtain additional capital through debt and equity financing, including sales of Class A Common Stock under the Cantor Sales Agreement, to the extent necessary, we have obtained no firm commitment from current or prospective investors to date and no assurance can be provided that such additional financing will be obtained at the level acceptable to the Company within the necessary timeframe, if at all. Failure to secure sufficient additional funding in a timely manner or at all will impact our liquidity, including its ability to service its debt and other liabilities, and may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact additional operating cost reductions available to management, which could have a material adverse effect on the our business, operating results, financial condition, and could force us to limit its business activities or discontinue its operations entirely.

If we raise funds by issuing equity securities, including under the Cantor Sales Agreement, dilution to stockholders will occur and may be substantial. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities could have rights, preferences, and privileges senior to those of common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations and increase the cost of capital due to interest payment requirements. The capital markets have been very difficult and expensive to access in recent periods, which could impact the availability and cost of equity and debt financing. It is possible that we will not enter into all of financing contemplated and that no additional funding will be available at all in the capital markets. In addition, recent and any future increases in federal fund rates set by the Federal Reserve, which serve as a benchmark for rates on borrowing, will impact the cost and availability of debt financing.

See “Contractual Obligations” below for a discussion of other obligations with respect to which we will be required to make significant future payments or under which we have significant financial contractual obligations.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Three Months Ended
	March 31,
	2024			2023
	(in thousands)
Cash activities for continuing operations:
Net cash used in operating activities	$	(6,112	)	$	(12,113	)
Net cash used in investing activities		(26	)		(325	)
Net cash provided by financing activities		857			13,205
Net increase (decrease) in cash and cash equivalents	$	(5,281	)	$	767

Cash activities for discontinued operations:
Net cash used in operating activities	$	432		$	(303	)
Net cash used in investing activities		-			-
Net cash provided by financing activities		-			-
Net increase (decrease) in cash and cash equivalents	$	432		$	(303	)

Cash flows used in operating activities

Net cash used in operating activities for continuing operations decreased by $6.0 million to $6.1 million for the three months ended March 31, 2024, compared to $12.1 million for the three months ended March 31, 2023. The decrease in cash used in operating activities was driven by:

●

a $11.8 million net decrease in non-cash gains which was primarily attributable to a $26.8 million decrease in settlement of accrued incentive compensation, a $4.7 million decrease in gain on change in fair value of earn-out liabilities and $2.4 million increase in amortization of deferred debt charges, including related party deferred debt charges, partially offset by a $10.6 million increase in gain on change in fair value of warrant liabilities, a $8.7 million decrease in equity-based compensation, and a $2.1 million decrease in loss on extinguishment of debt obligations; and

●

a $1.3 million favorable impact attributable to changes in operating assets and liabilities, primarily driven by an increase in favorable impact from contract assets by $13.9 million, accounts receivable by $12.5 million, and accounts payable by $2.5 million, partially offset by an increase in unfavorable impact from accrued expenses by $20.3 million, and prepaid expenses by $7.4 million;

●

partially offset by a $7.2 million increase in net loss.

Net cash provided by operating activities for discontinued operations increased by $0.7 million to $0.4 million for the three months ended March 31, 2024, compared to $(0.3) million for the three months ended March 31, 2023. The increase in cash used in operating activities was driven by:

●

a $1.1 million favorable impact attributable to changes in operating assets and liabilities, primarily driven by an increase in favorable impact from accrued expenses by $1.6 million and contract liabilities by $0.9 million partially offset by an increase in unfavorable impact from accounts receivable by $1.4 million;

●

offset in part by a $0.5 million increase in net loss.

Cash flows used in investing activities

Net cash used in investing activities decreased by $0.3 million to $-0-million for the three months ended March 31, 2024 compared to $0.3 million for the three months ended March 31, 2023. The decrease in cash used in investing activities was driven by $0.3 million decrease in property and equipment purchases.

Cash flows from financing activities

Net cash provided by financing activities was $0.9 million for the three months ended March 31, 2024 and $13.2 million for the three months ended March 31, 2023. Net cash provided by financing activities for the three months ended March 31, 2024 resulted from net proceeds from borrowings of line of credits of $0.9 million. Net cash provided by financing activities for the three months ended March 31, 2023 primarily driven by proceeds from the third party and related party debts of $25.7 million and $1.1 million proceeds from issuance of common stock, offset in part by $11.5 million repayments of debt obligations, $1.3 million of financing costs paid, and $1.1 million cash outflow for RSUs withheld to pay taxes.

Tax Receivable Agreement

In connection with the consummation of the Mergers, Rubicon entered into the Tax Receivable Agreement with the TRA Holders, whereby Rubicon is obligated to pay to the TRA Holders 85% of certain of Rubicon’s realized (or in certain cases, deemed realized) tax savings as a result of certain tax benefits related to the transactions contemplated by the Merger Agreement and future exchanges of Class B Units for Class A Common Stock or cash. Rubicon will benefit from the remaining 15% of such tax savings.

The actual future payments to the TRA Holders will vary, and estimating the amount of payments that may be made under the Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors and future events. The actual future payments under the Tax Receivable Agreement are dependent on a number of factors, including the price of Class A Common Stock at the time of the exchange; the timing of future exchanges; the extent to which exchanges are taxable; the amount and timing of the utilization of tax attributes; the amount, timing and character of our income; the U.S. federal, state and local tax rates then applicable; the depreciation and amortization periods that apply to the increases in tax basis; the timing and amount of any earlier payments that we may have made under the TRA; and the portion of our payments under the TRA that constitutes imputed interest or gives rise to depreciable or amortizable tax basis.

A significant portion of any potential future payments under the Tax Receivable Agreement is anticipated to be payable over 15 years, consistent with the period over which the associated tax deductions would be realized by Rubicon, assuming Holdings LLC generates sufficient income to utilize the deductions. If sufficient income is not generated by Holdings LLC, the associated taxable income of Rubicon will be affected and the associated tax benefits to be realized will be limited, thereby similarly reducing the associated Tax Receivable Agreement payments to be made. We may however still need to seek additional sources of financing depending on the given circumstances at the time any payments will be made.

While many of the factors that will determine the amount of payments that Rubicon will make under the Tax Receivable Agreement are outside of its control, Rubicon expects that the payments it will make under the Tax Receivable Agreement will be substantial. Rubicon generally expects to fund such distributions out of available cash of Holdings LLC, and as a result, such payments will reduce the cash provided by the tax savings generated from the relevant transactions that would otherwise have been available to Rubicon and Holdings LLC for other uses, including repayment of debt, funding day-to-day operations, reinvestment in the business or returning capital to holders of Class A Common Stock in the form of dividends or otherwise.

Rubicon may incur significant costs in addition to the due course obligations arising under the Tax Receivable Agreement described above. In particular, in the event that (a) Rubicon undergoes certain change of control events (e.g., certain mergers, dispositions and other similar transactions), (b) there is a material uncured breach under the Tax Receivable Agreement, or (c) Rubicon elects to terminate the Tax Receivable Agreement early, in each case, Rubicon’s obligations under the Tax Receivable Agreement would accelerate and become payable in a lump sum amount equal to the present value of the anticipated future tax savings calculated based on certain assumptions, as set forth in the Tax Receivable Agreement. In addition, the interest on the payments made pursuant to the Tax Receivable Agreement may significantly exceed Rubicon’s other costs of capital. In certain situations, including upon the occurrence of the events described above, Rubicon could be required to make payments under the Tax Receivable Agreement that exceed its actual cash savings, requiring it to seek funding from other sources, including incurring additional debt. Thus, Rubicon’s obligations under the Tax Receivable Agreement could have a substantial negative effect on its financial condition and liquidity.

Despite these potential costs, we do not believe that that the Tax Receivable Agreement will be a material detriment to Rubicon’s and Holdings LLC’s future results of operations and liquidity, as any payments required under the Tax Receivable Agreement will arise directly from realized (or in certain cases, deemed realized) tax savings of Rubicon as a result of certain tax benefits related to the Mergers and future exchanges of Class B Units for Class A Common Stock or cash and are expected to be made in lieu of income taxes otherwise payable by Rubicon. Additionally, Rubicon will receive the benefit of 15% of any such tax savings.

Debt

On December 22, 2021, we entered into a Subordinated Term Loan agreement which provides for $20.0 million of term loan with a maturity date of May 23, 2024. The Subordinated Term Loan bore interest at 14% until the agreement was amended on June 7, 2023. On June 7, 2023, we entered into an amendment to the Subordinated Term Loan agreement, which modified (a) its maturity date to the earlier of (i) the scheduled maturity date (June 7, 2025, which we have an option to extend to June 7, 2026 upon achievement of certain conditions) and (ii) the maturity date of the June 2023 Revolving Credit Facility, unless the Springing Maturity applies, and (b) the interest rate the Subordinated Term Loan bears to 15.0%, of which 11.0% is paid in cash and 4.0% is paid in kind by capitalizing such interest accrued to the principal each month in arrears. Concurrently, we entered into an amendment to the Subordinated Term Loan Warrants agreement, which amended the value of Class A Common Stock the Additional Subordinated Term Loan Warrants earn for the full calendar month starting June 23, 2023 to $0.38 million and such amount to increase by $25,000 each additional full calendar month thereafter until we repay the Subordinated Term Loan in full. On May 7, 2024, we entered into an amendment to the Subordinated Term Loan agreement. Pursuant to the amendment, the lender consented to the SaaS Business sale, which was completed on May 7, 2024.

On December 16, 2022, we entered into a security purchase agreement (the “First Closing Insider SPA”) with certain members of our management team and board of directors (the “First Closing Insider Investors”). Pursuant to the First Closing Insider SPA, on December 16, 2022, the First Closing Insider Investors purchased convertible debentures with a total principal amount of $11.9 million and the total net proceeds of $10.5 million (the “First Closing Insider Convertible Debentures”). The First Closing Insider Convertible Debentures had a maturity date of June 16, 2024, and accrue interest at a rate of 6.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at our option, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the First Closing Insider Convertible Debentures are outstanding, each of the First Closing Insider Investors may covert all or part of the principal and accrued and unpaid interest of their First Closing Insider Convertible Debentures into shares of Class A Common Stock. During the three months ended March 31, 2024, the First Closing Insider Investors did not convert any amount of the principal or accrued interest of the First Closing Insider Convertible Debentures. The First Closing Insider SPA contained customary representations, warranties, and covenants for the sale and purchase of the First Closing Insider Convertible Debentures. On June 2, 2023 and July 11, 2023, we entered into an amendment to all of the First Closing Insider Convertible Debentures, extending their maturity date to December 1, 2026. On September 15, 2023 we entered into an amendment which lowered the conversion price of these three debentures to $10.00 per share of Class A Common Stock.

On February 1, 2023, we entered into security purchase agreements (the “Third Party SPA” and the “NZ Superfund SPA”, collectively the “Second Closing Insider SPA”) with various third-party investors (the “Third Party Insider Investors”) and the NZ Superfund (the Third Party Insider Investors and NZ Superfund collectively, “Second Closing Insider Investors”). Pursuant to the Second Closing Insider SPA, the Second Closing Insider Investors purchased the Third Party Convertible Debentures and NZ Superfund Convertible Debenture (collectively “Second Closing Insider Convertible Debentures”) in the aggregate principal amount of $6.5 million and purchase price of $5.7 million. The Second Closing Insider Convertible Debentures had a maturity date of August 1, 2024, and accrue interest at a rate of 6.0% per annum, except for NZ Superfund Debenture that accrued interest at 8.0% per annum. The interest is due and payable quarterly in arrears, and any portion of the aggregate interest accrued may, at our option, be paid in kind by capitalizing the amount of accrued interest to the principal on each applicable interest payment date. At any time, so long as the Second Closing Insider Convertible Debentures are outstanding, each of the Second Closing Insider Investors may covert all or part of the principal and accrued and unpaid interest of their Second Closing Insider Convertible Debentures into shares of Class A Common Stock. Since the origination through March 31, 2024, the Second Closing Insider Investors did not convert any amount of the principal or accrued interest of the Second Closing Insider Convertible Debentures. The Second Closing Insider SPA contained customary representations, warranties, and covenants for the sale and purchase of the Second Closing Insider Convertible Debentures. On June 2, 2023 and July 31, 2023, we entered into amendments to all of the Second Closing Insider Convertible Debentures, extending their maturity date to December 1, 2026 and modifying the interest rate the NZ Superfund Convertible Debenture bears to 14.0%.

On June 7, 2023, we entered into the June 2023 Revolving Credit Facility, which provides a line of credit up to $90.0 million, with a maturity date of the earlier of (i) June 7, 2026 or (ii) 90 days prior to the maturity date of the June 2023 Term Loan (the “Springing Maturity”). The June 2023 Revolving Credit Facility bears an interest rate of SOFR plus 4.25% (or 3.95% if the Company meets certain conditions defined in the agreement) (9.7% as of March 31, 2024). As of March 31, 2024, we had $72.0 million of borrowings under the Revolving Credit Facility and no amount remained available to draw. The borrowing capacity is calculated based on our borrowing base collateral, which is comprised of qualified billed and unbilled receivables and the September 2023 Rodina Letter of Credit. The fee on the average daily balance of unused loan commitments is 0.5%. Interest and fees are payable monthly in arrears on the first day of each month. On September 22, 2023, an entity affiliated with Andres Chico and Jose Miguel Enrich issued the September 2023 Rodina Letter of Credit in the amount of $15.0 million to the lender of the June 2023 Revolving Credit Facility on our behalf, which increased our borrowing base collateral under the facility by $15.0 million. The expiration date of the September 2023 Rodina Letter of Credit is September 30, 2024 with an automatic renewal option for one additional year through September 30, 2025. On December 5, 2023, we entered into an amendment to the Credit Facility. The amendment temporally modified the calculation methodology of the borrowing base collateral, resulting in its increase by $5.0 million through January 15, 2024, which was subsequently extended to March 15, 2024 with an option to be further extended to June 15, 2024. To date, the modified calculation methodology of the borrowing base has been extended on a month-to-month basis. On May 7, 2024, we entered into an amendment to the June 2023 Revolving Credit Facility. Pursuant to the amendment, (i) the lender consented to the sale of SaaS Business and (ii) we agreed to make a partial prepayment of $11.4 million upon close of the sale SaaS Business, which was completed on May 7, 2024.

On June 7, 2023, we entered into a $75.0 million June 2023 Term Loan agreement with a maturity date of the earlier of (i) the scheduled maturity date (June 7, 2025, which the Company has an option to extend to June 7, 2026 upon achievement of certain conditions) and (ii) the maturity date of the June 2023 Revolving Credit Facility, unless the Springing Maturity applies. The June 2023 Term Loan bears an interest rate of the prime rate plus a margin of 8.75% or 8.25% if the Company meets certain conditions defined in the agreement. We had the option to pay the interest in kind each month in arrears by capitalizing such interest which accrues through August 31, 2023 as additional principal, and in such instance, the margin applicable for the interest rate was 10.25%. We elected to pay the interest accrued through August 31, 2023 in kind. We also have the option to pay in kind any excess interest over 13.5% after paying the first 13.5% in cash from September 1, 2023 through the maturity. We paid the first 13.5% of interest in cash and elected to pay the rest in kind through April 30, 2024. As of March 31, 2024, the applicable interest rate of the June 2023 Term Loan was 16.8%. At the time of any repayment of the June 2023 Term Loan, we are required to pay a fee in the amount of 12% of the principal repaid. Beginning on October 7, 2023 until the June 2023 Term Loan is fully repaid, the lender has the option to elect to convert the outstanding principal into Class A Common Stock. The aggregate number of shares delivered to the lender cannot result in the lender’s ownership exceeding (i) 19.99% of the number shares of Class A Common Stock issued and outstanding or (ii) $10.0 million. Concurrently, we entered into the June 2023 Term Loan Warrants agreements and issued common stock purchase warrants. The June 2023 Term Loan Warrants granted the lender the right to purchase up to 2,121,605 shares of Class A Common Stock (the June 2023 Term Loan Warrants Shares) at the exercise price of $0.08 any time before June 7, 2033. If at any time on or before December 7, 2024, we issue additional shares of common stock (excluding any shares of common stock or securities convertible into or exchangeable for shares of common stock under our equity incentive plans existing as of the issue date), the number of the June 2023 Term Loan Warrants Shares issuable upon exercise immediately prior to such common stock issuance will be proportionately increased such that the percentage represented by the June 2023 Term Loan Warrants Shares in Rubicon’s diluted common stock outstanding will remain the same. Additionally, the holders of the June 2023 Term Loan Warrants have the right to purchase up to the pro rata portion of any new common stock issuance by Rubicon up to $20.0 million in the aggregate, with certain exceptions defined in the agreement. Since the issuance through March 31, 2024, none of the June 2023 Term Loan Warrants were exercised. On May 7, 2024, we entered into an amendment to the June 2023 Term Loan agreement. Pursuant to the amendment, (i) the lender consented to the SaaS Business sale and (ii) we agreed to make a partial prepayment of $45.6 million upon close of the SaaS Business sale, which was completed on May 7, 2024.

The June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan are subject to certain cross-default provisions under the intercreditor agreement. Additionally, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements include covenants, which reduce the available borrowing base collateral under the June 2023 Revolving Credit Facility initially by $19.0 million. During the terms of the agreements, such Minimum Excess Availability Reserve could be decreased by up to $9.0 million, which will make the Minimum Excess Availability Reserve $10.0 million, if we achieve certain financial conditions defined in the agreements. As of March 31, 2024, the Minimum Excess Availability Reserve was $19.0 million. Furthermore, the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan agreements require us to maintain a $2.0 million letter of credit, which could be eliminated upon our achievement of certain financial conditions defined in the agreements.

See Note 5 – Debt and Note 9 – Warrants to our unaudited interim condensed consolidated financial statements included elsewhere in this report for a more detailed description of our indebtedness.

We do not have any special purpose entities and we do not engage in off-balance sheet financing arrangements.

Other Financing Arrangements

On November 30, 2022, we entered into the YA Warrant, which is exercisable at a price of $0.0008 per share for a number of shares of Class A Common Stock equal to $20.0 million, subject to certain adjustments pursuant to the terms set forth therein. We received approximately $6.0 million in proceeds from the issuance of the YA Warrant. During the three months ended March 31, 2024, the Company issued 4,104,797 shares of Class A Common Stock for partial exercise of the YA Warrant. On February 28, 2024, the number of shares of Class A Common Stock the YA Warrant is exercisable for was fixed, and as of March 31, 2024, 14,000,000 shares of Class A Common Stock remained to be exercised. For more information regarding the YA Warrant, see Note 9 – Warrants and Note 11 – Yorkville SPA, to our unaudited interim condensed consolidated financial statements included elsewhere in this report.

On September 5, 2023, we entered into the Cantor Sales Agreement with Cantor, pursuant to which we may offer and sell, from time to time through Cantor, shares of Class A Common Stock for aggregate gross proceeds up to $50.0 million. Pursuant to the Cantor Sales Agreement, Cantor may sell shares of Class A Common Stock in sales deemed to be “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act. We have no obligation to sell any shares of Class A Common Stock under the Cantor Sales Agreement. Cantor will act as sales agent and use commercially reasonable efforts to sell on our behalf all of the shares of Class A Common Stock requested to be sold by us. Under the terms of the Cantor Sales Agreement, we have agreed to pay Cantor a commission equal to 3.0% of the aggregate gross proceeds from any shares of Class A Common Stock sold pursuant to the Cantor Sales Agreement. The Cantor Sales Agreement will remain in effect until the aggregate gross proceeds of our sales of shares of Class A Common Stock reach $50.0 million in total unless terminated pursuant to the terms of the Cantor Sales Agreement. We did not sell any shares of Class A Common Stock under the Cantor Sales Agreement through March 31, 2024.

On May 7, 2024, we entered into the Rodina SPA with an entity affiliated with Andres Chico and Jose Miguel Enrich. Pursuant to the Rodina SPA, we issued and sold 20,000 shares of Rubicon’s Series A Convertible Perpetual Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) for an aggregate purchase price of $20.0 million. The Preferred Stock is entitled to receive, whether or not declared, dividends at the rate of 8.0% per annum of the stated value per share of the Preferred Stock. On the second anniversary of the closing date and each anniversary thereafter, the dividend rate on the Preferred Stock will increase by 1.0% per annum, up to a maximum dividend rate not to exceed 11.0% per annum. Each holder of the Preferred Stock has the right, at its option, to convert its Preferred Stock, in whole or in part, into shares of Class A Common Stock. The conversion price is $0.35 per share. As of the issuance date, the Preferred Stock was convertible into 57,142,857 shares of Class A Common Stock. The Preferred Stock will rank senior to Class A Common Stock and any other capital stock of Rubicon, with respect to dividend rights and rights upon voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Company. The Preferred Stock will vote on an as-converted basis with Class A and Class V Common Stock. The issuance of the Rodina SPA met change in control provisions in certain agreements of ours. We are currently evaluating any potential impact this matter may have. In relation to this matter, we received waivers from the lenders of the June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan. For more information, see Note 20 – Subsequent events, to our unaudited interim condensed consolidated financial statements included elsewhere in this report.

Contractual Obligations

Our principal commitments consist of obligations under debt agreements and leases for office facilities. We have a substantial level of debt. For more information regarding our debt service obligations and our lease obligations, see Note 5 – Debt and Note 16 – Commitments and contingencies, to our unaudited interim condensed consolidated financial statements included elsewhere in this report.

As of March 31, 2024, our software services subscription agreement with a certain PIPE Investor requires us to pay an aggregate of $15 million through December 2024. The agreement was subsequently amended and provides us with the option, in our sole discretion, to settle the $7.5 million of fees which are scheduled to become due through June 2024 (i) in cash or (ii) Class A Common Stock if we satisfy certain conditions as defined within the amended agreement. See Note 17 – Related party transactions, to our unaudited interim condensed consolidated financial statements included elsewhere in this report for more information regarding our software services subscription agreement with the PIPE Investor.

In 2023, we settled with certain Rubicon Management Rollover Holders a portion of the accrued management rollover consideration and the Company agreed to make quarterly cash payments to these Rubicon Management Rollover Holders through December 31, 2026, of which $2.8 million is coming due in the next 12 months of March 31, 2024 and $3.0 million thereafter. See Note 6 – Accrued expenses and Note 16 – Commitments and Contingencies, to our unaudited interim condensed consolidated financial statements included elsewhere in this report for more information regarding this settlement.

We could also be required to make certain significant payments under the Tax Receivable Agreement discussed above.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

For additional information about our critical accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2023 as well as Note 1, Nature of operations and summary of significant accounting policies in the notes to the condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

For information regarding recently issued accounting pronouncements and recently adopted accounting pronouncements, see Note 2 – Recent accounting pronouncements, to our unaudited interim condensed consolidated financial statements included elsewhere in this report.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure that it will achieve or realize these plans, intentions or expectations. All statements, other than statements of present or historical fact included in this Quarterly Report, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “could,” “would,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends,” the negative of such terms and similar expressions, although not all forward-looking statements contain such identifying words. Forward-looking statements are inherently subject to risks, uncertainties and assumptions and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statement. These forward-looking statements are based upon current expectations, estimates, projections, and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain; factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the outcome of any legal proceedings that may be instituted against the Company or others following the closing of the Mergers; 2) the Company’s ability to meet the NYSE’s listing standards following the consummation of the Mergers; 3) the risk that the Mergers disrupt current plans and operations of the Company as a result of consummation of the Mergers; 4) the ability to recognize the anticipated benefits of the Mergers, which may be affected by, among other things, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 5) costs related to the Mergers; 6) changes in applicable laws or regulations; 7) the possibility that the Company may be adversely affected by other economic, business and/or competitive factors, including the impacts of the COVID-19 pandemic, geopolitical conflicts, such as the conflict between Russia and Ukraine, the effects of inflation and potential recessionary conditions; 8) the Company’s execution of anticipated operational efficiency initiatives, cost reduction measures and financing arrangements; and 9) other risks and uncertainties. More information regarding the risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in our Annual Report on Form 10-K, as filed with the SEC on March 23,2023, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q and the Company’s other filings with the SEC. There may be additional risks that the Company presently does not know of or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements, many of which are beyond the Company’s control. Forward-looking statements are not guarantees of future performance and speak only as of the date hereof. We do not undertake, and expressly disclaim, any obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act and in Item 10(f)(1) of Regulation S-K and are not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specific in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Per Rules 13a-15(e) and 15d-15(e), the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer (“certifying officers”) have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of March 31, 2024. Our certifying officers concluded that, as a result of the material weakness in internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of March 31, 2024.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud due to inherent limitations of internal controls. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Our certifying officers concluded that the Company did not have an effective internal control over the review of the complex transactions related to the equity due to the lack of sufficient and effective review processes. The material weakness resulted in a restatement of our financial statements as described in the Explanatory Note to the amendment to the Company’s Annual Report on Form 10-K filed on May 20, 2024. Furthermore, the control deficiency described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Remediation Status of Material Weakness in Internal Control over Financial Reporting

We plan to enhance our processes by designing and implementing controls to review the equity transactions, including the completeness and accuracy of relevant information. We also plan to engage additional qualified resources and/or hire additional staff to ensure these incremental controls are properly implemented.

Management continues to be actively engaged to take steps to remediate the material weakness, including enhanced processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our consolidated financial statements, providing enhanced access to accounting literature, research materials and documents, and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications.

Changes in Internal Control Over Financial Reporting

Management will continue to take action to remediate the material weakness. However, the material weakness will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective.

Other than described above, there has not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the quarter to which this Report relates that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we are or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on our consolidated results of operations, cash flows or financial position.

Item 1A. Risk Factors

As of the date of this quarterly report, other than as set forth below, there have been no material changes with respect to those risk factors previously disclosed in our 10-K Annual Report as filed with the SEC on March 28, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

Except as previously disclosed in a Current Report on Form 8-K or as disclosed below, no unregistered sales of the Company’s equity securities were made during the fiscal quarter ended March 31, 2024.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

		Incorporated by Reference
Exhibit	Description	Schedule/ Form	File Number	Exhibits	Filing Date
10.1	Amendment No. 3 To Credit, Security and Guaranty Agreement, dated January 24, 2024, by and between Rubicon Technologies, Inc. and MidCap Funding IV Trust.	Form 8-K		10.1	January 30, 2024
10.2	The Sponsor Guaranty Agreement, dated January 24, 2024, by and between Rodina Capital and MidCap Funding IV Trust.	Form 8-K		10.2	January 30, 2024
10.3	The Sponsor Capital Contribution Agreement dated January 24, 2024, by and between Rubicon Technologies, Inc., Rubicon Technologies Holdings, LLC, Rubicon Technologies International, Inc., Rubicon Global, LLC, CleanCo LLC, Charter Waste Management, Inc., RiverRoad Waste Solutions, Inc., and Rodina Capital.	Form 8-K		10.3	January 30, 2024
10.4	Certificate of Designations, Preferences and Rights of Series A Convertible Perpetual Preferred Stock of Rubicon Technologies, Inc.	Form 8-K		3.1	May 7, 2024
10.5	Asset Purchase Agreement, dated May 7, 2024, by and among Rubicon Technologies, Inc., Rubicon Technologies Holdings, LLC and Wastech Corp. and, solely for the limited purposes set forth therein, GAFAPA, S.A. de C.V.	Form 8-K		10.1	May 7, 2024
10.6	Securities Purchase Agreement, dated May 7, 2024, by and between Rubicon Technologies, Inc. and MBI Holdings, LP	Form 8-K		10.2	May 7, 2024
10.7	Registration Rights Agreement, dated May 7, 2024, by and among Rubicon Technologies, Inc. and the Stockholder Parties thereto	Form 8-K		10.3	May 7, 2024
10.8	Form of Amendment No. 2 to Credit, Security and Guaranty Agreement, dated May 7, 2024, by and between Rubicon Technologies, Inc. and the Parties thereto	Form 8-K		10.4	May 7, 2024
10.9	Amendment No. 4 to Credit, Security and Guaranty Agreement, dated May 7, 2024, by and among Holdings, the Borrowers, Parent, Acquiom Agency Services LLC, as Agent	Form 8-K		10.5	May 7, 2024
10.10	Third Lien Sixth Amendment further amends the Credit, Security and Guaranty Agreement, dated as of December 22, 2021	Form 8-K		10.6	May 7, 2024
10.11	Form of Waiver Agreement, dated May 7, 2024	Form 8-K		10.7	May 7, 2024
31.1*	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.
**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Rubicon Technologies, Inc.

Date: May 20, 2024	By:	/s/ Philip Rodoni
		Philip Rodoni
		Chief Executive Officer

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

I, Phil Rodoni, certify that:

	1.	I have reviewed this Quarterly Report on Form 10-Q of Rubicon Technologies, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	[Reserved];

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 20, 2024	By:	/s/ Phil Rodoni
		Phil Rodoni
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

I, Kevin Schubert, certify that:

	1.	I have reviewed this Quarterly Report on Form 10-Q of Rubicon Technologies, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	[Reserved];

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 20, 2024	By:	/s/ Kevin Schubert
		Kevin Schubert
		Chief Financial Officer and President
		(Principal Financial Officer and President)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rubicon Technologies, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Phil Rodoni, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

	1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 20, 2024	By:	/s/ Phil Rodoni
		Phil Rodoni
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rubicon Technologies, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Kevin Schubert, Chief Financial Officer and President of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

	1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 20, 2024	By:	/s/ Kevin Schubert
		Kevin Schubert
		Chief Financial Officer and President
		(Principal Financial Officer and President)

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 20, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-40910
Entity Registrant Name	Rubicon Technologies, Inc.
Entity Central Index Key	0001862068
Entity Tax Identification Number	88-3703651
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	950 E Paces Ferry Rd NE Suite 810
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30326
City Area Code	(844)
Local Phone Number	479-1507
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	RBT
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Common Class A [Member]
Entity Common Stock, Shares Outstanding		54,761,991
Common Class V [Member]
Entity Common Stock, Shares Outstanding		1,074,899

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 13,846	$ 18,695
Accounts receivable, net	52,049	62,930
Contract assets, net	59,574	75,567
Prepaid expenses	20,172	13,197
Current assets of discontinued operations	6,338	5,257
Other current assets	3,915	3,742
Total Current Assets	155,894	179,388
Property and equipment, net	525	632
Operating right-of-use assets	331	567
Other noncurrent assets	1,912	2,114
Goodwill	19,872	19,872
Intangible assets, net	6,472	7,111
Noncurrent assets of discontinued operations	13,321	13,603
Total Assets	198,327	223,287
Current Liabilities:
Accounts payable	75,799	65,465
Line of credit	71,978	71,121
Accrued expenses	55,260	76,645
Contract liabilities	1,415	1,499
Operating lease liabilities, current	398	725
Warrant liabilities	2,697	26,493
Derivative liabilities	10,349	9,375
Current liabilities of discontinued operations	8,117	6,216
Total Current Liabilities	226,013	257,539
Long-Term Liabilities:
Deferred income taxes	202	197
Debt obligations, net of deferred debt charges	85,621	81,001
Related-party debt obligations, net of deferred debt charges	16,824	16,302
Derivative liabilities	1,564	3,683
Earn-out liabilities	31	142
Other long-term liabilities	3,015	3,395
Total Long-Term Liabilities	107,257	104,720
Total Liabilities	333,270	362,259
Stockholders’ (Deficit) Equity:
Preferred stock – par value of $0.0001 per share, 10,000,000 shares authorized, 0 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Additional paid-in capital	267,772	221,986
Accumulated deficit	(410,475)	(394,804)
Total stockholders’ deficit attributable to Rubicon Technologies, Inc.	(142,698)	(172,814)
Noncontrolling interests	7,755	33,842
Total Stockholders’ Deficit	(134,943)	(138,972)
Total Liabilities and Stockholders’ (Deficit) Equity	198,327	223,287
Common Class A [Member]
Stockholders’ (Deficit) Equity:
Common stock value	5	4
Common Class V [Member]
Stockholders’ (Deficit) Equity:
Common stock value

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Class A [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized shares	690,000,000	690,000,000
Common stock, shares issued	52,406,059	39,643,584
Common stock, shares outstanding	52,406,059	39,643,584
Common Class V [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized shares	275,000,000	275,000,000
Common stock, shares issued	1,074,899	4,425,388
Common stock, shares outstanding	1,074,899	4,425,388

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue:
Service	$ 147,252	$ 164,324
Recyclable commodity	15,810	14,733
Total revenue	163,062	179,057
Cost of revenue (exclusive of amortization and depreciation):
Service	140,347	157,514
Recyclable commodity	14,055	13,187
Total cost of revenue (exclusive of amortization and depreciation)	154,402	170,701
Sales and marketing	1,688	2,445
Product development	6,625	7,441
General and administrative	13,086	18,188
Gain on settlement of incentive compensation		(18,622)
Amortization and depreciation	931	1,113
Total Costs and Expenses	176,732	181,266
Loss from Operations	(13,670)	(2,209)
Other Income (Expense):
Interest earned	32	1
Gain (loss) on change in fair value of warrant liabilities	10,577	(55)
Gain on change in fair value of earnout liabilities	111	4,820
Loss on change in fair value of derivatives	(1,299)	(2,198)
Gain on service fee settlements in connection with the Mergers		632
Loss on extinguishment of debt obligations		(2,103)
Interest expense	(10,750)	(7,176)
Related party interest expense	(522)	(593)
Other expense	(951)	(421)
Total other income (expense)	(2,802)	(7,093)
Loss from continuing operations before income taxes	(16,472)	(9,302)
Income tax expense	12	16
Net loss from continuing operations	(16,484)	(9,318)
Discontinued operations:
Loss from discontinued operations before income taxes	(669)	(133)
Income tax expense
Net loss from discontinued operations	(669)	(133)
Net loss	(17,153)	(9,451)
Net loss from continuing operations attributable to noncontrolling interests	(1,437)	(6,234)
Net loss from continuing operations attributable to Class A common stockholders	(15,047)	(3,084)
Net loss from discontinued operations attributable to noncontrolling interests	(45)	(88)
Net loss from discontinued operations attributable to Class A common stockholders	$ (624)	$ (45)
Net loss per Class A Common share - basic	$ (0.33)	$ (0.41)
Net loss per Class A Common share - diluted	(0.33)	(0.41)
Net loss from discontinued operations per Class A Common share, basic	(0.01)	(0.01)
Net loss from discontinued operations per Class A Common share, diluted	$ (0.01)	$ (0.01)
Weighted average shares outstanding, basic	46,068,599	7,427,116
Weighted average shares outstanding, diluted	46,068,599	7,427,116

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock Class A [Member]	Common Stock Class V [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2022	$ 1	$ 1	$ 34,659	$ (337,860)	$ 148,747	$ (154,452)
Beginning balance, shares at Dec. 31, 2022	6,985,869	14,432,992
Equity-based compensation			9,302			9,302
Issuance of common stock for services rendered			10,245			10,245
Issuance of common stock for services rendered, shares	1,164,757
Issuance of equity-classified warrants			945			945
Issuance of common stock for vested RSUs
Issuance of common stock for vested RSUs, shares	463,961
RSUs withheld to pay taxes			(1,067)			(1,067)
Conversion of debt obligations to common stock			3,130			3,130
Conversion of debt obligations to common stock, shares	356,246
Proceeds from issuance of common stock			1,100			1,100
Proceeds from issuance of common stock, shares	152,778
Net loss				(3,129)	(6,322)	(9,451)
Ending balance, value at Mar. 31, 2023	$ 1	$ 1	58,314	(340,989)	142,425	(140,248)
Ending balance, shares, shares at Mar. 31, 2023	9,123,611	14,432,992
Beginning balance, value at Dec. 31, 2023	$ 4		221,986	(394,804)	33,842	(138,972)
Beginning balance, shares at Dec. 31, 2023	39,643,584	4,425,388
Equity-based compensation			563			563
Issuance of common stock for services rendered			3,750			3,750
Issuance of common stock for services rendered, shares	2,246,182
RSU Settlement
RSU Settlement, shares	(32,446)
Issuance of common stock for the FPA Termination Agreement Settlement			2,000			2,000
Issuance of common stock for the FPA Termination Agreement Settlement, shares	1,656,727
Exchange of Class V Common Stock to Class A Common Stock			24,605		(24,605)
Exchange of Class V Common Stock to Class A Common Stock, shares	3,350,489	(3,350,489)
Exercise and conversion of liability classified warrants	$ 1		4,023			4,024
Exercise and conversion of liability classified warrants, shares	3,831,232,000
Reclassification of liability classified warrants to equity			10,845			10,845
Exercise and conversion of equity classified warrants
Exercise and conversion of equity classified warrants, shares	1,710,291
Net loss				(15,671)	(1,482)	(17,153)
Ending balance, value at Mar. 31, 2024	$ 5		$ 267,772	$ (410,475)	$ 7,755	$ (134,943)
Ending balance, shares, shares at Mar. 31, 2024	52,406,059	1,074,899

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (17,153)	$ (9,451)
Net loss from discontinued operations	669	133
Adjustments to reconcile net loss to net cash flows from operating activities:
Loss on disposal of property and equipment		5
Amortization and depreciation	931	1,113
Amortization of deferred debt charges	3,808	1,237
Amortization of related party deferred debt charges	132	265
Paid-in-kind interest capitalized to principal of debt obligations	961	1,014
Paid-in-kind interest capitalized to principal of related party debt obligations	390	328
Allowances for accounts receivables and contract assets	598	745
(Gain) Loss on change in fair value of warrant liabilities	(10,577)	55
Loss on change in fair value of derivatives	1,299	2,198
Gain on change in fair value of earn-out liabilities	(111)	(4,820)
Loss on extinguishment of debt obligations		2,103
Equity-based compensation	563	9,302
Settlement of accrued incentive compensation		(26,826)
Service fees settled in common stock	3,750	3,808
Gain on service fee settlement in connection with the Mergers		(632)
Deferred income taxes	5	12
Change in operating assets and liabilities:
Accounts receivable	10,284	(2,161)
Contract assets	15,994	2,076
Prepaid expenses	(7,123)	235
Other current assets	(202)	(426)
Operating right-of-use assets	235	304
Other noncurrent assets	71	(120)
Accounts payable	9,541	7,061
Accrued expenses	(19,383)	875
Contract liabilities	(84)	(272)
Operating lease liabilities	(327)	(454)
Other liabilities	(383)	180
Net cash flows from operating activities – continuing operations	(6,112)	(12,113)
Net cash flows from operating activities – discontinued operations	432	(303)
Net cash flows from operating activities	(5,680)	(12,416)
Cash flows from investing activities:
Property and equipment purchases	(26)	(325)
Net cash flows from investing activities	(26)	(325)
Cash flows from financing activities:
Net borrowings on Revolving Credit Facility		201
Net borrowings on June 2023 Revolving Credit Facility	857
Proceeds from debt obligations		11,226
Repayments of debt obligations		(11,500)
Proceeds from related party debt obligations		14,520
Financing costs paid		(1,275)
Proceeds from issuance of common stock		1,100
RSUs withheld to pay taxes		(1,067)
Net cash flows from financing activities	857	13,205
Net change in cash and cash equivalents	(4,849)	464
Cash and cash equivalents, beginning of period	18,695	10,079
Cash and cash equivalents, end of period	13,846	10,543
Less: cash and cash equivalents of discontinued operations
Cash and cash equivalents of discontinued operations at end of period	13,846	10,543
Supplemental disclosure of cash flow information:
Cash paid for interest	5,393	3,648
Supplemental disclosures of non-cash investing and financing activities:
Exchange of warrant liability for common stock	4,219
Reclassification of liability classified warrants to equity	10,845
Settlement of the FPA Termination Agreement in common stock	2,000
Issuance of common stock for services rendered	3,750
Fair value of derivatives issued as debt discount		475
Fair value of derivatives issued as debt issuance cost		2,887
Conversions of debt obligations to common stock		2,250
Equity issuance costs settled with common stock		7,069
Loan commitment asset reclassed to deferred debt discount		$ 2,062

Nature of operations and summary of significant accounting policies

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of operations and summary of significant accounting policies

Note 1—Nature of operations and summary of significant accounting policies

Description of Business – Rubicon Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.”

Service Revenue:

Recyclable Commodity Revenue:

Cost of recyclable commodity revenues primarily consists of expenses related to purchases of OCC, ONP, aluminum, glass, pallets and other recyclable materials, and any associated transportation fees.

Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the NYSE.

Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities.

See Note 16 for further information regarding fair value measurements.

As of March 31, 2024, the Company has both liability-classified and equity-classified warrants outstanding. See Note 10 for further information.

(1)

(2)

The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows:

records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange;

the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss.

Recent accounting pronouncements

3 Months Ended

Mar. 31, 2024

Recent Accounting Pronouncements

Recent accounting pronouncements

Note 2—Recent accounting pronouncements

Accounting pronouncements issued, but not adopted as of March 31, 2024

Mergers

3 Months Ended

Mar. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Mergers

Note 3—Mergers

Blocked Unitholders and Rubicon Continuing Unitholders retained aggregate 2,480,865 shares of Class A Common Stock and 14,834,735 shares of Class V Common Stock at the Closing.

The Company and Holdings LLC entered into the Tax Receivable Agreement with the TRA Holders. See Note 1 for further information.

Discontinued operations of the SaaS Business

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations of the SaaS Business

Note 4— Discontinued operations of the SaaS Business

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of SaaS Business:


Assets and Liabilities of Discontinued Operations	March 31, 2024		December 31, 2023
Accounts receivable, net	$	5,339	$	4,047
Contract assets, net		632		1,054
Prepaid expenses		79		108
Other current assets		288		48
Current assets of discontinued operations		6,338		5,257
Property and equipment, net		676		793
Goodwill		12,260		12,260
Intangible assets, net		385		550
Total assets of discontinued operations	$	19,659	$	18,860

Accrued expenses	$	919	$	356
Contract liabilities		7,198		5,860
Current liabilities of discontinued operations	$	8,117	$	6,216


Results of Discontinued Operations	March 31, 2024			March 31, 2023
Revenue: Service	$	3,013		$	2,041
Cost of revenue (exclusive of amortization and depreciation): Service		1,000			487
Sales and marketing		1,500			829
Product development		700			651
General and administrative		200			(41	)
Amortization and depreciation		282			248
Total costs and expense		3,682			2,174
Loss before income taxes		(669	)		(133	)
Income taxes expenses (benefits)		-			-
Net loss from discontinued operations, net of taxes	$	(669	)	$	(133	)

Property and equipment

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Property and equipment

Note 5—Property and equipment

Property and equipment, net is comprised of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Schedule of property and equipment
	March 31,			December 31,
	2024			2023
Property and equipment of continuing operations:
Computers, equipment and software	$	2,349		$	2,324
Furniture and fixtures		210			210
Leasehold improvements		1,441			1,441
Total property and equipment		4,000			3,975
Less accumulated amortization and depreciation		(3,475	)		(3,343	)
Total property and equipment, net	$	525		$	632

Property and equipment of discontinued operations:
Customer equipment	$	1,891		$	1,891
Less accumulated amortization and depreciation		(1,215)			(1,098)
Total property and equipment, net	$	676		$	793

Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

Note 6—Debt

Revolving Credit Facilities

Term Loan Facilities

On May 19, 2023, the Company entered into an amendment to the Term Loan agreement, which extended the maturity date to May 23, 2024.

In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that these Term Loan amendments were debt modifications.

In accordance with ASC 470-50, Debt – Modifications and Extinguishments, the Company concluded that these Subordinated Term Loan amendments were debt modifications.

Convertible Debentures

Components of the Company’s debt obligations were as follows (in thousands):


	March 31,			December 31,
	2024			2023
Term loan balance	$	110,361		$	109,422
Convertible debt balance		1,489			1,467
Related-party convertible debt balance		18,814			18,424
Less unamortized deferred debt charges		(28,219	)		(32,010	)
Total borrowed		102,445			97,303
Less short-term debt obligation balance		-			-
Long-term debt obligation balance	$	102,445		$	97,303

At March 31, 2024, the future aggregate maturities of long-term debt for the remainder of 2024 and subsequent periods are as follows (in thousands):


Fiscal Years Ending December 31,
2024	$	-
2025		110,361
2026		20,303
Total	$	130,664

Accrued expenses

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

Accrued expenses

Note 7—Accrued expenses

Accrued expenses consist of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Schedule of accrued expenses
	March 31,		December 31,
	2024		2023
Accrued expenses of continuing operations:
Accrued hauler expenses	$	45,866	$	63,367
Accrued compensation		6,111		4,221
FPA Settlement Liability (as defined in Note 11)		-		2,000
Other accrued expenses		3,283		7,057
Total accrued expenses	$	55,260	$	76,645

Accrued expenses of discontinued operations:
Accrued expenses	$	919	$	356

Goodwill and other intangibles

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangibles

Note 8—Goodwill and other intangibles

Intangible assets consisted of the following (in thousands, except years):


	March 31, 2024
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets of continuing operations:
Trade Name	5	$	728	$	(728	)	$	-
Customer and hauler relationships	2 to 8		20,976		(15,340	)		5,636
Non-competition agreements	3 to 4		550		(550	)		-
Technology	3		1,197		(1,197	)		-
Total finite-lived intangible assets			23,451		(17,815	)		5,636
Domain Name	Indefinite		836		-			836
Total intangible assets		$	24,287	$	(17,815	)	$	6,472

Intangible assets of discontinued operations:
Technology	3	$	1,981	$	(1,596	)	$	385
Total intangible assets of discontinued operations		$	1,981	$	(1,596	)	$	385

	December 31, 2023
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets of continuing operations:
Trade Name	5	$	728	$	(728	)	$	-
Customer and hauler relationships	2 to 8		20,976		(14,700	)		6,276
Non-competition agreements	3 to 4		550		(550	)		-
Technology	3		1,197		(1,197	)		-
Total finite-lived intangible assets			23,451		(17,175	)		6,276
Domain Name	Indefinite		835		-			835
Total intangible assets		$	24,286	$	(17,175	)	$	7,111

Intangible assets of discontinued operations:
Technology	3	$	1,981	$	(1,431	)	$	550
Total intangible assets of discontinued operations		$	1,981	$	(1,431	)	$	550


Fiscal Years Ending December 31,
2024	$	(1,920	)
2025		(2,559	)
2026		(1,157	)
Total future amortization of intangible assets	$	(5,636	)

Stockholders’ (deficit) equity

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Stockholders’ (deficit) equity

Note 9—Stockholders’ (deficit) equity

The table set forth below reflects information about the Company’s equity as of March 31, 2024.

Schedule of stockholders equity
	Authorized		Issued		Outstanding
Class A Common Stock		690,000,000		52,406,059		52,406,059
Class V Common Stock		275,000,000		1,074,899		1,074,899
Preferred Stock		10,000,000		-		-
Total shares as of March 31, 2024		975,000,000		53,480,958		53,480,958

The table set forth below reflects information about the Company’s equity as of December 31, 2023.

	Authorized		Issued		Outstanding
Class A Common Stock		690,000,000		39,643,584		39,643,584
Class V Common Stock		275,000,000		4,425,388		4,425,388
Preferred Stock		10,000,000		-		-
Total shares as of December 31, 2023		975,000,000		44,068,972		44,068,972

During the three months ended March 31, 2024, 3,350,489 shares of Class V Common Stock were exchanged to the equal number of shares of Class A Common Stock.

Warrants

3 Months Ended

Mar. 31, 2024

Warrants

Warrants

Note 10—Warrants

The Company may redeem the IPO Warrants:

in whole and not in part;

at a price of $0.08 per warrant;

upon not less than 30 days’ prior written notice to each IPO Warrant holder and

Forward Purchase Agreement

3 Months Ended

Mar. 31, 2024

Forward Purchase Agreement

Forward Purchase Agreement

Note 11—Forward Purchase Agreement

Yorkville SPA

3 Months Ended

Mar. 31, 2024

Yorkville Spa

Yorkville SPA

Note 12—Yorkville SPA

Cantor Sales Agreement

3 Months Ended

Mar. 31, 2024

Cantor Sales Agreement

Cantor Sales Agreement

Note 13—Cantor Sales Agreement

Equity-based compensation

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Equity-based compensation

Note 14—Equity-based compensation

During the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation related to the 2022 Plans (as defined below).

The following represents a summary of the Company’s RSU activity and related information during the three months ended March 31, 2024:

Schedule of RSUs activity
	Units			Weighted Average Grant Date Fair Value
Nonvested – December 31, 2023		518,625		$	10.02
Granted		-			-
Vested		(198,789	)		9.88
Forfeited/redeemed		(5,794	)		15.84
Nonvested – March 31, 2024		314,042		$	10.00

The remaining RSUs will vest over the requisite service periods ranging from six to thirty-six months from the grant date.

The Company recognized $0.6 million and $9.3 million in total equity compensation costs for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the total unrecognized compensation cost related to outstanding RSUs was $3.2 million, which the Company expects to recognize over a weighted-average period of 1.1 years.

Loss per share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Loss per share

Note 15—Loss per share

Schedule of net loss per share
	Three Months Ended March 31, 2024
Numerator:
Net loss from continuing operations	$	(16,484	)
Less: Net loss from continuing operations attributable to noncontrolling interests		(1,437	)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	$	(15,047	)

Net loss from discontinued operations	$	(669	)
Less: Net loss from discontinued operations attributable to noncontrolling interests		(45	)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$	(624	)

Denominator:
Weighted average shares of Class A Common Stock outstanding – Basic and diluted		46,068,599

Net loss from continuing operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.33	)
Net loss from discontinued operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.01	)

The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for the three months ended March 31, 2023 are as follows (amounts in thousands, except for share and per share amounts):


	Three Months Ended March 31, 2023
Numerator:
Net loss from continuing operations	$	(9,318	)
Less: Net loss from continuing operations attributable to noncontrolling interests		(6,234	)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	$	(3,084	)

Net loss from discontinued operations	$	(133	)
Less: Net loss from discontinued operations attributable to noncontrolling interests		(88	)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$	(45	)

Denominator:
Weighted average shares of Class A Common Stock outstanding – Basic and diluted		7,427,116

Net loss from continuing operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.42	)
Net loss from discontinued operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.01	)

The Company’s potentially dilutive securities below were excluded from the computation of diluted loss per share as their effect would be anti-dilutive:

IPO Warrants, Additional Subordinated Term Loan Warrants, Advisor Warrant, June 2023 Term Loan Warrants, YA Warrant and Rodina Warrant.

Earn-Out Interests.

RSUs and DSUs.

Exchangeable Class V Common Stock.

Fair value measurements

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair value measurements

Note 16—Fair value measurements


	As of March 31, 2024
Liabilities	Level 1		Level 2			Level 3
Warrant liabilities	$	-	$	(2,697	)	$	-
Additional Subordinated Term Loan Warrants Derivative		-		-			(2,151	)
Subordinated Term Loan Warrants Make-Whole Derivative		-		-			(9,762	)
Total	$	-	$	(2,697	)	$	(11,913	)

	As of December 31, 2023
Liabilities	Level 1		Level 2			Level 3
Warrant liabilities	$	-	$	(26,493	)	$	-
Additional Subordinated Term Loan Warrants Derivative		-		-			(2,013	)
Subordinated Term Loan Warrants Make-Whole Derivative		-		-			(11,045	)
Total	$	-	$	(26,493	)	$	(13,058	)

Level 3 Rollfoward	Additional Subordinated Term Loan Warrants Derivative			Subordinated Term Loan Warrants Make-Whole Derivative
December 31, 2023 balances	$	(11,045	)	$	(2,013	)
Additions		-			-
Changes in fair value		(367	)		(138	)
Reclassified to level 2		1,650			-
March 31, 2024 balances	$	(9,762	)	$	(2,151	)

The following table provides quantitative information of the key assumptions utilized in the Subordinated Term Loan Warrants Make-Whole Derivative fair value measurements as of measurement dates:


	As of			As of
	March 31,			December 31,
	2024			2023
Price of Class A Common Stock	$	0.40		$	1.85
Strike Price of Class A Common Stock	$	18.96		$	18.96
Risk-free interest rate		4.35	%		3.90	%
Expected volatility		90.0	%		85.0	%
Expiration Date		December 12, 2027			December 12, 2027

Commitments and contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Note 17—Commitments and contingencies

Legal Matters

Management Rollover Settlement

Leases

Schedule of operating lease payments
Years Ending December 31,
2024	$	424
Total minimum lease payments		424
Less: Imputed interest		(26	)
Total operating lease liabilities	$	398

Related party transactions

3 Months Ended

Mar. 31, 2024

Related party transactions

Note 18—Related party transactions

On February 1, 2023, the Company issued the NZ Superfund Convertible Debenture, which was subsequently amended, with NZ Superfund.

See Note 6 for further information regarding these convertible debentures.

Concentrations

3 Months Ended

Mar. 31, 2024

Risks and Uncertainties [Abstract]

Concentrations

Note 19—Concentrations

Subsequent events

3 Months Ended

Mar. 31, 2024

Subsequent Events

Subsequent events

Note 20—Subsequent events

Nature of operations and summary of significant accounting policies (Policies)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of Business – Rubicon Technologies, Inc. and all subsidiaries are hereafter referred to as “Rubicon” or the “Company.”

Reverse Stock Split

Mergers

Basis of Presentation and Consolidation

Liquidity and going concern consideration

Segments

Use of Estimates

Emerging Growth Company

Revenue Recognition

Service Revenue:

Recyclable Commodity Revenue:

Cost of Revenue, exclusive of amortization and depreciation

Cost of recyclable commodity revenues primarily consists of expenses related to purchases of OCC, ONP, aluminum, glass, pallets and other recyclable materials, and any associated transportation fees.

Cash and Cash Equivalents

Accounts Receivable and Contract Balances

Accrued Hauler Expenses

Fair Value Measurements

Level 1 – Valuations for financial assets and financial liabilities traded in active exchange markets, such as the NYSE.

Level 2 – Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar financial assets and financial liabilities.

See Note 16 for further information regarding fair value measurements.

Offering Costs

Customer Acquisition Costs

Warrants

As of March 31, 2024, the Company has both liability-classified and equity-classified warrants outstanding. See Note 10 for further information.

Earn-out Liabilities

(1)

(2)

Noncontrolling Interest

Income Taxes

Tax Receivable Agreement Obligation

The Company accounts for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows:

records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange;

the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss.

Earnings (Loss) Per Share

Derivative Financial Instruments

Stock-Based Compensation

Discontinued operations of the SaaS Business (Tables)

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations [Table Text Block]


Assets and Liabilities of Discontinued Operations	March 31, 2024		December 31, 2023
Accounts receivable, net	$	5,339	$	4,047
Contract assets, net		632		1,054
Prepaid expenses		79		108
Other current assets		288		48
Current assets of discontinued operations		6,338		5,257
Property and equipment, net		676		793
Goodwill		12,260		12,260
Intangible assets, net		385		550
Total assets of discontinued operations	$	19,659	$	18,860

Accrued expenses	$	919	$	356
Contract liabilities		7,198		5,860
Current liabilities of discontinued operations	$	8,117	$	6,216


Results of Discontinued Operations	March 31, 2024			March 31, 2023
Revenue: Service	$	3,013		$	2,041
Cost of revenue (exclusive of amortization and depreciation): Service		1,000			487
Sales and marketing		1,500			829
Product development		700			651
General and administrative		200			(41	)
Amortization and depreciation		282			248
Total costs and expense		3,682			2,174
Loss before income taxes		(669	)		(133	)
Income taxes expenses (benefits)		-			-
Net loss from discontinued operations, net of taxes	$	(669	)	$	(133	)

Property and equipment (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Schedule of property and equipment
	March 31,			December 31,
	2024			2023
Property and equipment of continuing operations:
Computers, equipment and software	$	2,349		$	2,324
Furniture and fixtures		210			210
Leasehold improvements		1,441			1,441
Total property and equipment		4,000			3,975
Less accumulated amortization and depreciation		(3,475	)		(3,343	)
Total property and equipment, net	$	525		$	632

Property and equipment of discontinued operations:
Customer equipment	$	1,891		$	1,891
Less accumulated amortization and depreciation		(1,215)			(1,098)
Total property and equipment, net	$	676		$	793

Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of components of long-term debt


	March 31,			December 31,
	2024			2023
Term loan balance	$	110,361		$	109,422
Convertible debt balance		1,489			1,467
Related-party convertible debt balance		18,814			18,424
Less unamortized deferred debt charges		(28,219	)		(32,010	)
Total borrowed		102,445			97,303
Less short-term debt obligation balance		-			-
Long-term debt obligation balance	$	102,445		$	97,303

Schedule of maturities of long-term debt


Fiscal Years Ending December 31,
2024	$	-
2025		110,361
2026		20,303
Total	$	130,664

Accrued expenses (Tables)

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

Schedule of accrued expenses

Schedule of accrued expenses
	March 31,		December 31,
	2024		2023
Accrued expenses of continuing operations:
Accrued hauler expenses	$	45,866	$	63,367
Accrued compensation		6,111		4,221
FPA Settlement Liability (as defined in Note 11)		-		2,000
Other accrued expenses		3,283		7,057
Total accrued expenses	$	55,260	$	76,645

Accrued expenses of discontinued operations:
Accrued expenses	$	919	$	356

Goodwill and other intangibles (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets and goodwill


	March 31, 2024
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets of continuing operations:
Trade Name	5	$	728	$	(728	)	$	-
Customer and hauler relationships	2 to 8		20,976		(15,340	)		5,636
Non-competition agreements	3 to 4		550		(550	)		-
Technology	3		1,197		(1,197	)		-
Total finite-lived intangible assets			23,451		(17,815	)		5,636
Domain Name	Indefinite		836		-			836
Total intangible assets		$	24,287	$	(17,815	)	$	6,472

Intangible assets of discontinued operations:
Technology	3	$	1,981	$	(1,596	)	$	385
Total intangible assets of discontinued operations		$	1,981	$	(1,596	)	$	385

	December 31, 2023
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets of continuing operations:
Trade Name	5	$	728	$	(728	)	$	-
Customer and hauler relationships	2 to 8		20,976		(14,700	)		6,276
Non-competition agreements	3 to 4		550		(550	)		-
Technology	3		1,197		(1,197	)		-
Total finite-lived intangible assets			23,451		(17,175	)		6,276
Domain Name	Indefinite		835		-			835
Total intangible assets		$	24,286	$	(17,175	)	$	7,111

Intangible assets of discontinued operations:
Technology	3	$	1,981	$	(1,431	)	$	550
Total intangible assets of discontinued operations		$	1,981	$	(1,431	)	$	550

Schedule of finite- lived intangible assets, future amortization expense


Fiscal Years Ending December 31,
2024	$	(1,920	)
2025		(2,559	)
2026		(1,157	)
Total future amortization of intangible assets	$	(5,636	)

Stockholders’ (deficit) equity (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of stockholders equity

Schedule of stockholders equity
	Authorized		Issued		Outstanding
Class A Common Stock		690,000,000		52,406,059		52,406,059
Class V Common Stock		275,000,000		1,074,899		1,074,899
Preferred Stock		10,000,000		-		-
Total shares as of March 31, 2024		975,000,000		53,480,958		53,480,958

The table set forth below reflects information about the Company’s equity as of December 31, 2023.

	Authorized		Issued		Outstanding
Class A Common Stock		690,000,000		39,643,584		39,643,584
Class V Common Stock		275,000,000		4,425,388		4,425,388
Preferred Stock		10,000,000		-		-
Total shares as of December 31, 2023		975,000,000		44,068,972		44,068,972

Equity-based compensation (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of RSUs activity

Schedule of RSUs activity
	Units			Weighted Average Grant Date Fair Value
Nonvested – December 31, 2023		518,625		$	10.02
Granted		-			-
Vested		(198,789	)		9.88
Forfeited/redeemed		(5,794	)		15.84
Nonvested – March 31, 2024		314,042		$	10.00

Loss per share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of net loss per share

Schedule of net loss per share
	Three Months Ended March 31, 2024
Numerator:
Net loss from continuing operations	$	(16,484	)
Less: Net loss from continuing operations attributable to noncontrolling interests		(1,437	)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	$	(15,047	)

Net loss from discontinued operations	$	(669	)
Less: Net loss from discontinued operations attributable to noncontrolling interests		(45	)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$	(624	)

Denominator:
Weighted average shares of Class A Common Stock outstanding – Basic and diluted		46,068,599

Net loss from continuing operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.33	)
Net loss from discontinued operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.01	)

The computation of net loss per share attributable to Rubicon Technologies, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding for the three months ended March 31, 2023 are as follows (amounts in thousands, except for share and per share amounts):


	Three Months Ended March 31, 2023
Numerator:
Net loss from continuing operations	$	(9,318	)
Less: Net loss from continuing operations attributable to noncontrolling interests		(6,234	)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	$	(3,084	)

Net loss from discontinued operations	$	(133	)
Less: Net loss from discontinued operations attributable to noncontrolling interests		(88	)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$	(45	)

Denominator:
Weighted average shares of Class A Common Stock outstanding – Basic and diluted		7,427,116

Net loss from continuing operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.42	)
Net loss from discontinued operations per share attributable to Class A Common Stock – Basic and diluted	$	(0.01	)

Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]


	As of March 31, 2024
Liabilities	Level 1		Level 2			Level 3
Warrant liabilities	$	-	$	(2,697	)	$	-
Additional Subordinated Term Loan Warrants Derivative		-		-			(2,151	)
Subordinated Term Loan Warrants Make-Whole Derivative		-		-			(9,762	)
Total	$	-	$	(2,697	)	$	(11,913	)

	As of December 31, 2023
Liabilities	Level 1		Level 2			Level 3
Warrant liabilities	$	-	$	(26,493	)	$	-
Additional Subordinated Term Loan Warrants Derivative		-		-			(2,013	)
Subordinated Term Loan Warrants Make-Whole Derivative		-		-			(11,045	)
Total	$	-	$	(26,493	)	$	(13,058	)

Level 3 Rollfoward	Additional Subordinated Term Loan Warrants Derivative			Subordinated Term Loan Warrants Make-Whole Derivative
December 31, 2023 balances	$	(11,045	)	$	(2,013	)
Additions		-			-
Changes in fair value		(367	)		(138	)
Reclassified to level 2		1,650			-
March 31, 2024 balances	$	(9,762	)	$	(2,151	)

Schedule of derivative fair value measurements


	As of			As of
	March 31,			December 31,
	2024			2023
Price of Class A Common Stock	$	0.40		$	1.85
Strike Price of Class A Common Stock	$	18.96		$	18.96
Risk-free interest rate		4.35	%		3.90	%
Expected volatility		90.0	%		85.0	%
Expiration Date		December 12, 2027			December 12, 2027

Commitments and contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of operating lease payments

Schedule of operating lease payments
Years Ending December 31,
2024	$	424
Total minimum lease payments		424
Less: Imputed interest		(26	)
Total operating lease liabilities	$	398

Nature of operations and summary of significant accounting policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Cash and cash equivalents	$ 13,846		$ 18,695
Accounts receivable, net	52,049		62,930
Unbilled contracts receivable	60,000
Allowance for doubtful accounts	3,200		2,700
Unbilled receivables	59,600		75,600
Customer invoice	70,100
Contract assets	600		1,100
Deferred revenue	1,400		1,500
Contract liability recognized	1,500
Contract liabilities	7,200		5,900
Deferred offering costs capitalized	0		0
Additional paid-in capital	67,300
Gain on settlement	600	$ 0
Fair value of Earn-out Interests	0		100
Other income (expense)	100
Income tax expense (benefit)	$ 0	$ 0
Effective tax rate	0.10%	0.20%
Net deferred tax liability	$ 200		$ 200
Common Class A [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common stock, par value	$ 0.0001		$ 0.0001
Common Class A [Member] \| Merger Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares issued	186,064
Common Class A [Member] \| Cantor Sales Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Equity offering maximum amount	$ 50,000
Common Class V [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common stock, par value	$ 0.0001		$ 0.0001
Common Class B [Member] \| Merger Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares issued	1,112,605
Revolving Credit Facility [Member] \| June 2023 Revolving Credit Facility [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Line of credit facility, maximum borrowing capacity	$ 90,000
Line of credit facility, remaining borrowing capacity	$ 0

Mergers (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Aug. 15, 2022	Mar. 31, 2024	Mar. 31, 2023
Business Acquisition [Line Items]
Contributed capital		$ 73,800
Cash consideration		28,900
Aggregate proceeds received from the PIPE Investors		121,000
Transaction costs		67,300
Other expense		600
Gain on settlement		$ 600	$ 0
Common Stock Class A [Member]
Business Acquisition [Line Items]
Retained aggregate shares		2,480,865
Transaction costs		$ 7,000
Common Stock Class V [Member]
Business Acquisition [Line Items]
Retained aggregate shares		14,834,735
Class A Common Stock [Member]
Business Acquisition [Line Items]
Number of shares newly issued		20,000
Class B Units [Member]
Business Acquisition [Line Items]
Number of shares newly issued		110,000
Class A Shares [Member]
Business Acquisition [Line Items]
Number of shares forfeited		20,000
Founder Warrants [Member]
Business Acquisition [Line Items]
Warrant, description	each representing a right to acquire one Founder Class A Share for $92.00 (a “Founder Public Warrant”), converted automatically, on a one-for-one basis, into a public warrant of the Company (a “Public Warrant”) that represents a right to acquire one share of Class A Common Stock for $92.00 pursuant to the Warrant Agreement
PIPE Investors [Member] \| Class A Common Stock [Member]
Business Acquisition [Line Items]
Aggregate of shares		1,512,500
Share Price		$ 80.00
FPA Sellers [Member] \| Class A Common Stock [Member]
Business Acquisition [Line Items]
Aggregate of shares		885,327

Discontinued operations of the SaaS Business (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Contract assets, net	$ 600		$ 1,100
Current assets of discontinued operations	6,338		5,257
Contract liabilities	7,200		5,900
Current liabilities of discontinued operations	8,117		6,216
Loss before income taxes	(669)	$ (133)
Net loss from discontinued operations, net of taxes	(669)	(133)
Discontinued Operations [Member]
Accounts receivable, net	5,339		4,047
Contract assets, net	632		1,054
Prepaid expenses	79		108
Other current assets	288		48
Current assets of discontinued operations	6,338		5,257
Property and equipment, net	676		793
Goodwill	12,260		12,260
Intangible assets, net	385		550
Total assets of discontinued operations	19,659		18,860
Accrued expenses	919		356
Contract liabilities	7,198		5,860
Current liabilities of discontinued operations	8,117		$ 6,216
Revenue: Service	3,013	2,041
Cost of revenue (exclusive of amortization and depreciation): Service	1,000	487
Sales and marketing	1,500	829
Product development	700	651
General and administrative	200	(41)
Amortization and depreciation	282	248
Total costs and expense	3,682	2,174
Loss before income taxes	(669)	(133)
Income taxes expenses (benefits)
Net loss from discontinued operations, net of taxes	$ (669)	$ (133)

Discontinued operations of the SaaS Business (Details Narrative) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Discontinued Operations and Disposal Groups [Abstract]
Stock purchase price	$ 68,200
Earn-out payment	$ 12,500

Property and equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 4,000	$ 3,975
Less accumulated amortization and depreciation	(3,475)	(3,343)
Total property and equipment, net	525	632
Discontinued Operations [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	1,891	1,891
Less accumulated amortization and depreciation	(1,215)	(1,098)
Total property and equipment, net	676	793
Property, Plant and Equipment [Member] \| Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	2,349	2,324
Property, Plant and Equipment [Member] \| Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	210	210
Property, Plant and Equipment [Member] \| Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 1,441	$ 1,441

Property and equipment (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Amortization and depreciation expense	$ 100	$ 100
Total property and equipment	4,000		$ 3,975
Accumulated depreciation	3,475		3,343
Noncurrent Assets Of Discontinued Operations [Member]
Property, Plant and Equipment [Line Items]
Accumulated depreciation	1,200		1,100
Equipment [Member] \| Noncurrent Assets Of Discontinued Operations [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 1,900		$ 1,900

Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Term loan balance	$ 110,361	$ 109,422
Convertible debt balance	1,489	1,467
Related-party convertible debt balance	18,814	18,424
Less unamortized deferred debt charges	(28,219)	(32,010)
Total borrowed	102,445	97,303
Less short-term debt obligation balance
Long-term debt obligation balance	$ 102,445	$ 97,303

Debt (Details 1) $ in Thousands	Mar. 31, 2024 USD ($)
Debt Disclosure [Abstract]
2024
2025	110,361
2026	20,303
Total	$ 130,664

Debt (Details Narrative) - USD ($) $ in Thousands						1 Months Ended				3 Months Ended		12 Months Ended
Debt (Details Narrative) - USD ($) $ in Thousands	Jun. 07, 2023	Feb. 07, 2023	Feb. 02, 2023	Feb. 02, 2023	Dec. 14, 2018	Aug. 25, 2023	Dec. 16, 2022	Nov. 30, 2022	Dec. 22, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Sep. 22, 2023	Mar. 29, 2019
Line of Credit Facility [Line Items]
Principal amount								$ 7,000
Loss on extinguishments of debt											$ (2,103)
Interest expense										10,900	7,800
Convertible Debentures [Member]
Line of Credit Facility [Line Items]
Loss on extinguishment of debt										1,300
Deferred debt charges										1,700		$ 2,500
Principal amount								$ 7,000
Interest rate								4.00%
Principal converted into shares										2,300
Accrued interest to principal										$ 100
Convertible debentures share										2,849,962
YA Convertible Debentures [Member]
Line of Credit Facility [Line Items]
Principal converted into shares						$ 5,600
Convertible debentures share						1,428,760
Insider Convertible Debentures [Member]
Line of Credit Facility [Line Items]
Maturity date							Jun. 16, 2024
Amortization of deferred debt charges										$ 100	200
Principal amount							$ 11,900
Interest rate							6.00%
Accrued interest to principal										200	100
Net proceeds							$ 10,500
Third Party Convertible Debentures [Member]
Line of Credit Facility [Line Items]
Maturity date			Aug. 01, 2024
Interest rate effective percentage			6.00%	6.00%
Principal amount			$ 1,400	$ 1,400
Net proceeds			$ 1,200
NZ Superfund [Member]
Line of Credit Facility [Line Items]
Maturity date				Aug. 01, 2024
Interest rate effective percentage			8.00%	8.00%
Amortization of deferred debt charges										100	100
Principal amount			$ 5,100	$ 5,100
Accrued interest to principal										200	100
Net proceeds				$ 4,500
Rodina [Member]
Line of Credit Facility [Line Items]
Line of credit													$ 15,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Long-term debt, gross		$ 75,000			$ 60,000
Maturity date		Dec. 14, 2025			Dec. 14, 2023
Interest rate effective percentage		4.80%			5.60%
Repayments of debt	$ 48,600
Loss on extinguishment of debt												2,600
Amortization of deferred debt charges										$ 200
June 2023 Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Long-term debt, gross	$ 90,000
Maturity date	Jun. 07, 2026
Interest rate effective percentage	4.25%									9.70%
Line of credit										$ 72,000
Remainning credit value										0
Deferred debt charges										2,100		2,300
Term Loan Facility [Member]
Line of Credit Facility [Line Items]
Long-term debt, gross														$ 20,000
Interest rate effective percentage		9.60%												9.50%
Principal amount		$ 10,000
Loss on extinguishments of debt		$ 800										2,500
Subordinated Term Loan [Member]
Line of Credit Facility [Line Items]
Maturity date									Dec. 22, 2022
Interest rate effective percentage									14.00%
Deferred debt charges										9,200		$ 10,300
Amortization of deferred debt charges										$ 1,100	$ 200
Long-term construction loan									$ 20,000
June 2023 Term Loan [Member]
Line of Credit Facility [Line Items]
Interest rate effective percentage	10.25%									16.80%
Deferred debt charges										$ 24,000
Amortization of deferred debt charges										$ 2,600
Principal amount	$ 75,000
Term debt description										The June 2023 Revolving Credit Facility, the June 2023 Term Loan and the Subordinated Term Loan are subject to certain cross-default provisions under the intercreditor agreement. In addition, the June 2023 Revolving Credit Facility, the June 2023

Accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued hauler expenses	$ 45,866	$ 63,367
Accrued compensation	6,111	4,221
FPA Settlement Liability (as defined in Note 11)		2,000
Other accrued expenses	3,283	7,057
Total accrued expenses	55,260	76,645
Accrued expenses	$ 919	$ 356

Accrued expenses (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
RSUs granted amount	$ 8,200
Amount of rollover consideration	26,800
Gain on settlement of incentive compensation	$ 18,600
Accrued expenses		$ 55,260	$ 76,645
Other long-term liabilities		3,015	3,395
Current liabilities held for sale		900	400
Accrued Management Rollover Obligation [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Accrued expenses		2,100	2,200
Other long-term liabilities		$ 3,000	$ 3,400

Goodwill and other intangibles (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 24,287	$ 24,286
Accumulated Amortization	(17,815)	(17,175)
Net Carrying Amount	6,472	7,111
Discontinued Operations [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,981	1,981
Accumulated Amortization	(1,596)	(1,431)
Net Carrying Amount	385	550
Domain Name [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	836	835
Accumulated Amortization
Net Carrying Amount	836	835
Finite-Lived Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	23,451	23,451
Accumulated Amortization	(17,815)	(17,175)
Net Carrying Amount	$ 5,636	$ 6,276
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years	5 years
Gross Carrying Amount	$ 728	$ 728
Accumulated Amortization	(728)	(728)
Net Carrying Amount
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	20,976	20,976
Accumulated Amortization	(15,340)	(14,700)
Net Carrying Amount	$ 5,636	$ 6,276
Customer Relationships [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	2 years	2 years
Customer Relationships [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	8 years	8 years
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 550	$ 550
Accumulated Amortization	(550)	(550)
Net Carrying Amount
Noncompete Agreements [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Noncompete Agreements [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	4 years	4 years
Technology Equipment [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Gross Carrying Amount	$ 1,197	$ 1,197
Accumulated Amortization	(1,197)	(1,197)
Net Carrying Amount
Technology Equipment [Member] \| Discontinued Operations [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Gross Carrying Amount	$ 1,981	$ 1,981
Accumulated Amortization	(1,596)	(1,431)
Net Carrying Amount	$ 385	$ 550

Goodwill and other intangibles (Details 1) $ in Thousands	Mar. 31, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ (1,920)
2025	(2,559)
2026	(1,157)
Total future amortization of intangible assets	$ (5,636)

Goodwill and other intangibles (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Goodwill discontinued operations	$ 12,300
Amortization of intangible assets	600	$ 600
Accumulated amortization	(17,815)		$ (17,175)
Goodwill	19,872		19,872
Noncurrent Assets Of Discontinued Operations [Member]
Intangible assets	2,000		2,000
Accumulated amortization	1,600		1,400
Goodwill	12,300		12,300
Discontinued Operations [Member]
Amortization of intangible assets	200	$ 200
Accumulated amortization	$ (1,596)		$ (1,431)

Stockholders' (deficit) equity (Details) - shares	Mar. 31, 2024	Dec. 31, 2023
Class of Stock [Line Items]
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Equity [Member]
Class of Stock [Line Items]
Total shares authorized	975,000,000	975,000,000
Total shares issued	53,480,958	44,068,972
Total shares outstanding	53,480,958	44,068,972
Common Class A [Member]
Class of Stock [Line Items]
Common stock, shares authorized	690,000,000	690,000,000
Common stock, shares issued	52,406,059	39,643,584
Common stock, shares outstanding	52,406,059	39,643,584
Common Class A [Member] \| Equity [Member]
Class of Stock [Line Items]
Common stock, shares authorized	690,000,000	690,000,000
Common stock, shares issued	52,406,059	39,643,584
Common stock, shares outstanding	52,406,059	39,643,584
Common Class V [Member]
Class of Stock [Line Items]
Common stock, shares authorized	275,000,000	275,000,000
Common stock, shares issued	1,074,899	4,425,388
Common stock, shares outstanding	1,074,899	4,425,388
Common Class V [Member] \| Equity [Member]
Class of Stock [Line Items]
Common stock, shares authorized	275,000,000	275,000,000
Common stock, shares issued	1,074,899	4,425,388
Common stock, shares outstanding	1,074,899	4,425,388
Preferred Stock [Member] \| Equity [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding

Stockholders’ (deficit) equity (Details Narrative)	3 Months Ended
Stockholders’ (deficit) equity (Details Narrative)	Mar. 31, 2024 shares
Equity [Abstract]
Number of common stock exchanged	3,350,489

Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 07, 2023	Aug. 15, 2022	Dec. 22, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Feb. 28, 2024	Mar. 22, 2023	Nov. 30, 2022	Nov. 18, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, description		Company assumed a total of 3,752,107 outstanding warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $92.00 per share.
Warrant liabilities										$ 2,600
Warrant exercise price				$ 0.08
Public Warrants [Member] \| Private Placement [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding warrants		1,976,560
Private Warrants [Member] \| Private Placement [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding warrants		1,775,547
Term Loan Warrants [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding warrants				500
Warrants converted into common stock, amount			$ 2,600	$ 1,100		$ 3,700
Warrants converted into common stock, shares				1,436,726		1,355,045
Term Loan Warrants [Member] \| Firstamendment [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrant liabilities								$ 250
Term Loan Warrants [Member] \| Second Amendment [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrant liabilities								$ 350
Term Loan Warrants [Member] \| Additions
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrant liabilities	$ 380
YA Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrant liabilities						$ 18,600
Warrants converted into common stock, shares					4,104,797
Warrant purchase price									$ 6,000
Warrant is exercisable amount									$ 20,000
Warrant exercise price									$ 0.0008
Warrant liability reclassified to stockholders deficit equity							$ 10,800
Advisor Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding warrants									62,500
Warrant exercise price									$ 0.08
Loss on change in fair value				$ 100
June 2023 Term Loan Warrants [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants converted into common stock, shares	2,121,605
Fair value of warrants				2,200		$ 7,900
Change in fair value of warrants				$ 5,700

Forward Purchase Agreement (Details Narrative)	3 Months Ended
Forward Purchase Agreement (Details Narrative)	Mar. 31, 2024
Forward Purchase Agreement
Termination Agreement	the FPA Sellers entered into the Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). On November 30, 2022, the Company and the FPA Sellers entered into the FPA Termination Agreement and terminated the Forward Purchase Agreement. Pursuant to the FPA Termination Agreement, (i) the Company made a one-time $6.0 million cash payment to the FPA Sellers upon execution of the FPA Termination Agreement and agreed to make a $2.0 million payment to the FPA Sellers, which can be settled in cash or shares of Class A Common Stock at the Company’s sole option, on or around the earlier of (a) May 30, 2024 (the “FPA Lock-Up Date”), and (b) six months following 90% or more of the YA Convertible Debentures is repaid or converted into shares of Class A Common Stock (the “FPA Earlier Lock-Up Date”), (ii) the FPA Sellers forfeited and returned to the Company 277,765 shares of Class A Common Stock which the Company subsequently canceled, and further agreed not to transfer any of 267,606 shares of Class A Common Stock the FPA Sellers retained until the earlier of (a) the FPA Lock-Up Date, and (b) the FPA Earlier Lock-Up Date. As more than 90% of the YA Convertible Debentures were converted into shares of Class A Common Stock on August 25, 2023, the FPA Earlier Lock-Up Date was set as February 25, 2024. The value of 277,765 shares of Class A Common Stock returned by the FPA Seller and subsequently canceled by the Company was $4.6 million as of the FPA Termination Agreement execution date, which was recognized in common stock – Class A and accumulated deficit on the consolidated balance sheet. The $2.0 million obligation (the “FPA Settlement Liability”) was included in accrued expenses on the accompanying condensed consolidated balance sheet as of December 31, 2023 and settled by issuance of 1,656,727 shares of Class A Common Stock in February 2024 and $0.8 million cash payment made by the Company in March 2024.

Yorkville SPA (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2024	Nov. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Principal Amount		$ 7,000
Purchase price		7,000
Noncurrent assets		$ 2,000
Yorkville Facilities [Member]
Defined Benefit Plan Disclosure [Line Items]
Principal Amount	$ 10,000
Purchase price	10,000
Noncurrent assets	$ 2,100

Cantor Sales Agreement (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	Sep. 05, 2023	Mar. 31, 2024	Mar. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from common stock			$ 1,100
Cantor Sales Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from common stock	$ 50,000

Equity-based compensation (Details)	3 Months Ended
Equity-based compensation (Details)	Mar. 31, 2024 $ / shares shares
Equity [Abstract]
Options outstanding, beginning balance	518,625
Weighted average grant date fair value, beginning \| $ / shares	$ 10.02
Options granted
Weighted average grant date fair value, granted
Options vested	(198,789)
Weighted average grant date fair value, vested \| $ / shares	$ 9.88
Options forfeited/redeemed	(5,794)
Weighted average grant date fair value, forfeited/redeemed \| $ / shares	$ 15.84
Options outstanding, ending balance	314,042
Weighted average grant date fair value, ending \| $ / shares	$ 10.00

Equity-based compensation (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Aug. 15, 2022
Class of Stock [Line Items]
Equity compensation costs	$ 600	$ 9,300
Exchange of vested RSUs	206,906
Exchange of vested DSUs	17,331
Unrecognized compensation	$ 3,200
Weighted-average period	1 year 1 month 6 days
Common Class A [Member]
Class of Stock [Line Items]
Common stock, shares authorized	690,000,000		690,000,000
Common stock, shares issued	52,406,059		39,643,584
Common stock, shares outstanding	52,406,059		39,643,584
2022 Plan [Member] \| Common Class A [Member]
Class of Stock [Line Items]
Common stock, shares authorized				3,982,409
Common stock, shares issued				2,055,769
Common stock, shares outstanding				2,055,769

Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net loss from continuing operations	$ (17,153)	$ (9,451)
Less: Net loss from continuing operations attributable to noncontrolling interests	(1,437)	(6,234)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	(15,047)	(3,084)
Net loss from discontinued operations	(669)	(133)
Less: Net loss from discontinued operations attributable to noncontrolling interests	$ (45)	$ (88)
Weighted average shares outstanding, basic	46,068,599	7,427,116
Weighted average shares outstanding, diluted	46,068,599	7,427,116
Net loss per Class A Common share - basic	$ (0.33)	$ (0.41)
Net loss per Class A Common share - diluted	$ (0.33)	$ (0.41)
Common Class A [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net loss from continuing operations	$ (16,484)	$ (9,318)
Less: Net loss from continuing operations attributable to noncontrolling interests	(1,437)	(6,234)
Net loss attributable to continuing operations of Rubicon Technologies, Inc.	(15,047)	(3,084)
Net loss from discontinued operations	(669)	(133)
Less: Net loss from discontinued operations attributable to noncontrolling interests	(45)	(88)
Net loss attributable to discontinued operations of Rubicon Technologies, Inc.	$ (624)	$ (45)
Weighted average shares outstanding, basic	46,068,599	7,427,116
Weighted average shares outstanding, diluted	46,068,599	7,427,116
Net loss per Class A Common share - basic	$ (0.33)	$ (0.42)
Net loss per Class A Common share - diluted	(0.33)	(0.42)
Net loss per Class A Common share - basic	(0.01)	(0.01)
Net loss per Class A Common share - diluted	$ (0.01)	$ (0.01)

Fair value measurements (Details) - USD ($) $ in Thousands	3 Months Ended
Fair value measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Additional Subordinated Term Loan Warrants Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Begiining balances	$ (11,045)
Additions
Changes in fair value	(367)
March 31, 2024 balances	1,650
Ending balances	(9,762)
Subordinated Term Loan Warrants Makewhole Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Begiining balances	(2,013)
Additions
Changes in fair value	(138)
March 31, 2024 balances
Ending balances	(2,151)
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities
Additional Subordinated Term Loan Warrants Derivative
Subordinated Term Loan Warrants Make-Whole Derivative
Total
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	(2,697)	(26,493)
Additional Subordinated Term Loan Warrants Derivative
Subordinated Term Loan Warrants Make-Whole Derivative
Total	(2,697)	(26,493)
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities
Additional Subordinated Term Loan Warrants Derivative	(2,151)	(2,013)
Subordinated Term Loan Warrants Make-Whole Derivative	(9,762)	(11,045)
Total	$ (11,913)	$ (13,058)

Fair value measurements (Details 1) - Subordinated Term Loan Warrants Makewhole Derivative [Member] - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Price of Class A Common Stock	$ 0.40	$ 1.85
Strike Price of Class A Common Stock	$ 18.96	$ 18.96
Risk-free interest rate	4.35%	3.90%
Expected volatility	90.00%	85.00%
Expiration Date	December 12, 2027	December 12, 2027

Fair value measurements (Details Narrative) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) $ / shares
Class of Warrant or Right [Line Items]
Exercise prices \| $ / shares	$ 0.08
Additional Subordinated Term Loan Warrants [Member]
Class of Warrant or Right [Line Items]
Value of derivative \| $	$ 350
Discount rate	15.00%

Commitments and contingencies (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 424
Total minimum lease payments	424
Less: Imputed interest	(26)
Total operating lease liabilities	$ 398

Commitments and contingencies (Details Narrative) $ in Thousands	Mar. 31, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Due in the next 12 months	$ 2,800
Thereafter	$ 3,600

Related party transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended		3 Months Ended
	May 07, 2024	Jun. 30, 2024	Sep. 15, 2023	Dec. 31, 2023	Mar. 31, 2024	Sep. 22, 2023
Related Party Transaction [Line Items]
Due in the next 12 months					$ 15,000
Subscription fee		$ 7,500
SaaS Business [Member]
Related Party Transaction [Line Items]
Share price	$ 0.0001
Series A Convertible Perpetual Preferred Stock [Member]
Related Party Transaction [Line Items]
Number of stock sold	20,000
Aggregate purchase price	$ 20,000
June 2023 Revolving Credit Facility [Member]
Related Party Transaction [Line Items]
Letter of Credit					$ 72,000
Partial prepayment	68,200
June 2023 Term Loan Agreement [Member]
Related Party Transaction [Line Items]
Partial prepayment	$ 12,500
Rodina [Member]
Related Party Transaction [Line Items]
Letter of Credit						$ 15,000
Rodina Warrant [Member]
Related Party Transaction [Line Items]
Number of warrants granted			498,119
PIPE Investor [Member]
Related Party Transaction [Line Items]
Subscription fee				$ 3,800
Shares issued					2,246,182

Concentrations (Details Narrative) - Customer Concentration Risk [Member]	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Revenue Benchmark [Member] \| Two Customer [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	36.00%
Revenue Benchmark [Member] \| First Customer [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage		16.00%
Accounts Receivable [Member] \| Two Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	52.00%
Accounts Receivable [Member] \| Three Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			58.00%

Subsequent events (Details Narrative) $ / shares in Units, $ in Thousands	May 07, 2024 USD ($) $ / shares shares
SaaS Business [Member]
Share price \| $ / shares	$ 0.0001
Conversion price \| $ / shares	$ 0.35
Series A Convertible Perpetual Preferred Stock [Member]
Number of stock sold \| shares	20,000
Aggregate purchase price	$ 20,000
Dividends rate percentage	8.00%
Common Class A [Member]
Shares converted \| shares	57,142,857
June 2023 Revolving Credit Facility [Member]
Partial prepayment	$ 68,200
June 2023 Term Loan Agreement [Member]
Partial prepayment	$ 12,500

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