Thank you, operator. Good morning, everyone, and welcome to Vroom's first quarter 2023 earnings call.

Joining us on the call today are Tom Shortt, Chief Executive Officer; and Bob Krakowiak, Chief Financial Officer. Please note this call will be simultaneously webcast on the Investor Relations section of the company's corporate website at ir.vroom.com.

The first quarter 2023 earnings release and earnings presentation are also posted to the investor relations website. Before we begin, please note that the discussion today includes forward-looking statements within the meaning of the Federal Securities laws, including but not limited to statements about Vroom’s operations and future financial performance.

These and other forward-looking statements are based on management's current assumptions and are neither promises nor guarantees and are subject to a number of risks, uncertainties and other important factors that may cause actual results to differ materially. We direct you to the company's most recent SEC filings, including the Risk Factors section of Vroom's most recent Form 10-K for the year ended December 31, 2022, as updated by our quarterly report on Form 10-Q for the three months ended March 31, 2023.

For additional discussion of factors that could cause actual results to differ materially from those in the forward-looking statements. Please note further that today's discussion, including the forward-looking statements speak only as of the date of this call and Vroom assumes no obligation to update such statements based on future developments or otherwise.

The company may also discuss certain non-GAAP financial measures during today's call. You can find a presentation of the most directly comparable GAAP measures and a reconciliation of those measures in the first quarter 2023 earnings release and earnings presentation.

I'd like to now hand the conference over to Tom Shortt, chief Executive Officer, Tom?

Thank you, Jon, and thank you to all the investors, analysts, Vroommates, UACC colleagues and third-party partners who are joining us today. Starting on Slide 3, we introduced our long-term roadmap at our May 26, 2022 Investor Day, where we highlighted our mid-term goal of a breakeven EBITDA business and our long-term goal of 5% to 10% adjusted EBITDA margin business.

I am pleased with the progress we have made as we work towards these goals. As we indicated on Investor Day, we strategically slowed down the business in 2022, while we focus on improving our customer experience, improving our processes across titling and registration, pricing, marketing, reconditioning and logistics, and we insourced our sales function from our primary third-party resource.

As we execute our strategy in 2023, we intend to resume growth, sell through aged inventory, improve variable cost per unit, continue to reduce fixed costs, and continue to convert balance sheet items into cash, all while living within our means. Our long-term roadmap remains unchanged.

During 2023, we will continue to focus on our three key objectives and four strategic initiatives. On Slide 4, our first quarter highlights.

Before I discuss first quarter performance, please note a change we have made in the presentation of adjusted EBITDA and other non-GAAP measures. In previous quarters, we added back movements related to fair value adjustments of finance receivables.

We continue to hold the residual certificates from our 2023-1 securitization. In order to better reflect the current state of our finance receivables and the economic impact of those receivables to the company, we are including fair value adjustments of finance receivables in all adjusted EBITDA metrics.

Bob will speak more to this during his section. During the first quarter, we’ve recognized an adjusted EBITDA loss of $65 million within the range of our expectations.

We improved adjusted EBITDA excluding non-recurring costs by approximately $10 million or 14% sequentially. During the quarter, UACC sold approximately $239 million of rated asset backed securities for proceeds of $238 million, and retained the non-investment grade securities and residual certificates.

In April, as a result of an improved securitization market and the portfolio performance of our 2023-1 securitization, we sold the non-investment grade securities at 99% of par value generating approximately $23 million of additional liquidity. Given the current market condition, we continue to hold the residual certificate.

I'd like to comment on our strategy with regard to UACC securitization. On the right terms, we intend to sell the residual certificates, recognize a gain on sale, and have the transaction off balance sheet.

If the market conditions are not favorable, we expect to hold the residual certificates, keep the transaction on balance sheet, and realize the return on these residual certificates over time. During the quarter, we booked $5 million of upfront expenses related to UACC securitization given that we held the residual certificates and the securitization remains on balance sheet.

Have we sold the residual certificates; these upfront expenses would've been reflected in the gain on sale from the securitization. Excluding these upfront expenses relating to the securitization, our adjusted EBITDA excluding non-recurring costs for the quarter would have improved by $5 million.

E-commerce gross profit per unit or GPPU increased from $1,233 to $2,552 sequentially, benefiting from GPPU on unaged unit and electric vehicle inventory reserves taken in Q4. During the first quarter, 77% of our unit sold were held greater than 180 days compared to 75% in the fourth quarter of last year, and 49% in the third quarter of last year.

During our Q4 earnings call, I mentioned that we expect to sell through the vast majority of our aged inventory in the first half of 2023. As we sell through aged inventory, we have tightened our definition of aged units to greater than 180 days from greater than 270 days.

We expect a significant portion of our sales in the second quarter to be from aged units, which will put significant pressure on GPPU in the second quarter. We expect the back half of the year to show improved GPPU, as we sell a higher mix of unaged units.

We are making progress on our long-term roadmap and our four strategic initiatives. We're in the process of ramping up acquisitions and marketing spend to resume growth while simultaneously continuing to drive operational efficiencies and cost reduction throughout the organization.

We continue to make improvements in transaction processing, including titling and registration. As we've mentioned, our goal is to become best-in-class in titling and registration.

We have and will continue to be very focused on reducing variable and fixed costs. As a result of the operational improvements, we've made across all aspects of the organization, we're able to operate with significantly fewer resources.

In January and April, we completed reductions in force that we expect will result in approximately $42 million of annualized cost savings. Finally, we repurchase $15 million base value of our convertible notes for $6 million, reducing our leverage at a substantial discount.

Moving to Slide 5. During Investor Day, we outlined the unit economic drivers behind our four strategic initiatives that we believe are key to building a profitable business model, and we've been providing quarterly updates on our progress on those areas.

This slide is an update on our first quarter progress by financial lever, first product and vehicle GPPU. GPPU was $2,552, a $1,319 sequential improvement primarily driven by the inventory reserve in Q4, 77% of units sold in the first quarter were aged, and we expect a similar mix of units sold in the second quarter.

As I mentioned, we expect a significant reduction in the mix of aged units in the second half of the year relieving pressure on GPPU. Our GPPU for unaged units or units we've owned less than 180 days was comparable to our Q3 2022 GPPU, which was $4,206.

Unaged units continue to generate GPPU in line with our expectation. We also continue to invest in improvements in our pricing engine, which we expect to unlock increase GPPU.

We continue to see strong product GPPU as we develop and grow our UACC captive financing operations. Our logistics cost consistent with our long-term roadmap and 2023 objective to reduce costs per unit, we reduced our normalized all-in logistics costs per unit by 7% sequentially.

For comparison purposes, we have excluded certain accruals related to third party logistics that were released in the fourth quarter. Our inventory.

Our improved titling and registration processes resulted in a 21% improvement in inventory turns sequentially. As mentioned previously, we are ramping unit vehicle acquisitions to facilitate unit growth in sequential quarters, and we expect to continue to improve our inventory terms.

Our sales costs. We fully transitioned from our third-party sales provider as of the end of January of this year, consistent with our long-term roadmap and 2023 objective to reduce costs per unit, we reduced our selling costs per unit 11% sequentially.

Our titling, registration, and support costs. In the fourth quarter we mentioned significant progress in our titling and registration processes.

At the end of Q1, over 94% of our units were available for sale or pending sale compared to 87% in the fourth quarter, and 52% in the third quarter of last year. Consistent with our long-term roadmap and 2023 objective to reduce costs per unit, we reduced our titling, registration and support costs per unit 20% sequentially.

Additionally, $12 million of restricted cash that was previously trapped on the balance sheet was released within the quarter as a result of our continued improvement. For marketing costs, we increased our marketing spend $1.6 million sequentially to facilitate unit growth going forward.

For fixed costs in January and April of this year, we completed reductions in force that are expected to deliver an additional $22 million of annualized fixed cost savings, consistent with our long-term roadmap and 2023 objective to reduce cost per unit, we reduced our fixed cost per unit 11% sequentially. Lastly, our advanced analytics team, functional business teams and tech team continue to build data assets, analytical assets, and tech assets that we believe in the long term will provide a competitive advantage across title and registration, pricing, conversion, unit and product margin and supply chain costs.

Moving to Slide 6, I want to take a moment to recognize the significant improvements that our Vroommates and UACC colleagues have delivered over the past year. Excluding securitization gain and non-recurring costs we continue to reduce our losses despite absorbing significant GPPU pressure caused by our legacy titling and registration issues in 2022.

We expect to see continued improvement as we sell through the aged inventory that is pressuring GPPU and continue to focus on cost per unit reductions. We have reduced our annualized adjusted SG&A from $684 million in Q1 of 2022 to $264 million in Q1 of 2023, a reduction of over $400 million annualized in only 12 months.

While we continue to make progress on our long-term roadmap, we are at the turn where we are beginning to resume growth while we continue down the road of improving our operations and reducing fixed and variable costs. While our route is uphill for GPPU in Q1 and Q2 as we sell through aged inventory, we expect GPPU to normalize in the back half of the year when the majority of our sales are expected to be from unaged vehicles, which are currently delivering GPPU consistent with our long-term roadmap.

Now, I'll turn it over to Bob to discuss the first quarter result in greater detail. Bob.

Thanks, Tom. I'll start with a summary of our financial performance on Slide 8.

All comparisons are against the prior quarter unless otherwise noted. As Tom mentioned at the start of the call, we have recast our adjusted EBITDA metrics to include fair value adjustments on finance receivables by holding the residual certificates of the securitization completed in January.

We are accounting for those finance receivables under fair value accounting as opposed to health for sale accounting. Due to this, we felt it was no longer appropriate to exclude fair value adjustments from adjusted EBITDA as a significant share of our portfolio would be subject to such adjustments, when they previously only primarily applied to the pre-acquisition portfolio.

We have included a reconciliation of the change in the appendix of this presentation. Total revenue of $197 million decreased 6% as e-commerce units declined 5%.

Consistent with our strategy, we intentionally slowed transactions to focus on operational execution. E-commerce GPPU increased 107% to $2,552.

As we expected and discussed during the Q4 2022 earnings call, we realized the negative impact of selling through aged vehicles as we freed up inventory previously not listed for sale. This impact was offset by a benefit of inventory reserves taken in the fourth quarter that were released as we sold through aged inventory.

Adjusted EBITDA loss, excluding non-recurring costs improved $10 million to $64 million. The improvement was driven by reduced operating costs, higher growth profit in both e-commerce and wholesale channels, partially offset by lower unit volume and $5 million of securitization related expenses at UACC for our January, 2023 securitization.

On the expense side, we further reduced our fixed and variable operating costs as we continue to pursue our three key objectives and four focused strategic initiatives. Turning to UACC, first, I would like to provide an update on the status and performance of our off-balance sheet securitization completed in the third quarter of 2022.

As mentioned during our fourth quarter 2022 earnings call, consistent with increasing default rates across the market, UACC is experiencing higher than anticipated losses on the portfolio. In order to support the transaction, we elected to waive our servicing fees each month in the first quarter.

Due to this decision for accounting purposes, we now consolidate the securitization on broom's financial statements. There was no retroactive adjustment and this change in accounting treatment did not have a material impact on cash, liquidity or our risk profile.

In January of this year, we completed another securitization and used the proceeds of selling the rated notes to pay down our warehouse facilities and provide liquidity to continue portfolio growth at UACC. Due to market conditions, we elected to initially hold the BB notes and residual certificates.

During April, we sold the non-investment grade securities and improved liquidity by $23 million. We continue to hold the residual certificates.

As a result, this securitization remains on our balance sheet as we hold the residual credit risk, we recognize the income and expense from the finance receivables and related debt on the P&L. If market conditions improve and we decide to sell the residual portion of the securitization, we anticipated improvement to our year end liquidity by up to $25 million, we will continue to closely monitor the securitization markets and make the best economic decision in the interest of our stakeholders.

We remain focused on maximizing our liquidity and strengthening our balance sheet. In the first quarter, we repurchase 15 million face value of our convertible notes for $6 million further reducing our leverage.

Additionally, we release over $12 million in restricted cash on the balance sheet as a result of improved titling and registration processes. Let's move to Slide 9, which provides a bridge from fourth quarter 2022 to first quarter 2023 adjusted EBITDA, excluding non-recurring costs, as well as cash and liquidity.

E-commerce gross profit improved sequentially by approximately $5 million. The impact of selling through aged inventory as well as significantly reducing our inventory on hand allowed us to release inventory reserves by approximately $6 million, offsetting that was a negative impact of reduced sales margins on the aged inventory we sold within the quarter, an estimated $9 million headwind.

As mentioned previously, we expect these impacts to abate as we sell through these aged vehicles and improved inventory terms. Wholesale growth profit improved approximately $4 million sequentially, primarily driven by improvements in the overall wholesale market and reduced losses related to tighten issues from prior periods.

In addition to our improvements in e-commerce and wholesale growth profit, we continue to reduce our variable and fixed cost structure as we drive efficiencies throughout the organization. In total, for the quarter, we improved adjusted EBITDA, excluding non-recurring costs by approximately $10 million.

I would like to note that our first quarter results do not include the full quarter of the benefit of our reduction in force announced in late January, or the recently announced reduction in late April. Moving to liquidity, as outlined in the fourth quarter 2022 earnings call, as our retail inventory ages over six months, our floor plan facility does not provide the ability to borrow against the full value of those vehicles, requiring us to temporarily invest cash in inventory.

We anticipated a dip in our cash balance during the first quarter due to higher cash and inventory balances. We expect to recover this cash during the first half of the year as we sell through the age of inventory.

Offsetting this headwind, we released $15 million of cash trapped on the balance sheet, primarily related to initiatives to resolve legacy titling and registration issues. Next, we repurchase $15 million face value of our convertible notes for $6 million, reducing our leverage.

We may continue to opportunistically repurchase notes from time to time to reduce our outstanding indebtedness as a discount subject to market conditions and availability. These factors resulted in $317 million of cash and cash equivalence on the balance sheet at quarter end, which was within the range of our expectations.

Additionally, it is important to understand that earnings from the UACC business have been used to pay down warehouse lines. We could draw against these lines as a source of liquidity.

At the end of the first quarter, there was approximately $60 million of available liquidity at UACC, which one combined with our cash balance would give us greater than $375 million of total available liquidity. I would like to mention two additional transactions we recently completed in April to create incremental liquidity at UACC.

First, despite challenging market conditions, we sold the non-investment grade securities from the January securitization for $23 million. Additionally, we completed a repo financing on the vertical risk retention portion of our securitizations, resulting in approximately $24 million of incremental liquidity.

Both of these transactions, which total $47 million in proceeds are not included in the $377 million of available liquidity on March 31st. We remain focused on capturing balance sheet opportunities to improve our available liquidity.

Next, let's turn to our full year cash and cash equivalent outlook on Slide 10. As discussed during our fourth quarter 2022 call, we expect a 2023 ending cash and cash equivalent balance of $150 million to $200 million.

This is primarily driven by our expected EBITDA loss for 2023 plus modest interest expense. Continued progress on titling and registration along with other cash initiatives are expected to free up approximately $30 million in cash currently trapped on the balance sheet.

We remain on track with our expectations for year-end cash and cash equivalence. With respect to overall liquidity, we generated an additional $24 million from the repo financing with a potential for an incremental $25 million from selling the residual certificates.

Additionally, if we were to complete another securitization later in the year, our ending liquidity would improve as a result. Thank you for your time and attention this morning.

With that, I'll turn it back to Tom for a few closing remarks. Tom?

Thanks, Bob. Turning to Slide 11.

Yesterday marks one year since we pivoted the business and announced leadership changes as well as our three key objectives and four focused strategic initiatives. Additionally, last May 26th, we introduced our long-term roadmap.

Our long-term roadmap and four strategic initiatives remain unchanged, and I anticipate that they will remain unchanged, as we pursue building profitable business. I'm incredibly proud of what our team has accomplished over the last 12 months.

We have transformed virtually every aspect of the business to improve our customer experience, improve our processes, drive operational efficiencies, reduce variable and fixed costs, decrease our cash burn rate and reduce our debt. While we still have a lot of work to do, I do believe we are well-positioned to resume growth and continue our business transformation in 2023, as we execute our long-term road map and peruse our mid and long-term goals.

I look forward to updating you on our progress on our four strategic initiatives each quarter, as we pursue our long-term road map. Thank you for your time today and operator, we are ready for questions.

Great. Good morning and thanks for taking the questions.

Just firstly on like the EBITDA guidance and the run rate here once you get through the age inventory, looking at the one-time factors that impacted first quarter, and what could impact the second quarter as well as some of the securitization expenses and accounting for the risks that were announced recently. We are arriving at something close to $45 million to $50 million EBITDA loss rate, a quarterly EBITDA loss rate for the second half of this year.

Is that a fair assumption? Just wanted to clarify that, and I have a couple of follow ups.

Great, Rajat. Thanks for much for the question.

Yes, your math is pretty much right in line with what we have disclosed. If you look at our first quarter adjusted EBITDA that we reported was $65 million.

We did discuss in our comments that, within that $65 million, we had $5 million of debt issuance costs in the first quarter. And those costs, the reason that we had to spend those because that transaction is currently on the balance sheet in a transaction that is off balance sheet that would be netted against the gain on a sale.

So that was a $5 million adjustment. And then in addition to that, some of the other things that we have talked about, Tom talked about the January risk where we only had 2 months of the 3-month benefit.

And if you take the $27 million that we talked about, that's a couple of million dollars benefit per month and we didn't get one of those months in the first quarter. So we expect that as an ongoing benefit.

And then April, we announced an additional reduction in force and that was $15 million in annual savings and obviously we will see the benefit of that. We will see a couple of months of that benefit in Q2 and then get the full benefit of that approximately $3.5 million to $4 million benefit going forward.

And then the final item that you mentioned as well was the GPPU and Tom talked about the, the $1,700 delta that we're seeing the $1,700 impacted GPPU because 77% of what we're selling right now are aged vehicles. And if you take that times our 4,000 units, that's worth about $6.5 million.

And that gets you right in the range that you're, that you're thinking that's correct. That's the right way of looking at it.

And on SG&A, you mentioned, improving economics on a poor unit basis going forward. I'm curious, after you're done with the -- is there an opportunity to reduce absolute level of expenses, like just the dollars further as well?

Or is it going to be more about just growth or lend leveraging that growth beyond that? Just curious, like what's the message there?

Yeah, Rajat, we're focused on both of those, actually, there's kind of three levers or that we think, the way we think about it as we resume growth, if we keep operating costs the same, obviously cost per unit goes down, we'll have natural attrition that happens. And it's our goal with a few exceptions in our organization that when we do have attrition that we do everything possible not to replace those roles, and we're going to continue to drive productivity throughout the business.

We have several initiatives in place to do that as well as there are non-people costs that we've spent several months getting our arms around that. We have a team focused on driving down a lot of our non-people costs and contracts.

I think we mentioned previously contracts we entered into, while back that we're still very focused on reducing those costs. So we think the combination of those three we said last quarter, our plan is each quarter to sequentially reduce our cost per unit.

And so there's kind of three or four levers there that we're very focused on to achieve that.

And then, like just given where we are in terms of the dollar amount and you said you're trying to resume growth, now it seems to me that the next leg of cost reduction, I mean, you likely done with like the major chunk of reductions, which were low hanging fruit and with the remaining likely to come from likely to be more slow or likely to come from attrition, it seems like you need to be selling at least 2x or maybe even higher the number of units you're selling right now to get close to EBITDA breakeven. So -- and I'm curious like what's the timeline to get there and without having to add any more costs to get there and ultimately given the liquidity that you have and the 45 million to 50 million EBITDA burn rate in the second half.

Yeah, it's a great customer Rajat, and one we talk about literally every day. So here's how we think about it.

Our first goal is to minimize cash burn while we continue to improve the operations of the business and the cost structure of the business. And so we had a very strong March.

To the point where we were concerned if we continued at that rate, we would -- it would put so much pressure, pressure on our inventory, we would come too close to not having enough inventory. So we actually put the brakes on a little bit because our acquisition engine for really the last year plus, has been on almost idle, which was we're only buying enough vehicles to keep our systems working or reconditioning working, et cetera.

And we paused a little bit because we wanted to really make sure we had acquisitions right, because we have to grow responsibly. We're not going to buy a lot of cars that we can't sell at the margins we need to make in our long-term roadmap.

So we took April and throughout the month we actually figured that part of the equation out faster than I expected. And now we're kind of resuming growth again in May and June.

And so, the way we think about it is we've got to get all those levers right at the same time. And our plan would say, based on the things that we're doing, that we believe that we can continue to grow sequentially each quarter this year.

But we're going to do it very responsibly. While at the same time, to your point, we have to continue to drive down our cost per unit.

And then there will be a point in the year or a point soon, which I'm going to imagine is Q1 of next year will really want to step up growth at a higher rate. But I think of this year as really optimizing all those levers at the same time, getting the cost structure right, growing responsibly, getting the whole model right.

And then I think in Q1 and into next year is when we think about real strong acceleration of growth.

Yes. And then Rajat, one thing I just want to add too, on the liquidity side, I think's important is we talked about the repo financing today, so that was incremental to what we had talked about last quarter.

So if you go to page 10, you'll see that we've improved our midpoint potential liquidity by the amount of the repo financing. That's $274 million also does not include if we're able to execute another securitization, if the markets are favorable in the second half of the year, we could see upwards of another $20 million to $25 million of liquidity that could come out of that as well.

So I just wanted to make sure that you were thinking about that as well.

I apologize for my voice. I have come down to something this week, so hopefully I you can understand me.

But I wanted to ask about the GPU pressure that you alluded to in the second quarter. I'm assuming that GPU will worsen sequentially from the first quarter given the EV reserve that benefited the first quarter.

If you could kind of clarify that and whether there is any reserve benefit that we'll see in the second quarter, that would be helpful.

Yes, good morning, Sharon. Sorry, you're not feeling well.

We would expect Q2 to be directionally around where Q1 is as we work through the H inventory. And as I mentioned earlier, we're very pleased with the GPU we're getting on our own H unit.

And so, we really would like to sell through our H unit in Q2. And we're expecting pretty similar GPPU and Q2 as Q1.

And then we expect a pretty sizable increase in Q3 and Q4 and GPPU as we'll just be selling primarily on aged unit.

Okay. And then I wanted to touch base on what your customer demographic now looks like after the reset that you've done in unit volumes, when the company went public, it kind of skewed more prime higher income.

Obviously, you've done the acquisition of UACC and you've changed the inventory composition somewhat over the past few years. So what does the customer for Vroom really look like today if you could give us some idea of the demographics and psychographics?

Yes. We are definitely seeing a mix shift from primarily prime to a better mix across really the entire credit spectrum.

I think the combination with UACC has really enabled us to do a much better job of converting all the subprime traffic. If you recall from our Investor Day presentation, a significant predominant proportion of our traffic had come from sub-prime customers, but most of our business was prime customers.

And consistent with our strategy back then, we are seeing a better mix. One of the other things that we sensed was at the initial acceleration of interest rate increases, prime customers really slowed down, from the kind of the shocking rate.

And now that the rates have kind of leveled off, we are seeing the mix of our prime customers come back to more normalized levels. But we are really pleased with across the entire spectrum of -- We have a better mix across the entire credit spectrum than we had a year ago.

Got it. And then last question as you think about kind of meaningfully accelerating sales next year.

It sounds like in the first quarter. Are there any incremental fixed cost that you need to bring into the business?

Anything you have cut that kind of will need to come back to drive growth? And I know we've talked a lot about liquidity 2023.

I mean, do you feel as if currently you have enough liquidity for 2024 as well?

So I'll take the first one. With regard to fixed cost, we still believe we have opportunity to continue to reduce fixed cost as I mentioned earlier that we have some legacy non-people cost that we are working through that we think we can have pretty significant improvement in.

And then in terms of the people cost, we truly have completely changed every aspect of the business. The amount of information we get from our -- has really helped to streamline all fixed functions from HR to accounting to the speed at which we close our books.

And so we have made structural changes to where we think our fixed costs we can maintain relatively flat or even decline, with the exception of some things that may go up like DNO, insurance and other things. But generally, we think we have got a fixed cost base that we can grow on.

And we will continue to look to shrink it versus grow it.

Yes. And Sharon, with your second question, with respect to liquidity.

I talked about the range of $275 million to upwards of $300 million available at the end of the year and then we are looking at. We talked about Rajat's question earlier around that $45 million to $50 million run rate when you just look at our first quarter performance and what that could look like at the end of the year.

That gives you a little bit of an idea of how many quarters of liquidity we are looking as we enter into the end of 2023. So hopefully that additional disclosure was beneficial.

Yes. The other variable I'd add to Sharon that we look at is just what are the securitization markets going to be?

Because the way we think about the securitization, when they're healthy, and we can generate a gain on sale, we pull cash forward. And when they're not as favorable, we earn that invest, we earn that return over time.

And so, we've got a long time between now and 2024 to see what happens to the securitization markets. But obviously, the more favorable the better they are for our liquidity.

And then just Sharon, I guess -- Sharon, there's one more thing I would like to add, just in terms of our ability to pull down the warehouse facilities at UACC had moved that cash to room on an -- basis. That's fully available to us as well.

I want to make sure people understand that we have that flexibility.

Sorry, my line had dropped off middle of the previous question, but thanks for answering, it anyways. I was going to ask like at what point, when you're scaling this business, growing this business?

Would you realize that the path to break even might end up being longer or you need to have more expenses come in to get that credit? What would make you arrive at the decision to perhaps liquidate and return the cash to shareholders sooner rather than later?

And wait for the market to recover or the credit bankrupt to recover?

We focus literally every day on doing what's best for our stakeholders. And we have a plan in place that you kind of did the math and what the Q1 run rate would be with normalized things.

And we're going to continue to focus on improving that number throughout the year and growth. And we're going to be very responsible to all of our stakeholders to create the maximum return.

And so it's something that we look at every day. And right now, our plan is really on plan and we're going to continue focused on that, but obviously, our goal is to maximize return for all of our stakeholders.

Yes Rajat, the one thing I would add to that is, under any scenario, just the way that we're looking at this is minimizing our cash burn, living within our means and managing responsibly, it's in the best interest of all of our stakeholders under any scenario. But we're fully committed.

We're really pleased with the progress that we've made with respect to getting our cost structure in line. And now we've got work to do in terms of ramping up the growth engine.

We're pleased with the progress that we've made so far, with respect to ramping the business back up. But -- still a lot of work to do on that front and we'll keep you posted at our progress.

Thank you, everyone. I appreciate your time today.

Have a fantastic rest of your day, and we'll talk to you next quarter.